China's expanding economic power and projections it will surpass the US as the pre eminent commercial power have preoccupied people for years. But what about the idea of America as a kind of rogue state in its decline, lashing out here, lashing out there. That's not a perspective you run into every day, even in the Trump era. But as the Trump administration rolls on, more and more countries and world leaders might come to see America as the disruptor rather
than the stabilizer. Welcome to Benchmark. I'm Daniel Moss, the columnist at Bloomberg Opinion in New York, and I'm Scott Landman, an economics editor with Bloomberg New in Washington. America as the economic and political renegade rather than the status quo is a pretty new concept, but Bob Carr says it's one we should take seriously. He's a former Australian Foreign minister and longtime student of US history and politics. He's the author of a new book, Run for Your Life.
Bob joins US from Sydney, where he's Director of the Australia China Relations Institute at the University of Technology, Sydney. Bob thanks for joining us. Mike, pleasure, Dan and Scott By pleasure to be talking to you. You've had a long career in government. Before serving as Foreign Minister, you are a Premier of New South Wales for ten years, which for our American listeners is a little like being
both governor of New York and California combined. I should also stress from the outset that you're no anti American rabble rouser. But what has America traditionally meant for you. We've seen America traditionally as a great sources of democratic values, and America's had a proud and mobile, even if inconsistent or patchy record evalivating human rights. I mean, there've been moments when I have thought, I guess twenty years ago, that if there's going to be a dominant power in
the world, then it's it's good that it's America. Then came two shocks to that happy, rather optimistic view of American power, and Mike, one was the invasion of Iraq. In the absence of any concept of international law or any consensus in the West, the invasion of the Iraq was a huge disrupting influence. The other one was America deciding under Bush, that would really vacate leadership on on client to change that. That really got me thinking about
the US. And of course under Trump, both those concerns has been magnified. Let's go back a little further, Bob, I learned about Chester A. Arthur at my eleventh grade US history class. I can't recall all the details, but can you tell us what is the Chester A Arthur Society?
In the early eighties, Ion a group of friends formed the Chester A. Arthur Society to have dinners and to test ourselves with a paper on some aspect of US presidential history and a series of sometimes quite challenging trivia quizzes about about US the details of US presidential history. It was great fun. Do you still have the meetings, Bob? Or have you ceased them? In disgust? We ceased them and George W. Bush because it was you got to
celebrate the presidency of Franklin Roosevelt or Abraham Lincoln. If all this pageant simply lead to the disasters of the George W. Bush presidency, it would be utterly impossible to hold them now. I mean, I've discussed with friends who like me, have been so fond of American history, the hollowness of any any celebration of this great feast for storiography, when it all seems to lead to the degradation of
a Trump presidency. How you can extoll the shrewd, level headedness of Eisenhower's to term leadership of America, Let alone Franklin Roosevelt's leadership in depression and war when in the end, let alone Abraham Lincoln in the end, when it all devolves on a brabel rousing populist in Donald Trump, And without any sense, I might add, and I think this is an important point, Dan Scott, without had any sense of an imminent recovery, none of us believes, no, no
friends of America. It was wild friends of America. Looking at the Trump presidency from Australia, I think there's going to be a return to liberal internationalism. China's ascendency in this context isn't really a new idea. What are people failing to grasp about the current moment. There are two new elements in perceptions in Asia, and that is that the China's economic rise is robust, and China's on a trajectory whereby two thousand and thirty it'll have an economy.
According to an official Australian government assessment published in our Foreign policy white paper out late last year, we're the Chinese economy will be twice the size of the US economy, and I think that's a trauma for many Americans to contemplate no longer the as largest economy. And the second thing has been the Trump presidency. Across Asia, the consensus has formed that you cannot rely on America. It's behavior
is going to be uddly, unpredictable. Do you think with regards to China, is it really the fact that China is getting that big you think is threatening America? Or is it the fact that China's economy is becoming so much more sophisticated. I mean, it used to be all about sweatshops producing cheap clothes and shoes and that sort
of thing. They still do a fair amount of that, and yet the economy has evolved so much that you have technology powerhouses like Ali Baba, ten Cent that are being mentioned often in the same breath as American giants like Facebook, Amazon and so on. All of that's true. Another way of putting it is that when Joe Biden, Joe Biden used to say, he said to me, China
doesn't innovate. Well, that that can't be said today in view of already have pointed to China is a great source of innovation and in many respects has already overtaken the US in innovation. And I think that makes it even harder for American aggress I noticed in the New York Times there's hardly any coverage of this, of China's transition to an economy based on services and based on consumption.
The Chinese have already pulled off that transition. And as I look at the pages of the New York Times every day, and it's it's almost stubborn failure to cover what's happened in China. I think there's that there might be a latent American jealousy or distaste for what China represents. And I can understand that China's pulling off this economic transition without using the democratic means that we we'd all
prefer to see China using. It's it's becoming a predominantly middle class nations, becoming by international tests, a rich country, and without permitting more political freedoms. And this is this upsets the The rule book contradicts the rule book and the expectations that all US Democrats have had. American declinism is nothing new, As you're well aware, the country has
a long history of reinvention. Can it do it again? Yes, that's got to be admitted as a possibuilding and other possibuilding is that American decline is attenuated, it stretches out. None of us knows, None of us knows what form American decline will take. But we ought to be focusing with laser like concentration on the political crisis. There's a political crisis in Washington that is seeing the character of
the two great political parties transformed. Just think the Republican Party is becoming a party opposed to immigration and opposed to trade. It's also becoming the first choice, the first preference the white working class American males. The Democratic Party looks more and more like an alliance of America's rich living on the East and West coast and its welfare dependent classes. Now, these these are big shifts, and the bonapartism of Trump has produced this change, and that represents
nothing short of a political transformation in the US. But it's only one measure of the way America has changed politically. You could have a second career as a political analyst on one of the American television networks. I think with what you just said. But what you were just talking about reminded me of a quote that I saw that got some wide play back in when you were the Foreign Minister, and you said something along the lines of America was one budget deal away from restoring its global
pre eminence. Do you think it's going to take a lot more than one budget deal or one election even now to get back to that level. Yeah, I don't. I don't think America can return to the liberal internationalism that was once synonymous with its power and might. I just can't see that happening. I think Trump is the most transformative president since lb J or Franklin Roosevelt. He's the most successful demagogue in American political history. He's a
true bonapartist, the leader above party, above faction. And the fact that the Republican Party is shackled to him rather than the relationship being the other way around, him being a product of the Republican Party and its values. All this counts greatly. And I can't see the Democrats under any the candidates for presidency that are now now imaginable beating him in two thousand and twenty. I see him as a a two term president. Certainly that's the most
likely outcome. And I think America will be changed utterly by eight years of Trump and the Republican leadership that will emerge after him very different from the Republican leadership at the Bushy Earl let alone. What was there before George W. Bush and before the Tea Party. How do you get from the sense of political crisis and political
trauma to security threat. I think the political crisis in America, and that for once the term crisis is not is not hyperbole, is of significance precisely because it's changing America's international character. America is tearing up the rules on free trade. The next step can only be withdrawal from the World Trade Organized Nation because it's not adhering to the rules of the w t O. America is looking down, dusting off its allies like Canada, like the Europeans. America is
saying alliances don't matter to us anymore. America seems to be treating a North Korea and a Russia with more respect than it's treating Germany or the United Kingdom or Canada. You can't pawn the crown of global leadership and then
buy it back at the old price. If there is, in a stunning reverse all the election of a president who wants to abandon the key tenants of Trump's leadership, then he or she is going to find it very, very hard to rebuild alliances, to re establish respect because during the eight years of Trump and during whatever follows Trump, the world Asia, for example, but the Europeans as well,
again to be making their own security arrangements. Australia might be the most rusted on and the most unquestioning of allies, but I suspect even Australia I would need to take account of what appears to be happening in Southeast Asia, that is, the Ten Nations of Asigan reach in its own way accommodating Chinese power and counting on America to be utterly unreliable. But let's talk about China for a moment. I spent three years in China as an economics editor
in Beijing. It is an impressive place, but it also has its weaknesses that you might not be visible from a long distance. And there's this idea that China supports free and fair trade. They talk about a lot, but it seems like it's something that could be challenged. But to me, at least, China does talk about free and fair trade, and maybe isn't the one that's trying to
ratchet up the tariffs like the Trump administration is. But let me ask you, is China kind of getting a free pass right now for all of it's you know, the many kinds of violations they've been accused of in the economic arena for many years. Are those being kind of looked over just because America is being such a bad actor. Yes, I think they are getting a free pass.
And I think if there's a defense to be made of Trump's aggressive behavior on trade, it might be this that it will greatly strengthen the hand of the reforms
in China. The people who do want to see the Chinese economy open up, who do want to see a burst of economic liberalization, It could well be that they get the upper hand, and faced with the provocation and the challenges of all the Trump's doing on trade, that we see China introduced market based reforms at a faster rate than the Party, and the government has promised to introduce that would be good for the world, would be
very good for China. Already, China's got a smaller public sector in terms of the percentage of its workforce employed by government, including state earned enterprises, than many countries in the Western world, including Australia. But imagine if in response to Trump reformers really forge your head in China. It talked about the Asian countries making their own accommodation with China.
Why has the issue of China become so politically toxic in Australia of late Yeah, I think the government of Australia tilted against China from early two thousand and seventeen, so it left people like me running a think tank as I am on Australia China relations saying, as I've been saying very recently, we more or less had it right as an American ally running a pragmatic China relationship back under the prime ministership of Tony Abbott, the Prime
minister immediately before our current Prime Minister, Malcolm Turnbull. So we've gone through a period of shock and trauma because of the rapidity of China's rise. It's been a shock to the inherently pro American defense and security establishment in Canberra. It's just been a shock. It's been China's economic influence in the region to our north and China's success in
its assertiveness in the South China Sea. I think Chinese behavior too has contributed to the the way views of China have turned have turned negative among the Australian leadership. China lifting the two term limit that applied to its
its president is the biggest element in that. But while the Australian leadership has moved to a more entrenched or more flamboyant any China position, at least in terms of rhetoric, I mean we haven't repealed repealed our free trade agreement with the Chinese, public opinion has moved in the opposite direction.
The highly respected Lowing Institute, our leading foreign policy think tank, produced a poll three weeks ago that showed the percentage of Australians who see China more as economic opportunity than security threat went up in the last year. It now sits at In fact, over the last two years, I
think it's increased by five percent. So Australian views of China's economic potential in terms of mass public opinion have actually strengthened listen inclined to see China is a geo strategic threat then a couple of years ago, but which to me is very interesting now. Bigger than any class between China and Australia would of course be one between
China and the United States. And this topic has gotten some attention lately because Graham Allison, a scholar at Harvard, published a book about the Thucidities trap, which is when one great power threatens to overshadow another conflict typically not always, but but typically is the result. Now with China going down a more authoritarian path, like you mentioned, America being fundamentally reshaped by the age of Trump, how have these odds of such a conflict increased over the past year
or two. Well, you can say that the China and the US has moved into a trade war. You can say that that has got elements of a Cold war, especially with America reclassifying the way it regards China and seeing China as a strategic rival instead of a partner or a competitor. That's a huge challenge for Australia. But to conservative Australian politicians in the last twenty years have
actually addressed it. Alexander Dana, who was Foreign Minister in the Howard government said in two thousand and five in respect to the prospect of a clash in the Taiwan Strait that and wouldn't apply, that the security treaty between Australia and the United States would not drag us into such a conflict, and that made a lot of people
pay attention. And again in two thousand and thirteen or fourteen, the Defense Minister in the Abbott government said in respective conflict in the East China Sea that it was most likely that the Answers Treaty would not apply. In other words, and a conflict between China and Japan with the US intervening on behalf of Japan, Australia's obligation to protect its allied the US would not apply. We would not be dragged into it. And you got away with that comment
without any blowback in Australia. So there there two signals that really stand out that even on the conservative side of Australia, it would be seen as not in our national interest to enter a conflict between China and the United States. Only stores in the wind, but I think people in the U s state department focused on game playing about these sorts of eventualities would have to take notice.
That's Australia, I guess, is the most serious and rusted on American ally in the Pacific, apart from Japan, giving a strong cig no that in a show down between the U S and China it would have to consult its own national interests. One of the arguments advanced for why a conflict between the US and China is unlikely is that their capital markets and their economic systems are so enmashed. What's your perspective on that argument. Yeah, I
support that argument. And there is now some critical assessment of Graham Allison's notion of the vicidities trap emerging, among other things, people pointing out that it's it's got no historical residence in East Asia. It's a bit of historicism. Because some things have happened in the past, these same things have got to happen in the same way in the future. So I'm basically optimistic. I think a clash
would be disastrous for both powers. I am worried about the War Party in the United States at work in Washington, as advisors and commentators and think tankers moving around the circle of power, and I wouldn't hesitate to make the same point abount hawks in Beijing, but that simply puts an obligation on the rest of this to cause in realism and a bit of Kissinger style realism on the part of the the US is needed to avoid an ideological cold war approach to China, which sets us up
for the inevitability of some conflict. Bob, let's finish on a slightly different note, talk about some of your days in the government. One typically here's the bemoaning of the age of social media, how it's become almost impossible to govern these days, you know, to properly develop policy, to sell it to an increasingly distracted electorate. You lead Australia's biggest state for ten years. What do you think of
that argument? You're I come out of a different era, out of the era of newspapers, a time when people on buses and trains going to work were devowing newspapers, and an era when people watch the free to wear TV news at night, and you can sell a message by appearing on the front pages and on the TV captual summaries of the day's events and throughout the day
on that wonderful medium radio. Everything's been shattered, everything's been broken up, but politicians are pretty unconvincing when they complain about it. If the rules have changed, you've simply got to change with the rules. And that means, if necessary, putting the twenty four hour media, the social media to your use, if you've got a good record, if you're listening to the public, if you can pitch your case,
the new media rules should not disadvantage. In fact, I'd enjoy the challenge of being back in it again, being able to to take that new rule book and to make it work for me and for the government whose workers in charge of Or you could just take the new rules and take advantage of them as much as you possibly can and become president of the United States. You did once fantasize about being a senator, didn't you, Bob, Yeah, I did. That would have been nice. I thought i'd lead.
In my book, I share a fantasy that I'd lead the six Australian states in the American Union. There would have been some disadvantages, some disadvantages applying to that, of course, we would have had to live with America's gun laws. Bob, Thank you very much. For joining us. It's been great to have you good Dan, It's been my honor. Thank you. Scott.
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