Silent progress on the international stage

Gillard and Obama talk for the media - Image Source AFP

Julia Gillard has been jet-setting around the globe, representing Australia on the international stage. She hasn't yet been nicknamed after an aircraft like Kevin 747 yet, though the Liberal Party machine or Joe Hockey may churn something out in the near future. Interestingly enough, Kevin Rudd, when not in bad health, has been doing the same. His role as Minister for Foreign Affairs has seen him give a berating lecture to the UN, criticising it for all talk and no action. It is about time someone else other than Colonel Gaddafi gave the UN a good dressing down. Yet the real progress that has been made hasn't been Gillard getting used to foreign affairs, but what she and the international community have done in regards to trade liberalisation. Not to mention strengthening Australia's bilateral and multilateral relations. 

Foreign Affairs in Australian politics occasionally gets as juicy and zealous as "boat-people", Afghanistan and or something to do with New Zealand. When it comes to election issues, it's all about domestic politics with the exception of the aforementioned. Yet as all major parties declare that they are for 'responsible economic management' and 'furthering Australia's national interest abroad', Australia's involvement with free trade agreements are swiftly glossed over. Instead, images of the protesters and rallies being held outside of the G20 meeting, and the dress on Gillard's APEC doll are much more exciting. Then again, reams of documents outlining every miniscule detail about every product coming under a FTA (Free Trade Agreement) doesn't make for an interesting headline. But the agreements and relations that Australia has been fostering within these last two meetings, have set the framework for a more positive economic future for Australia as well as the Asia Pacific region.  

Gillard's conscientious effort to become more diplomatically engaged with other heads of state sets a positive outlook for future relations. It may seem corny that Gillard calls Obama her "mate", but such superficial and symbolic relations can be significantly built upon in times of need. Howard's chummy friendship with George W. Bush was a significant factor that lead to Howard evoking the ANZUS treaty soon after September 11, and unconditionally supporting the US in both its invasion of Afghanistan and Iraq. All the diplomatic hand shaking, smiling, and pandering to the media about being buddies and good friends is bluff. But it is bluff that can be turned into powerful political capital when necessary. 

Despite the leaders circus, minus the funny attire this time, the most important and significant outcome of both the G20 and APEC summit has been the continuing push towards the finalisation of a multilateral free trade agreement. Surprisingly enough tariffs and barriers to trade still extensively exists amongst most countries. China's (below market value) fixed currency acts as a practical barrier to imports while strengthening their exports. Similarly, the US Federal Reserve's decision to artificially lower its dollar via a $600 billion stimulus package acts as a barrier to trade. Such barriers are hard to regulate in an international environment, especially when it is the 'big two' (China and the US) who are playing dirty. But barriers like Japan's 778% tariff on imported rice can be dismantled and regulated easier. For many reasons (though mainly shorted sighted political self interest), developed countries block or try to slow down multilateral trade liberalisation agreements, like the Doha round, which benefit emerging economies more than it does them. Though with developed countries seeking post GFC recovery, trade liberalisation that encourages economic development, is what they appear to be turning to. Despite Japan having numerous conservative governments that have failed to create significant growth, Japan's is showing signs of accepting, or even supporting, more free trade within the Asia Pacific area. If economic growth is going to occur, Japan wants to be part of it. 

The US backed free trade block, the Trans-Pacific Partnership, is gaining momentum and support from many countries within the Asia Pacific region, including Australia. Having such an agreement would not only benifit Australia, but the entire region. It would open up Australia to the fastest growing export market, as well as foster stability within an otherwise relatively unstable region. Both Obama and Gillard acknowledged that regional stability comes with economic growth; which is the ideological objective of multilateral free trade agreements. Along with this, many APEC countries have agreed that the Doha round has been the elephant in the room for too long, and that agreement and action needs to be reached. Unsurprisingly enough, Gillard pledged Australia's support. 

Suddenly and silently, action appears to be occurring. The more media gusto and grandeur that is placed around these events, the greater the flop they usually are - Copenhagen anyone? So this relatively unnoticed summit that has fostered consensus, may yield some results. Though despite the international political acknowledgement that there are mutual benefits from an Asia Pacific free trade area, it could still silently slide of the table and into the abyss. Though all is not lost. Howard and his buddy Bush used their relationship to finalise the Australia-US Free Trade Agreement. If so, let us hope that Gillard can use some of the political capital she has built up to further bilateral free-trade agreements with China and our smaller regional neighbours. Plus, she has always got Kevin Rudd on hand. 

Links:

Gillard on the go is being undersold - National Times

APEC leaders agree on free trade zone - ABC online

Resist protectionism, Julia Gillard urges leaders at G20 summit in Seoul - The Australian 

Japan is test case for Pac Rim free trade zone - Associated Press 

Unite for free trade, Gillard tells G20 leaders - National Times