KIERAN GILBERT: I spoke to the Foreign Minister from the United Nations in New York just a short time ago and began by asking her about this comment by Sarah Sanders about potential carve outs for Mexico, Canada and other countries and could that include Australia?

JULIE BISHOP: That’s most certainly been the message we have been giving to the White House and the Trump Administration ever since the announcement in relation to steel and aluminium was made and our representations are based on that exemption of national security. I do note that the United States is currently re-negotiating the North America Free Trade Agreement with both Canada and Mexico, and so this might be a matter that is raised in the context of those renegotiations. Nevertheless, Australia has been putting its case and we will continue to press our case, that we should be exempt on those grounds. There is also an exemption contained in their trade laws relating to specific companies. And so another avenue is for companies to seek an exemption and we will most certainly be pushing that line as well, but the Australian Government is determined to continue to advocate that Australia should be exempted from this.

KIERAN GILBERT: Is this a glimmer of hope because up until this point, my understanding has been — and certainly the language from the White House has been — that there would be no nation-wide exemptions.

JULIE BISHOP: It is a change in the language, yes that is right, so we will most certainly push our case even harder, but we were already in contact with the Trump Administration. I’m scheduling a call with Secretary of State Rex Tillerson — he is currently travelling. I spoke today at a public lecture at the Asia Society here in New York, and Americans were present, and I made the point, I think very directly, that tariffs and increasing tariffs leads to economic decline. It won’t have the outcome that some might think. Protectionist measures have been proven over history to lead to economic decline so we are pushing the overall message that increasing tariffs is bad for economies like Australia but also specifically that should the United States continue down this path Australia should be exempt as a very close ally and partner of the United States.

KIERAN GILBERT: Exactly, if countries are exempt on national security grounds surely Australia with this Government’s commitment to increase defence spending as well as an important ally in this region - that would have to be factored in, wouldn’t it?

JULIE BISHOP: We have made the point very clearly that no two countries could claim to be closer than Australia and the United States in terms of our defence and security and intelligence sharing and the interoperability between our militaries. So, we will of course be pushing that line. Whether the Administration accepts our argument is yet to be seen, but we are doing all we can to get the message across. It is interesting that tomorrow, Australia time, on the eighth of March, Steve Ciobo, our Trade Minister will be signing the Trans-Pacific Partnership in Santiago. This is an example of Australia and other countries embracing free and open liberalised trade and investment for the benefit of all the eleven member economies of the TPP-11.

KIERAN GILBERT: I want to ask you specifically about that in a moment, but just if we can focus on the tariffs for the next little while. Donald Trump has previously given the Prime Minister assurances, direct assurances, at the G20 last year in Hamburg that there would be exemptions. Will you raise that as well when you speak to Secretary Tillerson?

JULIE BISHOP: I wasn’t present at that particular meeting, so I can’t judge or comment on the tone or the circumstances, but I’ll most certainly be putting the case to Secretary Tillerson that if there are exemptions to be made then Australia should be amongst those countries exempted, but overall there’s a broader message and that is increasing tariffs in this way risks retaliation. Action then brings reaction, and we don’t think that will be the least bit productive. If for example, other countries seek to impose tariffs on US goods it leads to a trade war, and nobody wins out of that. If the United States believes that there has been unfair competition, there has been unfair trade, there has been dumping of products in the United States then there are mechanisms available to it under the WTO, under the rules-based system, that the United States helped create, that can be utilised to get an outcome that is more favourable.

KIERAN GILBERT: We are already seeing the Trade Commissioner with those very threats on things like peanut butter and juice imports to Europe from the United States, so we are already seeing that start to emerge. With Gary Cohn, the Economics Adviser, leaving the White House, he is someone who Australia had a voice with, I know Joe Hockey had very strong contact with Mr Cohn and now he is gone. Does this worry you about the direction of the White House?

JULIE BISHOP: Indeed, we’ve had very close engagement with Gary Cohn as the Administration’s Economic Adviser. I met with him here in New York last September when we discussed energy policy and his views very much aligned with the Australian Government’s way of thinking on energy policy and also on trade. With him leaving, I understand over a policy difference, that is one voice less that we have in the White House. But of course we will continue to deal with Secretary of State Rex Tillerson and the Commerce Secretary and others to get our message across that we don’t believe that raising tariffs is in fact going to lead to the outcome that otherwise one might assume and in fact it is a race to the bottom. You rightly say that the Europeans are threatening to respond with tariffs on a whole range of products, I understand even Harley Davidsons and Levi jeans — iconic American products and the United States responded by saying they could impose tariffs on Mercedes Benz made in the European Union and this is what happens, it leads to a downward spiral and that is not good for any country. What we want to see is a continuation of US leadership on open, liberalised trade and investment. Now, Australia is entering our 27th consecutive year of uninterrupted economic growth. That’s a world record no other economy, or comparable economy has achieved that — it doesn’t happen by accident. It happens through ongoing economic reform and ensuring that our goods and services can be sold into markets around the world, and the free flow of ideas and capital and goods and services - so that is what we will be advocating to the Administration.

KIERAN GILBERT: Only a bit over a week ago that the Prime Minister was greeted with a lot of fanfare along with his wife Lucy Turnbull at the White House and all the talk of mateship, but it won’t reflect that well on that so called mateship if they don’t provide this exemption.

JULIE BISHOP: It is a very important issue for us and we are acting in the interest of our steel producers here in Australia, but more generally to ensure that free and open trade continues between Australia and the United States. We do have the Australia-US Free Trade Agreement. The US has a trade surplus in its favour, we have a trade deficit with the United States but we don’t complain about it because the goods and services we buy from the United States adds to the productivity of our nation. We have a very healthy economic relationship with the United Sates. They are our second largest goods partner, merchandise partner after China, they are by far the largest source of foreign direct investment into Australia. So we have a very close economic relationship with the United States and we certainly want that to continue.

KIERAN GILBERT: In your talks at the United Nations and you’ve touched on this earlier, but the Trans-Pacific Partnership, the TPP11, it is being signed formally in the early hours of tomorrow morning Eastern Australian Time by the Trade Minister. Is this something you are picking up from your colleagues as well that they want to try and use this as the foundation to push back against the protectionist forces being unleashed by the White House?

JULIE BISHOP: Well very much so. The Trans-Pacific Partnership, the TPP11, is now being seen in an even brighter light in that it represents a very high quality comprehensive free trade agreement, indeed the gold standard, and eleven nations including Australia, Japan, Canada, Mexico, Singapore, Vietnam, significant economies have come together to agree on much better trade terms for our eleven countries. And there is a great deal of interest in it now — particularly at this moment in history at this time — other nations are indicating an interest in joining. And I was in the United Kingdom recently and the UK are very keen to be considered for TPP once they get out of the European Union. So, it is being held up as an example of a high quality free trade agreement that will bring enormous benefits to the member countries. Because we did it as an open agreement, that means that other countries can accede to it, can come on board, as long as they adopt the principles and foundations of the TPP-11 then it can be an even broader free trade agreement and that’s an ambition Australia most certainly has.

KIERAN GILBERT: A few other issues before I let you go. North Korea — it looks like there has been some progress, but the Director of National intelligence, for one sceptical about that. The Prime Minister says the sanctions need to maintained and enforced in full, but what’s the view at the UN and your view personally — is there a fair dose of scepticism around this?

JULIE BISHOP: The fact is the diplomatic and economic pressure that we have placed on North Korea, including through the UN Security Council backed sanctions, is having an impact. That’s why we are seeing North Korea reach out to commence negotiations or talks with South Korea or indeed with the United States. But, we have had many false dawns before with North Korea and after commencing negotiations, even coming to agreements, they have gone back on their promises. We’ve seen this before. We always welcome any efforts at reducing tensions, but the fact remains that North Korea is in direct defiance of numerous Security Council resolutions that make illegal their ballistic missile and nuclear weapons programs. So until North Korea is prepared to give up these illegal programs the talks are likely to be just that, talks.

KIERAN GILBERT: So fair to say there is a quote a bit of scepticism at the UN around this issue?

JULIE BISHOP: Many countries here at the UN have seen this before, including Australia. You might recall that North and South Korea marched as one team at our Sydney Olympics in 2000, yet within six months North Korea had kicked out the independent weapons inspectors and had gone back to continuing down the path of building an illegal ballistic missile and nuclear weapons program. And, while we welcome any efforts to bring North Korea to the negotiating table and to deter it from making threats against its neighbours in the region, we of course wait to see real action on the part of North Korea. There have been so many false starts before that it is hard not to be sceptical.

KIERAN GILBERT: Finally, the former Secretary of your Department and the Defence Department as well, Dennis Richardson, one of the most respected and longest serving public servants has reiterated his call for Australia to participate in freedom of navigation exercises within 12 nautical miles of reclaimed Chinese territory in the South China Sea. He believes we should be involved in those exercises. Do you expect those calls to increase over coming months, particular given the fact that we’ve got a former, or outgoing Admiral and Commander Harry Harris arriving in Canberra as the next US Ambassador, someone who is of a similar view to Mr Richardson?

JULIE BISHOP: The Australian Government has made our position clear. We will continue to traverse the South China Sea. We have a significant presence there already and that will continue. We will continue to exercise our rights to freedom of navigation, pursuant to international law, as we have always done and we will continue to do so. What we won’t do is unilaterally provoke an increase in tensions in the South China Sea. There are a number of claimants, there are disputed territories and there are negotiations underway, between, particularly ASEAN, the South East Asian nations, and China. Australia will continue to do what we have always done, uphold our right to traverse the South China Sea in accordance with international law, and we already have a substantial presence in the South China Sea.

KIERAN GILBERT: Just not within those 12 nautical miles of that territory, as not to provoke one party in this…

JULIE BISHOP: What I am saying is that Australia acts in accordance with international law. We don’t have a global FONOPS program as the United Sates does. We support the United States carrying out its global freedom of navigation exercises all around the world. Australia doesn’t have that capability — that’s not our focus. But when it comes to the South China Sea we already have a significant presence there. We exercise our right of freedom of navigation. These are our most important trading routes, so of course we exercise freedom of navigation and freedom of overflight in accordance with international law.

KIERAN GILBERT: Foreign Minister, thanks for joining us from the UN in New York — appreciate it.

- Ends -

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