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The Hon. Scott Morrison MP Prime Minister

TRANSCRIPT DOORSTOP OSAKA, JAPAN FRIDAY 28 JUNE 2019

E&OE…

PRIME MINISTER: ...Uninterrupted economic growth that we cannot take for granted and without which we cannot do the things that we want to do and continue to do, whether it’s in health, in education or the National Disability Insurance Scheme, supporting our action on climate change. All of this is made possible by ensuring we keep our economy strong, that’s why it sits at the heart of our agenda as a Government and will continue to. And so being here today, as part of this forum, joined by Minister Cormann and Minister Birmingham, to be advancing Australia’s interests in trade, advancing Australia’s relationships that support that trade and the rules-based system that underpins all of that trade is incredibly important. Our winemakers exporting wine, our educational institutions welcoming international students, tourism businesses welcoming tourists up in North Queensland or over in Western Australia or down in Tasmania. All of this depends on productive relationships, a global trading system that has clear rules that means that people can invest with confidence, whether it’s in Australia or elsewhere.

It also is a recognition that Australia is an open economy. Our success is also impacted by the health and wellbeing of the broader, global economy and this is why we’re keen advocates of ensuring that where there are tensions and where there are issues that we play a constructive role to ensure that they can be resolved. But also having a clear-eyed understanding about where things are at and the responses and actions that we need to take as a Government to put Australia in the best possible position. So while we acknowledge and recognise that there are genuine and serious and real tensions in the biggest bilateral relationship in the world today - between China and the United States - that doesn’t mean we sit there and wait for that to come to some form of resolution. We seek to inform those discussions through our relationships, but equally we just get on with it in the many other relationships we have. And two of the biggest running right now for us and for this here is the RCEP arrangement that sits principally driven out of ASEAN, as well as our efforts to land an agreement with the EU.

Now, continuing to be active on these other trade agendas, while at the same time appreciating what the impact is with the biggest bilateral relationship having tensions and what that means for the global economy, are the practical things that we do to respond. And so that’s why we're here. It’s about jobs, it’s

about those watching from home in Australia, it’s about your job and it’s ensuring that your job can be in the most strengthened position it possibly can, through an Australian economy that is open, seeking out, taking opportunities to secure Australia’s economic future.

JOURNALIST: Prime Minister, it looks like we’re still in the same stalemate we were in in Buenos Aires back in December. How much more serious is the situation now than it was six or seven months ago, in terms of the impact globally and on our domestic economy if there is no resolution tomorrow?

PRIME MINISTER: Well. I think it would be unrealistic to expect a resolution tomorrow. But the short answer to your question, Phil, is it is more important, it’s more serious and, in fact, the IMF today reminded G20 members of how serious. It’s the difference between 3.6 per cent and 3.1 per cent in global economic growth on their assessment of the potential impacts of the implementation of further tariffs measures. So that is a serious measure. There is some influence and input we can provide to that. We were doing that last night and again I was doing that today in the brief conversation I had with President Xi. But the broader conversations are also incredibly important. The other 18 economies that sit around the table and well beyond the G20 as well. The meeting I had today with the Prime Minister of Thailand, who not only is important in that capacity, but also leading ASEAN this year and that ASEAN forum sitting at the heart of the RCEP agenda is incredibly important. I am very encouraged, whether it is from my meeting with Japan yesterday with Shinzo Abe or others, the keenness to see the RCEP agenda progressed.

JOURNALIST: Prime Minister, you had an opportunity to speak with President Xi this morning, what did you talk about?

PRIME MINISTER: We talked about the tensions that exist in the (China - US) bilateral relationship and as I said last night to the President, the impact that that issue being unresolved has on the broader global economy. The comment isn’t made as a criticism, it is just made as a candid observation and I am not the only one making it who is here. There is a strong awareness and realisation about what this means, but ultimately it is for those two parties to resolve the issues. I tried to describe it today in my interventions in the forum that what we are seeing here is the global economy at a new threshold, and the need for global trading rules to be modernised to just get that. I mean, there is no point going around pointing fingers. The simple fact is, over the last 25 years and longer, the global economy has transformed and the systems that were built to support it need updating and modernising. That is no one's fault, it is just a need.

JOURNALIST: Prime Minister you appeared to be deep in conversation with Justin Trudeau and Emmanuel Macron ahead of the plenary session and they’re backing your initiative on social media. Who else have you managed to talk to about that and what is your best case scenario for the outcome this afternoon?

PRIME MINISTER: Well, whether it’s today or tomorrow, I do greatly appreciate the support from Prime Minister Justin Trudeau and President Macron, but more broadly there has been very warm support for what we’ve been doing. I particularly want to thank Prime Minister Abe, who has obviously encouraged me to pursue this in the spirit of unity, which he is keen to characterise these meetings, and that is exactly what we have been doing. It is important to be clear about what we aren’t doing as well as what we are doing. What we are not doing is seeking to constrain free speech. It is not about that. It is about the internet being weaponised by violent terrorists, in the same way that they can pick up a more standard weapon. This is now part of the armoury of terrorists, and the G20 has an opportunity to send a very strong signal about that to those who govern the internet, which is not countries, ultimately, it is the

companies that established the platforms. And we believe in an open and free web, we do not want to change that. But while we celebrate the technology and its positive applications, what happened in Christchurch in March was a chilling wake-up call to how these important platforms can be weaponised by the most heinous evil.

JOURNALIST: Prime Minister, the deep concerns about Iran are part of the backdrop of this summit. Within a few days, according to independent experts, Iran will exceed the cap on enriched uranium under its nuclear deal from 2015. You’ve expressed concern about that deal in the past.

PRIME MINISTER: I have.

JOURNALIST: And last December you said there were going to be further measures that Australia would take, as well as supporting international efforts. Do you think Australia needs to do more now to make sure Iran honours that deal and if so, what will the options be?

PRIME MINISTER: We want to work with those that are direct participants in that arrangement, first of all. I have had my reservations about that arrangement but, frankly, it is better than anything else that is out there was a conclusion of our review. But that certainly wasn’t an endorsement of it being a wonderful agreement. The President of the United States uses different language to describe it. So to that extent, I think we had a bit of a shared understanding of its limitations. The greatest criticism against it is that it is quite limited in what it seeks to do and it leaves open a lot of activity for Iran. Last night we obviously had a discussion about that situation, but it is very premature for that to have extended to roles Australia might play. We are not in that territory and no requests were made. We are not anywhere near that stage, but there is, I think, a clear objective here from the United States which we would support and that is to get them back to the table, to get a tighter set of controls and conditions in place. That is good for world peace, it’s good for stability of the region and we support that.

JOURNALIST: Numbers out today show the Budget is back to balance [inaudible] of May and we’ll be back in surplus by the end of the financial year. A lot of that built on the back of coal and iron ore exports. Do you see any overlap with what is going on globally with the Chinese relationship? Are you confident [inaudible] the export markets safe from all this?

PRIME MINISTER: Well, first of all I am not over-reading those figures today and neither is Mathias or Josh. There is still another month to go and there’s been some, there’ll be considerable payments in June. We have just concluded two agreements on the NDIS with Victoria and with Queensland. Queensland has only been arrived at in the last 24 hours, and that involves payments in the June month. So I don’t think we should over read into those figures today. I would say the reason the Budget is in such a good position is because we have been creating a thousand jobs a day, which is people actually paying taxes rather than receiving welfare payments. And, no doubt, there has been an assistance at the margin that has come with where commodity prices are at and they’ve obviously been for iron ore quite strong. That is not something I’m going to complain about, but it also means that you can’t take any of this for granted. Yes, I welcome all that but at the same time the long term position of the Budget is going to be supported by the economic policies that we have put in place and will continue to put in place.

JOURNALIST: Is there any indication yet whether Alek Sigley has been detained in North Korea?

PRIME MINISTER: I haven’t got anything further on that for Alek, and my thoughts are with him and his wife, who is Japanese, here in Tokyo, and his family. Obviously there’s been contact between DFAT and the family. I have had the issue both raised with me last night and today by other leaders and I have raised it with them as well, those who particularly have insights and abilities to assist us and those offers of assistance have been very genuine. But I must say my… our key focus at the moment is to ascertain precisely where Alek is and in what circumstances, and that is the focus of the efforts of our officials and our partners right now.

JOURNALIST: Have you raised this with President Xi today?

PRIME MINISTER: It wasn’t a matter I discussed with him, no, in the short time we had available, I didn't have that opportunity. But I’ve discussed it with many other leaders.

JOURNALIST: Prime Minister just on Iran again, in the past Australia has escorted ships in the Middle East when there have been concerns about piracy. We’ve seen threats to oil tankers in that region. Would there be any role for Australia perhaps in escorting oil tankers in that region, is that something Australia could do to help?

PRIME MINISTER: I'm not getting into hypotheticals on this. At this stage, there has been no request for that and we have no plans for that. We'll monitor the situation closely. It's not unheard of to have Australian frigates in that part of the world engaged in Maritime operations. That is not unheard of but for the precise operations you are talking about, that would require a different analysis.

JOURNALIST: Prime Minister, you said you spoke with President Xi and you have expressed concerns about the trade situation. What did he say to you in reply to that and last night you said that you were optimistic, there was a sense of determination that President Trump was keen to resolve this issue. Did you have the same level optimism and sense of determination from President Xi today?

PRIME MINISTER: Yes, there is obviously a determination to resolve it. But I am not naïve about the difficulties of that occurring. The fact that they’re engaging is positive, but I'm similarly aware that there are very real, substantial and difficult issues to be resolved. And I set out a lot of those in a speech I gave earlier this week. Those same points I made this week, are being made and have been made by other leaders. I was talking to President Widodo today and they have been quite forward leaning on the issues of WTO modernisation here at this meeting and the paper that they’ve prepared, and that’s welcomed. I think there is just a frustration, we all know what needs to happen in terms of these WTO rules. And the WTO have been seeking to provide some guidance about how that occurs. I mean, what we want to see right now, practically, is we want to see the text in relation to fisheries distributed and then see if we can make progress on that by the end of the year. We want to see the industrial subsidies discussions continue. We want to see next year the agricultural issues put back on the table and for those to be addressed. So our focus is a very practical one.

JOURNALIST: Prime Minister, you said it’s unrealistic to expect a final deal tomorrow. Is it realistic though, are you hopeful there might be a pause in the cycle of tariffs? That they might come up with a short-term end to that?

PRIME MINISTER: I'm simply going to wait and see, Kieran. They’ll meet. As I said coming into this meeting, things retreated from where they were at post-Buenos Aries. That is disappointing, and it does require them to come a bit of distance, I think, to get to where you are talking about. And I hope they do. But that

means that will either happen or not happen. What we have to do is continue, I think, in the advocacy we are making, but also not stand still. With the TPP, I mentioned how former Prime Minister Turnbull kept going when it came to the TPP, despite the fact that the United States took their decision - which wasn’t a surprise, they went to an election. They said they weren’t going to do it, fair enough, no judgement, and the door remains open in the way the TPP was pursued. What we're seeing now with RCEP is a similar opportunity for the region to pursue that as a clear sign that they can do what they choose to do, they are all sovereign states. But as a region, we will continue to pursue these multilateral opportunities. Why? Because they are in our interests.

JOURNALIST: Prime Minister, Prime Minister Abe said that he harbours grave concern for the current situation on trade. Is your language that strong on that? And also, was the meeting with Xi Jinping, would you describe that as positive? Did you have a positive interaction?

PRIME MINISTER: Yeah look it was, I would. He took the opportunity to remind me that he has been in every state of Australia. He retains a genuine, I think, interest and affection for Australia. I think Tasmania features pretty heavily in that too. We talked about Tasmania. So at that level… the other thing we talked about was - as I have discussed on other occasions - the significant people to people relationships now that exist between Australia and China, which add a whole other dimension to the relationship. And I think that's a positive element to the relationship. It’s not a leverage point or anything like that, it just shows that there is a greater connection and where connections are great between peoples, then the opportunities, I suppose, to have arrangements that reflect that culture is a good one. So I remain positive on both of those, but our position is what we are seeking to do, is to be very clear about what our interests are, what our decisions are, the reasons for them, to do that in a respectful and an engaging way and to have the consistency and the patience to pursue a longer term relationship. And that is exactly what we are doing. That doesn't come at the expense of other relationships. If anything, what all of this demonstrates is why Australia has to be out and about as much as possible, engaging with as many countries as we can, to secure as many opportunities as we can. I mean, 76 per cent of our merchandise trade now is covered by trade agreements, we’ll get that to 90 (per cent) by 2022. Thank you very much.

[ENDS]

Contacts: Press Office, (02) 6277 7744 The Hon. Scott Morrison MP, Sydney