Australia has enjoyed a record-setting three decades of uninterrupted economic growth buoyed by the voracious appetite of a growing China. However, all good things come to end as the political, economic and strategic competition between the US and China enters a new phase, placing both the global and Australian economies in a precarious position.
Further compounding these emerging challenges is the growing period of economic and strategic competition between Japan and South Korea, equally important US and Australia allies, which have longstanding, robust links to Australia’s economic security.
As this vortex of competition continues to devolve into a game of economic brinkmanship, resulting in trade tariffs and hindered supply chain access, many within Australia’s political, economic and strategic policy communities have sought to redouble the nation’s exposure to volatile and slowing economies.
Australia’s earliest economic and strategic relationship with the British Empire established a foundation of dependence that would characterise all of the nation’s future economic, defence and national security relationships, both in the Indo-Pacific and the wider world.
As British power slowly declined following the First World War and the US emerged as the pre-eminent economic, political and strategic power during the Second World War – Australia became dependent on ‘Pax Americana’ or the American Peace.
The end of the Second World War and the creation of the post-war economic and strategic order, including the establishment of the Bretton Woods Conference, the International Monetary Fund and the United Nations, paved the way towards economic liberalisation and laid the foundation for the late 20th and early 21st century phenomenon of globalisation.
While the collapse of the Soviet Union and the end of the Cold War cemented America’s position as the pre-eminent world power – this period was relatively short-lived as costly engagements in Afghanistan and Iraq, peacekeeping interventions in southern Europe and enduring global security responsibilities have drained American ‘blood’ and ‘treasure’ – eroding the domestic political, economic and strategic resolve and capacity of the US to unilaterally counter the rise of totalitarian regimes and peer competitors in both China and Russia.
This combination of factors has come to characterise the special relationship between the United States and Australia in recent years, with the strategic competition between the US and China playing an increasingly influential role in directing the future relationship between the two nations.
Prime Minister Scott Morrison and the bombastic US President Donald Trump seemingly formed an instant rapport following the surprise election victory by Morrison in May this year – with the common values of “promoting peace, liberty and prosperity” serving as a core focus of the state visit.
Building on the ‘mateship’
Despite many US allies drawing the ire and unwanted attention from the US President, Australia has so far largely managed to avoid any direct attacks by the mercurial president who has, for all intents and purposes, thrown the international rule book out the window to focus on the interests of the US and supporting its constituency, albeit through a largely confrontational approach.
The Prime Minister has recognised the continued importance of the special relationship and sought to endear himself with the US by focusing on the areas of commonality and overlapping interest, with a focus on the long-vaunted century of ‘mateship’ between the two nations, with the official media statement highlighting this:
“Our alliance is stronger than ever – a partnership first forged on the battlefield, when we fought alongside one another at the Battle of Hamel in 1918. Since then, we have stood side by side in every major conflict since the First World War – in the defence of freedom, liberty and democracy,” Mr Morrison’s media statement highlighted.
This was expanded upon by a brief White House announcement from late July, stating: “The visit will celebrate our two countries’ close friendship and shared history and reaffirm our common vision for global peace, security and prosperity.”
The shared economic, political and strategic interests, particularly in the Indo-Pacific and southeast Asia in light of growing Chinese assertiveness in the South China Sea, the rise of grey zone tactics, namely political and cyber warfare, espionage and foreign influence peddling are all expected to figure strongly in the conversations between the two leaders.
Each of these touchpoints were strongly articulated by the Prime Minister in his official media statement: “I look forward to meeting again with President Trump and members of his Cabinet, including Vice President Pence, Secretary of State Pompeo and Secretary of Defense Esper to discuss how we can further strengthen our alliance and already close partnership. There is no deeper friendship than that which exists between Australia and the United States.
“Our alliance is stronger than ever – a partnership first forged on the battlefield, when we fought alongside one another at the Battle of Hamel in 1918. Since then, we have stood side by side in every major conflict since the First World War – in the defence of freedom, liberty and democracy.
“The United States is Australia’s largest economic partner. Investment between our two nations is worth more than $1.2 trillion, supporting hundreds of thousands of jobs. The Australia-US Free Trade Agreement itself is a shining example of our shared commitment to economic growth and prosperity – with our two-way trade growing by almost 60 per cent since it was signed,” the Prime Minister articulated.
The burgeoning relationship between the Australian Space Agency and NASA as a global leader will also figure strongly in the conversations between the two leaders, while the renewed tensions in the Middle East following the suspected drone attack on a Saudi oil facility will no doubt also figure as central talking points following the Prime Minister’s commitment of Australian resources to the region.
Indo-Pacific Asia’s rise means the ‘tyranny of distance’ has been replaced by a ‘predicament of proximity’. China, India, Indonesia, Thailand, Japan and several other regional nations are reshaping the economic and strategic paradigms with an unprecedented period of economic, political and arms build-up, competing interests and rising animosity towards the post-World War II order of which Australia is a pivotal part.
The nation is defined by its relationship with the region, with access to the growing economies and to strategic sea lines of communication supporting over 90 per cent of global trade, a result of the cost-effective and reliable nature of sea transport. Indo-Pacific Asia is at the epicentre of the global maritime trade, with about US$5 trillion worth of trade flowing through the South China Sea and the strategic waterways and choke points of south-east Asia annually.
For Australia, a nation defined by its relationship with traditionally larger yet economically weaker regional neighbours, the growing economic prosperity of the region and corresponding arms build-up, combined with ancient and more recent enmities, competing geopolitical, economic and strategic interests, places the nation at the centre of the 21st century’s ‘great game’.
Defence Connect will closely monitor the official state visit to the United States and will provide rolling coverage of the event to ensure that you don’t miss any important announcements.