Malcolm Turnbull is in more trouble than a Stark at a wedding. The polls are down and the knives are out.
Part of the problem is he talks a lot but he doesn’t do very much – and there is no better example of that than what he has been doing on trade. Hawke and Keating are the undisputed titans of trade. The open competitive economy we have today is built on the wreckage of the tariff walls they ripped down.
At the other end of the spectrum is Turnbull. Howard delivered three free trade agreements. So did the last Labor Government. Abbott also delivered three trade deals. Turnbull hasn’t delivered one.
He said he would he would sign a deal with India by the end of 2015. That didn’t happen. Over a year later and negotiations are apparently on hold.
He has also promised a deal with the European Union. His Trade Minister said in September last year that a scoping study was almost finished. In fact, it was supposed to be finished by the end of last year. At Senate Estimates last week, trade officials refused to say when it would be finished or if it would be made public.
One of the biggest trade deals currently being negotiated by 50 countries including the US, European Union and Australia is TiSA – the Trade in Services Agreement. This agreement focusses on services like is a services only agreement would cover 70 per cent of the world’s trade in services.
Turnbull has said TiSA is a top priority. Last week at Senate Estimates we found out just how important the Turnbull Government thinks it is. We asked how many people are working on the deal in the Department of Foreign Affairs and Trade. The answer – less than one.
The big trade deal Turnbull hoped to deliver this year was the TPP. It’s now RIP thanks to Donald Trump. The TPP signed by 12 countries last year can’t come into force unless the United States ratifies it. That means Trump’s decision to pull out is fatal.
When Trump pulled out Turnbull talked up the idea of another agreement between the remaining 11 countries. He called it 12 minus 1. Last week in Estimates we also discovered that not one of those countries have confirmed they want to go ahead with the current deal without the United States. 12 minus 1 suddenly looks more like 12 minus 11.
Turnbull has also talked up the idea of China replacing the United States in a new TPP agreement. That’s even been discredited by his own Trade Minister who has called that “very unlikely”.
He has got one thing right though. Today Turnbull is in Indonesia. He has promised a trade deal by the end of the year. This is good news. Indonesia is our next door neighbour. It’s got a population of 250 million people. By the middle of this century it’s likely to be the fourth biggest economy in the world – behind China, the US and India.
At the moment trade with Indonesia is massively underdone. This is an opportunity to fix that. I hope the deal Turnbull strikes is good for Australian businesses, farmers and workers.
Hopefully he won’t repeat the mistake he made in the TPP negotiations – where he agreed to let companies bring in workers from six different countries – Brunei, Canada, Malaysia, Mexico, Peru and Vietnam – without first checking to see if there is an Australian who can do the job.
It will also help if the final deal is evaluated by an independent body to see what the economic benefits will be for Australia before the Parliament is asked to vote on it.
Indonesia is just the start. Bilateral deals are good but region wide deals are better. Especially in our region. We sit on the cusp of what will be the biggest middle class the world has ever seen. In less than 15 years there will be three billion middle class shoppers on our doorstep.
Our challenge is to make them our customers. As Chris Bowen said today at the Lowy Institute if we get just one percent of that market it would be the equivalent of six cities the size of Sydney.
Turnbull should put his shoulder to the wheel to help finalise RCEP – the Regional Comprehensive Economic Partnership. This is a potential trade deal between 16 countries in our region and about 30 percent of the world’s GDP. It includes China, Japan, India, all the ASEAN nations and Australia. It is shrouded in secrecy. We don’t know what is in it, but hopefully a good deal can be struck.
Beyond that is an even bigger regional trade agreement that includes all the countries of the Asia Pacific, including the two giants China and the United States. That won’t be easy but it is important. It will help to underpin the peace and security necessary for Australia and the rest of the world to thrive this century.
It’s time to get started. There aren’t many Newspolls left before Turnbull’s very own Red Wedding. It’s time to stop talking about trade and start delivering.
A version of this opinion piece was first published by the Australian Financial Review Tuesday, 7 March 2017.
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