:00:00. > :00:00.Now on BBC News: HARDtalk talks to Australia's trade minister Steven
:00:00. > :00:17.Welcome to HARDtalk. I'm Stephen Sackur. Just a few years ago,
:00:18. > :00:23.conventional wisdom has it that globalisation and free trade were
:00:24. > :00:28.unalloyed positives I enriching us all. Now the mood is different.
:00:29. > :00:33.Think Donald Trump, Bernie Sanders and the rise of protectionist
:00:34. > :00:38.politicians in many democracies. But not, it seems, in Australia. A vast
:00:39. > :00:42.land rich in resources still eager to expand the scope of free trade.
:00:43. > :00:49.My guess is Australia's trade Minister, Steve Ciobo. Could
:00:50. > :00:50.Australia feel the fallout from growing disillusion with that
:00:51. > :01:23.globalisation? Welcome to HARDtalk. Pleasure to be
:01:24. > :01:27.with you. Here you are, Australia's trade minister in London at an
:01:28. > :01:34.extremely sensitive time post Brexit vote. What is your message to the
:01:35. > :01:38.government of Theresa May? We look forward to working with the
:01:39. > :01:42.government and the Prime Minister herself has said that she would like
:01:43. > :01:49.the UK to be a beacon for free trade around the world. My view is not
:01:50. > :01:54.dissimilar. My view is that this is a form of Le Grice trade, free
:01:55. > :02:00.trade, it has been orthodoxy for decades. It has driven global living
:02:01. > :02:03.standards and is the foundation of a lot of the health and wealth that
:02:04. > :02:11.developed countries around the world enjoyed. Do you accept my premise
:02:12. > :02:16.that the tide is turning and in many of the world 's democracies, it can
:02:17. > :02:23.no longer be given that people want free trade and the neck expansion of
:02:24. > :02:27.globalisation? I don't as I would say it is the tide is turning but
:02:28. > :02:30.there is an increasing sentiment in some sections of the community
:02:31. > :02:33.opposed to free at least what they believe to be the consequences of
:02:34. > :02:37.free trade. I think what is happening, though, at the moment is
:02:38. > :02:41.that you are getting a blend of different forces. In fact one of the
:02:42. > :02:44.primary forces I would contain, the people are rightly concerned about,
:02:45. > :02:50.is globalisation and that aspect of automation which is seen, for
:02:51. > :02:53.example, people in semiskilled or low skilled occupations finding
:02:54. > :02:57.increasingly that they are being outsourced to robots and automation.
:02:58. > :03:01.We will return to that and the impact it is having on politics
:03:02. > :03:05.around the world and in Australia is well later on. Let's stick with
:03:06. > :03:10.Brexit for now and the fallout from there. Australia's immediate
:03:11. > :03:13.reaction was somewhat confusing. I just want to read you what Prime
:03:14. > :03:17.Minister Malcolm Turnbull said to you. He said in its first meeting
:03:18. > :03:20.that he was hoping for a very strong very open trade deal with Britain
:03:21. > :03:25.and he said that Australia will be getting on to deal with the British
:03:26. > :03:28.very early. Nowt you came out just one or two days later and gave a
:03:29. > :03:34.very different message, suggesting that actually Australia's priority
:03:35. > :03:38.was doing a free trade deal with the European Union. What I said was that
:03:39. > :03:43.we want to pursue a free-trade agreement with both the UK and with
:03:44. > :03:48.the EU. Certainly our discussions with the EU are more Radwanska. We
:03:49. > :03:52.are in the closing stages of a scoping study with the EU and we had
:03:53. > :03:55.to be able to commence formal negotiations with the European Union
:03:56. > :04:00.toward the middle of next year. I put that to one side and say we are
:04:01. > :04:04.pursuing is well preliminary discussions with the UK around a
:04:05. > :04:08.free-trade agreement. But the advice to me from the UK government is that
:04:09. > :04:13.they cannot formally commence negotiations until such time as the
:04:14. > :04:19.UK exit is the European Union. Which we know. We are yet to trigger
:04:20. > :04:22.article 15 so that will not be before March 20 19. So when Malcolm
:04:23. > :04:26.Turnbull said, he was asked directly, could there be a trade
:04:27. > :04:32.deal with Britain within the lifetime of the Australia Parliament
:04:33. > :04:36.which is two years in nine months at the time, he replied, quote,
:04:37. > :04:39.absolutely. That is nonsense, isn't it? We are walking towards that
:04:40. > :04:43.outcome. You think that you could actually do the deal from an opening
:04:44. > :04:48.gun going off, more than two years from now, you would have come just a
:04:49. > :04:52.few months to get a full free trade a great deal with Britain don't and
:04:53. > :04:56.you think you can do it. It depends on what the starting point is. Our
:04:57. > :05:00.starting point is to have a free and liberalised trade as possible. Liam
:05:01. > :05:02.Fox and I have met. We have what we described as warm and cordial
:05:03. > :05:07.discussions. We are both quite committed towards trying to promote
:05:08. > :05:10.trade and by trade I embrace in that trade in goods and services,
:05:11. > :05:15.investment, Digital economy, all these matters. As copper hands of
:05:16. > :05:19.Lee as possible. And, ultimately, we have got a working group in place
:05:20. > :05:22.now that will help to steer our scoping around what a free-trade
:05:23. > :05:25.agreement will look like. Ultimately, though, the speed at
:05:26. > :05:30.which we can conclude such an agreement is yet to be determined. I
:05:31. > :05:35.love these words you are using such as preparing an scoping. It makes no
:05:36. > :05:38.sense to me. In Britain we have no idea, it seems. Our government
:05:39. > :05:43.ministers, we have three of them responsible for Brexit, they seem to
:05:44. > :05:47.have no clear idea of what Brexit will look like. So how on earth can
:05:48. > :05:51.you be having scoping talks? Because I think you have different forces at
:05:52. > :05:54.play and these things can happen in parallel. They do not need to happen
:05:55. > :05:58.one after the other or concurrently. You can have a situation where the
:05:59. > :06:02.discussion between the Australian government in the UK government
:06:03. > :06:07.about what we would be able to do in relation to tariff and terms of
:06:08. > :06:11.access to each other's markets, professional recognition, in
:06:12. > :06:15.relation to services in all these things, we can have those
:06:16. > :06:21.conversations. But one example, just a thing, it is absolutely unclear
:06:22. > :06:26.whether the government wants us to be inside the European Union customs
:06:27. > :06:30.union or outside. Now if we are inside it, there cannot be a
:06:31. > :06:34.bilateral custom still with Australia because they would be tied
:06:35. > :06:40.to the European Union deal. That is correct. So how can you discuss with
:06:41. > :06:44.Britain when you do not know whether they will be inside or outside. The
:06:45. > :06:50.British government still has big calls to make, but what we have done
:06:51. > :06:53.is commence the process and that processes the joint working group to
:06:54. > :06:57.have discussions. We have years. Let's not say this needs to be done
:06:58. > :07:02.the next two weeks. We literally have years to work on this and we
:07:03. > :07:06.will do so in good faith. As those major decisions are made, however,
:07:07. > :07:10.as we see the characteristics of what the UK exit from the EU
:07:11. > :07:13.ultimately looks like, that will of course inform your from a position
:07:14. > :07:18.that we adopt with respect to the UK. Let's cut to the chase. Based on
:07:19. > :07:24.what you heard from Theresa May from her lieutenants, Davies, Johnson,
:07:25. > :07:27.Fox, do you believe it is going to be a hard Brexit with Britain
:07:28. > :07:32.completely diss associated from the single European market and the
:07:33. > :07:37.customs union or you believe they still want in some way or another to
:07:38. > :07:41.get a softer Brexit which would allow them preferential access and
:07:42. > :07:45.stay inside the custom union? I think it is too early to tell. What
:07:46. > :07:49.is clear to me is that discussions are ongoing and there will need to
:07:50. > :07:53.be discussions had within the UK government, a call made ultimately
:07:54. > :07:56.about what may look like and in many respects this is also depending upon
:07:57. > :08:02.the attitude of the Europeans. So from my perspective is an Australian
:08:03. > :08:06.minister, I will work to secure the best deal I possibly can with the
:08:07. > :08:12.UK. It is still early days. And I don't think that we need to be too
:08:13. > :08:15.concerned in the short term as in over the months, the next three to
:08:16. > :08:20.six months about ultimately where that is going to end up because it
:08:21. > :08:24.will be what it is. Is it confusing and chaotic talking to the British
:08:25. > :08:31.at the moment? Not at all. I appreciated and understand the size
:08:32. > :08:33.and the challenge that faces the UK. They are talking about disentangling
:08:34. > :08:38.decades of entrenched relationships and brigade to continental Europe so
:08:39. > :08:42.that will take time to work out. Talking about challengers, you have
:08:43. > :08:46.a heck of a challenge in Europe as well. As an Australian trade
:08:47. > :08:50.Minister you have made it plain that you have big ambitions. One big
:08:51. > :08:55.ambition is to sign next year or it least get to a place where you can
:08:56. > :08:58.can be and to contemplate signing, a major free-trade deal with the
:08:59. > :09:02.European Union. We have just seen the collapse in chaos of the talks
:09:03. > :09:07.between Canada and the European Union after a huge effort to get a
:09:08. > :09:12.Canada EU trade deal. Your heart must have sunk into your boots. Let
:09:13. > :09:18.me be a more moderate voice. I would not characterise it as a collapse in
:09:19. > :09:23.chaos. What we saw was one part of Belgium, one part of a process of
:09:24. > :09:26.the EU had to move through because of what they called mixed
:09:27. > :09:30.competencies of the Canada EU agreement. In other words, it wasn't
:09:31. > :09:33.confined to purely being the decision of the EU Commission it
:09:34. > :09:38.aptly required a passage through each of the member states. Not even
:09:39. > :09:42.a 28 member states but actually regional governance is within. Like
:09:43. > :09:47.in Belgium which is where it all fell down. Correct. So you had one
:09:48. > :09:50.there that was a thorn in the side. It is impossible, isn't it, to do a
:09:51. > :09:56.deal with Europe in these circumstances? I don't think so. One
:09:57. > :10:00.option I have is to whether or not we stick to it and agreement that is
:10:01. > :10:02.purely within the competence of the European Commission. That will
:10:03. > :10:07.overcome significant challenges. That would have to be smaller scale
:10:08. > :10:12.deal. These are the sort of issues... So you are backing away
:10:13. > :10:15.from this? No, we want to pursue a conference in free-trade agreement.
:10:16. > :10:19.This is exactly why we have a scoping study under way and this
:10:20. > :10:23.will inform the Australian position as much as it informs, no doubt, the
:10:24. > :10:27.European Commission position and in many respects there is that pending
:10:28. > :10:31.court case, as I am informed, within the EU about whether competencies
:10:32. > :10:36.actually lay between Oldham, for example or Brussels, I should say
:10:37. > :10:39.and the Belgian member states. The annals, the former EU trade
:10:40. > :10:45.Commissioner, he looked at what happened with the breakdown in the
:10:46. > :10:50.talks in Wallonia, there decision to reject the deal. He said EU trade
:10:51. > :10:55.policy will not survive in this world where trade agreements have to
:10:56. > :10:58.be democratised by every single national parliament within the
:10:59. > :11:02.European Union including sub legislatures to. He says that this
:11:03. > :11:07.is the case, trade policy is impossible. Well, it makes a
:11:08. > :11:10.challenging, it certainly does. And perhaps for me and as Australian,
:11:11. > :11:14.coming from a federal system where we have, of course, a Central
:11:15. > :11:17.government and State governments as lawless territory governments,
:11:18. > :11:22.perhaps I am more used to dealing across a federated system which, in
:11:23. > :11:25.many respects, is also representative the EU style. These
:11:26. > :11:29.are challenging times, there is no doubt about it. But if I was
:11:30. > :11:32.pessimistic about it, I wouldn't be here and I wouldn't be having these
:11:33. > :11:37.conversations. I remain an optimist about what we can achieve together.
:11:38. > :11:41.Maybe you are optimistic because you are certainly ignoring reality. You
:11:42. > :11:44.only have to look at the street protests in Paris in Berlin across
:11:45. > :11:48.Europe and actually even consider what happened with Brexit whether
:11:49. > :11:52.British public appeared to put restricting freedom of movement of
:11:53. > :11:57.Labor far above access to the single European market. Look at all these
:11:58. > :12:04.trends and you have to say that the received wisdom about the positive
:12:05. > :12:09.effect of free trade of free markets and everything from leather goods or
:12:10. > :12:13.those days are over. You know, Stephen, I'd rather do time when
:12:14. > :12:16.writing and protesting farmers in Europe was my news on the nightly
:12:17. > :12:22.basis anyway. I mean, I'm not certain that things have changed. It
:12:23. > :12:26.is not only farmers. It is people who work in industry and services.
:12:27. > :12:30.People who think that this received wisdom that we have operated under
:12:31. > :12:33.for the last two or three decades no longer works for them. Let's
:12:34. > :12:38.contemplate the alternative. The alternative is with we retreat into
:12:39. > :12:43.protectionism. The alternative is to put up tariff walls. The alternative
:12:44. > :12:45.is to see the continuation of substantial taxpayer subsidies of
:12:46. > :12:50.inefficient and comparatively disadvantaged products and
:12:51. > :12:54.businesses and manufacturing lines and the sort of things. That message
:12:55. > :12:58.is precisely what we are hearing. Not just a Moluccas said at the
:12:59. > :13:01.beginning, Bernie Sanders, his message which won some real support
:13:02. > :13:05.amongst Democrats and the United States. In the primary phase of the
:13:06. > :13:09.US presidential election. But now Hillary Clinton. Hillary Clinton has
:13:10. > :13:13.backed away from that Pacific trade partnership which Australia wants to
:13:14. > :13:17.be a part of which will slash tariffs across 12 nations around the
:13:18. > :13:20.Pacific Rim. Hillary Clinton has now declared she is against it is
:13:21. > :13:25.effectively dead in the water. We still need to see. I think it is too
:13:26. > :13:29.early to make a call on that as well. Haven't spoken with many
:13:30. > :13:35.people for a lack of a better term, students a congressional politics,
:13:36. > :13:38.they tell me that they are cautiously optimistic. That Hillary
:13:39. > :13:41.Clinton is not telling the truth about her change of heart? No,
:13:42. > :13:44.because the Congress is a different system to the President. Yes there
:13:45. > :13:48.is a presidential campaign under way. Make no mistake there is also a
:13:49. > :13:52.big congressional process. It is the Congress that ratifies the TPP and
:13:53. > :13:55.they say that they are cautiously optimistic about the chances of
:13:56. > :13:59.congressional ratification in what is called the lame-duck session,
:14:00. > :14:04.that period post- presidential election prior to the inauguration.
:14:05. > :14:08.You said you are an optimist and my goodness you are an optimist. Who
:14:09. > :14:11.knows what will happen in the US presidential election but if you
:14:12. > :14:15.listen to the rhetoric coming from Donald Trump which actually gets his
:14:16. > :14:18.crowd really fired up in some of the parts of the United States were
:14:19. > :14:24.joblessness is time where people feel neglected or ignored by the
:14:25. > :14:28.government, I come back to this idea about a mood that is fundamentally
:14:29. > :14:34.changed. Which you are in Australia, Franco, seem to be slow to react to.
:14:35. > :14:45.The mood is different. Australia is very dynamic with its growth. Asia
:14:46. > :14:50.is enjoying strong growth and an approach towards trade that still
:14:51. > :14:55.holds close the many myriad of benefits of liberalised trade.
:14:56. > :15:01.Within Australia, the agriculture sector, it exports to thirds of what
:15:02. > :15:05.it produces. I am glad you directed me towards Asia. We cannot discuss
:15:06. > :15:10.Australia's economic trade policies without talking about China. Your
:15:11. > :15:15.biggest trade partner. You saw your government sign a free trade deal
:15:16. > :15:20.with the Chinese in December 2015. You are now charged with making sure
:15:21. > :15:26.it works well. An economist magazine said Australia is overexposed to the
:15:27. > :15:31.fortunes of China. Do you agree? No. Eysenck we have been conscious about
:15:32. > :15:37.the need to maintain balance in our relationships. -- I think. Yes, we
:15:38. > :15:41.have a free-trade with China. We also concluded a Free Trade
:15:42. > :15:46.Agreement with South Korea, and one with Japan, which we are vigorously
:15:47. > :15:52.pursuing with the Trans-Pacific Partnership. I would not apply
:15:53. > :15:57.vigorous to that any more. Let us speak with China. You are not the
:15:58. > :16:02.most. Let us get real. Let us talk about China. Likewise, we are
:16:03. > :16:05.talking about comprehensive economic partnership, a 16 member state
:16:06. > :16:10.regional agreement. Plus we have in place a comprehensive strategic
:16:11. > :16:14.partnership with Singapore. To go directly to your question, the
:16:15. > :16:18.reason we have interest in all of these areas is directly because we
:16:19. > :16:24.are diversifying and continuing to focus on the myriad of opportunities
:16:25. > :16:28.our region presents. The thing is that cracks authority developed in
:16:29. > :16:32.your trading partnership with China. You only signed in agreement, what,
:16:33. > :16:36.ten months ago. Already the Chinese are serious. It wasn't your decision
:16:37. > :16:41.personally, but the Australian Government has blocked two key deals
:16:42. > :16:46.that China wanted to do in a straight, one concerning a big power
:16:47. > :16:51.supply in New South Wales, Ausgrid, and the other concerning one of the
:16:52. > :17:00.biggest landholdings of ranches in Australia. That was blocked at all.
:17:01. > :17:05.A cattle ranch. The Chinese are saying this is Australian
:17:06. > :17:10.protectionism. I don't agree. The framework that applies to this in
:17:11. > :17:14.Australia, Australia remains a very liberal democracy when it comes to
:17:15. > :17:19.borrow and invest. We recognise foreign investment as helping
:17:20. > :17:23.growth. -- foreign investment. If you look at the foreign investment
:17:24. > :17:28.review board, the body that protects the national interest with respect
:17:29. > :17:32.to private investment, they receive about 1000 applications eight year.
:17:33. > :17:37.In the last 15 years, they have had roughly 50,000 applications. Five
:17:38. > :17:44.out of 15 represents... You said no twice in the very recent past. Your
:17:45. > :17:51.Treasurer, Scott Morrison, he said we blocked the Ausgrid deal, the
:17:52. > :17:55.power deal, he said for reasons of national security. That made no
:17:56. > :17:59.sense at all. The Chinese already owns substantial chunks of other
:18:00. > :18:04.major energy grids in Australia. How could it be a question of national
:18:05. > :18:08.security? It makes perfect sense. I have had the benefit of being
:18:09. > :18:13.briefed on what the national security concerns were. I would like
:18:14. > :18:19.to know what they are. Despite your warm words you do not trust the
:18:20. > :18:23.Chinese, is that it? We have to protect and uphold very closely
:18:24. > :18:28.national security. You understand I will not... I don't understand that
:18:29. > :18:32.all. You are saying China is the closest economic partner you have
:18:33. > :18:37.and you are staking a lot of your future on this race and ship with
:18:38. > :18:41.China. And you are telling me that they cannot buy a stake in an
:18:42. > :18:44.Australia power company because of reasons of national security. --
:18:45. > :18:47.relationship with. There are particular features of this asset
:18:48. > :18:51.that did trigger concerns in relation to national security.
:18:52. > :18:55.Frankly, it would not have mattered whether it was Chinese or Canadian
:18:56. > :19:03.or American interest. Or even UK interest! It would not matter what
:19:04. > :19:07.that interest was. We had to maintain this asset in Australian
:19:08. > :19:15.hands. The land steel. Let us talk about that. The guy who is the owner
:19:16. > :19:20.of the capital, that wanted to buy this huge ranch operation, he said
:19:21. > :19:24.when he was knocked back, the Turnbull government, your
:19:25. > :19:28.government, has got a protectionist attitude now towards Chinese foreign
:19:29. > :19:32.investment and it will discourage investors from taking further money
:19:33. > :19:40.into Australia. Well, I mean, one, that is not accurate. And two,
:19:41. > :19:44.saying no twice in 15,000 times is not protectionist. And three, we are
:19:45. > :19:47.continuing to see great interest in investing in Australia. We are
:19:48. > :19:54.having a diversified approach is a pity fact is that Chinese investment
:19:55. > :19:57.in Australia is quite small compared to UK and American investment into
:19:58. > :20:01.Australia... Malcolm Turnbull has been very critical of China on a
:20:02. > :20:06.political level. In July we had a major moment when your government,
:20:07. > :20:09.along with the Americans and the Japanese, condemned China for its
:20:10. > :20:16.policies in the South China Sea is following an international court
:20:17. > :20:20.decision on the disputed islands. Australia has a strong stance on
:20:21. > :20:24.this. It seems to me your government has decided it needs to signal to
:20:25. > :20:30.the UN that despite your strong economic ties to China you are still
:20:31. > :20:34.four square behind the US when it comes to your geopolitical posturing
:20:35. > :20:40.in the reason. Am I right? Australia has always been able to
:20:41. > :20:44.pragmatically maintain relationships. Have your cake and
:20:45. > :20:50.eat it? Frankly, our relationship with China is mature. From time to
:20:51. > :20:55.time there are politically irritants, in the same way we have
:20:56. > :21:00.them with Indonesia or the US, and that is part and parcel of being a
:21:01. > :21:07.mature democracy. We put for our point of view in a consistent way.
:21:08. > :21:14.That comes back to my point and the magazine the Economist, of being
:21:15. > :21:21.overexposed to China. You were called a paper cap that will not
:21:22. > :21:25.lash. All of these things with Beijing, they could in a flash be
:21:26. > :21:29.turned into something much more negative. Ultimately, it comes down
:21:30. > :21:33.to this. Is the relationship with China one that is of mutual benefit,
:21:34. > :21:38.the answer is clearly yes. The great thing that comes from this
:21:39. > :21:43.relationship is that it is a very mature relationship. So we can have
:21:44. > :21:48.a frank conversation around issues. We indeed held our position with the
:21:49. > :21:52.South China Sea. But in the same token we can have a great
:21:53. > :21:56.relationship with Japan, a great relationship with South Korea, and
:21:57. > :22:01.maintain our lifelong friendship with the US. Well, if final thought,
:22:02. > :22:05.then. You have been the fast in being optimistic throughout the
:22:06. > :22:09.issue. You have called Australia economically liberal. But you are
:22:10. > :22:13.not immune to the pressures and political tensions I have talked
:22:14. > :22:19.about elsewhere. An interesting poll recently on ABC Australia found that
:22:20. > :22:22.most of the public favour a ban on Muslim immigration. You are a
:22:23. > :22:27.country that still needs immigrants to feed economic growth. What do you
:22:28. > :22:30.think about that, the changing mood in your country, especially with
:22:31. > :22:35.certain kinds of immigration, it seems, like Muslims. I think the
:22:36. > :22:40.primary concern that really that poll reflects is a sentiment about
:22:41. > :22:43.values. I have consistently made the point in public life that what
:22:44. > :22:47.Australian ones are people emigrating to Australia who share
:22:48. > :22:50.our values. Where they believe their reasoning consistency in values,
:22:51. > :22:55.that is the main point of conflict. -- there is any consistency. Are you
:22:56. > :23:03.saying wasn't do not share your values? The opposite. -- Muslims
:23:04. > :23:08.don't. No, I haven't are saying we need to align with... I am unclear.
:23:09. > :23:13.You are saying those Australians who want a ban on Muslim immigration,
:23:14. > :23:19.are they right or wrong? I am opposed to a view that says ban all
:23:20. > :23:22.was limbs. I think that is a complete knee-jerk reaction. --
:23:23. > :23:28.Muslims. Are you worried about what is happening in Australia with
:23:29. > :23:33.public opinion? Part of my race responsibility as a public leader is
:23:34. > :23:40.to be clear about what is really stands for. You are right, we need
:23:41. > :23:43.immigration. Our population is growing because of the national
:23:44. > :23:46.growth rate. That is crucial to the long-term economic interests of the
:23:47. > :23:53.country. When it comes to those immigrants coming into the country,
:23:54. > :23:58.though, Australians expect a consistency of values through rules.
:23:59. > :24:03.That is not about precluding Muslims. That is my point. If you
:24:04. > :24:07.are a Muslim and share Australian values, fantastic, you should be
:24:08. > :24:09.able to get into the country. But if you are someone who doesn't share
:24:10. > :24:15.the virulent stick valleys Australians have, then we should be
:24:16. > :24:24.saying no you cannot come in. -- pluralistic. We have to stop there.
:24:25. > :24:26.Steven Ciobo, it has been a pleasure to have you on the show. Thank you.
:24:27. > :24:44.Thank you. THEME PLAYS. After nearly a month of easterly
:24:45. > :24:48.winds, we're now starting to see