While the Prime Minister’s visit to New York was chiefly notable for his doe-eyed fascination with Donald Trump and his enthusiastic endorsement of El Presidente’s assault on what passes for the US healthcare system, there was also what the foreign policy witchdoctors call the “readout” of their meeting. It featured few surprises — the two countries would be “co-operating to fight ISIS and other terrorist groups”, “addressing the threat posed by North Korea”, blah blah blah. The stenographers of US company News Corp (owned, of course, by Trump’s dear American friend Rupert Murdoch) dutifully tried to perform alchemy and transform this pabulum into some sort of historic moment. But the “readout” also noted that “President Trump and the Prime Minister also talked about the importance of building stronger economic bonds through increased trade and investment”.
Now, this is a little confusing, because we thought there was already a preferential trade agreement between Australia and the US (mistakenly called a “free trade agreement” in some documents, it has nothing to do with free trade) put in place between the Bush administration and the Howard government, which commenced in 2005. That, we were told at the time, was little short of an economic miracle and would yield massive benefits for Australia. “It will add enormous long-term benefits to the Australian economy,” Howard said. It was “a once-in-a generation opportunity”, there were “great benefits in this for manufacturing; there are great benefits in it for the service industry; there are very significant benefits in it for agriculture … There’ll be very big export opportunities opened up,” Howard declared.
So why is it now apparently important to build stronger bonds? Is there something wrong with the AUSFTA? Well, funny that. According to the US Census Bureau, between 2004, the last year before the AUSFTA came into effect, and 2016, US exports to Australia rose 59% in cash terms. But Australian exports to the US rose just 26%. In fact, adjusted for inflation, in 2016 Australia exported around US$600 million less to the United States than we did in 2004. Those “very big export opportunities opened up” were so huge they, um, shrank our exports.
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Then again we all know Trump loves a trade surplus — and Australia is one of the few Western countries where the US enjoys a huge and rising trade advantage. Thank goodness Australia is the Energiser bunny of grovelling to the US — we’re such a loyal vassal state that we even subordinate our economic interests to our mighty master.