Economics and finance, Trade and industry, International relations | Australia, Asia, The Pacific

7 April 2017

The Indian and Southern Oceans need as much foreign policy human and political capital as the Pacific Ocean to mould Australia into a three-ocean power, Tristan Kenderdine writes.

Australia has sophisticated Asia-Pacific trade, security and foreign policies. However, this has only really developed in the past 40 years. Before this, Asia was frequently seen as a security threat and held little economic value as Australia traded mostly with Europe. Similarly, today, a reliance on the Pacific casts the Indian Ocean into shadow. The Foreign Policy White Paper currently under development offers the opportunity to rethink, redirect and realign the country’s foreign policy narrative to position itself for opportunities beyond its own regional backyard.

How would it do this? A good start would be for Australia’s government to back an Indian Ocean trade community. Rather than looking backwards to a trade agreement with an ailing post-Brexit Britain, Australia should instead be focused on establishing a trade community, similar to APEC, in the Indian Ocean that connects East Africa, South Asia and the Gulf States within an Australian-led institution.

East Africa as a common market would be a US$1 trillion economy. The Gulf States, including Egypt and Iran, represent a US$1.5 trillion economy, India’s economy is approaching US$2 trillion and Australia is a US$1 trillion economy, with Indonesia closely approaching this value. Linking these economies together would create the world’s fourth largest economic bloc behind the European Union, the United States and APEC, and would be larger than the ASEAN Economic Community.

More on this: The Indo-Pacific century: new concept, new challenges

Another front that Australia’s foreign policymakers should apply themselves to is the Southern Ocean and Antarctic, where China’s increased interest is worrying for Australia. Australia should have a lead role in both living and non-living resource protection, scientific research agenda-setting, international treaty law and maritime law, and the political and economic geography of Antarctica. For too long Antarctica has been the preserve of environmental scientists and Australia must quickly catch up to the legal and political research and governance agendas being set by other states in the region. Australia should upgrade the Australian Antarctic Division to departmental level.

Australia also has a huge opportunity as a new country to engage with the trade agendas of land-locked Eurasian states emerging from planned economies. Kazakhstan and Mongolia, in particular, are states with many similarities to Australia. Kazakhstan is a rising petro-state enjoying vast mineral, hydrocarbon and water resources. There are many public policy areas in which Kazakhstan could benefit from closer formal relations with Australia. For Australia, mining and resource firms would benefit from greater access to new markets set to open as China’s Belt and Road policy pushes infrastructure investment into a regional policy to connect China with Europe.

In the Pacific, Australia should help Fiji to build a South Pacific Trade Terminus, harnessing Chinese investment in the Pacific and using it to leverage the Pacific Island Forum states into middle-income economies. China sees Fiji as a possible mid-transit shipping terminus joining South American and East Asian markets as a South Pacific answer to the US’ use of Hawaii in the North Pacific. Australian diplomatic and trade and investment support could help Fiji, and other Pacific Island Forum countries to maximise their industrial development goals with the incoming Chinese state capital.

More on this: Australia's new foreign policy White Paper

Another way that Australia could play a larger role in the near region is by increasing its involvement with the ASEAN Economic Community (AEC). A good step forward would be for the country to move past observer status and at least join the AEC’s custom union. Eventual monetary union and free movement of labour could also be considered.

Finally, Australia could position itself as a centre for peace and reconciliation in Asian security and general maritime law. In doing so, the country could play a larger role in ASEAN as the China-US relationship changes the dynamics of the region, and help to broker a Northeast Asian Security Dialogue, which could one day evolve into a security community.

The Foreign Policy White Paper currently under development is not only a chance for progressive thinking and novel solutions to old problems in our region. It is an opportunity to set an agenda for progressive engagement with our region in the Pacific, Indian and Southern Oceans; to set on the table an active role for leadership and engagement in Southeast Asia; to steer Australia towards a Northeast Asian security community; and to define the country’s collective interests and common destinies with the greater Asia-Pacific community.

Advancing Australia fair in the coming decades will require the country announcing to the world that it is ready to lead in the Asia-Pacific, to facilitate trade and investment in the Indian Ocean and to protect the Southern Ocean. What the country needs to avoid is looking back to Europe or to Cold War mentalities for a Pacific Century that it is already positioned at the forefront of the Western world for.

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