A small ado



Pre­dictably, some trades union lead­ers are trum­pet­ing oppo­si­tion to the Gillard-Emmer­son trade pol­i­cy state­ment: Trad­ing our way to more jobs and pros­per­i­ty.But their blus­ter is unde­served. The state­ment makes no con­crete pro­pos­als for new (or even few­er) trade nego­ti­a­tions and iden­ti­fies no spe­cif­ic eco­nom­ic reforms such as cut­ting Aus­trali­a’s mar­ket access bar­ri­ers for ser­vices, invest­ment or manufacturing. 

On first read­ing, the report appears to be a re-state­ment, with some refine­ments, of exist­ing Aus­tralian trade poli­cies dis­tin­guished by a sort of hand-on-heart, earnest­ness about basic micro-eco­nom­ic the­o­ry and good admin­is­tra­tive prac­tice that some will find refresh­ing and much-need­ed, but oth­ers rather naïve. 

Dr Emer­son acknowl­edges to, but does not attempt to cut through, some of the real­ly dif­fi­cult prob­lems that trade pol­i­cy pos­es for Aus­tralia. For exam­ple, the state­ment un-remark­ably endors­es our long-stand­ing sup­port for mul­ti­lat­er­al trade lib­er­al­iza­tion: a good-deal-if-you-can-get-it propo­si­tion for Aus­tralia, if ever there was one. He offers, how­ev­er, no new ideas about how to restore momen­tum and cred­i­bil­i­ty to the dead­locked and increas­ing­ly irrel­e­vant embod­i­ment of mul­ti­lat­er­al­ism in the WTO. Rather, the state­ment appears only to accept, briefly and with unspec­i­fied qual­i­fi­ca­tion, the rec­om­men­da­tion of the Pro­duc­tiv­i­ty Com­mis­sion that the gov­ern­ment con­sid­er options for pluri­lat­er­al agree­ments in future. 

The state­ment suc­cinct­ly re-states, with­out over-stat­ing, the defi­cien­cies of dis­crim­i­na­to­ry trade agree­ments such as FTAs—endorsing almost all of the rec­om­men­da­tions in the recent Pro­duc­tiv­i­ty Com­mis­sion report—and assures us that Aus­tralia will nev­er par­tic­i­pate in “low qual­i­ty” agree­ments (not com­pre­hen­sive or “not tru­ly trade lib­er­al­is­ing”). But, as the state­ment con­firms, the end­less painful nego­ti­a­tions with Japan and Chi­na must, obvi­ous­ly, con­tin­ue, although there is zero prospect of a com­pre­hen­sive, pref­er­en­tial lib­er­al­i­sa­tion deal with either of them. 

The report also rehash­es, with a rather fool­ish dec­la­ra­tion, an old—and entire­ly pointless—piece of prod­uct-dif­fer­en­ti­a­tion (Emmer­son­’s trade port­fo­lio from Rud­d’s for­eign rela­tions). “Aus­tralia will not allow for­eign pol­i­cy to dic­tate par­ties to and the con­tent of trade deals” it pro­claims. Real­ly? What then of our joint agen­da with Chi­na, Japan, the Unit­ed States, New Zealand, the Pacif­ic Islands…

On bal­ance, Dr Emmer­son­’s report is a wor­thy tes­ta­ment to his belief in the prac­tice of “neo­clas­si­cal lib­er­al eco­nom­ics” that has been so bit­ter­ly and inex­pert­ly crit­i­cised in the past by his port­fo­lio’s senior part­ner. This tone leads him to hint at some good inten­tions for the future (a more scep­ti­cal atten­tion to quar­an­tine pro­tec­tion­ism, for exam­ple). He wise­ly dis­miss­es sim­ple-mind­ed tech­noc­ra­cy; reject­ing the major­i­ty-rec­om­men­da­tion in Pro­duc­tiv­i­ty Com­mis­sion’s report, for exam­ple, that trade mod­el­ling should deter­mine our nation­al inter­est in trade agree­ments. He gives lit­tle com­fort to those who want to erect trade restric­tions in the name of labour stan­dards or envi­ron­men­tal “sus­tain­abil­i­ty”. But the lack of con­crete inno­va­tion sug­gests no new insight into the most seri­ous chal­lenges fac­ing our trade policy. 

A Trade Min­is­ter’s job is dif­fi­cult: the oppor­tu­ni­ties for “vic­to­ry” in trade agree­ments are few and far-between;the task of restor­ing choice and resources to con­sumers is near­ly thank­less, and; the pres­sures for com­pro­mise and prag­ma­tism are greater, no doubt, than Dr Emer­son would like. The high­er her or his prin­ci­ples soar, the more like­ly is a Trade Min­is­ter to trip-up on the pedes­tri­an real­i­ties. For exam­ple, when pressed by busi­ness lob­bies to defend this curi­ous dec­la­ra­tion: “[I]n nego­ti­a­tions with trad­ing part­ners the Gillard Gov­ern­ment will not seek exclu­sive or entrenched pref­er­en­tial access to oth­er coun­tries’ mar­kets”, Dr Emer­son may have to acknowl­edge that this not a pol­i­cy but a fact. In real­i­ty, we have no alter­na­tive.

Dr Emer­son sug­gests to us in this report that he intends to rec­on­cile inter­na­tion­al rela­tions pres­sures and polit­i­cal-econ­o­my pres­sures at home (e.g. par­lia­men­tary dread of the for­eign inte­gra­tion of our secu­ri­ties mar­kets) with the eco­nom­ic poli­cies that we would choose if we real­ly were the myth­i­cal “small coun­try,” hap­pi­ly gov­erned by a wise dic­ta­tor with reli­able fore­sight. I gen­uine­ly wish him good luck but I’m not encour­aged by this report to lay short odds. 

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