Trade with China and the national interest

Trade policy is usually the eye-glazing preserve of policy wonks and public officials. Suddenly, however, it’s the epicentre of a debate that tells us much about the difficulties facing political parties as they try to reconcile potentially competing domestic and international interests. Neither of the main political parties in Australia is likely to emerge from this process unscathed.

The most obvious political damage is being done to the Australian Labor Party. It’s not a good look to be picking a fight with your major trade partner at the best of times. But when the country in question is Asian and especially sensitive about its international standing, then the potential for blowback and misunderstanding is intensified.

The union movement’s less-than-glorious historical record in supporting protectionist policies with a racial component makes this a doubly difficult issue for the ALP.

But the ALP and its union affiliates do have a point. It is entirely possible that the provisions of the yet-to-be-legislated free trade agreement with China could be used to change to conditions that apply to certain Chinese projects and the workers they employ.

The question is whether it is worth getting into a lather about relatively minor changes that are unlikely to have much impact on the workforce as whole. On the contrary, trade boosters argue that the overall benefits to the country are too big and long term to jeopardise.

One of the people making this argument is Bob Hawke, not only a former prime minister, but also one-time Australian Council of Trade Unions president. One might think his views would carry some weight. One might be wrong: like many other former political leaders, Hawke has made a fortune working as a lobbyist representing Chinese companies from his office in Shanghai. Interests don’t get much more vested or opinions more compromised.

Hawke’s activities also illustrate why the relationship with China is far from straightforward for the Coalition either. Barnaby Joyce is simply the loudest voice in a conservative chorus that frets about China buying up the farm. In this context, Joyce publicly criticised Hawke’s lobbying activities on behalf of the Chinese company Zhongfu and its efforts to invest in the Ord River area.

One of Hawke’s great attractions as far as his Chinese clients are concerned is his network of connections that transcends political divides. One of the people Hawke lobbied over the Ord River investments, for example, was West Australian Premier Colin Barnett, a man who famously suggested that Beijing was becoming more important to WA than Canberra. He may be right, but it’s another reminder of just how illusory the idea of an unambiguously national interest actually is in such matters.

If there is a national perspective in Australian economic policy, perhaps it’s to be found in the view from China. The good news here is that Australia’s reputation as a generally reliable and predictable partner is widely established.

True, Australia is frequently seen as a compliant appendage of the US when it comes to security issues, but it’s one with which China can do business, at least. Trying to unpick a free trade agreement that has been years in the making would not send a positive message in this regard.

It’s also important to recognise that just as there is no uniformity of opinion in Australia about trade relations, neither is there in China either. This was made painfully clear to me this week when I interviewed an official from the Ministry of Commerce who is also a prominent “left-wing” blogger with a large domestic following.

I was told in no uncertain terms that Australia should know its place in relation to China. Indeed, it was rather impertinent that ignoramuses like myself should have the temerity to question, much less imply any criticism of China’s economic policies.

Such opinions may not be mainstream, but they are not irrelevant either. Sending ambivalent messages from Australia will be grist for the mill of Chinese nationalist sentiment.

While there may not be much that Australian policymakers can – or should – do about the pluralistic and occasionally combustible nature of the policy debate in this country, it is important to recognise that it does not occur in a vacuum. Australian policy debates are closely followed in China, albeit by a rather limited number of specialists.

There will never be the same interest in – even obsession with – Australian politics as there is with the American variety, but this doesn’t mean that China’s policymakers aren’t taking note of the current furore.

The FTA with China may be far from perfect, but sabotaging it at this stage would send a very unfortunate message. For Bill Shorten in particular, deciding just what the “national interest” is in this case poses an acutely difficult political question. The answer will tell us much about how the ALP weighs short-term domestic political advantage against long-term economic integration with the region.