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By Robert A. Vella

In geopolitics, there are superpowers, regional powers, and lesser states.  This is not meant to disparage any particular country or people, but is intended to convey the hard realities of international relations.  Early twentieth century Italy was one of those secondary regional powers which had great aspirations for itself, but was overshadowed by Europe’s top dogs Germany, France, Great Britain, and Russia.  Although it had signed a strategic defense agreement in 1882 with Germany and Austria-Hungary known as the Triple Alliance, Italy declined to join the fighting when World War I broke out in late July of 1914.  Since Germany had declared war against Russia on August 1st, Italy claimed that its decision did not violate the mutual defense terms of the alliance.  However, Italy was in reality playing both sides of the fence in order to gain a perceived advantage.  In April 1915, it secretly signed an agreement with the Triple Entente (France, Great Britain, and Russia) known as the Treaty of London which promised territorial compensations if Italy would join the war against Germany and Austria-Hungary.  A month later, Italy did so at great cost.  Not only did Italy suffer over one million deaths (from all causes) in WWI, it incurred unaffordable financial costs which triggered the social unrest that gave rise to Benito Mussolini and the specter of fascism.  To add insult to injury, the Treaty of Versailles disallowed many of the territories that had been promised to Italy four years earlier.

Italy’s experience in WWI has relevance to the current situation Australia finds itself in.  As superpowers China and the U.S. escalate their geopolitical contest for dominance, secondary powers and lesser nations are getting caught-up in the struggle.  The choices they each face are undesirable and unfortunate.  They can choose sides and hope that they pick the winner, or they can try to play both sides of the fence like Italy did in WWI.  Either way, the risk is very high.  Australia’s prime minister Scott Morrison appears to be attempting the latter.  I wonder, though, how long Australia will be able to stay in the middle.  Sooner or later, an opportunity to gain an advantage will be perceived by its leaders… just as it was in 1915.

From:  Australia Won’t ‘Sit Back’ as U.S.-China Fight Worsens, PM Says

(Bloomberg) — Australia is urging Indo-Pacific nations to step up their commitment to free trade as the worsening fallout from the U.S.-China impasse threatens global growth.

[…]

He warned that countries may need to adjust to the decoupling of U.S. and Chinese economic systems in areas such as technology, payments systems and financial services. “We should not just sit back and passively await our fate in the wake of a major power contest,” Morrison plans to say, according to a copy of the speech distributed to reporters.

Morrison’s appeal comes as world leaders prepare to gather at the Group of 20 summit in Osaka this weekend. President Donald Trump and China’s Xi Jinping are set to meet on the sidelines for a high-stakes discussion that could determine whether their year-long trade war escalates further, potentially altering global supply chains.

Australia is vulnerable to worsening ties between the U.S., its most important strategic ally, and China, its biggest trading partner. It also sits in the heart of a region where the world’s two biggest economies are sparring for influence.

[…]

In his first foreign-policy speech since his conservative government was re-elected last month, Morrison will say Indo-Pacific nations can take practical measures to counter the trade war, including “a commitment to open markets with trade relationships based on rules, not coercion” and respect for international law.

He’s backing multilateral trading agreements including the 11-member Trans Pacific Partnership and the China-backed Regional Comprehensive Economic Partnership. The latter could be completed this year, with the help of potential participants sending their trade ministers to a meeting next month in Beijing “with a clear mandate to deal,” he said.

Morrison is under no illusions about the damage posed by the trade war.

“The collateral damage is spreading,” Morrison said in the speech notes. “The global trading system is under real pressure. Global growth projections are being wound back.”

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13 thoughts on “Between a rock and a hard place: Australia at the center of Sino-American trade war

  1. Pulling out of TPP was seen in Australia as just plain stupid.

    After the debacle in Singapore, Australia redirected our alliance focus to the US. After England joined the EU, we switched our economic strategy to Asia. We don’t want to, but Australia will ditch the US in a heartbeat if they threatened us economically. We’d remain friendly, but the US would not be able to count on Australian support accross the board.

    Liked by 1 person

  2. Just a passing general thought about trade ‘war’. I wonder if the Chinese have that perspective re ‘war’, or if they simply just get on and make deals. Those making war appear to be the countries that so hotly espouse free market trading while imposing death inducing conditions (sanctions) on nations who are not making themselves available to be fully exploited by the free marketeers. Or would that be pirates?

    Liked by 2 people

    • Tish, I’d urge caution about entertaining ideas which define good guys versus bad guys in this trade dispute. Although your inference to “free market” countries being imperialistic and warlike has merit, it seems to ignore the authoritarianism and aggression of China’s history since 1949. Earlier this month (June 4th), for example, was the 30th anniversary of the Tiananmen Square massacre when Deng Xiaoping’s Communist Party ruthlessly killed about 2000 Chinese students and other citizens who were protesting for democratic reforms.

      Liked by 2 people

      • I wasn’t really thinking of good or bad, only that the Chinese have been phenomenal traders since the year dot, and long before America of the European variety was invented. I was just thinking of differing attitudes, and how several western nations do seem to think they have the right to control just about everything – which is too often more about corporate empire building and resource grabbing than democracy for their citizens. Which strikes me as more than a touch hypocritical.

        Liked by 2 people

  3. In comparing nations who wage economic war against each other the terms “good guy” and “bad guy” often lose meaning, but we choose our political partners based on economics for the most part and don’t allow morality to be considered part of the equation. No matter who holds the actual government titles or makes the actual speeches about foreign doplomacy (intervention), wealthy business executives actually run our foreign affairs. From that pespective, we’re bad guys – as are most so-called leaders.

    Liked by 1 person

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