The swearing in of the new Abbott Ministry yesterday portends something of a new era for the Department of Foreign Affairs and Trade.

The inclusion of Investment in the Trade portfolio was no surprise, given the discussion and policy release in the election lead-up. It aligns with the Coalition’s ‘economic diplomacy’ strategy, outlined in Julie Bishop’s Interpreter piece and then emphasised in its policy document launched a day or so before the election.

In her Interpreter piece, the new Minister outlined a ‘clear focus on promoting the economic interests of the Australian people and Australian businesses in its international engagement’, together with building a stronger network of bilateral and regional FTAs, particularly in the Indo-Pacific region.

The enlarged trade and investment ministry takes on greater significance, however, when taken with other changes mooted for the Foreign Affairs and Trade portfolio overall. In the lead-up to the election, there were steady rumours in Canberra circles that the Coalition’s intention was to split the Department of Foreign Affairs and Trade into two departments, allowing Andrew Robb to take charge of a super-ministry with its own department (and make way for Arthur Sinodinos to take the Finance portfolio, a corollary which hasn’t materialised this week).

This would be a strange move. There were strong reasons for merging Foreign Affairs with Trade in 1975, and not only relating to efficiency. Stuart Harris, Secretary of the Department in the period straddling the 1987 merger from 1984-88, assessed its benefits in 2002, arguing that the Hawke Government’s goal of a more internationally competitive economy favouring increased exports and openness to foreign investment was one of the drivers of the merger, and that it ‘resulted in practice in a higher priority being given to economic relations.’

The Abbott Government appears to be serious about economic diplomacy and driving foreign investment, to the point that the new Trade and Investment minister will be making an annual statement to parliament on the quantum of new investment and new jobs in Australia. The success of the Department’s 1987 merger demonstrates that re-dividing it would be organisationally counterproductive and damaging to the new government’s own economic diplomacy goals.

The Abbott Government also appears to be serious about cutting 12,000 jobs from the public sector. If it is, then dividing Foreign Affairs and Trade — a move which resulted in an immediate staffing contraction of around 6% after the 1987 merger — hardly seems logical.

The idea appears to have been shelved for the moment. If so, this is good news for the effective conduct of Australia’s foreign and trade affairs. A focus on ‘economic diplomacy’ can be code for deep cuts and major restructuring for a ministry of foreign affairs, as our friends across the ditch well know.

Photo by Flickr user neonzu1.