AUKUS – and what now?

AUKUS – and what now?

By Anne-Marie Schleich in Lianhe Zaobao, Think China, 28 Oct 2021

Anne-Marie Schleich

Former German Ambassador to New Zealand

The September 15 announcement of AUKUS, a trilateral security partnership between the United States, the United Kingdom and Australia, signalled a dramatic shift in Asia’s geopolitical balance of power. The pact will strengthen information and technology sharing as well as the ‘integration of security-related science, technology, industrial bases and supply chains’ between the three countries. The first initiative of AUKUS was Australia’s new deal with the U.S. and the UK for eight nuclear powered submarines armed with US defence missiles. The announcement was accompanied by Australia’s abrupt cancellation of a five-year old $ 66 billion contract for twelve conventionally powered submarines with France’s Naval Group, a move which caused enormous anger in France. Both initiatives set off a cascade of assessments of their probable ramifications. AUKUS may create more ripple effects in the region than originally anticipated.

  • The move to form a trilateral pact follows the United States Government’s decision to identify China as the biggest strategic and military threat and systemic challenge which needs to be addressed with the greatest urgency. This view is shared by both parties in the US and by the American public and most of the media in the US. After years of half-hearted declarations of a pivot to Asia under the Obama Administration, the new partnership AUKUS reflects a firm US strategic positioning in the Asia-Pacific joined by two strong traditional partners. AUKUS is complemented by two overlapping partnership arrangements: the revived Quad cooperation between Japan, India the US and Australia and the Five Eyes Agreement (US, UK, Canada, Australia and New Zealand). The Five Eyes partners have become more vocal in the last two years as they issued strong statements against China. One can expect that the Biden Administration will try to rebuild the relationship with France. It needs to take France, a European as well as a Pacific power, onboard again to line up support from important Western democracies. The US doesn’t want the China topic to divide the US and the Europeans with the first steps taken by both sides during the recent G20 summit.
  • Australia made a pragmatic but not so unexpected decision in choosing the US as the best partner for its security needs. There were five reasons to join AUKUS: (1) a historically close military and security relationship with the US, (2) a shared belief system that democracies need to safeguard a Free and Open Pacific, (3) the fact that all Australian parties and the electorate perceive China as a threat, (4) Australia’s mounting unhappiness about exploding contract costs and insufficient local job creation by the French contractor and (5) a resilient Australian economy which diversified its export market after recent Chinese tariffs and bans on its export goods.

Australia has been a vital ally of the US for a long time. The two countries fought side by side in the various wars since WW I and WWII in Europe, the Pacific, Korea, the Middle East and in Afghanistan. The 1951 ANZUS treaty between the US, Australia and New Zealand is the foundation for the US military presence in the Pacific Ocean. Since 2005, the US and Australia have held joint biennial military exercises, the last one in July 2021. In 2014, the two countries signed a Force Posture Agreement, which paved the way for increased US aircraft rotations in Australia and for US Marines to be permanently deployed in Darwin. These rotations and tripartite military interoperability will be increased under AUKUS.

The 2017 Foreign Policy White Paper already warned of growing instability in the region and called for closer ties with its regional partners. A policy shift was already foreshadowed in the Australian ‘2020 Defence Strategic Update’ in July 2020 which marked a shift of Australia’s defence policy from a historically defensive force to a deterrent force, ready to lead operations in Australia’s neighbourhood. The report underlined the importance of building defence relationships and security links with partners while PM Morrison emphasised that Australia faces its ‘most consequential strategic realignment since the Second World War’. As a consequence, his government will increase defence spending to 2 % of GDP.

Since 2020, Australia and China have been embroiled in escalating trade and diplomatic disputes. The seesawing conflict started in 2018, when Australia barred Huawei from providing 5G network services. It continued in February 2020, when the Australia initiated anti-dumping duties on various Chinese steel and aluminium products. In April 2020, Australia pushed for an international inquiry into the origins of Coronavirus. China retaliated with import suspensions or higher tariffs on a number of Australian import goods. In spite of this, the Australian economy achieved a record surplus in 2020 of A$ 75 billion (2019: A$ 68 billion). Australian exporters diversified their exports across the Asia Pacific, EU and UK. Australian exports to China stood at 30.7 % of total exports in 2020 and only dipped 2.6 %, much less than its exports to the US (-10%). With energy prices skyrocketing and increased international coal shortages, the Australian government calculated that it could weather any economic fallout from China in the aftermath of AUKUS.

  • One can only guess why New Zealand was not invited to join AUKUS. Until AUKUS,Australia was its closest security and political partner in the Pacific with the common interest of both countries being the stability at their doorsteps, the South Pacific. There are three reasons why New Zealand was not been included: New Zealand’s staunch independent foreign policy, its clear anti-nuclear stand dating back to the 1980ies and its trade dependence on China. It is a member of the ANZUS treaty and the Fives Eyes intelligence sharing and has – like Australia – supported the US in many wars. Defence relations with the US were rebooted after a 30-year strain. It was President Obama’s “Pivot towards Asia” which brought New Zealand back into the US fold. The Washington Declaration signed by the US and New Zealand in 2012 provided a framework to reopen bilateral defence ties. However, the New Zealand Labour-Greens coalition government under PM Jacinda Ardern has recently demonstrated a reluctance to sign up to some of the Five Eyes political declarations against China. She explained earlier this year that her government had raised “grave concerns” with China on human rights issues. But she also stressed that “areas of difference with China…need not define a relationship”. New Zealand’s strong dependence on trade with China also made it difficult to choose between the US and China. It will be interesting to observe how AUKUS will affect strategic relations between Australia and New Zealand and the information sharing system amongst the Five Eyes. NZL has recently already flagged that it might be interested in joining parts of the AUKUS cooperation, for example in the cyber area.
  • There will be AUKUS ramifications in Australia’s closest neighbourhood, the Pacific island countries. They fear that Australia’s nuclear-powered submarines might infringe the policy of a nuclear-free Blue Pacific, enshrined in the 1985 Treaty of Rarotonga which Australia signed. The US and Australia consider the South Pacific as an important strategic area to safeguard its sea lanes. But China is now the biggest trading partner and the second biggest donor to the Pacific island countries. Australia is losing its traditionally dominant position in its backyard due to (1) the growing Pacific island countries trade with China, (2) a cut in Australia’s development budget and (3) the Australian government’s unambitious carbon emissions policy. Pacific countries such as Kiribati, the Solomon Islands and other Pacific Island Forum (PIF) countries have become politically or economically closely linked to China, some of them heavily indebted to it. The Marshall Islands and Palau are however in the US sphere of influence. PIF already in 2019 rejected the notion that the region needed to choose between the US and China. AUKUS, with its China-containment focus, might increase divisions between Pacific island countries and Australia.
  • France in 2018, Germany and the Netherlands in 2020 (as well as the UK in April 2021) have drawn up broad national Indo-Pacific strategies pointing out many fields of present and future economic, political, strategic and developmental cooperation with the region. These countries also underlined their commitment by sending ships to the region. The publication of the EU Indo-Pacific strategy in September 2021- in the making for over one year – was overshadowed by the announcement of AUKUS the day before. A common denominator of the strategies is their concern that the regional order is increasingly challenged. The strategies offer cooperation in a number of areas such as climate change and cybersecurity and expressly include China. As Josep Borell, the EU High Representative for Foreign Affairs, put it: “Cooperate whenever possible, protect whenever necessary.” European countries have become weary of China’s long-term intentions but do not (yet) follow the tripartite AUKUS aim of strategic competition and hard power response with China. Their approach has a more inclusive character as they are convinced that many current challenges can only be solved together. This ambiguity was probably one of the reasons, why France, a resident Pacific power with direct economic, political and military stakes in the Pacific, and other EU countries were left out of the trilateral pact. The next few months will see a robust discussion and a reality check among European countries about the changed scenario. Can they maintain their balancing act or are they ready to embrace the US/UK/Australia community of values view of a strategic competition with China? Together with Germany, France will be a strong European voice as it will be heading the EU presidency from January 2020. And the Biden Administration is seriously evaluating how it can take the Europeans on board. US President Biden made first steps in that direction at the recent G20 summit in Rome.

Dr Anne-Marie Schleich was a German diplomat from 1979 until 2016. She was the German Ambassador to New Zealand and seven Pacific island countries from 2012 to 2016. She was also Consul-General in Australia from 2008 to 2012. Her articles on geopolitical trends in Asia have been published in Switzerland, Singapore, Australia and Germany.

Also recommended the article in the Bangkok Post by the Vice President of the EU Commission Josep Borell to let the ASEAN and Thais know that there is something like an EU Indo-Pacific strategy and an EU:

„EU’s Indo-Pacific commitment

published : 2 Nov 2021 at 04:00

writer: Josep Borrell

The world’s centre of gravity is moving to the Indo-Pacific region, in geo-economic and geo-political terms. Recently, the decision by Australia, the UK and the US to deepen their security and defence ties (the so-called Aukus group) has certainly triggered a lot of debate on the underlying dynamics in the region and how partners can best respond.

As the EU, we have a big stake in the future of the region and, we believe, a big contribution to make as well. That is why we published our own Indo-Pacific strategy last month. Its central message is that the EU is ready to step up its engagement in and with the region, working on issues where we have long cooperated, such as trade and investment, but also expanding this to areas where there is scope to do more, eg, collaborating on shared global challenges like climate action and the digital transition, or on common security challenges like cyber and maritime security.

Why is the EU adopting a new Indo-Pacific strategy now? Amid all the economic dynamism of the Indo-Pacific, we see that the regional order is increasingly challenged, due to growing geo-political competition. We can observe the consequences around the world, but most sharply in this region. As the EU, we have a vital interest that the regional order remains open and rules-based. To that end, we want to enhance cooperation with all Indo-Pacific partners who share our goals.

What do we have in mind? Concretely, we have identified several priority areas where we seek to deepen cooperation in practical terms. Take Connectivity. The EU is and remains a Connectivity super power, in terms of setting standards that are globally relevant and in terms of mobilising finance. We want to build links not dependencies and that is why we favour a sustainable and rules-based approach to connectivity.

A big priority will be our cooperation on global challenges. Climate change is on everyone’s mind. It is an urgent global challenge so we need to join forces to fight, mitigate and adapt to climate change by increasing the level of ambition of our climate action ahead of COP26 in Glasgow. At the same time, we should address broader environmental degradation including plastic pollution and biodiversity loss. Under the strategy, we have stressed that we want to enhance our digital partnerships, including by working closely together on setting the standards that will shape our digital lives.

We also want to deepen our security engagement including counter-terrorism and cybersecurity, seeking to make that cooperation as concrete as possible. Under the strategy, we commit to an open and rules-based regional security architecture, including secure sea lines of communication, capacity-building and enhanced naval presence by EU Member States. Furthermore, the EU will seek to conduct more joint exercises and port calls with Indo-Pacific partners, including multilateral exercises, to fight piracy and protect freedom of navigation in the region. The EU will also support Indo-Pacific partners‘ capacity to tackle cybercrime.

In terms of which partner we want to work with, the EU’s strategy is inclusive of all our partners wishing to cooperate. Certainly, Asean and Thailand lie at the heart of this crucially important region. Indeed, Asean — The Association of Southeast Asian Nations — is a strategic partner for the EU and naturally has a prominent and privileged place in our Indo-Pacific strategy. The EU has bilateral Partnership and Cooperation Agreements (PCAs) with many of its partners in the region and it intends to conclude new PCAs with Thailand and Malaysia. We also intend to work with Thailand, the second-largest economy of Asean, to reinforce value chains by strengthening and diversifying trade relations, including through the possible resumption of free trade agreement negotiations.

We do also include China in our Indo-Pacific plans. On many areas, such as climate and biodiversity for instance, China’s cooperation is essential. At the same time, we want to deepen our cooperation with democratic, like-minded partners.

In short, the EU’s Indo-Pacific strategy is about scaling up and diversifying our political and economic partnerships across the region. With one overall motto: cooperate whenever possible, protect whenever necessary.

Josep Borrell is High Representative of the European Union for Foreign Affairs and Security Policy/Vice-President of the European Commission.

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