Tag Archive for: Defence Cooperation

Fireside chat with Pat Conroy and Bec Shrimpton

On 6 December 2023, Bec Shrimpton, ASPI’s Director of Defence Strategy and National Security participated in AMCHAM’s ‘Meet the Minister: Business Luncheon’ featuring the Hon Pat Conroy MP, Minister for Defence Industry and Minister for International Development and the Pacific.

After the Minister delivered his address at the event, Bec and Minister Conroy sat down for a fireside chat. The discussion covered a diverse range of topics including AUKUS, the upcoming Defence Industry Development Strategy and the role of Australian sovereign industry capability within it, how Australian industry can better access Defence grants and contracts, the improvements needed to achieve greater agility, certainty and performance in defence acquisition, as well as defence innovation. The Minister took a range of questions and also discussed Australia’s unique engagement advantages and responsibilities in the Pacific, including the importance of sports diplomacy.

Tag Archive for: Defence Cooperation

Policy, Guns and Money: US–Australia alliance and defence cooperation

In this episode, ASPI’s Bec Shrimpton speaks to Chris Maier from the US Department of Defense about the origin of special operations forces, the role they play in integrated deterrence and their ability to work across multiple domains. They also discuss the history of cooperation between Australian and US special operations forces and the importance of wargaming to force design.

Recently, ASPI’s US Army War College fellow, Alan Throop, released the report Impactful mateship, which focuses on strengthening the US–Australia defence relationship at a vital time as it develops in complexity and builds towards the ambitions of AUKUS. ASPI’s Jennifer Parker speaks to Colonel Throop about his fellowship at ASPI and the report’s recommendations, including more training for inbound US personnel and conducting allied-centric training.

Educating for effect: bolstering Australia–India military exchanges

On 2 March, Australia and India signed a landmark framework for the mutual recognition of educational qualifications, with the aim of enhancing two-way mobility for students and professionals. A week later, Australian Prime Minister Anthony Albanese visited India, where, as the first foreign leader to set foot on India’s locally constructed aircraft carrier, Vikrant, he described India as a ‘top tier’ defence partner.

These developments are part of a significant uptick in bilateral relations. While the connection between education and defence may not be immediately apparent, professional military education is a key element of Australia’s defence relationships throughout the Indo-Pacific. With the Australia–India relationship getting a comprehensive overhaul, it’s time to leverage and build on the professional military education program to deliver outcomes that can enable greater security in the region.

Each year, two Australian Defence Force officers head to India, one to the Defence Services Staff College in southern India, and the other to the National Defence College in New Delhi. At the same time, three Indian military officers head to the Australian War College in Canberra, two of whom participate in the Australian command and staff course for mid-career officers, and one in the defence and strategic studies course for more senior officers.

Both countries send their brightest military minds to these courses. Participants undergo a year of rigorous education interspersed with social and cultural exposure to their host country. This exposure is vital to developing links between the defence establishments of Australia and India, particularly as officers from these programs often go on to senior leadership roles. For instance, Vice Admiral Jonathan Meade, who headed the AUKUS submarine taskforce in Australia, is a graduate of the National Defence College in New Delhi.

The annual program is supplemented by short-term and occasional exchanges. For example, an Australian naval officer completed the specialist hydrographic course offered by the Indian Navy, and an Indian naval officer spent three months as a visiting research fellow at the Sea Power Centre in Canberra.

In March, a group of 15 ADF officers visited India as part of the inaugural General Rawat India–Australia Young Defence Officers’ Exchange Program, which is designed to ‘foster greater understanding and cooperation’ among officers in Australia and India.

Professional military education is vital for familiarisation and networking, but as the Indian and Australian defence forces draw closer, it should increasingly be focused on preparing for combined operations.

The annual mid- and senior-level exchanges have the most potential to achieve more ambitious results. Since participants rotate among different services and some will assume strategic leadership roles, further investment in these courses would have a significant impact.

These exchanges could, at a relatively small cost, be supplemented with additional bilateral or minilateral activities to promote interoperability. Australian and Indian officers could, for example, participate in scenario-based workshops and war games that require them to conduct simulated combined operations. For senior-level courses, this could also involve drafting strategies for such operations.

The scenarios could start at the lower end of the spectrum of military operations, such as humanitarian assistance and disaster relief or maritime law enforcement. They could then be scaled up to non-combatant evacuation, combined interdictions of maritime militia, or even combined special forces operations such as in hostage situations.

While the program already includes some exercises, conducting them in small, focused groups in bilateral or minilateral settings could provide officers with insights that would inform future combined operations in the region. Short modules focused on combined operations could supplement the course offerings in both countries.

In Australia, these units could be delivered at the National Security College at the Australian National University, which runs professional development courses in security and strategic studies. The Australian Civil–Military Centre and the Sea Power Centre could also deliver specialist modules.

In India, domain-focused think tanks such as the National Maritime Foundation, the Centre for Land Warfare Studies and the Centre for Air Power Studies could play this role. Exposure to non-military elements of government would also enhance officers’ understanding of the nuances of combined operations. Incrementally, the target group for these activities could be expanded to include representatives from the other Quad partners—Japan and the US.

There are many other courses that could benefit from a regular program of reciprocal engagement, and Australia and India could identify which of these could incorporate a periodic exchange program. This would contribute to sustained bilateral defence engagement at all career levels. Closer training could also set a foundation for cross-deployment of personnel on operational rotation across various military units.

The primary purpose of military training and education is to enhance operational effectiveness. Reciprocal engagement programs should be strongest between partners that may be required to operate together. The Indo-Pacific, with its numerous security challenges, is an arena where such combined operations may become an essential pillar of maintaining security. Expanding this area of bilateral defence engagement will contribute significantly to Australia and India being truly ‘top tier’ defence partners.

This article was written as part of the Australia India Institute’s defence program undertaken with the support of the Australian Department of Defence. All views expressed in this article are those of the author only.

AUKUS needs trilateral technology safeguards, not just capabilities

We’re at an important inflection point on the AUKUS timeline.

Now that a roadmap for Australia’s acquisition of nuclear-powered submarines is in place under the banner of AUKUS Pillar 1, all three members are turning greater attention to building out Pillar 2 and its focus on advanced capabilities and technologies.

To be sure, the AUKUS partners have yet to demonstrate proof of concept for Pillar 2. But at the very least, the testing of an AUKUS artificial intelligence and autonomy capability in the United Kingdom in April certainly demonstrated proof of life in the Pillar 2 enterprise.

It’s through these sorts of projects that Australia’s latent technological advantages can come into their own. After all, Pillar 2 isn’t simply about accessing US technologies, though that’s certainly part of the appeal. It’s also about Australia making valuable—and valued—contributions to developing the capabilities that will help the AUKUS partners achieve shared objectives in the Indo-Pacific.

For Pillar 2 to truly succeed, Australia will need as much faith in the capacity of our AUKUS partners to safeguard our advantages as they will need in us to do the same. In other words, the three countries need to think creatively about how they will protect their shared advantages, not just how they will develop them, as part of the partnership’s greater architecture.

Evidence suggests that this is where the conversation is headed. Testimony from two senior White House officials before the US House Foreign Affairs Committee last month indicated that discussions about the requirements for a fully functioning AUKUS are evolving in the right direction.

The hearing in question ostensibly focused on ‘modernising US arms exports for a stronger AUKUS’, an issue of critical importance to Australia—and the subject of a major report published by the United States Studies Centre that I coauthored with William Greenwalt, titled Breaking the barriers. On this, there were encouraging signs of progress. Assistant Secretary of Defense for Strategies, Plans and Capabilities Mara Karlin and Assistant Secretary of State for Political-Military Affairs Jessica Lewis both outlined how Washington intends to modernise and streamline export control regimes for AUKUS countries.

As Karlin said, ‘This historic opportunity requires historic change.’

Importantly, however, the hearing raised other questions about how the three countries will protect their military-technological advantages from prying eyes and ears.

On this issue, Lewis said that the US would also seek commitments from Australia and Britain ‘on shared standards for the protection of defense information and materials’ consistent with US regulations. Doing so, she claimed, would ensure that US export control standards ‘serve as a shield for our trilateral defence technological advantage’.

Kickstarting the discussion about how the AUKUS partners will protect their shared defence technology advantages is a good move. It will help to set the conditions for seamless collaboration on advanced military capabilities in the long term. After all, that’s what AUKUS requires: rethinking the way in which Australia, the UK and the US cooperate on defence industry and technology.

But for Australia, the solution is not a wholesale adoption of the American model. To truly reflect the spirit of AUKUS, the partners need a genuinely trilateral approach to developing common procedures and protections for shared advantages.

This will be essential for establishing a mutually trusted community of commercial and defence companies to help deliver AUKUS projects. The current approach—where the three countries adjudicate the trustworthiness of these entities independently—is not fit for that purpose and will create problems down the line if left untouched.

Addressing these requirements trilaterally will also put to bed the perennial trust issues that have shadowed AUKUS since its inception.

Australians might have assumed that our Five Eyes membership and already-intimate defence relationship with America would make sharing information and technology through AUKUS Pillar 2 relatively easy.

In reality, things haven’t been that simple. In private, US interlocutors have increasingly voiced reservations around the integrity of Australian and UK information and technology protections. But until recently, those concerns were rarely articulated with the detail or specificity that would help Australia to understand the issues, let alone address them.

That led many across the Australian defence landscape to consider the trust discussion a bit of a red herring.

This isn’t to say that Australia doesn’t have work to do. Yes, there’s a good news story to tell about measures already taken in areas like foreign interference and investment screening. Yet as the AUKUS partners gear up to deliver Pillars 1 and 2, Australia will likely need to consider further reforms to things like workforce vetting procedures, digital platform security and security clearance checks.

At the same time, these reforms won’t always mirror US practices and procedures. Australia’s painful experience with US export controls is a good example of why simply bringing allies ‘up to speed’ with American technology protections isn’t always the optimal solution.

What’s more, allies could point to the leakiness of Washington’s own defence technology ecosystem as grounds for their own concerns. Reporting in October 2022 revealed that front companies connected to the Chinese military had harvested troves of US software products with potential military applications. Evidence suggests that some of these products supported China’s October 2021 hypersonic missile test, dubbed a ‘Sputnik moment’ by US Chairman of the Joint Chiefs of Staff Mark Milley.

But this isn’t about pointing fingers; it’s about underscoring the requirement for a truly collaborative approach to developing technology protections that incorporate the preferences and best practices of all three countries. The mutual trust and spirit of collaboration that AUKUS is supposed to reflect will only be realised if all three partners contribute to setting the terms for new forms of cooperation. A genuinely trilateral approach to developing AUKUS-grade technology protections is the best way to foster—and to keep—that trust.

Australia’s geography could be our greatest strategic asset

In the debate about what AUKUS is and what it might become, much has been made of the idea that in an era of heightened geopolitical competition, Australia possesses some of the Indo-Pacific’s most valuable geopolitical real estate from a basing perspective.

For Australia and its allies, that geographic advantage lies in the fact that the nation lies between the Pacific and Indian Oceans. And as some analysts note, northern Australia is close—but not too close—to the geopolitically sensitive South China Sea and to major shipping arteries that support regional trade.

The United States is base heavy in the Pacific, its presence fanning out from Indo-Pacific Command in Hawaii to Yokosuka in Japan, home of the Seventh Fleet. Other forward-deployed forces are based in Okinawa, South Korea and Guam. US forces also rotate through Australia, Singapore and the Philippines.

But the US military presence is much sparser in the Indian Ocean with only two major facilities. The Fifth Fleet is stationed at US Naval Forces Central Command in Bahrain, and the US Navy Support Facility on the UK-administered territory of Diego Garcia supports air and naval forces in the Middle East and the Indian Ocean.

There’s a long stretch between US facilities in both theatres, so, in theory, Australia’s geography would allow faster deployments in either direction.

The north’s proximity to Southeast Asia also works to connect the regions and could prove important as a base for regional humanitarian and disaster relief missions, helping climate-change-affected neighbours survive and recover from what are likely to be increasingly cascading and concurrent events.

Northern Australia has lots of space. With investment, it could host some of the world’s best military training facilities, as well significant clean energy production that could support the region as it transitions from fossil fuels.

The north’s geographic value is augmented by other strengths such as Australia’s relative political stability, deep alliance with the US, and economic wealth.

Australia is unencumbered by the sovereignty issues that trouble Diego Garcia, for example. And it has much closer alliance and defence relationships compared with other middle powers in the Indo-Pacific except maybe Japan.

It can finance enabling infrastructure and possesses abundant strategically valuable mining and food-production resources to supply high-end military platforms and operations.

In recent years, there have been intermittent calls in Australia and in the US for permanent US basing in the north, perhaps to host a reanimated First Fleet.

In 2020, the US Navy announced the fleet’s resurrection with a permanent base in India or Singapore, saying it would be expeditionary and without a land-based headquarters. Since then, President Joe Biden has tasked the US Pacific Fleet commander to carry out a feasibility study on the challenges of bringing back the First Fleet and identifying its mission.

This week, the Pentagon released the results of the Biden administration’s first global posture review, which will inform the development of the new national defence strategy. No public version of the review will be released, and officials have said that that’s partly because the government is still figuring out how to expand the US presence in talks with allies and partners. In the meantime, the review directs the US defence forces to push for more cooperation with allies and partners and to improve infrastructure in Guam and Australia.

The Biden administration has indicated elsewhere that it’s keen to build more regional bases to host more distributed forces and logistics chains across the Indo-Pacific.

As ASPI’s John Coyne pointed out recently, AUKUS member Britain wants to increase its presence, as do the larger NATO powers. Quad partners Japan and India might also welcome such a development.

Desire for a US naval base and a permanent combat or strike capability in Australia is probably not yet mainstream, and Canberra has traditionally insisted on a ‘places not bases’ policy. Nonetheless, past rumours suggested Glyde Point, 40 kilometres northeast of Darwin, as a possible location. In 2019, Senator Linda Reynolds offered up Derby, Broome and Exmouth in north Western Australia as ‘a hub and base for operations for all our allies in the Indian Ocean’. Others have suggested a reciprocal basing arrangement among Quad partners.

At the least, AUKUS envisages much increased engagement and expansion of facilities, something that the government, before AUKUS, had earmarked roughly half a billion dollars towards. However, this money is directed at training facilities rather than basing. The cost of an expanded or new naval base is an open question but could run into the billions.

But whatever Australia decides about basing in the north, geography won’t be sufficient.

Historically, Australia’s thinking about its location has gone through many contortions. The tyranny of distance in the colonial era morphed into the advantage of the sea–air gap as a defendable line between Indonesia and Australia, which eventually led to current thinking about the continent’s alliance value in the Indo-Pacific.

But changes in the strategic environment, particularly on the technological front, can dilute the advantages of geography.

Australia’s potential asymmetric geographic advantage is currently offset by major challenges—missiles, cyber threats, competition in the space domain, climate change and supply chains—as well as a reluctance to fully engage with the implications of the government’s assessments of reduced warning times.

China’s rapid development of long-range bombers, as well as long-range ballistic, land-attack cruise and hypersonic missiles, conventional and nuclear armed, potentially holds Australian military facilities at risk, especially in the north. The problem gets worse if China builds bases in the Southeast Asian, Melanesian or Pacific approaches to Australia.

According to ASPI’s Malcolm Davis, the missile problem could be ameliorated by a mixture of deterrence—being able to hold launch platforms in the Chinese mainland and South China Sea at risk—and the deployment of more land and sea missile defence capabilities. However, current missile defence platforms don’t offer much protection from hypersonic weapons.

The increasing digitisation of military capabilities, basing infrastructure, platforms and command-and-control structures also presents new vulnerabilities. And the disruptive abilities and audacity of state-based cyber adversaries and criminal actors are growing.

Expanding basing structures would require big investments in cyber infrastructure in the north, involving government, industry and defence partnerships. That’s a lot of players and potential cyber vulnerabilities to cover, especially in the civilian sector.

Climate change is also contributing to the deteriorating strategic outlook. For Australia’s north, with its already difficult environment, this means more intense and more frequent extreme weather events such as cyclones, fires and flooding—even at the 1.5°C of warming currently baked into the climate, let alone the 1.9–3°C projected under national decarbonisation pledges.

Climate change will also alter coastlines through sea-level rise and land through deforestation and desertification—important issues when designing basing and training facilities.

Defence is doing some work to protect existing facilities and platforms against climate hazards, but resilience will have to be integrated into future capability and infrastructure design.

Another challenge is climate disruption driving away skilled personnel, which will worsen as more extreme weather impacts homes, transport, education, supply chains and energy infrastructure. And all of this will be increasingly uninsurable in conventional terms and may need new sovereign insurance arrangements.

And, like other Pacific bases, any new facilities in Australia and the logistics and globally integrated supply chains that service them will be at risk from the impacts of coercive trade practices and climate change on global transport, food and water systems.

Lucky geography may give Australia an asymmetric advantage, but exactly what that might look like is still uncertain, even as state and local governments and the private sector make anticipatory investments in the north. More leadership, investment and ingenuity from the government and Defence will be needed to transform valuable real estate into a genuine strategic asset.

Does Australia need a massive US naval base?

The US Naval War College’s James Holmes, a strategist of serious stature, has suggested that the US Navy should establish a ‘massive’ base in Australia. This isn’t Holmes’s first stab at this. His initial proposal, back in 2011, apparently received the ‘gimlet-eye’ treatment from the would-be hosts.

Maybe there’s a touch of tongue-in-cheek to the ‘massive’ framing? If Holmes was hoping to provoke a rise from Down Under, the reaction from Australian commentators this time around has been more deadpan than gimlet-eyed. But a proposal this bold deserves a response.

I’ll have a go then.

Australians pride themselves on their reputation as a dependable ally on the battlefield. But they are more reluctant to yield up slices of their plentiful territory for foreign military use. The only enduring US base on Australian soil is the joint intelligence facility at Pine Gap. The secret to its longevity is that it is rooted in an equitable burden-sharing arrangement.

That mutually beneficial arrangement has underpinned bipartisan support and enabled successive governments to argue that the national interest is served and sovereignty maintained. Australia also plays host to a sizeable Singaporean military contingent, for training purposes. Singapore pays its way and has incrementally acquired a reputation for respecting sovereignty.

Training is one thing. Hosting combat forces is another matter. In 2011, President Barack Obama announced the establishment of a rotational US Marine Corps detachment at Darwin. This was a political initiative designed to underscore the US rebalancing commitment to the Indo-Pacific. It has taken almost a decade to realise the modest total of 2,500 marines originally envisioned, and there have been torturous cost-sharing negotiations along the way.

The result is an expensive and somewhat attenuated Marine Corps presence that is neither fish nor fowl. The Northern Territory offers useful training opportunities, but less strategic value than widely assumed. Without sealift, the Darwin detachment is hobbled as an amphibious force.

If the US were to invest in a new naval facility in Australia, a port near Darwin—without Chinese leaseholders this time—would be an obvious candidate and useful to the Australian Defence Force besides. However, well-placed US defence sources say that recent media claims that Washington is constructing a new naval base in the Top End are wide of the mark. The US is investing substantial sums in joint infrastructure, following the plan laid out under the force posture initiative. But none of it is specifically earmarked for naval use. Meanwhile, Australia’s Defence Department is investing exclusively in upgrading existing naval facilities in the Northern Territory.

New US bases in Australia are not part of the current alliance conversation. Instead, access and adaptability are the watchwords at a military level. The US and Australia already conduct large joint exercises, like Talisman Sabre. The US Air Force has sent visiting detachments of increasing complexity, including an F-22 squadron complete with embedded Australian pilot. And the marines are in Darwin for half the year.

But the US military is likely to move away from concentrating high-value assets in fixed locations, as portended by the current Marine Corps planning and guidance. Building a big facility in Australia would be going against the strategic grain, not to mention budgetary realities.

Holmes is on the money in emphasising the importance of Australia’s geography, as a central Indo-Pacific anchor point. Australia offers extensive Indian Ocean and Pacific frontage and proximity to Southeast Asia. But it remains infrastructure-poor, while the terrain beyond the more habitable southeast and southwestern corners is challenging.

If Australia was willing to offer up territory for a base, in response to an American request, the US Navy would face the same challenges that have deterred generations of Australians from developing the country’s northern half. The Royal Australian Navy itself remains decidedly bottom-heavy, dividing its fleet between Sydney and Perth, despite periodic calls for more dispersed basing. These bases lie much closer to the Southern Ocean than to likely areas of US strategic interest further north.

Even the new joint base being developed by Australia and Papua New Guinea on Manus Island, on the site of a former American fleet base no less, offers only marginal positional advantage for the US Navy, despite Washington’s interest in joining as a partner. Manus will matter more as a hub for regional engagement and capacity building with Pacific island nations than for classical power projection.

Holmes correctly identifies Australia as occupying a sweet spot: not too far from the focal points of US strategic attention in the Western Pacific, nor too close to China’s layered defences for sea and air denial.

Yet he also contends that Australia lies ‘just outside’ the South China Sea. Darwin, Australia’s jumping-off point into the archipelago, is 2,600 kilometres from the South China Sea—roughly the distance between Los Angeles and New Orleans. Moreover, navigating across Indonesia can throw up knottier obstacles for warships than just the tyranny of distance.

To be sure, in wartime, or full-blown crisis, Australia’s relative remoteness would be a valuable asset for US forces looking to disperse and obtain in-theatre support. But since Canberra would be likely to grant access to Australian facilities, it’s not clear that the outlays for a new stand-alone US base would be justified.

Politically, the Morrison government evinces little appetite for quantitative or qualitative enhancements to the US military footprint here, even as Australia’s geostrategic stock has risen in US eyes. Even assuming Washington wanted to stretch its sea legs, Canberra would still be extremely cautious about the reaction from Beijing.

In August, the prime minister appeared to rule out of consideration the deployment of US land-based ballistic missiles. That may be the US’s fault for starting post-INF hares running prematurely. But the PM’s hasty response nonetheless suggests an underlying nervousness about hosting ‘permanent’ US strike capabilities. And nothing says permanent quite like a massive military base.

Australia’s alliance with the US is at an odd disjuncture. Militarily, the trend is towards closer force integration and defence technology cooperation, creating capability uplift. Yet questioning among US military allies about Washington’s political commitment has never been so intense. Canberra’s diplomatic hedging and extreme sensitivity about offending China raise US eyebrows too.

State premiers might actually be more inclined than sailors or cabinet ministers to welcome a new naval base and all its associated goodies—provided Uncle Sam is paying the overheads, of course. Then again, nobody throws gimlet eyes quite like the purse-holders up on Capitol Hill.

Sorry, James. Personally, I’d love to see the US Navy back in Melbourne. Third time lucky?

The makings of a ‘geopolitical’ European Commission

On 1 December, Ursula von der Leyen will finally take office as president of the European Commission. She has promised to lead a commission that will avoid a scenario in which, as French President Emmanuel Macron recently warned, Europe might ‘disappear geopolitically’ amid an escalating Sino-American rivalry.

To be sure, the European Union has the largest market in the world, the second-highest defence spending (after the United States), 55,000 diplomats, and the world’s largest development-assistance budget. But these strengths are constrained by the fragmentation of European power both between and within member states and EU institutions. While China and the US are both adept at integrating geopolitics with their economic interests, the EU stubbornly acts as if these were separate agendas.

If von der Leyen is to succeed in building an effective ‘geopolitical commission’, she will need to pass seven big tests. The first will be to build unity behind her proposed European green deal, which she has made one of her central priorities. The question is not just whether she can direct an effective European response to climate change, but whether she can prevent the issue from becoming another front in the culture war between the EU’s western member states and the cohort in Central and Eastern Europe.

Voters in the Czech Republic, Poland and Slovakia are ambivalent about whether climate change needs to be addressed at all. If von der Leyen’s commission doesn’t take steps to bring these populations on board, the European green deal could reprise the politics of the euro and refugee crises, when marginal EU constituencies felt neglected by more powerful actors in the EU core (many of whom were clearly convinced of their own moral superiority).

Second, von der Leyen’s commission will have to be open to potential countermeasures against America’s weaponisation of the dollar. Since US President Donald Trump withdrew from the Iran nuclear deal, his administration has effectively been deciding with whom Europeans may trade, by threatening secondary sanctions against any company that does business with Iran. The challenge for a geopolitical commission, then, is to identify areas where US companies are asymmetrically dependent on Europe, and where European sanctions (or the mere threat of sanctions) could be deployed to maximum effect. This strategy has already proved effective in the standoff over auto tariffs.

Third, von der Leyen’s commission will have to take up the issue of European defence. There are three discernible camps. The first includes the French, who want to achieve European strategic autonomy and end the bloc’s dependence on the US. The second camp, epitomised by Poland, favors ‘strategic servitude’ and wants to double down on the transatlantic relationship by purchasing more US equipment and establishing ‘Fort Trumps’ to keep the US engaged on the continent. The third, represented by Germany, advocates ‘strategic patience’, based on the hope that Trump’s eventual departure will allow for a return to normality. The only way to reconcile these views is to strengthen Europe’s contributions to NATO, so that it is seen as a better partner to the US.

Fourth, von der Leyen’s commission must reconsider the EU’s competition policy, which currently focuses only on state aid and other unfair practices within Europe, while ignoring unfair competition from abroad. Fifth, and on a related note, the commission will need to develop a screening mechanism for foreign investments that both protects sensitive sectors and compensates EU member states that are asked to turn down foreign capital. In addition to establishing common screening procedures, the EU should empower the commission to veto foreign investments on security grounds, with the European Council retaining the final say (through qualified majority voting).

Sixth, von der Leyen’s commission will need to develop a European cyber defence agency worthy of the name. Specifically, the EU’s new leaders should transform ENISA (the EU Agency for Cybersecurity) into a well-staffed and well-financed institution with centralised computer emergency response teams, cyber forensic squads, and legislative representatives to push for stronger security protocols across the bloc.

Finally, von der Leyen will be tasked with repositioning the European Investment Bank and the European Bank for Reconstruction and Development as credible counterweights to China’s Belt and Road Initiative. So far, the EU hasn’t taken a strategic approach to reshaping the global financial architecture, and its response to China’s global investment and development activities has been timid at best. Giving the EIB and the EBRD a global remit to fund projects outside of Europe would help to reverse this failure. It would also allow Europe to bail out countries facing fiscal or financial crises in the event that the US or China ties the hands of the International Monetary Fund or other institutions.

Each of these seven tests is in an area where the EU could potentially become a key global player, capable of holding its own with other great powers. But each challenge will require genuine unity among Europeans, with EU institutions and member-state governments working together seamlessly.

Rather than dealing with these issues in a piecemeal fashion, von der Leyen should pursue a grand bargain that gives real meaning and shape to the next five years of EU policymaking. Among other things, that will require creative thinking about the next seven-year budget framework, which should be used to marshal the resources that Europe needs to establish itself as a global player, and to advance innovative measures like green bonds, digital taxation and carbon pricing. Only then will ‘geopolitical commission’ be a turning point, not a sound bite.

Can the Europeans defend Europe?

A renewed sense of urgency over European defence has come only after a cumulative series of strategic shocks. The European powers have long resisted supranational defence institutions, instead depending heavily on NATO and the US. Prior to 1989, Western European and US strategic interests converged as the trans-Atlantic powers faced a hostile Soviet Union. After the Cold War, the Europeans failed to assume responsibility for the peace and security of their own continent. Can they now?

Europe’s buoyant post–Cold War mood was shattered by the brutal Bosnian War (1992–1995), Russia’s employment of force in Georgia (1991–1993), and then war in Kosovo (1998–1999). Those shocks catalysed an intense turn-of-the-century debate over Europe’s capacity to manage its own security affairs. Impotence over Kosovo, in particular, highlighted the problem, though little actual progress occurred as a result.

The debate was reinvigorated by Russia’s violations of territorial sovereignty in Georgia (2008) and in Ukraine, and the occupation and annexation of Crimea (2014). It was exacerbated by mass migration from Africa and the Middle East, domestic extremist violence, and the Brexit referendum (2016). President Donald Trump’s ambiguity about the US commitment to NATO and policy cleavages over the Paris climate agreement and the Iran nuclear deal helped precipitate the latest movement on European defence.

Even before Trump’s election, analysts considered that ‘the ability of the EU to collectively ensure its security and defence is in serious doubt’ and that ‘security and defence have become the new front lines of the European project’. The EU’s 2016 global strategy stated that ‘investment in security and defence is a matter of urgency’, arguing that ‘full spectrum defence capabilities are necessary to respond to external crises, [to] build our partners’ capacities, and to guarantee Europe’s safety’. It stressed that ‘capabilities should be developed with maximum interoperability’.

The 2007 Lisbon Treaty sought to ‘enable tangible progress on the level of investment expenditure on defence equipment, collaborative capability development goals and the availability of deployable defence capabilities for combined missions and operations acknowledging the single set of forces principle’. Permanent structured cooperation (PeSCO) was the intended vehicle.

Only ‘limited progress’ has been made on PeSCO. Participation in PeSCO is restricted to EU member states that satisfy the criteria in Protocol 10 to the Lisbon Treaty. Contrary to the EU’s norm of unanimity, the European Council (EC) decided to require a qualified majority vote on PeSCO-related issues to avoid matters being blocked by dissenting members.

A joint notification on PeSCO was presented to the EC by 23 member states in November 2017. It set out 20 commitments, including increasing defence budgets to 2% of GDP in real terms, increasing defence investment expenditure to 20% of total defence spending, engaging more in joint and collaborative strategic defence capabilities projects, developing the interoperability of their forces, optimising multinational structures, and using the European Defence Agency (EDA) as the forum for joint capability development.

PeSCO will be closely tied to the new coordinated annual review on defence, an EDA initiative that systematically monitors national defence spending plans, and the European Defence Fund, which is currently being developed. The initial PeSCO projects will be put to the EC for endorsement in early 2018 and will address ‘training, capability development and operational readiness’.

As the impetus towards greater cooperation, coordination and interoperability on defence builds, the countervailing forces are asserting themselves. The fate of achieving effective defence policy integration may depend on the growing reaction to European integration in general in other policy domains. European voters are increasingly concerned that loss of sovereignty and the dilution of national culture will result in the politicisation of European integration. Brexit is the exemplar of that phenomenon.

Moreover, national defence and the exercise of sovereign rights are integral to nation-states. The 2017 French strategic review strongly emphasised this, insisting that ‘maintaining the model of a full-spectrum and balanced military is critical for France’s national independence, strategic autonomy and freedom of action’. In the economic sphere, the review declared that ‘pursuing a high level of ambition in the manufacturing and technology fields is a matter of sovereignty and a pillar of our strategic autonomy’. That stands in contrast to President Emmanuel Macron’s views on national sovereignty and EU integration in general.

The French review’s nod towards ‘permanent structured cooperation and the European Defence Fund’ belies the tension between strategic autonomy and the meaningful integration of the EU’s most powerful military into a supranational institution. Similarly, Italy, another major European power, speaks in its 2015 white paper of focusing ‘on those geographical areas that are a priority for national interests’ and ‘pushing into the background other crises’. Germany’s Social Democrats oppose increasing defence expenditure to 2% and their inclusion in a new coalition government would pose problems for PeSCO.

Achieving effective interoperability, capability development and readiness—and unity of command—across 23 sovereign nations will be a herculean task. The historical legacy of dissimilar national approaches to capability will need to be addressed, and inevitably diverging national interests will arise based on straightforward geography. In Eastern Europe, the Russian threat looms large, while nations facing the Mediterranean will concentrate more on the Middle East chaos and the ungovernable spaces of North Africa. Issues of domestic politics, especially the prevalence of Euroscepticism, and the effects of strategic culture will also need to be overcome.

That new life has been injected into the issue of European defence is a symptom and recognition of the tectonic shifts taking place in international power relationships. Still, even when confronted with new and serious strategic challenges, there’s no guarantee that the national interests of its members will aggregate into a set of common EU defence interests. The engagement in PeSCO is encouraging, but there’s a long way to go before Europe can expect to effectively defend Europe.

US third offset (part 2): opportunities for Australia

As I outlined in part 1, America and, by extension, Australia are losing their military-technological edge in the Indo-Pacific. A new type of great-power competition is emerging throughout the region—one that involves a race to develop strategic technologies and integrate them into military forces.

But there are policies and innovative initiatives that Australia can pursue to help balance that trend. One path is to take further advantage of our close defence relationship with the US while it pursues its ‘third offset’ strategy.

For Australia to get the full benefit from this still-developing initiative—in both the short and long term—the engagement should be broad. We should be looking for ways not only to maximise our limited resources in defence science and innovation, but also to improve coordination in research and development with the US and other partners. And we should also be seeking to participate in and learn from the wargaming and simulations that the US will use to help shape third offset operational concepts.

New developments in legal statutes in the US, such as Australia’s recent promotion to the national technology and industrial base (NTIB), may provide the basis for deeper linkages and coordination on specific third offset programs. The NTIB is the US legal framework that defines the ‘persons and organizations that are engaged in research, development, production, integration, services or information technology activities’ in the UK, Canada and, as of this year, the UK and Australia. It effectively embeds Australia’s defence industrial base within the Pentagon’s legal structures and purview.

The NTIB provides for a range of potential activities. For instance, through the NTIB, Australia’s defence industry is now included in the Pentagon’s annual assessments of the US defence industrial base and its capabilities, which are factored into the US national defence strategy. A recent study from the Center for Strategic and International Studies on Canada’s inclusion in the NTIB highlighted the framework’s promotional and legal role in facilitating defence integration and coordination between Ottawa and Washington, particularly among small and medium enterprises.

While a similar in-depth study is needed to understand the nuances of the Australia–US defence industrial relationship, the CSIS report found that product-related contracts dominated the Pentagon’s spending in the Canadian market, compared to science and technology research and late-stage development work. Given the similarities between the Canadian and Australian markets, it’s worth exploring whether Australia is also underutilised for R&D-related work for the Pentagon and, if so, what policy settings can be changed to improve the situation. The report offers some practical recommendations that could easily be applied to the Australia–US relationship and our efforts to engage with the third offset, including aligning our defence innovation and science initiatives and prioritising specific technologies that are relevant to the strategy.

Australia’s inclusion in the NTIB could also lead to new forms of defence technology funding and coordination. For example, Australia would make a good trial location for the first international Defense Innovation Unit Experimental (DIUx), an organisation set up by former US defence secretary Ash Carter as an outreach and funding office to Silicon Valley. DIUx provides a pathway for small emerging technology start-ups to engage with Pentagon procurement. It’s also an investment vehicle for the government in critical technologies. While DIUx has only recently expanded outside of Silicon Valley, the existence of US–Australia defence export agreements and extensive defence industry cooperation, and now Canberra’s membership of the NTIB, make Australia an appealing international location on legal, technological and national security grounds.

Despite Canberra’s attention to defence R&D in the 2016 defence white paper, which has created bodies such as the Next Generation Technology Fund, funding models like DIUx or DARPA are still largely absent in Australia. A DIUx office in Australia—co-funded or co-operated by the US and Australia—could fill a gap in our own defence industry, providing easier access for Australian companies to Pentagon procurement and funding. At the least, Canberra should be exploring the possibility of seconding Australian personnel to DIUx or similar offices in the US, to build experience that could underpin the creation of a similar Australian organisation.

Finally, Australia should be focusing its engagement with the third offset on the wargaming and simulations that will eventually form its operational concepts. Aside from technological developments, those activities are arguably the most important for allies that want to understand the direction of the strategy and the role they may be expected to play. Much of this development is occurring in joint-warfare centres in the US.

As additional third offset capabilities are introduced to the US military, Australia should be actively involved in trialling them through joint operations with allied forces. Even parallel wargaming programs in other allied countries might create a ‘competitive marketplace of ideas’ on new operational concepts and strategies. A surge in American wargaming resources provides an opportunity for Australia to gain insights into the direction of US thinking on the third offset, informing our own defence planning and strategic outlook.

Indonesia and the next defence white paper

Marty Natalegawa, Indonesia's Minister of Foreign AffairsThe Abbott government has promised to write a new Defence White Paper within 18 months, and one of the key challenges it will face is considering the place of Indonesia in Australian defence thinking. As the fear of a direct Indonesian threat retreats into the past, it is being replaced by a view of Indonesia as a potential ‘buffer’ separating Australia from the vagaries of the East Asian system. But when the new government considers Australia’s defence options in the next century, it’d do well to remember that Indonesia gets a vote in the role it plays in defending Australia.

Historically, Indonesia has comprised an important, though unclear, element in Australia’s strategic environment. When Australia looks at its neighbourhood in isolation, Indonesia’s proximity and strategic potential makes it appear as a liability. But if the lens is widened to encompass the entire Asia-Pacific strategic system, a strong Indonesia looks more like an asset. During the Cold War Australia’s security concerns about Indonesia revolved around threats associated with Konfrontasi, communism and state collapse, with the prospect of a nuclear-armed Sukarno regime menacing briefly in 1965. But as early as the 1970s, Defence was also conducting studies of possible regional contingencies which involved Indonesia as an ally in achieving regional security. So recognition of our mutual strategic interests coexisted with security concerns about Indonesia. Read more