Mega free-trade deal a lifeline for Australia-China relations
smh.com.au
smh.com.au
HN of all places should be a place where people understand that domain models matter, that precisely specifying them for either purposes of automation or legal formalization is going to involve significant descriptive effort, possibly even volume, and even apparently simple things -- from trade and health care down to how the arithmetic you think you're used to -- have a lot of complexity underneath them.
I haven't been this excited since I read the entire CARES Act
Eg. My family's orchard no longer grows oranges, nor kiwi fruit, nor other exotic fruit due to "free trade". The local supermarket chains (coles and woolworths) both decimated these industries by forcing farmers to suddenly sell at Asian market cost. My whole area used to be renowned for oranges... But there are all but a small handful of tiny orchards now.
Because of fruit fly, the other owners, including my family, had to destroy the trees. So, there's no chance of ever returning the property to it's former orchard status.
A secondary effect of "free trade" is that the above mentioned supermarkets started buying the land of the farmers they'd driven to the wall, and put in "manager farmers" who do not look after the land near as much as a family owned property does. Eg. Excessive use of pesticides, ignoring noxious weeds (a cost saving), use of temporary & often overseas workers. All profits that used to go to local industries (eg hardware stores & other shops) are now sent out from centralised warehouses.
To compound the problem, these "free trade" partners now also purchase the land, so even the profits now go overseas. China is now a very large landowner of Australia, and have long term 99yr leases on the ports of Melbourne and Darwin.
So, personally, I'm not a fan of anything "free trade".
Have countries abandoned the idea of uniting against China?
Was this Trump's doing?
What about TPP?
This is some of the same countries, but lots of other ones too (all the members of ASEAN). India was in this new one until last year when they got cold feet about reducing tariffs on milk and meat products.
The main points are standardising goods classifications, paperwork, and procedures at point of import. This simplifies things a lot for exporters. There is some loosening of restrictions on services exports (I guess things like insurance, finance, business services, software) also.
For the United States, it continues a slow marginalisation in world trade. Unless the US harmonises its rules with everyone else, it'll be too much bother to try to export there.
Uniting against China... Here's an accurate if unsparing description of the US: "a crisis-wracked, oil-rich, nuclear-armed country in which an aging would-be dictator for life tries to stave off replacement by his popular successor amid large protests, while heavily armed groups roam the ethnically divided interior".
China looks like a model of stability and calm by comparison.
Edit: I forgot to attribute the quote: Kenyan comedian Gathara.
>China looks like a model of stability and calm by comparison.
Isn’t Xi effectively dictator for life now, and not simply a “would be” like in the US?
Doesn’t China have the 4th largest nuclear stockpile? (US is #2)
Doesn’t China have the 12th largest proven oil reserves? (US is #10)
Do the tens of thousands arrested/wounded/dead in Hong Kong count as “crisis wracked”?
Doesn’t China ethnically divide itself between the Han vs everyone else, culturally erasing groups like the Tibetans or simply rounding up Uyghurs to fill concentration camps?
Ranking hides context. China plans to double nuclear stockpile to around 600, but that's still 10% of what US current has at 6,000. Charitably 15% because US is slated to reduce stockpile to 3,800.
China is a massive oil importer whereas US fracking makes it a net producer. This means China _must_ maintain SLOCs and maritime trade, whereas US has incentive to disrupt it.
XJ/HK/Tibet can protest and it would be a relatively minor disruption because they account for ~1% of the population, the disruption in HKs case is only because anglosphere is making it a geopolitical issue. HK under NSL has moved _up_ Global Finance Centre Index this year, overtaking Singapore. Stability is good for business. And as Singapore demonstrates, one party systems is fine for long term financial prosperity.
XJ had terrorism, but that's completely suppressed by the security architecture. Compared to US prison industrial complex, even if China jails every Uyghur rather than the alleged 1M+ right now, lifetime likelihood of being detained for Chinese Muslims (total population 80M) would be less than US Blacks at 28%. Rising pork prices is more of a concern of CCP than minority protests.
Incidentally, food security and dependency on oil / resource imports is broadly why China benefits massively from global stability and existence of multilateral systems. Whereas US is largely self sufficient and can step back and watch the world burn. Ultimately, China needs stability, whereas US doesn't. Indeed US can afford to disrupt stability for everyone else, perhaps even sufficiently so at US relative gain.
China has issues, but it's consistent.
US is inconsistent. One year it's a messenger of trade and peace. Another year it's an anti-trade anti-peace rambler.
Of course, other democracies have similar issues. But none are as sharply polarized as the US forced two-party system, where the objective of each party is to run on a platform to undo the other. The policy ping pong has probably reached it's extremes, so much that you cannot expect any kind of continuity anymore.
With the exit of US from global stage and it's lack of continuity, other countries have to cope up to a new center of gravity.
That’s over. Trump ripped off the bandaid. Those WTO appellate judges - whose appointments Obama blocked and Trump continued to block - will never sit and rule. The days of truly multilateral trade negotiations are over and right and the left in the US are in agreement over this.
Iran, TPP, NAFTA, Paris Agreement, Korea free trade agreement (KORUS), ... There is a very long list. I believe it goes both sides on both parties, but what is there today is what is relevant to countries today. No country is going to look back at the "great old times" of USA as the benchmark for today's decisions.
We can cook up a reason for each, and pretend the senate is a happy body working together in the spirit of democracy on foreign policy and trade. But reality is, other nations cannot and do not treat US as a role model for foreign policy continuity anymore.
The WTO was the landmark achievement in US foreign and economic policy of the 1990’s and until recently was emblematic of US engagement with the rest of the world. US foreign and economic policy have actually been exceptionally consistent up until very recently. Every one of the issues you brought up - NAFTA, TPP, the Paris agreement - these were all ripped up during Trump’s term. But remember that it was Lighthizer and co who gave Trump the scissors.
Other nations can think whatever they want about “US [...] foreign policy continuity” and can find whatever role models they like. The US just isn’t playing anymore - they neither aspire to nor are interested in being such a role model and the truth is that the rest of the world needs them a great deal more than they need it.
Multilateralism is dead in Washington and the US will continue to engage with the world, but piecemeal and one country at a time. Anyone can opt out, but it means foregoing the biggest consumer market in the world and the largest and most efficient finance markets in the world.
I don’t think that this agreement means very much.
China has been retaliating recently against Australia since they chose to stand up to them over COVID-19, HK, South China Sea etc.
And they've done this through sneaky but legal means e.g. suspending wine imports by accusing them of dumping, magically finding pests in a range of imports and labelling Australia as a dangerous place to live in order to discourage Chinese students.
So having a FTA in place doesn't necessarily mean much.
FTA doesn't disallow anti-dumping and tariff punishment. Trump admin had slapped huge tariff on Canada/Mexico on automobile/steel/logs, for example, when the NAFTA is still in place.
The other country can choose to slap counter tariff if they see fit, but they can nothing about each other's choice.
Force? How? Can you give an example?
Australia's foreign policy has a massive contradiction at its heart: China is Australia's most important trading partner, but Australia's closest military ally, the United States, is pursuing an aggressive strategy to suppress China's rise as a peer-level state. Australia has to figure out how to reconcile these two facts, but it can't have its cake and eat it too. It's not possible to go along with American anti-Chinese initiatives while at the same time expecting the economic gravy train of exports to China to continue.
In this context, the decision to call for an investigation into the origins of SARS-CoV-2, heavily hinting at some sort of nefarious origin, was a completely unnecessary blunder. One wonders what the Australian government thought it would get out of that.
Speaking of China: China joined WTO since 2001, promised to open up its financial and banking sectors to foreign competitions as conditions for joining, still has not done enough.
I agree that this new agreement may not mean much.
If you said they are a set of rules, regulations and specifications for commerce that make trade processes more uniform and less expensive, unencumbered by tariffs, you'd be right.
If you said they force Country A to buy goods from Country B, you'd be mistaken.
The article explains nothing, other than saying "yeah they agreed on something".
There is little of harmonization except clarifying some rules of origin issues https://www.wto.org/english/tratop_e/roi_e/roi_info_e.htm
It contains some tariff removals. Tariffs have lost importance relative to other issues because they are already relatively low. The world has gone trough nine rounds of GATT and is on 10th.
I think this signals that ASEAN countries are willing to play China and the US against each other in trade.
Trump threw out TPP, which was designed to isolate China, and in doing so managed to do the opposite, isolating the US economically from the entire Asia-Pacific region. This is going to massively favor China in its fight for economic dominance with the US for the next decades, and probably the greatest failure of policy in the last 50 years, yes, even worse than the Iraq war. India is the other great loser.
Maybe this sort of thing doesn't interest the readers of the Times so much?
Is this true?
The US has a free trade agreement with Korea, recently signed a very limited free trade agreement with Japan with the expectation that it will be expanded. Also Vietnam has risen three spots to #8 on the list of trading partners with the US.
Of course Congress is the tricky part. Trump pulled the USA out as he was essentially a Democrat in terms of trade protectionism - a very odd position for a Republican. Congress is split but I could see the Republican Senate passing it. The question is will enough a Democrats in the House agree to it? Likely a very divisive issue between the Liberal (maybe yes) and Progressive (no) sides.
It has been demonized by the conservatives, or anti-globalists from both parties, here in US. With PA/WI/MI being the king maker in past 2 elections in US, I dare any president would go that far to agonize the voters in those states, even though it might be strategically right choice to stabilize US's influence in Asia.
I do wonder if there’s enough of a bi-partisan coalition (east coast wealthy liberals, west coast states that would benefit, Texas conservatives, etc) to push it. But you’re right that both sides see those states as strategically important and it’s doubtful Biden would want to approve it since that could be poison next election.
This is from the 2015 session where TPP fast track was debated.
The average Republican member received $19,673.28 from corporate TPP supporters.
The average Democrat received $9,689.23 from those same donors.
Source: https://thenewamerican.com/corporations-bribe-senators-to-vo...
The Chinese certainly don't consume as much per person as Americans... but they probably wish they could.
I mean the US government could do things like provide lots of incentives for its citizens to reproduce but, nah, too difficult. Just import the entire third world, things will work out fine.
Doubtful it'll happen, but still a possibility.
The minute oil producers start accepting other currencies (which is what trade blocs such as this could accomplish) or they reduce their dependence on oil (which is what Chinese companies are offering for cheap), these countries will not even try to export to North America because population-wise, America can never have as many consumers as Asia and Africa.
Our wealth in America is only because we are the reserve currency. We are not producing goods and services of the future any longer.
Not sure what you are talking about here.
Majority of globally successful companies still come from the US and that isn't changing anytime soon.
You should look at China's stock market and what they are able to achieve without printing trillions like the US just did. And we are still not out of covid.
The entire Chinese banking system is essentially bankrupt.
Chinese companies are forced to accept suboptimal business decisions to further CCP goals.
In spite of the incredible inventiveness of the Chinese people, companies in China outside of PCB-level board assembly are weak and uncompetitive, having been the beneficiaries of government protectionism (how many countries use Baidu for example).
Except for a video-sharing website for teenage girls.
And a network switch manufacturer that is subsidized and owned by the government.
And the population is getting old before it gets rich, with no social safety net.
What does fiat currency even mean in a closed society? Is China solvent or not? What can we say about government debt when private banks are forced to make bad loans at the government’s request? And what can lenders expect back when the government doesn’t respect private property?
"In 2019, Fortune's Global 500 list of the world's largest corporations included 119 Chinese companies, with combined revenues of US$8.2 trillion (that's 40% of US GDP). That same year, Forbes reported that five of the world's ten largest public companies were Chinese"
Because I could’ve sworn that America was engaging in QE-infinity for the last 12 years. The money printing machines have been running on overtime.
There is no price discovery in the American stock market anymore, because the Fed has distorted everything.
I've heard this POV many times but it seems very hard to believe. Especially with the internet, the knowledge gap is closing or already closed. Capital is now generally available for good ideas, and access to electronics and computing hardware in many Chinese cities is better than in the US.
With 4x the population of the US, many of whom now have access to the whole of human knowledge via the internet, hardware and cheap manufacturing for rapid iteration, how does this not result in change?
It's truly stunning scale and most armchair philosophers here in the US just can't appreciate the scale of it until they actually see it.
This is tinfoil hat territory. The US makes, perhaps, a few 10s of billions from seigniorage of dollars held abroad, but that's a very small number in comparison to the US GDP of approx. 20 trillion.
For a better measure of understanding how economies are operating, look at GDP (PPP).
The US doesn't have a very high GDP because of the dollar reserve currency status. It has a high GDP because it is one of the most technically advanced nations in the world and also has quite a high population. Those things combined enable it to produce a lot of stuff every year.
As for GDP, technology has always been the reason for American GDP. But today, China has caught up technologically and they still have more than 50% of the country yet to develop. That's how much China has left to grow. The direction is clear.
Once the US dollar is not the reserve, the dollar will devalue fast and all the statistics which show US number 1 will be up for correction. GDP is one of it.
Previous countries didn't lose their preeminent places in the world because their currency stopped being the world reserve. Their currencies stopped being the world reserve because the countries lost their preeminent places.
You are now saying something different. That's fine. I think there is some truth to what you are saying now, though personally I don't think the situation is as dire as you seem to. The UK used to rule of the world. It doesn't anymore. It's still a fine place to live.
Merkel even said after the NATO meeting, that Europe can no longer rely on foreign partners. In response to Trumps actions and the UK leaving the EU.
NATO existed to fight off global communism by keeping the Soviet Union out of Western Europe. This was directly in the US national interest because the US didn’t want to face a pan-Eurasian communist front in a future war.
What does NATO do anymore? The US, as the only global superpower with a homeland separated from any potential, conceivable enemy by the two biggest oceans in the world, is largely invulnerable to invasion. And without an enemy with an energizing ideology behind it, what is anyone allied against?
What matters most is trade balance. If somehow a trade is completely balanced, which is quite unlikely, then it's zero-sum.
The problem is that China very rarely has trade surplus with other countries. They often come up with illegitimate reasons to restrict trade to those countries with surplus.
Australia joining free trade agreement with China makes sense because they've sold so much of their natural resources to Chinese companies. Exporting Iron/Coal for example is huge. The free trade agreement with china will give them a surplus that will make Australians quite wealthy.
Climate change will be used to restrict or even eliminate coal use within Australia in order to abuse that situation more. Australia stands to benefit greatly at the expense of China.
Japan on the otherhand? They are still in the midst of a deflationary spiral due to their debt crisis and their trade deficit with China will become worse. The Japanese people are pretending to be wealthy right now and are going to be far less wealthy soon.
Ask yourself how free "free" is a "free trade" agreement when one side:
- Has a per capita fraction of the environmental regulations/costs.
- Has a per capita fraction of the social program costs.
- Has a per capita fraction of the labor/union costs.
- Has a per capita fraction of the regulatory/I.P. costs.
- Provides tax incentives for export.
- Manipulates its currency to undercut global pricing.
- Has no foreign bribe prohibitions.
The world's one and only attempt to check Chinese economic domination died when Trump lost his reelection bid. It is now a race to curry favor with Beijing.
This post will be downvoted into oblivion because it says thing people don't want said and that others don't want to believe.
Pulling out of TPP was a massive geo-political and economic win for China. And nothing was done about widespread IP theft, trade imbalances, data sovereignty concerns or the use of trade to influence other country's policies.
To the extent that I expect China to dominate the global economy for the next century or so, it is because I expect others to choose to fight amongst themselves instead of choosing to build and grow, and not because of China itself.
Please tell me why you think I’m wrong.
The Western world established dictatorships abroad to palliates this, whose workers have no safety and where the environment is an afterthought to compensate.
It has nothing to do with scruples. It's just that we pretty much force poor countries to act this way.
FWIW, working conditions and environmental concerns seem to be improving in China as GDP per capita rises and they can afford not to compete with other low income countries on price.
The Chinese economy is effectively a huge bubble fed by monetary stimulus, and it doesn't seem to be sustaining its historical growth since the 2010's -- although nobody really knows what's going on there, given that the CCP discloses information that favors whatever narrative they want. In any case, it may quite well happen that Covid has been accelerating the Chinese economy's demise.
The CCP is very aware that the country is in trouble, and this is evidenced on how bellicose they're getting in the last few years, as a matter of desperation.
On the top of that, the Chinese population is increasingly becoming aware of the corruption in its government. The number of conflicts between the population and the CCP has progressively been escalating.
This has been said during the last 30 years at the very least. It's not going to happen, white Americans must accept that they will not longer be rulers of this planet.
As for "increasingly becoming aware of the corruption in its government"... that's not really true simply because everyone has been aware of it for literally a thousand years. The corruption is sort of background noise there, it is essentially expected. The question most people ask is instead more like, "is there more or less corruption now?" "is the corruption more or less harmful?"
Finally, I don't know where you're getting the idea that the "the number of conflicts between the population and the PCC has progressively been escalating". If anything, the gov of china is more respected inside China now than ever before. I suspect it's mostly because of their aggressive response to covid. Which they never tire of letting everyone in China know about. Short term, at least, the CCP's power inside China is quite secure. Long term, who knows.
rump fucked the farmers in favor of the agribusinesses.