22/06/2022 - 10:33

Beyond the rhetoric lies real engagement

22/06/2022 - 10:33

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Deeper engagement with Asia will require more than just a change in style from the Australian government.

Beyond the rhetoric lies real engagement
Gordon Flake leads PerthUSAsia Centre. Photo: Gabriel Oliveira

TO understand the differing approaches Anthony Albanese and Scott Morrison bring to foreign affairs, Perth USAsia Centre chief executive Gordon Flake highlights a key distinction: climate change.

Within days of being sworn in as prime minister, Mr Albanese had flown to Japan to take part in the Quad leaders meeting, where his address made standard diplomatic commitments to democratic rights, the rule of law and Australia’s foreign aid contributions.

They all came second to climate action, which warranted no fewer than four mentions by Mr Albanese.

“The region is looking to us to work with them and to lead by example,” Mr Albanese told the meeting.

“That’s why my government will take ambitious action on climate change and increase our support to partners in the region as they work to address it, including with new finance.”

Mr Morrison never proved particularly amenable to climate action, having infamously brandished a lump of coal in parliament and later mocking electric vehicles as having the potential to “end the weekend”.

Those stunts served him well, for a time, in domestic politics but were an item of serious contention internationally, with the US repeatedly calling for Australia to lift its target of a 26 to 28 per cent reduction in emissions by 2030 ahead of last September’s Quad meeting.

The former prime minister proved himself not for turning, however.

Now that Mr Morrison’s on the backbench, the opportunity for Mr Albanese to ingratiate himself with world leaders by dint of more ambitious climate action was an easy win for Labor in its first days in government.

“When the Quad leaders first met virtually, they laid out an agenda, and the second item on the agenda was climate change,” Professor Flake told Business News.

“The fact that Australia is at least in rhetoric more in close coordination with the rest of the world puts us in a good spot.”

It’s a subtle difference, even if it doesn’t change the course of Australia’s foreign policy.

As Professor Flake pointed out, Mr Albanese’s appearance at the Quad meeting (after the security dialogue was restarted in 2017 under Malcolm Turnbull) and stated support for AUKUS (an alliance struck under Mr Morrison’s government) is evidence there will be more continuity than change with his government.

The stylistic shift is worth noting, though, as evidenced by the movements of new Foreign Affairs Minister Penny Wong since the election.

After accompanying Mr Albanese to last month’s Quad meeting, Senator Wong subsequently flew to Fiji to talk up the government’s renewed commitment to tackling climate change and engaging in the Pacific, later travelling to Samoa and Tonga to spruik labour programs and the renewal of relationships in the region.

The political optics of her itinerary were clear, given Mr Albanese’s fierce criticism of the Morrison government’s handling of Solomon Islands’ decision to sign a security pact with China in mid-April.

China loomed as a physical presence during Ms Wong’s visits, as its foreign affairs minister embarked on a competing tour seeking agreement on a spate of trade and security deals with Pacific nations.

Not that Ms Wong saw her entreaties as part of a regional power struggle.

“Look, this is about the Australian government on behalf of Australia reaching out to the Pacific,” Senator Wong told ABC’s Patricia Karvelas.

“We said in the election we would bring new energy and more resources to the Pacific.

“We said that we would have a much more ambitious position on climate, which of course is such a central issue to the Pacific Island nations.

“So, I’m very grateful to the nations who have received us.

“We’ve had a warm welcome.

“We’ll continue to work in the Pacific family.”

It’s that sort of language Professor Flake believes indicates a renewed belief in a more inclusive approach to foreign affairs under Mr Albanese.

“Even small changes in rhetoric and moving away from a more parochial framing of the Pacific as our backyard, implying we own this area, to the Pacific family or neighbourhood, implies more of a traditional Australian approach to working together,” Professor Flake said.

It would be difficult to argue Labor isn’t offering a tonal shift on foreign affairs.

Under the previous government, the threat of conflict with China became a present concern after Mr Morrison became a cheerleader for a UN-led investigation into the origins of the COVID-19 pandemic.

Peter Dutton, defence minister at the time, frequently took the issue into political territory, at one point using parliamentary privilege to accuse his successor and now deputy prime minister, Richard Marles, of being a ‘Manchurian candidate’, in reference to Richard Condon’s piece of 1950s Cold War literature.

Mr Dutton has sought to soften his image since taking on the opposition’s leadership, talking up the party’s embrace of the political centre in the aftermath of the May election.

However, he has said comparatively little to indicate he’d walk back his stated foreign policy views as opposition leader in an interview with 2GB’s Ben Fordham within a day of being elected opposition leader.

“China hasn’t stopped making nuclear weapons, they haven’t stopped building a navy the scale of which we haven’t seen in history, and they’ve been very clear about their intent in regard to Taiwan,” Mr Dutton said.

“Now, if people believe that that’s changed within 48 hours, then just wait a little longer because in this business, I think you pay on results and the words are pretty cheap.

“Let’s see what happens.

“The government does have to be strong and to stand up for our values and they can’t compromise.

“I suspect Penny Wong and Anthony Albanese will be saying one thing behind closed doors and something else to the Australian public, and we’ll call them out for that.

Brashness is Mr Dutton’s calling card, but it may not leave him in good stead in the next three years, given Newspoll found 7 per cent of respondents named him as their preferred prime minister when he first challenged for leadership of the Liberal Party in 2018.

Critics could argue his unpopularity boils down to his hawkish stances, with Premier Mark McGowan, who was not shy about being photographed with Mr Morrison in the weeks leading up to the election, spelling it out in harsh terms shortly after Mr Dutton confirmed his leadership ambitions.

“He’s an extremist,” Mr McGowan said.

“I actually don’t think he’s that smart.”

Insults aside, the change in tack appears to being pay off.

Mr Albanese already appears to have more breathing room with China, which has sought to congratulate and seek cooperation with Australia’s new government.

That’s despite top officials showing little interest in rolling back a raft of sanctions imposed on Australian exports over the last two years.

On that front, Mr Albanese faces challenges beyond China, including communicating the opportunities and risks inherent in broadening Australia’s trade relationship throughout Asia.

Certainly, businesses already have experience working with China, a veritable basket case in the region that the Economist Intelligence Unit’s latest democracy index report assigned no score for its electoral process or pluralism.

On functioning of government, though, it ranks clearly ahead of the likes of Myanmar and Laos, as well as nominally freer countries such as Vietnam and Cambodia.

Countries that would otherwise be considered allies, like Singapore, the Philippines and Malaysia demonstrated attributes of a flawed democracy, which, while more familiar to Australians than the clear authoritarianism of China, only made Australia’s classification as one of just five full democracies stand apart.

Jon Greenaway, who was previously an adviser with Woodside Energy and now works with UK-based consulting firm Control Risks, framed instability and corruption as a considerable obstacle to doing business in the region.

“Those who are well connected today can turn out to be a liability when the government changes and local competitors leverage their relationships with lawmakers and regulators, often to the detriment of foreign companies,” Mr Greenaway said.

Still, he’s sanguine about the threats relative to elsewhere, and was particularly strong in his belief that the potential for conflict with Taiwan was far less likely than secondary sanctions to China arising from conflict in Ukraine.

“Political risk is everywhere across the globe, but you could argue that there are currently some comparative advantages for the Asian region,” Mr Greenaway said.

“Yes, China is wanting to play a bigger role, and you have the effect of lockdowns on the Chinese mainland on supply chains and their GDP, but there is some distance from the immediate impacts of the Ukraine conflict and the cost-of-living pressures that are destabilising countries in Africa and the Middle East.”

Refocusing trade to elsewhere in Asia appears the focus for Mr Albanese’s government, as outlined by Labor’s trade spokesperson in opposition, Madeleine King, in a speech to the PerthUSAsia Centre in the weeks before the May election.

Money will be no object, with $1 billion set aside for a value-adding resources fund as part of Labor’s flagship $15 billion national reconstruction fund.

Strategy was more noteworthy, though, with Ms King keen to stress: early ministerial visits to Indonesia, India and Japan as part of an export market and diversification policy; a taskforce to identify developable export markets by 2040; a working group to initially focus on biosecurity blockages to trade; and reform of existing export market development grants.

Doubling down on trade with India will also be high on the list, offering literacy programs to train local businesspeople to be culturally sensitive in their dealings with the country.

In that sense, Labor’s trade diversification plan reserves much of the hesitation and suspicion the previous government held about engaging with China, while seeking a firmer exit plan if the relationship does turn sour.

“In the face of rising economic coercion, we must work to strengthen the global rules-based trade system and hold countries that break these rules to account,” Ms King said.

“More than ever, we need effective and inclusive multinational fora to enable nations to come together, in the good times and in the bad.”

That there is a continuity in key aspects of trade policy was encouraging to Professor Flake.

“For the eight years [the Perth USAsia Centre has] been in existence, not only the national economy but the state economy has become less diverse and increasingly reliant on a single market and a relatively small number of commodities,” he said.

“There is a newfound understanding, which I don’t think is partisan, of the essential mandate we have to diversify [trade relationships].”

Complicating the federal government’s efforts is the extent to which Chinese buyers continue to bolster Western Australia’s economy.

Here, the state government has faced significant criticism over reform of its trade commissioner postings, which have slimmed down from seven to four in favour of a regional rather than nation-based model, and the decision to ditch Asian engagement as a ministerial portfolio in March last year.

Mr McGowan and his deputy Roger Cook have already been to Singapore and Indonesia as part of efforts to re-engage with the region after the pandemic, and in July will visit India with Energy Minister Bill Johnston and Sports Minister David Templeman in tow to deepen ties there.

Still, with the spot price of iron ore hovering at between $120 and $160 per tonne since January and royalties of more than $11.4 billion expected in FY2022, the imperative to stop trading with China just doesn’t exist.

It’s a problem Professor Flake boils down to the harsh reality of business.

“China isn’t buying our iron ore because they like us or out of good will, they’re buying it because they need it,” he said.

“They have made decisions for their own domestic political reasons to respond to economic headwinds by building infrastructure, and that requires an awful lot of steel.”

Diversifying trade when business is booming will prove difficult, but, as The Indonesia Institute president Ross Taylor puts it, efforts to deepen value-adding relationships between businesses and embrace closer cultural ties in the region will require more than just lip service from policymakers.

“We tend to hear words like partnership, but it’s just rhetoric,” Mr Taylor said.

“We’ve got a long way to go.”

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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