The rise of protectionism is very threatening in the world today. What’s your prognosis on this for the next few years? Do you think that we’re really in for a bad time with trade wars?

This is probably the issue on which I think I’m personally most gloomy. I’m an economist by training and DFAT’s work is around removal of trade barriers. A country like Australia absolutely has to have free and open trading arrangements and barriers reduced, not only in tariffs but new markets opening for services, non-tariff measures being removed. That’s how you grow economies, and create jobs. That’s how you create a prosperous Indo-Pacific.

But the winds of protectionism are indeed strengthening. We have always been very strong supporters of, and contributors to, the World Trade Organization. The WTO is under a deep threat at the moment and one of the big challenges for our diplomacy is to ensure that it’s able to rise to the challenges and not, as some would rather have it, be cast to one side.

But is anyone listening to us?

Well, our job is to ensure that people do. There are plenty of like-minded people but there are challenges. And we’ve done some very innovative work on digital trade and e-commerce within the WTO. Particular issues that we want to work on include transparency and dispute settlement mechanisms. Some of this is quite technical, of course, but we’ve got, I think, some of the world’s best trade negotiators in this department and if anyone can ensure that it has a happy ending they will be able to.

Australia talks a lot about the rules-based international order but increasingly we’re really seeing international politics operating in quite another fashion. President Donald Trump and Chairman Kim Jong-un have different styles to other international leaders and they’re putting aside the rules-based order and going at things in a different way. Do you think this notion has now been passed by history?

It’s a good question to ask and I think it’s too soon really to say. We identified this in the foreign policy white paper as a very significant challenge. As the world’s 13th largest economy, we are best served by an international order where disputes are settled in accordance with international law and where there are rules governing trading arrangements and other things.

So it’s overwhelmingly in our interest to seek to uphold it. There may be areas where change is a good thing, so we shouldn’t regard this order, if you like, as set in concrete. But our interests are best served by continuing to ensure that it’s able to strengthen in areas where perhaps it’s been probed and been found to be weak.

But are we now in a more ad hoc era?

There are examples of what you might call ad hocery, but I also think that there’s a deeper basis of rules about which we must not be remotely complacent and on which we will need to build. But in fact we are doing everything we can to ensure that orderly processes survive and prosper.

Experts have widely different interpretations of the outcome of the Singapore summit. What’s your read-out?

It’s really too soon to tell. Of course it was an historic moment when President Trump met, I think we now call him Chairman Kim, but it’s not something that I would have predicted six months ago. I think what we’re all focused on is the need for denuclearisation of North Korea and that means complete, verifiable and irreversible denuclearisation. Experts in this area have seen similar undertakings made in the past and very little lasting action was taken. The US secretary of state and officials are starting to work through the detail. It will take months and years before we really know whether this is as historic in its implementation as it was in the moment.

Are you optimistic or sceptical?

I’m very cautiously optimistic.

Do you think it’s likely under President Trump that the US will substantially withdraw from the Asia–Pacific region and what would the consequences for Australia be?

I don’t think that’s likely. That may not be what you’re expecting me to say, but I don’t actually think that’s likely and I heard Secretary of Defense Jim Mattis deliver a speech at the Shangri-La Dialogue in Singapore in which he reiterated a very strong US commitment to the Indo-Pacific, to enduring engagement in the Indo-Pacific.

Obviously he had a focus on the military dimension, but I think there’s plenty of evidence that, while the US might be going about its business in some respects in ways that we haven’t seen before, I think its interests are overwhelmingly engaged in the region—including economically. And where those interests are engaged I would expect to see the US want to continue to defend those interests.

Julie Bishop said the other day, ‘With the US fighting Canada and making friends with North Korea who can make sense of what’s going on?’ How difficult is it for Australian foreign policy makers, including departmental officials, to keep up with US foreign policy under President Trump, and can we assume that Australia is in a special category among America’s allies, perhaps a different category to Canada? 

We’ve had to make some adjustments obviously in our perceptions and in practical ways in our diplomacy over the last 18 months or so. We’ve got used to concepts of disruption wherever they come from, and I think that one of the things Malcolm Turnbull has done as prime minister from day one is to emphasise the importance of agility and the importance of innovative approaches and we’ve had to deploy a few of those.

We have a deep and long-lasting relationship with the US, and Joe Hockey’s ‘hundred years of mateship’ has a lot of prominence. The centenary of the battle of Le Hamel is coming up and we’ve fought with them in every battle (since). That still counts for something.

Are we dealing with two deal-makers here? The president and the prime minister? 

I won’t comment on that, but I’ve seen that they are able to work very effectively with each other and we will need to continue to do that. Also, Australia is a very substantial investor in the US—about $100 billion worth. We put that at about 100,000 jobs. So we’ve got very substantial investments. We also have a trade deficit with the US. I won’t be remotely complacent about our alliance partner, but I think we’ve shown over the last 18 months that we can both make it work.

The Lowy Institute poll found there’s no question that Trump’s presidency has eroded Australians’ trust and confidence in the US as a responsible global actor. The poll found support for the alliance but trust has fallen to its lowest point in the poll’s history. Is this erosion of trust a serious problem or just a passing phenomenon? 

The poll has demonstrated the ups and downs in our relationship over a number of years. But I think it keeps coming back to a central point of valuing the alliance. Other things can be a bit more volatile.

The US has just pulled out of the United Nations Human Rights Council, a body that Australia fought very hard to get on. The government has said it’s disappointed by the American decision. What effect do you think that decision will have?

Well, I would expect it to be a source of disappointment around the world. Human rights matter greatly. While I heard and understood the rationale for the withdrawal, I think countries like ours would always say that it’s much more important to be at the table and express one’s views with all international institutions. They really only work as well as the level of members’ belief that there’s value in participating in them.

So I think we will now need to bear a heavier load. So will other members of the council. We are very disappointed in it. We have deep shared values with the US when it comes to human rights. We hope, as with some other forums from which they’ve withdrawn, that at some point they’ll be back again. For now, we’re not holding back in expressing our disappointment.

Were we consulted at all in that decision, or sounded out? 

I don’t know about sounded out. It had certainly been a matter of conversation. We’d expressed our views over a period of time, as we would in any international organisation in which the US is fulfilling a role.

So we tried to persuade them not to take this decision?

We expressed our view that the Human Rights Council would remain a stronger organisation with US participation.

This is an edited extract of Michelle Grattan’s conversation with Frances Adamson. To listen to the full conversation, click on the play button below.