1. Phil Scanlan and the American connection
IT'S early in the evening of April 22 and there is a full house at the Australian consulate-general in
Midtown Manhattan. In the 34th-floor Monash Room, which has views of Grand Central Station
and the iconic Chrysler building, Phil Scanlan is hosting an Australian American Leadership
Conversation with former prime minister John Howard.
Those who have attended similar events are familiar with Scanlan's refrain. According to our consul-
general in New York, Australia, with a seat at the G20 table and a non-permanent position on the United
Nations security council, is now an "adult" country.
"Australia is expected to contribute value around that table," he tells the gathering, "and one of the reasons
we have these sessions at the consulate-general, here in the global capital of New York, the big
megaphone city, is to have the opportunity of talking to global leaders from a number of countries and
hearing what they think."
A former chief executive of Coca-Cola Amatil and the inaugural chairman of The Sydney Institute,
Scanlan was appointed consul general in late 2008 by then prime minister Kevin Rudd. The move
recognised Scanlan's role in founding a highly successful annual private diplomatic and business exchange
with the US, the Australian American Leadership Dialogue, in 1992.
Scanlan's networking abilities are legend. Many global leaders in politics and business - from the US and
Australia, but also from nations such as Britain, Indonesia, Japan, Turkey, Mexico, Brazil and Germany -
have been invited to speak at the consulate-general.
THE AUSTRALIAN
GEOFF ELLIOTT AND CLIVE MATHIESON THE AUSTRALIAN MAY 16, 2013 2:00PM
From left: Peter Brennan (Austrade); Prashanti Kanagasabai (Austrade); Drew Hart (consular policy officer); Julie Singer Scanlan
(director, Australian American Leadership Dialogue); Phil Scanlan (consul-general, New York); Darren Sharp (deputy consul-general);
Vered Rainisch (consular director, global affairs); and Katrina Lempenski (Austrade). Source: Supplied
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2. However, Scanlan says hosting Howard is the "icing on the cake". Given the former prime minister's
championing of the Australia-US free trade agreement and his strong and enduring ties to America,
Howard's deep understanding of the bilateral relationship makes for compelling listening. (Howard and
wife Janette will travel on to Texas to catch up with his good friend George W. Bush.)
Speaking without notes, Howard tells the audience he remains "intensely interested in the international
relations of my country" and then sketches out Australia's role in the world, particularly in terms of China
and the US. "One of the things Australia must do is avoid those people who say we have to make choices,"
he says. "We have what I call a rather infantile debate going on in Australia at the moment about [making]
a choice between China and the US. It is in Australia's national interest to ensure that there is no time in
the future where we make that choice."
His comments are well timed. Recent economic debate has focused on Australia's trade ties with China,
which overtook Japan to become our largest trading partner in 2007. Yet the investment ties between
Australia and the US are far stronger.
The total stock of US investment in Australia in 2011 was $556 billion, while Australian investment in the
US totalled $410 billion. That's a $1 trillion friendship and easily dwarfs the total two-way investment
between China and Australia of less than $40 billion in 2011. For all the talk of a coming Chinese century,
Australia's deepest political and business engagements remain with the US.
It is upon this strong foundation that Australians and Americans are working together in New York to
develop a far more sophisticated map of Australia's place in the world and its role in the biggest economic,
diplomatic and business game in town - the US-China relationship. And on that map Australia is right in
the thick of things, a player.
Despite all of its problems since the global financial crisis, the US is still the world's dominant economy.
Unforeseeable even just a few years ago, an American energy revolution, driven by the shale gas boom, is
creating cheap and sustainable sources and enabling a revival of the manufacturing sector - the great
insourcing, as it is known. Energy independence is arriving and the US could soon be exporting natural
gas to the Asia-Pacific.
US ambassador to Australia Jeffrey Bleich tells the deal Americans are perpetual optimists for good
reason. "I believe the US economy is well positioned, with the housing sector turning an important corner,
the manufacturing sector rebounding strongly, the US now exporting more refined petroleum than it
imports, investments rising and our traditional strengths of innovation, mobility and productivity stronger
than ever." The giant is stirring again.
"I was very unusual back then, but I always thought about coming to America," says Andrew
Liveris."What I've seen in many, many years since is still very true today: Nothing will take the place of
the deep American-Australian relationship, because we're so alike."
Liveris was a boy from Darwin who joined US manufacturing giant Dow Chemical in 1976 and is now its
president and chief executive. Like other Australian expatriates in powerful roles in the US, such as News
Corporation executive chairman Rupert Murdoch and BHP Billiton chairman Jac Nasser, Liveris has had a
significant impact on American corporate life and he is influential in the US political debate. All three men
not only maintain an active connection to Australia, but also work to leverage the considerable American
goodwill towards the country of their birth to Australia's advantage.
They are part of what Scanlan calls "Team Australia". Scanlan, who has a Master in Public Administration
from Harvard University's John F. Kennedy School of Government, draws on the strong support of
professional Australians working in the US, as well as some highly influential Americans who serve as
great ambassadors for "Down Under".
"Yes, we will have relationships with other countries and yes, we will develop probably very good
personal relationships with people from those countries," Liveris tells the deal. "But at the end of the day,
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3. Australia and the US share [the fact that] people want to come to those countries. Most people want to be a
part of those communities."
Howard urges his audience to take a measured approach to China. While Australia and China have
significant economic and people to people ties, he says it is important "not to be mesmerised by what is
happening in China, given the early stage of its economic development and its internal political and
demographic challenges".
"Yes, it is the second-largest economy in the world, but that is the product of sheer size. On a GDP per
capita basis, which is the proper measure of wealth, China is still a long way behind. It will be years before
it matches the strength of many middle-ranking European countries and it is still a long way behind
Australia, Germany and, of course, the US and Japan."
Perhaps not surprisingly for someone who was in Washington on September 11, 2001, Howard says no
relationship is more important to Australia than that with the US. "It's a relationship that transcends
political barriers. It's not Republican and Liberal or Labor and Democrat; it's American and Australian."
He sees Australia and the US as united by shared history, heritage and values. "The common values of the
US and Australia are there to be seen: the commitment to democracy; the belief that the worth of an
individual derives not from race or class or ethnicity or religious beliefs, [but] from character and
individual worth; [and the idea] that giving people the incentive to work hard and achieve is the most
effective way of keeping them out of poverty."
At a dinner for Howard later that April evening, hosted by Scanlan at the consul-general's magnificent
residence overlooking the East River, that special connection is on display. An A-list line-up of US
business, political and cultural leaders is in attendance. Most, says Scanlan, are friends of Team Australia
who have helped him personally in his role as consul-general, championed Australia or participated in his
New York Young Leaders' Program (launched in 2010 to establish a network of young, talented Australian
and international up-and-comers).
Surrounded by Australian colonial, modern and Aboriginal art, Scanlan keeps the conversation moving,
shifting it seamlessly from the wines of the Margaret River region to the future of the Republican Party,
the upcoming Australian election and the need to improve schooling in the US. A former US Federal
Reserve chairman and one of the nation's most powerful media executives engage in a lively but jovial
debate about quantitative easing.
Relaxing afterwards, Scanlan says he often organises such evenings - off-the-record dinners that bring
together speakers and guests from many countries - as part of his mission to increase Australia's "global
engagement". And it's certainly working. Some of the high-powered Americans on his "team" look at
Australia's achievements over the past few decades with a degree of awe.
Abby Cohen, the senior investment strategist at Goldman Sachs rated one of America's most powerful
women, understands that Australia is more than a big quarry. "Australia is well positioned to thrive in the
21st century global economy," she tells the deal. "This is not just a matter of physical proximity to the fast-
growing nations in Asia or Australia's long history of effective trade relationships with developed nations
in Europe and the Americas. It is also a function of national resources ... [and] includes essential features
such as a labour force which is well educated and growing and public policies which have emphasised
sustainability in areas ranging from government finance to the environment."
Just a few days before Howard's speech in New York, Scanlan had been in his home town of Melbourne to
attend The Australian's Global Food Forum, a reflection of his earlier career in the dairy industry and role
as the chief executive of beverage giant Coca-Cola Amatil in the early 1990s. Later, over a lunch by the
Yarra, Scanlan gave voice to his own frustration over the China-or-the-US debate. He believes that there is
a potentially transformative role for Australia to play, given its strong ties to both economic giants. "A lot
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4. of people see the US and China relationship like this," says Scanlan, holding his hands up with the palms
out. "But it is like this." He rotates his hands to interlock his fingers. "And we are in there, too."
Bleich says China and the US are more tightly bound than ever before. "China has become our largest
trading partner in the world outside [the North American free trade agreement], the largest non-NAFTA
destination for US exports, our largest source of imports and our fourth-biggest destination for foreign
direct investment in the Asia-Pacific."
More evidence of Scanlan's thesis can be found in the actions of US multinationals. As America "pivots"
to Asia in both its business and its military ties, it is looking to Australia as well. One of the world's largest
engineering and technology corporations, GE, is rapidly expanding its portfolio in Australia as it services
the $200 billion gas investment boom that will provide the power for Asia's growing middle class.
GE chief executive Jeff Immelt tells the deal the company has decided to headquarter its mining business
in Australia. In his view, investing in innovation here allows GE to take advantage of Australia's growing
role in the Asian century.
"We think that we can develop hi-tech mining products that can be shipped around the world," he says.
"You are on the leading edge of some of the world's most advanced LNG facilities and it's always good to
have some of the application resources close to the customer. So I see us using either our location in Perth
or another location in Australia to drive some of the software and analytics around natural gas."
Bleich says trade and investment flows between Australia and the US have soared since the free trade
agreement came into force in 2005. "US exports to and investment in Australia are critical to driving
Australian exports to Asian markets like China, Japan and South Korea."
Scanlan's time as consul-general in New York is drawing to a close (he is expected to finish in
September). However, he will continue his deep engagement with the US through his roles with the
Australian American Leadership Dialogue and the Young Leadership Dialogue.
He says Australia's unique position reflects decisions taken in the early 1980s to become "connected to the
global grid". Donning his former chief executive hat, he urges Australian business to connect: "It is about
moving from a corporate culture more preoccupied with home base, with a domestic rather than an
international focus, to an enterprise culture that is truly global."
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