The Endangered Asian Century
America, China, and the Perils of Confrontation
Owen Harries, the Welsh-born Australian editor of The National Interest, once remarked that Americans needed good peripheral vision to be able to find Australia on a map. When the country did get attention, as often as not it was either for some natural calamity (floods, bushfires, shark attacks) or else for its charms as a holiday destination.
Those days are over. Australia now figures more prominently in U.S. foreign policy than at any time since 1942–45, when Australian combat troops served under General Douglas MacArthur and scores of U.S. air and naval bases and army camps were stationed Down Under.
Australia, a medium-sized regional power with a population of 23 million, is the twelfth largest economy in the world; it hosted the G–20 in Brisbane last November, and just completed a successful stint as a non-permanent member of the United Nations Security Council. It has not succumbed to recession in nearly a quarter century and has played high-profile roles in the wars in and subsequent occupations of Afghanistan and Iraq. Under Prime Minister Tony Abbott, Australia was the first nation to back the U.S. campaign against the Islamic State of Iraq and al-Sham (ISIS), deploying 400 airmen and 200 Special Forces personnel to the fight.
Although Australia is one of five U.S. security treaty allies in the Asia-Pacific (Japan, South Korea, Thailand, and the Philippines are the other four), it will increasingly matter more to Washington. Unlike the other allies, Australia is not involved in any territorial disputes with its neighbors. The country is at the fulcrum between the Pacific and Indian Oceans and has a long history of engagement in this region; an expanse of rich strategic and economic promise that Washington would like to influence. It is also a critically important supplier of energy, raw materials, and food to China, which adds a measure of leverage to U.S. efforts to shape China’s economic and political choices.
For all of these reasons, deeper engagement with Australia—including through increased presence of U.S. military, surveillance, and intelligence assets on Australian soil; additional rotations of U.S. Marines through Darwin; greater access to airstrips in northern Australia; and, potentially, a base near Perth for U.S. nuclear submarines—is necessary to bolster the United States’ rebalance to Asia. Indeed, for Washington, the U.S.–Australian partnership has become a special relationship with few equivalents in the world. But few outside a small circle of policy elites seem to have noticed.
The U.S.-Australian relationship has deep roots, grounded in common histories, common traditions and values, and a common language—a powerful normative foundation that cannot be overlooked, but which is too readily taken for granted. Australia is the only nation to have joined the United States in the foxhole in every major military intervention in the past century: both world wars, Korea, Vietnam, the Gulf War, Afghanistan, and Iraq. The alliance first arose in 1951, out of the threat of Asian communism. Close coordination and intelligence and technology sharing persisted throughout the Cold War. Now, the shifting geopolitics of Asia, particularly a rising China, has strengthened the bond.
Already, each year 1,150 U.S. Marines spend six months near Darwin in northern Australia—a figure that is set to rise to 2,500 by 2016–17. When the deal was originally struck during U.S. President Barack Obama’s visit to Darwin in November 2011, the New York Times described it as “the first expansion of America’s military presence in the Pacific since the end of the Vietnam War.” But the Darwin deployment is not even half the story. The two countries closely cooperate on intelligence; military, intelligence, and diplomatic personnel exchanges; and joint planning, exercises, and strategic consultations. Since 2012, moreover, the Deputy Commanding General (Operations) of the U.S. Army in the Pacific has been an Australian.
Washington and Canberra are also working to increase U.S. access to Australian naval and airfield facilities, and are positioning more U.S. equipment there, including relocating a C-band space surveillance radar from the Caribbean and building an advanced space surveillance telescope, both to be set up in western Australia. Meanwhile, the Australian defense sector is heavily focused on procuring military technology and platforms from the United States, with plans underway to purchase EA-18G Growler electronic warfare aircraft, E-7A Wedgetail airborne early warning and control aircraft, C-27J battlefield airlift aircraft, MH-60R Seahawk antisurface and antisubmarine helicopters, and 72 F-35A Joint Strike Fighters.
Such moves make good sense. Australia is located close to Southeast Asia, which is home to the world’s busiest shipping lanes and to newly discovered undersea gas and oil fields. U.S. military forces are still concentrated in Northeast Asia, so enhanced security ties with Australia will help build up a substantial U.S. footprint across the western and southern parts of the region, including the South China Sea, the Straits of Malacca, and the broader maritime sphere around Southeast Asia.
Moreover, Australia is the only U.S. regional ally in the Indian Ocean. The United States rents naval and air space on the small island of Diego Garcia, which is about 1,000 miles south of India. The island is crowded, with limited room to expand, and the future of the base is unsettled given that its lease from the United Kingdom will expire in 2016. Hence Washington’s interest in another coral atoll 1,700 miles to the east: the Cocos Islands, a remote Australian territory. There, the United States could deploy manned and unmanned long-range surveillance aircraft as well as armed drones.
The United States and Australia are also taking steps to increase U.S. aircraft and naval vessel rotations—including aircraft carriers and nuclear submarines—in northern and western Australia, including at the HMAS Stirling base south of Perth in the Indian Ocean. Further, at the annual high-level talks on defense and diplomacy in Sydney last August, the foreign and defense ministers of both nations signed the Force Posture Agreement (FPA). The FPA provides the legal basis for the rotation of U.S. Marines near Darwin, and also prepares the way for further expansion of U.S.–Australian security and defense cooperation elsewhere. Such cooperation could include rotations, and possible home porting, of U.S. Navy vessels and Air Force aircraft in western and northern Australia, as well as collaboration on cutting-edge defense technology, ballistic missile defense systems, and possible drone and surveillance flights from the Cocos Islands in the years ahead.
The U.S.-Australian partnership goes well beyond security and defense ties. Extensive and growing economic ties between the two countries—and between them and the broader region—are an underappreciated pillar of the relationship. Australia and the United States have a shared interest in promoting prosperity in the Asia-Pacific, which is an important element in securing their own economic growth and ensuring continued stability in the region. To that end, U.S. firms have invested $100 billion in the Australian energy sector to guarantee energy supply at competitive prices to Asia, which will fuel regional growth.
The United States is the largest investor in Australia, and that investment doubled between 2006 and 2011 (to around $500 billion), on the back of Australia’s mining boom. Meanwhile, the United States is the top destination for Australian investment overseas: Australian investment in the United States has increased by about two-thirds (to over $360 billion) as Australian retirement funds have sought higher returns outside their small domestic market.
The Australia-U.S. Free Trade Agreement (AUSFTA), which marks its tenth anniversary in 2015, has likewise been a remarkable success. AUSFTA immediately eliminated barriers on more than 90 percent of all bilateral merchandise trade. Since then, most of the remaining barriers have also been phased out. Now, the United States is Australia’s third-largest goods trade partner (behind only China and Japan) and its largest partner in services trade. Trade with the United States also accounts for a significantly greater percentage of Australia’s higher value-added exports than trade with China.
In short, the more the United States is involved in the Asia-Pacific, the more value relations with Australia bring.
THE AMERICAN ATTRACTION
To be sure, Australia and the United States have had their disagreements. After the Chinese Revolution in 1949, Washington pushed for an economic boycott of the mainland, whereas Canberra supported trade with the new communist state. During the Suez crisis of 1956, U.S. President Dwight Eisenhower opposed military action against Nasser’s Egypt, while Australian Prime Minister Robert Menzies sided with France, Israel, and the United Kingdom. So tense were relations by 1974 that U.S. President Richard Nixon and his national security team, according to recent scholarship, seriously considered scrapping the alliance. Yet, each time disagreements erupted, they moderated before long.
The current Australian prime minister, Abbott, is well aware of the importance of not just his country’s alliance with the United States, but the role Australia, a middle power, plays in helping the reluctant hegemon exercise benign global leadership. “It’s wrong to expect America to be the world’s policeman with only token assistance from allies,” he argued in his memoirs in 2009. “If Australia is to matter in the wider world, Australians should expect more, not less, future involvement in international security issues.”
Indeed, Canberra’s deepening strategic ties with Washington (alongside its growing economic ties with China) testifies to the depth of bipartisan and widespread public support for the U.S. alliance in Australia. Across much of Australia, there remains a well-founded conviction that the United States will remain the world’s dominant player. Meanwhile, although the notion of American exceptionalism all too often offends the sensibilities of foreigners, it does not seem to upset Australians much. In recent times, political leaders have made remarkable declarations of their faith in America as the exceptional nation. Abbott is an unashamed champion of the United States, observing in 2011 that it is “a force for good,” with leadership that “may only be truly appreciated when it’s gone.” “None of us want to find out the hard way what a shrunken America looks like,” he added.
Nor is this faith in the United States a partisan issue. When Abbott’s Labor predecessor Julia Gillard addressed a joint session of the U.S. Congress in 2011, she declared to the American people: “You can do anything today.” This was a Labor politician—who, only six years earlier, had called for an “independent foreign policy” (a polite way of snubbing Uncle Sam)—praising Ronald Reagan for displaying the same values that she believed would see the United States continue to provide global leadership.
Simply put, the alliance is just too valuable for Australia not to take it seriously. Close ties to the United States mean an important security insurance policy and favorable access to intelligence and defense technology. The alliance provides Australia with capabilities it would not otherwise command: Its U.S.-produced and supplied F-18s, Super Hornets, and Joint Strike Fighter F-35s are vastly superior to anything else that other regional states possess. The joint communications facilities give early warnings of ballistic missile launches and provide Australia with unmatched intelligence. And, along with Canada, New Zealand, and the United Kingdom, Australia and the United States form the well-known “Five-Eyes,” an intelligence-sharing club, which is a cornerstone of the Western alliance system. Notwithstanding some carping from critics on the margins of Australian politics, everyone knows that the alliance is a vital asset for Australia.
RISKS AND REGIONAL CONSEQUENCES
At the same time, there are a number of uncertainties. Australia risks being seen as a free rider in the alliance unless it increases defense spending from 1.59 percent of GDP to 2 percent as pledged by both the previous and current Australian governments. Australia needs to make a more equitable contribution to defense and security activities, and interoperability and complementarity between their defense forces must be a priority—including the future Australian submarine program. For its part, Washington has slashed its defense budget as deeply as at any time since World War II. Given the massive imbalance in defense procurement in its favor, Washington should place greater priority on purchasing competitive products from the Australian defense industry.
Separately, Australia and the United States should redouble their efforts to build a more open trade and investment environment in Asia, focusing on negotiating the Trans-Pacific Partnership (TPP) trade deal to incorporate China, South Korea, and Taiwan. With the midterm elections behind him, Obama needs to persuade both congressional Democrats and Republicans to support trade promotion authority—or so-called fast track legislation. Without that, it will be difficult for Washington to conclude and ratify the TPP, a key component of the pivot to Asia. Many House and Senate Democrats appear unlikely to support trade promotion authority, but the president might receive enough votes from pro-trade Republicans and moderate Democrats to override his party’s skeptics.
Another risk is a hotly debated issue: how to reconcile Australia’s rapidly expanding trade ties with Beijing and its deepening security alliance with Washington. Not only is China Australia’s biggest trading partner, it is the single-largest buyer of Australian government debt and a major buyer of farmland and property. When Obama and former Australian Prime Minister Gillard announced the decision to deploy U.S. Marines to Darwin in 2011, China bristled. So did a few prominent Australian businessmen. In a 2014 Lowy poll, Australians rated China as “Australia’s best friend in Asia” (slightly ahead of Japan), which appears to contradict public sentiments that indicated that China would be a threat to Australia in two decades. In any case, such ambivalent attitudes might explain the cautious progress on the FPA during the last three years and also why Canberra is keen to stress that enhanced security cooperation with Washington is not aimed at containing China. It might also help explain why Canberra invited U.S. and Chinese soldiers to conduct a trilateral joint exercise on Australian soil, which they did for the first time last October.
To complicate matters still further, it is not altogether clear how Australia would respond to any clash between China and the United States. In 2004, Alexander Downer, Australian foreign minister at the time, caused a diplomatic and political storm when, in an unguarded moment, he told a journalist in Beijing that Washington could not expect Australia to automatically side with the United States if China attacked Taiwan. The response to Downer’s remarks was overwhelmingly hostile, with the U.S. ambassador making it clear that he expected Canberra to help the United States in any military conflict in the region. It was left to the then prime minister, John Howard, to calm things down. Australia, he cautioned, would work hard to resolve any conflict between China and the United States, because good relationships with both nations was in its interest.
A decade later, in June 2014, David Johnston, the defense minister, made more or less the same remarks as Downer, only this time in relation to any Sino-American confrontation in the region. When asked by a host on live television whether the U.S. alliance “commits Australia … if the U.S. is in a conflict in our region,” the Defense Minister said: “I don’t believe it does.” However, unlike a decade earlier, the incident sparked hardly any controversy. Whereas Downer’s frank remarks in 2004 were denounced as heresy, Johnston’s equally candid remarks in 2014 went largely unremarked.
The upshot from these episodes is not just that diplomats and government officials should refrain from speculating publicly on what his or her nation would do in the event of a hypothetical military conflict. It is that China means different things to Australia and the United States. For the latter, China’s emergence as a potential rival bears strategic significance; for the former, China largely represents a rewarding economic opportunity. Australia now exports more to China than the United States does by a ratio of more than six to one. In Australia, China policy is more a source of unity than division: Unlike in the United States, vocal China hawks or sinophobes seem few and far between in the Antipodes. That does not mean Australia is faced with a hard, stark choice between China and the United States. It means that Canberra will need to play a more demanding diplomatic game than ever before, one that will on occasion involve the difficult feat of riding two horses simultaneously.
Where there is doubt about the alliance in Australia, it is due to fears about the United States’ long-term commitment to Asia. When Obama missed the APEC and ASEAN summits in October 2013 because of the partial government shutdown in Washington, a few local skeptics wondered how the United States could keep the peace in the region if it could not keep its own house in order.
In recent years, Malcolm Fraser, Australian prime minister from 1975 to 1983, and Hugh White, professor of strategic studies at Australian National University and former chief strategic planner in the Defense Department, have been among several intellectuals who have called on Canberra to distance itself from Washington to accommodate a rising China. According to White, the United States and its allies should allow China breathing room, which means that Canberra should ask Washington to partially withdraw from Asia militarily. The problem with this argument is that history, values, and public opinion make Australia unlikely to weaken its alliance with Washington, and all the more so at a time when Australia’s neighborhood is changing, owing in large measure to China’s ascendance.
For his part, Fraser calls for the abandonment of the alliance. That stance remains at odds with both major political parties and the broad cross-section of the Australian people. After all, it would leave Australia bereft of great power protection as well as other critical benefits. Fraser also maintains that Australia is too dependent on Washington, yet unable to rely on U.S. assistance in case of need. That kind of angst about abandonment is not unusual in junior alliance partners. But it also misunderstands the reality. Looking ahead, the growing importance of the Asia-Pacific to U.S. interests, and Australia’s growing diplomatic, economic, and security role in the region, means that the United States’ commitment to Australia’s future is growing stronger not weaker.
Enhanced diplomatic, economic, and security ties between Australia and the United States belie the skepticism about the Obama administration’s commitment to devote additional U.S. attention and resources to Asia. It was in Australia’s parliament in November 2011 where Obama set out the broad outline of his administration’s signature foreign-policy initiative: that America was “all in” on Asia. And it was Australia’s political class that enthusiastically embraced his vision. “As a Pacific nation,” the President declared to rapturous applause, “the United States will play a larger and long-term role in shaping this region and its future.”
The intensified U.S.-Australian relationship in recent years may attract little congressional attention and awareness among the American public. But more and more policymakers in Washington are coming to recognize the importance of Australia as a strategic ally, diplomatic partner, and growing economic player, especially given Australia’s advantageous position—geographically, politically, and economically—within the Indian Ocean and the Asia-Pacific and the United States’ clear strategic interest to be more deeply engaged there. Now and in the future, this is a special relationship that the United States should appreciate all the more.