The Australian

By Rowan Callick

THE stars have started to align for Australia's foreign affairs policy, just as the biggest star in global politics touched down in Canberra. Most of Australia's exports are bought by Asia, most tourists and foreign students come from there. Increasingly, most migrants are Asians, too.

US priorities have been very different, however, during the decade since president George W. Bush declared war on terror, making these difficult years for Australia to develop a coherent international strategy.

As on every occasion since the US came to Australia's rescue during World War II, Canberra responded positively to Washington's subsequent calls to arms, against Saddam Hussein and against the Islamist threat in Afghanistan and elsewhere.

But this led to dislocation between elements of core Australian interests, security and economic.

This was underlined in the previous speech made by a US president to the Australian parliament, by Bush in 2003.

The speech focused firmly on the Middle East, its theme "the nature of the terrorist threat defines the strategy we are using to fight it".

The following day, China's President Hu Jintao delivered a more sweeping speech to parliament that four times urged "all-round co-operation" between Australia and China.

Since then, despite the conclusion in 2004 of a free trade agreement with the US, Australian interests have appeared to be bifurcated between its shared security responsibilities with its great ally and its increasing economic and cultural enmeshment with its neighbourhood.

But last year that began to change, and the coming together of Australia's international interests into a single coherent narrative has accelerated this year.

This is expected to be underlined amply by Barack Obama's speech to parliament today. He will underline the US return to Asia, and Australia's role as a crucial security, economic and cultural partner in this thrust.

As anticipated by The Australian's foreign editor Greg Sheridan, the President will confirm the deepening of US military ties with Australia, which will become the crucial pivot point of US surveillance and engagement, extending its flexibility as it switches its focus back and forward between the Pacific and Indian oceans.

Julia Gillard's intention to allow uranium sales to India and the imminence of a trade deal between Australia and South Korea form other elements of this growing cohesion of policy, building links between like-minded countries.

Geoff Garrett, chief executive of the University of Sydney's US Studies Centre, says the growing alignment of India, Indonesia, South Korea, Japan and Australia comprises a "democratic values coalition" that down the track may also include Vietnam, which is rapidly building close military links with the US.

"All of these countries are moving in a pro-market direction and have big economic relations with China while being concerned about China's ultimate ambitions," Garrett says.

Obama, who lived as a boy in Indonesia, spent last weekend in Hawaii hosting the Asia-Pacific Economic Co-operation summit, and flies from Darwin tomorrow to Bali to participate in the East Asia Summit co-ordinated by the Association of Southeast Asian Nations.

This will be the first attendance of a US president at the EAS, which Australia joined under John Howard.

It commits US leaders to attend a second annual summit in the Asia-Pacific region, with APEC, naturally extending Washington's focus on Asia.

During the 1950s, the US - whose forces had fought across the Asia-Pacific region a few years before - responded swiftly to the Cold War threat posed by the Soviet Union and, potentially, also China, a threat realised in the devastating Korean war.

Washington agreed a series of mutual defence pacts: with Japan, South Korea, Thailand and The Philippines, as well as Australia and New Zealand. US commerce and US sailors and soldiers were everywhere in Asia. But following the end of the Vietnam war, Richard Nixon's meeting in Beijing with Mao Zedong and the subsequent recognition of the People's Republic of China, and then the conclusion of the Cold War 21 years ago, the US presence slowly began to ebb.

This coincided with the rise of China, following Deng Xiaoping's announcement in 1978 of a new "opening and reform" era.

In 2008, the global financial crisis triggered a switch in the world's economic centre of gravity from the Atlantic to Asia.

Much of the rest of Asia had begun the road to modernisation before China. But the sheer size of China and the persistence of its growth, by 10 per cent a year, naturally pushed it to the front of the pack.

India, too, has followed but it still has some catching up to do. Its economy is about one-quarter the size of China's, although its population will surpass it in a decade or so.

A US distracted by its war on terror found it hard to get to grips with the new Asia, while its ally Australia had not only begun to come to terms with the region but to feel at home there.

However, as distance grew from the Deng era, China's new elite began to feel sufficiently confident to set aside his advice on foreign policy, to "adopt a low profile and never take the lead".

Beijing started to push the envelope, to test the limits to its new-found Asian supremacy. A series of incidents at sea between China and Japan, Vietnam and other neighbours followed.

The annual regional security forum of the ASEAN - which includes most Asia-Pacific countries, including Australia and the US - is usually a drab affair enlivened only by the traditional song-and-dance routines required of the national delegations.

But last year, in Hanoi, the mood was different. One by one, Asian delegations let US Secretary of State Hillary Clinton know just how anxious they were about China's new-found - or regained - presumption of supremacy.

Clinton said: "The US has a national interest in freedom of navigation, open access to Asia's maritime commons and respect for international law in the South China Sea."

China's Foreign Minister Yang Jiechi responded that these remarks amounted to "an attack on China". But with The Philippines, Brunei, Malaysia, Indonesia, Taiwan and Vietnam all feeling the heat from China's claims of sovereignty in the South China Sea, Clinton's affirmation of US solidarity went down exceptionally well in Hanoi.

The US has never really left Asia; it has scores of thousands of troops, for instance, in bases in South Korea, in Okinawa in Japan, and in Guam, and of course its great global brands have become ubiquitous in the region.

At the political level, however, Asians have begun to feel the US is back.

Obama's State of the Union address this year marked a watershed moment in this trend. Terrorism failed to gain a single mention. The new challenge, he said, was "to win the future".

This is the present generation's "Sputnik moment", as when its parents discovered the Soviet Union could send a person into orbit; only now the revelation is about engagement with Asia.

Obama mentioned China four times in the speech, India three times and South Korea five times. Iraq and Afghanistan featured, but as places from which the US was withdrawing rather than as part of the way to win the future.

The audacious killing of Osama bin Laden in Pakistan in May by US Navy SEALs further helped draw a line across the previous US focus on the war on terror and the Middle Eastern morass.

Garrett says the Bush presidency was a period of "benign neglect" of "dynamic Asian regionalism".

That situation is now being transformed, with Obama - who last month signed free trade agreements with South Korea, Colombia and Panama - pushing at APEC for the Trans-Pacific Partnership to be fast-tracked.

The original agreement was signed between Brunei, Chile, New Zealand and Singapore in 2005, and Australia, Malaysia, Peru, the US and Vietnam joined negotiations last year. Japan, Mexico and Canada now wish to participate too. Even without Mexico and Canada, the TPP economy would be 1.5 times that of the European Union.

Garrett says: "It's the biggest trade initiative since the Uruguay round created the World Trade Organisation 20 years ago."

He says there has been "a lot more constancy" in the core US relationship with China than many commentators believe, underlined in recent years by the six-monthly meetings between the countries' cabinets, as a strategic economic dialogue.

The TPP groups together most of China's biggest trading partners in the region, giving it a big incentive to seek to join too.

"But the price of admission would be quite high," Garrett says. "The other members would want some movement on floating the currency, more market access and more protection for property.

"This is a socialisation strategy. It is a Western-oriented, US-led group, reflecting the principles of all the major partners.

"If it wanted to join, China would have to take some domestic steps it has been unwilling to take before."

Garrett says the position of analysts such as the Australian National University's Hugh White, that the intensification of US-Australia military co-operation risks a backlash from China, "assumes a lack of sophistication in the Chinese leadership".

Both countries frequently respond negatively to public assertions of the other's core principles, he says, for instance in China's case to US comments on the South China Sea or Tibet, or in the US case to Chinese comments defending its currency's status, or on trade.

"I view these as pressure release valves, with a focus on the respective domestic audiences. Things that are predictable, and that you know about the other team, won't shock you.

"Might they cause China to stop buying Australian iron ore? That doesn't make any sense because (Chinese) interests don't push in that direction."

Garrett says the heat that Obama has been prepared to take domestically over his forays this week - from the Republicans over leaving Washington as debt reduction talks reach their final stages, and from those on the Left of his own Democrats for pushing free trade agreements they claim to be job-killers - "tells me the Asia-Pacific pivot is pretty important to him".