Australia to push EU-style trade deal in Asia – The Sydney Morning Herald

The China-driven partnership, which would create a European Union-style block in Asia, has been overshadowed by the Trans-Pacific Partnership and leadership drama in Canberra but could prove vital as the trade dispute between China and US President Donald Trump escalates.

Senator Birmingham flew into the debate for the first time on Thursday, telling Fairfax Media there was “a widely held desire to secure this regional agreement,” but many significant issues still require negotiation and resolution in the face of global headwinds.

“We continue to encourage all countries to work hard towards what would be one of the most economically significant trade agreements in the world covering the 10 ASEAN nations and other economic powerhouses such as China, India, Japan and South Korea,” he said.

In a clear sign he wanted to stake out a pro-trade position in the region, Mr Morrison declared “Australia can compete with the best of the world,” before flying to Indonesia on Thursday.

That position could face a test under the economic partnership, with India demanding greater access to service markets in Australia for its IT workers in exchange for Australian access to its agriculture and dairy markets.

The multibillion-dollar boost for farmers could come at the cost of jobs for Australian workers under the agreement, but firm details remain locked behind closed doors in Singapore.

“It is one of the most secretive free trade negotiations we have,” said Monash Business School international trade law lecturer Giovanni Di Lieto.

“Australia is a very good example of the conundrum of the negotiating position,” said Dr Di Lieto.

“Bilateral trade with India has been frozen for a decade. It would be good to have a foot in the door to conclude an economic partnership.”

He said many countries involved in the economic partnership and the Trans-Pacific Partnership – including Australia, New Zealand and Japan – were playing “two tables”.

“This used to be quite a viable option before the advent of Trump but now it has become more and more tricky to appease both superpowers.”

India has come under increasing pressure from the US to resist China’s advances, with the US highlighting its role in Pakistan and Afghanistan, but that influence is diminishing as the US withdraws as a free-trade advocate under Mr Trump.

In Jakarta, the first step of a comprehensive bilateral free trade agreement will allow Australian universities to open up campuses in Indonesia.

Indonesian President Joko Widodo and Australian Prime Minister Scott Morrison will meet on Thursday.

Indonesian President Joko Widodo and Australian Prime Minister Scott Morrison will meet on Thursday.

Photo: AP, Fairfax Media

“This agreement will help forge stronger economic ties with one of our major trading partners and provide businesses and investors with more access to Indonesia’s trillion-dollar economy,” said Senator Birmingham.

Cattle, wheat and grain exports to Indonesia, transport, health and digital economy co-operation are also expected to be on the table when Mr Morrison meets Joko Widodo at his Presidential palace on Friday.

“We’ll always believe that trade will generate positive results for our economy,” Mr Morrison said before departing Sydney on Thursday. “It’s how we keep the economy strong, it’s how we’ve been a prosperous country.”

Former prime minister Malcolm Turnbull was due to travel to Indonesia and then to Nauru for the Pacific Islands forum next week before he was ousted as Liberal leader on Friday.

Newly appointed Foreign Minister Marise Payne will represent Australia in Nauru after Mr Turnbull’s deputy Julie Bishop also resigned in the wake of the leadership spill.

Eryk Bagshaw is an economics reporter for the Sydney Morning Herald and The Age, based in Parliament House

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