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28 August 2019

With Jonathan Pearlman

Bypassing the US and China

In the past week, global stock markets have dipped and climbed as Donald Trump threatened to increase tariffs on China, then suggested he may not, then claimed – despite Beijing’s denials – that Chinese officials had called the White House to resume trade talks. Asked if he was having second thoughts about his tactics, Trump said “I have second thoughts about everything.”

Though Xi Jinping is not on Twitter, and both his statements and tariffs have been more carefully calibrated than Trump’s, there’s little hope that China’s president for life will readily guide this trade war to an end. Xi has shown little sign of compromising. He has no electorate to answer to and he has more power than Trump to intervene in his country’s economy to deal with any fallout.

In these circumstances, nations such as Australia suddenly find their stability and prosperity at risk because of a reckless conflict beyond their control. In France earlier this week, Scott Morrison said, “It’s up to those two countries [the US and China] to sort it out.” However, Australia and the rest of the world need not wait. Some countries are starting to form coalitions and seek trade deals and diplomatic initiatives that do not depend on Washington or Beijing.

On Tuesday, Peter Drysdale, one of Australia’s most experienced international trade experts, said it was necessary to fill the global leadership vacuum caused by Trump’s assault on international economic rules and institutions. Writing in the Australian Financial Review, he called on Australia and others to take action. “Other countries are not used to the burden of leading the trading system that they long presumed the United States would willingly carry,” he wrote. “They also have little experience in mobilising coalitions of significant partners to provide collective leadership … But that’s exactly what is needed.”

Drysdale, whose research is credited with leading to the creation of the Asia-Pacific Economic Cooperation, pointed to two recent examples of countries pursuing significant trade cooperation without Washington. The first is the effort by Canada and the European Union to develop a new system for resolving trade disputes. This would help to overcome Trump’s attack on the current dispute mechanism operated by the World Trade Organization. The other is the protracted effort to forge a new free trade deal among ten south-east nations, along with Japan, India, South Korea, Australia and New Zealand, as well as China. Progress has been slow, though further talks were held in Beijing earlier this month and an agreement could be ready by the end of the year.

Promoting such open and fair international trade through coalitions that cannot be hijacked by major powers will benefit both Australia and its partners. Trade now accounts for about 43 per cent of Australia’s gross domestic product, compared with about 30 per cent in the 1980s. But it could also set a precedent for Australia as it grapples with its next great challenge: adjusting to an Asia in which the US is not the sole dominant power. Forging partnerships is the best hope of ensuring the mantle of Asia’s commander-in-chief is not one day passed on from a US president to a Chinese president, or anyone else. Collective leadership is exactly what is needed.


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“Stop interfering” – China hits back at Australia over imprisoned Australian writer

“[Marise] Payne said she was ‘very concerned and disappointed’ at news of the arrest, and insisted: ‘There is no basis for any allegation Dr Yang was spying for the Australian government.’” Kirsty Needham & Fergus Hunter, The Sydney Morning Herald

Australia in the Gulf – will we make a difference?

“Australia would be at risk of legal hypocrisy if it flouted the rules of transit passage and allowed Australian assets to patrol the Strait of Hormuz as opposed to escorting ships directly through it. But what ships would the Australian frigate escort through the strait? No Australian-flag merchant ships use the strait.” Sam Bateman, The Interpreter (Lowy Institute)

Scott Morrison leaves G7 summit insisting world leaders are noticing Australia

“Mr Morrison was not at the big table, but he brushed shoulders with leaders of the biggest economies in the world. A meeting with British Prime Minister Boris Johnson, a warm encounter with French President Emmanuel Macron, a so-called ‘pull-aside’ with US President Donald Trump.” Samantha Hawley, ABC News

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Hong Kong – the anatomy of a protest

“It is likely that most of the demonstrators in Saturday’s march, and in all of the demonstrations and protests that will forever define the summer of 2019 in Hong Kong, will stick it out in Hong Kong for the duration. That means that unless they cover their faces, they will forever be known by both Hong Kong and Beijing for having protested Beijing’s rule.” Bonnie Girard, The Diplomat

Why Indonesia’s government is moving capital from Jakarta to a “strategic location” in Borneo

“Jakarta, home to some 10 million people, is one of the fastest-sinking cities on earth. Experts forecast that one third of the city could be entirely submerged by 2050.” Nicola SmithThe Telegraph

Free from Australian Foreign Affairs

Cross purposes– why is Australia’s Pacific influence waning?

“China’s growing aid, trade and investment has given island states choices, reducing Australia’s leverage. Australian ministers and diplomats will need to work harder to convince their Pacific island counterparts to back its policy choices.” Jenny Hayward-JonesHERE

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AMAZON FIRES

We cannot allow you to destroy everything.

Emmanuel Macron, president (France)

The French president … recalls the colonialist mindset.

Jair Bolsonaro, president (Brazil)

A senior member of the administration attended [the G7’s Amazon session] in his [Donald Trump’s] stead.

Stephanie Grisham, press secretary (United States)

Sources: ABC News, Twitter, The Hill



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