The Australian

By Geoffrey Garrett

JULIA Gillard's speech to the US congress today celebrates the six-decade history of Australia's geopolitical alliance with the US, built on the two countries' deep stock of shared values and interests and manifested by their fighting side by side in every significant international conflict, from World War II to Afghanistan.

But Gillard and Barack Obama know that the challenges facing the alliance in the next few decades will be different from those it was originally designed to meet.

For the first 40 years of the alliance, the Soviet Union was a profound political and military threat to the US, Australia and other democracies, but its economy was irrelevant to the capitalist world.

Today, the West remains sceptical about China's political and military ambitions but China's growing global economic weight has been a defining feature of the past two decades.

If the 20th-century Australia-US alliance was born of the need to contain the Soviet Union, one central focus of the 21st-century alliance will surely be China. The key challenge is to maximise the benefits for all of China's rise while working to ensure that China becomes a responsible global stakeholder and to insure against the risk that it does not.

The other big change from the 20th to the 21st century for the alliance concerns globalisation. The speed, density and breadth of contemporary global interconnections and interdependencies dwarfs anything that could have been imagined even 20 years ago at the end of the Cold War. One important consequence of this is the blurring, if not obliteration, of the traditional divide between domestic and foreign policy.

What to do about climate change is an obvious example. Obama and Foreign Minister Kevin Rudd proposed emissions trading schemes for their countries on the presumption that national action would go hand in hand with international action. The failure of the Copenhagen summit to secure a global deal at the end of 2009 sounded the death knell for Obama's and Rudd's proposals and clouds the debate over Gillard's carbon tax.

But the brave new realities of emerging Asia in a globalised world do not render the Australia-US alliance outmoded or its foundation of shared values and interests irrelevant. In fact, there is every reason to believe that the alliance will be at least as important to both countries in the next half century as it has been in the past, with more issues on the table and more avenues for the two nations to collaborate in addressing them.

In terms of security, look for Australia and the US to intensify their support for open regionalism in the Asia-Pacific, promoting freer trade and investment and furthering the cause of political openness. This was a central message in the extended trips by Obama and US Secretary of State Hillary Clinton to Asia and Australia last November. Obama in particular extended the language of shared values and interests to US relations with India and Indonesia. Both talked about renewed American commitment to the Asia-Pacific and to building institutions in the region.

These initiatives were well received in Australia and across the region because of worries about unwarranted and unwelcome Chinese assertiveness in 2010.

There are serious impediments to moving the Asia-Pacific Economic Co-operation forum beyond its status as a useful talking shop. Rudd's notion of an Asia-Pacific community proved too ambitious. Obama had little choice but to join the East Asian Summit after the benign neglect of Association of South-East Asian Nations-led institutionalism in the Bush era.

Expect more attention in Australia and the US to be devoted to the Trans-Pacific Partnership, an emerging grouping of free traders on both sides of the Pacific that it is hoped will soon draw in Japan and South Korea, and perhaps ultimately even include China.

TPP reflects the shared US-Australian strategies to bind together countries in the region around shared values of economic and political openness. Both sides also hope that TPP and other such regional institutions will socialise China into adopting their principles, if not actually joining them. But in the interim the impetus behind TPP will remind China that many countries in the region have values and interests similar to those of Australia and the US.

While the geopolitics of the Asia-Pacific must be a central focus of Australia-US relations, there is also great value for both countries in confronting common problems at home by sharing experiences and expertise.

Sustainability is a perfect example. Creating green-tech jobs, managing scarce water resources, moving to cheaper and lower-emissions fossil fuels such as natural gas, and replenishing soils to increase agricultural productivity and store carbon are daunting challenges for both countries. They are not the conventional stuff of international relations and big global agreements seem, at best, a long way off.

Australia and the US will, in the first instance, have to address the challenges of sustainability domestically. But doing so amid awareness of the opportunities and constraints in both countries can improve the domestic policy process and lay a stronger foundation for international action.

To be sure, there are disagreements between the two countries. Australia is a stronger supporter of the Doha free trade agreement than the US. It was also out in front of the US on the idea of a no-fly zone in Libya. And it seems more supportive of Julian Assange.

But these pale behind the bedrock of shared values and common policies between the two countries. The Australia-US relationship was forged against the dire backdrop of wars, hot and cold. But it provides a platform for joint problem-solving that is of increasing value to both countries.

Geoffrey Garrett is chief executive of the United States Studies Centre at the University of Sydney.