Wednesday 02 Dec 2020 | 04:38 | SYDNEY
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About the project

The 2016 Defence White Paper describes a rules-based global order as a “fundamental strategic interest”. 

This project, supported by the Department of Defence’s Strategic Policy Grants Program, aims to lead a national debate on the rules-based order and its implications for Australian security and defence. It will connect the legal, political, and historical debates about the nature of the global order with the practical realities of Australia’s strategic environment. It will address how the order can evolve to meet new technological challenges and modes of warfare, including grey zone operations.

Cover image: Official U.S. Navy / Flickr

Latest publications

Morrison’s messages to the “sophisticated state-based cyber actor”

Prime Minister Scott Morrison’s announcement today that Australia was being targeted by a “sophisticated state-based cyber actor” was curiously measured. On the one hand, the “targeting” necessitated a Prime Ministerial statement, guaranteeing widespread media coverage. On the other hand, the PM’s assured the public that “this has been a constant for Australia to deal with”.

That’s probably because Morrison needs to deliver two messages.

First, the Prime Minister wants to communicate to the Australian private sector, to reassure local companies that might be seeing signs of the “targeting” that the government agencies are on top of it, and to encourage those that haven’t to tighten security. Morrison laid the groundwork for the more detailed technical advisory from the Australian Cyber Security Centre.

Countries such as Australia want to deter adversaries without provoking them.

Second, the Prime Minister is unavoidably sending a message to the “state-based actor” behind the intrusions (which is almost certainly China). In essence, Morrison is saying: We know what you’re up to, but we aren’t going to name you (yet)

That reluctance is part of the emerging rules of this new game of cyber competition. Countries around the world are struggling to develop a framework to manage growing state-on-state rivalry in and through cyberspace.

Countries such as Australia want to deter adversaries without provoking them. Public attribution – and the threat of doing so – is seen as one of way of warning and deterring an opponent. But early attribution can also be provocative and leave less room for subsequent escalation. Australian agencies may hope that the PM’s statement will deter the attackers from moving on to extract large volumes of information or engaging in any sabotage. 

As the PM put it, “That fact that these threats present is not a surprise in this world in which we now live”. One part of managing that threat – and creating more rules – has to be a more nuanced popular vocabulary. Though the PM’s words were chosen carefully, the alarming and imprecise phrase “cyber attack” was used heavily in the media build up and subsequent coverage of his remarks.

Canberra vs Beijing: A reply to Alan Dupont

Australia’s national debate about China has been dramatically transformed over the last few years. China’s rise is arguably the most important thing to happen to Australia’s place in the world since federation, so the fact that we are debating its implications so openly and frankly is entirely welcome. To those complaining about name-calling and a lack of “nuance”, I would respond that Australia’s culture of public debate could do with a bit more grit. 

But although Australians are now much better informed about the kind of challenge China poses, the national debate hasn’t yet turned to the question of costs: What price are we prepared to pay, and what risks are we prepared to take, to mitigate the challenge posed by China?

Lowy Institute non-resident Fellow Alan Dupont’s opinion piece in The Australian on Tuesday is a case in point. Dupont makes the now familiar argument that Australia is too economically dependent on China and needs to diversify. When I say the argument is familiar, I mean among strategic commentators – you rarely hear it from economists because they recognise how costly such diversification could be. 

Dupont says “The cost of not diversifying is too great”, but without an estimate of the cost of diversification, it’s hard to make a judgment about what it would cost to not diversify. Safe to say, however, that if it was easy and cheap, we would have done it by now. More likely, it will be expensive and will involve levels of government intervention in the economy that will make both major parties and the Treasury deeply uncomfortable.

From time to time even the US has coerced Australia, and we had to compromise for the greater good. Now we will need to compromise with another great power, one that will grow even bigger than the US and is much less friendly towards us.

Dupont also says “We can’t be held hostage to China’s whims and coercion”. He says “can’t” but what he really means is “shouldn’t” – he’s making a value judgment rather than stating a fact. But again, we should be thinking about the costs of such a stance, and on its face it seems as if building an economy that makes Australia entirely immune to threats and coercion from Beijing would be prohibitively expensive. 

That means we need to be selective about where we are prepared to compromise and where we will stand firm. We can’t just declare, as Prime Minister Scott Morrison recently did, that Australia will “never … trade our values in response to coercion from wherever it comes”, because that’s an impossibly high standard. Indeed, it is a standard we never met in our foreign relations even before China was a great power. 

From time to time even the US has coerced Australia, and we had to compromise for the greater good. Now we will need to compromise with another great power, one that will grow even bigger than the US and is much less friendly towards us. We are already being tested by Beijing, and the tests will get harder as China grows.

But will it grow? Dupont argues that there is a kind of fatalism in Australia about this question, which he says has been “shattered” by recent events. China faces “growing headwinds” in Asia, including the loss of American goodwill, the deterioration of relations with neighbours, the professed desire of America’s friends and allies in Asia for Washington to maintain its presence, and the Duterte government’s reconsideration of its decision to revise its defence treaty with the US. China’s relations with Europe have also soured.

Dupont’s conclusion is that “China’s power may already have peaked, challenging the notion that the communist nation will inevitably become the dominant state and global rule-setter”. But note the crucial words “may have” rather than “probably has”, which suggests Dupont himself thinks it’s a less than 50/50 likelihood.

Needless to say, the future is unknowable, but if Dupont is basing this tentative judgment solely on recent diplomatic setbacks he lists, it seems like a thin reed. China is a truly colossal economic power, a nation which is already by some measures the world’s largest economy and which has enormous potential for further growth. We can’t be certain China’s growth rate will continue on a straight line. Coronavirus will take a big chunk out of this year’s growth figures and there may be another even bigger crisis ahead. Then again, the United States went through a Great Depression and the biggest war in human history, yet still emerged as the leading global power. 

So we can’t base our plans for the future on the possibility that China may fail. In fact, despite the vigour and candour of the contemporary Australian debate about China, we may still not have fully internalised how successful China could be. Yes, China is riddled with internal problems and has increasingly fractious relations with neighbours and other great powers. But given the scale of its economic miracle, it’s hard to believe this will shift the dial enough to stop China’s trajectory towards regional leadership. That’s not fatalism; it’s reality.

Weight on the scales

A few months back – only in January, yet seemingly a very different time ­– Mike Mazarr and I offered some initial reflections on America’s and China’s contrasting “theories of influence”. The article prompted a series of contributions, including an initial rejoinder from Sam Roggeveen and most recently a response by Nurliana Kamaruddin and Jan Vincent Galas, which collectively furnish a rich basis for discussion.

The novel coronavirus has sufficiently affected the geopolitical landscape in the intervening weeks – particularly since Mazarr’s response in February and a further reply from Roggeveen in March – that I thought it would be appropriate to split my comments into two sections. The first contains some observations I wrote down before the World Health Organisation declared Covid-19 a pandemic, and another contains some observations I wrote afterward.

Before the pandemic declaration

Roggeveen rightly cautions against a blinkered view of US conduct; Washington has launched unilateral wars of choice, supported authoritarian regimes, and used economic coercion to entrench its pre-eminence. Still, it premised its post-war foreign policy in large part on facilitating Eurasia’s resuscitation and, in effect, reducing its own relative weight in the world economy. Where the US accounted for roughly half of gross world product after the Second World War, it contributed only about a quarter by the early 1970s. While there was a strategic rationale at work – Washington hoped that a network of democratic economies could serve as a bulwark against Moscow – the US and its allies continued to develop the post-war order even after the Soviet Union’s dissolution obviated that pretext.

In addition, while US pre-eminence is rooted in its unrivalled ability to project force, Mazarr encourages observers to consider “the fullness of the US-led post-war order,” which constitutes a rich complex of institutions, processes, and norms. No less than Fu Ying, former chair of the foreign affairs committee of China’s National People’s Congress, concedes that the US “ has made great contributions to human progress and economic growth”.

A crucial litmus test for the US and Chinese theories of influence will be the kind of balancing in which middle powers engage, especially longstanding US allies and partners. While the conventional framing – how to enhance security ties with Washington and economic ties with Beijing in parallel – might still apply from a bird’s-eye view of the world, it discounts the extent to which changes in each country’s behaviour have complicated the sustainment of that balance.

The relationship between Washington and Beijing has reached its nadir precisely when the need for their cooperation has reached its peak.

Because China’s centrality to the global economy has increased apace, middle powers face intensifying pressure to maintain robust trading and investment ties. But because China’s foreign policy has also grown more assertive, those same powers are also strengthening their individual military defences and conducting more sophisticated joint exercises to hedge against the possibility of a China that pursues regional dominion.

The US, meanwhile, has become a considerably more unpredictable actor in recent years, pursuing a transactional foreign policy that seems equally likely to target competitors and friends. Middle powers must now factor into their strategic outlooks the possibility of another administration that hews to some variant of “America First,” and the attendant realisation that even if they regain some avenues of cooperation with a more multilateralist successor, a subsequent one might close them off again.

While most middle powers have more room to manoeuvre between the US and China today than they did between Washington and Moscow during the Cold War, it is no trivial task to stay in the acceptable graces of an increasingly disruptive incumbent as well as an increasingly assertive challenger. Tim Huxley, head of the International Institute for Strategic Studies’ Asia office, remarked to me in December that that challenge is subjecting them to growing strategic stress.

Both the US and China, then, have their work cut out for them. No matter how vigorously the US defends its erstwhile theory of influence and highlights the gross human rights abuses China is committing, its relative competitiveness will continue to diminish unless it can develop a geoeconomic agenda that credibly rivals or at least supplements that being offered by China. Even those countries that have deep apprehensions about China’s military modernisation and strategic ambitions have largely rejected the Trump administration’s efforts to stymie its economic development.

China, meanwhile, would appear to be making a risky bet: that it can largely ignore its neighbours’ growing anxieties if it maintains a certain degree of economic centrality within the Asia-Pacific. While Beijing has not been wholly unresponsive to external criticism – it has, most notably, recalibrated its Belt and Road Initiative in response to concerns over that undertaking’s consequences for participating countries’ ecology and indebtedness – its leadership generally seems indifferent to the reputational damage it has incurred in recent years on account of, to name a few examples, its continued militarisation of the South China Sea, its growing intimidation of Hong Kong and Taiwan, and its mass internment of Uighurs. China would be unwise to conclude that militarily and economically formidable democracies such as Australia, India, Japan, and South Korea will acquiesce to its vision of regional order.

After the pandemic declaration

Roggeveen concludes that because US attempts to promulgate a liberal order in the Asia-Pacific would encounter opposition from China, and perhaps even India, the region’s evolution should be grounded in a pursuit to which even its most normatively antithetical participants would assent – as he puts it, “ensuring that Asia’s major powers never fight a potentially catastrophic war between them”. That goal is anything but “modest”.

It is sad, nonetheless, that expectations for the region’s evolution have become this constrained. It was not too long ago, after all, that middle powers invested some hope in a US-China “G-2” or a “new model of great-power relations” – reassuring, if nebulous, commitments to a more enlightened geopolitics in which a preeminent power and its principal challenger could subordinate the inevitability of structural tensions to the imperative of sustained cooperation.

Today, by contrast, explains the Washington Post’s Beijing bureau chief Anna Fifield, “[a]nalysts in both countries are now describing the worst state in relations since President Richard Nixon began the process of rapprochement with China in the 1970s”. Far from arresting that downturn, even if temporarily, Covid-19 has only intensified mutual distrust: the relationship between Washington and Beijing has reached its nadir precisely when the need for their cooperation has reached its peak.

While neither of them is acting like an especially responsible stakeholder at the moment, many Asia-Pacific powers have set examples for the rest of the world to follow, including Taiwan, Singapore, Hong Kong, Japan, and South Korea. Whether these have sufficient economic and diplomatic heft between them to reinvigorate global cooperation is an open question. Whether the US and China will belatedly join forces to curtail further devastation by the pandemic is another.

Of two propositions, however, one can be reasonably sure. First, history will judge both the US and China harshly if they fail to change course. Second, while the Asia-Pacific may well be the epicentre of their strategic competition, Washington and Beijing would be ill-advised to suggest that they see the region’s middle powers as mere instruments in that affair. As Kamaruddin and Galas observe, after all, “influence and leadership rests on the acceptance of those ‘influenced’”.

The missing piece in the debate about the future regional order

With cruise ships banned from ports around the world, it would not be a stretch to wonder about the impact the coronavirus pandemic will have on future military movement as well. Such questions matter, for the practice of sending warships on visits to foreign ports has been an enduring feature of strategic diplomacy. Indeed, in March, just as the global scale of Covid-19 crisis began to unfold, a US aircraft carrier arrived for the second time in Vietnam. The visit was intended to showcase the increasing interest and strategic importance of the Southeast Asian region in the clash of power between the US and China.

The USS Theodore Roosevelt has since itself been in the headlines after an outbreak of the virus onboard and the dismissal of its captain. The cost of coronavirus also appears to have focused even greater attention of US-China rivalry.

Southeast Asia will continue to be a venue for that competition, which inevitably brings its multilateral platforms into play, particularly the Association of Southeast Asian Nations. Before the virus, the future shape of the region and the pace of the US has already well debated – including here on the pages of The Interpreter recently between Sam Roggeveen Michael Mazarr and Ali Wyne. As the virus continues to play out, and in the aftermath, the debate about the future order in the region will remain crucial.

Roggeveen argued US dominance has historically rested upon its ability to project and enforce its military capacity – a dominance that is increasingly questioned – whereas Mazarr and Wyne contend the most important way for the US to maintain its leadership position is through the role it plays in international organisations.

Compelling though both articles are, somewhere in between lies the truth. Both articles fail to assess that influence and leadership rests on the acceptance of those “influenced”.

ASEAN countries have continuously sought to navigate the clash of interests between the US and China to their own advantage.

In the great power politics between China and the US in the region, no one clear-cut winner emerges for the simple reason that ASEAN countries have always prioritised their own sovereignty over all else. The experience of colonialism and then the Cold War has made ASEAN member states wary. Much value is placed not only on the non-intervention policy among its members, but also in ensuring the goal to remain neutral in the face of great power rivalry.

The inability of the US to gain support for SEATO in the 1950s and 1960s aside from Thailand and the Philippines, all the way to the Philippines’s recent decision to terminate the Visiting Forces Agreement reflect how any military sphere of influence is precarious at best.

More importantly, ASEAN countries have continuously sought to navigate the clash of interests between the US and China to their own advantage, leveraging on both the US and China in order to benefit. The priority for Southeast Asian countries remains development and growth, and this means seeking the most from the large economic market offered by both countries, alongside foreign investment and technological transfer. Both Vietnam and Singapore, for example, continue to cultivate close economic ties with China, military cooperation with the US non-withstanding.

Furthermore, it would also be unwise to simply divide the poles of influence as a rivalry between the US and China. For example, Russia’s growing assertiveness and its significant contribution to the arms market in Southeast Asia also makes Moscow an important player in competing for regional influence. This again makes the interaction via ASEAN crucial to understanding regional dynamics.

What is often called the “ASEAN Way” is less about US or China but more about hedging foreign powers and adopting pragmatic policies aimed at securing safety nets. This strategy allows ASEAN not to be trapped by a US-China dilemma. Since the organisation’s founding principles focus on non-intrusive mechanisms and sovereign equality, ASEAN offers the grouping a strength that they would not have alone, amplifying concerns that might not have gained attention in bilateral dealings.

In strategic moves, ASEAN has taken a central role in the region’s multilateral economic and security arrangements by facilitating dialogues among region’s power through the creation of ASEAN Regional Forum (ARF), ASEAN Defense Ministers Meeting Plus (ADMM-Plus), ASEAN plus one, ASEAN plus three, and the East Asia Summit (EAS).

Such a framework provides ASEAN states a platform to negotiate key regional initiatives. For example, ADMM-China and ASEAN plus China advanced opportunities in areas of humanitarian assistance and disaster relief, while ASEAN-US forums have secured cooperation in combatting transnational crime and other non-traditional security, such as via the ASEAN Senior Officials’ Meeting on Transnational Crime (SOMTC). The grouping has also secured a long term economic partnerships with both China and US. China has been the largest trading partner of ASEAN, reaching US$479.4 billion in 2018, while US remains an important trading partner of ASEAN, with two-way trade of $260.6 billion.

More than this, ASEAN sits at the centre of efforts by other countries such as South Korea, China, Japan, Australia and New Zealand to institutionalise the Regional Comprehensive Economic Partnership (RCEP), a mega economic bloc that accounts for half of the global population and one-third of the world’s gross domestic product. RCEP aims to offset some disruptive consequences of US-China trade war.

These ASEAN regional strategies may not be a salve for all the issues in the increasing US-China contest, but the framework and normative principles that have been created point to other possibilities which are inclusive and reflective of the interests of the region. It may be cooperation, not competition, that defines the future, should ASEAN’s multilateral platforms serve to facilitate the engagement.

The black, white and grey in defining the “rules-based order”

I joined the Lowy Institute this month to direct the new project on “Australia’s National Security and the Rules-Based International Order”.

In talking to friends about the move it’s quickly become apparent that my new job description is not self-explanatory. “I get the national security bit,” has been a common response, “but what did you call that other thing?”

Whether the international order is just, fair, or in Australia’s interests depends on the type of international order it is.

Though the phrase “rules-based international order” is being used ever more often by world leaders, governments, and the media, it still doesn’t seem to have resonated much with the wider public. That’s not completely surprising – even supposed experts disagree on whether the rules-based order actually exists. And among those who believe it does, there is no consensus on what it actually is.

So, I’m going to set out, at least in part, what I think the rules-based order is and what it means for Australia’s national security choices. I hope this answers some questions about my job, but it’s not intended to be the final word. Rather, this is a set of starting assumptions that I hope will be tested through debate as this project unfolds. 

1.    Order and chaos

There is very little that is inherently orderly about international relations. For most of human history countries have interacted in a way that could be better described as anarchical. Order is necessary to reduce chaos. But whether the international order is just, fair, or in Australia’s interests depends on the type of international order it is.

2.    Power and rules

Australia’s is more secure in an international order that is shaped less by power and more by rules. That’s because Australia is not a great military power and, as a healthy democracy, is relatively adept at operating in rules-based systems, especially when they accord with our values.

3.    The post-war order

After the Second World War the United States sought to create a more rules-based international order and drove the creation of new institutions, chiefly the United Nations, the World Bank and the International Monetary Fund. 

From the outset, Australia has played an outsized role in the development and enhancement of the institutions and norms of the post-war order. That reflects our enduring interests and demonstrates the impact that we can have.

The UN General Assembly meeting on Oceans and the law of the sea, 11 March (Mark Garten/UN Photo)

4.    A rules-shaped international order

Many “realists” argue that the rules-based order is a fiction and that international relations are still determined by power. And at the other end of the spectrum there are many idealised narratives of the rules-based order. This debate is irresolvable. The story of how the world works can be told in endlessly different ways. Any attempt at scientifically testing the existence of the rules-based order is quickly confounded by the infinite number of variables and impossibility of isolating cause and effect.

My assumption is that the truth is somewhere in the middle. International relations are not defined exclusively by either power or rules, and the distinction between the two is not always clear cut. 

International relations are fundamentally based on raw economic and military power. But international norms shape the way in which that power is exercised: legitimacy enhances state power. Illegitimacy detracts from it. Rules matter even when they are violated. Though rules-based order is now accepted shorthand, the international order can be more accurately described as “shaped by”, rather than “based on” rules. 

Power also shapes rules. The permanent membership of the UN Security Council reflected the balance of power when it was created. Effective international rules cannot be entirely detached from power relations. If they are, they will be ignored. But international norms that simply replicated power relations would lose any legitimacy

5.    A liberal international order?

The terms “liberal international order” and “rules-based order” are often used interchangeably but there is a difference. The assertion of a liberal international order carries with it a claim that the post war order has been – or should be – politically and economically liberal. That, in turn, implies that illiberal behaviour by states – even within their own borders – is a challenge to the order. A rules-based order could, theoretically, be entirely illiberal.

Americans often prefer the term “liberal international order”. The apparent Australian reluctance to adopt this term – at least in official documents – probably reflects suspicion of values-based foreign policy and wariness of US democracy-promotion. 

6.    Under pressure

Whether it is rules-based, rules-shaped or liberal, the existing international order is under mounting pressure and probably unsustainable in its current form. The world is changing. International power is shifting away from the United States and “the West”, and towards China and “the East”. The world is becoming more multipolar. The United States’ commitment to the order it helped create is waning. Unhappy publics – including in many Western countries – are less accepting of the premises of the rules-based order.

US President Donald Trump (White House/Flickr)

7.    The need for change

Australia has strong interests in both defending the existing order and promoting change that will make it more sustainable. At least in the short term, we may need to do so without much help from the United States. A more sustainable international order needs to be more inclusive and multilateral. The more like-minded powers we can cooperate with to this end the better. Our own consistency in abiding by international law will be a factor.

8.    It has to be a package deal

Australia’s interests are advanced by international norms and rules that accord with our values and interests. Most basically, this means rules that protect our sovereignty and democracy, discourage the use of force, encourage the peaceful resolution of disputes and support open economies and free trade. But even rules that don’t accord with our immediate interests can advance our broader objectives if they also support the sort of international order that we want. So there is a cost to selective compliance. 

9.    Prepare for the grey zone

But we also need a plan B. We need to prepare for securing Australia in a world where relations between states are shaped more by power and less by rules. That could mean investing more in power – mostly but not only military capability – as well as thinking more about how we should be prepared to use it.

International law is based on black-and-white distinctions between war and peace. But countries are increasingly competing in the “grey zone” that exists between the two. That includes openly aggressive measures that still fall short of the legally category “use of force” as well as more covert – or at least “plausibly deniable” – means. The purpose of these activities is typically to make incremental gains with the ultimate goal of “winning without fighting”.

Examples include China’s island building in the South China Sea. Russia’s “little green men” in Ukraine, Iran’s use of militias and proxies, cyber intrusions, information operations, foreign interference, and some forms of economic coercion.

This sort of state behaviour both exploits and hastens the weakening of the rules-based order. So Australia needs to think thoroughly and carefully about when and how we should engage in so-called “grey zone competition”.

China’s Xi Jinping (GovernmentZA/Flickr)

Democrats on trade, and North Korea: “No hot dish for the dictator”

This is the third of a three-part series of articles examining the Democrats’ and America’s place in the world in the lead-up to the US presidential election. The first article can be read here, and the second here.

CPTPP: The trade agreement America loves to hate

The fate of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) symbolises, perhaps more than any other large trade agreement, the collapse in support for free trade in the American polity – concerns now so deep that they comprehensively overshadow arguments that the CTPP could be an important component of an integrated American strategy to balance China’s power in the Indo-Pacific.

President Donald Trump signed the executive order withdrawing the US from the Trans Pacific Partnership (TPP, as it was then known) on just his third day in office, after variously describing the agreement as a “bad, bad deal”, a “disaster”, and a “rape of the country”.

For Australia and some of its like-minded partners in Asia, particularly Japan, the CPTPP made good sense.

Australia and Japan scrambled to save the deal, and the CPTPP was subsequently signed by 11 Indo-Pacific countries in 2018. To date, it has been ratified by Australia, Canada, Japan, Mexico, New Zealand, Singapore, and Vietnam. The signatory countries encompass some 500 million people, and account for 13% of world GDP and 14% of world trade.

Bernie Sanders flat-out rejects the possibility the US would ever rejoin the agreement – “under no circumstances”. He puts the CPTPP in a basket with other major trade agreements such as the North American Free Trade Agreement, which he says have resulted in “massive job losses in the United States and the shutting down of tens of thousands of factories”.

Democratic Party centrists strike a more pragmatic tone. Biden, whose revived campaign means he is now all but assured of his party’s nomination, says the “TPP wasn’t perfect, but the idea was a good one”. But he has also been clear he would not join the agreement in its current form. The centrists seek more labour and environmental protections, stronger intellectual property disciplines, and, vaguely, clearer benefits for American workers. Biden goes further by pledging there would be no new trade deals were he to be elected until “we have invested in Americans and equipped them to succeed in the global economy”.

 Houston container docks (Louis Vest/Flickr)

Renegotiating the agreement with all its parties to satisfy these conditions would be tortuous, if it is possible at all. How much does this matter? US economic engagement in the region is already immense and its leading companies prominent in the economic landscape. Still, for Australia and some of its like-minded partners in Asia, particularly Japan, the CPTPP made good sense.

First, the CPTPP is an exercise in rule-making by like-minded countries at a time when China is seeking more often to shape global rules to its advantage. The CPTPP sets strong standards in areas important to modern economic activity, such as competition policy, digital trade, investment, and intellectual property rights.

Second, the agreement promotes open and inclusive economic regionalism. This is a partial hedge against the possibility of a narrower East Asian free trade area forming around China.

Third, the agreement was a way of reinforcing US economic engagement and integration with Asia, in part to help balance the immense gravitational pull of China’s economy.

For these reasons, withdrawal from the TPP left a hole in America’s Indo-Pacific strategy. “America First” is not an economic narrative that wins friends at a time of geopolitical contest. And plurilateral trade agreements in Asia are not just about setting rules and facilitating trade and investment – they are also about having a place in the region’s architecture.

North Korea’s nuclear threat  

The Democrats would also face a formidable foreign-policy challenge in managing US approaches to North Korea.

Decades of US efforts to roll back North Korea’s nuclear and missile programs have foundered repeatedly on the paranoia and intransigence of the Democratic People’s Republic of Korea. The Trump administration offers supreme leader Kim Jong-un a grand bargain – denuclearisation in return for sanctions relief and transformational economic opportunity – but has made no headway.

The Democratic candidates have talked in general terms of coordinated diplomatic campaigns and working with partners, none of which has made a jot of difference in the past.

Interestingly, however, both Biden and Sanders seem willing to countenance an interim deal in which limited or “targeted” sanctions relief would be offered in return for some verifiable steps towards denuclearisation, preferably ones that would remove North Korea’s ability to target continental United States.

(Uwe Brodrecht/Flickr)

This is fine in principle, but as the talks under the Trump administration demonstrate, North Korea’s idea of a great deal is full sanctions relief in return for not very much denuclearisation at all. Moreover, seasoned North Korea experts believe there is simply no prospect of the DPRK ever giving up the entirety of its nuclear program, which it regards as central to regime survival.

That doesn’t mean a partial deal, if it could be achieved, isn’t worth considering. Taking North Korean long-range missiles off the table and capping the nuclear program, for example, could reduce the risk of a dangerous miscalculation with the United States. Such a deal would, of course, leave neighbours South Korea and Japan still sitting unhappily under the threat of North Korea’s short- and medium-range, nuclear-capable missiles.

It’s hard to see how yet another round of talks can succeed where many others before have failed.

Where then, would this leave policy on North Korea under a Democratic president? The starting point is likely to be more diplomacy in an attempt to bring North Korea back to the negotiating table. Sanders has said he is prepared to continue Trump’s personal diplomacy with Kim, something Biden has ruled out. (Senator Amy Klobuchar, who dropped out of the race and has backed Biden, offered more colourful criticism of Trump’s summitry with Kim, likening it to bringing a “hot dish over the fence to the dictator next door”.)

It’s hard, though, to see how yet another round of talks can succeed where many others before have failed. What are the alternatives? Pre-emptive US military strikes would carry immense risks and would run counter to the Democrats’ emphasis on restraint in the use of military force: they are unlikely to be countenanced, short of a real and imminent threat to America or its allies.

In all likelihood, a Democratic president will have to accept the reality of a nuclear North Korea, at least for the foreseeable future, and double down on a tough policy of sanctions, economic isolation, and deterrence.

This would require strict enforcement of existing UN Security Council sanctions, especially in Asia, at a time when Chinese enthusiasm is waning for clamping down on the illegal oil and coal trade and other sanction-busting activities. But assuming diplomacy fails again, and the novel coronavirus Covid-19 does not change the game somehow, for Australia such an approach is likely to represent the least worst approach to one of Asia’s most intractable security challenges.

The Democrats and China: “Our values are not a bargaining chip”

This is the second in a three-part series of articles examining the Democrats’ and America’s place in the world in the lead-up to the US presidential election. The first article can be read here and the third here.

Throughout the Democratic Party primaries, the candidates have been rhetorically tough on China, especially its hardening authoritarianism, human rights violations, and trade practices, in keeping with the long winter of American discontent with Beijing. Equally, both Biden and Sanders argue the United States must find space to cooperate with China where interests align, notably on climate change. Elizabeth Warren, who has now dropped out of the race, could have been speaking for both progressives and centrists when she said the next president would have an obligation to cooperate with China to advance high priority national interests but that “our values cannot be used as a bargaining chip”.

“Cooperate where we can, push back where we must” is fine, so far as it goes, but it falls a long way short of a comprehensive strategy – progressive or centrist – to deal with a peer competitor like no other the US has faced. We are left largely guessing as to how the multidimensional challenges posed by China will be met.

A Democratic president would continue to battle Beijing on long-standing grievances like forced technology transfer, protection of intellectual property, and subsidies for state-owned enterprises.

Some consequential questions are worth considering. First, would competition with China continue to drive American grand strategy under a Democratic president?

The Trump administration’s 2017 National Security Strategy (NSS) marked a decisive shift from nearly two decades of focus on terrorism and other transnational threats towards state-to-state competition with China and Russia. The NSS commits the US to “compete with all tools of national power to ensure that regions of the world are not dominated by one power”. In the Indo-Pacific, America’s goal is to “uphold a regional order respectful of sovereignty”.

The roll-out of a plan to implement the NSS has been patchy, and President Donald Trump’s focus on trade deficits and ambivalence about alliances have significantly undercut its objectives. Even so, renewed US commitment to compete with China is welcomed by Australia, India, and Japan and, more quietly, by others such as Vietnam and Indonesia. Even those Asian nations that worry about being caught in the middle of great-power competition want the US to balance China’s power in the Indo-Pacific.

If he makes it to the White House, Biden will almost certainly persist with an Indo-Pacific strategy that puts competition with China at its heart and which invests in US allies and partners. There is no shortage of ideas in Washington on how to do this more effectively. We could also expect continued strong support for Taiwan (even Sanders, whose Congressional record on Taiwan is mixed, appears prepared to consider military force if China were to attack Taiwan).

Democratic Party centrists, at least, see the need for US foreign policy in the Indo-Pacific to be backed by hard power in the form of a US military able to deter aggression. They point also to the ultimate source of US power – the economy – arguing America must out-innovate and outcompete China.

The viewpoint of a Sanders presidency would be much less clear. Sanders has been comfortable confronting China when the subject is values, but he has had little to say about geopolitical competition.

Sanders’ advisers have expressed doubts about the long-term costs of sustaining US alliances, including in Asia. And Sanders himself has wondered aloud whether US-China competition could be softened in order to focus on the “common enemy” of climate change. Such a trade-off would give China enormous leverage over the US in the Indo-Pacific. The two issues do not need to be linked: renewed US engagement in the Paris Agreement is the proper place to push Beijing harder on emissions reductions.

In office, would Sanders have the interest and international focus for an immensely hard, drawn-out struggle over global power and influence with China? Would his approach to defence policy and unwillingness to use force sustain American deterrence against rivals such as China and Russia?

It’s too early to say if any of this would amount to the US abandoning any efforts to balance China’s power in the Indo-Pacific (“retrenchment”, as the strategists call it) under a Sanders presidency, but the possibility hangs in the air. This would be a disastrous turn of events for Australia and Asia, hastening the arrival of a Chinese sphere of interest in which our ability to protect our sovereignty and the independence of our decision-making is likely to be significantly weakened.

Second, what might happen to the complex intertwining of the American and Chinese economies under a Democratic president?

 Partial decoupling could continue under a Democratic president, driven by a combination of economic and security factors (Garik Asplund/Flickr)

The centrists are probably not instinctively in favour of managed trade outcomes, but it’s hard to see any Democratic Party candidate walking away from the “phase one” deal negotiated by the Trump administration, with its massive commitments to buy US goods and commodities (assuming China doesn’t scrap the deal – a good test for a new President – because of the coronavirus).

A Democratic president would continue to battle Beijing on long-standing grievances like forced technology transfer, protection of intellectual property, and subsidies for state-owned enterprises. Trump’s “phase one” deal did not address all of these issues. Enforcement of others will remain a challenge.

We could also expect some partial decoupling to continue, driven by a combination of economic and security factors. Sanders could be even harder on China on trade than Trump: he has made it clear he wants to rewrite US trade policies to favour American workers and bring more manufacturing jobs back to America.

The Covid-19 emergency will amplify the voices of those calling for the US to reduce its dependency on China. China won’t suddenly stop being a major global manufacturing hub. Shifting production is expensive, and China still has some significant advantages, including an immense and readily deployable labour force. But the coronavirus outbreak is likely to accelerate an existing trend towards some diversification of supply chains and the shifting of production by US companies closer to other global markets. In some industries, such as the production of essential medicines, change is likely to be faster and more substantial.  

Competition over technology will also continue to drive partial decoupling. Any future Democratic president, for example, is likely to want and/or face significant pressure to keep Chinese companies out of US critical infrastructure such as America’s 5G wireless networks.
 

The next article in this series will explore Democratic approaches to trade agreements, and the challenge presented by North Korea.

The Democrats and America’s place in the world: “A rescue mission”

This is the first in a three-part series of articles examining the Democrats’ and America’s place in the world in the lead-up to the US presidential election. The second article can be read here and the third here.

The Democratic presidential contest unfolding in America presents the party of modern American liberalism with a stark choice between two utterly different candidates.

This is a choice between the high-taxing, radically progressive climate change, health, and education policies of Senator Bernie Sanders and the centrist approaches of former Vice President Joe Biden. The choice is at once about who has the best chance of beating President Donald Trump in November’s election and about the future shape of America.

It would be a mistake to view the contest as simply one over domestic economic and social policies, even though these dominate the campaign. America’s place in the world is also up for grabs. The voters have yet to have their say, but there is potentially much at stake for Australia and the Indo-Pacific.

The campaign focus on domestic issues tends to mute somewhat the differences between Democratic progressives and centrists on foreign policy. But these exist and are important. Biden is a known quantity on foreign policy. Sanders decidedly is not.

The centrist and progressive camps of the Democratic Party critique US foreign policy under Trump in broadly similar terms. They argue he has alienated allies, emboldened autocrats, left American diplomacy in tatters, and “trashed” the sources of US soft power abroad, particularly its ability to lead on the basis of “American values”.

Withdrawal from the Paris climate change agreement and the nuclear deal with Iran has damaged US credibility and weakened US global leadership. Trump has confronted China without effectively competing with it, and his “clumsy” trade war has hurt American farmers and manufacturers.

Joe Biden argues things have gotten so bad US foreign policy needs “rescuing” more than it does rethinking.

So much, then, for what the Democratic Party candidates stand against. What do they stand for?

Biden says he will take “decisive steps” to renew America’s “core values” so that the US can lead by the power of example. Sanders also calls for a foreign policy that “clarifies our commitment to democratic values both at home and abroad”. Liberty, accountability, and the rule of law are the starting points. These foundation stones of American democracy are to be restored at home and asserted abroad, including by standing up to authoritarian regimes like China and Russia.

Both Biden and Sanders endorse a green “new deal” – a “national mobilisation” against climate change that covers emissions, investment in technology, infrastructure, and economic and social adjustment packages. The candidates have pledged to rejoin the Paris agreement. Biden has committed to a net zero emissions by 2050 target, and Sanders argues for “complete decarbonisation” by that date.

There are some important differences in the detail of these climate change policies, including on nuclear power, gas, and the respective roles of government and the private sector, as this useful summary shows. Even so, the shared ambition on climate change across the progressive-centrist divide is palpable. Australia will be on notice if the Democrats win the presidential election.

Smoke haze from bushfires shrouds the Sydney Harbour Bridge, December 2019. A Democratic presidency would bring a marked shift in US climate policy (Andrew Merry/Getty Images)

Elsewhere, there are promises to restore America’s regard for allies and close partners. Both progressive and centrists want to get the US out of the “forever wars” in Afghanistan and the Middle East, albeit with some variations on how a drawdown should be achieved and what should be left behind to focus on counterterrorism. Moreover, America should learn from the strategic and moral disaster of the Iraq intervention: military force should be the last option, reserved for direct threats to America or to avert mass atrocities, for example. Diplomacy is to be privileged.

Another striking feature of the Democratic primaries is the strong emphasis on working families and the US middle class. This reflects now-mainstream concerns about the negative effects of globalisation, particularly the swathe cut through US manufacturing in recent decades by trade competition and automation. Nor can any Democratic Party candidate afford to cede this political ground to Trump’s brilliant ability to tap into American discontent.

Sanders sees globalisation as the enemy and free trade agreements as a problem, not an opportunity – just one part of an overall economic model that has to be radically overturned to reduce inequality and drive, as he sees it, fairer and more sustainable economic growth. But even Biden and his fellow centrists won’t contemplate new trade deals without significant conditionality.

Some Democratic Party foreign policy thinkers go further. Jennifer Harris and Jake Sullivan, for example, argue that America’s foreign policy establishment needs to contribute a geopolitical perspective to the debate on what should follow economic “neoliberalism”.

This is not just about rethinking the net effects of free trade, but looking afresh at other economic policy approaches once banished under the Washington Consensus, like industry policy for example. Harris and Sullivan argue US firms will continue to lose ground to China if Washington relies solely on private-sector research and development. Some on the Republican side of US politics make the same arguments, a remarkable shift away from the primacy of free markets and private enterprise.

Not much has been said yet on responding to the Covid-19 pandemic, with its hard-to-predict short- and long-term effects on the global economy and geo-politics. It seems highly likely, however, that whoever wins the presidential election will be rethinking what US resilience means in a hyper-connected world and dealing with a set of challenges and priorities not foreseen when the campaign began in earnest.

The campaign focus on domestic issues tends to mute somewhat the differences between Democratic progressives and centrists on foreign policy. But these exist and are important. Biden is a known quantity on foreign policy. Sanders decidedly is not.

Sanders wants to cut the US defence budget at a time when China’s military is closing the capability gap. He would set a much higher bar for the deployment of military force. He may trade off balancing China’s power in the Indo-Pacific for more ambition from Beijing on climate change. His opposition to free trade surpasses even that of Trump. Inevitably, a highly progressive domestic agenda would come to shape other aspects of US foreign policy. Astute observers of US politics suggest that in office Sanders could prove as revolutionary as Trump has been when it comes to America’s place in the world and how it prosecutes its interests globally.
 

The next article in this series will explore what these differences might mean for Australia’s interests in the Indo-Pacific.

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