Robertson, David, Review - Institute of Public Affairs
Trade Matters David Robertson reviews Australia and the Global Trade System: From Havana to Seattle by Ann Capling Cambridge University Press, Victoria, 2001); pb $A39.95 (260 pages)
This history of Australia's participation in international trade negotiations over the past 50 years is detailed and comprehensive. It draws on careful research into official files and interviews with key participants in these seemingly unending negotiations. This study pays tribute to these `trade warriors', though in retrospect many of the policies pursued were dubious.
The conclusion of this study, that `Australia has been a deeply influential player in the multilateral trading system since its creation' (page 7) overstates the evidence offered.
* Australia took a high profile in the 1946-48 ITO negotiations, when it argued on behalf of under-developed countries that full employment and economic development should be included. But `the negotiating skill and expertise demonstrated' (page 35) also contributed to the US Congress rejecting the Havana Charter. A hollow victory!
During the difficult early years of the GATT, Australian governments' propensity for trade preferences and protectionism threatened to undermine the fledgling institution. In the McEwen era (1947-71), these policies also imposed severe costs on the Australian economy.
The brief period of economic reform under Whitlam, which included the 25 per cent acrossthe-board tariff cut, was reversed with the return of the Fraser Coalition Government.
When the Hawke-Keating Governments adopted economic reform in the mid-1980s (symbolized by floating the Australian dollar and reducing trade barriers unilaterally), this philosophy was absorbed into the tool-box of trade negotiators just embarking on the Uruguay Round negotiations. Convening the Cairns Group and undertaking some `honest brokering' in services' trade enabled Australia's negotiators to influence outcomes and to mediate among the major players (the EU and the US), as well as engaging important non-OECD members. This contribution to the multilateral trading system is justly acclaimed.
At the beginning of her book, Ms Capling defines her purpose, `to provide a political analysis ... of trade policy and trade diplomacy' (page 7). Yet on the next page, she claims to examine `the role of the State in Australia's political and economic development', and `the interplay between competing economic and political interests in policy-making'. The absence of any economic analysis of trade and the linkages between the domestic economy and international trade and capital flows leaves serious gaps in this story-line.
For example, trade negotiations under fixed exchange rates were quite different from those after 1983, when the Australian dollar had floated and capital flows were deregulated. …