Q&A: Bishop on trade, uncertainty & taming China
SHANE WHITE, CONTENT MANAGER, INSTITUTIONAL, ANZ | FEBRUARY 2019
In business nobody likes uncertainty. And modern foreign relations are full of it.
As an MP and former Australian Foreign Minister ,the Hon Julie Bishop MP has a unique perspective on the new world order as populism spreads, Asian demographics change and China’s economy evolves alongside its escalating trade war with the United States.
At a recent ANZ-sponsored AustCham event in Hong Kong, Ms Bishop sat down with ANZ Group Executive International, Farhan Faruqui to address how the world - and business - can ride out the wave of complexity. Below is an edited transcript of that discussion.
They started by addressing Australia’s place in the maelstrom.
JULIE BISHOP: We are facing one of the most-contested and competitive periods seen around the world for some time, and there are many significant issues unravelling.
But I think Australia is well placed to withstand the buffeting the globe will invariably deliver.
FARHAN FARUQUI: There are challenges arising all around the world - the US and China, climate change, NATO, the G20, Russia, Middle East & Asia regional tensions, etc. These are all trending negatively.
While each event in itself may not pose a global threat, the combination of them can. How much does that worry you and do you feel a potential crisis is looming?
“The old order that managed such crises in the past is fraying. It hasn’t disappeared but it is fraying at the edges.”
MP & former Australian Foreign Minister the Hon Julie Bishop MP
JULIE BISHOP: It concerns me to an extent. The world is currently looking for leadership and the old order that managed such crises in the past is fraying. It hasn’t disappeared but it is fraying at the edges.
When the UN Security Council can rarely agree, when the US is taking an unorthodox approach to foreign policy, when Britain is consumed with Brexit, when leaders around the world no longer have the popular support they once had, I fear one of the biggest concerns we have is leadership.
And while there have been dire global events in the past, there have always been strong, focussed leaders to take us through them. I think that’s lacking at present.
FARHAN FARUQUI: Do you think the world is looking for leaders in all the wrong places?
JULIE BISHOP: Populism worries me immensely. I understand politicians must design attractive policies to get elected but everything is too short term.
There’s a tendency for populist leaders to win support because they promise outcomes which will be popular in the short term but we all know in the long term will be detrimental.
That’s a level of populism we’re seeing in many countries around the world, and that I think is a concern.
FARHAN FARUQUI: When you look at some of the countries around the region – and Australia is one of them – there’s a growing need to balance and manage relationships with the two superpowers.
As the stress between US & China elevates, what advice would you give to countries trying to thread that needle?
JULIE BISHOP: We’ve lived in a unipolar world since the end of the Cold War. What we are seeing is an emerging global power in China and history has shown when an emerging power comes up against an existing power, there are consequences.
What we must do is ensure those consequences are peaceful and - as friends of China as allies of the US - it is incumbent upon us to impress upon both the importance of working together.
That is why I am hopeful the trade difficulties will ultimately end in a very positive agreement between China and the US.
Of course Australia is not the only country with this dilemma. About 120 countries around the world count China as their biggest trading partner. The US has a significant network of alliances around the world. Most countries are caught up in this one way or another.
I think it is going to take leadership. It is going to take honest and frank discussion. We all must continue discussions to build on the relationships we have.
Personal relationships matter a lot in the field of foreign affairs, diplomacy and international relations. I think we’ll steer our way through.
FARHAN FARUQUI: Is it inevitable that the world becomes more protectionist?
JULIE BISHOP: We are seeing worrying strains of protectionism around the world and in some unexpected places - the US is an obvious example - a champion of free trade for many years, and has since pulled out of the Trans-Pacific Partnership.
What I think is interesting is that the remaining 11 countries went ahead and concluded the agreement without the US when so many said that was impossible.
With the leadership of Japanese Prime Minister Abe, Malcolm Turnbull and others, we concluded the TPP-11, one of the highest standard free-trade deals in the world. That alone is proof we can resist protectionism.
Obviously the World Trade Organisation needs reform – it’s not perfect. I know Australia is advocating for positive reform. And I think the activity from the US will be the impetus required for that change to occur.
FARHAN FARUQUI: So you’re optimistic that we’re not entering an irreversible era of protectionism?
JULIE BISHOP: Not irreversible.
FARHAN FARUQUI: What’s your experience dealing with China and lessons you’ve learned that you can share with businesses operating in China?
JULIE BISHOP: The Australia-China relationship is one of the most significant our country has, and the effort we put in to managing that relationship should never be underestimated.
China respects strength. It does not respect weakness. And Australia must always stand up for its values and stand up for well-considered foreign policy. That doesn’t always please China. They make their displeasure known in various ways.
But you couldn’t have a closer relationship between two countries than the US and Australia, and we disagree with the US from time to time. It’s how we manage those differences that count.
I think Australia and China are still learning to manage our differences. We’re very different countries. Different culturally, with different social values.
I think it’s important we spend much more time understanding each other’s perspective - spending time in each other’s shoes - so we can manage the inevitable differences which arise.
Shane White is content manager, institutional at ANZ
This article is an edited version of a discussion held at an ANZ-sponsored AustCham event in Hong Kong. To see a full version of Julie Bishop’s speech from the event, click HERE.
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