Economic diplomacy: New Labor ministers tackle old issues

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Made in Australia

Last year, as new prime minister Fumio Kishida sought to regenerate a tired Japanese government, he appointed an economic security minister to chart a path for economic growth between falling confidence in globalization and mounting pressure to relocate manufacturing.

Last month, as Australia’s elections began, Minister for Economic Security Kobayashi Takayuki said: Finally a law in Japan to strengthen supply chains for key materials, give the government more control over infrastructure, and encourage public-private collaboration in research and technology. Oddly enough practically only The Japanese Communist Party argued that the government exercised too much control over private enterprise.

As a new government comes to power in Australia, the country Japan Inc has increasingly turned to for profitable private investment and geoeconomic cooperation in recent years, who should Kobayashi call?

Prime Minister Anthony Albanese appointed a new ministerial team this week that includes a better-than-usual mix of people with previous government experience and diversity. Serving at least two decent terms in government, something the Labor Party has rarely done nationally, seems to bode well for a steady start for Albanese’s plan.

But one area where questions arise is who will win on the issue Kishida raised with a minister, US Treasury Secretary Janet Yellen vocation “Friendshoring” and the outgoing Australian government used to call it “economic sovereignty”?

The bigger question is who, in an Australian Labor Party with a protectionist-leaning union base but a proud legacy of the government’s past trade liberalization policy, will really take the political baton for broader international trade relations – all amid a debate over the advantages of globalization.

Trade reforms in previous Labor governments have often been associated with ministers who were not held back by long union backgrounds, such as John Dawkins in the Hawke government and Craig Emerson in the Rudd/Gillard governments. The use of structural adjustment measures to deal with industrial transformation amid unilateral and multilateral trade barrier dismantling is still one outstanding performance the Hawke government, which Albanese sees as his model for success.

Chalmers also says he plans to go to the next G20 finance ministers meeting in Jakarta in July and hints that Australia supports Indonesia in the debate over whether Russia should be able to attend the Indonesia-hosted G20 – Participate in annual activities.

Albanese has repeatedly said he wants to lead a country that produces more. And his campaign got a lot more attention relocation of production than the diversification of exports encapsulated by the campaign launch where he explained: “Will we strengthen our skills, training and manufacturing capacity to ensure we are not isolated at the bottom of global supply chains?”

But Labor’s little-reported campaign trade policywhich contained echoes of Hawke-era thinking, was developed by Western Australian Madeleine King, who will now, unsurprisingly, oversee the resources and development of Northern Australia.

The post of relatively prestigious Trade Secretary went to the powerful right-wing Labor leader and former retail workers union official Don Farrell, who briefly worked in tourism, science and sport in the last Labor government from 2007 to 2013.

Deputy Prime Minister and Secretary of Defense Richard Marles, also a former union official, was due to be there as a former spokesman for jobs, skills and national reconstruction, but his responsibilities will no doubt include building a nuclear submarine.

Treasurer Jim Chalmers will also have his hands full dealing with the immediate domestic challenges of budget, inflation and whether to do so Limit gas exports to dampen domestic prices and help domestic manufacturers. This decision has interesting economic diplomacy implications for Australia’s reliability as a resource exporter and for its climate change credentials as it seeks to offset declining fossil fuel investment amid climate change potential “green inflation” from the rising costs of investing in alternatives.

Farrell has an assistant secretary in Tim Ayers, who is conveniently also assistant secretary for production. But Ayers is relatively new to Parliament and comes from a background in the manufacturing workers’ union. And that led him, in his first speech to Parliament to reiterate the sort of sentiment heard from the Biden administration that a decline in manufacturing jobs in Australia has been linked to falling confidence in democracy. In his first comment on the task ahead of us this week, Ayers told ABC: “Rebuilding Australian manufacturing, ensuring we’re making things in Australia again, improving our economic diversity and resilience is a core goal of the Government.”

The standing Husic Minister for Industry and Science is sworn in by Australia’s Governor General David Hurley (Jenny Evans/Getty Images).

But the Secretary who has the most interesting potential to grapple with the dilemma of maintaining resilient sovereign manufacturing capacity in a country highly dependent on access to globalized export markets is incoming Industry Secretary Ed Husic, who happens to be Part of the new diversity as a muslim. Husic is also a former union official, but interestingly for the purpose of managing a changing digital economy, from the communications department of the electrical union. And he firmly embraced the Hawke record in his 2010 year first speech to Parliament and stated:

I remember the economic reforms of the past few years, like the massive trade liberalization that we did 20 years ago. We never waited for trade doors to open elsewhere before doing what was right for this country. We made the right decision: we formed the Cairns Group, we pushed for APEC and we pursued the matter elsewhere. Australia and the world are better for it now.

In his first job interview This week, Husic emphasized the role of the government’s proposed National Recovery Fund in providing cheap capital to supply chain-sensitive businesses, as the existing Clean Energy Finance Corporation does for renewable energy.

We need to rethink what our national manufacturing capacity is in all sectors and how we replenish and rebuild…there are areas where we can make a difference, resources, agriculture and especially medicine…not only in terms of export opportunities but also in terms of the opportunity to meet the needs of business here.

So watch this space as an Albanian government pays more than lip service to its Hawke-era aspirations.

More with less

Secretary of State Penny Wong has drawn all the attention with her previous trips to Fiji, Samoa and Tonga as she tackled Australia’s complex mix of defence, diplomatic and development challenges in the Pacific.

But when Wong’s colleague in charge of the Treasury Department, Jim Chalmers, gets involved budget hole Finally, left behind by the outgoing government, attention will have to turn to one of the main dilemmas, namely China’s Belt and Road initiative to further tap scarce fiscal resources.

Labor pledged about $1 billion more in foreign aid cash Pacific, South East Asia and possibly beyond in the developing countries of Asia over a period of four years was the campaign’s big headline. But the focus on benefits in kind in Labor’s aid policy may ultimately be more important. The plan to issue 3000 Permanent residency work visa to Pacific citizens could be the first step towards a pact with some Pacific countries, which was raised in the recent report of Parliament’s Joint Standing Committee on Foreign Affairs, Trade and Defense.

A DFAT review is planned for new loan guarantee options (MoD)

But the aid policy sketched of the new Minister for International Development and the Pacific Pat Conroy, who usefully still holds the role of Secretary of Defense Industries for strategic coordination purposes, placed great emphasis on “new forms of development finance to complement Australia’s [overseas development assistance].” Conroy plans a Department of Foreign Affairs and Trade review of new options in loan guarantees, equity ownership and insurance, which the last government has already aggressively embraced with initiatives such as supporting Telstra’s purchase of Digicel Pacific.

“These have the potential to increase the effectiveness of grant funding by mobilizing development investment from the private sector, financial institutions and multilateral institutions. Australia needs to help shape those opportunities,” Conroy said. And Labor has already moved down that path by dodging it Funding Partnership for Pacific Climate Infrastructure into Australia’s Pacific Infrastructure Finance Partnership, which the outgoing government topped up with an additional $1.5 billion in March.

Talking to Jakarta

As Anthony Albanese and Penny Wong Trip to Indonesia something happened at the weekend Rite of passage first visit For Australia’s new prime ministers, Chalmers already seems to have elevated the country’s standing in the new government.

He made his first international phone Called his Indonesian counterpart Sri Mulyani Indrawati this week, partly making up for the fact that in the very first days of his tenure as prime minister, Albanese broke his first visit practice by going to the Quad Summit in Japan.

But more importantly, Chalmers also plans to go to the next G20 finance ministers’ meeting in Jakarta in July, suggesting Australia is backing Indonesia in the debate over whether Russia should be able to participate in Indonesia’s organized activities of the G20 year.

US, Canadian and some European finance ministers gone out of the finance ministers’ meeting hosted by Sri Mulyani in Washington in April, and Australian officials attending remotely turned off their screens as a Russian spoke. Former Prime Minister Scott Morrison has said it is difficult to attend the G20 when Vladimir Putin is there.

So this could be the first sign of a different approach by the Albanian government to the United States, where regional and global interests diverge.

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