As Julie Bishop and Marise Payne meet with their American counterparts, Mike Pompeo and James Mattis, at the annual AUSMIN talks in California this week, we're entering an uncertain new chapter for United States-Australia relations in Asia.
Following major strategic policy reviews by both governments calling for collective efforts to deal with the Indo-Pacific's deteriorating security landscape, the alliance has never had a clearer mandate to focus on the power shift taking place in our region.
This clarity of purpose, however, comes with a hitch. Never in AUSMIN's 33-year history have Australian decision-makers been less confident about the president's willingness to carry out the wishes of America's national security bureaucracy.
For Australia, this presents a formidable challenge.
Focusing our alliance on the Indo-Pacific is politically difficult at the best of times.
But Canberra must resist the temptation to hesitate in the face of an unpredictable US administration.
With this year's AUSMIN all about Indo-Pacific strategy – including the need to provide infrastructure, economic growth, governance support and security assistance to help Pacific and south-east Asian nations cope with Chinese influence – Australia has a responsibility to step up its leadership role in our backyard.
Whether or not the Trump administration can deliver on an effective regional strategy, we need to rebalance our own alliance investments to support a stable and resilient Indo-Pacific. This means working with the remaining adults in the room in Trump's White House, prioritising Asian engagement over Middle Eastern operations and boosting our independent contributions to shared regional objectives.
It's hard to overstate how far Australian confidence in the Trump administration has eroded since last year's AUSMIN talks. Reeling from Trump's attack on US allies and cancellation of the Trans-Pacific Partnership, Australian officials took great comfort in Defence Secretary James Mattis' pre-AUSMIN promise that "once we've exhausted all possible alternatives, the Americans will do the right thing".
The 2017 AUSMIN talks reiterated this reassurance. Alongside then-Secretary of State Rex Tillerson, Mattis calmed Australian nerves about Trump's destabilising stance on Asia policy, alliances and regional security. Though the joint statement was unusually brief – and didn't mention free trade, climate change or good governance – it said all the right things on defence and security from Syria to the South China Sea. The key message: the adults in the room would keep Trump in check.
This no longer appears to be the case. Not only have moderate voices in the administration been eclipsed by the "America First" crew. But it's not even clear that last year's AUSMIN line-up mattered.
Secretary Tillerson has been ousted by Pompeo, switching the administration's original advocate of a "free and open Indo-Pacific region" for someone who has barely used the phrase.
Having risen to power on too-good-to-be-true promises to halt North Korea's nuclear program, Pompeo's focus on Pyongyang is sucking the oxygen out of efforts to construct a regional strategy.
He's cancelled high-level meetings with Indian cabinet officials to attend high-risk talks with Kim Jong-un; and failed, so far, to lead his department to put meat on the bone of its Indo-Pacific strategy.
He wasn't consulted on Trump's erratic call to stop military exercises with South Korea; he was blindsided on the decision to establish a Space Force inside the Pentagon; and he lost the bureaucratic fight to save the Iran nuclear deal.
As the cabinet's staunchest supporter of allies and Indo-Pacific strategy, the retired general's fall from the front ranks of influence is deeply troubling for Australia and America's other partners.
The Defence Secretary's declining influence couldn't come at a worse time. Since AUSMIN 2017, there's been a major push by the Pentagon and other security agencies to retool America for "long-term strategic competition" with China – a task that will require careful leadership and significant new resources.
Assessing Beijing's near-term goal as "Indo-Pacific hegemony", the National Security Strategy and National Defence Strategy note that China is challenging America's strategic position by modernising its military, stealing intellectual property, eroding America's technological edge, and using geo-economic and grey-zone tactics to expand its regional influence. With similar challenges being prosecuted by Russia, the Pentagon has boldly declared that: "Inter-state strategic competition, not terrorism, is now the primary concern in US national security."
Delivering on this strategic reorientation to Asia won't be easy. Given Washington's decades-long focus on Middle Eastern wars and global counter-terrorism, and rusted-on Cold Warrior instincts to check Russian aggression, it will take a steady hand in the Pentagon to prioritise Asia. Moreover, as Mattis observed at the Shangri La Dialogue this year, an effective US Indo-Pacific strategy must be a "whole-of-government" affair that offers "significant security, economic and development investments" to regional nations "large and small". In light of America's declining relative power and the "America First" ethos of its President, this is where allies like Australia must pitch in.
Australia's 2017 Foreign Policy White Paper sketched out such an agenda. Identifying "an open, inclusive and prosperous Indo-Pacific" as Australia's most fundamental strategic objective, it went further than any previous government document in laying out the challenges to this order and a strategy to meet them.
It can be summarised as follows: As China is "challenging America's position" in the Indo-Pacific and as America's economic output on a purchasing power basis will be less than half of China's by 2030, Australia and other like-minded middle powers must support American leadership by advancing "collective efforts to limit the exercise of coercive power". This balancing strategy aligns with the objectives of America's two strategic reviews, both of which envisage a larger burden-sharing role for US alliances. But it will require big and ongoing investments in the Indo-Pacific's security, geo-economic and developmental needs.
This is Australia's mandate to redouble its focus on Asia. While Canberra has taken steps to rebalance its engagement across the Indo-Pacific, the scale of the strategic and economic shifts under way make it high time to ask if we're doing enough. The lack of reliable support from Trump for an American Indo-Pacific strategy makes investments in our region all the more important.
In addition to strengthening our military and regional defence networks, one the most visible examples of Australia's regional rebalance is Indo-Pacific Endeavour. Endeavour, which began in 2017, is a three-month security assistance mission by an Australian Defence Force taskforce comprising four naval ships and nearly 1000 personnel which rotates annually throughout the Pacific and south-east Asia. It is backed by surveillance flights to help Pacific Island nations monitor their exclusive economic zones. As part of a broader effort to build up Pacific maritime security – in which Defence is investing $2 billion over 30 years – Endeavour is the type of military engagement Australia should prioritise.
Australia has also stepped up counter-terrorism operations, military capacity-building and interoperability training in our region. Last year, for example, Canberra sent two P-3 surveillance aircraft to support the Philippines government in battling insurgents in Marawi. A special forces taskforce was established to train Filipino troops and $20 million has been pledged for recovery efforts in the embattled city. More generally, the ADF holds robust military exercises with Japan, Singapore, Indonesia, Malaysia and India, and assists with capacity-building for most south-east Asian militaries.
But Australia still spends huge defence resources on long-standing alliance and coalition commitments in the Middle East – with significant opportunity costs for Indo-Pacific engagement. Canberra, for instance, has maintained a frigate in and around the Persian Gulf for 66 rotations since 1990, the sustainment of which requires at least three other frigates for maintenance and training. Notwithstanding the noble "global order" objectives these ships fulfil, it's a heavy lift for a navy with only eight frigates available.
Freeing up extra frigates or other assets for the Indo-Pacific are the kind of alliance realignments Canberra needs to consider. An additional warship for capacity-building with key south-east Asian nations, to assist with humanitarian, disaster relief and interoperability training, or to use in counter-terrorism operations with regional partners like Indonesia or the Philippines, would be crucial in supporting our Indo-Pacific strategy.
This applies to our broader security commitments in the Middle East. According to the last budget estimates, Australia's defence spending in that region – including in Iraq and Afghanistan – was $813.5 million for the 2017 financial year alone. We've just announced more aid for the Afghan Army to improve its helicopter capability and are the second largest contributor to the Afghan National Army Trust Fund, having donated over $700 million since 2010.
These are large amounts of money that could be better spent in the Indo-Pacific. But they're even more eye-opening when compared against the resource difficulties we face in responding to Beijing's growing geo-economic influence in our neighbourhood.
As the discussions at AUSMIN will be exploring in great detail, China is rewiring the US-led order in Asia as much through economic statecraft as military modernisation. Given the Indo-Pacific's booming need for infrastructure investment in roads, bridges, electrical grids, ports and telecommunications, many regional nations are being drawn to Beijing's trillion-dollar Belt and Road Initiative – albeit at the risk of unsustainable debt burdens and critical infrastructure vulnerabilities.
While some Chinese loans are solely for profit, others have geopolitical objectives. Sri Lanka, for instance, was last year compelled to transfer its strategic Hambantota port to China on a 99-year lease after becoming unable to repay Chinese state-owned enterprises. Similar risks have been flagged in the Maldives, Papua New Guinea, the Philippines, Laos and Cambodia, alongside broader concerns about the overt and covert political influence Chinese investments give Beijing.
Unable to compete on a deal-by-deal basis, Australia and other like-minded countries are looking to pursue alternative strategies. One idea is to encourage the private sector to invest by underwriting some of the risks involved or providing other financial incentives. Later this month, the US Chamber of Commerce will host an Indo-Pacific Business Forum with this objective in mind, connecting representatives from the Trump cabinet with business figures and diplomats from Singapore, India, Australia and Japan. Similar efforts are under way elsewhere in the region.
Another approach is to increase public funds for regional infrastructure. Japan has established a $US110 billion Partnership for Quality Infrastructure; the US Congress is overhauling America's Overseas Private Investment Corporation; New Zealand has announced $180 million for a strategic international development fund; and Australia has announced an Infrastructure Cooperation Initiative with ASEAN, the funding for which it has yet to reveal.
While Australia's scheme is likely to be a good step, more resources and a more strategic approach are needed if we're going to fund regional infrastructure of national importance in a sustainable way.
Consider how Canberra arranged the $136.6 million telecommunication cable between the Solomon Islands, Papua New Guinea and Australia. To ensure that Chinese firm Huawei did not win the rights to this critical infrastructure, the government had to cobble together small pots of money from across Australia's aid program, including $30 million from Indonesia, $6 million from Cambodia, and $30 million from health and sanitation assistance.
Declining aid budget
While the investment was secured on this occasion, the haphazard way it took place – which cut funds from other parts of our declining aid budget – is neither replicable nor desirable, particularly when we're spending more than five times that amount on the Middle East per year. As the number of regional infrastructure projects which touch on our geostrategic interests will undoubtedly rise, it's time we redirected funds from alliance efforts in the Middle East to geo-economic and developmental efforts in the Indo-Pacific.
Australia is deeply proud of its "100 Years of Mateship" with America and the role our alliance has served in defending liberal values worldwide. We've supported the US in every major conflict since the Battle of Hamel, doing our part in Europe, the Middle East and Asia.
But with a President whose willingness to invest in the Indo-Pacific looks shaky, and faced with funding shortfalls in both our countries, Australia needs to refocus its resources and alliance efforts back in the Indo-Pacific. This will raise concerns in Beijing and may frustrate some in Washington. But it will make a more meaningful contribution to the rules-based order that the US and Australia want to preserve in our region.