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After a few years marked by COVID-19 disruptions and a fractured relationship with China, Australia seemed set to return to its traditional geopolitical position in 2024.
The US alliance had been cemented with the inclusion of the United Kingdom in the AUKUS ‘security partnership’ — formally presented as a commercial deal for submarine procurement but widely seen as a replacement of ANZUS. Australia’s trade relationship with China, upset by the latter’s hostile response to former prime minister Scott Morrison’s calls for an investigation into the origins of COVID-19, gradually returned to normal.
There is an inherent contradiction in all this. The thinly veiled purpose of AUKUS is to counter Chinese adventurism in the South China Sea — seen, among other things, as a threat to vital trade links. While a large proportion of Australia’s trade depends on the South China Sea, the contradiction is that much of this trade goes to and from its largest trading partner, China itself.
Australia’s position depends on a delicate balancing act between its political and military alliance with the United States and its economic dependence on China. One way or another, equilibrium has by and large been maintained. Australia has also remained on good terms with its neighbours, including Indonesia — once seen as the most likely potential threat to the country’s security.
But global events in 2024 have upset the balance. The most notable event was the election, for the second time, of Donald Trump as US president. The Australian political class is worried by the prospect that Trump might seek to renegotiate the terms of the AUKUS agreement. But this significantly understates the changes in Australia’s broader geopolitical situation.
Trump’s election threatens a central premise of Australia’s alliance with the United States — a shared commitment to democracy. Trump has repeatedly mused about becoming a dictator and overcoming the constitutional restrictions that would preclude a third term. The Republican party has shown itself willing to impose all kinds of anti-democratic measures to keep Democrats out of office. With unfettered control of Congress and the Supreme Court, this could become a reality.
But even if US democracy survives this challenge, the idea of the United States as a reliable ally, committed to come to Australia’s aid in the event of a serious threat, is fallacious. Trump’s slogan ‘America First’ echoes that of the isolationists who opposed US entry into World War II. Although Trump is often described as transactional, this term implies a willingness to adhere to the terms of a bargain once it is struck. But even with a renegotiated AUKUS, Australia could not count on Trump to fulfil the explicit and implicit security guarantees involved.
And what is true of Trump is likely true of any Republican successor. Unless the Republican party is thoroughly defeated and remodelled — a process that will take decades — US foreign policy will now shift dramatically with every change of government.
Beyond defence, Trump has expressed a willingness to use tariffs to punish both friendly and unfriendly countries for real or imagined slights. It has already been suggested that the Australian government’s social media policies might attract such retaliation. This implies even greater reliance on China as a trading partner and as a defender of open trade.
The change of government in the United Kingdom was less dramatic, but it will prove equally important. UK involvement in AUKUS was largely a product of former prime minister Boris Johnson’s nostalgia for the glory days of the British Empire, which were to be recreated following Brexit. The country’s ‘Indo-Pacific tilt’ reflected its desire to disengage with Europe, while the shift from ‘Asia-Pacific’ reflected the goal of preventing China from extending its influence into the Indian Ocean.
The newly elected Labour government, led by Keir Starmer, has made only marginal changes to the policies it inherited. Moves to restore a European focus have been limited. A symbolic commitment to the Indo-Pacific is evident in the deployment of two patrol boats to counter illegal fishing and an announced visit to Singapore by the aircraft carrier HMS Prince Of Wales.
But the need to recommit to Europe, combined with the parlous state of UK public finance, means that not much can be spent on the Indo-Pacific. The motive for continuing with AUKUS is the financial support it provides to the country’s submarine industry. As with Trump, the United Kingdom’s historical record suggests that Australia should not expect a reciprocal commitment to its defence in the event of an emergency.
Finally, there is the downturn in the Chinese economy, notably reflected in reduced demand for iron ore. This decline is already creating problems for the Australian government’s budget, which has benefited greatly from taxes paid by mining companies. But the contraction of one large market only increases the urgency of expanding trade as much as possible.
The world looks a lot less friendly for Australia than it did at the beginning of 2024 and this is unlikely to change any time soon. Australia needs to face its situation realistically rather than relying on the illusion that ‘great and powerful friends’ have its best interests at heart.
John Quiggin is VC Senior Fellow in Economics at the University of Queensland.
This article is part of an EAF special feature series on 2024 in review and the year ahead.
EAF |Australia |Australia finds itself with fickle friends in 2024