The former head of the World Bank, Robert Zoellick, says the Obama Administration was wrong to lobby its allies, including Australia, not to join the China-led Asian Infrastructure Investment Bank, the AIIB.
The US pressured its trading partners not to accept invitations from China to become founding members of the new $100 billion AIIB, citing concerns about corporate governance and China’s foreign policy ambitions in the region.
The lobbying effort proved unsuccessful, however, with 56 countries formally signing on to the initiative at a ceremony in Beijing this week.
Australia took several months to decide, but finally agreed to join the bank last month, with Treasurer Joe Hockey attending the ceremony in China this week.
In an exclusive radio interview with RN Breakfast, Zoellick said he disagreed with the US government’s approach.
‘I feel doubly bad because I think Australia, out of sense of partnership with President Obama, agreed not to be part of it. Frankly, that was a very noble thing to do as a friend of the United States, but I think ultimately Australia has made the right decision.’
Zoellick said the US needed to work with the Chinese ‘when they come up with reasonable ideas’.
‘On the other hand, when they do things that are dangerous such as in cyber security or in the South China Sea, where they can threaten freedom of navigation, we have to draw the line. But draw the line where it’s rational—not just because someone else comes up with an idea.’
Zoellick is currently in Australia to take part in celebrations marking the 10th anniversary of the Australia-US Free Trade Agreement.
The deal was forged 10 years ago between the Bush Administration and the Australian government under Prime Minister John Howard. Zoellick was President Bush’s trade representative at the time and helped broker the deal.
While some critics say the Australia-US trade deal has been a ‘dud’, Zoellick says its helped to link Australia with ‘cutting edge’ developments in the US economy by boosting two-way foreign direct investment.
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