APEC awaits Donald Trump’s plans for trade pacts
With the ruins of Inca civilisation in the mountains behind, Malcolm Turnbull and other leaders at the Asia-Pacific Economic Co-operation summit in the Peruvian capital last weekend contemplated the threatened end of the globalisation and free trade paradigm that has sustained their upbeat story for the past quarter-century.
Barack Obama was the zombie at the feast, receiving farewells and expressions of hope that his achievements would not leave office with him on January 20. The conquistador in the offing, Donald Trump, was on everyone’s minds.
For those leaders in the American camp, the main issue was whether Trump would turn from his opposition to the Trans-Pacific Partnership, the trade and investment pact agreed by the United States and 11 other countries around the Pacific Rim early this year, but now stranded for lack of ratification by the US senate. The deal can’t come into force unless enough countries representing a total of 85 per cent of the membership’s combined gross domestic product ratify it, meaning US inclusion is essential.
As we reported last week, Japan’s Shinzō Abe stopped at Trump Tower on his way to Lima, having just rammed TPP ratification through his Diet, to make his pitch. Wrapped inside the TPP’s web of investor and intellectual property right protection, its labour and environmental standards, and services trade openings, is a far-reaching US–Japan market-opening agreement. “The TPP would be meaningless without the United States,” Abe said in Lima.
On his way back from APEC, Turnbull was still holding out hope that Trump would come around. He said the TPP was important as a “strategic commitment”. Indeed, the TPP is the economic pillar of Washington’s plan to stay engaged in Asia. The Americans can’t match China’s uncritical largesse to countries such as Malaysia and the Philippines. Obama’s trade negotiator, Michael Froman, has said that blocking the pact is like “handing the keys of the castle over to China”.
But that’s what Trump still insists on doing. After hearing the pleas of allies such as Japan, Australia and Singapore to stay with the TPP, Trump issued a YouTube video on Monday calling the TPP “a potential disaster for our country” and vowing to withdraw “from day one” of his presidency. He also insisted he would renegotiate existing free-trade pacts to “bring jobs and industry back”.
Forlornly, Turnbull’s trade minister Steve Ciobo suggested the 11 remaining TPP members would adjust the agreement to substitute China and Indonesia for the US. Both are highly protectionist and murky about investor and intellectual property rights. Abe discounts this idea.
He fears instead a new focus on a trade pact called the Regional Comprehensive Economic Partnership that China is promoting. It comprises China, Japan and 12 other Asian countries, plus Australia and New Zealand – but doesn’t extend across the Pacific to the US. In a way this is the Greater East Asia Co-Prosperity Sphere that Abe’s grandfather Nobusuke Kishi helped push before 1945, but with China at the core, not Japan.
Trump has been Mr Nice Guy since winning the election. He has said he might retain parts of Obamacare, might only build a “fence” along the Mexican border, has an “open mind” about the Paris climate change accord, and doesn’t want the FBI to pursue charges against Hillary Clinton.
But hopes he would smoothly transition to a “normal” Republican president were dashed with his choice of candidates for top legal and intelligence posts in his administration.
For attorney-general, he’s putting forward the conservative Alabama senator Jeff Sessions, who was rejected for a federal court judgeship in 1986 for racial slurs and is known for hardline views on abortion, gay rights, capital punishment and suspension of civil rights in wartime and emergencies.
For his national security adviser, Trump has chosen retired army general Mike Flynn, whom Obama sacked as head of the Defence Intelligence Agency two years ago for his extreme views about the nature and extent of Islamist terrorism threats. Former colleagues have described his view as “off the charts” and note his reliance on dubious “Flynn facts” originating in social media and rumour. He thinks Islam is a political ideology, not a religion, and poses an “existential” threat to the US. Earlier this year he tweeted that “Fear of Muslims is RATIONAL: please forward this to others: the truth fears no questions…” He also has baggage in recent paid gigs for Russia and Turkey.
For director of the Central Intelligence Agency, Trump has gone for congressman Mike Pompeo, a Tea Party supporter within the Republicans, who opposed the Iran nuclear deal and is against abortion rights, carbon emission controls, limits on gun ownership and closure of the Guantanamo detention camp. He’s for torture of suspected terrorists and restoring mass surveillance halted after revelations by Edward Snowden, whom he’d like put on trial and preferably executed.
All of which could make the “shared values” said to underpin Australia’s alliance with the United States a lot harder to propagate. Should Trump’s appointments as secretaries of defence and state be matchingly bellicose, Canberra might have to review its policy of following the US into every possible war.
This was the talk during the week in Canberra, when defence and foreign policy types gathered at the annual conference of the Australian Institute of International Affairs, and then rather more sadly and reflectively at the Australian National University’s memorial service for its great nuclear war and intelligence scholar Des Ball, who died of cancer on October 12, aged 69.
Kim Beazley’s message at the first event was to urge Canberra to engage even more closely with Washington to shape its policies. A fine idea, except when you note the limited success so far even when it involved Australian citizens in US military or intelligence detention, or look for evidence of Canberra remonstrating when the ally goes in for torture, questionable drone strikes and illegal surveillance.
At the ANU ceremony, Beazley praised Ball for the way his thinking shaped the Defence of Australia doctrine and helped win public (and Labor Party) acceptance of Pine Gap. He didn’t mention Ball’s more recent shift of thinking, criticising the stealthy progress of “interoperability” binding Australia’s military into US operations with dozens of Australian officers now embedded in US command centres in Hawaii.
Ball’s view of Pine Gap changed, too. In our last meetings before he died, Ball said its arms verification role was replaced by a darker mission early this century, controlling US battles in the Middle East and drone strikes on individuals. “On balance, I think that the developments of around 2000-06 make it difficult for me to support the place,” he said in his last email to me. “It’s not my PG anymore. And that means that if it is the strategic essence of the alliance, I now have to question my overall support for that too!!”
Alexander Downer also emerged as an unlikely fan of Des Ball, sending a video message from London saying he liked Ball’s thinking while not always agreeing et cetera.
It got some in the audience wondering what happens next with Downer, whose term as high commissioner ends in May. He had a Kevin Rudd-like hope of an international role, quietly letting it be known last year that he would not turn down the job of Commonwealth secretary-general.
But the grouping’s last heads of government meeting in Malta last November chose the former British Labour Party attorney-general and now baroness Patricia Scotland, a QC who also holds citizenship of her ancestral Dominica. It is not known if Malcolm Turnbull pushed Downer’s barrow, as he declined to do for Rudd’s candidacy for UN secretary-general.
This article was first published in the print edition of The Saturday Paper on Nov 26, 2016 as "APEC awaits Trump’s plans for trade pacts". Subscribe here.