Political Insights Series | Scott Morrison & The Middle Power Consensus

Steve Lewis, Senior Adviser at Newgate Australia and former journalist with the Canberra Press Gallery, shares his insights into how Australia’s Prime Minister is forging closer ties with European leaders. Lewis also looks into how the formalisation of a free trade agreement with the European Union will create opportunities for Australia in the years to come.

When Scott Morrison recently dialled into a meeting of global leaders his focus was on more than just dealing with the ravages of COVID-19. For the second time in a month, the Prime Minister spent close to an hour discussing the global pandemic with leaders from other “middle power” nations including Austria, Israel, Greece, Denmark, Singapore, Norway and the Czech Republic.

Dubbed the “First Movers Group” – due to their nation’s successful handling of coronavirus – these leaders are using these global hook-ups to compare notes on how each has managed the pandemic.

But there’s another agenda at play here: the PM is keen to build a new global consensus, in part as a hedge against Australia’s reliance on the two big superpowers, China and the United States.

Mr Morrison is also leveraging the “First Movers” forum to forge closer relationships with key European leaders, hoping this will play to Australia’s advantage over the longer term. The PM has been particularly impressed with his Greek counterpart, Kyriakos Mitsotakis.

This then is the unlikely upside from the global pandemic: the forging of more productive partnerships with countries such as Greece in the hope that this will pay dividends economically.

With Australia in recession for the first time since 1991, the Morrison Government is determined to look for ways to build new trade opportunities. This is doubly important given the plummeting relationship with China, our largest trading partner.

Revisiting the Free Trade Agreement with the EU

Specifically, Mr Morrison hopes that his foreign policy waltz with European leaders will pay off when Australia gets down to the nitty gritty of a free trade agreement with the European Union. Formal talks on an FTA with the EU – which in 2018 was the largest single source of foreign investment into Australia - kicked off two years ago but have slowed due to the global pandemic.

They will fire up again soon though and the Government is hopeful that it can be formalised by this time next year, perhaps sooner. If a raft of difficult issues – mostly related to agriculture – can be resolved, Australia will sign an FTA that will open up a market of half a billion people with a combined GDP of A$27 trillion.

In particular it would be a massive boost for Australia’s agricultural sector which has long complained about the protectionist nature of Europe’s influential farming lobby. But there will also be strong opportunities for Australia’s innovative tech sector to forge new links if the FTA comes off.

According to the Government’s official “fact sheet”, an FTA with the EU will deliver a raft of benefits for Australian FinTech and other innovative enterprises: “Australia will seek to guarantee access for Australian services exporters to the EU, as well as create new opportunities in sectors of key commercial interest, such as in education, financial and professional services. An FTA is an opportunity to establish a framework for the mutual recognition of professional licensing and qualifications, as well as greater certainty for skilled professionals entering the EU labour market.”

An FTA with the EU and with the United Kingdom – negotiations for which formally kick off in a few weeks – would also serve Australia’s geo-political interests in that they would reduce our reliance on the world’s two superpowers, China and the United States.

Building consensus with middle power nations

Australia is seeking to build a new consensus among middle power nations that will serve as a buffer against the US and China who are engaged in a tussle that many fear will end in conflict before the decade is over.

This push for an alliance of middle power nations is smart politics from a Prime Minister who previously has not been thought of as a foreign policy specialist, in the same way that Kevin Rudd was, for instance.

But like Paul Keating, credited with helping establish the APEC trading bloc, Mr Morrison is carving out an important role for himself on the global stage, and COVID-19 and the Government’s defence and trade policy agenda has given him leverage to achieve this.

Within Canberra it’s known that Mr Morrison has himself identified dealing with China as his most pressing issue. The PM is having to deal with an increasingly bellicose Chinese Government – helmed by President Xi Jinping – which is taking the fight up to nations such as Australia who have been critical of its handling of COVID-19. The recent trade spat over barley and beef reflects a superpower intent on squashing perceived minnows such as Australia who have the temerity to challenge its behaviour on the global stage.

Relations with Beijing have never been more strained: the Chinese Government refuses to return phone calls to senior ministers, key exports are slapped with punitive tariffs, and Australia is threatened with a consumer boycott over its call for an independent inquiry into COVID-19. There are increasing calls within the Morrison Government for Australia to take a more assertive stance with China, led by key backbenchers such as Andrew Hastie who chairs the influential Parliamentary Joint Committee on Intelligence and Security and

Dave Sharma, a former diplomat who is now the member for Wentworth in Sydney’s affluent eastern suburbs.

The fallout with China has alarmed many in business who fret that the PM is too close to US President Donald Trump but it is hard to see this dynamic changing any time soon.

All of which helps to explain why building closer relations with the leaders of Greece, Austria, Israel, Denmark and Singapore might serve Australia’s longer-term interests, well after the global pandemic has been finally extinguished.