by Sergei DeSilva-Ranasinghe
As the American refocus towards the Asia-Pacific and the Indian Ocean commences, Australia’s increasingly useful strategic location in US strategy has been increasingly highlighted. According to Kim Beazley, Australia’s current ambassador to the US, who spoke with Sergei DeSilva-Ranasinghe in April, the relationship between Australia and the US is as significant as it ever, with the stage now set for the further intensification of strategic cooperation.
APSM: What is the status of the Australia-US relationship today?
Kim Beazley: The relationship between the United States and Australia is probably as intense as it’s ever been. In terms of the enhancing the capacity of the ADF, the US has never been as important to us as it is now. At the level of equipment acquisition it is actually an extraordinary period. For example, we are practically in the process of acquiring an entire air force from the US. These include Boeing C-17 military transport air craft, refuelling planes, super hornets, joint strike fighters, helicopters and so on. ADF personnel are also embedded with American forces in command structures around the globe.
The fact that our relations are more intense now than during the Cold War actually reflects many things. It reflects partly what we used to talk about as the revolution in military affairs, that is, the creation of systems and the focus on the technological capability of platforms. We used to talk about it back in the 1980s, but now it has happened and the consequence of that is to bring the relationship between Australia and the US closer. During the Cold War Australia was really in a strategic backwater. Today the direction of American policy, which is to rebalance America’s global priorities to the Asia Pacific region, represents something like a peak in the bilateral relationship. We are now in a strategically significant zone in the American mind, rather than in a strategic backwater.
APSM: How would you illustrate the developments in bilateral ties since your tenure first began in February 2010?
Kim Beazley: There are two things I would like to identify which were amplifications and trends that pre-existed before I came here as ambassador. Take the security end, there is no doubt at all that it is the most significant. The fruits of what has been an ongoing discussion on future collaboration in the Australian region, between the Australian and American militaries, surfaced with some announcements related to Darwin and the utilisation of Australian air bases. That is the first thing I would identify.
The second factor not really appreciated by Australians and is much more diffuse and not government directed. The US is of growing importance as both a source of investment in Australia and as a location of Australian investment. We have got to look at international economic relationships from two angles. One is trade, but the other is investment. Overwhelmingly the preference for Australian overseas investment has become the United States.
Today there are around 11,000 Australian companies operating in the US. Similarly, there is also around USD400 billion dollars plus worth of Australian investment in the US. Westfield’s is just about the biggest shopping centre owner over here, Boral is the biggest brick producer and Macquarie Bank is enormously influential in infrastructure investment. The Australian presence here is becoming quite extensive. The two-way investment between Australia and the US will be in the realm of about USD900 billion. In comparison, two-way investment between Australia and China is about USD100 billion.
Presently, there is over USD500 billion worth of US investment in Australia and USD400 billion worth of Australian investment in the US. Today there are around 150,000 Australian expatriates in the US, with 60,000 of them living in California. However when it comes to trade, the US is Australia’s third-largest trading partner while China is our biggest trading partner. Noteworthy here however is the fact that Australia/US trade has nearly doubled since the implementation of the Free Trade Agreement.
APSM: How do you respond to claims that the US is in decline?
Kim Beazley: In the sense that things are relative there is no decline. In terms of relativities there are other powers rising. The region that Australia inhabits is experiencing the simultaneous rise of a multiplicity of economic powers: China, India, South Korea and Japan are very strong. Then there is Indonesia and Vietnam rising to prosperity.
If you want to talk about the decline of the US, you could say that given that they were 55 per cent of world product back in 1945, the US has been in decline ever since. The biggest surge in the so called decline has not been in recent years, but during the recovery of post-war Europe in the 1950s and 60s. That is what saw the US decline from being about 55 per cent to about 30 per cent. But these are meaningless calculations. If you look at the capacity of US defence forces technologically, they are much more effective and substantial in their technological capability than they were 10 years ago.
APSM: How does Australia fit into US strategy in the Asia-Pacific region?
Kim Beazley: The US is altering its priorities and focus to the Asia-Pacific region because it is part of this region. They are beginning to see the connection between the Pacific and Indian Oceans as seamless. When they talk about the Asia-Pacific, they do not seem to talk about it in oceanic terms. What they have incorporated in their view of Asia is a substantial number of littoral states in the Indian Ocean. That has also been an important facet in their increasing interest in doing more with Australia. They are also responding to our willingness.
We are willing to accept responsibility in our region and the US is partly responding to the shifting geo-political perspective. The Asian region was important during the Cold War, but it was specifically northeast Asia that was important. Now the American gaze is shifting south and there is a real consciousness of the sea lines of communication through the Southeast Asian archipelago. Australians have been talking about this for years, but the Americans have not. A lot of the language that I see now and the way things are discussed here in Washington, is the way we discussed it most of my life time in politics. The Americans never did.
Defence Minister Stephen Smith has identified continuing discussions with the Americans about utilising other Australian facilities such as HMAS Stirling and we are interested in upgrading our facilities on Cocos Islands. In Australia, the progress report of the Force Posture Review that was announced several months ago identified defence of Australia’s approaches far more intensively than was the case of the 2009 white paper. There is also the possibility of substantial upgrades associated with air bases and other facilities that we have in the north. All these are of interest to the US as well and are features in the conversations between our two countries. These conversations are not going to end anytime soon. These discussions are going to be part of our national security life and the difference is that the Americans are now very focussed and interested. One would have to say that back in the 1950s and 60s we were always trying to get the Americans interested, without success. But now they are interested. That is not to say they will do more. These are tight times here but they are interested in what we are doing.
Back in the 1980s we had this focus on our approaches. The period of the immediate aftermath of the Cold War saw us tend to focus on the forward projection of Australian forces in the south pacific region and more recently in the Middle East and Afghanistan. Those commitments are beginning to decline and at the same time we see the rise in significance of the Southeast Asian archipelago in the minds of our allies. In our minds it has always been significant. The US see it very much in the context of the sea lines of communication between the Indian Ocean and the Pacific.
Australia is to some extent also driving the agenda. If you look back at government policy over the last couple of years, there has been a determination by Australia that the United Sates needs to re-orient itself to engage in our region. You will find in Washington many people will give due credit to the Australian government’s part in helping to refocus American interest. Australia has been playing that sort of middle power role with great activity. Now that they are interested in the region in a manner unlike before, they are interested in ensuring that international behaviours within the zone conform to the rules-based system which had been built up over the last 60 years, be that in trade, access to the global commons and mediation of regional maritime disputes.
APSM: What impact is the rise of China having on Australia’s strategic calculations?
Kim Beazley: In terms of its rising to prosperity this is a new dynamic in global politics but the Chinese story is part of a much wider Asia-Pacific story. The rise of China has been enormously beneficial to the economies of Australia and the United States. Conversely, we and the Americans have been enormously beneficial to China. Access to the American market has driven a substantial part of China’s rise to prosperity. Similarly, access to Australian raw materials has also been a part of the Chinese rise to prosperity.
Why are we useful for both of them? Australia is what you might describe as a ‘muse’. Both China and the US have good relationships with us and can bounce ideas off us. We get valued as a source of ideas and opinion because we are seen by both of them as having considerable knowledge both of themselves and of the other party. We are not economically dependent on China. As I have indicated regarding investment patterns and the like, our global and regional economic stance is much more complex than those sort of simple equations.
We maintain a close defence discussion and economic relationship with China. We have regular discussions with the Chinese on international economic issues and on military policy. From time to time this requires management, but to be frank it is not difficult management. The Chinese have for a long time been very willing to have that conversation with us. The Chinese like all powers are entitled to prepare their own defences. But common sense says that you should be as transparent as possible to your regional neighbourhood. That is a challenge for Australia in the Southeast Asian region. It was a challenge when I was defence minister and it still is today.
Sergei DeSilva-Ranasinghe, APSM
Contributing Security Analyst on global strategic and security issues.
