The price of abandoning ANZUS

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From Peter Hartcher today:

The former secretary of Australia’s Department of Foreign Affairs and Trade, Peter Varghese, makes the point that any undercutting of US alliances in the region would damage all of them.

“Anything that weakens the alliance network in the Asia-Pacific weakens Australia’s position. That alliance network is important for the stability of the region. We would be in for a bumpy ride.”

An Australian cabinet minister observes…“We’d probably need to think about spending an extra $100 billion on our defence,” the minister says, though making clear that this was nothing more than a top-of-the-head guess. Australia’s annual defence budget is currently $32 billion.

The head of the Australian Strategic Policy Institute, Peter Jennings, has estimated that, without a credible US alliance, Australia would need to double its defence spending from 2 per cent of GDP a year to 4 per cent, an extra $32 billion a year in today’s dollars.

…And if Japan and South Korea decide to take Trump’s cue? If there’s a risk that the protective US nuclear umbrella is about to be folded up and taken home, they will need to decide whether to arm themselves with nuclear weapons of their own [as would we].

…A Washington expert with close knowledge of Clinton’s policy infrastructure says that Hillary’s administration would have a list of three questions for Australia immediately. None is easy.

“She is very invested in the pivot to Asia and sustaining advantage [over China], rather than chasing crisis to crisis,” says the expert, who spoke on condition of anonymity. Flowing from this, he expects that President Clinton’s first question to Canberra would be, “You guys are great at contributing outside Asia; where is your contribution inside Asia?”…“Where are your freedom of navigation operations from Australia?”…“Where are your joint patrols of the South China Sea, together with the US?”

James Brown of the US Studies Centre adds two more questions that a Clinton administration would pose to Australia before too long. Is Australia prepared to host US long-range bombers? Is Australia prepared to host a US aircraft carrier battle group? “They are both pretty heavily on the agenda,” says Brown.

It’s coming ready or not. I’ll only add that we are also abandoning the alliance in great strides with our mushrooming reliance on China in the service economy. This has only gotten worse under Do-nothing Malcolm and his real estate Treasurer.

So why would the US bend to protect us?

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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.