Australia
In a sea of exclusion
Is Australia's standing in Asia getting worse, asks David Costello, Courier-Mail, Brisbane
Oct 21, 2003

In the day after Australia tied up a free-trade pact with Thailand, it may seem churlish to ask whether we are falling out of bed with Asia.

But that is what a chorus of critics, both here and within our northern neighbours, are saying loud and clear.

Prime Minister John Howard spent Sunday trumpeting the benefits of the breakthrough with the second-biggest economy in the 10-nation Association of South-East Asian Nations bloc.

It is part of intensive effort under which Canberra has sealed a free-trade deal with Singapore while working on similar agreements with the US and China.

When signed next year, the Thai pact is set to cut tariffs on motor vehicles, wine and minerals and increase access for meat and dairy products.

Howard's critics, however, say this is little-picture stuff. The big picture is not so reassuring. And while there is no cause for alarm, they do have a point.

The argument, which has been put in the past week by Reserve Bank Governor Ian Macfarlane, eminent economist Ross Garnaut and Opposition foreign affairs spokesman Kevin Rudd, is that we are missing out on the big multilateral trade deals being done in Asia.

In particular, they say, Australia's exclusion from the "ASEAN plus three" process is bad news.

This group, which puts ASEAN together with China, Japan and South Korea, is aiming to build a massive free-trade bloc by 2010.

But we may not have to wait that long before adverse impacts are felt.

Beijing announced last week that it would permit duty-free agricultural imports from ASEAN nations in 2004. That, says Rudd, means the potential for discriminatory impact on Australia is huge.

"This presents real problems in the real world right now, not in the by and by," he told The Courier-Mail last week. "For Australia and Queensland's and the Northern Territory's tropical fruit and vegetable exports to North-East Asia."

Garnaut, in an interview with The Australian newspaper, has warned that the consequences of the ASEAN-China preferential deal could be more damaging to Australia than Britain's entry to the European Union a generation ago.

The problem does not end with China. ASEAN also has its eye on free-trade deals with India and with Japan, Australia's biggest export market.

Canberra has set a policy priority of getting into this ASEAN-plus network. But this effort is going nowhere, thanks to opposition spearheaded by the implacable Malaysian leader Mahathir Mohamad.

He also was a prime mover early this year in blocking efforts to stop closer links between ASEAN and the Australian-New Zealand Closer Economic Relations process.

Mahathir is retiring at the end of this month but it is unlikely there will be any swift change of sentiment towards Australia.

Even our Asian "friends" are hesitant, with Singaporean Prime Minister Goh Chok Tong saying at the weekend that Australia was not yet fully accepted in the region and it was better if it remained out of the ASEAN vision for the time being.

The next question is whether some of these problems are of the Government's making. The answer appears to be yes, and the problem lies not just in policy but in style.

Indonesian commentators contacted by The Courier-Mail have cited a list of reasons why Asia remains suspicious of the Howard Government.

Some of these have been on the record for years, such as the 1999 controversy over the Prime Minister's apparent willingness to be a "deputy sheriff" for the US in the Asia-Pacific.

Another sore point is Howard's statement last year on the possibility of pre-emptive strikes against terrorists in the region.

Former presidential adviser Dewi Fortuna Anwar says Howard "has tended to shoot from the hip, and this is not appreciated in Asia".

She also highlighted Canberra's emphasis on relations with Washington and its support for the Bush Administration's war in Iraq, as other negatives.

But the Indonesian opinion makers are quick to point out that the past year has brought some positive developments.

In particular, the rapid and successful joint police operation which netted the Bali bombers was a striking example of how the two countries could work together.

The situation outlined here is complex. But the Federal Government could and should take some corrective action to improve its stocks in Asia.

The Prime Minister must try to cement better personal relationships with Asian leaders. And he should put more resources into multilateral trade efforts.

(This article by The Courier-Mail's foreign editor was published in Oct 21, 2003).