AS THE RUSSIAN invasion of Ukraine throws global food security into the spotlight, Australia has some challenges and opportunities of its own to deal with, according to esteemed former Australian diplomat Dennis Richardson.
Speaking at the Australian Grain Industry Conference around the theme Challenging Success, Maintaining Momentum, Mr Richardson’s insights were a highlight of the event held last week in Melbourne.
On his topic of Strategic Geopolitical Issues Challenging Australia’s Success, Mr Richardson said while some of Australia’s major exports such as iron ore to China could not diversify, agricultural exports elicited a broader appeal.
“When it comes to agricultural produce, I think there’s going to be increasing demand…over coming decades.”
Optimism for China
Mr Richardson’s session was postscripted with a short video presentation from Federal Trade Minister Don Farrell, whose address bolstered one of the threads of AGIC 2023 presentations: China’s return as a buyer of Australian barley is seen as imminent.
Mr Farrell said the Federal Government was “very encouraged that China agreed in April” to a review of the issues that led to China imposing hefty tariffs on Australian barley in 2020.
“We expect an outcome in the next few weeks, no later than mid-August,” Mr Farrell said.
“My counterpart Mr Wang advised that.”
This follows a series of meetings between senior Australian Ministers and their Chinese counterparts, including China’s Minister for Commerce Wang Wentao.
In his take on world trade, Mr Richardson said the change of government which occurred in Australia has been helpful for the resumption of exports of in-demand commodities including barley.
“Fortunately, we have a lot of the things that the world needs,” Mr Richardson said, with iron ore to China being the prime example.
He said, in contrast to rhetoric heard from the previous government, the tone coming from Albanese Government Ministers has been helpful.
“We don’t have a defence minister talking every second week on war with China.”
However, Mr Richardson said China’s merchandising might gave it big levers to pull should it see the need.
“The system is so opaque that you can never be overly confident on the way you read China.”
“China will always reserve the right to take evasive action against trade countries.
“The way they can punish countries is through trade.”
Mr Richardson said the United States could also exert its influence against trading partners, but through financial channels rather than tariffs.
Veiled protectionism apparent
Mr Richardson said a return to a Republican Government at the next US election could increase protectionism.
“Trumpism has captured most of the Republican party.
“It has turned it from a party with very strong elements of free trade into a party of ‘America first’, which is simply a slogan for protectionism.
“It will continue as long as Trump is the dominant figure in the Republican Party; beyond that, I don’t know.”
Mr Richardson said environmental considerations were being factored into European Union trade policies, albeit in a veiled way.
“That’s mixed up with increased concerns about the environment and climate change.”
Mr Richardson said that extended to imports of critical materials, and policies supporting their own industries.
“They use the environment for protectionist issues.
“They do mix it up with their protectionist ideology.”
Concern over Ukraine
Conflict in Ukraine was the other common thread running through many of the AGIC 2023 presentations, and Mr Richardson said the conflict had made food security a global priority.
“It is highlighting just how readily certain supply chains can be disrupted.”
Mr Richardson was clear on what he sees as the reason for Russia’s invasion of Ukraine.
“Putin fundamentally does not believe Ukraine has a right to exist.
“The war goes on – there remains a risk that it could develop into a wider war; we’re not out of the woods yet.”
Closer to Australia, Mr Richardson said stability in the Pacific region, and in South-east Asia was “fundamental to our interest”, and that China’s relationships in the region with nations including Taiwan could cause trouble.
“I don’t think either the US or China want war; it’s not in either of their interests to have military conflict.”
Mr Richardson said he believed Taiwan wanted the status quo to continue in its bilateral relationship with China, and that China and the US could also change tack.
Promise in India, scope for Indonesia
Mr Richardson said he first traveled to India in 1989, at a time when it was described by then Prime Minister Bob Hawke as being “full of promise”.
“It’s been full of promise ever since.
“India is changing and that’s a good thing.”
“There’s a long long way to go but they are changing.
“India will become an increasingly more important trading partner for us.”
Mr Richardson said there was plenty for improvement in Australia’s relationship with Indonesia.
“What we lack there is the depth of an economic and investment relationship.
“We’re neighbours (but) it’s a government-led relationship.”
Mr Richardson said investors in both countries tended to look to destinations with a closer fit to their economic cultures.
“When our business sectors look out globally, they look at countries that have more in common with our legal framework and the like.”
“It’d be great to see us in a really strong relationship with Indonesia.”
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