Australia knows more intimately than most the “economic coercion” the U.S. says China is deploying in a bid to bend the world system to its economic and political ends.
Perhaps dismayed at Australia’s calls for inquiries into the origins of the coronavirus that expanded out of China and embroiled the world in a pandemic, China imposed sweeping tariffs on Australian goods, including wine, coal, barley and more, under the cover of supposed trade infractions.
The sour spell with Australia’s biggest buyer has devastated some industries — premium wines may never regain their privileged status in China — though hefty stimulus aimed at post-pandemic recovery has blunted the broader impact of the trade spat on the Australian economy.
What the episode has shown unequivocally, Australian Ambassador Arthur Sinodinos told Global Atlanta, is that democracies must partner to shore up the global trading system.
And that could mean deeper avenues for collaboration with the United States, now turning to “allies and partners” for scientific research collaboration and the sharing of sensitive or defense-related technologies, he said during a public interview over Zoom sponsored by Georgia State University CIBER and hosted in partnership with the Atlanta Council on International Relations.
Watch the full video here:
In the early 2000s and beyond, Australia enjoyed a trade bonanza as China snapped up commodities to fuel its growth, then sent out increasingly prosperous students and tourists.
But over time it became clear that a line had to be drawn, Mr. Sinodinos said, as concerns mounted over Chinese telecom giant Huawei’s involvement in Australia’s 5G infrastructure and the Communist Party’s interference in its political affairs.
“No one rang us up one day and said, ‘Look, you’ve got to take China on.’ I think it evolved over time out of a series of decisions Australia took in response to issues that were arising,” Mr. Sinodinos said.
That skepticism and those issues paralleled that of the U.S. under former President Donald Trump, who launched a trade war with China that many called misguided due to its “go-it-alone” approach. But the action touched off a global reckoning with the previous view that political liberalization would accompany China’s rise.
Now, the Australia and U.S. views have pretty much converged, Mr. Sinodinos said, and under new President Joe Biden the U.S. is marshaling a coalition of partners to address widely shared concern about China’s goals to offer a rival development model.
“One of the unique advantages of the U.S. is this network of allies and partners, and that should be leveraged as we seek to persuade China that they’re better off being part of the global, rules-based order which can be adapted to their rise,” Mr. Sinodinos said. “But the idea is not for that global order to be upended and then we just have, in effect, a version of the law of the jungle where the most powerful just can do whatever they want, and everybody else has just got to suck it up.”
While Australia previously had taken a more subtle approach to China, given its economic entwinement with the country, that stance is no longer tenable as China challenges the commercial foundations of what the U.S. and Australia are now calling the Indo-Pacific region.
“It’s essentially about calling a spade a spade. And that’s what we had to do. And we’re far more explicit about that now than we were in the past. And that’s just the geopolitical reality we have to live with,” Mr. Sinodinos said.
Beefing Up ’The Quad’
Australia has been a champion of the global system that Mr. Sinodinos said the U.S. created “in one of the greatest acts of enlightened self interest” after World War II.
The country has a free-trade agreement with the United States, but it’s also a member of the Comprehensive and Progressive Trans-Pacific Partnership, the 11-country trade pact led by the U.S. from which Mr. Trump withdrew. It’s also part of APEC and the newly enacted Regional Comprehensive Economic Partnership, another massive Asian trade deal. Both of the latter include China.
But this week, Prime Minister Scott Morrison is pressing its case at a meeting with the Group of Seven economies in the United Kingdom, where Australia was invited to add input to the proceedings along with other democracies like South Korea and India.
Mr. Morrison will bring up the prospect of “economic coercion,” Mr. Sinodinos said, along with the need to create “collective response mechanisms” to counter further trade abuses by China. Australia, he said, is not pushing necessarily to scrap the World Trade Organization, but to make it more resilient through reform.
Mr. Biden’s visit to NATO in Brussels after the G7 summit also has a China focus, as Europe sets up a technology and trade council to protect its industrial base from investment that in China’s state capitalist system cannot be safely decoupled from military applications, Mr. Sinodinos said.
That was a key concern raised during the Quadrilateral Security Dialogue, a forum among the U.S., Japan, Australia and India that was elevated to the leaders’ level this March.
During the first such meeting, leaders of the four Quad countries committed to working together to help vaccinate the world against COVID-19, tackling climate change and ensuring new technologies are developed with democratic standards.
These “critical emerging technologies” like 5G, artificial intelligence, quantum computing, hypersonic jets and more must not become “dual-use” technologies in China, Mr. Sinodinos said.
“These are the areas where China is investing very heavily. It wants to dominate those future industries,” he said, noting the need to set standards among like-minded parties. “Because we feel that if the rules and standards are left to be set, if you like, by authoritarian states, it will be done in such a way as to undermine the global rules based order. So that for us is a very important function of the Quad.”
Golden Opportunity for Georgia
It may not be evident immediately how the sentiments expressed in a security dialogue on the opposite end of the world affect Georgia.
But Mr. Sinodinos — who served as Australia’s former minister for industry, innovation and science — said the return to thinking about trade partnerships with a national security lens creates a golden opportunity for collaboration between Australian and American firms and institutions.
The country is focused heavily on clean energy, advanced manufacturing and food production — all areas where Georgia excels — and it’s looking to the U.S. for investment and research partnerships.
Australian diplomats often double as trade commissioners with Austrade, the government agency tasked with promoting Australian exports and attracting investment to the country. (Atlanta now has neither consulate nor trade office, the joint operation having shut down in 2012).
Still, Australian companies have found a home here. Australian investment bank Macquarie Group has an office in Atlanta, while Atlanta-based Pratt Industries, the world’s largest paper and cardboard box producer using only recycled materials, is a subsidiary of Australia’s Visy. LendLease, an Australia-born development and real estate giant, similarly has a presence in Atlanta. Deputy, a provider of workforce management software, is growing rapidly in Atlanta.
Georgia manufacturers, payment processors, retailers and franchisors alike are strong in Australia, often entering the country via acquisition. These include flooring manufacturer Interface Group, auto parts giant Genuine Parts Co. and Global Payments, to name a few. Local software firms like CloudSherpas are setting up offices in Sydney with greater frequency.
“I look at a place like Georgia, for example, and I think well, ‘What are some of the standout opportunities in Georgia? How do we get Australian firms interested in that?’ It’s not just about creating jobs in Australia; it’s creating jobs in the U.S .as well.”
Trade ties have been strong, but they carry even greater potential as tech and defense become more interlinked, the ambassador said.
“There’s a big upsurge in venture capital firms investing in Australia,” he said, emphasizing Australia’s strong scientific and research infrastructure. “We punch above our weight in those sorts of areas. The challenge we have in Australia is commercializing a lot of the science and tech, whereas the U.S. has a better model for doing that.”
Mr. Sinodinos expressed an interest in visiting Atlanta in the near future; in the meantime, he encouraged economic development agencies to plan trips to the country and open their doors to Australian firms — when COVID-19 permits, of course. He recently held an in-person meeting with Georgia’s U.S. Sen. Jon Ossoff, whose mother was born and raised in Australia:
Delighted to meet Senator Jon @Ossoff to discuss strength of ??Australia – ?? US relationship and opportunities for economic cooperation and investment between Australia-Georgia pic.twitter.com/THd5KDpcdX
— Arthur Sinodinos AO (@A_Sinodinos) May 26, 2021
Australia has been simultaneously lauded for keeping the pandemic at bay and criticized over strict quarantine policies that have kept many of its own citizens stranded abroad over the last year.
As for coming into the country, some exceptions can be made for essential business travel, but a 14-day quarantine remains in place.
Mr. Sinodinos spoke extensively during the interview about Australia’s response to COVID-19, outlining its desire to ramp up vaccinations both at home to return to normalcy and to help its “backyard in the Southwest Pacific.” He welcomed President Biden’s Thursday announcement that the U.S. would procure 500 million more doses of the Pfizer vaccine to donate to lower-income countries through the Covax initiative on top of 80 million doses already announced. Australia, he said, has donated AU$600 million toward regional initiatives to vaccinate children and put AU$100 toward the Quad’s vaccination campaign, along with adding AU$130 million to Covax.
“This can’t be a rich-versus-developing-country issue. Everyone’s got to get vaccinated. It’s in the interests of all of us,” said the former New South Wales senator, Australian cabinet member, Goldman Sachs banker and prime minister’s chief of staff. “This is the classic public good.”
Learn more about Australia’s trade and investment opportunities at https://www.austrade.gov.au.
The Dean Rusk International Law Center at the University of Georgia is the presenting sponsor of Global Atlanta's Diplomacy Channel. Subscribe here for monthly Diplomacy newsletters.