Australian Prime Minister Malcolm Turnbull has two pitches readied for President Donald Trump when he visits the White House Friday: Offering to invest Australian pension money in U.S. infrastructure, and attempting to convince the US to rejoin the Trans-Pacific Partnership.
The first world leader to be received at the White House in Trump's second year, Turnbull will propose using a portion of funds in Australia's nearly $2 trillion pension fund to invest in U.S. infrastructure.
"A lot of counties, cities, and states have a massive amount of capital tied up in assets that are paying no tax, making profits that shareholders never see and basically, in many cases, could be used more efficiently," Joe Hockey, ambassador of Australia to the United States, told reporters, citing the success of a similar program in Australia.
"They could be ports, they could be railways, airports, they could be even blocks of unused land bought for redevelopment."
Australia's private sector funds have long invested in U.S. infrastructure projects, providing nearly $14 billion since 2010 in projects ranging from the Indiana Toll Road, to liquefied natural gas terminals and parking garages. The level of investments in U.S. infrastructure slowed dramatically in 2017, according to data from Preqin.
Members of Congress reportedly will travel to Australia later this year to discuss such funding sources for their forthcoming infrastructure legislation.
On trade, Turnbull must walk a fine line: Trump has signaled he is open to re-engaging in talks, but he wants any submission to reflect a political win or, in his words, "a substantially better deal."
A multilateral deal excluding the United States was agreed to late last month, at which time Turnbull suggested the door was still open for the U.S. to re-enter. Australian officials have been consulting with members of Congress and former U.S. Trade Representative Michael Froman —the chief negotiator of the original TPP — to gauge the best path forward.
The Trump administration seems to have dug-in its position to stay out of the TPP. Vice President Mike Pence, in a bilateral meeting with Japan in October, called TPP "a thing of the past for the United States of America," saying the decision to withdraw "will be our policy going forward."
Australia's appeal to Trump will be to tout the virtue of free trade for rank-and-file workers and citizens across the U.S., an approach that — so far — has been successful when Cabinet officials and members of Congress have urged the president not to withdraw from the North American Free Trade Agreement.
"I don't think a lecture from Australia about free trade is going to change attitudes in the United States," said Hockey. "But there definitely needs to be buy-in from those people who are the beneficiaries of free trade being so many small business people across American and so many communities in America that have seen their prosperity grow."
The "mateship" — as the Australians have termed the longstanding alliance with the United States — was strained in the early days of the Trump presidency, with the U.S. leader critical of a program to accept refugees turned away from Australia.
The discord led Trump to describe his telephone conversation with Turnbull as "the worst call so far" in a string he was conducting with various world leaders. The U.S. ended up honoring the terms of the refugee program, and Hockey said the two leaders share a "transactional business language" and "enjoy each other's company."