Turnbull talks up single market
Aussie PM says economic unity with New Zealand ‘getting closer’
Malcolm Turnbull resorts to a ready metaphor — “it’s a bit like knocking the barnacles off your boat” — when it comes to describing progress towards an Australasian single economic market.
“When business says there is some obstacles and some regulations where we can improve things . . . let’s just keep fine-tuning.”
Forging a single economic market between New Zealand and Australia is “getting closer”, the visiting Australian Prime Minister says.
In a Herald interview he cites the mutual recognition agreement of the Australian Trusted Trader programme and the NZ Secure Exports Scheme which will strip out compliance costs and increase efficiency for businesses trading across the Tasman.
“Both countries have been great beneficiaries of it,” he says. “A lot of improvements in arrangements like this don’t have to be a dramatic leap.
“Just keep on fine-tuning and that is what we have done.”
Unfortunately for both Australia and New Zealand, forging a model single economic market will not be enough to build sustained economic prosperity in a time of resurgent protectionism.
That is why Turnbull and Kiwi Prime Minister Bill English have combined forces to reinvigorate the Trans-Pacific Partnership (TPP) after the United States pulled out.
Barely a month into his presidency Donald Trump has set on a path to dismantle decades of US trade policy and the long-standing alliances which have underpinned the spread of global trade.
He has threatened to tax imports, abandon existing agreements (as he has with TPP) and has ignited the spectre of a trade war between the US and China.
In the Herald Turnbull would not be drawn on whether he thought Trump would make good on his antitrade threats. “In terms of our discussions with the American Administration we are circumspect in public and obviously frank and forthright, as friends should be, in private, and we don’t run a commentary on US politics,” he says.
The Australian Prime Minister emphasises it is up to leaders to represent their nation’s interests. “It is manifestly in Australia’s interest to have access to bigger and wider markets,” he adds.
“We are a trading nation, as indeed New Zealand is.
“We believe we’re the best and the bigger and more open the field that is there for us to run on to — that’s good.“
Asked how realistic it is for New Zealand and Australia to try to keep the TPP (Minus One) deal alive, Turnbull resorts to a back story.
“When we had Apec in Lima — John Key was the first leader to raise the possibility of the TPP continuing without the US.
“Everyone wants the US to be part of it, obviously. But given that there was such support for it from within the other 11 countries to continue with the TPP — on the basis that the US may change its mind at a later date and rejoin — there is a strong sense not to waste the good work that has been done on this very highquality trade deal, and a lot of other countries are supportive of that.”
The Australian Prime Minister acknowledges that there will have to be a renegotiated treaty — “you can’t just delete one country and proceed [with TPP]”.
But he is adamant the other TPP countries don’t want to lose the momentum of an agreement which goes well beyond a normal trade pact which deals with reciprocal reductions of tariffs.
Turnbull has canvassed the issue with other leaders. “We are all committed to open markets, to free trade — those of us other than the US — support the TPP, support its high ambition and support a regional agreement.
“What is very important about the TPP is not just its measures but the fact that it binds in so many countries and that it raises the standards for trade in a way that is going to benefit the whole region.
“Frankly, smaller economies — like New Zealand and, indeed, Australia — we all benefit from a multilateral agreement as long as they are ambitious ones.”
The issue will be on the agenda at an upcoming TPP trade ministers’ meeting in Chile next month.
This was Turnbull’s first formal bilateral meeting with Bill English as Prime Minister.
The Australian leader has a strong personal relationship with John Key
(“John and Bronagh have become good friends,” he said, confirming that he and wife Lucy lunched with the Keys in Sydney recently).
But English’s reputation as Finance Minister stands him in good stead.
“I am a very big fan of New Zealand,” Turnbull confides.
“I think you at many levels — and partly because you are not a federation system and so forth — at many levels you have much less regulation that we do and I have always felt there is a lot to learn.
“We are good at knocking ourselves but New Zealand does so many things so well and I think from our point of view we pay a lot of attention to that and the economic leadership that John Key and Bill English provided — and now Bill English and Steven Joyce are providing — is also something we observe very closely.
“So like you have done we hope to return to surplus, we are certainly focused on the same goal.”