Anthony Albanese must use China trip to prevent ‘Balkanisation’ of global economy: Andrew Robb

The architect of Australia’s trade agreement with China says Anthony Albanese must use his reported upcoming trip to Beijing to prevent the “Balkanisation” of the global economy.

Former trade minister Andrew Robb, who during his time in office negotiated the China Australia Free Trade Agreement (CHAFTA), trade deals with South Korea and Japan, as well as the 12 nation Trans Pacific Partnership, said that over the longer term Australia was highly exposed to a trade war.

He said American foreign policy seemed to be about protecting its status as the world’s most powerful country, and in his experience Democrats and Republicans alike were both threatened by China’s rise.

Given the enmity, Mr Robb said Australia could find itself being forced to choose between its political ally and its biggest economic partner.

“If the US helps Balkanise the world, we might be caught between two streams of activity, like the the adoption of AI. China might well say, ‘we’ll block your meat if you adopt that US AI system and not our system’. Then we are stuck with a decision but the world is worse off whatever we do,” he said.

Mr Robb called on the Labor Government to review the “highly successful” CHAFTA but also attempt to broker a detente between the two sides.

“The Government should reinforce Australia’s ambition to have a working relationship with China and with the United States right, and reinforce the fact that things like the coercion that President Trump is exercising, we don’t want to see it from either country,” Mr Robb said.

If the trade talks fail, Mr Robb said Australia would ultimately suffer as Australia had continued to benefit from economic development across Asia and would likely continue to do so.

He said the Government should be building alliances across Asia to shore up the global trading system which could prepare the ground for bringing America back into the fold.

“We’ve got to go and find friends. We should be in Southeast Asia, promoting the TPP and RCEP (Regional Comprehensive Economic Partnership) to show we’re looking for a better free trade outcome.

“That makes a statement to the US. ‘The architecture allows you to come in, but only if you accept, not Balkanizing the world’,” Mr Robb said.

In the meantime, Australia was benefiting from Chinese consumers rejection of American products.

Mr Robb, who is a board member of the Gina Rinehart-owned Kidman Cattle company said, “they couldn’t get enough meat to satisfy the Chinese market because of what America has done”.

That view was shared by participants at the NSW Farm Writer’s lunch, where Mr Robb was speaking, who said that a recent food and beverage trade show in Shenzhen, the demonstration marquee for Australian beef was packed, while the US’ marquee was effectively shunned.

China’s affinity for Australian products was also noted by Reserve Bank of Australia deputy governor Andrew Hauser, yesterday when he revealed that in a trip to China shortly after Donald Trump imposed tariffs on Australia as part of its global ‘Liberation Day‘, he encountered much optimism among the Australian business community.

Mr Hauser told a Lowy Institute dinner that many Australian businesses he met with, across retail, agriculture, banking, finance, law, steel, health care, manufacturing and commercial property, were optimistic about the opportunities there.

“What really struck me about that session was how upbeat most, if not all, of the firms were about the outlook for their businesses,” he said.

“There was also a sense that recent developments in trade policy could enhance their competitive position in Chinese markets.”

Mr Hauser also revealed the bank observed “striking confidence” that the country could ride out the economic turmoil.

“China feels it has a strong economic hand in responding to tariffs, (a) deep belief in the authorities’ commitment to deliver the growth target of ‘around 5 per cent’ a year (and) a confidence that the Chinese authorities had the policy tools, the space and the will to inject the domestic stimulus needed to compensate for any weaker growth in trade,” Mr Hauser said.

Mr Robb said Australia should continue to focus its attention to the rapid economic growth in Asia and India.

He said India was on track to be the third largest economy in 10 years time, with a middle class of 200 million people, while Chinese technology was advancing at a far greater pace than most realise.

“We’ve got to stop assuming that China and Vietnam and Indonesia and India are underdeveloped. They are walking past us,” he said.

“Some of this stuff you see coming out of companies in China, we can’t even conceive it.”

Mr Robb, who grew up on dairy farm and has had a lifelong battle with depression, also became quite emotional when talking about ‘Liberation Day’.

“I’m involved in mental health issues and I see all the time that what a lot of other people don’t, which is thousands of young people who’ve been in Vietnam, and now Afghanistan,” Mr Robb said.

“You go five times to Afghanistan, you’re never the same. Thousands of them with post traumatic stress disorder, their lives are finished. It’s not just them, it’s their families.

“Now that’s the price we paid, and we’ve agreed to pay it because of the strength of our alliance. And then Trump comes along and puts 10 per cent, puts 100 per cent on film, 25 per cent on aluminium. I do not accept it. This is intolerable and a total reject of an alliance that goes back 70 years.”