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Thayer Consultancy Background Brief

ABN # 65 648 097 123


Australia-United States Relations
and the Indo-Pacific Region
June 11, 2018

Q1. How important is Asia-Pacific security to the United States in comparison to that
of Europe and the Middle East? How much leverage does Australia have in shifting
U.S. priority to the Asia-Pacific region?
ANSWER: The centre of world power in both economic and military terms has shifted
to the Asia-Pacific with China’s rise and India’s high economic growth. North Korea’s
development of nuclear weapons and intercontinental ballistic missiles is the most
serious global challenge faced by the United States. In addition, the South China Sea
is the strategic linchpin for the rapid deployment of U.S. military forces from the
Western Pacific to the Indian Ocean and Persian Gulf.
In the Middle East the threat of Islamic State has been reduced but not eliminated.
The situation in Europe is stable. Russia has succeeded in annexing the Crimea and
intervening in the Ukraine. NATO countries face low level incursions by Russian air and
naval forces.
The U.S. Pacific Command, now rebranded the Indo-Pacific Command, is the largest
combatant command in the world in terms of geographic scope. The U.S. commitment
to the Indo-Pacific has been reaffirmed in the National Security Strategy (2017) and
National Defense Strategy (2018).
The Indo-Pacific Command straddles the Western Pacific and eastern reaches of the
Indian Ocean via the South China Sea. This is a strategic passageway for U.S. warships
and military aircraft and serves to link the Middle East to the Indo-Pacific.
NOTE: See the statement by Admiral Harry Harris to the House Armed Services
Committee on February 14, 2018:
https://docs.house.gov/meetings/AS/AS00/20180214/106847/HHRG-115-AS00-
Wstate-HarrisJrH-20180214.pdf
Fundamental U.S. national interests did not change when Donald Trump was elected
president of the United States. The network of U.S. alliances and strategic partners
has not changed; even the Philippines stepped up military exercises with the U.S. this
year.
The U.S. remains a top trading partner of many nations in the region even if China is
number one. U.S. investment dwarfs Chinese investment even though Chinese
investment is rising fast
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In sum, the Asia-Pacific -Indo-Pacific - remains the most important threatre of


operations for the United States.
Australia’s leverage with the United States is based on the 1951 security treaty with
the United States and New Zealand (ANZUS). This provides for annual ministerial
meetings between their respective foreign affairs and defence ministers. Australia’s
prime minister also has access to the U.S. president. Australia has considerable
diplomatic leverage with the U.S. Defense and State departments and the U.S.
Congress. These relations provide a conduit for Australian views to reach the U.S.
president. Finally, there are strong people-to-people linkages arising from education,
tourism and immigration.
Other sources of Australian leverage include strong economic and financial ties with
the United States, Australia’s provision of intelligence to the Five Eyes network (U.S.,
United Kingdom, Canada, Australia and New Zealand, arms and equipment purchases
from the United States, interoperability of Australina defence force with the United
States, and Australia’s ability to provide niche expertise to the alliance, such as special
forces.
The question of Australian leverage can be illustrated by (a) President Trump’s
agreement, however reluctant, to honour the Nauru refugee settlement agreement
reached by President Obama and Prime Minister Turnbull in late 2016 and (b)
Australia’s exemption from steel and aluminium tariffs. Australia also has a trade
deficit with the United States, which helps in dealing with Trump.
In one sense Australia does not need to apply leverage to keep the United States
engaged in the Indo-Pacific. The U.S. has substantial economic and strategic interests
in the region of long standing. However, Australia needs to exert its leverage to suit
Australia’s national interests on specific issues such as multilateral trade agreements
including the Trans-Pacific Partnership.
No amount of Australia leverage, however, can change Trump’s style of decision-
making and leadership. At the moment, both Australia and the United States share
similar concerns about nuclear proliferation on the Korean peninsula and China’s
militarization of the South China Sea.
Q2. What are current major U.S. military engagement activities in the region,
particularly with respect to the South China Sea disputes?
ANSWER: The U.S. has multiple forms of engagement with the Indo-Pacific, ranging
from multilateral exercises such as the Pacific Partnership, CARAT (Cooperation Afloat
Readiness and Training), Maritime Security Initiative (capacity building assistance to
the Indonesia, Malaysia, Philippines, Thailand and Vietnam), Exercise Malabar (India,
Japan and the U.S.), and the RIMPAC (Rim of the Pacific, the world’s largest
multilateral naval exercise) to bilateral exercises with allies (Balikatan with the
Philippines and Talisman Saber with Australia).
In addition, there are three separate military engagement programs in the South China
Sea: (1) Freedom of Navigation Operational Patrols, (2) continuous bomber presence
flights and (3) naval presence patrols (in 2017 the U.S. Navy was present in the South
China Sea for 900 “ship days” up from the average of 700 ship days in previous years).
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Q3. How does China’s territorial expansion threaten ANZUS interests (apart from the
rule-based global order and freedom of navigation)?
ANSWER: China’s militarization of the South China Sea threatens the interests of the
United States and Australia by providing the means for China to exercise coercion
against Southeast Asian states in an effort to lessen their support for the U.S. And
China’s militarization of the South China Sea threatens the ability of the United States
and Australia to deploy military ships and aircraft in the region on missions unrelated
to freedom of navigation. As noted in your question, however, the mains challenges
posed by China relate to upholding a rules-based regional order and freedom of
navigation.
ANZUS is a treaty to consult if the armed forces of any of its members are attacked in
the Pacific region. The 1951 Security Treaty states:
Article IV
Each Party recognizes that an armed attack in the Pacific Area on any of the Parties
would be dangerous to its own peace and safety and declares that it would act to
meet the common danger in accordance with its constitutional processes.
Any such armed attack and all measures taken as a result thereof shall be
immediately reported to the Security Council of the United Nations. Such
measures shall be terminated when the Security Council has taken the measures
necessary to restore and maintain international peace and security.
Article V
For the purpose of Article IV, an armed attack on any of the Parties is deemed to
include an armed attack on the metropolitan territory of any of the Parties, or on
the island territories under its jurisdiction in the Pacific or on its armed forces,
public vessels or aircraft in the Pacific.
As noted above, ANZUS interests are threatened by China’s militarization of the South
China Sea that can be used to coerce regional states such as the Philippines, Vietnam
and Malaysia and undermine their relations with Australia and the United States.
China’s militarization could lead to its dominance over the South China Sea and
restrictions on the movement of foreign military ships and aircraft.
Defence Minister Marise Payne’s statement at this year’s Shangri-la Dialogue
identified maintaining the rules-based order and freedom of navigation as the main
challenges to Australia’s security. Minister Payne said:
Emerging security challenges
The importance of the rules-based order is as relevant today as ever before.
Today’s challenges and threats are increasingly complex, ranging from the variants
of the terrorist threat and the proliferation of weapons of mass destruction, to the
effects of climate change and cyber attacks.
We must challenge any tendency to complacency, born of a belief that our
increasing economic interdependence acts as a guarantor of security.
Because that is a false belief.
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We need to invest the same level of commitment and ambition in our security
cooperation that we have in economic cooperation.
And we need to make new efforts to uphold and reinforce the rules-based order
that has enabled us to get to where we are today – an order by which all in the
region have benefited.
China and the South China Sea
Perhaps the greatest example of this benefit is China. China has lifted half a billion
people out of poverty, in large part by engaging with global markets in a stable
security environment.
And that growth has driven prosperity in many other countries too.
Trade in goods and resources has been the foundation of this growth. And
maritime security – built on the foundation of agreed rules for how all nations
behave at sea – has made that possible. We need to maintain those rules to
maintain our shared prosperity.
It is even more important that we do so when confronted with challenging
circumstances, such as those of overlapping sovereignty claims in the South China
Sea.
Australia calls on all countries to act in the South China Sea in ways that are
consistent with international law, including the decision of the 2016 Arbitral
Tribunal.
Australia will continue to act in accordance with international law.
Our ships, our aircraft will operate in the South China Sea, as they have for
decades, consistent with the rights of freedom of navigation and freedom of
overflight. And we will also continue to strongly support the right of others to
exercise those rights.
https://www.minister.defence.gov.au/minister/marise-
payne/speeches/minister-defence-16th-iiss-asia-security-summit-shangri-la-
dialogue
Q4. What is Australia’s policy regarding the South China Sea dispute? Does Australia
have any direct military engagement in the South China Sea? How does Australia fulfil
its role as a bridge between the U.S. and the Indo-Pacific region in mitigating tensions?
Are these mechanisms sufficient given Australia’s strong economic dependence on
China?
ANSWER: Australia is one of the most Northeast Asia trade dependent countries in the
world. Australia’s biggest trading partners are China (largest), Japan (third largest),
South Korea (fourth largest), Singapore (seventh largest) and Thailand (eighth largest).
The United States ranks second. Australia has a national interest in safe and secure
trade routes through the South China Sea.
Australia’s official position on the South China Sea is that it does not take sides on
sovereignty disputes. Australia advocates the peaceful settlement of disputes without
resource to force or the threat of force in accordance with international law, including
the United Nations Convention on the Law of the Sea.
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As a treaty ally of the United States, Australia has an interest in seeing that the United
States remains engaged with the region.
Australia is bound to the defence of peninsula Malaysia/Singapore through the 1971
Five Power Defence Arrangements (FPDA). Australia regularly conducts military
exercises with its FPDA partners. Australia bases maritime patrol aircraft at
Butterworth Base in Malaysia and conducts regular reconnaissance flights over the
South China Sea. Australian warships also pay friendly port visits to Singapore,
Malaysia, the Philippines, Vietnam and other countries.
In addition, Australia supports the Philippines in maritime capacity building, having
gifted several decommissioned navy transport ships, and counter-terrorism (training
and intelligence). Australia has defence cooperation programs with Papua New
Guinea, Timor-Leste, Vietnam and Indonesia.
Australia acts more as a partner rather than a bridge in developing relations with the
United States and the Indo-Pacific. The two countries hold annual ministerial talks
(AUSMIN) between their respective defence and foreign ministers. They map out an
annual program. The AUSMIN talks, high-level visits and routine liaison provide the
means to coordinate policy and responses to security challenges in the Indo-Pacific.
Within the Five Eyes intelligence program Australia has special responsibility for
signals and electronic intelligence collection in Southeast Asia (and Oceania).
In recent years Australia’s long history of security ties has changed. In the past
Australia’s main ally was also its largest trade partner. This is no longer the case as
China has become Australia’s largest trading partner. China is also the largest trade
partner of the United States, Japan and South Korea.
It is important to note that Australia’s alliance with the United States dates to 1951.
Australia’s trade relationship with China is much more recent. It is not a question of
justifying this relationship but observing that it is a fact. This new relationship adds
tension from time to time in relations between Canberra and Beijing. Even if China is
Australia’s largest trade partner, that does not mitigate Chinese dependence on
Australia as a source of raw materials such as iron ore.
Over the past two years Chinese interference in Australia’s domestic affairs has
become a prominent issue. This has led China to suspend ministerial visits and to
create some delays in the import of Australian goods such as wine and chilled beef.
It is China’s domestic interference in Australia through donations of money to
politicians, commercial hacking, influence operations in the ethnic Chinese
community and Chinese language media, and espionage that is the number one
problem in bilateral relations. The key question for Canberra is how to manage its
relations with China while maintaining strong economic, financial and defence ties
with the United States.

Suggested citation: Carlyle A. Thayer, “Australia-United States Relations and the Indo-
Pacific Region,” Thayer Consultancy Background Brief, June 11, 2018. All background
briefs are posted on Scribd.com (search for Thayer). To remove yourself from the
mailing list type, UNSUBSCRIBE in the Subject heading and hit the Reply key.
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Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.

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