China’s application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) just hours after announcement of the new tripartite AUKUS (Australia, United Kingdom and United States) security partnership may – or may not – have been coincidental. Regardless, both events illustrate the rapidly shifting geostrategic environment in the Indo-Pacific region.

AUKUS is a momentous agreement – for all three parties.

The “forever” partnership is especially consequential for Australia. For proponents, AUKUS is a prudent, practical and far-sighted response to the existential threat Australia perceives in the evolving and increasingly tense strategic environment emerging in the Indo-Pacific region. Like many, Australia is worried by the more bellicose approach being taken by Xi Jinping’s China. In responding to this challenge, the US remains for Canberra its indispensable partner.   

For the US, AUKUS is a win. It exemplifies the importance Washington attaches to deepening cooperation with key allies, and strengthening their military capabilities to assist in deterring the security challenges posed by China in the region. Australia, a long-time trusted and strategically located Indo-Pacific ally, looms large in Washington’s regional calculations. So does the Quad (US, Australia, Japan and India), whose leaders meet in Washington on 24 September.

Early signs are that AUKUS will enjoy significant, if not full, bipartisan support in Australia.

And for the United Kingdom, AUKUS is a tangible expression of the global ambitions of post-Brexit Britain, reinforcing its renewed focus on the Indo-Pacific, complemented by trade deals with Japan, South Korea and Australia. AUKUS helpfully reaffirms too the UK’s standing as a close and trusted US partner.

International attention has focused on the commitment by the US and UK to cooperate in providing Australia with a nuclear-powered submarine fleet. 

This is unquestionably a significant move – with major strategic and operational implications for Australia. Together with planned acquisition of sea and air-launched cruise missiles, nuclear-powered submarines will substantially enhance the Australian Defence Force’s long-range strike capabilities. Nuclear submarines offer greater speed, stealth and range.    

Much flesh remains to be put on AUKUS’s bones. The nuclear-powered submarine deal is just the initial dividend. Even more important is the deeper tripartite cooperation AUKUS foreshadows in developing advanced capabilities in areas like cyber, artificial intelligence and quantum computing.

Early signs are that AUKUS will enjoy significant, if not full, bipartisan support in Australia. It seems remarkable, nonetheless, that Canberra signed up to this “historic” agreement without any prior parliamentary or public discussion. 

AUKUS is not without its critics and risks.   

Beijing portrays its bid to join the CPTPP as demonstrating China’s commitment to collaboration in promoting rules-based Asia-Pacific economic and trade cooperation (Ishant Mishra/Unsplash)

It represents a decisive shift towards Australia’s closer military integration and foreign policy alignment with the US. At a time of continuing political division and uncertainty in the US, some argue that AUKUS is a gamble on US staying power in the Indo-Pacific. 

Acquiring nuclear-powered rather than conventional submarines will make Australia dependent on the US and UK to support the nuclear propulsion technology. AUKUS could heighten US expectations of closer alignment and support from Canberra – and not only on China. AUKUS may thus prove constraining for Australia in its wider foreign policy.

Especially if domestic production is prioritised, Australia’s new submarines will not arrive anytime soon. Meanwhile, any gap in capability will likely be filled by expanded deployments of US naval and air assets to Australia.

International reaction to AUKUS has been mixed. China has, predictably, responded negatively to AUKUS.

The submarine deal may raise proliferation hackles in some quarters, especially given the likely use of highly enriched uranium fuel (HEU). Australia’s acquisition of cruise missiles might be questioned under the Missile Technology Control Regime (MTCR). These issues are manageable in Australia’s case, although they risk setting unhelpful precedents

International reaction to AUKUS has been mixed.

China has, predictably, responded negatively to AUKUS. But since Australia will only be acquiring capabilities that China has itself developed at pace over recent years, Beijing is hardly well-placed to criticise Canberra. And warnings that AUKUS makes Australia a target for Chinese missiles in any conflict with America are unremarkable, since existing US strategic facilities in Australia entail this risk already.

On the other side of the ledger, Japan and Taiwan have strongly welcomed AUKUS as visible evidence of readiness to stand up to China’s assertiveness. 

Non-inclusion of Five Eyes partner New Zealand in AUKUS has been portrayed by Wellington and most commentators as unsurprising, given its nuclear-free status and limited military heft, although criticised by some as disappointing. Longer-term, AUKUS’s focus on developing leading-edge defence capabilities, such as cyber and AI, does risk potential interoperability gaps for New Zealand, given its close security ties with all three AUKUS partners, above all Australia.

AUKUS has provoked a sharply negative reaction from Paris, for commercial (Australia cancelling its contracted purchase of conventional submarines from France) and strategic reasons, since the Australian deal was a key element in France’s increased Indo-Pacific profile.  

Also caught unawares was the European Union, which released its own Indo-Pacific strategy the same day as the AUKUS announcement. Having been blindsided by the US’s hasty withdrawal from Afghanistan and earlier by the US volte-face on the Nord Stream 2 project to bring Arctic Russian gas to Germany, AUKUS raised eyebrows among US European allies, and inevitably fuelled calls for greater strategic autonomy.

There is a mismatch between China’s coercive security posture and its espousal of multilateral economic cooperation in the region. 

In striking contrast to its hardline security approach in the region, Beijing portrays its bid to join the CPTPP as demonstrating China’s commitment to collaboration in promoting rules-based Asia-Pacific economic and trade cooperation. 

It’s ironic that the CPTPP – originally viewed by the US (if not other parties) in the context of countering China, but from which the Trump administration walked away – is now seen by China as a way of enhancing its economic weight and influence in the region. 

This comes on top, moreover, of conclusion of the Regional Comprehensive Economic Partnership (RCEP), an even wider trade agreement, also including China (but not the US), seeking to promote improved regional trade flows and supply chain connectivity. 

There is a mismatch between China’s coercive security posture and its espousal of multilateral economic cooperation in the region. 

Unfortunately, Washington’s non-engagement in these regional economic integration initiatives prevents the US from effectively challenging the inconsistency of Beijing’s approach. In focusing narrowly on security deterrence of China, while eschewing a broader path that encompasses economic and trade integration with East Asian states, Washington may be missing a trick.

Meanwhile, assuming CPTPP members agree to open accession talks with China (and the UK is ahead of Beijing in the queue), there will be tough issues to negotiate, such as state subsidies, dispute settlement and cross-border data flows. 

Buckle up then: with AUKUS and the CPTPP in play, the shifting and fast-moving geostrategic environment in the Indo-Pacific region is set to get even more fraught.