The Australian

by Geoffrey Garrett

Barack Obama recently responded to a question about his nation-building objectives in the Middle East by saying the nation he cared most about building is the US - ravaged by the global financial crisis, gridlocked by vituperative partisanship and now covered in BP oil slime.

Putting off Obama Down Under, first to fight the healthcare reform endgame and now to respond to the oil spill disaster, is ample demonstration of the domestic imperative in contemporary American politics.

But the postponement should not be used as grist for the mill among naysayers about the US's commitments to Asia and Australia's important place in them. Since the onset of the global financial crisis, the whispers have grown louder that the US is a dying empire destined soon for China's rearview mirror, that Asia will be the first place this is evident, and that Australia will have fundamentally to rethink its international strategy as a result.

This almost apocalyptic vision overlooks two important realities. Talk of the US's demise is exaggerated. The resilience of the US economy has been shown by the recent "flight to quality" back into the greenback amid Europe's debt turmoil and by the global fanfare greeting the arrival of the iPad as a platform for the American-dominated entertainment industry.

In terms of geopolitics, the US is increasingly on the front foot in Asia, with a three-part strategy of allies, institutions and new friends. Obama's "Pacific presidency" strategy has twin aims. The administration is committed to managing down the inevitable frictions in its relations with China, but it also wants to insure against the risks of serious clashes with China by investing heavily in other relationships in the region.

Obama is continuing the US's fundamental China policy that dates back at least 20 years. It is predicated on the notion that economic engagement with China is the best way to promote prosperity in both countries and the world, to reduce geopolitical rivalry as China rises, and to increase the prospects for political liberalisation in China.

At the same time, the fundamental differences in world views between Washington and Beijing mean that some degree of wary coexistence will always shroud the US's economic engagement with China. Enter Obama's Asian triptych of allies, institutions and new friends.

First, Obama wants to strengthen the US's traditional bilateral political military alliances in Asia. With Japan's political system in crisis and the country facing profound structural challenges of staggering public debt and rapid aging with no tolerance for large-scale immigration, the US knows it should not put too many alliance eggs in the Japan basket.

US-South Korea relations are probably better today than they have been for at least a decade. But the ongoing security instability-cum-crisis on the Korean peninsula continues to pose challenges in the US's relationship with South Korea and neither of the two sides has been able to break the impasse in their stalled bilateral free-trade negotiations.

Australia's political and economic future seems more secure than Japan's and, unlike South Korea, there are no major issues to get in the way of Australian-American co-operation. High-level intelligence sharing and rising concerns over cyber security will likely only increase the importance of the alliance to both sides as the 21st century unfolds.

The second element of Obama's Pacific presidency is to get involved in regional institution building. But Obama's US does not want to be a late joiner in the ASEAN-centred and Asia-only regionalism of the past decade.

Instead, the US is looking for institutions that span the Pacific and in which it can play a lead and formative role. Kevin Rudd's Asia Pacific community and APEC could potentially fit the bill. But the APC hasn't gained enough traction and APEC seems tired and outdated..

This may explain why the US is placing increasing emphasis on the Trans-Pacific Partnership negotiations for creating an Asia-Pacific free-trade area among the US, Australia and six small free traders on both sides of the Pacific. In addition to showing American leadership on trade when existing deals such as Doha and the Korea-US FTA remain in the too-hard basket, TPP fits the bill as a US-led Asia-Pacific initiative that the big players such as South Korea, Japan and China might ultimately join.

New friends is the final element in Obama's Pacific presidency strategy. Despite some early bumps, Obama is committed to the US's new partnership with India forged by the Bush administration and centred on its agreement to share civilian nuclear technology.

This Pacific presidency agenda belies grumblings about the US's Asian inaction and indifference. Far from facing the grim spectre of American withdrawal, Australia can look forward to working even more closely with the US in the region in the years to come. An Obama visit would have shined a very bright light on this reality. But the absence of a visit does not detract from it.

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