Portal de Periódicos da CAPES

Issues in Australian Foreign Policy July to December 2018

2019; Wiley; Volume: 65; Issue: 2 Linguagem: Inglês

10.1111/ajph.12567

1467-8497

Rebecca Strating,

Commonwealth, Australian Politics and Federalism

As previous editions of Issues in Australian Foreign Policy have observed, global politics has become increasingly defined by “disruption and volatility”.1 In the second half of 2018, contestation between the United States (US) and China ratcheted up even further, as tit-for-tat tariffs and escalating disputes over trade rules signified a distinct breakdown in economic and political convergence between the great powers. While these so-called “trade wars” were the primary area of global concern over the period, competition in the strategic and development spheres also became increasingly pronounced. The growing great power rivalry was on full display in US Vice-President Mike Pence’s defining speech to the Hudson Institute in October, in which he declared a new era of competition over cooperation, and called out Beijing’s “malign” political interference in US internal affairs, its “debt-trap diplomacy” of the Belt and Road Initiative (BRI) and “reckless harassment” of the US in the South China Sea.2 In response, Beijing said the accusations were “unwarranted” and “slanderous”.3 The speech was described by some commentators as a portent of a “new Cold War”. 4 For its part, Australia has struggled to manage the intensifying geo-political and geo-economic rivalry between its primary ally and biggest trading partner. Debates continue to rage about the best ways for Australia to navigate this rapidly changing and contested environment, particularly around the question of whether it should continue to depend upon the unpredictable US or make a greater effort to accommodate a rising China. Indeed, the events of the period covered in this piece get to the heart of what an independent Australian foreign policy comprises. Given these rising tensions, this paper focuses predominantly on how specific initiatives and events are linked to the broader dilemmas of managing great power relations. To this end, this issue focuses particular attention on Australia’s Pacific “step-up” policies as the centrepiece initiative for the period under review. The renewed Pacific engagement has been driven by the Australian government’s desire to anchor the US in the region and offset the uncertainty about its ongoing regional commitments, and to counter-balance the growing influence of China. This issue also examines Australian responses to disputes over tariffs and trade rules, its attempted China “reset”, and developments in the South China Sea. Ultimately, its rhetoric and operation in international relations over this time highlights the challenges it faces in developing coherent policy responses to massive structural transformations. While successive governments double-down on the narrative that Australia need not pick a side, the analysis of security and development initiatives here suggests that, rather than hedging, Australia is balancing against China’s rising influence in the region. As a secondary theme, this paper also considers the disruptive effects of domestic political instability on Australian foreign policy, which is examined in the last section. In August, Prime Minister Malcolm Turnbull was replaced by Scott Morrison, the third leader of a federal Coalition Government since 2013. Australia’s credibility and reputation is affected by the domestic turmoil, as is its capacity to co-ordinate coherent and complex policy responses to international events, and develop positive personal relations with other leaders on the world stage. The primacy of party politics leaves Australia less capable of steering a clear-eyed course through turbulent international waters. From July to December 2018, the most significant global issue was the escalating Sino-US trade dispute. On 6 July, Washington imposed a 25 per cent duty on US$34 billion in Chinese imports, and a month later, further tariffs were placed on US$16 billion worth of goods. China retaliated by announcing tariffs on US$60 billion worth of US imports.5 The trade war came to a head in September when the US imposed a 10 per cent tariff on up to 10,000 Chinese goods worth US$267 billion, which were slated to rise to 25 per cent from the start of 2019 if the Chinese refused concessions. This meant more than half of US imports of Chinese goods were subject to tariffs. In response, China said it would impose a new 10 per cent duty on US$60 billion worth of US goods.6 Globally, economic experts expressed their concerns that the trade war would have an adverse impact on global economic growth — as any drop in Chinese growth would have international consequences — and also affect the vitality of the “rules-based global trading system”.7 For Australia’s economy, the trade dispute was mostly — but not always — interpreted as likely to have a negative effect as it increased uncertainty and risk.8 In foreign policy, the Trump administration’s protectionist, “America First” attitude to trade and the lack of detail about plans to reform the World Trade Organisation (WTO) was a source of frustration for Canberra.9 These disputes over trade and infrastructure came to a head at the Asia-Pacific Economic Cooperation (APEC) summit, held in November in Papua New Guinea (PNG). For the first time in over a quarter of a century, APEC’s member states failed to agree upon a formal written communication. The impasse was driven by the US and China, who disagreed about overhauling the WTO and global trade rules. In the absence of the US President, Vice-President Pence argued that China participated in unfair trading, and — quoting President Trump — said the days of China taking “advantage of the United States […] are over”.10 China refused to agree on the proposed language of the joint communique as the US called for reforms targeting predatory trade and fair treatment of state-owned corporations, and instead accused the US of creating controversy and discord, and diminishing the spirit of cooperation.11 Chinese leaders were also able to use American protectionism to undermine Washington’s credentials on free trade.12 At APEC, Australia’s Prime Minister Scott Morrison compared the great power disagreement to a family dispute.13 However, he criticised the trade war, arguing that: “Tit-for-tat protectionism and threats of trade wars are in no one’s interests economically, and undermine the authority of the global and regional trading rules that benefit us all”.14 Australia, like many other APEC states, was disappointed by the failure to reach consensus, and reportedly urged the US and China to put aside their disagreements. A final communique — the “Era Kone Statement” — was ultimately issued by PNG Prime Minister Peter O’Neill a week after the event.15 While APEC signalled the ratcheting up of great power contestation, the G20 — held in Buenos Aires at the beginning of December — ushered in a détente on the tariff wars, a relief for Australian leaders who were keen to see the US and China reduce tensions in their trade skirmish. Arriving in Buenos Aires, Prime Minister Morrison claimed it would be an “own goal” if Donald Trump and Xi Jinping continued the trade war, calling out both states for threatening the certainty and stability of the global economy.16 With both Presidents Xi and Trump in attendance, the states negotiated a ninety-day ceasefire at the sidelines of the G20, providing a temporary halt to tariff hikes on Chinese imports. While the states managed an agreement on trade at the G20 that included a commitment to reforming the WTO, one of the compromises saw any reference to the need to fight protectionism abandoned at the request of the US.17 This reflects a significant departure from the traditional advocacy of the US for global free trade. According to journalist Philip Coorey, Prime Minister Morrison ultimately defended the US stance, “saying the G20 communique also extolled the economic virtues of trade and everyone accepted protectionism was wrong”.18 The Prime Minister also defended the US against the allegations it was protectionist, despite the clear “America First” position of the US President on economic issues. By the end of the year, the US and China had at least temporarily halted their tit-for-tat tariff war, however it was far from clear whether it would be resolved in 2019. By July 2018, a tentative thaw was emerging in the Australia-China bilateral relations after a testy eighteen months saw Australia in the diplomatic deep freeze. On 7 August, then Prime Minister Turnbull attempted to present an olive branch in a speech at the University of New South Wales. Billed as the “China reset”, the speech was driven by concerns from Australian universities that Australia’s attitude to China would affect international student numbers. In the audience was China’s Ambassador and Consul-General in Sydney. Turnbull spoke positively about the relationship, arguing that there was a “need for collaboration based on mutual respect”, and that it would be a mistake to attempt to contain China.19 Turnbull’s speech was well received by China and its advocates. Yet, the timing was interesting: it was delivered after the announcement that Australia with US and Japan were establishing an Indo-Pacific infrastructure fund to rival the BRI (discussed below), and before the Australian government’s decision to ban Chinese Telcos from participating in the 5G rollout. The 5G decision highlights the difficulties Australia faces in sending out coherent messages on China. While rhetorically Turnbull was presenting an optimistic view of China-Australia relations, the real test for the reset was whether Australia would allow Huawei and ZTE to bid for 5G rollout contracts. While other states at the time — the UK for instance — had decided Huawei's involvement in its 5G network was an acceptable risk provided certain security safeguards were in place, on the back of advice from Australian and US security agencies the Australian government determined that potential threats of Chinese intrusion were too great. The sticking point was the obligation of Chinese corporations to potentially act against the interests of foreign states for intelligence-gathering purposes, as outlined in Chinese National Intelligence Law. In response, Chinese officials said the ban was “politically motivated” and “discriminatory”. Almost immediately after the Huawei decision was announced, Australia’s national broadcaster, the ABC, was blocked in China. China's Central Cyberspace Affairs Commission defended this decision, stating that it had violated China’s laws and regulations, yet did not provide specific details. On the face of it, it seemed relations between Canberra and Beijing were warmer under the new Morrison Government, which continued to hold the line on the idea that Australia does not need to pick sides between the US and China. The Turnbull government had notably put the Chinese leadership offside with its strong language on the South China Sea and foreign interference laws. Morrison, in contrast, signalled that he would “drop the megaphone diplomacy in favour of a more direct dialogue with the Chinese leadership”.20 In November, new Foreign Minister Marise Payne went to China to meet her Chinese counterpart, Wang Yi. China’s Premier Li Keqiang said the new leadership was an opportunity to repair the relationship.21 The trip, originally planned for Payne’s predecessor Julie Bishop, was the first visit to Beijing by Australia’s top diplomat since February 2016. But what the leadership change did offer was an opportunity for Chinese officials to shape the new Morrison government’s messaging by playing up the notion that the new Prime Minister was more positively disposed toward China than Turnbull. Yet, whether there was a significant change in Australian-China relations is questionable. While Morrison refused to “showboat” on human rights issues, the Turnbull government was likewise reluctant.22 Issues of human rights and rule of law reveal Australia’s problems in reconciling domestic opinion with official preferences for keeping criticism of China behind closed doors. On the issue of the Uyghur camps in Xinjiang, Australia joined a co-ordinated approach among diplomats of fifteen countries, while quietly raising the issue in high-level diplomatic meetings. At the 2018 Universal Periodic Review of China at the UN, Australia urged China to, inter alia, “cease the arbitrary detention of Uighurs and other Muslim groups in Xinjiang”.23 Yet for the most part, the Morrison government public diplomacy on the Uyghur issue has been timid. In December, China detained two Canadian citizens, Michael Kovrig, a former diplomat now with International Crisis Group, and entrepreneur Michael Spavor, on allegations they were endangering Chinese national security. This was widely viewed as political retaliation against Canada for the arrest in Vancouver of Huawei executive, Meng Wanzhou, at the request of the US for breach of sanctions against Iran. China viewed the arrest of Meng — the daughter of Huawei founder Ren Zhengfei — as political. 24 While the EU, the US, Britain, Germany and France released statements against the arrest, Australian leaders were initially reluctant to comment. It was not until a group of over thirty academics and foreign policy experts released a petition calling upon Senator Payne to “support Canada’s call for the immediate release of these two detainees” that a statement was released. In it, Senator Payne said she was “very concerned” about the arrests.25 However, she stopped short of joining Canada and the US in their demands that China immediately release the two Canadians.26 This incident would throw up a number of dilemmas for Australian foreign policy, including whether “hostage diplomacy” would impact Australian academics, business people and other professionals travelling or working in China.27 Another question is the extent to which Australia should band around “like-minded” states with shared liberal-democratic values even if it means publicly calling out its biggest trading partner. Under a new government, Australia struggled to balance its public diplomacy towards China in a way that would substantiate its rhetoric around defending the liberal “rules-based order”. While the government argues that addressing rights violations is more effective behind closed doors, the situation in Xinjiang suggests this approach is not working. Additionally, security experts criticised the Morrison government’s silence on Chinese cyber-attacks.28 It was only very late in the year that Australia publicly accused China of large-scale hacking for the first time. Chinese intelligence services were accused of widespread data theft, with state-directed hackers using invasive techniques to steal commercial secrets.29 In the US, two Chinese nationals were indicted by a US District Court, and were linked to a group of Chinese Ministry of State Security hackers known as the APT10.30 On 21 December, Washington’s accusations against China’s global cyber-hacking were backed by a joint statement from Senator Payne and Home Affairs Minister Peter Dutton. The response by Chinese Foreign Affairs ministry spokeswoman Hua Chunying was that they should stop their “deliberate defamation” and “slanderous smears” of China as their allegations risked damaging relations.31 Finally, one of the key debates in Australia vis-à-vis the China relationship is its potential engagement with the BRI. While Australia signed a Memorandum of Understanding (MOU) in September about co-operation in third party states, it refused to release the details.32 More importantly, perhaps, is the way in which federalism has proved a point of weakness in constructing a coherent Australian approach to the BRI, as states, territories and cities have attempted to cash in on the immense infrastructure fund. Most notably, in October the Victorian Labor government signed an MOU with China on BRI, which Prime Minister Morrison viewed as sending “mixed messages” about Australia’s BRI engagement and undermining the Commonwealth’s role in foreign policy formation.33 The MOU signing was widely interpreted as contradicting the federal government’s refusal to sign Australia up to the BRI, with sceptics describing it is “a type of interference in Australia’s political system”.34 The Victorian government tried to keep the contents of the MOU secret, but was pressured to release the text over a month after it was first announced. The MOU talks a lot about “cooperation”, “consultation”, “synergy” and the “silk road spirit” but is loose on specific details about the shape or nature of potential BRI projects and investments in Victoria.35 It is no secret that Victoria has attempted to court Chinese investment and that China has sought to influence the Victorian government. Indeed, states do not have to deal with the strategic implications of their economic choices. Yet, this incident also highlighted inconsistent approaches within the federal government. While Prime Minister Morrison rebuked the Victorian government, Senator Payne said there was no need for the involvement of Commonwealth because the MOU is not a treaty, and that states and territories are entitled to pursue such opportunities. Trade Minister Simon Birmingham welcomed Victoria’s “enthusiasm and initiative”.36 There is no doubt that since 2016, the erratic President of the United States has presented formidable challenges for foreign policy-makers in Australia. In the second half of 2018, it appeared that not only were US officials continuing to reassure Australia of its ongoing presence in the region, but also that Australia’s policy initiatives were underpinned by an effort to anchor the US in the region. While rhetorical efforts were made at a “China reset”, in the area of defence and security policy, Australia’s actions pointed to a balancing strategy with the US, undertaken to constrain China’s rising influence in the region. Diplomatically, US-Australia relations were relatively positive. While the lead-up to the G20 saw doubts over whether Prime Minister Morrison would meet President Trump, a last minute cancellation of Trump’s meeting with Russian President Vladimir Putin saw an opening arise for a meeting between Australian and US leaders. At the regular bilateral meeting AUSMIN in San Francisco in July, new Secretary of State Mike Pompeo moved to reassure Australia that the alliance was “rock solid” and the US would step up its presence in the South Pacific, a specific area of concern for Australia.37 In August, Jim Carouso — the then-top US envoy in Canberra — publicly acknowledged how hard it was for the US to assure its allies, but described Australia as a “poster child” for alliance burden-sharing.38 Carouso also highlighted in a speech “an agreement to increase the number of US marines rotating through Australia to a record 2500, the scale of the Talisman Sabre joint military exercises slated for 2019 and Australia’s exemption from US tariffs on steel and aluminium” as examples of US commitment. These diplomatic efforts were particularly important as the actions of President Trump increasingly concerned allies. In a European tour in July, he lashed out at NATO allies, insisting they increase their defence spending to 4 per cent of GDP (a higher percentage than the US), while confounding political analysts in Helsinki by accepting Putin’s reassurances that Russia did not meddle in US elections. Further, the departure of Defence Secretary Jim Mattis, along with Brett McGurk, the special US envoy to the coalition against Islamic State, left many concerned that the “only adult in the room” had departed.39 In his resignation letter, General Mattis criticised Trump’s unilateral withdrawal of American troops from Syria and Afghanistan, and the undermining of US relations with allies in Syria. Mattis wrote: “[w]hile the US remains the indispensable nation in the free world, we cannot protect our interests or serve that role effectively without maintaining strong alliances and showing respect to those allies”. Certainly the troop withdrawal took Australian officials by surprise: it was announced just days after Prime Minister Morrison had arrived back from Iraq and Afghanistan, where he had doubled-down on Australia’s commitment to staying the course.40 At least the year ended on a positive note: after a two-year wait, Republican lawyer Arthur B. Culvahouse Jnr was announced as US ambassador in Canberra, promising to support Australia in countering Chinese influence in the Indo-Pacific region. In the security arena, the United States and Australia shared similar concerns about the strategic implications of China’s BRI. Infrastructure funding was one of the key topics at AUSMIN. The states reportedly discussed protecting Indo-Pacific nations from “external coercion”, which, in this context, can be interpreted as meaning Chinese influence. While Chinese President Xi Jinping argued that it was not a debt trap with a “hidden agenda”,41 in October, US Vice-President Mike Pence warned other states that the BRI was a “constricting belt” and a “one-way” road.42 Countering the BRI has been a driving force behind US-Australia infrastructure cooperation. In July, it was announced that Australia, Japan and the United States would establish a new trilateral infrastructure fund for the Indo-Pacific.43 While Australia insisted that it was not meant to challenge the BRI, US Chargé d’Affaires Carouso described the fund as “competition to the Belt and Road”.44 China responded to the plan by downplaying its size and encouraging the parties to invest “real money” in Indo-Pacific infrastructure.45 This initiative was followed by a new military, economic and infrastructure deal in the Pacific, which reflected an attempt to push back against Chinese influence as a form of strategic denial. This also reflected renewed efforts by the US to increase involvement in the South Pacific as a strategically important region. Under the $2.3 billion plan, Australia would lead US, New Zealand and Japanese efforts to improve electricity and internet in PNG. Australia’s contribution is up to $25 million annually.46 As the next section on the Pacific “step-up” suggests, infrastructure balancing is unlikely to work if Australia and its allies remain focused on their own strategic concerns, and are unwilling to commit to genuine engagement with Pacific partners. In any case, these funds reflect Australia’s efforts to constrain Chinese influence as well as its attempts to draw the US into the region. Another joint area of concern are East Asian maritime and territorial disputes, particularly in the South China Sea (SCS). In August, tensions heightened in the SCS when a US destroyer nearly collided with a Chinese warship. In late September, a Chinese destroyer came close to bunting a US warship, an action condemned by Australian Defence Minister Christopher Pyne as “aggressive tactics” that were “destabilising and potentially dangerous”.47 In December, China warned other states that it would take “necessary measures” to defend its sovereignty after two incidents in a week involving US warships sailing near disputed waters.48 In late September, the Australian warship HMAS Melbourne transited through Taiwan Strait, which was seen as provocative by China due to its claims over Taiwan.49 Australia moved to increase joint exercises and port visits, and at the end of August, during Australia’s largest naval exercise — Exercise Kakadu — it called upon all states to respect “freedom of navigation” and “free and open international order”.50 At the RIMPAC (Rim of the Pacific) exercise in July, China was disinvited in protest at China’s militarisation of the Spratly Islands. In a live drill, Australia sent a message when its new P-8 Poseidon aircraft sank the decommissioned USS Racine.51 However, US and Australia continue to diverge on the issue of Freedom of Navigation Operations (FONOPs) — or, more specifically, about whether Australia should conduct them. Again, Australia continues to resist pressure from US officials to conduct unilateral surface FONOPs within twelve nautical miles of contested islands, reefs and shoals.52 In September 2018, Britain conducted its first SCS FONOP as it passed near the Paracels, with China strongly opposing what it saw as a violation of its sovereignty. These activities followed France’s earlier forays into SCS FONOPs. There is potential for Australia to conduct joint operations with Britain and France in the future. This would provide an opportunity to assert the rules-based order — operationally as well as rhetorically — without binding itself so closely to the US. The biggest development in Australian foreign policy in the last half of 2018 was the Pacific “step-up”, a suite of policies including new development projects, military cooperation and diplomatic postings. It was with these policy initiatives that Australia most clearly demonstrated its intentions of balancing against China’s influence and persuading the US to maintain its presence in the Pacific as a strategically important area and zone of contestation. Foreign and security policy-makers have hence engaged in this step-up as a policy of strategic denial, and an attempt to reposition Australia as the pre-eminent “leader” in the region. In order to counter Chinese rising influence in the South Pacific through military and infrastructure projects, Prime Minister Morrison announced that Canberra would take Pacific “engagement to a new level”, representing a “new chapter in relations with our Pacific family”.53 This language of the “Pacific family” also appeared after APEC (funded by PNG with $130 million assistance by Australia), when PM Morrison hosted a “Pacific family barbecue” for thirteen Pacific leaders.54 As part of the “step-up”, Australia announced an AU$2 billion Pacific Island infrastructure fund, with an additional $1 billion to support investment and trade in the region. Five new diplomatic posts were announced in Palau, the Marshall Islands, French Polynesia, Niue and the Cook Islands. On 15 November, Senator Payne announced the establishment of the Office of the Pacific within DFAT to “support Australia’s efforts to develop even closer ties with the Pacific”.55 Also in November, the Australian government announced a new education package providing expanded scholarship opportunities for secondary and tertiary level students, teacher training and vocational training.56 Despite new movements in diplomacy, the “step-up” has been largely security-focused. Concerns in Canberra have been growing that China could establish a military foothold in the region by encouraging small, developing island states to service unsustainable debts by leasing China key pieces of infrastructure, such as ports. In late 2018, unconfirmed reports surfaced that Beijing would bankroll the upgrading of Asau port in Samoa, raising concerns about what such a potential Chinese base might mean for Australia’s security.57 A Chinese military port in Samoa is viewed as a potential threat to Australia as it could extend Beijing’s surveillance and operational capacities in Australia's eastern sea lanes and “drive a wedge between Australia and the largest US Pacific bases on Guam and Hawaii”.58 The centrepiece defence policy of the step-up was Australia’s agreement on 1 November with PNG and US to upgrade the Lombrum naval base on Manus Island. Lombrum was originally built as a US naval base in 1944, but it is not clear how substantial the base will be — i.e. whether it will have permanent force presence — or its future role in Australian defence policy. Nonetheless, the initiative is significant insofar as it reveals the continuing behind-the-scenes efforts of Australian policy-makers to anchor the US in the region. Yet this was a Turnbull not a Morrison government initiative: Turnbull and PNG counterpart Peter O’Neill reportedly discussed the defence partnership at a meeting in Brisbane in July.59 It followed the August announcement that Australia had outbid China for funding Fiji’s Black Rock military training facility, announced the week Turnbull lost office. Australia and Fiji confirmed that the base would be a regional hub for training police and peace-keepers, and it is believed that it will also become the centre for Canberra’s proposed Australian Pacific Security College.60 Turnbull’s negotiations were bent on ensuring that Australia would be the sole foreign donor in redeveloping the base. Senator Payne also announced a new Pacific Fusion Centre would be established in mid-2019 (with Australia to contribute $17 million), providing Pacific decision-makers with information needed “to better identify and respond to security threats, such as illegal fishing, people smuggling and narcotics trafficking”.61 The Centre is aimed to complement Australia’s Pacific Maritime Security Program, a $2 billion program to be rolled out over five years that will provide twenty-one new Guardian-class patrol boats and an integrated aerial surveillance package to the Pacific.62 On 8 November, Australia announced a raft of new spends in the Pacific, including a dedicated vessel for delivering humanitarian and disaster relief and response; a Joint Heads of Pacific Security Forces annual event; an Australian Defence Force Pacific Mobile Training Team; and the Pacific Faculty of Policing at the Australian Institute of Police Management.63 PNG signed up to China’s Belt and Road Initiative in June, and, according to the ABC, owes China nearly $2 billion — nearly a quarter of its total debt.64 China’s investment in PNG is not new: according to the Lowy Institute, between 2006 and 2016, China spent US$858.4 million on twenty-seven projects in PNG.65 However, funding for big ticket infrastructure in PNG appears to be on the rise, such as China’s pledge of US$3.5 billion to build a new road network.66 Australia has made direct ef