Weekend Edition: Dealing with the US. The tactics of an Aussie trade negotiator.
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Why are trade deals now being concluded in weeks instead of years?
Free trade negotiations used to take years to reach a conclusion with big trade teams on both sides working through the minute eye. So how come President Trump can do m deals in a matter of weeks or days or sometimes just on a phone call for an hour or two? What's been lost or gained in the process and where does it all end? That's this week. The morning call from NAB with Phil Dobby.
The weekend edition.
Yeah, just how long will this ever changing landscape, this flux in tariffs, investment commitments and whatever else the US President wants to throw in, how long will that last? And how different is this this rapid fire process of arriving at trade deals? How different is it to the traditional way that deals are done? And of course those deals traditionally have been more to do with uh introducing more free trade rather than introducing More protectionism. Well, let's talk to someone who knows a lot about trade deals. Dmitry Gosubinsky is the author of Why Politicians Lie About Trade. He represented Australia at the World Trade Organization from 2014 to 2018. And now, based in Geneva, he runs Explain Trade, who trains government officials on complex trade negotiations.
So, Dmitry, I mean, first of all, All w this is all about protectionism. Should we have protectionism of any sort? I mean, when is it valid and when is it not so valid?
Well I think we should begin by saying that Donald Trump is a fan of tariffs first and foremost. Even more than he is a fan of protectionism. And I think to explain that distinction kind of goes to your question. If you wanted to encourage a lot more production in your country, so you wanted to do traditional protection and you wanted to use tariffs, you wanted to make it harder to sell your citizens' things so that people built factories in, say, Australia to sell to Australian citizens. What you would want to do is announce modest targeted tariffs and keep them in place. Signal that they will be in place for a decade and make sure that they only hit the things you actually want to see factories making outside of Sydney.
So you want to see factories making T shirts outside of Sydney, you put a high tariff on T shirts, you pass an act of say Australian Parliament that says these tariffs are gonna be in place for the next fifty years and then you drop the tariff on cotton, for example, to zero.
So a strategy, in other words, for a particular purpose. So an example of that, I guess, would be the automotive industry in Japan, right up to nineteen forty eight, where they grew their domestic base and had an industry that was big enough for them to start to generate, as it turned out, quite a lot of export revenue.
Yeah, and look, these there's some there's some like complicated arguments you can have there about the benefits of exposing an industry to competition versus shielding it. Um I think th the bigger kind of message though is that Japan wasn't tweaking its car tariffs every ten minutes. When Japan introduced its car tariffs, it didn't immediately tell Toyota, Oh, by the way, we're going to be negotiating on these car tariffs with five countries, and if those countries make a big enough investment pledge, we may get rid of them. Toyota had the long term confidence to make those investments. And while Trump likes that kind of protectionism, he also very clearly likes being able to use tariffs as a tool of day to day transactional diplomacy.
Right. So it sounds like what you're saying is if he stuck bad, if he had a strategy that uh had some consistency and longevity to it, then we'd be in a in in a better position.
How does a targeted‑tariff strategy aim to boost domestic manufacturing?
But as to, you know, what he's doing right now, I mean he is playing the cards, isn't he? He holds all the cards, it's all about power. America is such a big market, uh people are very wealthy, uh, and it's a it's a market that everyone wants to to get into. So in a way I mean it's a bit surprising that the US has been so lenient on people and has not actually introduced these sorts of policies in the past. What's taken them so long?
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Chapters
8 chapters
1
Why are trade deals now being concluded in weeks instead of years?
0:01–3:47
2
How does a targeted‑tariff strategy aim to boost domestic manufacturing?
3:47–8:31
3
Why are US trade negotiations becoming rapid‑fire phone calls with no written contracts?
8:31–12:19
4
What challenges do Australian SMEs face with the new US tariff paperwork and customs rules?
12:19–16:40
5
Will the US tariff volatility continue through the rest of the Trump administration?
16:40–21:56
6
Is the United States using tariffs as a substitute for tax revenue rather than protecting jobs?
21:56–27:49
7
How will prolonged US trade uncertainty reshape global supply chains and market diversification?
27:49–32:27
8
What new data‑centre opportunities are emerging for Australia in the current trade climate?
32:27–32:37