PM: I'm here with Dr Emerson, the Minister for Trade and we've just attended a meeting convened by President Obama on the Trans- Pacific Partnership and I'm delighted to be able to announce that following that meeting we have reached broad agreement on the Trans-Pacific Partnership - on the broad outline of the Trans-Pacific Partnership.
I've said consistently to Australians that trade equals jobs. We are a great trading nation and anything we can do to increase our capacity to trade is good for Australian jobs. To give you a sense of the scale of this, of working on the Trans-Pacific Partnership is part of ultimately leading to a free trade zone in the Asia Pacific. It's an important development for our nation's trading future. When we look at the number of economies involved in the Trans-Pacific Partnership, currently the countries involved account for around one quarter of global GDP. As we were discussing yesterday, Japan has indicated an interest in becoming involved in the Trans-Pacific Partnership - if that occurred then this would cover more than one third of global GDP. So, in scope, the Trans-Pacific Partnership encompasses a range of economies and a great scale of global GDP. In ambition, and this is very important, in ambition the TPP has as a goal eliminating barriers to trade in our region. That is, eliminating tariffs, a very important expression of the level of ambition of this new partnership.
So, we will now keep working as quickly as possible with the nations involved in the Trans-Pacific Partnership to bring this matter to a conclusion. In particular, we are aiming for the Trans-Pacific Partnership to reach the stage of a legal text during the course of 2012. I am delighted with this development. There is a great deal of ambition and scope in the Trans-Pacific Partnership and this is good for Australia, because with our proud trade credentials that means jobs for Australians.
I'll turn now to Dr Emerson for some comments on the TPP and then come back for some broader comments on APEC.
MINISTER EMERSON: Thank you PM. A defining feature of the Trans-Pacific Partnership is that it has political momentum. There's an enormous amount of enthusiasm for the Trans-Pacific Partnership amongst the nine members and most particularly the United States is very keen on seeking to achieve agreement on legal text in 2012. So we want to capitalize on the fact that there is so much political will here to create a free trade grouping that would be, with the addition of Japan, constituting more than one third of global GDP; would include, with the addition of Japan, the biggest and third biggest economies on earth. We have long sought to position Australia in the Asian region in the Asian century. The Prime Minister, through her White Paper exercise, has been doing this and the Trans-Pacific Partnership is an expression - an early indication - of our commitment to integrate our economy more closely into the fastest growing region on earth because that means more jobs and more prosperity.
So we're pretty excited about it. We're excited about the fact that the partners, the nine partners have agreed that the goal is to eliminate all tariffs which helps move this from a concept to something that's very practical and very real because the elimination of tariff barriers means that we have access to other countries' markets. Our own tariffs are very low or zero but having this goal expressed in the statements today means that other countries are fair dinkum about that. Better access for our exporters, whether they're agricultural exporters, whether they're manufacturing exporters, and increasingly in the 21st century, the service economy where all the new opportunities present themselves for Australia.
So a very exciting development - we're thrilled that the President of the United States is so keen on this. The other eight members are very keen on it and are also, in respect of the possible inclusion of Japan and other countries that have expressed an interest. We've already said that we're positive about that. But we need to maintain a high level of ambition, a high level of ambition for the Trans-Pacific Partnership and we need to maintain the pace. Very hard to gain political momentum - once you've achieved you've got to keep rolling and that's what we'll do.
PM: So, if I could thank the Minister for Trade for his hard work so far but as you can tell, from today's discussion, we are delighted with this result but that means that there is more hard work to come to bring this to a conclusion in 2012 and it will be good for our economy and good for jobs. As we move towards the APEC meeting itself, the focus on trade will continue. In particular, Australia will be taking the same message to APEC that we took to the G20 and a message that the Minister for Trade has been taking around the world, which is that we need to recognize that the DOHA discussions have reached gridlock and we need to take a fresh approach if we are going to see progress. We achieved at the G20 a broad recognition that a fresh approach is required and that was reflected in the leaders' statement. We'll be taking that perspective into APEC, once again looking for a fresh approach to those global trade talks. So instead of having to wait till everybody can agree everything, we can break the round into components and get things done amongst willing countries.
Second, on the question of trade as we move into the APEC discussion themselves, we will be discussing what I believe is a new frontier for trade and that is trade in environmental goods. As our region and the world grapples with the challenge of climate change, then increasingly focus will turn to having ready access to the environmental goods that make a difference to carbon pollution and to reducing carbon pollution. It's in all of our interests that trade in those goods is as free as possible so people can get access to the goods that they need so that they can cut back their carbon pollution.
Then, in addition, the APEC meeting will focus on matters associated with a seamless regional economy. There are often barriers beyond just direct trade barriers - regulatory differences between nations that can make it hard for say an Australian business to go into our region and to trade everywhere and to find it easy to do that. So the work of APEC on getting rid of those behind the border impediments will continue.
And, as I said yesterday, the APEC meeting comes at an important time in the global economy. We had a key focus at the G20 on the Eurozone crisis. This will give leaders another opportunity to share reflections on where we are with the global economy and next steps in ensuring that we can bring the global economy to a pattern of balance and sustained growth.
I'm very happy to take questions.
JOURNALIST: Prime Minister, you talked about the ambition of the TPP and you set up a framework about how we move ahead but how likely is it that we will actually get to a position of eliminating tariffs? Will some the participants want to have tariff cut-outs that they want exceptions to their rule - for example, Japan doesn't want to compete on rice, for example? So how likely would you get to something that's real?
PM: We're bringing a spirit of optimism to this and I think that optimism is justified because the amount of progress that has been made already - that we are standing here and able to see leaders endorse a leaders' statement, a broad outline of the Trans-Pacific Partnership, but also have leaders endorse the ministerial report to leaders from Trade Ministers. And that ministerial report actually discusses the elimination of tariffs. So I think we should take from that an optimistic message that people are aiming high with the Trans-Pacific Partnership. So the coverage of the Trans-Pacific Partnership is broad - around a quarter of global GDP. It could become broader with the inclusion of nations like Japan taking us to more than a third of global GDP. And the aim is high. On the aim I'll turn to Dr Emerson for some comments on your question, then we'll take some others.
MINISTER EMERSON: Well to reaffirm what the Prime Minister said. It's a very significant development that the TPP parties agreed to include the elimination of tariffs. Your question is really when or how likely. There will be a phased reduction in tariffs - there always has been. In our case we've been phasing down tariffs since about 1985 and we're pragmatic about the schedules, that is, we want the destination to be zero. The journey: we're happy to discuss because that obviously involves structural assistance in some of these countries with higher tariffs. And in respect of the entry of other countries, they'll need to sign up to similar level of ambition. That's certainly the determination of the TPP parties, we want more countries in but we want those countries in on the basis of maintaining a high level of ambition and a good pace - keeping these negotiations going at a good click.
PM: We'll go to Mark and then we'll come round. Yes Mark.
JOURNALIST: Prime Minister, sorry just to boil this down a little bit. What sectors of the economy stand to benefit most from this? What industries?
PM: I think certainly agriculture stands to benefit a great deal. We are a great agricultural nation. We have very efficient farmers, very efficient and productive farmers and when you talk to them they are very alive to the barriers that prevent them getting full access into other markets and if they had full access, then they would well and truly compete on price and quality. So for our farmers this is a very important development. Beyond our farmers we move from just growing food to actually producing food. We've got increasingly a great reputation as a quality food producer. We've got a historic reputation as a clean green producer. We are a producer of fine foods; fine wines and once again, we can get barriers that prevent us competing fairly in markets where people would want to buy Australian products but can't do it now.
For our manufacturing sector, there are impediments to selling our manufactured goods into our region. It frustrates many of our manufacturers that they can't get their products to market, once again at a fair price, so it's important for them. And I would also replicate what Dr Emerson has said and this has been a focus within the government as we work towards Australia in the Asian Century White Paper. Often when we think about the growth of Asia, people think about resources and of course that has been growing. We say let's focus more broadly, there's great opportunities here in food, in elaborately transformed manufactured goods but there's also great opportunities here in services. Whether it be accounting services, legal services, engineering services, the services that a mining industry consumes, you know, you name it, the things that we do through the knowledge and capacity and skills of the Australian people can be traded goods too. So, Australians with expertise providing services into other markets and doing that on the basis of fair competition.
Dr Emerson might want to add.
MINISTER EMERSON: I would just give you the basic statistics there. Service economy constitutes about three quarters of our domestic economy and about 23 percent of our exports. Now there's no magic in getting that up to three quarters because we are a great resource-producing nation but you can sense from that the upside potential in converting our strong service economy into a strong service export economy. And all of those businesses, large and small, the accounting firms, the financial advice, all of that is important. In a dramatically, rapidly growing region, these are the sorts of services that the TPP parties will be looking for and what we need to do is harmonize the arrangements so that's what good in Australia is good in those TPP parties. That their licences, that the regulations, are smooth and harmonized so that they can do business in any of those TPP parties.
PM: We do just need, I'll take the next question, but as we have these discussion s of trade, people may have in their minds that this is big businesses doing business overseas. In today's world and tomorrow's world with the national broadband network it will literally be increasingly possible to be a small business, indeed a micro business, where people are working from home and trade what you do internationally.
Yes.
JOURNALIST: Prime Minister, despite you optimism, is it true to say that with this broad outline of agreement , there is no agreement or schedule or timeframe at this stage to actually produce and eliminate tariffs?
PM: Leaders in the room expressed their ambition to bring the Trans-Pacific Partnership to the stage of legal text - so to work it all the way through during the course of 2012. So that is an important statement of ambition about getting this done.
JOURNALIST: Do you think it's a realistic ambition?
PM: Well we wouldn't have said it if we didn't think that it was realistic. Is it a stretch? Is it going to be hard? Absolutely, but what the trade ministers have achieved so far has been a stretch, it's been hard, and they've got it done.
JOURNALIST: It's very positive developments but - there's no doubt about that - but China is Australia's biggest trading partner at the moment, and the second largest economy in the world. Will you be working diplomatically to encourage China or towards China also joining the TPP?
PM: Well of course our great trading relationship with China will continue as we also work on the Trans-Pacific Partnership. The outlook from leaders when we met is that we are open to broadening this, to having other countries indicate their interests in being involved but we don't want that to slow down the pace of development of the Trans-Pacific Partnership. So we have, for example, had an indication from Japan and that's a good thing. But we'll be working on trade at every level as a government. We've come up with this proposal about a fresh approach to DOHA and that is being taken up by the world. That's a good thing. We focussed on this Trans-Pacific Partnership and we are seeing progress. We're also focussed on some key bilateral trade agreements and I am hoping that during the course of these APEC discussions, we can also put a focus on freer trade, easier trade in environmental goods.
JOURNALIST: Prime Minister, yesterday you mentioned at the CEO Summit that people had to adapt to more change and that it would be stressful on their lives. Given the TPP and the movement towards reducing all tariffs what about the Australian textile, clothing, footwear workers who are, effectively, the most protected in the country, what's your message to them under this deal?
PM: Well we've been reducing tariffs in the textile, clothing and footwear industry for a long period of time now. Indeed when that tariff reduction program started, I was a lawyer at Slater and Gordon and I had the opportunity to see up close what that meant for some of the working people in the textile, clothing and footwear industry. And it hasn't been an easy journey of change but it's been a journey where, increasingly we have gone up the value-added chain so that we, you know, produce things that the world wants to buy. They are not your mass production garments but they are high quality, high design, high fashion, customised - still very valuable commodities. So, progress there continues in the TCF industry and they have been adaptable to that change - it's been difficult but they've been adaptable. And the Labor government, when these tariff reductions started, so that's back in the era of the Hawke and Keating governments, did work to support that industry and those workers in a journey in change. And we've learnt some things about how to work with people during periods of adjustment.
JOURNALIST: So they can expect to see some more assistance to help them adjust?
PM: Well we are on a known and agreed path with TCF. So that path is there, it's accepted by the textile, clothing and footwear industry. More generally, can I say, I'm happy for anybody to look at the transcript of my remarks yesterday when I was at the business forum. The point I was making yesterday very clearly is what are the kinds of characteristics we will see in the future workforce and what does that mean that we need to think about in terms of our education system. The characteristics of that future workforce, I believe, will be a strong emphasis on the foundation skills. If you can't read, write, do numbers then you don't get entry into anything else. A strong focus on adaptability - we live in a world of change and that world of change will continue. A strong focus on creativity - we will be great innovators and we will bring creative skills to bear in that innovation. Great teamwork because modern work structures require people to collaborate and finally, I made the point I also think it will require citizenship skills so people can be very discriminating about the mass of information that's available to them today. They're the comments I made yesterday.
JOURNALIST: Prime Minister, you're seeing a lot of Barack Obama at the moment, the G20, you've got this, you've got next week at the East Asian Summit. Can you give us some insight into the working relationship with the US President? How you get on? Just some insights into that internal relationship?
PM: Oh I think President Obama and I personally both got on very well. I enjoy working with President Obama. I've enjoyed working with him in a variety of formats. Obviously, G20 not that long ago, then of course here at APEC, and we'll have the opportunity to see President Obama in Australia. So I think we work well together, personally get on so I'm really looking forward to welcoming him in Australia. As I frequently joke with him we're both 1961 kids. It was a good year.
JOURNALIST: Prime Minister, tonight the dinner and tomorrow at APEC, green growth is obviously one of the themes - will you be talking about Australia's recent achievements and how easy it's been to do?
PM: I do strike a fair degree of interest, as I travel, from leaders about what's happening in Australia with carbon pricing and I've been explaining to people that carbon pricing will start on the 1st of July next year. That we have a very emissions intensive economy and we're addressing that in the cheapest way possible so that we start cutting our carbon pollution. They are sometimes interested in how fast and furious the political debate has been but at the end of the day that's a matter for Australian politics. What's important for Australia is the outcome that we've struck so less carbon pollution, still working with our industries so they maintain their competitiveness, and a major tax reform which will see more money in people's pockets and see a million people out of the tax system.
JOURNALIST: Prime Minister, what sort of impact would there be on growth in Australia? Is there any dollar value or anything from a TPP? And if it was a legal text in 2012 how soon would the benefits start to flow?
PM: Well look I go to the Minister for Trade on how text and all that subsequent work rolls out. We're not in a position now to model for you an agreement that is still being worked on but there's a very clear general proposition here and that very general clear proposition is trade equals jobs. Trade's good for growth and it's good for jobs. We are a great trading nation. Ever since we've opened our doors to the world, we have made our way in world by being good at what we do. I am incredibly optimistic about the capacity of Australians to keep being absolutely world class at what we do and that means we're a great trading nation, that means more Australian jobs.
MINISTER EMERSON: In terms of modelling, I think realistically, you need to wait till the TPP takes shape. Economists are wonderful people, but they can make things up too. And you will be making it up. If you did some economic modelling about a concept and whatever you plugged in you'll get a result on the other side and everyone will say, wow look at that, isn't it terrific. So, being realistic, though, I think if we go back to those basic statistics that we're looking at an area that ultimately would be a free trade area - leading by the way to a free trade area for the whole Asia Pacific. That's the ultimate goal here. So we start with nine and keep expanding. All of those nine are APEC economies. And wouldn't it be fantastic to have a free trade area in the fasted growing region on earth. And so when I get to quantify those benefits, it will be an extraordinarily large number but let's have the TPP take a bit more shape. We get the text then we get their schedules about reductions in tariffs and other barriers overtime - that's when the modelling can occur. But anything that's up to almost one and a half times the size of the European Union but defined by rapid growth whereas the European Union is not defined by rapid growth - you'd rather be here. Right here, in the right place, at the right time in the Asian region in the Asian century.
PM: I don't think we can top that shameless plug for economists from the man with a PhD in economics so thank you very much.
MINISTER EMERSON: Thank you.