Resources security: No, it’s not the self-serving excuse pushed by certain West Australian industries for grabbing cheap gas – it’s the sort of thinking that has led and could again lead to war. And it’s spreading amongst our two most important trade partners.

While much of the world has been trying to keep faith in market mechanisms and reasonable behaviour to allocate resources, China and Japan are showing signs of backsliding into pre-emptive asset grabs. It’s resulted in such embarrassments as China treating the old crook and madman Robert Mugabe like a hero and Japan seeking guaranteed supply of resources and food as part of any free trade agreement with Australia.

The AFR reported yesterday that Australia rebuffed the Japanese attempt. Writes Tracy Sutherland:

A senior Japanese trade official recently called on Australia to make a long-term commitment to guarantee Japan’s food supply if it wanted to win an FTA, while a leading Japanese business group has said an FTA should include a commitment to supply Japan with resources in the face of competition for commodities from China.

Trade Minister Warren Truss told the Fin, Japanese demands for supply guarantees was a key issue in the proposed FTA. Japan was a priority for us but “we can’t guarantee ever that it’s going to rain and we’ll have products to sell, so there are limits to what we can do in that regard”.

Truss reasonably postulates that the marketplace will always govern which markets are the priorities for trade. “I’m sure Australia has the capability to be a reliable supplier to both markets,” he said.

The worry is that Japan is seeking to lock up access to resources, just as China is endeavouring to, even if it means courting corrupt regimes. When nations start chasing ownership or control of resources for their exclusive use, the international markets that sustain us all at unprecedented standards of wealth and potential wealth become threatened.

The whiff of “us or them” in the Japanese stance could mean Australia’s biggest business and diplomatic balancing act might not be on the high wire between Washington and Beijing, but between the old foes in Tokyo and Beijing. It might not be stretching too far to suggest it also displays a sad Japanese view that resources are finite and therefore should be grabbed and consumed before someone else does and never mind the consequences. Like blue fin tuna.

Peter Fray

Get your first 12 weeks of Crikey for $12.

Without subscribers, Crikey can’t do what it does. Fortunately, our support base is growing.

Every day, Crikey aims to bring new and challenging insights into politics, business, national affairs, media and society. We lift up the rocks that other news media largely ignore. Without your support, more of those rocks – and the secrets beneath them — will remain lodged in the dirt.

Join today and get your first 12 weeks of Crikey for just $12.

 

Peter Fray
Editor-in-chief of Crikey

JOIN NOW