An Anti-China Axis?

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A recent multi think-tank publication entitled “Shared Goals, Converging Interests: A Plan for U.S.–Australia–India Cooperation in the Indo–Pacific,” has apparently been the source of an about-face by Australian Foreign Minister Kevin Rudd.

Co-published by Australia’s Lowy Institute, India’s Observer Research Foundation, and the U.S. Heritage Institute, the authors called for a tripartite defense pact between the United States, Australia, and India in a world where “the rise of China…is posing the first serious challenge to U.S. military preeminence in Asia in half a century.”

While there have been no official intergovernmental talks about this particular defense pact, on November 30, a spokesperson for Rudd’s office appeared receptive to the report, stating:

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“The idea of trilateral co-operation between India, the U.S. and Australia is a thoughtful one that deserves further study. We are logical partners, and it’s in all three countries' interests to continue to expand consultation and co-operation.”

Furthermore, in an interview with the Australian Financial Review, Rudd was quoted as having said that India “has really been quite positive” to the possibility of a trilateral defense arrangement.

However, the very next day, India’s External Affairs Ministry published on its website a statement flatly denying Rudd’s characterization of New Delhi’s interest in the trilateral pact.

“We have seen media reports about the comments attributed to the Australian Foreign Minister Mr. Kevin Rudd on a possible three-way economic and security pact with the US and India. We are not aware of any such proposal.”

And, within a day, Canberra was quick to rectify what had become a public contradiction on a seemingly direct affront to Beijing. Australia’s High Commission released a statementthat the country “has not proposed such a trilateral arrangement,” and that “characterizing India’s views on a trilateral security dialogue between India, Australia and the U.S. are wrong.” Rudd also categorically denied that Canberra had any ambitions to create a multilateral security agreement within the region.

Whether this public gaffe was a mere misinterpretation of the foreign minister’s words or an internal Ministry miscommunication remains unclear. However, what this public slip does reflect is the increasing tendency of Australia and its other Asian partners to tread carefully over growing security issues resulting from China’s non-transparent military and economic rise in the region.

Australia’s “China Reality”

Australia-China relations are convoluted at best. On the one hand, trade growth between the two nations has grown exponentially in recent years. While most of the world suffered from the global financial crisis, because of China’s insatiable demand for energy resource, Australia actually experienced economic growth. Since 2009, China has become Australia’s largest trading partner, an exchange valued at $105 billion. Especially in the sector of energy, China is a major importer of Australia’s natural resources, which have prompted an economic boom for the western half of the country.

However, China’s growing trade clout in Australia has also been a source of uneven economic growth. The ever-increasing exports of natural resources has forced the Australian dollar to rise, increased the cost of labor as skilled workers enter the natural resource sector, and has left Australian manufacturing unable to compete. In the past two years, it’s estimated that nearly 100,000 manufacturing jobs have disappeared. And, while the resource and mining sector continues to grow, other areas of Australia’s economy, such as tourism, have been suffering.

In addition to the unbalanced economic relationship, Australia also faces growing security concerns over China’s increasingly aggressive stance regarding the territorial disputes in the South China Sea. Situated just north of Australia, Beijing hasn’t been shy in using implied military threats to assert its claims in these contested waters. And while the United States has reiterated its commitment to its military presence and allies in the region, constant threats by Congress on major military budget cuts have raised doubts in Asia about the sustainability of U.S. military strength in the region.

So, while Rudd may have flatly denied the prospect of a trilateral defense pact, it’s not difficult to imagine Canberra entertaining the idea behind closed doors.

Australia’s Measured Response

In an effort to strengthen its security vis-à-vis China, Canberra has begun a multibillion dollar defense modernization project that includes new helicopters, tanks, and high-range missile submarines.

In August, the government approved four major defense programs that included the purchase of over 950 new training vehicles, upgrades to its Standard Missle-2, upgrades to its Sea Sparrow Missiles, and the modernization of its military satellite capabilities. The cost of completing all these projects alone has been estimated to be around $3 billion.

In addition to upgrading its weapons systems, Australia has initiated military cooperation with its regional neighbors. In June of this year, the Japan-U.S. Security Consultative Committee adopted the strategic goal of strengthening U.S.-Japan-Australian defense cooperation. And by the following month, the three countries conducted their first-ever joint military exercises off the coast of Brunei.

Perhaps the most controversial move by Canberra occurred last month, when Barack Obama and Australian Prime Minister Julia Gillard agreed to establish a U.S. base in northern Australia, which would station 2,500 marines. As expected, Beijing protested this move, accusing the United States of engaging in “cold war mentality.”

Despite all these measures, Australia, one of the United States’ closet allies in the region, is walking a fine line as it attempts to remain resolute against Chinese military aggression while not provoking its largest trading partner.

Broadening Multilateral Possibilities

As Canberra continues this balancing act, Washington may soon find itself sidelined as a bilateral, or even trilateral, regional partner in counterbalancing Beijing. Indeed, international organizations have increasingly become the preferred vehicle for confronting Beijing. This is especially true in the South China Sea, where ASEAN has taken the lead in representing many of the interested parties. Countries such as Vietnam and the Philippines have become some of the most vocal critics of China’s claims and have been pressuring ASEAN to take stronger steps against Beijing. Recently, the Philippines released its own plan for settling the dispute, pushing ASEAN to adopt it.

And while Rudd denounced any sort of anti-China military pact, in the same breath he suggested that any union should be a part of a larger multilateral venue:

“The Defense Ministry is also not keen on hopping onto any multilateral security constructs in the region excepting those under the UN flag or such broad-based arrangements as ASEAN Defense Ministers Meeting and the ASEAN Regional Forum.”

For now, the United States can afford to focus on bilateral agreements with regional partners, such as the deal over the deployment of marines in northern Australia. However, Washington should be aware that the ground is starting to shift, with multilateral venues and arrangements increasingly looking like the Asia-Pacific’s preferred approach to thorny issues.

John K. Yi is an Alfa Fellow currently living in Moscow, Russia. He received his M.A. in Eurasian, Russian, and Eastern European Studies at Georgetown University, focusing on Russian foreign policy in East Asia and in the Six Party Talks.

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