By Denis Bright
As President Trump crisscrosses the United States on the merry-go-round of ceremonial and media events, the Administration’s policy insiders are likely to be preparing for the G20 Summit in Buenos Aires from 30 November to 1 December 2018.
Now is the time for the federal LNP to insist on a more independent voice for Australia as Buenos Aires goes into for the forthcoming G20 Summit.
Mike Pence was scheduled to have a private luncheon at the White House soon after he arrived back in the USA from APEC. This was a non-media event. These controls only magnify media speculation about the inner-workings of the Trump White House.
As global markets and superannuation funds continue to be rattled by the Trump Administration’s trade wars, neither the US nor middle ranking economies like ours are benefiting from the gyrations.
Argentina itself is in shock from the excesses of the local centre-right government’s own austerity budget:
Argentina‘s Senate approved an austerity budget for 2019 on Thursday that cuts social spending and raises debt payments to meet the stiff requirements of a $56bn International Monetary Fund bailout.
The budget projects a 0.5 percent slide in the gross domestic product and a 23 percent inflation rate by year-end, down from 44 percent this year.
The proposal passed the Senate with 45 votes in favour to 24 against after a 13-hour debate that went into the early hours of the morning. It was approved earlier by the lower house.
Critics say the budget slashes social spending by 35 percent once inflation is accounted for. It also calls for a 50 percent increase in debt service payments in peso terms.
Centre-right President Mauricio Macri had previously pledged billions of dollars’ worth of cuts in health, education, science, transportation, public works and culture next year.
He welcomed Thursday’s vote, saying, “this is something we set out to achieve for a majority of Argentines who understand that we have to begin to be responsible, serious, that we cannot continue to live above our means”.
The IMF called the move a “very positive step” that showed a “clear commitment by the Argentine authorities” to strengthen its economic policies.
The sharp recession which is descending on Argentina under President Macri will not be noticed by elite visitors to the G20 unless they happen to see the pockets of shanty-towns in Buenos Aires from their incoming aircrafts.
Writing for the Japan Times, Jason Scott, Dandan Li and Isabel Reynolds are rightly pessimistic about the prospects of a rapprochement between the Trump Administration and the remainder of the G20 Summit:
The language we heard from Pence is quite concerning because it shows we’re moving toward a zero-sum game geopolitics in the Asia-Pacific,” said Jonathan Pryke, a researcher specializing in the Pacific at the Lowy Institute, a Sydney-based research group. “The great hope of convergence between China and the U.S. is becoming less and less of a likely reality.”
The meetings in Singapore and Papua New Guinea produced little to suggest U.S. President Donald Trump and Chinese counterpart Xi Jinping would reach a deal when they meet in a few weeks at the Group of 20 summit in Argentina. The Asia-Pacific Economic Cooperation summit ended in disarray on Sunday after leaders failed to agree on a joint statement, reflecting tensions after Trump threatened to add to tariffs already in place on $250 billion worth of Chinese goods. Xi has retaliated with duties on $110 billion in U.S. imports.
Smaller economies in the Asia-Pacific have long sought to balance ties, reaping the benefits of trade with China’s fast-growing economy while relying on American firepower to rein in Beijing’s assertiveness over disputed territory. Yet the trade war has raised the prospect that nations will now need to pick sides, particularly as higher U.S. tariffs threaten to alter long-established supply chains.
Earlier this month, former U.S. Treasury Secretary Hank Paulson warned of an “Economic Iron Curtain” dividing the world if the U.S. and China fail to resolve strategic differences. That could lead both sides to deny each other technology, capital and investment, reversing decades of gains from globalization.
Singapore Prime Minister Lee Hsien Loong echoed those fears last week, saying tensions between the U.S. and China are rising to a point where Southeast Asia may one day have to “choose one or the other.
As a respected participant in the forthcoming G20 Summit, Australia should share these concerns. Pressure to sign up the G20 Summit to polarisation against China’s Belt and Road Investment Initiatives should be severely questioned.
Richard Maude transmitted Australia’s concerns to the Asia Society in Sydney as reported in this article from the Japan Times:
Smaller and middle powers lean to one side or to the other,” Richard Maude, a senior adviser at Australia’s Department of Foreign Affairs and Trade, told an Asia Society event hosted by Bloomberg in Sydney earlier this month. “They don’t want to make one big single binary choice between Washington and Beijing. What they want is to find the space to stay in the middle and to prosecute their own interests.”
While the U.S. can depend on allies like Japan, Australia and Taiwan, nations such as South Korea and the Philippines that have defense arrangements with the U.S. would try to hedge, according to Minxin Pei, a China scholar and specialist in U.S.-Asia relations.
Southeast Asian countries were “desperate fence sitters” that don’t want to make China an enemy, said Pei, who is a professor of government at Claremont McKenna College in California. “China and the U.S will try very hard in the next few years to charm the countries in the region.”
While in Asia, Pence said the U.S. provides “a better option” for nations in the region and announced a plan along with key Pacific allies to build a $1.7 billion electricity grid in Papua New Guinea. The U.S. also joined with Australia to redevelop a naval base and held a meeting of “the Quad” — a grouping that also includes India and Japan — in a bid to balance China’s rising economic and military strength.
Without the wisdom of Nostradamus, it is probably foolish to question this professional opinion from Dr Minxin Pei at the Claremont McKenna College in suburban Los Angeles. Perhaps outcomes at forthcoming G-20 Summit in Buenos Aires are indeed predetermined. Only time will tell if the Trump Administration can play its strategic cards at the G20 Summit and come out smiling after some difficult months ahead.
Something must be amiss if one country in the G20 Summit can dictate its policy outcomes and over-ride moderating effects of input from the Affinity Groups to monitor the concerns of stake-holder groups with qualitative research input.
Our representatives and their support staff must lobby for greater accountability. Prime Minister Morrison was definitely onside with this approach in Port Moresby despite some caveats in other parts of the door-stop interview:
Well the first thing is Australia always has to stand up for its interests. Australian interests must be defined in Australia and that Australia must pursue that very independently as its own sovereign nation. And that’s what the other countries are doing, and I think what I’ve learnt and what I was of the view before I came here is that we all work well in this region because we respect each other. And we work with other countries and we respect their independence and the more we connect, and this is Indonesia’s position, President Widodo’s vision of the Indo Pacific, it’s about a connectedness of independent, sovereign states and economies respecting each other that within our economies, within our countries, we make our own decisions, we make our own way. But we look for opportunities to work together and that’s what makes our region prosperous. It’s not about control, it’s about collaboration and it’s about partnership.
Decades ago bipartisan support for the ANZUS Alliance was offered by Dr Evatt as Leader of the Opposition to ensure consultative procedures were always put in place in negotiations with the US over our mutual strategic concerns. These procedures were refined in 1984 prior to the first meeting of the Australia-United States Ministerial Consultation (AUSMIN). This allowed strategic policies to be bended with wider commercial and national interests of both the US and Australia but only through accountable consultation.
If the federal LNP is wavering about commitment to the national interest, Bill Shorten can offer bipartisan support for the same principles as Dr Evatt advanced in 1952.
My guess is that President Trump will be forced into a more conciliatory mode towards global opinion at the G20 Summit. Even The Economist offers its own criticisms of the excesses of corporate power:
Since 1997 market concentration has risen in two-thirds of American industries. A tenth of the economy is made up of industries in which four firms control more than two-thirds of the market. In a healthy economy you would expect profits to be competed down, but the free cashflow of companies is 76% above its 50-year average, relative to GDP. In Europe the trend is similar, if less extreme. The average market share of the biggest four firms in each industry has risen by three percentage points since 2000. On both continents, dominant firms have become harder to dislodge.
It is surely in Australia’s best interests to call for moderation in Buenos Aires before the trade war with China escalates. A weaker Chinese economy has very negative effects on both Australia and the United States in an integrated global economy that has superannuation funds and global markets rattled (Dow Jones Trends in 2018 to 20 November from Yahoo):
Denis Bright is a registered teacher and a member of the Media, Entertainment and Arts Alliance (MEAA). Denis has recent postgraduate qualifications in journalism, public policy and international relations. He is interested in advancing pragmatic public policies that are compatible with contemporary globalisation.