Ideas in Australian trade policy

Trade pol­i­cy is, usu­al­ly, what­ev­er emerges as the pos­si­bly tem­po­rary polit­i­cal out­come of a com­pe­ti­tion between vest­ed inter­ests for gov­ern­ment favour. It’s no use pre­tend­ing that delib­er­a­tion or reflec­tion deter­mine the out­come on a reg­u­lar basis. But that’s not to say that the dis­course of trade pol­i­cy is based only on inter­est and prej­u­dice and is free of ideas. What ideas mat­ter to Aus­tralian trade pol­i­cy? Two of the most influ­en­tial sources have been: the eco­nom­ic analy­sis of trade and the Aus­tralain expe­ri­ence of mul­ti­lat­er­al diplo­ma­cy. Heres a thumb­nail sketch. A more care­ful, detailed account that, how­ev­er, owes noth­ing to my views, is avail­able “here”: In some coun­tries, the ideas that emerge most often in dis­cus­sion of trade pol­i­cy are shared assump­tions about nation­al aspi­ra­tions, the expres­sion of pow­er, the devel­op­ment of region­al alliances, or claimed racial or nation­al char­ac­ter­is­tics. These ideas don’t have much sig­nif­i­cance for Aus­tralian trade pol­i­cy. Aus­tralian trade pol­i­cy think­ing has been strong­ly affect­ed by eco­nom­ic analy­sis since the late 1960’s when the “Tar­iff Board” was appoint­ed to make rec­om­men­da­tions on assis­tance to man­u­fac­tur­ing indus­try. Arguably, it was the development—and the the even­tu­al failure—of Australia’s own high-pro­tec­tion man­u­fac­tur­ing indus­try strate­gies of the first six decades after Fed­er­a­tion, and loss of oppor­tu­ni­ties to ‘hide’ the pro­tec­tion of agri­cul­ture through manip­u­la­tion of the exchange rate (after the min­er­als boom of the late 1960s), that gave it this char­ac­ter. Aca­d­e­mics, cer­tain­ly, but also bureau­crats and even Min­is­ters were ready to con­sid­er the ‘Aus­tralian case’ for pro­tec­tion as a sort of social exper­i­ment that offered either lessons about the futu­il­i­ty of pro­tec­tion or an oppor­tu­ni­ty for fur­ther tin­ker­ing (depend­ing on their view­point). The 1970s saw the devel­op­ment of techniques—many of them by Aus­tralian economists—for mod­el­ing com­plex net­works of mar­kets for resources and food prod­ucts. The Aus­tralian Bureau of Agri­cul­tur­al and Resource Eco­nom­ics (“ABARE”:, the fore­run­ners of the “Pro­duc­tiv­i­ty Commission”: as well as sev­er­al aca­d­e­m­ic fac­ul­ties spe­cialised in this form of eco­nom­ic mea­sure­ment and have been a fount of world-class analy­sis and ana­lysts since[1]. Mul­ti­lat­er­al diplo­ma­cy—the oth­er source of influ­en­tial ideas—had been a vec­tor of Australia’s matur­ing diplo­mat­ic inde­pen­dence from Britain—and occa­sion­al­ly from the influ­ence of the Unit­ed States—since the late 1940s when Australia’s for­eign Min­is­ter (H V Evatt) won Chair­man­ship of the new Unit­ed Nations Gen­er­al Assem­bly in return for his con­tri­bu­tions at the San Fran­cis­co con­fer­ence. Its roots lie in much ear­li­er attempts by Aus­tralian gov­ern­ments to assert some influ­ence on a patron­iz­ing Impe­r­i­al Cab­i­net dur­ing the last few decades of the British Empire. By the 1960s, Aus­tralia was already using every oppor­tu­ni­ty in forums such as the GATT—where the rule is “one coun­try, one vote”—to assert it’s trade inter­ests more strong­ly than could have been jus­ti­fied by it’s eco­nom­ic pow­er. Of course, it didn’t hurt then, or lat­er, that the Trade Depart­ment, which sup­plied the rep­re­sen­ta­tives in the GATT, deserved its rep­u­ta­tion for a pugna­cious, argu­men­ta­tive cul­ture or that its rep­re­sen­ta­tives were at home in (a ver­sion of) the eng­lish lan­guage. From the ear­ly 1980’s, the cre­ation of exten­sive trade data col­lec­tions by the UN and WTO and increased researcher access to com­put­ers capa­ble of solv­ing the mass­es of simul­ta­ne­ous equa­tions that dri­ve cred­i­ble mod­els of glob­al com­mod­i­ty mar­kets made it pos­si­ble to iden­ti­fy and quan­ti­fy the exter­nal impacts of pro­tec­tion, invest­ment and sup­ply poli­cies in Europe, Japan and North Amer­i­ca on the com­mer­cial inter­ests of the rest of the world. A com­bi­na­tion of expe­ri­ence ‘work­ing the room’ in GATT—developing alliances with oth­er small economies—and access to new ideas and data about glob­al impact of inap­pro­pri­ate sup­ply and pro­tec­tion poli­cies in Europe, Japan and North Amer­i­ca gave rise to and sus­tained Aus­tralian efforts to cre­ate glob­al coali­tions of gov­ern­ments from the ‘rest of the world’. The “Cairns Group”: of agri­cul­tur­al exporters, cre­at­ed in 1986 with help from some Latin Amer­i­can economists/officials who trained in Aus­tralia has been by far the most suc­cess­ful of these. It has inspired some Aus­tralian-led spin-offs such as the “Glob­al Dairy Alliance”: and the “Glob­al Sug­ar Alliance”: dri­ving force behind a ground­break­ing and “appar­ent­ly victorious”: WTO dis­pute). Both the lead­er­ship (Brazil, Argenti­na, South Africa) and strate­gies of the “G-20”:,2763,1106544,00.html have them­selves spun-off the Aus­tralian-led Cairns Group. Australia’s mul­ti­lat­er­al trade pol­i­cy suc­cess­es of the past two decades—in the Uruguay Round of WTO nego­ti­a­tions and beyond—have fad­ed. The G-20, which emerged in the Can­cún Con­fer­ence, has over­shad­owed it’s Cairns Group ori­gins and the increas­ing eco­nom­ic pow­er of giant devel­op­ing economies (Brazil, India) has secured the new group a role that could well endure longer than the diplo­mat­ic ploys of the Cairns Group, pro­vid­ed that it finds a basis for coher­ence oth­er than oppo­si­tion to the EU and USA. fn1. “Here’s”: a nice brief account of one out­stand­ing analyst—Richard Snape—from a eulo­gy by the Chair­man of the Pro­duc­tiv­i­ty Com­mis­sion (Gary Banks)

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