Neo-Protectionism in the Age of Brexit and Trump – What does Australia do with its Powerful Friends?

This chapter reviews Australia’s economic history and considers how its policies can meet the contemporary challenges to globalisation. As a well-endowed, rich, small country, Australia, from its colonial origins, has survived, thrived and benefited from ‘globalisation’, largely sheltered under its umbrella of strategic alliances with its ‘great and powerful friends’, namely, Britain and then the United States. The country’s geographical isolation, the ‘great southern land’, made its embrace of globalisation a necessity. Australia has successfully confronted significant challenges in the progressive restructuring and growth of its economy. However, recently emerging trends of global nationalism and protectionism, manifested in Brexit and Trump, raise difficult questions and choices for Australia. The country’s future now turns on how it might successfully transcend the current tide of anti-globalisation initiated by its ‘powerful friends ‘while further engaging with its region and embracing the opportunities presented by China. So what has gone so wrong? Why and when did the world turn from its commitment to globalisation and free trade on a multilateral basis? And how do we find ourselves embarking upon what looks like a new era of global protectionism and isolationism, led ironically, by our two ‘great and powerful friends’ - Britain with its Brexit vote and America with the election of president Trump? Will the world economy - against all past lessons - fall back into the era of ‘tit for tat’ protectionism, global depression and world wars consequent on the emerging neo-protectionism, isolationism, and xenophobia? Is Australia in danger of ending its dream run of growth and prosperity based on an outward facing economic, trade and foreign policy? Will Australia become inward looking and protectionist once again? Who will be the country’s next ‘big and powerful friend’ as the global power order once again historically shifts, this time from the Anglo European sphere with its commitment to liberal democracy, to the Asia Pacific