Assistant Minister Andrew Leigh is not holding back in denouncing punitive tariffs. Photo: Michelle Kroll.
As US President Donald Trump’s latest round of sweeping tariffs kicks in across the globe, Andrew Leigh is using a keynote address to the Asialink Leaders Summit in Canberra on Friday (8 August) to mount a passionate defence of free trade and open markets.
The Assistant Minister for Productivity, Competition, Charities and Treasury argues the case for fewer and reduced tariffs, and he details how openness has hugely benefited Australia, continuing to do so even in the face of looming protectionism.
President Trump has imposed tariffs of varying degrees against more than 90 countries, and is also flagging a 250 per cent tariff on pharmaceuticals, which would hit Australia very hard.
The Federal Government is pressing the case for exemptions and the continuation of free trade.
Dr Leigh has taken a not-so-backhanded swipe at the US’s new tariff regime and how it has upturned the conventions of international trade.
“The global rules-based economic system that has underpinned decades of relative prosperity and stability for Australia is under strain,” the Assistant Minister said.
“Intensifying strategic competition between our most important trading partner and most important security ally, and growing backlash against globalisation, regional conflicts and weakening multilateral institutions are all contributing to a more fragmented and less resilient world.”
Dr Leigh said the current phase Australia is going through is not the first backlash against openness, and it won’t be the last.
He said it would be easy to take the populist approach and respond to tariffs with tariffs.
“But that’s not the Australian way. It’s not how we handled previous impediments to trade with China, which totalled around A$20 billion at their height, and it’s not how we’re responding to US tariffs,” he said.
“Australia is a trading nation and a strong advocate for open and rules-based trade. Australia and the United States have a gold standard free trade agreement in the Australia-United States Free Trade Agreement.
“Our country has a well-earned and highly respected position around the world in terms of commitment to open trade rules.
“That’s why we continue to advocate for the removal of unjustified and unwarranted tariffs on Australian goods, and why we won’t be implementing tariffs in return.
“And we continue to advocate for removal of unjustified and unwarranted tariffs on Australian goods.
“Imposing tariffs on Australian exports to the United States hurts American consumers – resulting in higher prices, supply chain disruptions and slower growth.”
Pointing out that openness is one of Australia’s great strengths, Dr Leigh said the only path was to continue explaining the case for free trade if the best outcomes for Australians are to be delivered.
In an era of uncertainty, he said, the case for openness is stronger, not weaker.
“Our prosperity has never come from closing ourselves off, but from connecting with ideas, with markets, and with our neighbours,” he said.
“Trade has made us more competitive. Immigration has made us more dynamic. International cooperation has made us more secure.
“Resilience isn’t about building walls, it’s about building networks strong enough to withstand the shocks.”
The policy wonk Assistant Minister even went a laugh by comparing himself unflatteringly to television goofball Mr Bean.
“Trade is most beneficial when it leverages our comparative advantage,” he said.
“Most of us don’t cut our own hair, sew our own suits or cobble our own shoes – which is a relief, since in my own case, I’d end up looking like Mr Bean on laundry day.
“Thanks to specialisation in the labour market, we do what we do best. Then, we pay others to do what they do best.
“The same principle applies to countries. No nation can efficiently make everything it needs.
“But when each country focuses on producing what it’s relatively good at – whether that’s software or sugar, education or energy – and trades for the rest, everyone ends up better off.
“Specialisation and exchange allow us to produce more, waste less, and enjoy a greater range of goods and services than we ever could on our own.
“When we put up walls, we don’t just shrink our economic opportunities – we damage our relationships with allies who are essential to solving shared problems, from climate change to tax avoidance.
“Put simply: trade expands opportunity. Isolation shrinks it.”
