December 2016

Posted by Anton Murray Consulting on . Posted in 2016

A Year of Conservative Political Shake-Ups

Politically, it’s been an interesting year. One that has surprised many, shocked some, and sent others into a momentary tailspin. The world appears to be trending toward more conservative, nationalist politics and, in the case of the United States, away from politicians altogether.

Six months ago Britons voted to leave the European Union and at first the reaction was one of shock. The markets were in chaos and the Pound, understandably, took a beating. In the most recent twist it’s been reported that Russia may have fixed the election. So what does this all mean for Asia-Pacific? In September, Australian Foreign Minister Julie Bishop and Trade Minister Steve Ciobo were asked about their plans by a number of politicians in Europe, urging them to prioritise discussions with the EU, rather than the UK. And British Labour representative David Martin told us we “cannot dance with two people at once”, challenging Australia to consider its plans post-Brexit. Formal talks with the UK cannot be held until Brexit actually takes place and Mr Ciobo pointed out back in September that trade discussions with the EU were at a much more “mature” stage than with the UK. It will be interesting to see how these trade negotiations play out and where priorities will indeed lie, especially following the collapse of a European trade deal with Canada in October. The UK is Australia’s second-largest foreign investor and their seventh largest trading partner. The relationship has been strong for decades, so it seems unlikely that Australia will not do everything in its power to negotiate a trade deal with the UK, while also forging a stronger relationship with Europe. If it can be managed.

Ultimately the decision by 52% of Britons to leave the EU was spurred on by ‘Leave‘ commentary aroundglobalisation not working for Britain and a desire to protect its borders. Something similar happened in the US this November when Donald Trump was voted in as the next president. He’s promised to remove the US from its responsibility as the ‘world’s policeman‘ and to raise tarrifs, opposing free trade agreements, in another big protectionist move. As the world becomes more parochial, Australia and Asia-Pac nations should be open to managing their own economies and military better. If Trump wants to be less involved in global conflicts, countries like Australia may well be required to pump more into their own military, which obviously comes at a cost. He’s already suggested that Japan and Korea would need to be more independent from a military perspective. And if global tarrifs are raised and restrictions are placed on imports and exports, we are likely to feel exposed here in Asia-Pac, in turn affecting our economies and confidence. While PM Malcolm Turnbull reassured Australians that they are politically independent on the battlefield, Brooking’s Institute security analyst Thomas Wright warned, “There will be real doubts about the alliance with the US, the alliance system in the Asia-Pacific more generally, and whether the United States will remain present in the region”. Australia’s Kim Beazley went as far as stating that if Trump “imposes the tariff he’s talking about with respect to China, it will cause close to an economic crisis.” Others have argued that stepping away from the US can only be a good thing, and will push us harder into forging stronger relationships in the region. Whatever happens next year, it will definitely be an interesting one from a political, trade, economic and military perspective.

Thank you for your support in 2016. We hope you’ve enjoyed our monthly newsletters and gained from our news and opportunity updates in your inbox and on your social media feeds. We wish you a safe and happy Christmas season and hope 2017 is prosperous and memorable. As always, we are available to chat about your career and plans for next year across our four key markets: Sydney, Melbourne, Singapore and Hong Kong. Drop us a line and we’ll be happy to help.

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