The Politics    Friday, June 28, 2019

Birmingham’s trade play

By Paddy Manning

Image of Mathias Cormann, Scott Morrison and Simon Birmingham at the G20 in Osaka

Finance Minister Mathias Cormann, Prime Minister Scott Morrison and Trade Minister Simon Birmingham at a working dinner with the president of the United States, Donald Trump, the G20 in Osaka. AAP Image/Lukas Coch

A new pan-Asian trade pact without the US could be a very good thing

Reports that Australia is hosting secret talks to strike an EU-type, pan-Asian trade deal spark hopes that the Morrison government is doing something sensible, constructive and off its own bat about the US–China trade war, rather than just urging the US and China to back down. Whether another multilateral trade deal – a 16-nation Regional Comprehensive Economic Partnership (RCEP), on top of the 10-member ASEAN group and eclipsing the TPP-11 – will help stabilise the region is not clear. But Australia can point to a solid track record of facilitating multilateral negotiations, from setting up the Cairns Group of agricultural exporters in the 1980s, to championing APEC through the ’90s, to ramping up the G20 during the financial crisis, or keeping the TPP-11 on track after US president Donald Trump pulled out in 2017. Given that expectations of a US–China breakthrough at today’s G20 summit in Osaka are low [$], and notwithstanding sharp reservations about the secrecy and terms of any new pan-Asian deal, Trade Minister Simon Birmingham should be commended for rolling up his sleeves and getting started on such an ambitious project.

The Australian Financial Review’s political editor, Phillip Coorey, wrote [$] last night that the Osaka G20 summit had similar hallmarks to December’s meeting in Buenos Aires: “So here we are again, new city, same situation. The WTO still hasn’t been reformed, the trade war is worsening and the world awaits another meeting between Trump and Xi.” An hour-long dinner between Trump, Morrison and the substantial US and Australian delegations has thrown up the possibility of a presidential visit to the Presidents Cup golf tournament in Melbourne later this year. (No doubt Iran was discussed, and alarmingly, unlike in the UK, the PM is not ruling out [$] Australian involvement in another US war of aggression in the Middle East.)

In a Parliament House address yesterday, China’s ambassador to Australia, Cheng Jingye, said [$] his country would “fight to the end” in its trade war with the US. China’s foreign ministry today issued a statement [$] that stopped short of criticising the PM over his speech earlier this week – which backed the trade grievances of the US – and said: “We hope Australia will meet China halfway and promote the healthy and steady development of the bilateral relations on the basis of mutual trust and mutual benefit.”

Details are scant about the proposed RCEP, which will include ASEAN plus China, Japan, South Korea, Australia, New Zealand and India. Birmingham has called it “one of the most economically significant trade agreements in the world”, covering 30 per cent of global gross domestic product and 3.5 billion people.

The Australian Fair Trade and Investment Network yesterday issued an open letter to Birmingham on behalf of more than 50 community groups, including the ACTU. The letter demands the release of negotiating texts, and asks the government to oppose clauses that would give greater rights to global corporations at the expense of peoples’ rights, through so-called investor–state dispute settlement (ISDS) provisions, which allow corporations to sue signatory countries over domestic laws and policies.

Opposition Leader Anthony Albanese flagged similar concerns in an interview with Sky News Australia’s Laura Jayes yesterday: “Let’s be very clear – we don’t think that investor–state dispute clauses are appropriate. Other countries exclude them from trade agreements because they raise real issues of national sovereignty when it comes to our capacity to control what happens in our national economy. So we don’t think that a commitment to being a trading nation means that you give away your sovereignty, or that you give away the idea that you examine each issue with regard to jobs being created here in Australia.”

That’s not to say, however, that multilateral trade deals should never happen; a truly pan-Asian trade pact that tied Australia more closely to the region would be welcome – exciting, even – and may work better without the US. As former foreign minister Bob Carr wrote today, Trump has changed America more radically than any president in a century, forcing Australians to think again about their great friend.

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Paddy Manning

Paddy Manning has worked for the ABC, Fairfax, Crikey and The Australian. He is the author of Body Count: How Climate Change Is Killing Us, Inside the Greens and Born To Rule: The Unauthorised Biography of Malcolm Turnbull.

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