The US election, EU-China trade deals - what will it all mean?

Will the ASEAN trade door swing Australia's way amid shifting global sands?

Opinion
Aa

The US election highlighted that a lot of Americans support Trump's views - what might this mean for Australia's future trade?

Aa

As the world watches the US election fallout, one aspect being lost among the drama is that in the largest voter turnout in the country's history, it was still a close race.

So what did almost half of (voting) America see that defies global opinion and meant so many people still voted for Trump, including a lot of rural Americans?

And what might all this mean for Australia, especially given the US, one of our largest trading partners, firstly, is in turmoil, and secondly, signed a significant trade deal a year ago this week with another of our key trading partners, that being China?

Trump's messaging from the start of his term was "putting American jobs first" as part of his pledge to stop "offshoring jobs", and to also alter trade policy.

For US farmers, it has a been a bitter-sweet four years. US farm bankruptcies last year reached an eight year high, coinciding with record level farm debt, all on the back of the 2018-19 US/China trade war.

Yet, the carrot of a record US$46 billion in farm subsidies in 2020 (Australia's 2019-20 agricultural exports reached about US$38.59b) and a China trade deal that promises to increase purchases of US agricultural goods from about US$10b in January 2020 to around US$40b in just two years was obviously too juicy to pass up.

Additionally, in 2019, the US unemployment rate also hit a 50-year low of about 3.5pc, which hit a note with voters. And whether it be via Twitter, personal notes in food aid boxes, or broadband funding for disadvantaged rural areas, Trump connected with voters who otherwise couldn't relate to the big picture ideas of the Democrats.

The Mexican border wall remains unfinished and Trump's promise of more coal jobs never eventuated, but while many despise Trump's exploiting of social divides, regardless of whether or not he helped people, he has shone a light on a big proportion of the population that was otherwise ignored.

The resulting domestic focus in the US, along with the EU now also having signed a new trade deal with China, which itself is in no rush to reduce trade tariffs on Australian goods, are all factors working against us.

While we need to retain these countries as important trading partners, we are clearly being shuffled aside, the alternative opportunity perhaps is the ASEAN bloc (Southeast Asia) - the region that in the next decade is expected to outpace China with its rate of growth. But, there's a lot of work to do.

Aa

From the front page

Sponsored by