Issues & Insights Vol. 19, CR3 - The US and Australia: Addressing 21st Century Challenges Together

March 1, 2019

The Pacific Forum, in partnership with the United States Studies Centre at the University of Sydney and the Australian Institute of International Affairs, co-hosted a public panel featuring four Pacific Forum Young Leaders, two moderators, and more than 40 audience members from the United States and Australia, all attending in their private capacity, in Canberra, Australia, on Dec. 6, 2018. Supported by the Embassy of the United States of America, the panel discussion explored the development of the Indo-Pacific strategy and how the United States-Australia alliance should evolve to address future challenges. In this, emphasis was on identifying and probing differences in thinking about the 21st century challenges facing the United States and Australia. This report contains papers presented by the Young Leaders within the context of the public panel.

Understanding the Indo-Pacific Strategy

In the first session, the discussion centered around understanding the Indo-Pacific strategy from both allies’ perspectives. Panelists distinguished between the United States’ Indo-Pacific Strategy (IPS) and what Australia is beginning to operationalize as part of its Indo-Pacific outlook.

American panelists described the IPS as a “vision” for the future of the region: strong and independent countries free from coercion, able to defend their people and contribute fairly to the world economy. The IPS is not about containing or encircling the People’s Republic of China (PRC), but rather, sustaining the free and open order under threat from aggressive and predatory behavior by the PRC.

Economics, governance, and security make up the three pillars of the strategy that work in concert to unlock the full potential of the vision. The economic pillar seeks to attract private investment to the countries that need it the most. Poor governance – including bribery and corruption, frail rule of law and court systems, opaque public finance, weak bureaucratic institutions and election fraud – tends to stymie private sector investment from Western firms. The governance pillar seeks to address these barriers to entry, thereby increasing business activity in developing countries. As peace and stability underpins prosperity for the entire region, the security pillar ties the region together and strengthens the US position as a security partner of choice.

The IPS was characterized by its competitive paradigm with China, ability to leverage the American private sector as US foreign direct investment (FDI) in the Indo-Pacific region approaches nearly $1 trillion, embrace of development finance such as through the $60 billion BUILD Act, and a shared vision with allies and partners, including India.

American panelists emphasized joint cooperation with Pacific Island countries, expanding the role of quadrilateral dialogue between Australia, Japan, India, and the United States – often referred to as the “Quad,” having a strategic messaging platform, employing a resourced and staffed approach, and revisiting ASEAN engagement as future opportunities. Areas of emphasis where allies and partners can optimize cooperation included infrastructure, energy, digital economy, and transparency in governance.

Australian panelists cited their 2017 Foreign Policy White Paper, which offered a comprehensive picture of Australia’s Indo-Pacific outlook. While stressing the ongoing importance of the US alliance and the rules-based order, the document included key priorities such as increasing influence and partnerships across the Pacific, Southeast Asia, and the Indian Ocean, as well as building a more capable defense force. It also emphasized upholding norms and institutions of the rules-based order, firm commitment to the ANZUS Treaty, a strengthened and more active defense force, the ‘Pacific Step-Up’ and becoming ASEAN’s ‘partner of choice.’

Australian panelists identified upholding the rules-based order, stronger India relations, providing economic alternatives to the PRC’s Belt and Road Initiative (BRI), and ASEAN centrality as evident synergies between Australia’s Indo-Pacific outlook and the IPS.

The military dimension of the Indo-Pacific strategy

In the second session, the conversation moved from conceptualizing the Indo-Pacific to discussing the military component of the Indo-Pacific strategy from both allies’ perspectives.

American panelists explained that underpinning the shift in balance of power is the rise of a more powerful and aggressive PRC under the complete control of the Chinese Communist Party (CCP). The military component of the IPS is to enhance deterrence so that it becomes riskier for the CCP to engage in coercive actions. Indeed, capability and credibility is required for good deterrence. To increase capability, the US emphasized the importance of the Indian Ocean and revised conventional arms transfer policies to streamline arms transfers to partners and allies. The issue of credibility still remains, however, as questions surrounding the risks Australia and the US are willing to incur and how much each is willing to pay for defense remains unanswered.

To address this concern, American panelists recommended Australia and the US have an open conversation about strategic, operational, and tactical needs of the alliance and adjust burden-sharing accordingly.

Strategically, the alliance should integrate deterrence concepts into its broader security cooperation and defense posturing and better define the goals and resolve of the alliance. A restructuring similar to that of the US-Japan alliance could be useful. Operationally, Australia and the US should redefine their roles, missions, and capabilities while taking into consideration the cost they are willing to incur to boost deterrence and how to deter a potential adversary that engages in coercive tactics in all spheres of interaction. Tactically, the alliance should boost arms sales, achieve machine-speed interoperability, and focus on protecting crucial maritime chokepoints such as the Sunda or Lombok Straits.

Australian panelists explained that modern military strategy is as much about politics and psychology as it is about capabilities. Amidst a rapidly changing geo-strategic environment in the Indo-Pacific, Australia and the US can maintain focus on values-based alliances and partnerships, translate these relationships into the realm of military cooperation, and shore up the rules-based order to ensure security and stability in the region.

Focus on values-based alliances and partnerships includes maximizing the benefits of the Quad and other minilateral arrangements, formalizing the Australia-Japan relationship, and engaging with Pacific Island nations. Translating these relationships into the realm of military cooperation was described as conducting joint military exercises, practicing and assessing interoperability, and ensuring soldiers are trained for state-on-state conflict with militarily advanced adversaries. Shoring up the rules-based order implies participating in the development of rules for new realms of conflict while taking care not to disadvantage themselves in the face of more recalcitrant states. Ensuring the rules are unambiguous is a key aspect of deterrence.

In conclusion, panelists agreed that while the outlook for the Indo-Pacific region is complex, both Australia and the US benefit from their alliance and would do well to manage challenges through continued discussion and commitment. While various synergies between the IPS and Australia’s Indo-Pacific outlook exist, Australia and the US should consider pursuing specific priorities with a high probability of success while openly discussing roles, capabilities, and the cost each ally is willing to incur.

Download the PDF file of "Issues & Insights Vol. 19, CR3" to view the full conference report.