Over the past week, Australia hosted the Group of 20 (G-20) meeting in Brisbane, and the public heard speeches from a number of leaders including those from the United Kingdom and Germany. But eyes were mostly trained on the words and deeds of presidents Barack Obama and Xi Jinping.
In a region where the sway and cunning of both are closely watched and compared, it has been a good week for the Chinese leader and a poor one for the American.
To be fair, President Xi had an inherent advantage during this recent trip Down Under. In addition to attending the G-20 meeting, the Chinese leader was there to sign the China-Australia Free Trade Agreement – one hailed by many Australians as the most comprehensive FTA China has signed.
It must be said that such an assessment is premature. Eventually lowering tariffs on around 95 per cent of Australian exports to China seems like a big deal. But whether Australian businesses can negotiate the raft of regulatory and other ad hoc barriers periodically placed in front of foreign firms remains to be seen.
Australia also did not receive its much-wanted concessions for exports of soft commodities such as wheat, rice and sugar, while Chinese state-owned enterprises did not receive an exemption from scrutiny by Australia’s watchful Foreign Investment Review Board for investments of A$1.08 billion (S$1.22 billion) or below.
Discussion on these and other issues will occur again in three years when the FTA is officially reviewed, and one can bet that both sides will be in a less generous mood to compromise on these key demands.
Even so, the FTA represents a significant milestone in the economic relationship between the two signatories. And President Xi played his part perfectly. In his address to the Australian Parliament, he offered the FTA as a sign of China’s friendship and evidence of the economic opportunity its rise is creating for neighbours. Expressing hope that the strategic partnership between the two countries will become a comprehensive one, President Xi urged Australia to pursue a more independent strategic direction. Although Parliament knew what this means – moving away from America, if not yet closer to China – the point was nevertheless respectfully posed.
In contrast, consider the performance by Mr Obama. The American leader has spent much of his term trying to reassure allies and security partners that faith in America and American leadership is justified.
Prior to his trip to the region, these allies and partners were crying out for President Obama to offer credible and convincing statements about America’s staying power in Asia, and how Washington intends to create economic opportunities and enhance stability in the region.
Rather than focus on security or economics, President Obama’s landmark announcement was a climate pact with China. He pledged to reduce America’s carbon emissions by 26 per cent to 28 per cent below 2005 levels, while China promised to cap its emissions “around 2030”.
Even if one agreed with the President that lowering carbon emissions ought to be one of the highest priorities, Asia was not fooled by the so-called historic agreement. It is well known that the incoming Republican-led Congress is highly unlikely to agree to such an agreement, and such support is even more improbable as Congress was apparently surprised and ambushed by the President on this announcement.
Additionally, and besides refusing to commit itself to any binding target, modelling by American and Chinese researchers suggest that “business as usual” will lead to China’s emissions reaching a peak by around 2030 in any event, as a result of current urbanisation, demographic and energy trends.
In other words, President Obama looks like he has been played for a fool by the Chinese, or that he played the role all by himself.
Granted, he will use this non-binding pact in an attempt to strong-arm other countries to commit to targets when the issue is discussed in Paris next year. But such false idealism does not stand America in good stead.
The President then made it worse by raising climate change as his primary issue in a public speech to students in Brisbane and demanding that Australia follow his lead in agreeing to a cap on emissions. By blindsiding Australian Prime Minister Tony Abbott who wanted to focus on economic and security matters during Canberra’s big moment on the world stage, President Obama insulted and disrespected his host and most loyal ally in the region.
To be sure, Australians did not confuse a well-crafted speech with action. Take for example, President Xi’s pledge to Australia’s Parliament that China will always address its maritime disputes peacefully. It would have more credibility if China were less obstructionist in moving forward on a long-promised binding China-Asean Code of Conduct in the South China Sea, and stepped back from engaging in increasingly frequent and coercive behaviour in contested maritime zones in that body of water. Indeed, President Xi’s pointed reminder in his speech that Beijing will “firmly uphold core interests of China’s sovereignty, security and territorial integrity” was not overlooked.
Even so, Australians now know that China has a charming and formidable leader who visited the country and offered something of value to Canberra.
In the same week, President Obama needlessly fomented division while on Australian soil, even if no lasting damage to the US-Australia relationship was done. If the regional expectation of the last quarter of the Obama presidency is a low one of “doing no harm”, then the President has not even achieved that.