One consequence of the recent standoff between India and China in the Himalayas has been a re-examination of the role of the Quadrilateral Framework (hereafter, Quad) as an “effective instrument of dissuasion and moderation.” The foreign, security, and economic policies of Australia, as the southern bookend of the Quad, are receiving renewed attention in India. In that regard, Prime Minister Scott Morrison’s quest for an “open, sovereign Indo-Pacific, free from coercion and hegemony” has found consonance in Delhi and is also in line with the security architectures visualized by the other Quad members – Japan and the United States.
On June 30, the Australian government announced that it would provide $186 billion in defense spending over the next 10 years “amid rising tensions in the Indo-Pacific region.” This is an increase of nearly 40 percent compared to what the government had earmarked for the decade in a White Paper in 2016. Indeed, Australia has been rapidly increasing its defense imports as well. Australia’s share of arms imports has risen from 3.7 percent (2010-14) to 4.9 percent (2015-19), making it the fourth-largest importer of major arms in the world. While Canberra does not have any immediate continental security threats unlike other major arms importers such as Saudi Arabia (No.1), Egypt (No.3) or India (No.2), such an increase in recent years is suggestive of at least two recognizable concerns for Australia.
First, Canberra is worried about Washington’s move away from its commitments to the U.S.-based alliance framework in the region. President Donald Trump withdrew from the Trans-Pacific Partnership soon after assuming office, and President Barack Obama’s “pivot to Asia” failed to convince stakeholders. For instance, while announcing his pivot in Canberra in 2011, Obama had claimed that the U.S. would “allocate 60 percent of its Navy fleet to the Asia-Pacific.” However, in 2017, Defense Secretary Jim Mattis again announced that “55 percent of the Army and two-thirds of the fleet Marine forces had…been assigned to the U.S. Pacific Command.” The United States policies in the region are therefore viewed as a mere continuation of previous strategies rather than a “revolution” as frequently promoted.
Second, Canberra is anxious about Beijing as recent relations between the two have been fraught with mistrust. In 2018, Australia decided to exclude Huawei Technologies from its 5G network and also passed an anti-interference law in an effort to prevent Beijing from meddling in Australia’s internal affairs. In turn, China delayed clearance of Australian coal through its ports over “alleged environmental compliance checks.” Further, amid the Covid-19 pandemic, Australia in May floated a motion for the World Health Assembly to conduct an “impartial, independent, and comprehensive investigation” into the origins of the outbreak. Beijing responded by limiting beef imports from four Australian producers and imposing an 80 percent tariff on barley. On June 5, China also issued a warning to its citizens against travel to Australia citing “racial discrimination and violence against Chinese.” This came after Australia had announced “a tough new screening regime on foreign investors seeking to buy sensitive assets” in order to address some of its national security concerns.
On May 28, Australian foreign minister Marise Payne signed a joint statement with her counterparts from the United States, United Kingdom, and Canada expressing “deep concern regarding Beijing’s decision to impose a national security law in Hong Kong.” On July 9, 2020, Canberra announced that it was suspending its extradition treaty with Hong Kong. It also announced “measures to attract people and businesses from the Asian financial hub after Beijing imposed a new security law there.” When a cyber-attack hit Australia in June 2020, Prime Minister Morrison claimed that “because of the scale and nature of the targeting and trade crafts used,” the government had identified it as a “state hack.” Cyber intelligence experts have claimed that China was likely behind the attacks. Canberra subsequently announced that it would spend $926 million over the next decade to boost its cybersecurity.
Given the rapidly changing geopolitical dynamics, it is anticipated that Australia-India relations will be significantly enhanced. Morrison participated in a virtual summit with Prime Minister Narendra Modi on June 4. It was a timely opportunity for both leaders to take stock of the bilateral relationship, which has begun to acquire salience. A significant outcome of the summit was the elevation of the India-Australia relationship to a Comprehensive Strategic Partnership based on “mutual understanding, trust, common interests and the shared values of democracy and the rule of law.”
However, “mutual understanding” and “common interests” have not always been guaranteed between Delhi and Canberra. A reluctance to export uranium and lack of confidence to do business with India have been part of the baggage in the recent past. Nevertheless, the relationship has evolved since then with the export of uranium to India allowed since 2017, despite India being a non-signatory of the Nuclear Non-Proliferation Treaty. Australian investments to India also rose by 27 percent from 2018 to 2019. More significantly, bilateral trade has grown in recent years, and Delhi and Canberra have decided to re-engage in negotiations to conclude a bilateral Comprehensive Economic Cooperation Agreement.
The India-Australia defense partnership has also expanded based on the 2006 Memorandum on Defence Cooperation and the 2009 Joint Declaration on Security Cooperation. This includes annual defense exercises between the three services of each country as well as staff talks and military training initiatives. Moreover, reports have emerged that Delhi is prepared to expand the Malabar trilateral naval exercise involving India, the United States, and Japan to include Australia. Recognizing the potential for meaningful partnerships across the Indo-Pacific, Delhi and Canberra released a Joint Declaration on “Maritime Cooperation in the Indo-Pacific” during the virtual summit. They also signed an Agreement concerning Mutual Logistics Support which will enable interoperability and provide a framework for defense science and technology research.
While unveiling his Defence Plan on June 30, Prime Minister Morrison argued that the current strategic uncertainty in the region constitutes an “existential threat.” However, there is a dichotomy in Australia’s perception of threats. Like most of the region, Australia recognizes China’s assertive nature, from the Himalayas to the South China Sea. Salami-slicing tactics have complemented Beijing’s “Wolf Warrior” diplomacy. The latest example was the use of the Chinese phrase “to realize our shared vision for a common future” in a draft declaration to commemorate the 75th anniversary of the United Nations, which was opposed by Australia.
And yet, Australia is currently the most China-reliant economy of the developed world. Since Canberra signed a free trade agreement with Beijing in 2015, China has accounted for more than 30 percent of its exports by value ($87.7 billion in 2018) and almost 25 percent of its imports ($57.7 billion in 2018). Moreover, Chinese nationals make up roughly 38 percent of Australia’s international students and 15 percent of its tourists. And despite Delhi’s repeated demonstrations of reliability and capability as a strategic partner, Canberra has indicated minimal appetite to consider Indian interests when imagining Asian economic architectures. For instance, Australia sought a hurried conclusion to the Regional Comprehensive Economic Partnership even though there were genuine concerns for India. Australia must ensure congruence between its geopolitical and economic strategies in Asia to substantiate its relationship with India.
The views expressed in this paper are those of the authors and should not be attributed to the Delhi Policy Group.