2 weeks Ago By Bernard Keane
For two decades, China has been the key source of Australia’s economic prosperity — and our key national security threat. We’ve spent much of the time since the Howard years trying to navigate that strategic dilemma, but now there’s a second one to deal with: the United States, pivotal to Australia’s national security, has become our greatest economic threat. Moreover, where the US was a defence guarantor that underwrote continued security for Australia in the face of a growing Chinese threat, China, with its commitment to a global trading system, is now a guarantor of economic stability in the face of the threat of a US transformed into a global bully.
Donald Trump has crystallised this new dilemma in the same way Xi Jinping crystallised the old one, starting a decade ago. Under the Howard — and Abbott — governments, we thought we could have the best of both worlds: economically embracing China while becoming America’s deputy sheriff in our region. Hu Jintao, then Chinese president, addressed Parliament the day after George W.
Bush did in 2003, while Howard was planning a free trade agreement with the US. Abbott invited Xi Jinping to address Parliament in 2014, signed a free trade deal with him and even agreed to an extradition treaty. But China under Xi was already behaving like the great power it had become, throwing its weight around in the South China Sea and becoming increasingly assertive regionally.
Tensions broke into the open under Malcolm Turnbull and became full-blown under Scott Morrison, who appeared to relish provoking China. The result: punitive tariffs on Australian goods and a 14-point list of demands presented by “wolf warrior” diplomats. The Coalition and its friends at News Corp went from accusing Labor of racism for questioning a trade agreement with China to accusing Labor of being soft on China.
Trump has now crystallised mirror-image tensions between security and economics. The trade agreement with the US — which was linked by proponents to our American alliance and deepening commitment to the US military machine — was already economically damaging to Australia. It proved no impediment to Trump slapping tariffs on Australia.
Beyond the direct impact, Trump’s global declaration of trade war is the greatest threat in nearly a century to global economic growth and the free trade that Australia is so dependent on — and all at a time when Australia has become more reliant on the US for our defence and security. What can our experience of navigating the strategic challenges posed by China tell us about dealing with Trump’s mirror-image of the same dilemma? First, agreements with great powers mean nothing. The trade agreement with China meant nothing when Xi decided to make an example of us.
Nor did the Australia–US Free Trade Agreement protect us from Trump. Great powers don’t have to abide by agreements with smaller powers; they simply act in their own interests, which may or may not complement our own. It’s a lesson that pro-American security and defence figures don’t appear to have learnt yet: if the Americans decide not to honour the ANZUS agreement, or decide to shaft us on it, or limit our capacity to use F-35s or other defence equipment, there’s nothing we can do.
And Trump has demonstrated a willingness to abrogate any agreement that it suits him to, just like Xi. Second, calmly standing up to bullies works. When Xi imposed sanctions on Australia, harassed Australian journalists and unleashed his “wolf warrior” crowd, Australia stood firm and refused to change its policies.
There was no surrender to any of the 14 demands — but nor was there any retaliation against Chinese goods. Anyone who suggested we find ways to accommodate China was howled down as an appeaser. And it worked.
After the circuitbreaker of the election of a Labor government, China began removing, one by one, its tariffs on Australian goods. The “wolf warrior” crap was ditched as counterproductive, replaced by more agreeable diplomats who stressed a better relationship. All that continued as Australia proceeded with its “step up” in the Pacific, overtly aimed at countering China.
This, too, seems a lesson that many have failed to learn. Rather than saying Australia won’t be bullied and standing firm, both Labor and the Coalition are looking for ways to cave in to the US — especially on critical minerals, where they appear to be looking for opportunities to hand Australia’s key resources to the Americans outside a market process that would deliver a fair price. Peter Dutton went further yesterday and flagged that defence cooperation could be the basis of a deal on tariffs.
He was initially vague about exactly how that would work — allowing Labor, via prize buffoon Richard Marles, to confect outrage that Dutton was going to threaten our security relationship with the US. As he later clarified, Dutton meant offering a deepening of defence ties, not placing them at risk. Whether it’s still further surrendering our sovereignty on defence, or handing over our mineral wealth on the cheap, both sides are demonstrating they learnt nothing from our successful response to China’s tariff bullying: stand firm, don’t overreact, but don’t give the bully anything either.
They appear to be in a rush to placate the bully. If only Marles was right, and Dutton really did think we should be telling the Americans that Darwin might be off-limits to marines for a while, or the USAF might need somewhere other than Tindal to park its B-52s for a bit. It would suggest at least the opposition leader understood you don’t give in to bullies.
That’s not the case. How dumb our major parties are, that the hard-won lessons of standing up to bullying have been so obviously forgotten within a matter of months. Have something to say about this article? Write to us at letters@crikey.
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