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4 August 2021

With Greg Earl

Abbott goes to India

The Morrison government has sent former prime minister Tony Abbott to India to revive long-running efforts to strike a trade deal between Canberra and New Delhi.

Australia has more active former prime ministers than in the past, due to the high turnover of party leaders in recent years. It is sensible for governments to use them as special envoys, especially in countries where former leaders command respect.

But Abbott is a curious choice for this particular mission.

He is already a trade adviser to the United Kingdom, which is competing with Australia to establish a trade deal with India.

As prime minister, Abbott also created unrealistic expectations about trade talks with India when he committed to reaching an agreement within one year of meeting Prime Minister Narendra Modi in 2014.

A deal with India is the missing link in Australia’s bilateral trade network. But there has been a stalemate on the issue over the past seven years, suggesting that a comprehensive deal is unlikely. A set of sector-specific agreements may be required instead.

Australia India Business Council chair Jim Varghese told a recent technology summit that IT was “one form of trade that can fast-track the relationship”.

But Confederation of Indian Industry executive Pranav Kumar told a trade conference that Australia would probably have to wait its turn while India pursues trade deal talks with the larger economies of the United Kingdom and the European Union.

And Australian Industry Group policy director Louise McGrath warned that after several false starts, Australian businesses would not be tempted to engage with India by recitations of the “big numbers”, such as the size of its population or its middle class.

Reviving trade talks with India will require focused work, and may prove more difficult than it seems.


Biden’s ASEAN pitch

The Biden administration has stepped up efforts to rebuild the diplomatic stature of the United States in South-East Asia, sending a number of high-profile officials to the region.

The deputy secretary of state, Wendy Sherman, made trips to Indonesia, Cambodia and Thailand two months ago, US defence secretary Lloyd Austin visited Singapore, Vietnam and the Philippines last week, and Vice-President Kamala Harris is set to travel to Singapore and Vietnam this month.

While in Singapore, Austin directly addressed concerns that the United States is trying to draw South-East Asian countries into a conflict with China, declaring, “We are not asking countries in the region to choose between the US and China.”

This week, Secretary of State Antony Blinken is attending meetings with regional foreign ministers at the midyear meeting of the Association of Southeast Asian Nations (ASEAN), which is being held online due to rising COVID-19 cases in the region.

Notably, Indonesian foreign minister Retno Marsudi has opted to meet Blinken in Washington instead, where the two countries launched a previously announced strategic dialogue.

In recent years, the United States has not always sent sufficiently high-level representatives to Asian summits, and has been perceived as not paying enough attention to South-East Asia. But these latest meetings are giving substance to Joe Biden’s commitment to talk more with its partners in the region.

Meanwhile, Australian ministers have had limited in-person contact with Australia’s closest Asian neighbours since the pandemic started. Dan Tehan and Zed Seselja only recently visited the region since being appointed as trade minister and international development minister respectively.

But the Morrison government will be relieved to be overshadowed by the Biden administration. Australia has long tried to persuade the United States that by just turning up to summits, it can play a big role in ASEAN’s opaque, slow-moving diplomatic culture.

Greater American engagement should also pressure ASEAN ministers to deliver on their claim that they are central to regional diplomacy by increasing their efforts to resolve the Myanmar conflict.


Pacific challenges

Power has changed hands in Samoa for the first time in forty years, after a disputed election led to a four-month constitutional crisis.

The new prime minister, Fiame Naomi Mata’afa, deserted the long-ruling Human Rights Protection Party to lead the newly formed Fa’atuatua i le Atua Samoa ua Tasi Party to a narrow victory at the polls in April.

Her election has been welcomed by the Morrison government, which subtly backed the ability of an independent Samoan judiciary to resolve the post-election crisis. In the Pacific region, political stalemates often involve the misuse of both the military and judiciary.

The Australian government has also been encouraging small Pacific island countries to be cautious about taking on Chinese debt, so it will no doubt be pleased by Fiame’s decision to scrap construction of a $100 million port financed by China, one of the first actions taken by her new government.

Canberra has stepped up its own efforts to foster more Australian business engagement in the region, this week joining the ANZ Bank in financing Fijian airport infrastructure.

Still, big challenges loom in the Pacific. The region faces a severe economic downturn thanks to COVID-19. Calls for the creation of new Pacific nations in Bougainville and New Caledonia are gaining momentum. And the Pacific Islands Forum still faces the loss of its five Micronesian members next year.

The election of Fiame, a leader with fresh ideas but substantial political experience, should be a positive for Australia as it tries to navigate these issues.


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