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An Australia-China grand bargain

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COMMENTS

18 July 2011 11:42

It's time to terminate Australia's six-year effort to negotiate a free trade agreement with China. Canberra and Beijing should redefine the ambition and raise the rhetoric with a comprehensive Pact of Engagement, Amity, Cooperation and Economic Partnership.

Those initials produce the PEACE Partnership Treaty. Perhaps PEACE is not quite what you want in the headline, but you get the idea. Whatever the title, it needs to be fluting and somewhat florid, even as the intent is deeply serious.

The idea for the PEACE Partnership is drawn from one of those serendipitous moments when a Canberra political leader is exposed, almost inadvertently, to the insights offered by an intellectual who has deep knowledge of politics, but is not constrained by its conventions. The moment took place last week at the China Update in Canberra when the Treasurer, Wayne Swan, arrived to deliver his speech to the conference. The session prior to Swan's address was coming to an end and on his feet was one of Australia's great Asianists, Professor Peter Drysdale

The ANU makes a fair call in describing Drysdale as 'the leading intellectual architect of APEC'. In the way of these things, Drysdale is probably more easily identified as a living national treasure in Japan policy circles than in much of Oz, but that is the price to be paid by a top-flight operator who is as wryly modest as he is smart. As the Treasurer took his front-row seat, Drysdale made his pitch. The Professor drew on a lifetime of thinking about Australia-Japan relations to call for a rethink of the way Australia is trying to do China policy.

Australia and China, he thinks, need a grand bargain reflecting political and strategic needs as well as trade rules.

The current size and future growth prospects of the relations means, he thinks, that that there is no time to waste in getting the partnership right. Waiting for the barren six-year free trade effort to blossom is not going to be enough to achieve that sense of partnership:

Projections to 2020, which in trade terms is just around the corner, will see the economic relationship with China become Australia's most comprehensive ever. For China, its economic ties to Australia are hugely important for its own economic security. The two countries' relationship is also a key anchor in Asian security. But Australia and China need to work together better in order to get the relationship right, or else they risk damaging its current and future benefits and broader economic and political interests.

There needs to be a new comprehensive economic agreement between Australia and China, which underpins both countries deep economic and political interests across existing strategic resource and energy ties. Arguments over foreign investment also need to be fixed — not with band-aids but with a strategic policy re-positioning. Good foreign economic relations start at home and most of the two countries' economic troubles can be fixed domestically.

The PEACE Partnership would take its inspiration and much of its wording from NARA (the Nippon-Australia Relations Agreement), the 1976 Basic Treaty of Friendship and Cooperation and Protocol between Australia and Japan that Drysdale helped build. Other elements would be drawn from Australia's umbrella treaty with Indonesia.

The 'Amity and Cooperation' elements would be an attempt, both fascinating and fiddly, to go beyond 'mutual respect' to shape the way two extraordinarily different peoples and polities think about each other. The Amity text could reflect — in the most muted diplomatic terms — some of Australia's experience of dealing with biffs and buffetings from Beijing during the down periods in the relationship under the Howard and Rudd Governments.

The Economic Partnership part of the pact would be a document with a lot of detail, drawing on what has been agreed over six difficult years of work in the free trade negotiations. Mercifully, all the knotty issues that have ground the process to a halt would be quietly put aside for another time. That approach was part of the NARA magic.

The next column will offer up a draft text for the Pact of Engagement, Amity, Cooperation and Economic Partnership.

Photo by Flickr user pierre poulquin.

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