Democratic US presidential candidate Joe Biden will not return the US to the global free trading era of presidents Clinton, Bush and Obama.
Instead he plans a different version of Donald Trump’s “Make America Great Again” campaign, claiming the Trump version did not work.
This is an important development for Australia, and we will need to embrace part of the Biden plan.
Australia is now isolated from our main trading partner China and it is not going to be easy to repair the damage.
In retaliation China is planning a series of measures to lessen dependence on Australian iron ore, including greater use of domestic supplies, development of mines in Africa and Canada and increasing the use of scrap.
We need to adapt to the new game.
Biden plans a $US400bn, four-year increase in government purchasing of US-based goods and services, plus $US300bn to be spent in research and development.
Going one step further, he proposes tightening current “Buy American” laws and regulations that are intended to benefit US firms but can be easily circumvented by government agencies.
According to Biden’s advisers: “This will be the largest mobilisation of public investments in procurement, infrastructure and research and development since World War II.”
Biden would require his plan to be operating in domestic markets before negotiating any new international trade deals.
Australia can learn a lot from Biden because government purchasing can be an effective weapon in a less globalised world to boost employment and shape the nation.
Scott Morrison promised at the last election that large enterprises that are slow payers of smaller suppliers will be banned from government contracts. He has not yet honoured that promise. Maybe the Biden plan will jog his memory.
The massive submarine investment was planned as a boost for Australian high technology manufacturing. We botched that negotiation and the French look like stealing our lunch.
We had a government policy to boost research and development but many of those who were helped were then bankrupted when the Australian Taxation Office demanded the already spent money be returned, sending the program into chaos.
And the list goes on.
Biden says that in the US there is a stated preference to buy American-made goods and services but it is ignored by vast areas of the public service. That’s why tougher regulations are required.
I think it’s fair to say that the same thing has happened in Australia.
Strangely, the area where we have had considerable success in dealing with the US in supplying high technology parts is the Joint Strike Fighter. The problems with that aircraft have been well documented but it has boosted Australian high technology manufacturing in ways that will not happen with the submarine.
Dangerously for Australia, Trump is canvassing concentrating all the manufacturing of parts for the JSF in the US. We need to work very hard to retain our industry and if Biden wins the US election, try to use our free trade agreement and defence alliance to gain greater access to what will be a more restricted US market.
Biden also plans to strengthen workers’ collective bargaining rights and repeal part of the Trump corporate and individual tax reductions.
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