Australia must play the geoeconomics game, or risk being side-lined – by Naoise McDonagh (Lowy Institute – October 18, 2023)

The world is moving away from a rules-based order and towards power politics. Is Canberra ready?

Last month, JPMorgan Chase CEO Jamie Dimon stated geopolitics is now the biggest global risk to the economy. Australian business leaders on the receiving end of Chinese economic coercion could have sent that memo to Wall Street two years ago.

So could many of the world’s governments who have been busily implementing economic policy for a geopolitical world. From war in Ukraine and exploitation of energy, to economic coercion and weaponisation of wine, we are living through a geopolitical transition to a new world economy.

Our new geoeconomic order pirouettes to a different melody than the rules-based era of globalisation, challenging traditional Australian trade policy settings, which while moving in the right direction have further to go.

Power politics through economic means is the order of the day, with consequences for industries Australia has historically competed in with a straight economic hand of comparative advantage. Yet those claiming Australia’s comparative advantages will continue to serve the nation well, have failed to understand the depth of the geoeconomic transition underway, backed by hard coin and clear policy settings.

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