Prime Minister Malcolm Turnbull delivered a strident defence of free trade. Photo: Nic Walker Prime Minister Malcolm Turnbull delivered a strident defence of free trade. Photo: Andrew Meares
The world must embrace free trade, not retreat from it, Prime Minister Malcolm Turnbull has said in a speech that positions Australia as a champion of open markets and sharply contrasts with the isolationist rhetoric of US President-elect Donald Trump.
Mr Turnbull has also reminded businesses that they must be able to “look Australians in the eye” and act in accordance with community standards. The reminder comes as the government is set to delay until 2017 its plan to cut company taxes to 25 per cent.
The Prime Minister was one of the first world leaders to speak to Mr Trump – thanks to a phone call facilitated by golfing legend Greg Norman – after the Republican rode a populist wave of resentment to the White House.
Mr Turnbull has emphasised the close ties and shared interests between the two nations since Mr Trump’s shock victory. But the President-elect has indicated the US would walk away from the Trans-Pacific Partnership free trade deal – which Australia supports – as well as threatening to renegotiate or tear up the North American Free Trade Agreement and potentially slap a 45 per cent tariff on China for currency manipulation.
Before his departure to Peru for President Barack Obama’s final APEC meeting, Mr Turnbull delivered a strident defence of free trade, while acknowledging weaker income growth had stoked anti-free trade sentiment in the developed world.
“Countries that have embraced open trade and investment policies have experienced significant gains in income, employment and living standards,” he told a Business Council of Australia dinner in Sydney. “They have lifted billions out of poverty. But people are seeing things change around them; they are concerned that they could be left behind.
“In the past year, we have seen economies introduce new protectionist trade measures at the fastest pace since the global financial crisis – the equivalent of five per week. But retreating from policies that have delivered us prosperity and opportunity is the wrong call. We would ignore the gains from openness at our peril.
“Instead of looking backwards, we must make the case to increase global economic integration … to overcome the rising disquiet, we must ensure that the benefits of open markets deliver for the many and not just a few. If the results of the recent US presidential election have taught us anything, it is that policy changes must be fair in a very broad sense.”
Mr Turnbull’s defence of free trade and open markets amounts to an acknowledgement of rising sentiment in the United States, Australia and around the developed world that globalisation and free trade has contributed to rising inequality that has cost jobs in such sectors as manufacturing, and suppressed wages.
It also comes as the Labor opposition has struck a more populist note in recent weeks about the need to defend Australian jobs from skilled workers on 457 visas.
Opposition Leader Bill Shorten described Mr Turnbull’s company tax cut plan as a crazy “Donald Trump-style corporate tax cut” on Thursday.
As Federal Parliament prepares for the final two sittings weeks of the year, and the government prepares to make a final push in 2016 to pass union-busting industrial relations laws, backpacker tax changes and superannuation tax changes, Mr Turnbull also highlighted at Thursday night’s event concerns among ratings agencies that the “belligerence” of the previous Parliament could risk the budget’s return to surplus.
“We have passed $12 billion in budget improvement measures, income tax cuts to prevent half a million Australians from entering the second highest tax bracket, and a bill to protect the integrity and autonomy of volunteers and emergency services workers. But these cannot be one-off deals or goodwill gestures,” he said.
“We cannot entertain another term of Parliament that features three years of political posturing by Labor, followed by a series of conveniently timed backflips when promises are put under the microscope during an election campaign.”
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