Government incoherent on North Korea

Advertisement

Not that that is any surprise but here’s the proof. Yesterday Do-nothing Malcolm declared war on the DPRK:

“The reality is we are facing on the Korean Peninsula the gravest threat to peace since the end of the Korean War,” Mr Turnbull told ABC radio on Monday morning.

…That response should include China cutting off its supply of crude oil to North Korea.

“That absolutely would be a lever that China could pull, and that would put enormous economic pressure on the regime,” he said.

…Mr Turnbull agreed with former prime minister John Howard’s assessment the rogue nation’s dictator Kim Jong-un was evil.

Foreign Minister Julie Bishop said a Chinese ban on oil exports would be unprecedented action.

“It would have a significant impact on North Korea. This is the type of measure that would have to be considered,” she said.

Cutting off oil supply is a declaration of war. Moreover, it is hardly in Australia’s economic interests to elevate tensions, offering cover to the US to impose sanctions on China, as well as pressuring us to join them. A point China itself made rather well:

Prime Minister Malcolm Turnbull’s call for China to cut off its oil pipeline to North Korea has prompted a fierce rebuke from a high-circulating Chinese newspaper, which accused him of going beyond even Donald Trump.

The Global Times, which sells more than one million copies, devoted an editorial to Mr Turnbull’s “indiscreet” and “absurd” comments, and saying Australia was a “second class citizen of the West”.

“Although President Trump has complained about China in contradictory statements, he has so far never publicly asked China to cut North Korea’s oil supply,” the Global Times wrote.

The editorial said Australia had become America’s loudspeaker in the Asia Pacific.

“This speaker works very hard, and very proud, but more and more it becomes local noise, self-righteously blah blah blahing.”

…”Australia does not have to pay or bear the loss for sanctions against North Korea. Even if war breaks out in [the] peninsula, refugees would not run to Australia. How can people not hate such a country who plays high-profile from a far distance and tries to instruct China what to do.”

Advertisement

Indeed, today the trade minister warns on the blow back of just such an outcome:

“There is no doubt that if there was a trade war that would be very bad for Australia and indeed it would be very bad for the entire world,” he told the ABC.

“The Productivity Commission recently concluded a study looking at what the potential impact of a trade war would be. We know it would send the world into recession, we know it would cost many jobs and we would see as a consequence economic growth go backwards.

“That’s not an outcome that we want, it’s not an outcome the United States wants, it’s not an outcome that China wants.”

While China is Australia’s biggest trading partner, Mr Ciobo said it was a misconception though Australia was overly-reliant on it as a customer for iron ore, coal and other resources.

Ameh…yeh right.

Advertisement

Of course we’re largely immaterial to the outcomes but why stick your head in the noose at all?

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.