Wine exports are getting hit. Where does it end?
So Australia’s $1.1bn wine export industry has become the latest victim in our on-going spat with China.
It’s no secret that their anti-dumping investigation is retaliation for taking sides with the US. They know it, we know it. Let’s just call a spade a spade.
Australia is responding with what is cutely being called “The Morrison Doctrine”. In Scomo’s words:
“We will never trade away our sovereignty in Australia on any issue. We will be consistent. We will be clear. We will be respectful and we will get on with the business.”
That is, “Yeah, nah, we’re going with America on this one hey. But if you still want to trade with us, we’re keen for that.”
You could call this the “having your cake and eating it too” doctrine.
And I don’t see it flying.
America is drawing a pretty clear line in the sand these days.
You can trace it back to a speech that US Secretary of State Mike Pompeo made last month in the Richard Nixon Library. (Seriously, how did that guy get a library named after him? Should have been a T.A.B)
Anyway, Pompeo declared that this was a global struggle that should involve all nations since “securing our freedoms from the Chinese Communist Party is the mission of our time”.
I mean, sure, this is in the context of an election year, and Trump has a lot to gain from a bit of old fashioned sabre-rattling.
Ban Tik-Tok. Call some Chinese leaders some funny names. It’s got to be good for the polls.
But still, I don’t think it means the change in strategic direction isn’t real or enduring.
When you think about it, the only surprising thing is that it hasn’t happened sooner.
It’s amazing that the US went with off-shoring all of their critical infrastructure and economy to a strategic rival for so long.
In what universe does it make sense for Chinese companies (under the control of the CCP) to be building the communications infrastructure for the US defence force?
That was never going to last.
And now we’re here. With the world waking up to the reality that the US and China are strategic rivals.
And that doesn’t have to be a bad thing. Coke and Pepsi are strategic rivals, and that competition largely results in a cheaper and better kind of soft-drink.
(Still, Coke and Pepsi don’t have nukes, so there is that.)
But now that the strategic rivalry is exposed, China and the US are tallying their friends.
Australia, as it probably should be, is on the US side of the ledger.
And in the context of a global rivalry, that makes Australia the sharp end of the US spear in the Asia-Pacific.
China is obviously not happy about that. And China has shown that it very willing to leverage economic power into political power, and the bans on wine, beef, wheat and whatever else is coming, are just the start of that.
Expect more of it.
Iron ore will be last, but even that will have to go eventually. Is the US really going to be happy with us selling the raw material of bullets and war-ships to their major rival?
Not for long.
So we need to get ready, right now.
We have allowed our economy to be dangerously reliant on a single economy. We put all our eggs in the basket of the Chinese century.
It’s time to start spreading those eggs around.
Better we do it now than have matter forced upon us.
But if you think the Morrison Doctrine is going to fly, you’re dreaming. You don’t get to have your cake and it too.
The die has been cast. Time to start building the post-China economy today.