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One of the significant challenges with commodity investments is knowing when to buy and sell. Some view such investments as a form of institutionalised gambling. However, an understanding of the market, and a firm plan for return on investment, usually underpin investor decisions. Two years ago, the Australian government made such a commodity investment when it purchased $94 million worth of oil and stored it in the US Strategic Petroleum Reserve.

When Australia joined the International Energy Agency back in 1979, it was still a net exporter of oil with enough leverage to control the volatility of the price of fuel in Australia. At the time of joining, Australia was exempt from IEA’s requirement to stockpile at least 90 days of daily net imports. A decline in refining capacity and increased imports over the years have meant that Australia became non-compliant with IEA’s stockpiling requirement in 2012 and has remained so ever since.

In February 2020, Australia held 25, 20 and 22 days of consumption cover for petrol, diesel and jet fuel, respectively. In April 2020, five months into the Covid-19 pandemic, the government officially recognised what countless economists and strategists had warned for over a decade: Australia’s just-in-time approach to fuel supplies and the gradual decline in onshore refining left the nation vulnerable. In response, the government announced the establishment of a national oil reserve. Australia bought roughly 30 million barrels, or three days of national supply at the current usage rate, at the historically low price of US$20 per barrel. It was a sound economic decision, given the dramatic fall in global oil prices. But it also exposed Australia’s lack of bulk storage capacity.

The government signed a 10-year lease agreement to store the oil in the US, arguing there was no more secure place than the US Strategic Petroleum Reserve. There’s no doubt that this is true from a US context. However, the other and more pressing reasons for this arrangement were the rising geostrategic tensions in Australia’s region and a bulk storage problem at home.

But storing oil thousands of kilometres away from Australian shores didn’t make strategic sense then or now. A more secure place would have been on Australian soil had it not been for the lack of commercial storage facilities. In this context, the government’s purchase seems more akin to a wise commodity investment than a means to increase fuel resilience.

A few weeks later, the government announced a three-part fuel security package. The first part of the package was a recommitment to establishing a government-owned oil reserve for domestic fuel security in the US. The second was a commitment to work with the private sector to develop options to increase local storage as quickly as possible. The third involves the government considering a temporary change to fuel standards. Just over two years later, despite the best efforts of the private and public sectors, there’s been no real improvement in fuel resilience.

The expiration next week of the government’s fuel excise discount has brought the issues of fuel prices and energy security again front of mind. The excise cut was always going to be a short-term solution.

The hope was that during the six months when it ran, the oil price would decline from its stratospheric heights. Unfortunately, the effects, albeit well intended, didn’t last long, and the scheme’s benefits have been eaten away by more oil price rises.

The challenges the scheme was trying to tackle are baked in with no easy solution. As of June 2022, Australia had a net import coverage of 58 days and remains non-compliant with the IEA requirement even if we were to count the oil that’s on vessels on their way to Australia. The issue is about more than fuel prices; it is directly associated with Australia’s sovereign fuel production and storage capacity and the effects of those factors on long-term energy security. The government must address an enduring problem at the core of Australia’s access to liquid energy, which fulfils more than half of Australia’s energy demand.

There can be no doubt that in the future, perhaps within a decade or two, Australia’s reliance on fossil fuels will be reduced. But as the country transitions to renewables, liquid energy will still play a role for some years. Australia should therefore increase its liquid-fuel storage capacity in these strategically uncertain times. Of course, such investments are challenging in an environment of economic uncertainty and increasing national debt.

The good news is that the 30 million barrels of oil the government bought in 2020 are worth a lot more today. The economic opportunity cost of the oil Australia has in the US Strategic Petroleum Reserve in the current market, trading at around US$85 per barrel, is easily quantifiable. Harder to measure is the strategic opportunity cost of not having that oil on Australian soil if it takes up to a month for it to arrive here on ships.

It seems that Australia’s commodity investment, which brings little in the way of fuel resilience, has matured. If we sell that oil on the open market and make a profit, what do we do with the money? Of course, there’s the argument that the government should put it towards repairing the budget, which is the reason for halting the fuel excise discount. The other idea is perhaps selling this oil and resolving the real problem by investing in onshore strategic storage.

Since its announcement a year ago, the AUKUS agreement linking the US and the UK to Australia’s ambition to acquire nuclear-powered submarines has divided opinion.

Critics have portrayed the pact as an alliance that could destabilise the security architecture of the Indo-Pacific region. The notion is that a proliferation of nuclear-powered submarines could invite a regional arms race and leave the door open to the eventual arming of future Australian subs with nuclear weapons.

One year on, are the critics right in their concerns about AUKUS? This question can be answered only by understanding what AUKUS is, and what it is not, and why this agreement matters beyond its immediate technical provisions.

AUKUS is not a security alliance. It holds no provision to suggest such a notion, nor were any of the steps undertaken so far aimed at making it an alliance.

AUKUS is a technology accelerator agreement for the purpose of national defence, no more, no less. It is designed to allow three countries to work closely together to translate the promise of today’s maturing technologies, such as quantum computing and artificial intelligence, into tomorrow’s military edge.

Last April, the three participating governments said that the implementation of AUKUS would be overseen by senior officials and joint steering group meetings that would define different lines of effort.

These areas would be developed through 17 technical working groups. Nine of them are focused on the submarine program, while eight relate to advanced capabilities. This is not an alliance-building policy process, though the sensitive nature of the technologies in question demands a commitment to sharing highly classified information.

This clarification leads to a second observation. AUKUS is not about achieving stability through a form of deterrence delivered by nuclear-armed submarines.

Rather, the themes in the working groups on advanced capabilities suggest that the main aim of the pact is to elevate the intelligence and deterrent value of conventional capabilities.

In this regard, one of the most striking assumptions about AUKUS is the belief in technology as the key to unlocking the full potential of conventional undersea capabilities through enhanced early warning and, if needed, unmatched targeting precision.

Moreover, AUKUS has revealed how leaders in the three national capitals view the maritime domain as a central pillar to the stability of the Indo-Pacific and the wider international order.

This is why understanding what AUKUS is about matters strategically. It matters because it sheds light on a worldview in which the sea is vital to international affairs and, as a consequence, technology that allows for better operation in, and from, this domain has critical value.

AUKUS’s worldview is one that stems from the recognition that the maritime foundations of the international order stand vulnerable to state coercion. Safe and secure shipping lanes and intact undersea cables are engines fuelling economic prosperity and political stability. This is true in the Indo-Pacific as elsewhere.

The recent Russian blockade of Ukraine’s Black Sea access and China’s military manoeuvres across the Strait of Taiwan are reminders of the risks of disruption to global prosperity at the hands of states willing to exploit the maritime order to exert political pressure.

AUKUS is, therefore, a down payment to prevent one of the most critical components of the international order from being further destabilised.

AUKUS is a statement about why such a specific technology agreement has wider strategic relevance. It does not destabilise regional security because no other piece in the regional architecture is designed to ensure that the sea remains open to business and unchallenged by revisionist states.

Yet, like any investment in future capabilities, AUKUS is likely to change over time. The sensitive nature of the advanced capabilities explored in the collaboration, from submarines to hypersonic missiles, will invite greater proximity and strategic convergence among the partners. The recent news that Australian submariners will train on British boats implies the understanding of such a demand and the willingness to pursue it.

This is the second reason why AUKUS matters strategically. In a context in which advanced technology will matter increasingly more to maintain a military edge, only trusted partners will be able to achieve the most from defence collaborations.

In AUKUS’s case, renewed conversations about cooperation between Australia and France, and among Japan and the AUKUS partners, indicate that AUKUS is not an exclusive club but one with a membership defined by high standards of innovation and information security.

This doesn’t mean that AUKUS won’t face challenges along the way before Australia deploys nuclear-powered submarines in 2040. Implementing the agreement will put national industrial capacity under pressure. Recent comments from senior American officials suggest that the idea of building the initial submarines for Australia in the US could be problematic.

On the other hand, until the propulsion system is chosen, the design and building of the boats remain an open question. When considered against the impact of technology on future changes in systems and sensors, the division of labour is likely to remain a major changing variable.

What is certain is that one year on, AUKUS has started to chart a clear path as to what it is and why it matters. AUKUS is set on a path about a maritime-informed worldview in which accelerating advanced technology cooperation might very well make the difference in how strategic advantages can be secured and maritime stability can be maintained.

The $1 billion failure of the Super Seasprite helicopter project was a low point in Australian government procurement. It seems incomprehensible that the Department of Defence could ever replicate it.

In detailing a rapid deterioration in regional security, the 2020 defence strategic update highlights that Australia can’t afford to spend time or money on projects that don’t deliver the required warfighting capability efficiently and effectively. The scope and complexity of the capabilities required for Australia’s security are expanding, while the timeframe for procurement is decreasing. Supply-chain issues are bringing new pressures to design and manufacture more in Australia. Defence must be an effective ‘smart buyer’ as envisaged by the first principles review, which considered it critical that decision-makers assess ‘whether risks and interdependencies have been identified and managed’.

Test and evaluation (T&E) is a key systems engineering tool to identify risk across the capability life cycle, and Defence has long had dedicated policies outlining why it’s important and detailing how it should be used in acquisition, sustainment and force generation.

Following multiple reviews, there have been periodic ‘new’ pathways to establish (or recover) and sustain an effective T&E capability. As the various defence procurement and capability manuals have been updated, a consistent theme has been the vital role of T&E in informing risk-based decisions.

In recommending a smart-buyer approach, the first principles review assumes that Defence can use a T&E process to assess whether risks and interdependencies have been identified and managed. T&E has more recently been recognised as one of the 10 initial sovereign defence industry capability priorities.

Given this consistent emphasis, it should surprise taxpayers that almost every review into defence procurement delivers a negative assessment of how Defence deals with T&E. Concerns include difficulties in defining, creating and sustaining an experienced workforce; the lag and surge of experience on a project-by-project basis that makes it difficult to apply effective T&E early in the capability life cycle; a lack of coordination between the various entities that are stakeholders in defence T&E (including industry); a lack of coordinated investment in T&E infrastructure; and a lack of accountability to ensure that projects engage T&E and take meaningful account of any subsequent reports.

The first principles review highlighted the need to strengthen and place at arm’s length a continuous contestability function that operates throughout the capability development life cycle from concept to disposal.

It transferred accountability for setting and managing requirements to the vice chief of the defence force and the service chiefs within a regime of strong, arm’s-length contestability.

For contestability to be effective, the risk-identification function must be independent so that assessment is made without bias or influence, intended or unintended. Independence also ensures that the assessor of risk has a voice—not a veto—that is heard at each decision-making level of the capability life cycle. Defence and ultimately the National Security Committee of Cabinet should always make the final risk-based decisions as they are responsible for providing military response options to government.

The first principles review recognised that Defence must ensure that committed people with the right skills are in appropriate jobs. Competence is a matrix of qualifications and experience relevant to the task at hand. Those who performed competently as operational commanders or maintenance engineers may not be competent to assess technical performance, integration and certification risk.

Risk assessors working within Defence face various barriers, individual or organisational, that influence whether their voices are actually heard. Risk must be assessed and the results considered by decision-makers. Given the costs and national security implications, the taxpayer deserves to know that this is occurring, despite the commercial and security considerations of full transparency. There’s already a good model for this. The Office of the Inspector-General of Intelligence and Security conducts regular audits of the national intelligence community as well as specific investigations and reports to the relevant minister and the Parliamentary Joint Committee on Intelligence and Security.

Measures to identify and manage risks and interdependencies must be professional and appropriate to needs across the capability life cycle. This is also true for off-the-shelf products that may be used by an ally. In the Australian mission and environment, an allied capability may be the best option to buy, but those operating and managing it, the government and the taxpayer deserve to know that what is being bought may not be capable of everything hoped of it. It could require additional funding, or a supplementary capability may be required for some tasks. This knowledge is important for operational planning, forecasting funding, and even reputation management.

Facing similar issues, the US Congress legislated for independent T&E providing mandatory annual reporting to Congress on all major defence acquisitions. A UK company, Qinetiq, provides technical support to Britain’s Ministry of Defence, including T&E. This model provides independence and highlights that industry can take a lead in determining competence and training requirements, providing training, and managing test ranges and infrastructure.

The defence strategic review should bring a different approach embracing these principles.

It should recommend establishment of a defence capability assurance agency (DCAA), an independent statutory body to assess risks associated with materiel procurement and sustainment, which may include technical risk, systems integration risk, force-integration risk, contractual risk, process risk or even reputational risk. It would be led by a director appointed by a board and its workforce would be qualified and experienced T&E practitioners drawn from defence and industry. The agency would report to the defence minister and parliament.

The DCAA would be required to evaluate risk at agreed points across the capability life cycle and its recommendations would be included in briefs to project managers, assurance bodies, the defence investment committee and the NSC. The agency wouldn’t have a veto but it would ensure that risk-based decisions have a credibly informed basis.

The agency should have a long-term agreement with an Australian industry partner to provide depth of domain expertise and a consistent comprehensive approach to T&E through the life of multiple platforms, environments and systems. The industry partner wouldn’t necessarily conduct all T&E, but as a minimum would oversee the qualifications and professional standards of the workforce conducting T&E.

Defence already has a good model for this approach—the technical airworthiness system. The Defence Aviation Safety Authority (DASA) provides assurance, through assessment of candidate suitability and ongoing audit, that anyone working in this mission-critical and safety-critical area have appropriate qualifications and experience. DASA also provides a range of specialised support services where deep domain expertise is required, such as in aircraft structural integrity.

The industry partner should provide a regulatory function analogous to DASA, in essence acting as the DCAA regulator, and it would be required to sustain an expert workforce providing the capacity to surge, mentor, support and develop T&E practice in support of defence capability. The industry partner could also be responsible for the quality and operation of T&E infrastructure and efficacy of training. Subject to an assessment of probity measures, the industry partner may be limited to selecting, auditing and managing contracted training providers or may also provide a range of in-house T&E training for defence and industry stakeholders.

Scale and flexibility would be achieved by the DCAA drawing on defence personnel or industry providers that meet the qualifications and experience required by the DCAA regulator. This T&E domain expertise would be complemented by the recent operational experience of defence force operators or engineers with relevant T&E training being embedded within DCAA. They could also audit the compliance with qualifications and experience requirements for defence or civilian T&E staff who may be external to the DCAA to comply with operational regulatory requirements.

Defence should be audited to ensure appropriate engagement of the DCAA and transparency of subsequent reporting of identified risks. This should be conducted by a small team with security clearances and subject to protections for commercial-in-confidence information. It would work as part of an independent assurance office.

There are units and individuals within Defence who are professional and competent technical risk assessors, but the organisational inability of Defence to generate, sustain, consistently task and transparently respond to a credible assessment of risk in procurement and sustainment is well known.

The defence strategic review shouldn’t seek to initiate yet another review of T&E within Defence. The strategic imperative for Defence to be a smart buyer, now, should compel the government to instigate legislative reform to establish an independent capability assurance agency.

Which country is Australia’s most important defence partner in Southeast Asia? I’m guessing not many readers of The Strategist would put the Philippines at the top of their lists. The correct answer, of course, is, ‘It depends.’ Yet, for some of the most demanding military scenarios that may confront the Australian Defence Force in the decade ahead, such as a war over Taiwan or in the South China Sea, the Philippines could be an indispensable partner because of its location and potential willingness, as a fellow treaty ally of the United States, to grant access and logistical support to Australian forces. Although low profile, the Australia–Philippines defence relationship has surprising depth and potential, meriting a closer look.

Australia’s deepest defence ties in Southeast Asia are with Malaysia and Singapore, through the Five Power Defence Arrangements (FPDA) and as bilateral partners in their own right. Singapore’s military capabilities are the most advanced in Southeast Asia. But the utility of the FPDA in a South China Sea contingency is questionable because its remit is limited to West Malaysia and Singapore. The probability of these countries extending basing access to Australian forces for operations to defend Taiwan is almost certainly lower.

Australia’s defence relationship with Indonesia attracts a political premium for Canberra, but it lacks strategic underpinnings and Jakarta is unlikely to offer access for the ADF beyond transit through the archipelago. Vietnam holds out more promise of a like-minded approach to pushing back against China’s expansionism in the South China Sea. But Hanoi keeps its distance from the US and its allies in the military domain. Australia has expanded its defence relationship with Brunei since 2020, but like most Southeast Asian countries the small sultanate would tread very carefully in any crisis or conflict involving China unless it is directly threatened.

The US is likely to confront similar ambivalence across Southeast Asia, including from its ally Thailand. Laos and Myanmar would remain neutral, at best, while Cambodia is in an invidious position as the prospective host for Chinese naval and possibly air force assets.

The Philippines has been portrayed as an unreliable ally of the US, with some justification. The 2014 Philippines–US Enhanced Defence Cooperation Agreement failed to progress significantly under Rodrigo Duterte’s dyspeptic presidency. The vital visiting forces agreement was nearly terminated. But alliance relations have stabilised since 2020. Beijing’s relentless pressure tactics in what Filipinos call the West Philippine Sea have darkened perceptions of China in the Philippines. The government under President Ferdinand Marcos Jr, though still new and by no means anti-China, appears to recognise the irreplaceable value of the US alliance for deterring further aggression by China, despite Washington’s mixed record of deterrence in the South China Sea.

In Philippine military circles there’s a sense of realism that proximity to Taiwan would make it extremely difficult for Manila to stay on the sidelines during a major conflict there. In the worst case, China could occupy Philippine islands in the Bashi Channel or even parts of northern Luzon, to deny the use of adjacent territory to the US or its use as a safe haven for Taiwan’s armed forces. Fighting could spread to the South China Sea proper, including China’s artificial island bases, one of which—Mischief Reef—sits within the Philippine exclusive economic zone.

The fraught prospect of a high-intensity maritime conflict between China and the US shines an uncommonly intense light on defence ties between Canberra and Manila. Fortunately, Australia and the Philippines, which have been comprehensive strategic partners since 2015, have already established a notably broad-based and durable bilateral defence relationship. It has deeper historical roots than widely assumed. In World War II, Australian forces made an active contribution to the liberation of the Philippines, incurring significant losses at Lingayen Gulf. The newly independent Philippines and Australia fought side by side in the Korean War.

In more recent times, the basis for cooperative defence activities was a bilateral memorandum of understanding agreed in 1995. That opened the door for members of the Armed Forces of the Philippines (AFP) to receive education and training in Australia. Around 100 AFP, coastguard and civilian defence personnel do so every year. ADF mobile training teams also deliver courses in the Philippines. Terrorism was the main focus of security cooperation with the Philippines for almost two decades after the 11 September 2001 attacks on the US. The culmination of that effort was Operation Augury—Philippines, which provided training to more than 10,000 AFP personnel during and after the siege of Marawi city, from October 2017 until December 2019, when the operation transitioned to become the Enhanced Defence Cooperation Program. Since then, the emphasis has shifted towards assisting the AFP’s modernisation and external defence plans.

Defence capacity-building delivered to the Philippines has focused on maritime security and domain awareness, as well as the lingering threat from terrorism and pandemic healthcare more recently. In July 2015, Australia donated two landing craft to the Philippine Navy. A further three were acquired in March 2016.

Australia is the only country apart from the US with which the Philippines has a reciprocal visiting forces agreement, signed in 2007. It entered into force in September 2012, fortuitously facilitating the ADF’s delivery of disaster relief assistance to the Philippines in the wake of Typhoon Haiyan in 2013. In August 2021, the two governments concluded a mutual logistics support arrangement, providing a second pillar to sustain the deployment of ADF assets and personnel to the Philippines. It would be too crude to suggest that Australia provides capacity to the AFP and receives access for the ADF in return, though that does provide a basis for reciprocity in the defence relationship. Underpinning the relationship at a human level are close interpersonal connections across the armed services and defence bureaucracies.

Like most militaries in Southeast Asia, the AFP is army dominated, despite the Philippines’ archipelagic geography, but there are also bilateral links between the Australian and Philippine navies and air forces. The Anzac-class frigate HMAS Arunta and corvette BRP Apolinario Mabini exercised together in the Celebes Sea in September 2020, and Australian navy patrol boats have previously been deployed to the Philippines. The Philippine Air Force is currently participating in Exercise Pitch Black in northern Australia. Earlier this year, the Royal Australian Air Force delivered a combat air control simulator to the Philippine Air Force ‘to support training’. Since at least 2017, the RAAF has periodically conducted surveillance flights over the South China Sea from the Philippines.

In May, one of a pair of RAAF P-8A Poseidon aircraft operating from Clark Air Base, north of Manila, was unsafely intercepted by a Chinese J-16 fighter reportedly near the Paracel Islands. Australia’s ability to fly P-8A missions out of the Philippines demonstrates the strategic potential of the relationship. One obvious deficiency in defence relations is the absence of an industrial-level partnership. The recent failure of Australian shipbuilder Austal’s bid to supply six new offshore patrol vessels to the Philippine Navy was a missed opportunity in this regard.

One reason Australia’s defence profile in the Philippines doesn’t receive more attention is because the US alliance still tends to overshadow Manila’s defence policymaking. Australia’s defence offer to the Philippines is on a modest scale compared with US programs. Nonetheless, Australia benefits from operating in a complementary fashion without the political drag that sometimes attaches to US activities in the Philippines because of historical baggage.

US military exercises with the AFP provide opportunities for the ADF to train alongside Americans and Filipinos. In the 2022 iteration of Balikatan, for example, Australian commandos took part in a helicopter raid on the island of Corregidor together with US and Philippine marines. However, Australia’s population is around a quarter of that of the Philippines and there are just 60,000 ADF personnel in uniform. Canberra therefore needs to manage Manila’s expectations of what Australia can realistically deliver, short of a formal alliance.

Australia’s defence partnership with the Philippines is repaying the dividend of past investments at a time when the limits to more traditional relationships in Southeast Asia are becoming increasingly apparent.

Missed by many amid Russia’s war on Ukraine, Australia’s federal election and China’s inroads into the Pacific was the European Union’s strategic compass, launched in March after almost two years of development. As Deputy Prime Minister and Defence Minister Richard Marles announces a visit to France, we should understand its importance—and its significance for Australia—and encourage its implementation.

Much happened in the past two years, including Covid-19, a deterioration in EU–China relations and Russia’s invasion of Ukraine. In this context, the strategic compass is a potential game-changer or, in the words of EU High Representative for Foreign Affairs and Security Policy Josep Borrell, a ‘turning point’. It’s the first time the 27 EU members have come together to focus on defence and security rather than just trade. France considers it a significant achievement of its role as chair of the EU Council.

The strategic compass, which the EU Council describes as ‘an ambitious plan of action for strengthening the EU’s security and defence policy by 2030’, launched in a ‘more hostile security environment’. It is aimed not only at empowering the bloc’s strategic autonomy, but also at fostering its cooperation with security partners. It coincides with NATO’s launch of its 2022 strategic concept, which in an unprecedented way refers to China as a challenge.

This shift in Europe comes at a time when Australia is resetting its relations with France following the cancellation of the Attack-class submarine project and with the EU after years of misalignment on climate policy. Australia’s national security and regional stability require both resets to happen, so the government should embrace the compass as an opportunity to proactively encourage the EU’s strategic shift, notwithstanding its focus on Russia.

The EU has for many years approached its relationship with China hoping an engagement strategy that was relatively silent on malicious activity would result in both EU economic prosperity and increased liberalisation in China. The result has been some economic prosperity but more dependence and interference, with greater opportunities for attempted coercion by Beijing.

While the EU’s 2021 Indo-Pacific strategy referred to China as a systemic rival, it also called it a partner. This is true for almost all countries by virtue of China’s trading relationships, but the inconsistency and ambiguity were always a short-term tactic rather than a long-term strategy.

The strategic compass needs to be that long-term security strategy. A lasting problem is that some EU members view the US with cynicism. The clear emphasis of the compass on EU security autonomy is in part born out of an aim to quell limited but loud public discontent about the union being too reliant on the US. Ensuring the US is held accountable for its actions is vital, but EU members’ hesitancy to consistently hold Beijing to the same standards has hurt Australia, because it feeds into regional fears of Beijing’s coercive power and reinforces a false narrative that strategic competition is limited to the US and China.

On the other hand, EU countries collectively have more influence and trust than they may realise in Southeast Asia and the Pacific. Australia should work with the EU to turn this position of trust into a position of positive influence. The strategic compass must be part of this, with Australia able to emphasise the strategy’s focus on strengthening security partnerships with both the EU and individual member states. This is vital for foreign and defence policy, to ensure EU members know that groups like AUKUS and the Quad don’t rule out broader security partnerships.

The EU’s experience with China should be a key lesson for our region, which would benefit from EU members being upfront about the challenges they have faced. The Chinese government has tried to use its economic heft to bully and coerce individual EU members like Lithuania and the union as a whole. By itself, the Baltic country would not have stood a chance, but the EU showed its collective strength and how to counter coercion from a major power. This is something that single member states too often forget.

The response required EU members to be willing to forgo short-term economic gain and impose costs—both reputational and economic—on Beijing, a combination that has in the past often proven to be an insurmountable obstacle for collective action. It stymied China’s attempt to embed itself in Europe through the 17+1 trade grouping and other initiatives—thinking it could rely on those in Europe who thought the easiest way out of economic crisis was through Beijing’s largesse. The 17+1, now effectively 14+1 after Lithuania and, more recently, Estonia and Latvia left, is on the verge of collapsing because of China’s malicious activities, in particular economic coercion and failure to deliver promised results.

While the EU–China relationship shouldn’t have become as entangled as it did, the Lithuania case was the catalyst for refocusing on individual and regional sovereignty. The EU has finally found some momentum to look after its unity and integrity.

Why does this matter to Australia? Apart from the principle of supporting all partners subject to coercion, the similarities with the Pacific are clear—China is picking off those small nations keen on quick financial support and making inroads through what it sees as weak links.

Hoping, or even expecting, a Lithuania-style own goal from Beijing in the Pacific is not a strategy. Australia now has a chance to become the leading partner for the EU in the region, especially with its renewed focus on climate policy that matches the Pacific’s top priority, as well as the EU’s. Combine that with Australia’s efforts to reset with France and expect to see a Pacific program as part of reinvigorated relations.

Active Australia–EU collaboration, along with partners such as the US and Japan, can ensure we are not just relying on China’s own goals but scoring plenty of our own.