Saturday 27th of November 2021

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Earlier this month, with great fanfare, Washington, London, and Canberra announced the AUKUS pact: a security arrangement meant to confront China. The deal was hailed as a “historic opportunity” by Australian Prime Minister Scott Morrison “to protect shared values and promote security and prosperity in the Indo-Pacific region.”

As the U.S.-China strategic rivalry intensifies, no other capital in the Asia-Pacific region has exceeded Canberra’s gumption in backing Washington, as well as trying to rally others to the cause. Security arrangements like the AUKUS deal might imply that these efforts are paying off, as America strongly supports Canberra’s efforts as relations with China worsen.

 

By Professor James Laurenceson

 

But the realm of trade tells a more complicated story. Canberra’s handling of superpower relations has provided a cost-free lesson for those elsewhere. Australia is the starkest example of a dilemma all countries in the region face: relying on China for economic growth, yet on the United States for security. Canberra’s choices reveal the mistakes behind a mindset that regards suffering economic repercussions for “standing up to China” as a badge of honor—and how a country that takes such an approach would likely stand alone, pundit plaudits aside.

Australia’s tilt against China began in the second half of 2016. But for the most part, Beijing limited its displeasure to the diplomatic realm. The last time a leader’s visit took place was in March 2017, and ministerial-level visits were few and far between.

 

This changed in April 2020 when Australian political leaders conveyed a distinct impression of coordinating with the Trump administration to attack China over the COVID-19 pandemic.

 

Beijing unleashed a campaign of trade disruption that now affects around a dozen Australian exports—everything from coal to wine.

Despite local boosters of Canberra’s “crazy-brave” approach emphasizing that officials in Tokyo and New Delhi have issued joint statements with Canberra “opposing coercive economic practices,” neither Tokyo nor New Delhi were prepared to even confront China by name.  

Indonesia, the indisputable center of economic and strategic gravity in Southeast Asia, declined altogether to sign up to any reference to economic coercion.

The fact is that plenty of capitals have serious concerns about China’s behavior under President Xi Jinping and have far more serious direct disputes with Beijing than does Canberra. But few appear convinced that the Australian government’s approach is preferable to a strategy of cautious hedging.

 

And why would they be?

Australia is now an outlier in having no senior political dialogue with China and in the breadth of trade disruption it is experiencing. 

In June, Singapore Prime Minister Lee Hsien Loong delivered pointed remarks while standing alongside Prime Minister Morrison at a joint press conference: “There will be rough spots [with China]…and you have to deal with that…But deal with them as issues in a partnership which you want to keep going and not issues which add up to an adversary which you are trying to suppress.”

The region also hasn’t missed that while U.S. Secretary of State Antony Blinken, insisted in May that the United States “will not leave Australia alone on the field,” Washington has yet to show any interest in bearing a cost to make good on that promise.

In March, the acting U.S. ambassador in Canberra, Mike Goldman, cheered Australia on: “I’d just say keep on doing what you’re doing but with confidence that the United States and other like-minded democracies see an interest in having Australia succeed.” Yet when presented with the latest trade data showing American companies were exporting more commodities to China, filling the gap left by barred Australian imports, the U.S. embassy declined to comment.

 Six months after White House coordinator for the Indo-Pacific Kurt Campbell insisted that the U.S. was “not prepared to improve relations” with China so long as Australia was being hit with trade attacks, U.S. Commerce Secretary Gina Raimondo is now talking up increased trade with China: “It’s just an economic fact. I actually think robust commercial engagement will help to mitigate any potential tensions.” 

After an eight-month review of the U.S.-China trade relationship, this week the U.S. Trade Representative, Katherine Tai, announced that the Biden administration was striving for a “recoupling” rather than decoupling. She said her intention was to advance this agenda and tackle ongoing U.S. concerns through direct dialogue and negotiations with the Chinese side.

Meanwhile, Australia’s trade minister, Dan Tehan, has not been able to secure even a phone call with his counterpart in Beijing since he took on the portfolio in December last year.

Ambassador Tai also emphasized that enforcement of the Phase One deal the Trump administration struck with Beijing in January 2020 was a priority. This deal contained numerous Chinese commitments to purchase American goods, putting producers in Australia at an unfair disadvantage.

To be clear: None of this excuses or deflects attention away from Beijing’s bad behavior toward Australia. And, for its part, Washington’s support for American producers and households is exactly what one should expect.

 

As Michèle Flournoy, a former senior Clinton and Obama administration official, stated last month: “I’m not sure that the White House can control Napa Valley exports of wines to China.”

This complicated balance is well understood in Australia’s region. The one exception, perhaps, is Canberra.

 

 

Professor James Laurenceson is director of the Australia-China Relations Institute at the University of Technology Sydney. 

 

Read more:

https://fortune.com/2021/10/13/australia-china-relations-trade-aukus-embargo-james-laurenceson/

 

 

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Former prime minister Paul Keating’s National Press Club address showed just how badly awry Australia’s policies on Asia have gone.

 

By John Menadue

 

At last we have a compelling story by a senior political leader about how our relationship with China has gone badly off track and why and how we need to cooperate with ASEAN leaders, particularly Indonesia, to find what Keating calls “our security in Asia, not from Asia”.

There are many reasons why Australian policies are seriously off track.

There is a  deliberate wilfulness by the Morrison government to play to our insecurity in our own region. The promotion of fear has always been a successful Coalition tactic regardless of the national interest. We keep clinging to remote powers rather than coming to terms with our geographical situation in Asia. As Keating graphically put it, major defence policies relating to Australia are made in Cornwall between Scott Morrison, Joe Biden and Boris Johnson!

Political leaders in both major parties have, in effect, forfeited our national sovereignty to the US on important security matters. Having done so, we find that both the US Democrats and  Republicans are hostile to China. Neither major party in the US can shake itself free of the extensive power, economic, political and financial, of the military-industrial complex.

As a result, America is almost always at war. As the War on Terrorism fails, a new enemy must be found, and this time it’s China. The American political elite propagandises about Chinese alleged aggression and misbehaviour but what it resents most is that China is successful.

Meanwhile, Australian industry groups like the Business Council of Australia and the Minerals Council of Australia are too frightened to call out the Australian government for the damage it is causing to trade relations with China — they’re reluctant to upset their ideological friends in the Liberal Party.

In his speech, Keating correctly described our media’s coverage of China as “appalling”. Our White Man’s Media reflects the interests and views of Washington, New York and London — its derivative China coverage reveals ignorance, prejudice and racism.

Chinese diplomacy has been clumsy and unhelpful.

Our Department of Foreign Affairs and Trade has failed as the principal adviser to the government on relations with China. Instead policy advice on China has been ceded to our security agencies that Paul Keating calls “nutters”. While these agencies have a lot of information, from my experience they have very poor judgement.  They are driving the anti China frenzy. Their modus operandi is to doll out untested information to gullible politicians and journalists.

Keating has given us a teaching opportunity in our relations with China.

Will we seize that opportunity to repair the largely self-inflicted damage?

 

 

Read more:

https://johnmenadue.com/keatings-speech-is-a-teaching-moment-in-a-fraught-relationship-with-china/

 

 


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As the US talks more about co-operation with China than competition, Australia’s lack of vision on China is on full display.


One can imagine the scenes in senior foreign policy circles in Canberra recently — people walking into broom cupboards, bumping into each other, disoriented and confused. It wasn’t meant to be like this.

First, the US and China announced a mega 20-year LNG deal, which China’s Global Times tabloid gleefully observed was at Australia’s expense. Then, at COP26, the US and China revealed that for months they had been working together in secret on a major global initiative to cut methane emissions.

And now Joe Biden and Xi Jinping are meeting in a virtual summit, after they have spoken twice by phone. Although the White House spokesman has predictably tried to lower expectations for the meeting, discussion will be comprehensive, covering areas of multilateral co-operation, security, points of conflict in the bilateral relationship such as cyber and technology theft, nuclear non-proliferation, Taiwan, North Korea and Afghanistan, to mention a few topics. Australia will not be among Biden’s talking points.

The signs that the US and China are finding a new accommodation have been apparent for months. Senior officials on both sides have increased the frequency of their meetings. The two most senior foreign policy officials from the US and China met last month in Zurich. The US’s chief climate change negotiator was in China recently. You can be sure his brief went well beyond climate change.

These days the administration talks more about co-operation with China than competition. Containment has disappeared from its vocabulary. Talk of a “new” Cold War is archly dismissed by the US national security adviser. While the US president can’t remember the Australian prime minister’s name, he is eager to appease France’s President Emmanuel Macron and give Australia a clip behind the ears for embarrassing him over AUKUS.

Such is the world of great power politics. In the old cliché, there are no permanent friends (nor enemies), just permanent interests.

Over the past few months, China has wound back its utterly counterproductive “wolf warrior” diplomacy. It seems also to have curtailed its more abrasive activity in the South China Sea. It blindsided just about everyone when it said it wished to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or TPP-11.

The difficulty for Canberra is that these days, and for some time now, it has had no controlling vision for how Australia needs to navigate its way in the new multipolar order. The international system is chaotic. Great powers do as they wish. Others try to advance their interests and look after themselves as best they can.

Last week former prime minister Paul Keating tried to assist by offering Canberra a contemporary conceptual framework with which to make sense of all of this. Far from receiving an intellectually coherent response, the prime minister and defence minister retreated to puerile name-calling. These are individuals who have the power to send young Australians to war to defend the country but cannot offer a defence of their own policies when criticised by a distinguished former prime minister.

 

Read more: https://johnmenadue.com/a-sino-us-thaw-would-leave-australia-stranded-on-a-rock/

 

 

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The wrecking ball Trump took to the global trading system is still swinging, with implications for Australian trade and even the survival of the WTO.

 

BY Gary Sampson

 

Putting bite into president Donald Trump’s disdain for trade deficits, the US administration, in violation of World Trade Organization (WTO) agreements, imposed a 25 per cent tariff on $US50 billion on Chinese imports, the first in a series of such tariffs during 2018 and 2019. China, also in violation of the WTO, immediately retaliated with tariffs on an equivalent value of US trade.

Had it waited for the WTO panel report, China could have imposed retaliatory tariffs with the support of 163 countries. With the tit-for-tat tariffs that followed, matters spiralled out of control and the US-China trade war was under way … outside the discipline of the WTO.

To contain the tariff spiral, the two countries negotiated the “Phase One” agreement, by which China committed to purchase between 2020 and 2021 an additional $200 billion of US products over 2017 levels.

This agreement was flawed from the start. China was obliged to direct its state-controlled entities to purchase fixed quantities of US imports irrespective of price, moving China further from the market-based economy sought by the US. It also meant diverting imports from longstanding suppliers including Australia.

The $200 billion goal for exports will not be met. With three months to the end of 2021, US exports to China were just 60 per cent of the final target. For agricultural goods, the figure was 82 per cent, 59 per cent for manufactured goods and 38 per cent for energy products.

The post-Trump US-China trade policy was outlined in a recent talk by Katherine Tai, the Biden-appointed US trade representative. The key elements: the Trump penalty tariffs will remain; the Trump Phase One agreement will be pursued more forcefully; and the US will work with “allies” on the China problem.

This is managed trade, pure and simple, and the antithesis of what the US has fought to avoid for seven decades.

The inherent contradiction of the Phase One strategy is clear. At the extreme, all China’s import commitments could be fulfilled by trade diversion from traditional trading partners — case in point, Australian barley.

In Tai’s presentation, she was asked: how could working with “allies” be consistent with the Phase One agreement? Her response: the “critical question” was not how to accommodate the concerns of “allies” but “whether the structure that we have is effective in addressing the interests we have as an economy”. Too bad for the “allies”.

A further feature of the Biden administration’s trade policy is to enforce its much touted “race to the top” of US (and EU) national standards. In other words, only import from countries that meet US environmental, labour and other social standards. Linking access to markets depending on whether the standards of the exporting country are met is anathema to most WTO members and is an infringement of national sovereignty.

Requiring that imports come from countries that meet the unilaterally determined labour standards, for example, has long been considered by most as protectionism behind a humanitarian mask.

Speaking at an AFL-CIO union event outlining President Joe Biden’s “worker-centred” trade policies targeting imports from low wage countries, Tai said: “WTO’s rules actually don’t include any labour standards, and workers are often an afterthought. This needs to change.”

As part of the “race to the top”, unilaterally determined measures also characterise carbon border adjustment schemes, which Biden describes as a “carbon adjustment fee against countries that are failing to meet their climate obligations”.

In the absence of a carbon tax or emissions trading scheme, Australia, presumably along with many others, will be on the “hit list”. These countries will strongly oppose in the WTO what Trade Minister Dan Tehan describes as “a new form of protectionism”.

So where does the WTO stand with respect to the Trump-Biden agenda and particularly with respect to US-China trade? A partial answer came in an awkward moment as the hour-long Tai presentation was breaking up.

No role had been proffered for the WTO and a note was passed from the floor to the moderator. He responded: “I forgot to ask it and it’s embarrassing that I forgot. What role does the WTO play in all this?”

The WTO, Tai said, was an inadequate tool for addressing US trade concerns and the US needed to “think outside of the box”.

Those looking for a US-led inclusive multilateral rules-based trading system to address today’s global problems ought not hold their breath.

 

 

Read more:

https://johnmenadue.com/us-china-tit-for-tat-tariff-stoush-fosters-a-protection-racket/

 

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