The fight to save global free trade in the face of rising protectionism is in the hands of the young, who have known only globalisation, says Australia’s trade minister.
The recent move away in some countries from the concept of globalisation is a result of governments mismanaging their economic destinies while failing to improve the lives of all. Australia should know, said Steven Ciobo, because it suffered the same fate until the 1980s.
What was needed now, he said, was global openness – and the people best placed to make the case for this were the young.
“They are instinctive globalists, and if armed with the facts of the economic and humanitarian case for free trade, will be our most powerful allies in the battle of ideas now playing out,” he said.
Ciobo, speaking at the March 19 club lunch, said the one thing governments should avoid when distributing gains among their populations is protectionism.
“Governments at large have a responsibility to do what they can to assist those negatively affected by reform to make transitions within an evolving economy – but protectionism is a fatal mistake to make,” he said.
Australia is currently the world’s 10th richest country in terms of GDP per capita and is in its 27th year of consecutive growth. But success wasn’t always the story for Australia.
Falling from one of the world’s strongest economies at the turn of the 20th Century, Ciobo explained, Australia hit a long period of slow decline – the roots of which lay in protectionism.
“Over the decades successive governments sought to shield big employment industries like manufacturing and textiles from overseas competition, to protect jobs and living standards,” he said. “That era of failed policy, though, led only to higher and higher social and economic costs, so by the late 1970s the evolution of a highly-protected economy was a major burden on the public purse.”
Additionally, a rigid economic system meant that the country was poorly placed to deal with unexpected shocks like the oil price hikes of the 1970s, Ciobo, whose official title is Minister for Trade, Tourism and Investment, added.
Change only began to take hold once the government opened the economy up to through major policy reform and exposed it to international competition. Since then, Australia has thrived: “Far from killing our national economy, the removal of protectionism made it stronger, changed its shape, and gave it new momentum,” he said.
Ciobo cited Australia’s decision to pursue the TPP-11 after the withdrawal of the United States as an indication of how it was forging ahead with global free trade agreements.
He talked in depth about China’s rise from “an isolated, very inward-looking place” to a country that is “a great example of what happens when reform and trade liberalisation are allowed to take place”.
The China-Australia Free Trade Agreement – “the highest quality trade agreement China has ever concluded” – has given Australia better access and has further cemented the economic relationship between the two countries.
“The result is an all-time high of $175 billion in two-way trade in 2016-17,” Ciobo said.
And the relationship looks set to become closer, with Australia being the first country to be invited to China’s international Import Expo to be held in Shanghai in November this year.
“Australia is also working proactively with China to strengthen intellectual property rights for Australian businesses,” he said, adding that the government had appointed its first ever IP Counsellor at the Australian Embassy in Beijing “to enhance cooperation at a government-to-government level”.
Some foreign businesses complain that Chinese firms have stolen their ideas and software after forcing them to turn over intellectual property as part of the price of doing business in the country. For its part, China has in recent years taken steps to protect both local and foreign intellectual property. Ciobo said Australia enjoyed a very good working relationship with China when it came to IPR and added he firmly believed China would make more progress on the issue.
Post Date: March 19, 2018