AN EMPHATIC Labor victory at the federal election has placed Australia in a strong position to defend the free trade agenda, a webinar organised by La Trobe University has heard.
The webinar, Australia’s Election and the International Agenda, included Professor Nick Bisley from the School of Humanities and former federal Labor leader Bill Shorten.
Professor Bisley said the Albanese government had strengthened its cause before the election by endorsing free trade and had rejected the option of reciprocal tariffs.
“This was partly for domestic reasons, it is expensive to do so, but it is also a principled decision,” he said.
“We believe that reduced barriers to trade make everyone better off and I think we absolutely have to stick to our guns.”
The webinar occurred during a week when the US and China concluded trade talks with an outcome widely considered as a defeat for the Trump Administration.
Professor Bisley said recent market gyrations were extraordinary in that they were the direct consequence of government choices.
“The [US} government stood up and said we are going to rip up what we have been doing in terms of trade policy,” he said.
“We are going to turn our back on free trade principles and having the American (US) market open to most things from most countries and impose these, frankly, ridiculous program of tariffs.”
Professor Bisley used the example of Vietnam, a communist nation that had been drifting into the US orbit, only to be suddenly hit with 46 percent tariffs.
“They are flummoxed as to where this came from,” he said.
He noted that the US Treasury Bond market suggested “the most conservative investors in the world” believed the country was run by people who had zero idea what they were doing.
“As a result, you saw a very significant drop in confidence in the US as an economic actor,” he said.
“Now quite where this ends it is hard to say, it is still early days, but what we have seen is a lot of chaos.”
Professor Bisley said one bright spot was Trump had responded to markets and understood that upsetting the bond market was “a very bad thing”.
“Every country that sees itself as a partner of the United States has to start thinking about what we do in a world in which your principal partner is one who you cannot say is a good faith actor,” he said, noting “Australia should act with dignity and strength”.