Global players could lock horns in power transition
THE US withdrawing from the Trans-Pacific Partnership is the biggest destabiliser to Australia's trade region, and the US learning to share its global power with China could be like "two bulls” fighting for dominance in a paddock.
Those were the opinions of former minister for trade and investment Andrew Robb when addressing the Rural Press Club in Brisbane.
The former executive director of the National Farmers' Federation, and agriculture economist by profession, was at the meeting to discuss how family farmers, small and large, could capitalise on current and future trade agreements.
Starting on a positive note, Mr Robb said the next few decades could be a peak time for Australian farmers.
"This is the start of what I believe is the golden era of agriculture,” he said.
"In the next 20 years, if we play our cards correctly, it could be a spectacular time for Australian agriculture.”
The signing of the reformed TPP agreement, which is now called Comprehensive and Progressive Agreement for Trans-Pacific Partnership and includes 11 countries after the US withdrew from the original deal, was a major milestone for Australian exporters, however, Mr Robb said the US pulling out of the deal could also set the tone for the country's future interaction within that region.
"My sense is America's withdrawal from the Trans- Pacific Partnership agreement... it will put a lot of pressure on the US, let me tell you,” he said.
"Their withdrawal from that agreement is by far the biggest destabilising factor in the region.
"For several years the TPP was promoted by the Americans, very aggressively, publicly and strongly, as a firm symbol of their involvement and commitment to the region.”
He said notions by President Donald Trump's administration to "contain” China were futile and counterproductive.
"The US has had a leadership role to the rest of the world. They introduced China and the rest of Asia to the power of liberating markets and opening up their economies to trade and investment. As a consequence, 500 million people have come out of poverty in the last 15 to 20 years - it's a humanitarian miracle.”
Mr Robb predicted China and India would eventually return to a dominant global position.
"How do we bring more people out of poverty and back into prosperity, and at the same time have a peaceful transition?” he asked.
"In the last 70 years we have had the US dominating and doing a great job, so how do we transition to them into sharing power? "How will they accept that? There is a reluctance at the moment.
"It's like two bulls in the paddock. The senior bull is not going to give it up easily.”
He said capitalising on emerging markets in the growing middle class came down to old-fashioned business notions: building relationships and forming trust.
"There is one thing to have a (trade) agreement, but it's another thing to take advantage of it,” he said.
"For over 170 of the last 200 years we have overwhelmingly traded with Europe and with the United States 12,000 miles away.
"It's only in the last 30 years that we have had any substantial involvement with this region. Now it's 80% of our trade. We haven't touched the sides in terms of understanding who is buying our product.”