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With the world in a state of seemingly constant flux and the established norms being rewritten on a daily basis, Australia, like many American allies and partners, has the potential to renegotiate and restructure Pax Americana to our explicit benefit. So, why don’t we?
In the aftermath of the Second World War, the world witnessed the rise of Pax Americana – a period during which the United States emerged as the dominant global power, securing peace and stability through a unique blend of military might and economic ingenuity.
This era was defined by the creation of institutions like the World Bank, International Monetary Fund and others under the Bretton Woods system and military alliances such as the North Atlantic Treaty Organisation (NATO), which collectively helped foster an environment of cooperation and reconstruction.
The United States, buoyed by its substantial economic resources and military capabilities, assumed the role of the global policeman, providing security against the spread of communism, putting an end to the conflicts of imperial powers, and laid the foundation for a new and transformative international order.
As the decades progressed, the consolidation of Pax Americana was evident in the extensive network of alliances and trade agreements that spanned continents. The American-led order promoted a degree of predictability and order in international relations that contributed to a period of remarkable global growth and prosperity.
Yet, as the closing years of the 20th century approached and the new millennium dawned, signs of waning American hegemony began to manifest. The unipolar moment started to fracture under the weight of shifting economic landscapes, rising multipolarity and emerging challenges that proved resistant to outdated strategic frameworks.
Several factors have contributed to this slow decline. The financial strains of sustaining an extensive global military presence, coupled with domestic political polarisation and economic uncertainty and, of course, the emergence of a growing number of great powers, have all played a part in eroding the perceived inevitability of American dominance.
Australia’s role in this changing dynamic remains particularly significant. For decades, Canberra has maintained a close and resilient alliance with Washington, reaping the immense, if not benefits of security assurances and broader regional and global economic stability.
As the international system shifts towards a “new normal” and more multipolar configuration, Australia is faced with the imperative to recalibrate its strategic alliances renegotiating its position and role in the Pax Americana balanced against new and established partnerships in the Asia-Pacific region. Embracing a more diversified foreign policy approach, Australia seeks to protect its national interests while contributing to a stable and balanced international order in an era of diminishing Pax Americana.
Now with everything seemingly up for negotiation at the behest of an American president seeking the “best deal”, Australia’s roles, responsibilities and, indeed, our own prosperity and stability within the umbrella of Pax Americana, are equally up for negotiation, requiring a radical new approach and paradigm of thinking in the face of this new world order.
Highlighting a push for a broader “reset” of Pax Americana is former secretary of the Department of Home Affairs Mike Pezzullo in a detailed analysis for ASPI, titled, Reset Pax Americana: the West needs a grand accord in which he articulated, “We should not be surprised that from time to time, the US might deploy its enormous strategic and financial power to reset the terms of global prosperity and security. Whether by design or otherwise, we appear to be in another such moment.”
Shaping our seat at the table
Australia has long prided itself on being a responsible, contributing member to the post-Second World War economic, political and strategic order, one that has reliably committed its own “blood” and “treasure” to various causes since the formalisation of the Pax Americana global order in the late-1940s.
So in terms of “relationship equity” in the bank, we have a decent amount to draw upon, particularly if we approach the negotiations in good faith, as exemplified by the AUKUS trilateral relationship that will ultimately see Australia fielding a fleet of conventionally armed, nuclear-powered submarines.
This “relationship equity” provides Australia with a unique opportunity and despite what others in the political and strategic community might say, a robust position from which to negotiate a new, prominent seat at the table, with significant benefits to Australia.
Pezzullo hinted at this new paradigm, stating, “Through the shock of the Trump tariffs, the US has created for itself an extraordinary opportunity to restructure the global trading and financial system, with two twin objectives in mind. These are to increase the relative gains from that system for Americans and to reallocate the costs of Pax Americana, so that they are borne more by allies and partners and less by US taxpayers.
“The best way to do this, in a way that would take maximum advantage of the opening that the tariff shock has created, would be for Trump to call an urgent meeting of what might be termed the ‘G7+’. This would not be a meeting whose objective would be to craft and issue a worthy but forgettable communique. Terms would be set out and agreed in outline, under the threat of total trade war ... The G7+ would consist of the US, Germany, Japan, Britain, France, Italy and Canada (as G7 members), along with India, Brazil, South Korea, Australia, Mexico, Indonesia (representing itself and the rest of Southeast Asia) and the European Union (in its own right and also representing the 24 non-G7 EU members).”
In order to achieve a new compact however, negotiation should, as Pezzullo believes, be focused on addressing a host of challenges that undermine the enduring capacity of not only the United States, but also its global partners, Australia in particular.
Key targets include America’s ongoing trade deficits, Beijing’s weaponisation of the international trade organisations and norms, currency manipulations and overproduction capacity, alongside Beijing’s capture and lockdown of critical supply chains, the costs incurred by the United States as the global security guarantor and the relationship with debt, a coordinated effort to boost both American and allied industrialisation, and of course, an expectation that America’s allies will drastically increase their defence spending and capability, among others.
This broad spectrum and ambitious agenda would require a dramatic and pragmatic negotiation by all parties should they actually be committed to the endurance of the post-Second World War global order, something Pezzullo detailed, saying, “This is an ambitious agenda. A Pax Americana accord would address US trade grievances but more importantly would better spread the costs and risks of global security. It would reset the terms of Pax Americana such that it could be sustained. The US would be reassured about its strategic solvency, and allies and partners would take an active stake.”
And it is here that Australia can really come into its own.
At home and our region is where it begins
Australia has long been America’s trusty deputy in the Indo-Pacific, faithfully backing US interests in every major 20th century conflict – a proud legacy of paying into the alliance’s insurance policy.
While that model worked well, especially during the late Cold War and into the 21st century when America bore most of the burden, letting Australia and its Western partners grow “fat, rich, happy and complacent” on the back of US sacrifice – and later, through initiatives like AUKUS.
But times have irrevocably changed. America can’t shoulder the costs alone in an era marked by fierce geopolitical competition and rivals with growing economic, political and strategic heft. Now is the moment for allies like Australia and the United Kingdom to lighten America’s load and seize new opportunities with bold, agile strategies that are designed to build economic, political and strategic resilience, capacity and critically, competitiveness.
For Australia, this means breaking free from the tired notion that its role is confined to a “lazy” South Pacific. Instead, its strategic focus should stretch from the east coast of Africa and the Persian Gulf, through American Samoa, and into the South China Sea, a vast and vibrant arena of opportunity.
This expansive region is home to some of the world’s fastest-growing economies: India, Thailand, Bangladesh, Indonesia, Vietnam, Malaysia, Kenya, and the Philippines. By 2030, this area is expected to host 5 billion people with a combined gross domestic product (GDP) of US$13.13 trillion (AU$20.1 trillion). Come 2050, it will swell to 5.7 billion people with a GDP of US$30.35 trillion (AU$46.5 trillion), igniting insatiable demand for raw materials, agricultural goods, financial services and premium products – markets Australia is uniquely poised to serve.
US-based geopolitical analyst Peter Zeihan warned that a deglobalised world fractures into countless separate geographies, each weaker without collective strength. Although the figures here don’t capture every nation in the region, they underscore the seismic scale of opportunity right on Australia’s doorstep, distinct from our economic dependence on China.
These nations yearn for prolonged peace, prosperity and stability, a chance for Australia to emerge as the strategic benefactor and linchpin of regional order through a Pax Australis under a revamped Pax Americana.
It’s time to start this transformation at home, yesterday.
Final thoughts
Despite the ambitious rhetoric from both sides of politics, the reality for the average Australian is far from promising. While Australia is blessed with abundant natural resources and immense potential, there is little indication that we are fully harnessing our unique national strengths.
Declining economic opportunities, a rapidly deteriorating global and regional balance of power, and the increasing politicisation of everyday life have deepened a sense of disconnection, apathy and helplessness among many Australians.
Meanwhile, modern Australia has been largely insulated from the harsh realities of conflict, with generations having never experienced food, energy, or medical rationing – let alone understanding the economic and social upheaval such restrictions would bring to our world-leading standard of living.
To safeguard its future, Australia must build the capacity to act as an independent power, developing strategic economic, diplomatic and military capabilities more in line with great power expectations. This shift would not only reinforce Australia’s sovereignty but also position it as a key player in ensuring regional security and prosperity.
Moving beyond the prevailing mindset of “it’s all too difficult” would open unprecedented economic, diplomatic and strategic opportunities for the nation.
As tensions in the Indo-Pacific intensify and China continues to assert its economic, political and military influence, Australia faces a defining choice: remain a secondary power or embrace a larger, more independent role in an era of great power competition. Expanding opportunities for Australians while strengthening economic resilience – and, by extension, reducing vulnerability to economic coercion – must be at the core of government policy.
Only with a strong and dynamic economy can Australia effectively deter threats to its national interests and ensure long-term security and prosperity.
Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch at
Stephen Kuper
Steve has an extensive career across government, defence industry and advocacy, having previously worked for cabinet ministers at both Federal and State levels.
