I was privileged to be in the audience last month for an address by former Prime Minister Paul Keating. I have long been an admirer of Mr Keating for his vision and courage while in office, and, of course, his famed rhetorical flair. He didn’t fail to deliver on this occasion. He spoke with eloquence: on his defence of the Alliance during the Cold War; and on his predictions for both America’s decline on the global stage and the inevitable rise of China—as he argued are ordained by history.

It was fascinating. It was articulate. It was wrong.

His primary error is in assuming an inevitability to the rise and fall of nations. At the end of the 19th century, Argentina was expected to be a superpower. In 1979, there were very few who expected the Soviet Union to fall in 1989. And by 1989 there were even fewer who anticipated where China would be today. As the great American philosopher Yogi Berra taught us: ‘It’s tough to make predictions. Especially about the future.’

Presumably because of this inevitability thesis, there’s an insistent murmuring in certain sectors of this country that Australia must make a choice: America? Or China? I frankly find this a bewildering notion—not least because neither China, nor the US, are actually asking this question of Australia.

Now, a nation’s foreign policy is derived from its interests and principles. With every country there’s a Venn diagram of where these overlap. The goal is to maximise the benefit derived from the overlap and minimise the friction in areas that don’t overlap. Regardless of who sits in the White House, US foreign policy always has these three underlying touchstones.

1. The defence of a political philosophy of basic civil freedoms, the rule of law, and government by the consent of the governed. Our own peace and security are enhanced when these rights are enhanced.
2. A global trade system that is not zero sum and is underpinned by internationally agreed rules.
3. To better secure the foregoing, we enter into treaties and alliances.

I believe Australian foreign policy has a very similar basis.

The US–Australian alliance has been mutually beneficial. When we have worked together, it’s because Australia determined it was in Australia’s interest for us to work together. This is not some perverse finger trap—broken only by severing the bonds of allegiance. Nor is it fuelled by misty nostalgia without regard to current realities. This has always been a working and effective partnership—one in which we sometimes speak bluntly to each other; but then go and grab a beer together afterwards. This is ‘independent Australian foreign policy’ at work.

Peter Varghese recently commented on what he called the ‘phony debate’ on whether there’s an independent Australian foreign policy. He said those people: ‘should pay more attention to the historical drivers of Australia’s Asia policy. If they did, they’d recognise a fairly consistent pattern of seeing Asia through the prism of Australian national interests. And where Australian policy coincided with first British and then American policy in the post war period it was not imitation or dependence, but shared interests that shaped the coincidence.’

You may say that was in the past. Now, the US is withdrawing from global leadership. But just where is this withdrawal? Not in the Middle East, where we continue to support the pushback against ISIS and the development of Iraq. Certainly not in Afghanistan—the President has just released his strategy for Afghanistan and South Asia. And not in Asia where, you may have heard, we are committed to working with our allies in resolving the many grave threats posed by North Korea.

We don’t need to look beyond our own region to see the new administration, at the highest levels, pursuing bilateral, trilateral and multilateral partnerships to solve the world’s most pressing issues, old and new.

In the first nine months of the Trump administration, our countries have had leaders’ meetings, attended high-level strategic dialogues, enjoyed Vice-Presidential visits and had the President’s commitment to attend regional meetings later this year. These are not the actions of a country fleeing from multilateralism. They are the actions of a country working closely with the world at large. Check out the number of conversations between Trump and Xi, Abe, Moon, Modi, and Turnbull.

However—and this is the crux of the matter—we are engaging on our own terms. I draw upon President Trump’s remarks to Prime Minister Abe earlier this year in seeking a ‘trading relationship that is free, fair and reciprocal, benefitting both of our countries’. This is no different to how Australia or China or any previous US president has operated on the world stage. We all want the best outcomes for our people.

And peace, prosperity, and security in the Indo-Asia–Pacific—indeed, the world—is in the best interests of the US. Secretary Mattis affirmed last month that ‘each nation gains security in concert with other nations’. And, as Vice President Pence has repeatedly said, ‘America first’ does not mean America only. Let’s not forget, even before the Obama administration announced its Asia Pivot in 2011, we were deeply involved in Asia.

Our goal remains to reduce barriers to, and raise standards for, trade and investment, regionally and globally, while upholding the rules-based order to ensure the continued safety and prosperity of our people. The difference is that our modus operandi is now written in bold. And underlined a few times. And then tweeted for good measure. That’s democracy for you. But you are all well-versed in how to peer beyond the rhetoric, to see through the daily media fodder and focus on tangible actions and outcomes.

Mr Keating noted in his address last month that China has provided 60% of global economic growth since the GFC in 2008. This is true. China is currently the world’s number one trading partner—indeed, it’s America’s number one trading partner.

But the US is a pretty handy partner too. We offer reliability, market access, capital, technology, work opportunities, and joint ventures that are not government mandated. Your companies trust our courts as avenues for unbiased dispute resolution. That’s why the US is, by far, the largest destination for Australian outbound investment. We can each pursue our economic interests knowing we’re working in an environment of predictable standards and practices. That’s why Australian companies operating in the US made more than $60 billion in sales last year. That’s why American firms have created 335,000 highly-paid jobs in Australia. And that’s why we are Australia’s most significant economic partner. That’s the economic value of shared interests and principles.

We have a history of investment in this country that has weathered wars, withstood economic crises and witnessed world leaders come and go. The veins of this partnership run deep—not just at the government level, but between individuals, companies and institutions. They run deep because our nations—and our people—operate on the common principles of individual liberties, equal rights and, to steal that wonderful Aussie phrase, the principle of ‘a fair go’.

One commentator, debating the so-called US/China choice last month, argued that China is Australia’s most important economic partner because ‘we could replace one but not the other’. Who would ever posit that greater reliance on a single customer is a good idea? This perspective discounts the sheer impact of US investment in Australia—which is worth more than the 2nd and 3rd largest investors combined. And it completely ignores the consequences for Australia’s next largest export markets—Japan and Korea; not to mention the huge potential of India. We need only to look at the official tightening of Chinese foreign investment to conclude: it may not be entirely up to you.

China is and will continue to be a critical counterpart in the region and the world, as it should be. Our bilateral relationship is deep and we cooperate across a broad range of global issues, including non-proliferation, counter-terrorism and climate change. And Chinese investors continue to flock to the US market for those very same benefits as Australians. Anybody who thinks the US is a replaceable economic power clearly has not told the Chinese.

Beyond the alarmist headlines, China and the US enjoy and work to strengthen a very productive relationship even as we have strong disagreements on certain matters. The Chinese economic miracle could not have happened without the rules-based order the US, Australia and Japan have long supported. But to reiterate a recent sentiment expressed by Secretary Tillerson: with economic power comes security responsibilities. China has a huge stake in maintaining the system that got them to where they are today.

I hark back to July 1973 when Gough Whitlam told the National Press Club in Washington: ‘… in our efforts to redress the imbalance of a generation of unthinking hostility towards China, we do not propose to introduce a new imbalance by discarding or downgrading older relationships’.

Earlier this year, Dennis Richardson noted that Australia has two friends; one Alliance. Two strong economic partnerships; one firm, historic friendship. There is no either/or. The trite phrase ‘more Asia, less America’ might as well be ‘more walking, less gum-chewing’. I think you can do both.

Australia continues to reap the rewards of significant economic and irreplaceable strategic relationships across the Pacific. You have achieved security and a record run of economic growth by following your interests and principles. So it really begs the question: if you’re sitting on a royal flush—why so eager to discard the ace?

Defence Department Secretary Dennis Richardson retired today, after 48 years in the public service. In that time he also headed ASIO and DFAT, and served a term as Australia’s ambassador to Washington. This is an edited version of his farewell speech at the National Press Club in Canberra on the complex three-way relationship of Australia, the US and China.

 

[When I] joined the public service in 1969, the Cold War was 22 years old, and had another 23 years to run. Then the US economy accounted for 37.9% of the global economy while China, then in the midst of the Cultural Revolution, accounted for just under 3%. Today, China’s share of the global economy is 15.5%, with the US at 24.4%, demonstrating both China’s remarkable rise and American resilience.

The events of 9/11 and the subsequent operations in Iraq led to us being militarily engaged in the Middle East alongside the US for most of the past 16 years. The global financial crisis of 2008-9 gave rise to populist and economic nationalism in many Liberal Democracies, contributing to politico-strategic uncertainty and anxiety. That populism, in part, also saw the election of Donald Trump.

All of that, especially the rise of China and the arrival of President Trump, have raised questions about the continued relevance and value of our Alliance with the US and the question of ‘independence’ in Australian policy. But any reassessment of the Alliance should flow from clear-eyed analysis and judgement, not the emotional reaction to one person.

Australian governments generally have a strong and consistent record of charting their own course, with the Alliance part of the overall strategy, not the driver. Indonesia is perhaps the best example of where Australian and US approaches have often diverged. And Australia’s approach to New Zealand after its effective withdrawal from ANZUS in the early 1980’s is another.

At decisive points, Australian governments have very much done their own thing or have pressed the US hard to take a particular course to serve our own interests.

The Howard Government’s decision in 2005 to seek membership of the East Asia Summit and the decision by the Bush Administration to call a G20 Leaders Meeting in 2008, as opposed to a G13 or G14 which would have omitted Australia, are but two examples.

Including the Korean War, Australia has been involved in ten major military operations since 1951, excluding operations such as Cambodia, Rwanda and the Solomon Islands. The US was not involved militarily in the Malayan Emergency or Konfrontasi, and was in a supportive role in East Timor. The Korean War and the 1991 Iraq War were backed by Chapter 7 UN resolutions. Somalia, East Timor and Afghanistan were also supported and framed by UN resolutions.

Without US leadership and involvement, we would not have been in most of the conflicts since 1951. But the Alliance has not always been the sole driver of decision making, with our presence in Iraq/Syria and Afghanistan today serving strong national interests independent of the Alliance. In some instances, without the US we would not have been able to give full effect to our own national interests through the use of force. And sometimes the use of force is necessary.

The Alliance was the dominant reason for our involvement in Vietnam and in the invasion of Iraq. It’s also arguable that, given the world as seen from Canberra in the 1960s, there was a respectable case for Vietnam, independent of the Alliance. And, in the case of Iraq in 2003, the government was very careful about the extent and nature of its on-ground commitment, in contrast to the UK. Australian governments have generally been pragmatic and hard headed in weighing Alliance considerations on matters of war and peace. Understanding that is critical at a time when it is all too easy to opportunistically suggest that Australia lacks policy independence.

We need to ensure that military operations don’t drive policy. Beyond operations, military-to-military activity needs to be conducted within a deliberate policy framework. A decision to embed an Australian naval vessel within a US carrier strike group should always be considered a matter of policy, not a routine navy to navy activity.

The preparedness of the US to share sensitive military technologies and capabilities is now more essential to our defence and broader strategic interests than ever.

Intelligence sharing arrangements, have expanded enormously, but are well understood and appreciated by the Australian community because of enhanced transparency and accountability, and the immediacy of terrorism.

China’s relationship with Australia is beyond the imagining of 50 years ago, including: our largest merchandise trading partner by far, a growing investment relationship, people-to-people ties encompassing tourism, education and migration, and developing defence ties. Australia and China are in the 20th year of annual Defence Strategic Dialogues. The range and scope of joint military exercises has slowly increased, albeit from a very low base.

But it is no secret that China is very active in intelligence activities directed at us. It is more than Cyber. That is no reason to engage in knee jerk anti-China decision making or to avoid seeking to build a stronger relationship with China. It’s simply the world in which we live.

Foreign investment proposals from China are weighed carefully, but it doesn’t follow that because one electricity grid can go to a Chinese entity, another must.  Those who argue for so called consistency across a single sector of the economy should be careful of what they seek. We should have open and frank discussions with China about this. Certainly, they are not bashful in denying foreign investment opportunities in their own country.

Likewise, China’s government keeps a watchful eye inside Australian-Chinese communities and effectively controls some Chinese language media in Australia. We have substantive concerns about China’s activities in the South China Sea, and look to China to do much more on North Korea.

I’ve always thought that we in Australia do not always see the full dimension of the US/China relationship, in both its depth and complexity. The US and China are strategic rivals. There are, and will continue to be, points of real tension. The dynamic will play out for many decades. Misunderstandings could lead to miscalculation. But both seek to manage the relationship reasonably sensibly and work hard to avoid military conflicts.

I think Australia’s relationship with China and the US will continue to be ‘friends with both, allies with one’, and any notion that the growth in our relationship with China requires a recalibration of our relationship with the US is inconsistent with the facts, and lacks logic or purpose.

Some, including former decision makers, suggest that we should retain the Alliance, but with the US in more of a stand-off arrangement in the region, engaging when needed, especially if China overreaches. But do we expect an inalienable right to a US response if things get difficult while we put in less and talk the Alliance down?

It’s essential for those who believe the Alliance is important to our national interests to engage in the public discourse. It’s perfectly reasonable for millennials to question and query its contemporary relevance. That relevance should be articulated in terms of today’s world: its strategic dynamics, the vibrancy and depth of the contemporary Australia-US relationship, and a bit of history to connect past and present.

Since last November, many of Washington’s closest allies and partners have been in a virtual state of panic over the impetuous and unpredictable President Trump. But on a recent trip to India we found that the view in New Delhi was rather different. Indian policymakers and analysts are a lot kinder to Trump than those in European or Asian capitals.

India’s been on the receiving end of US power more than once, not least through Washington’s long military support for Pakistan, which India sees as the world’s greatest source of terrorism. That’s led Delhi to take an unsentimental view of the United States as a power that’s hugely important, but also one that needs to be approached with a clear understanding of one’s own national interests.

India realises that it needs to work productively with the US in balancing against China. And India’s leadership is also keenly aware of how much the United States needs them as a balance against China—and it’s prepared to milk that fact for all it’s worth. India and the US are pressing ahead with greater defence cooperation, which largely seems to involve the United States making special deals to transfer defence technology to India.

New Delhi may dream of a multipolar Indo-Pacific, but there’s a clear understanding that there’ll be no substitute for US military power for a long time. But even as New Delhi understands the importance of a strong US presence in the region, Indians seem remarkably un-phased by Trump and what he may mean for the US–India relationship.

Like Trump, India’s Prime Minister Narendra Modi is a ‘strong man’ from outside India’s political traditions. Surely strong men will be better at doing deals with each other than with ‘ordinary’ politicians?

New Delhi isn’t unhappy with Trump’s overtures towards Russia: India’s had a time-tested relationship with Russia, which it considers an important partner and a strategic counterweight to China.

Nor is Trump’s apparently unconstrained support for Israel a cause of concern. Israel has sold India considerable amounts of military equipment. There’s been serious cooperation between the military industries and the intelligence services of the two states. Modi is expected to visit Israel later this year.

Indians also feel less moral outrage than others at Trump’s tough border protection stance: Indian border guards long had a shoot-to-kill policy with immigrants trying to cross India’s border with Bangladesh and it’s in the process of building even more border walls to ‘seal the border.’

Trump’s tough anti-Islamic terrorism stance goes down well in a country that has been on the receiving end of terrorism. President Trump has made it clear that a central focus of his tenure will be, in his own words, to ‘eradicate radical Islamic terrorism from the face of the earth.’ Although India is home to some 170 million Muslims, largely living in peace, it’s also a prime target of regular cross-border terrorist attacks from Pakistan.

Trump’s apparent tough-on-China stance (the South China Sea and trade) also plays well with many Indians who have come to regard China as India’s biggest long-term threat. Over the last few years, Indian strategists have become increasingly concerned that the US hasn’t been doing enough to stand up to China’s expanding military footprint in the Indian Ocean and Asia. They saw President Obama’s prevarication on Chinese island-building in the South China Sea as essentially giving China the green light for salami-slicing assertiveness elsewhere in the region, including on India’s disputed border with China.

Both countries are also concerned that China’s One Belt, One Road initiative and the China Pakistan Economic Corridor aren’t just about infrastructure, but are aimed at expanding China’s geo-strategic interests.

Of course, India’s equanimity towards Trump mightn’t last: any cut-off of US work visas to Indian IT specialists could, for example, do significant damage to India’s economy (and America’s as well). Ramping up US support for Pakistan, or doing a deal with China, could upset the equation. Nevertheless, India is probably well placed to continue to benefit from the US security relationship.

In Australia we tend to think that we understand our American partners well, after an alliance lasting more than 66 years. But maybe there are a few things we can learn from India’s approach. That includes not being too sentimental about the relationship and finding how one can best leverage your advantages.

Canberra will need to play its cards carefully over the next four years of the Trump administration to maximise Australia’s position.  This includes diversifying our regional security relationships. More than ever, we’ll need to build up a regional network of strategic relationships, especially with partners such as India and Japan, as a partial hedge to the possibility of US retrenchment from the region.

We should also think about how to better leverage our relationship with the US and adopt a much more unsentimental approach towards the alliance. We need a much clearer understanding of where our and American interests begin and end and we’ll need to be less afraid of making explicit deals, just as India will be when it comes to pressing its interests with the US.

Compared to other countries, we’re probably well placed to benefit from Trump’s transactional approach to US allies. There’ll be a greater emphasis on making deals than on relying on warm and fuzzy shared values, and that may be a good thing.

As New Delhi well appreciates, change brings opportunities. Australia needs to move past our hand-wringing about Trump and think about those opportunities.

In a recent podcast for Foreign Policy, editor David Rothkopf interviewed Thomas Friedman about his latest book—essentially an argument for why, in 2017, we should feel optimistic about the future. Friedman’s core argument is that we’re living in an age of ‘three non-linear accelerations’, which include: Moore’s law (growth in IT capabilities), the market (growth in digital globalisation) and Mother Nature (dramatic changes in biodiversity, climate and population). I have to say that I find Friedman’s argument suggestive but not compelling. Indeed, it’s reminiscent of an argument I recall from the early 1990s—namely that Chinese authoritarianism couldn’t endure because Madonna and the internet were on our side.

But Rothkopf and Friedman have made me think more specifically about what the Asian strategic environment looks like in 2017 and, in particular, to confront the question of whether that environment is more worrying now than it was in earlier years. Depressingly, the answer is ‘yes’. Long-running trends (like the growth of Asian economies and militaries, power diffusion, and—because of technological change—increasing uncertainties about comparative power balances) are being exacerbated by a geographical and positional competition between Asian great powers, doubts over the future US role in the region, and a heightened risk profile at the key flash-points (Korean peninsula, Taiwan and South Asia). Those flash-points aren’t new, but regional strategists have long understood that if major conflict broke out at any of them the casualties would number in the millions.

On the other side of the ledger, forces driving cohesion, cooperation and liberalism—we might think of them in terms of the Kantian tripod of economic interdependence, international institutions and democracy—seem to be weakening, as opposition to globalisation rises, the TPP collapses, nationalism surges, China’s economic growth slows, and regional democracies struggle. Both President Rodrigo Duterte’s policies in the Philippines, and political life in Bangkok after the military coup and the death of the king suggest a higher regional tolerance for authoritarianism, even if sometimes of a populist hue. Meanwhile, the political scandal in Seoul (over influence-peddling) is complicating US relations with a third Asian ally.

True, none of those factors constitutes an automatic pathway to war. But, put together, they’re valid reasons for at least some degree of unease about what the forthcoming year might hold. At a minimum, they suggest a need for a heightened vigilance in relation to small crises which could spiral quickly in Asia this year. But I’d venture to say they actually signal something more ominous—namely, a long-term shift in regional geopolitics. The tempo of strategic transformation in Asia may be quickening.

It probably doesn’t need to be spelt out, but the likely shifts won’t play to Australia’s strategic advantage. For Australia to feel comfortable within those shifting geopolitical relationships, it has to source new inputs in favour of a liberal, stable, prosperous regional order. And the problem, of course, isn’t that no such inputs are available—there are, after all, regular and supportive contacts between Australia, Japan, India and Indonesia, for example. But the inputs available so far are too thin to assure regional policy-makers that the order can survive. The latest bout of tension between Australia and Indonesia—like the coolness in the Australia–Japan strategic relationship in the wake of the submarine tender decision—is a reminder of the brittleness of those contacts. Putting it in the language of the current ‘hub-and-spokes’ order, ‘spoke-to-spoke’ and ‘spoke-to-nonspoke’ bridges, while promising, can’t bear much traffic at the moment.

And that’s not merely going to be Australia’s conclusion. Other regional states who sit down to do the assessment are likely to arrive at the same answer. That leaves us with three options, none a perfect solution for a more difficult region.

First, we work to nurture a closer relationship with the US even while its relative strategic position slips and its priorities shift towards an agenda of ‘America First’—because even a superpower in relative decline makes a good ally, and because Washington has a proven record of being a liberal order-builder in Asia. Problem? How many eggs can we put in one basket?

Second, we work harder at building bridges in Asia—both to other US allies (Japan and South Korea) and to other key players (India, Indonesia and Singapore). Problem? The bridges need heavy-duty engineering in terms of shared commitments—not merely in terms of others’ commitment to us, but vice versa.

Third, we push the notion of defence self-reliance more seriously than we have in the past. Problem? We’re currently building capacity too slowly—the multi-decade timetable for the Collins replacement a case in point—and, perhaps, too conservatively. In a changing Asia, we should be looking for gamechangers—not least because others will be.