Dismantling our Asian neutrality

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I’ve recalled for readers before a description offered by Paul Kelly about the John Howard view of Australia’s strategic bind vis-a-vis the US and China. Kelly used the old Yogi Berra phrase, “when you come to a fork in the road, take it”. That is, Howard was determined to not choose sides at all. He opened the nation’s arms to Chinese investment, diplomatic and economic engagement. Yet he also pursued historically close ties with the US military, which included the bizarre notion of the “democratic quadrilateral” containment of China via an explicit alliance between the US, Japan, India and Australia based, in part, upon shared values. Then again, Alexander Downer once went so far as to state that Australia may not support the US in any conflict between Taiwan and mainland China.

It may be that John Howard was a man of his times. There was no need to choose sides in the early millennium, as China’s rise was fresh, the US was distracted by the terror wars of George W. Bush and the theatre of hottest contest was the Middle East.

Then again, maybe John Howard wasn’t just a man of his times. Maybe he foresaw that in the long run, although the strategic contest between China and the US was inevitable, there was simply no reason to hasten it.

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I could be critical of Howard. The failure to manage the mining boom arising from the embrace of China led to an economic over-dependence on that nation but the effect of most of his decisions was to create a kind operational neutrality for Australia in the Asia-Pacific region as he managed Australian interests with an eye to alliance maintenance and engagement with a growing new power.

But that wisdom appears to have been lost, on both sides of politics.

Earlier this year we had the spectacle of Australia hosting Barack Obama’s open declaration of Chinese rivalry in Darwin in his “Pivot to Asia” speech. It was accompanied by the announcement that Australia will host a bevy of marines. The Gillard government is also pretty clearly shifting its policy stance on selling uranium to India, implicitly undermining the Nuclear Non-Proliferation Treaty in a way that will, on way or another, encourage the development of nuclear capabilities in other Asian nations.

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Now, we have a debate, triggered by the Coalition and sponsored by the AFR, about whether we should upgrade out nuclear submarine fleet to nuclear-powered subs.

To my mind, this is the mother of all of these recent bad ideas.

Weirdly, the debate is being led by our old sparring partner, Christopher Joye, who has lifted his gaze from housing prognostication to take on strategic policy. According to Joye:

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As a geographically isolated middle power in an increasingly fractious strategic environment, Australia can no longer afford to wantonly free-ride off the US alliance and its embedded principle of extended nuclear deterrence.

…You can imagine, therefore, the consternation our fading defence spending is causing in the US. Labor has cut the defence budget to just 1.6 per cent of GDP, the lowest it has been since the 1930s.

…Simply throwing more money at the military is not the answer. While acknowledging that free-riding is the “unspoken core issue at the heart of Australian strategic policy”, Thomson from ASPI backs it because “even if we boosted our defence spending to 3 per cent of GDP we would remain irrelevant to the balance of power between China and the US”.

There are, in fact, modest “asymmetric” investments we can make that would have a tremendous impact on the US alliance and Indo-Pacific relations. One of these would be a small fleet of nuclear-powered but conventionally equipped submarines leased off the shelf from the US.

…As exclusively reported by this newspaper, senior Coalition front-benchers privately believe this is an option that should be evaluated if they win government. US defence experts argue that leasing, as opposed to purchasing, the submarines would obviate the need for a domestic nuclear industry.

…Australia is now in a position to make a durable, if belated, investment in its most important security alliance. Taxpayers who expect our military to supply dependable “longevity insurance”, and US Secretary of Defence Leon Panetta and Secretary of State Hillary Clinton, should demand nothing less.

I don’t doubt for a moment that the US would like Australia to spend more. And perhaps we should. But the question tax-payers should ask is not about budgets, it is whether it is in the national interest to have a fleet of nuclear powered submarines roaming Asian waters?

Think about it. Sure, you can base those subs in Australia but in doing so you have to develop an implicit nuclear capability. Whether or not the boats are armed with nuclear weapons is besides the point. Nuclear powered submarines are a very large step towards a weaponised nuclear capability and significantly raise the risk of the same response in other Asia nations. Indonesia currently has only a couple of clapped-out submarines. It plans to develop that to ten by 2020. All diesel. Ask yourself, is it wise to prompt Indonesia to move closer to nuclear weapons and first strike capability?

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Conversely, if you aim to offset this problem by leasing the boats, as Joye suggests, then you are signing up to be a client state and both your operational and strategic choices vis-a-vis any future conflict are that much more circumscribed. Plus, the bad regional flow on effects still happen.

Beijing knows full well that Australia is a dependable (dependent) US ally. When I interviewed former Chinese ambassador, Fu Ying, about the Chinese view of Australia’s strategic relationship with the US, she made is very clear that the Chinese understood it was an alliance built on much more than strategic imperative. She recounted a story of an insight she’d had when travelling in our immediate north where she could imagine Australian and US troops fighting side by side against the Japanese invasion. These were deep cultural and historical connections she noted. Beijing is unlikely to surprised by any deepening of the strategic relationship.

But there is a very large difference between that understanding and our choosing to engage in a very substantial ratcheting up of a regional arms race based upon no stronger rationale than budget wrangles.

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Both sides of politics need to take stock. Successive regimes of Australian government have striven to balance the needs of ANZUS with a kind of operational Asian neutrality. This is worth preserving.

David Llewellyn-Smith is a former editor and founding publisher of The Diplomat, the Asia Pacific’s leading international relations publication.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.