For two decades Australia assumed it could maintain beneficial ties with both the United States and China indefinitely. That assumption has collapsed. Work to build a greater resilience and autonomy, with our region, will take years, but that work must begin now. Nick Bisley reports.
Beijing’s shift away from its post-Mao foreign policy consensus, and Washington’s abandonment of the liberal international order, have left Canberra exposed. Australia must develop greater resilience and autonomy by building coalitions of like-minded trading states to defend and strengthen the rules-based order.
We don’t have to choose. For nearly two decades, this statement defined Australian political and policy elites’ approach to the country’s principal strategic dilemma. Canberra’s security and defence policy was bound to the United States through its alliance, while its economy was propelled by China’s appetite for Australian exports. Australian leaders believed they could, with some judicious diplomacy, maintain beneficial ties with both sides indefinitely.
This approach was informed by optimism about the geopolitical circumstances of the early 21st century and rested on core assumptions about Chinese and US behaviour that have proven badly misplaced.
Like others, policy leaders in Australia assumed that China’s post-Mao political settlement would endure. The Chinese Communist Party had tied itself to economic growth, requiring a technocratic approach to domestic governance as well as a moderate and risk-averse foreign policy. Canberra presumed that China would always have leaders like former Chinese president Jiang Zemin.
Australian decision-makers also assumed that the United States would always approach its interests in Asia as it had for decades. US primacy would underpin the region’s strategic stability, while Washington would support its allies and pursue a broadly liberal approach to international relations.
For Australian foreign policy 2016 was a watershed year, as Australian political leaders began to voice growing concerns about China. Beijing’s deviation from the post-Mao path had been visible since at least 2012 but it took four years for Canberra to respond.
That year also brought US President Donald Trump to the White House for the first time, though the shifts in foreign policy took longer to surface. A chaotic first Trump term had, at its core, changed the direction of long-term US strategic policy, though the Biden administration promised a return to the norm. A decade on, no one can doubt that US foreign policy has now entered a new phase and Australia faces a very different world from the one it assumed it would inhabit.
The material circumstances that gave rise to the ‘never having to choose’ mantra have not changed. China remains Australia’s top trade partner, accounting for more than a third of its exports. The security relationship with the United States has become even closer, epitomised by the AUKUS agreement to acquire nuclear powered submarines and advanced security technology.
Both countries are now sources of coercion and each presents distinctive risks to Australia and the region. China’s economic pressure has caused hardship in parts of the Australian economy. Yet even in the face of the pressure from Beijing and Canberra’s exhortations to diversify, the economic interdependence between the two countries remains largely unchanged.
That the United States, an ally and friend for decades, has shredded its treaty commitments, turned its back on the liberal international order and shown contempt for the long-term strategic utility of alliances, is more surprising.
This period has also underscored something recognised during the COVID-19 pandemic but which quickly receded – states need to be better able to look after their own interests. Dependence -whether on imported hydrocarbons, exports of iron ore or intelligence and security – comes with inherent vulnerabilities. In good times these vulnerabilities are hidden, and when those times last for decades, they come to be seen as normal and reliable.
The shocks – COVID-19, the Russian invasion of Ukraine, Trump’s upending of the global tariff regime and the US and Israeli war on Iran – should make clear to Australian leaders the pressing need for greater resilience and autonomy in an unstable world.
The great powers are not only in competition with one another – their approaches towards the system mean lesser states must advance their interests and values or risk being trampled underfoot. Like many trade-dependent, liberal states, Australia has been exposed by the shifting attitudes of the major powers and must manage the risks of an international order in which raw power plays a much greater role.
Australia should take some inspiration from Finland’s ‘values-based realism’ as described by its President Alexander Stubb. It needs to focus on its critical interests and the values underpinning them, working with partners to advance and protect those interests.
Australia is most threatened by the erosion of the global trade regime and the broader rules governing international relations. The biggest problem for non-great powers relates to hard power. Although it may take a generation to achieve, Australia must become less dependent on its alliance for its own security and bolster its contribution to regional stability.
The most immediate focus should be on building coalitions of trading states who can buttress the liberal trade regime. Liberal approaches to trade are threatened by US hostility and the growing mercantilism prompted by geopolitics and the securitisation of key sectors, especially high-technology areas.
The work that turned the Trans-Pacific Partnership into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), after the United States quit, illustrates what can be done. As does the creation of the Multi-Party Interim Appeal Aeastasiaforum.org/…/australian-critical-mineral-geopolitics-and-domestic-interests-2rbitration Arrangement by members of the WTO frustrated by the stalling of its dispute resolution process.
Most states in Australia’s region share these concerns about trade, the erosion of rules and fears about strategic instability. Canberra has a strong record of diplomatic collaboration and entrepreneurial statecraft. Examples include the expansion of security ties with Japan, the Philippines, Vietnam and Indonesia. The recent conclusion of the EU free trade agreement signals that trade policy need not head in an illiberal direction.
Canberra should advocate for the expansion of CPTPP membership, including support for China’s application for accession while maintaining high standards for all participants. It can also help align CPTPP with the European Union to underpin a more liberal global trade regime.
The scale of this diplomatic task should not be understated. Australia’s early 21st century strategy was complacent because it assumed that the great powers would always act as if it was forever 2005. Policy settings have been recalibrated but remain shaped by a view of the world that is becoming increasingly out of date.
China and the United States have both changed. Asia’s regional powers have significant collective capacity and a shared sense of what kind of region they want. The challenge is to galvanise them around a shared vision of that future, to invest in and build that order. It will take decades for Australia and its partners to move themselves towards greater resilience and autonomy but it is work that needs to begin immediately.
Republished from East Asia Forum
