Great and powerful friends

Draft of an article for East Asia Forum Year in Review 2024

After the massive disruption of the Covid lockdowns, Australia seemed set to return to its traditional geopolitical position in 2024. The US alliance had been cemented with the inclusion of the UK in the AUKUS strategy. Meanwhile the trade relationship with China, upset by China’s hostile response to the ill-judged intervention in Covid politics by former PM Scott Morrison, gradually returned to normal.

There was an inherent contradiction in all of this, pointed out long ago by the satirical mock-documentary Utopia.

The openly stated purpose of AUKUS is to counter Chinese adventurism in the South China Sea, seen, among other things as a threat to vital trade links. And, indeed, a large proportion of Australia’s trade depends on the South China Sea. The contradiction is that this trade goes to and from our largest trading partner, China.

Australia’s position depends on a delicate balancing act between our political and military alliance with the US and our economic dependence on China. One way or another, equilibrium has been maintained until now.

But global events in 2024 have upset all of this. The most important was the election, for the second time, of Donald Trump as US President. The Australian political class is worried by the prospect that Trump might seek to re-negotiate the terms of the AUKUS agreement. But this massively understates the change in our geopolitical situation.

Trump’s election threatens a central premise of our alliance with the US, that of a shared commitment to democracy. Trump has repeatedly mused about becoming a dictator and about overcoming the constitutional restrictions that would preclude a third term. Moreover, the Republican party has shown itself willing to impose all kinds of anti-democratic measures to keep Democrats out of office. With unfettered control of Congress and the Supreme Court, it is entirely possible that they can change the rules to keep themselves in power indefinitely.

But even if US democracy survives this challenge, the idea of the US as a reliable ally, committed to come to our aid in the event of a serious threat, will not. Trump’s slogan “America First” echoes that of the isolationists who opposed US entry into World War II (a similarly named group in Australia advocated an alliance with the Axis powers).

Although Trump is often described as “transactional”, this term implies a willingness to adhere to the terms of a bargain, once it is struck. By contrast, even with a renegotiated AUKUS, Australia could not count on Trump to fulfil the explicit and implicit security guarantees involved.

And what is true of Trump is true of any likely Republican successor. Unless the Republican party is thoroughly defeated and remodelled, a process that will take decades, US foreign policy will now shift with every change of governments

Looking beyond defence, Trump has expressed both strong support for tariffs in general and a willingness to use tariffs to punish both friendly and unfriendly countries for real or imagined slights. It has already been suggested that the Australian government’s social media policies might attract such retaliation. https://www.afr.com/politics/federal/trump-may-use-tariffs-to-hit-back-at-pm-s-tech-crackdown-20241122-p5ksqt This implies even greater reliance on China as a trading partner,

The change of government in the UK has been less dramatic, but it will ultimately prove equally important. UK involvement in AUKUS was, in large measure, a product of Boris Johnson’s nostalgia for the glory days of the British Empire, which were to be recreated following Brexit. The announced “Indo-Pacific” tilt reflected the desire to disengage with Europe.

As on most things, the newly elected Labour government, led by Keir Starmer has made only marginal changes to the policies it inherited. Moves to restore a European focus have been limited. A symbolic commitment to the Indo-Pacific has been reflected in the deployment of two patrol boats to counter illegal fishing and announced visit to Singapore by the aircraft carrier HMS Prince Of Wales. (This is a choice with some unfortunate historical resonances - the sinking in 1941 of a namesake battleship led directly to the fall of Singapore, and to the end of the British commitment to defend Australia. https://en.wikipedia.org/wiki/HMS_Prince_of_Wales_%2853%29)

But the need to re-commit to Europe, combined with the parlous state of British public finance means that not much can be spent on the Indo-Pacific. The motive for continuing with AUKUS is the financial support it provides to the British submarine industry. As with Trump, Britain’s historical record suggests that Australia should not expect a reciprocal commitment to our defence in the event of an emergency.

Finally, there is the downturn in the Chinese economy, notably reflected in reduced demand for iron ore. This is already creating problems for the Australian government’s budget, which has benefited greatly from taxes paid by mining companies. But this only increases the urgency of expanding trade as much as possible.

The world looks a lot less friendly for Australia than it did at the beginning of 2024. That’s unlikely to change any time soon. We need to face our situation realistically rather than relying on the illusion that “great and powerful friends” have our best interests at heart.

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