Back in 2014, then foreign minister Julie Bishop raised eyebrows when she described the US, not China, as our most important economic relationship. The argument was that one ought to consider foreign direct investment and not just trade in making an assessment.
US ambassador Arthur Culvahouse made a similar argument which was reported in these pages this month. Going against the common wisdom that China is well entrenched as Australia’s most important economic partner, Culvahouse pointed to the $1.6 trillion two-way investment between the US and Australia. This is on top of the US remaining our third-largest two-way trading partner.
Many will view with scepticism the comments by the ambassador given the increase in two-way trade and foreign direct investment with China that has occurred since Bishop made her comments. But we need to get the economics right if we are to better debate how best to position Australia vis-a-vis the two largest economies in the world. Bishop was correct back then and Culvahouse is correct now.
Read the full article in The Australian here