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Free Trade

 

Former Labor Prime Minister Paul Keating once opined that Free Trade:

 "..can underwrite Australia’s future. It can give us sustainable growth, employment, a role in technological innovation, cultural stimulation and enrichment. It can substantially underwrite the democratic, rich and dynamic nation we want to be in the 21st century.”

Well, here we are almost two decades into the 21st century.

 

Manufacturing in 2016 was 6.05 % of GDP, whereas it was 14 % in 1995 (1). There are no longer any major car manufacturers in Australia, and we completely failed to capitalise on opportunities in solar and lithium batteries - for which there is a significant domestic market - now serviced by imports together with the car market.

 

The shutdown of Australia's auto sector, despite increased population and hence demand, was an inevitible consequence of decades of gradual cuts to import tariffs on cars. Auto manufacturing was the jewel in the crown of Australia's manufacturing sector, we were one of a small number of countries that could build a car from scratch. Losing this industry will be to our detriment for decades to come, and it could have been prevented so easily.

 

Meanwhile mining has seen enormous growth, yet for many minerals it is an inherantly unsustainable industry owing to the finite nature of deposits of resources. Tourism has seen large growth too, again an inherently unsustainable (and low skills) sector that doesn't always deliver stable employment outcomes.
 

Where technical innovation is concerned, there's little place for innovation to go to in Australia once it's been developed in a university or government laboratory. Why should other countries be the main economic beneficiaries of our own discoveries, often expensive to make? Our scientists and engineers often find their best opportunities overseas, and the vast majority of technological products consumed in Australia are imported - many of them of poor quality, which hurts sustainability and imposes a high recycling burden on the importer.

 

Free trade is not taking this country in the right direction. We export various forms of dirt and import cars, phones, batteries and computers. We cater for tourists in every way possible but our technical people struggle to find work. Australia should recognise that import tariffs serve an important purpose, and have both economic and moral justification, and that continuing with free trade as an automatic principle is not a wise philosophy.

 

(1) https://theconversation.com/the-australian-manufacturing-industry-is-not-dying-its-evolving-csiro-study-69398