Steven Ciobo, Australian Minister for Trade, Tourism & Investment HARDtalk

Now on BBC News: HARDtalk talks to Australia's trade minister Steven

Welcome to HARDtalk. I'm Stephen Sackur. Just a few years ago,

conventional wisdom has it that globalisation and free trade were

unalloyed positives I enriching us all. Now the mood is different.

Think Donald Trump, Bernie Sanders and the rise of protectionist

politicians in many democracies. But not, it seems, in Australia. A vast

land rich in resources still eager to expand the scope of free trade.

My guess is Australia's trade Minister, Steve Ciobo. Could

Australia feel the fallout from growing disillusion with that

globalisation? Welcome to HARDtalk. Pleasure to be

with you. Here you are, Australia's trade minister in London at an

extremely sensitive time post Brexit vote. What is your message to the

government of Theresa May? We look forward to working with the

government and the Prime Minister herself has said that she would like

the UK to be a beacon for free trade around the world. My view is not

dissimilar. My view is that this is a form of Le Grice trade, free

trade, it has been orthodoxy for decades. It has driven global living

standards and is the foundation of a lot of the health and wealth that

developed countries around the world enjoyed. Do you accept my premise

that the tide is turning and in many of the world 's democracies, it can

no longer be given that people want free trade and the neck expansion of

globalisation? I don't as I would say it is the tide is turning but

there is an increasing sentiment in some sections of the community

opposed to free at least what they believe to be the consequences of

free trade. I think what is happening, though, at the moment is

that you are getting a blend of different forces. In fact one of the

primary forces I would contain, the people are rightly concerned about,

is globalisation and that aspect of automation which is seen, for

example, people in semiskilled or low skilled occupations finding

increasingly that they are being outsourced to robots and automation.

We will return to that and the impact it is having on politics

around the world and in Australia is well later on. Let's stick with

Brexit for now and the fallout from there. Australia's immediate

reaction was somewhat confusing. I just want to read you what Prime

Minister Malcolm Turnbull said to you. He said in its first meeting

that he was hoping for a very strong very open trade deal with Britain

and he said that Australia will be getting on to deal with the British

very early. Nowt you came out just one or two days later and gave a

very different message, suggesting that actually Australia's priority

was doing a free trade deal with the European Union. What I said was that

we want to pursue a free-trade agreement with both the UK and with

the EU. Certainly our discussions with the EU are more Radwanska. We

are in the closing stages of a scoping study with the EU and we had

to be able to commence formal negotiations with the European Union

toward the middle of next year. I put that to one side and say we are

pursuing is well preliminary discussions with the UK around a

free-trade agreement. But the advice to me from the UK government is that

they cannot formally commence negotiations until such time as the

UK exit is the European Union. Which we know. We are yet to trigger

article 15 so that will not be before March 20 19. So when Malcolm

Turnbull said, he was asked directly, could there be a trade

deal with Britain within the lifetime of the Australia Parliament

which is two years in nine months at the time, he replied, quote,

absolutely. That is nonsense, isn't it? We are walking towards that

outcome. You think that you could actually do the deal from an opening

gun going off, more than two years from now, you would have come just a

few months to get a full free trade a great deal with Britain don't and

you think you can do it. It depends on what the starting point is. Our

starting point is to have a free and liberalised trade as possible. Liam

Fox and I have met. We have what we described as warm and cordial

discussions. We are both quite committed towards trying to promote

trade and by trade I embrace in that trade in goods and services,

investment, Digital economy, all these matters. As copper hands of

Lee as possible. And, ultimately, we have got a working group in place

now that will help to steer our scoping around what a free-trade

agreement will look like. Ultimately, though, the speed at

which we can conclude such an agreement is yet to be determined. I

love these words you are using such as preparing an scoping. It makes no

sense to me. In Britain we have no idea, it seems. Our government

ministers, we have three of them responsible for Brexit, they seem to

have no clear idea of what Brexit will look like. So how on earth can

you be having scoping talks? Because I think you have different forces at

play and these things can happen in parallel. They do not need to happen

one after the other or concurrently. You can have a situation where the

discussion between the Australian government in the UK government

about what we would be able to do in relation to tariff and terms of

access to each other's markets, professional recognition, in

relation to services in all these things, we can have those

conversations. But one example, just a thing, it is absolutely unclear

whether the government wants us to be inside the European Union customs

union or outside. Now if we are inside it, there cannot be a

bilateral custom still with Australia because they would be tied

to the European Union deal. That is correct. So how can you discuss with

Britain when you do not know whether they will be inside or outside. The

British government still has big calls to make, but what we have done

is commence the process and that processes the joint working group to

have discussions. We have years. Let's not say this needs to be done

the next two weeks. We literally have years to work on this and we

will do so in good faith. As those major decisions are made, however,

as we see the characteristics of what the UK exit from the EU

ultimately looks like, that will of course inform your from a position

that we adopt with respect to the UK. Let's cut to the chase. Based on

what you heard from Theresa May from her lieutenants, Davies, Johnson,

Fox, do you believe it is going to be a hard Brexit with Britain

completely diss associated from the single European market and the

customs union or you believe they still want in some way or another to

get a softer Brexit which would allow them preferential access and

stay inside the custom union? I think it is too early to tell. What

is clear to me is that discussions are ongoing and there will need to

be discussions had within the UK government, a call made ultimately

about what may look like and in many respects this is also depending upon

the attitude of the Europeans. So from my perspective is an Australian

minister, I will work to secure the best deal I possibly can with the

UK. It is still early days. And I don't think that we need to be too

concerned in the short term as in over the months, the next three to

six months about ultimately where that is going to end up because it

will be what it is. Is it confusing and chaotic talking to the British

at the moment? Not at all. I appreciated and understand the size

and the challenge that faces the UK. They are talking about disentangling

decades of entrenched relationships and brigade to continental Europe so

that will take time to work out. Talking about challengers, you have

a heck of a challenge in Europe as well. As an Australian trade

Minister you have made it plain that you have big ambitions. One big

ambition is to sign next year or it least get to a place where you can

can be and to contemplate signing, a major free-trade deal with the

European Union. We have just seen the collapse in chaos of the talks

between Canada and the European Union after a huge effort to get a

Canada EU trade deal. Your heart must have sunk into your boots. Let

me be a more moderate voice. I would not characterise it as a collapse in

chaos. What we saw was one part of Belgium, one part of a process of

the EU had to move through because of what they called mixed

competencies of the Canada EU agreement. In other words, it wasn't

confined to purely being the decision of the EU Commission it

aptly required a passage through each of the member states. Not even

a 28 member states but actually regional governance is within. Like

in Belgium which is where it all fell down. Correct. So you had one

there that was a thorn in the side. It is impossible, isn't it, to do a

deal with Europe in these circumstances? I don't think so. One

option I have is to whether or not we stick to it and agreement that is

purely within the competence of the European Commission. That will

overcome significant challenges. That would have to be smaller scale

deal. These are the sort of issues... So you are backing away

from this? No, we want to pursue a conference in free-trade agreement.

This is exactly why we have a scoping study under way and this

will inform the Australian position as much as it informs, no doubt, the

European Commission position and in many respects there is that pending

court case, as I am informed, within the EU about whether competencies

actually lay between Oldham, for example or Brussels, I should say

and the Belgian member states. The annals, the former EU trade

Commissioner, he looked at what happened with the breakdown in the

talks in Wallonia, there decision to reject the deal. He said EU trade

policy will not survive in this world where trade agreements have to

be democratised by every single national parliament within the

European Union including sub legislatures to. He says that this

is the case, trade policy is impossible. Well, it makes a

challenging, it certainly does. And perhaps for me and as Australian,

coming from a federal system where we have, of course, a Central

government and State governments as lawless territory governments,

perhaps I am more used to dealing across a federated system which, in

many respects, is also representative the EU style. These

are challenging times, there is no doubt about it. But if I was

pessimistic about it, I wouldn't be here and I wouldn't be having these

conversations. I remain an optimist about what we can achieve together.

Maybe you are optimistic because you are certainly ignoring reality. You

only have to look at the street protests in Paris in Berlin across

Europe and actually even consider what happened with Brexit whether

British public appeared to put restricting freedom of movement of

Labor far above access to the single European market. Look at all these

trends and you have to say that the received wisdom about the positive

effect of free trade of free markets and everything from leather goods or

those days are over. You know, Stephen, I'd rather do time when

writing and protesting farmers in Europe was my news on the nightly

basis anyway. I mean, I'm not certain that things have changed. It

is not only farmers. It is people who work in industry and services.

People who think that this received wisdom that we have operated under

for the last two or three decades no longer works for them. Let's

contemplate the alternative. The alternative is with we retreat into

protectionism. The alternative is to put up tariff walls. The alternative

is to see the continuation of substantial taxpayer subsidies of

inefficient and comparatively disadvantaged products and

businesses and manufacturing lines and the sort of things. That message

is precisely what we are hearing. Not just a Moluccas said at the

beginning, Bernie Sanders, his message which won some real support

amongst Democrats and the United States. In the primary phase of the

US presidential election. But now Hillary Clinton. Hillary Clinton has

backed away from that Pacific trade partnership which Australia wants to

be a part of which will slash tariffs across 12 nations around the

Pacific Rim. Hillary Clinton has now declared she is against it is

effectively dead in the water. We still need to see. I think it is too

early to make a call on that as well. Haven't spoken with many

people for a lack of a better term, students a congressional politics,

they tell me that they are cautiously optimistic. That Hillary

Clinton is not telling the truth about her change of heart? No,

because the Congress is a different system to the President. Yes there

is a presidential campaign under way. Make no mistake there is also a

big congressional process. It is the Congress that ratifies the TPP and

they say that they are cautiously optimistic about the chances of

congressional ratification in what is called the lame-duck session,

that period post- presidential election prior to the inauguration.

You said you are an optimist and my goodness you are an optimist. Who

knows what will happen in the US presidential election but if you

listen to the rhetoric coming from Donald Trump which actually gets his

crowd really fired up in some of the parts of the United States were

joblessness is time where people feel neglected or ignored by the

government, I come back to this idea about a mood that is fundamentally

changed. Which you are in Australia, Franco, seem to be slow to react to.

The mood is different. Australia is very dynamic with its growth. Asia

is enjoying strong growth and an approach towards trade that still

holds close the many myriad of benefits of liberalised trade.

Within Australia, the agriculture sector, it exports to thirds of what

it produces. I am glad you directed me towards Asia. We cannot discuss

Australia's economic trade policies without talking about China. Your

biggest trade partner. You saw your government sign a free trade deal

with the Chinese in December 2015. You are now charged with making sure

it works well. An economist magazine said Australia is overexposed to the

fortunes of China. Do you agree? No. Eysenck we have been conscious about

the need to maintain balance in our relationships. -- I think. Yes, we

have a free-trade with China. We also concluded a Free Trade

Agreement with South Korea, and one with Japan, which we are vigorously

pursuing with the Trans-Pacific Partnership. I would not apply

vigorous to that any more. Let us speak with China. You are not the

most. Let us get real. Let us talk about China. Likewise, we are

talking about comprehensive economic partnership, a 16 member state

regional agreement. Plus we have in place a comprehensive strategic

partnership with Singapore. To go directly to your question, the

reason we have interest in all of these areas is directly because we

are diversifying and continuing to focus on the myriad of opportunities

our region presents. The thing is that cracks authority developed in

your trading partnership with China. You only signed in agreement, what,

ten months ago. Already the Chinese are serious. It wasn't your decision

personally, but the Australian Government has blocked two key deals

that China wanted to do in a straight, one concerning a big power

supply in New South Wales, Ausgrid, and the other concerning one of the

biggest landholdings of ranches in Australia. That was blocked at all.

A cattle ranch. The Chinese are saying this is Australian

protectionism. I don't agree. The framework that applies to this in

Australia, Australia remains a very liberal democracy when it comes to

borrow and invest. We recognise foreign investment as helping

growth. -- foreign investment. If you look at the foreign investment

review board, the body that protects the national interest with respect

to private investment, they receive about 1000 applications eight year.

In the last 15 years, they have had roughly 50,000 applications. Five

out of 15 represents... You said no twice in the very recent past. Your

Treasurer, Scott Morrison, he said we blocked the Ausgrid deal, the

power deal, he said for reasons of national security. That made no

sense at all. The Chinese already owns substantial chunks of other

major energy grids in Australia. How could it be a question of national

security? It makes perfect sense. I have had the benefit of being

briefed on what the national security concerns were. I would like

to know what they are. Despite your warm words you do not trust the

Chinese, is that it? We have to protect and uphold very closely

national security. You understand I will not... I don't understand that

all. You are saying China is the closest economic partner you have

and you are staking a lot of your future on this race and ship with

China. And you are telling me that they cannot buy a stake in an

Australia power company because of reasons of national security. --

relationship with. There are particular features of this asset

that did trigger concerns in relation to national security.

Frankly, it would not have mattered whether it was Chinese or Canadian

or American interest. Or even UK interest! It would not matter what

that interest was. We had to maintain this asset in Australian

hands. The land steel. Let us talk about that. The guy who is the owner

of the capital, that wanted to buy this huge ranch operation, he said

when he was knocked back, the Turnbull government, your

government, has got a protectionist attitude now towards Chinese foreign

investment and it will discourage investors from taking further money

into Australia. Well, I mean, one, that is not accurate. And two,

saying no twice in 15,000 times is not protectionist. And three, we are

continuing to see great interest in investing in Australia. We are

having a diversified approach is a pity fact is that Chinese investment

in Australia is quite small compared to UK and American investment into

Australia... Malcolm Turnbull has been very critical of China on a

political level. In July we had a major moment when your government,

along with the Americans and the Japanese, condemned China for its

policies in the South China Sea is following an international court

decision on the disputed islands. Australia has a strong stance on

this. It seems to me your government has decided it needs to signal to

the UN that despite your strong economic ties to China you are still

four square behind the US when it comes to your geopolitical posturing

in the reason. Am I right? Australia has always been able to

pragmatically maintain relationships. Have your cake and

eat it? Frankly, our relationship with China is mature. From time to

time there are politically irritants, in the same way we have

them with Indonesia or the US, and that is part and parcel of being a

mature democracy. We put for our point of view in a consistent way.

That comes back to my point and the magazine the Economist, of being

overexposed to China. You were called a paper cap that will not

lash. All of these things with Beijing, they could in a flash be

turned into something much more negative. Ultimately, it comes down

to this. Is the relationship with China one that is of mutual benefit,

the answer is clearly yes. The great thing that comes from this

relationship is that it is a very mature relationship. So we can have

a frank conversation around issues. We indeed held our position with the

South China Sea. But in the same token we can have a great

relationship with Japan, a great relationship with South Korea, and

maintain our lifelong friendship with the US. Well, if final thought,

then. You have been the fast in being optimistic throughout the

issue. You have called Australia economically liberal. But you are

not immune to the pressures and political tensions I have talked

about elsewhere. An interesting poll recently on ABC Australia found that

most of the public favour a ban on Muslim immigration. You are a

country that still needs immigrants to feed economic growth. What do you

think about that, the changing mood in your country, especially with

certain kinds of immigration, it seems, like Muslims. I think the

primary concern that really that poll reflects is a sentiment about

values. I have consistently made the point in public life that what

Australian ones are people emigrating to Australia who share

our values. Where they believe their reasoning consistency in values,

that is the main point of conflict. -- there is any consistency. Are you

saying wasn't do not share your values? The opposite. -- Muslims

don't. No, I haven't are saying we need to align with... I am unclear.

You are saying those Australians who want a ban on Muslim immigration,

are they right or wrong? I am opposed to a view that says ban all

was limbs. I think that is a complete knee-jerk reaction. --

Muslims. Are you worried about what is happening in Australia with

public opinion? Part of my race responsibility as a public leader is

to be clear about what is really stands for. You are right, we need

immigration. Our population is growing because of the national

growth rate. That is crucial to the long-term economic interests of the

country. When it comes to those immigrants coming into the country,

though, Australians expect a consistency of values through rules.

That is not about precluding Muslims. That is my point. If you

are a Muslim and share Australian values, fantastic, you should be

able to get into the country. But if you are someone who doesn't share

the virulent stick valleys Australians have, then we should be

saying no you cannot come in. -- pluralistic. We have to stop there.

Steven Ciobo, it has been a pleasure to have you on the show. Thank you.

Thank you. THEME PLAYS. After nearly a month of easterly

winds, we're now starting to see