Learning the right policy lessons from Beijing's campaign of trade disruption against Australia

Abstract

Perceived threats to sovereignty stemming from trade exposure to China have led to calls for the Australian government to embrace the concept of ‘trusted trade’. This involves using policy levers to drive trade towards markets that have capitals more geopolitically aligned with Canberra and finds practical expression in forms such as ‘friend-shored’ supply chains. A theme of ‘trusted trade’ advocacy is the conscription of existing security-oriented partnerships, including the ANZUS alliance, the Quad grouping and the Five Eyes intelligence-sharing arrangement, to take on economic dimensions. While holding superficial appeal, this paper details why pursuing this policy path would be to learn the wrong lessons from Beijing’s campaign of trade disruption that began in May 2020, and make Australia both poorer and less secure. Three key data points are highlighted that collectively support an assessment that the Australian government’s traditional trade policy approach, emphasising open regionalism, remains overwhelmingly fit for purpose.