In the fast-paced world of economic security and trade negotiations, staying ahead of the game is crucial. The Editor’s Digest, a weekly newsletter curated by Roula Khalaf, Editor of the FT, offers an insider’s look at the latest stories shaping the global market.
As the European Commission embarks on a five-year turf war over the enigmatic term "economic security," they face a daunting challenge in defining and implementing policies that can balance open trade, robust growth, supply-chain resilience, and geopolitical coherence. Drawing inspiration from Australia, a country at the forefront of Chinese economic pressure, there are valuable lessons to be learned.
Here are key takeaways from Australia’s approach to economic security:
- Synthesizing Mindsets: Unlike the EU, where national security remains decentralized, Australia has successfully merged economic and securocrat mindsets to create a cohesive strategy. This collaboration has paved the way for a more integrated and effective approach to tackling external threats.
- Foreign Investment Screening: Australia’s stringent foreign direct investment screening laws have proven instrumental in curbing Chinese influence over strategic industries like rare-earth mining. By enacting robust legislation, the country has safeguarded its economic interests and national security.
- Market Diversification: In the face of Chinese trade coercion, Australia demonstrated resilience by diversifying its export markets. By reducing its reliance on the Chinese market and exploring opportunities elsewhere, the country effectively mitigated the adverse effects of external pressure.
- Balanced Industrial Policy: Australia’s Made In Australia programme strikes a delicate balance between boosting domestic resilience and maintaining a liberal economic framework. This targeted approach prioritizes economic security without resorting to protectionist measures.
While Australia’s model is not without its flaws, particularly in addressing climate change denial, it offers valuable insights for other nations grappling with economic security challenges. One crucial lesson is the importance of consensus and coordination in crafting effective policies. By aligning stakeholders and priorities, countries can navigate complex geopolitical landscapes with more confidence and foresight.
As the EU navigates its own economic security challenges, it’s essential to learn from successful models like Australia’s. By fostering unity and clarity of purpose, nations can enhance their resilience and adaptability in an ever-evolving global market. Embracing a holistic approach that combines economic growth, national security, and geopolitical strategy is key to ensuring long-term stability and prosperity.
