How Would Kerry & Bush Affect Australia?

Michael Fullilove, a friend of mine who works at the Lowy Institute, has a new report out on the foreign policies of Bush & Kerry (for the whole report, click here; for a summary article in the SMH, click here). The central thrust of the report is that in foreign policy terms, there’s not much to choose between the candidates. Michael, who is on record as opposing the Iraq intervention before it took place, sums it up as “Bush is from Mars, Kerry is from Mars too”. On the first page, he takes a shot at “steroid-fuelled pre-emption” (about time someone called for Rich Armitage to be tested). But the unspoken tenor of the report seems to be that intervention in Iraq was a clear mistake, and the world would be a better place had Saddam not been toppled.

The report piqued my curiosity on another front: trade liberalisation. While most of the attention in the press, and in this report, has been on foreign policy, the world welfare gains from bringing home a big Doha round are enormous – in fact, probably larger than the gains from bringing happy liberal democracies to all three members of the Axis of Evil. Michael doesn’t see much difference between the candidates on trade, but I demur. A Kerry adminstration could manage to do what Kennedy and Clinton pulled off, and really engage developed and developing nations in cutting trade barriers. While Bush has a bunch of committed free traders running USTR, I simply don’t see them as likely to bring home the Doha round. Instead, I suspect a 2nd Bush term will see a few more preferential trade agreements, at best marginally increasing, but probably decreasing, world welfare. Despite his wobbles on the “trade and” issues (trade & labour, trade & environment), Kerry might just be able to bring off the north-south trade diplomacy required to secure a new round.

Based on the past 8.5 years, my guess is that Australia’s trade strategy will follow whatever the White House does. Under Bush, we’ll likely pursue more prefential trade agreements; under Kerry, we might once again find a role in the multilateral arena, if the other members of the Cairns Group will take us seriously again.

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