Episode 48: Does Australia Really Need a Statutory Advisory Group?

So Steve, maybe just to pick up on, uh, a metaphor that the Biden administration framed, which is the small yard, high fence.

If I understand you correctly, the small yard and the high fence around it, critical minerals from the Chinese side, export restrictions, semiconductors on the US side, and other things, that remains in place.

If anything, it, it's, it's expanded somewhat since the Biden administration left office.

Within the, or outside of the small yard, they're going to construct another small yard, and in that small yard, there will be relatively free trade.

But for the rest, high tariffs will remain.

Yes.

Yes.

If, if they proceeded down that track, and to be honest, I, I, I, I think it's a, um, a fairly constructive, positive recognition of the world as it is.

Uh, we understand there's not going to be any grand bargains.

We understand that the US and China are not going to magically solve all their problems.

But they're saying, "Look, understanding that we're gonna continue to have problems in a whole bunch of other areas, aren't there some areas where we can say, 'Look, let's seek mutual benefit.

Let's, let's facilitate mutual beneficial trade in non-controversial areas by doing some tariff cutting.'" It's modest, but I think it's constructive and, and again, I think it's, it's, it's a recognition of the reality that these countries find themselves in.

I was gonna ask you a question about what you thought success looked like, but it sounds like we're potentially going to have for a long period of time this sort of boiling away tensions between the US and China, where success is actually them continuing to talk.

And it's not necessarily, as, as you say, going to see key outcomes in those core areas where there's real economic competitiveness issues between the two and strategic national security issues between the two, but a willingness to at least talk and to continue to trade in those non-sensitive issues.

And when we're, you know, we're doing a lot of thinking about what the new global order looks like when it comes to global markets and trade, and I'm-- I guess, do you see that potentially as, as the ongoing sort of state of relations for, for a long time while these tensions exist between the US and China?

China?I, I do.

I, I do.

I think, look, the, the, the underlying fundamental structural differences between these two countries, fundamentally different economic systems trying to exist under the rubric of a single set of global trade rules that were predicated on the assumption that sooner or later everybody was gonna become like the United States, okay, those issues are not go-- I don't think they're gonna be resolved in my lifetime.

So I think increasingly both sides are recognizing that, and they're saying, "Okay, given that, given that that's kind of the general background, the operating environment we're going to be operating in, how do we tamp down the inevitable frictions as they arise? And then not only tamp down the inevitable frictions as they arise, could we even find some small discrete places where we could even interact constructively?" I think that's, I think that's how we're gonna be proceeding for the foreseeable future.

You know, the idea of a grand bargain between these countries that's somehow going to resolve all these issues and the US and China are going to, you know, hold hands and sing Kumbaya, that's not on.

That's, that's not gonna happen.

So it's a matter of, so it's a matter of, of managing these frictions as they arise and seeing if you can find a few areas for constructive cooperation.