Sky News, PM Agenda - Interview with David Speers

  • Transcript, E&OE
Subjects: Indonesia-Australia Comprehensive Economic Partnership (IA-CEPA); Free Trade Agreements with the European Union and United Kingdom; Steel Trade with the United States.
13 July 2017

DAVID SPEERS: It is going to be a very busy time ahead for the Trade Minister Steve Ciobo, and it's a demonstration the Turnbull Government is not going down the protectionist path being advocated by some, including Donald Trump. Far from it. More and more free trade deals, but what do we actually get out of these trade deals, and what are we willing to give up? I spoke to the Minister for Trade just a short time ago. Steve Ciobo, thanks very much for your time, so let's start with the first of these, Indonesia. Can you really finalise a free trade agreement with Indonesia by the end of the year - that's a little more than five months away?

STEVEN CIOBO: Well, that's certainly my expectation, and that's what I've been working towards, David. You'd recall, in March last year, when I came into the portfolio we relaunched FTA negotiations with Indonesia, had really good conversations on an ongoing basis since then, initially with Indonesia's Trade Minister Tom Lembong. It's now Indonesia's Trade Minister Enggar Lukita. He and I have been chatting very regularly, meeting very regularly, and the discussions are progressing very well.

DAVID SPEERS: Have you settled some of the Indonesian concerns about access for their paper and their palm oil to the Australian market, or are they still sticking points?

STEVEN CIOBO: Well, look, like any negotiation, there's, of course, offensive and defensive interests on both sides. What is most important is that we're engaging in terms of our chief negotiators on a bona fide basis, really good conversations. We're making good progress, both in relation to market access discussions, with respect to services, and with respect to investment, so I'm confident that what we'll see through this agreement is a very high-quality agreement that's going to enable Australia and Indonesian trade relationships to reach their full potential.

DAVID SPEERS: But this one on paper is pretty important for Indonesia, and earlier this year, you put a tariff on Indonesian paper and other paper imports as well, because you said they were being dumped on the Australian market. Indonesia said at the time this could hurt the negotiations for a free trade agreement, so where is that at? Are you willing to lift those - remove those tariffs?

STEVEN CIOBO: Well, that was a decision of the independent Anti-Dumping Commission. Now, the Anti-Dumping Commission is set up in Australia in a transparent way. It also is fully compliant with World Trade Organisation rules, so decisions of the Anti-Dumping Commission are exactly that. They're independent. They're transparent, and they're not decisions of government. The Indonesians understand that. Now, of course, they're going to make representations about concerns that they have, and I understand that, but to go directly to your question about has that affected negotiations, no, it hasn't, because they know that it's transparent. They know it's compliant with WTO position, and we're continuing to engage in a very constructive way around our negotiations.

DAVID SPEERS: One of the difficult things with many of these free trade deals is, well, the issues around labour, and whether Indonesians, in this case, would have greater access to the Australian market for the Indonesian workforce to come and live here, work here. Will they get greater access?

STEVEN CIOBO: Well, I mean, David, you're asking me to speculate about what the outcome of negotiations are going to be, and obviously, I'm not going to do that while we're still in negotiations. What we'll look at doing though is having a high-quality agreement that protects Australia's national interest. I want to make sure that we are in a very strong position for Australian exporters. I want to make sure that we have the best potential opportunity, and of course, I'm going to act in a way that's consistent with what we've done in the past when it comes to FTA negotiations.

DAVID SPEERS: But does all of this have to remain confidential? I mean, is that just, I'm genuinely interested, do you have to keep it all under wraps, or can the Australian people get an insight into what you're actually discussing?

STEVEN CIOBO: Well, of course, we consult with the stakeholders all the time. My department, the Department of Foreign Affairs and Trade, has regular consultations with stakeholders about both offensive and defensive interests. We talk to them. We want their input, we value their feedback, and they are an essential part of the discussions that we're having so, it's absolutely not a case of being confidential and secret, we're engaging in a productive way, but what I'm not going to do David, is I'm not going to engage in negotiations through the media, I'm sure you would appreciate that, and that's not how you go about achieving a good outcome.

DAVID SPEERS: No, no, no, I'm not asking you to do that. I'm just wondering whether you're willing to allow more Indonesian workers into Australia?

STEVEN CIOBO: Look, what I'd say is anything we do will be consistent with past FTAs, and will be consistent with FTAs that have been put in place under the Labor Party, FTAs that have been put in place under the Coalition, so Australians shouldn't be concerned that there's going to be anything out of the ordinary in terms of these negotiations, other than a good quality outcome for Australian exporters.

DAVID SPEERS: Can I turn to the European Union now? This deadline is a further 12 months back, so end of next year. Europe of course has huge subsidies in place to protect its farmers. Are we really going to see those removed or reduced?

STEVEN CIOBO: Well I've made it clear that I expect us to be able to get much better access to the European market, especially around agriculture. An extraordinary fact David, is that Australia actually imports more agricultural products from Europe, than we do as a nation with 24 million people, export to Europe. So I'd indicate some of the imbalances that have been there for decades. Now, I'm absolutely focused on righting this, we want to make sure that we put in place again another high quality, comprehensive trade deal with the European Union, one that ensures that Australia's national interest is well safeguarded and pursued. I welcome the really productive discussions between Prime Minister Turnbull and President Juncker from the European Union, they've given us, that is myself and Cecilia Malmstrom who's Europe's Trade Commissioner, they've given us a lot to work with, so we're very focused on putting in place a good quality deal.

DAVID SPEERS: And what do the Europeans want for their side of this deal?STEVEN CIOBO: Well you know David, these again, it's the same issue in every case, where there's offensive and defensive interests. We want to make sure that we liberalise opportunities for Australian exporters in relation to goods, services and investment. Now, the good news is, that Europe, like Australia is a highly developed economy. And so, the fact is that we're already competitive in a whole range of areas. The inroads for Australia will be around tariff reduction, but if you look at services, which of course is a large proportion of the Australian economy, but a relatively modest proportion of our exports, we have huge potential to do more in the services space, and that's not a case of either side winning or losing, these are win-win outcomes, good for the Europeans, good for Australia.

DAVID SPEERS: Now obviously when it comes to negotiating with the European Union right now, that includes Britain, until Brexit happens that includes the United Kingdom. Does the deal change after Britain leaves the European Union?

STEVEN CIOBO: Well David as you'd be aware, we've got a working group between Australia and the UK now. That working group is basically to have preliminary discussions with the UK about putting in place a high-quality FTA, that is a free trade agreement, with the UK once it formally exits the EU. We were the first country, one of the things that I did early in my tenure in this role as Trade, Tourism and Investment Minister was to travel to the UK to sit down with Liam Fox who's the Secretary for International Trade, and say look, 'We've got a great relationship, let's try to put in place a high quality agreement as soon as we possibly can'.

DAVID SPEERS: And I appreciate that, I'm just wondering with the EU deal though, if you get a deal with the EU and Brexit still hasn't happened, and then it does. Surely that changes the benefits of the deal for Australia?

STEVEN CIOBO: Not really, what will happen is that any deal we do with the European Union, will be a deal with all members of the European Union. Now when the UK's in, that means that, that deal applies to them. When the UK exits, that will then fall under the bilateral agreement that we'll be looking at striking between Australia and the UK, so I guess what I'm saying in summary is that, for as long as the UK remains in the EU, the benefits of the EU FTA will apply to them, and then once they exit, that'll come down to the bilateral agreement that we'll negotiate.

DAVID SPEERS: Now the labour movement is a big issue in terms of the Brexit negotiations in Europe and the UK. As we know it was one of the big reasons why Britons voted for Brexit, they wanted more control over their borders and so on. What would be the situation for Australians once Brexit happens, in terms of people movement in and out of the UK?

STEVEN CIOBO: Well again, this will in part be discussions that we have in the negotiations, and we look at for example, what will happen around, in particular, it's predominantly skilled workers, skilled services accounts for 75 per cent of the Australian economy but only 22 per cent of our exports. Now, you get, for example, a market like the UK. We've got Australian lawyers, Australian accountants, Australian doctors, for example, all highly skilled. I want to make sure that they have the opportunity to export their services to the UK. Vice versa, we've seen a number of – I mean, let's deal with what a lot of Australians would know – they've seen a lot of UK doctors who take the decision to come and work in Australia for 12 months. These ultimately are good outcomes for both countries. It's not about unskilled labour; it's about skilled labour. It's about mutual recognition of professional standards between both countries.

DAVID SPEERS: What about backpackers, and the situation at the moment where Australians can go and live and work when they're young in the UK. Will they still be able to do that?

STEVEN CIOBO: Well, we're starting to move away from what is traditionally the domain of a trade agreement through to actual decisions about immigration. Now, as I said, trade deals tend to deal with skilled occupations and tend to deal with contractual services suppliers. That's different to the broader question that you're going to now about can backpackers travel, what will be the requirements for them. That's more of an immigration matter, and that obviously is within the jurisdiction of the relevant ministers: in our case, Peter Dutton and his equivalent to the UK.

DAVID SPEERS: Fair enough. There is some doubt about this at the moment, isn't there, once Brexit happens, whether Aussies will still get the same rite of passage that many have enjoyed over many, many years in the UK.

STEVEN CIOBO: Well, it won't surprise anyone to know that I think absolutely we should and we'll be putting our best foot forward. I guess I'd put the other side of the coin forward, David, which is that with the UK exiting the EU, Australia potentially is best placed to be able to get a more liberalised environment for Aussies to travel into the UK. But I mean these are the subject of many discussions over a long period of time. They're not explicitly tied back to trade, so we'll just have to see how they go.

DAVID SPEERS: And a final one: Donald Trump in the US. He's yet to announce any new tariffs on steel imports, mainly aimed at China, it would seem. But we know the Prime Minister spoke to Donald Trump at the G20 meeting about this. You've been speaking to your counterpart over there as well about this. And it does sound like there is going to be an exemption for Australia. How ironclad is that commitment?

STEVEN CIOBO: Well, look, time will tell. I, obviously, travelled to the United States a couple of weeks ago. Actually, I missed Parliament to go there because we knew this issue was looming large. They have what's called a 232 investigation. Pushing the jargon to one side, the US is looking at whether or not they impose, potentially, punitive tariffs on imported steel and aluminium. Now, Australia has interests in the US, including BlueScope Steel, who operates a business there called Steelscape. I wanted to make sure that we put our best foot forward. I argued strongly on Australia's behalf that we should be exempt. The Prime Minister has obviously raised that matter directly as well with President Trump. They're yet to take a decision. We'll know in the force of time. Both the Prime Minister and I are very focused on making sure the Americans understand our expectations around our steel and aluminium businesses.

DAVID SPEERS: Final one before I let you go. Away from your portfolio, the renewable energy target. Are you worried it's killing people?

STEVEN CIOBO: Well, look, David, I think we should always, of course, be very attuned to the impact of any policy decision. Whether it's things like pink batts or whether it's things like renewable energy, what it comes down to is one fundamental fact: as a nation, we have seen energy prices escalating rapidly. In large part, this has been a consequence of, frankly, some misguided policies at a state government level that have seen energy costs just skyrocketing. Here in Queensland, we've still got a State Labor Premier –

DAVID SPEERS: Not the Federal Government's renewable energy target.

STEVEN CIOBO: No. This is a consequence of the targets that have been put in place by state governments which are leading to a reduction of base load power generation from a number – now, these things are multi-faceted, David. It's about the economics. It's about commercial finance that's available in the marketplace. It's about government policy. Let's not pretend this comes down to any one particular policy. The fact is it's a perfect storm of different factors that are all having an impact on energy price. But fundamentally from an-

DAVID SPEERS: Well, it's a bit of a worry, though, isn't it, that one of your own colleagues is sheeting home blame to your own Government's renewable energy target.

STEVEN CIOBO: Well, look, Craig Kelly's made those comments. They're his right to make comments about renewable energy targets. I don't agree with the premise that it's the Federal Government. As I said, we've got, here in Queensland, a State Premier who says that she wants a 50 per cent renewable energy target with absolutely no plans in terms of dependency of base load power. We saw what happened in South Australia. I make the point again, though: these are complex matters involving commercial finance arrangements, economic decisions about life cycles on coal-generated power stations. They're about what's happening in terms of the policy architecture around renewables as well as fossil fuels. All of these are impacting on what's happening with energy prices in Australia, and it's what we are absolutely focused on, trying to reduce the price of energy for all Australians.

DAVID SPEERS: Trade Minister Steve Ciobo, I appreciate your time. Thanks very much for joining us.

STEVEN CIOBO: Thanks, mate.

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