Introduction

The world order is transitioning.  Faced with a challenging security environment, Australia has strengthened its security alliance with the United States (US), supported the ASEAN Outlook on the Indo-Pacific (AOIP), joined the Quad agenda for a Free and Open Indo-Pacific, and entered into the Australia-UK-US (AUKUS) partnership for sharing military technology. 

China’s rise and assertive behaviour has been a source of concern to both India and Australia. While India’s focus is on the border dispute with China and the PLA’s growing presence in the Indian Ocean, Australia is concerned about growing tensions in Sino-US relations, including over Taiwan, and China’s inroads in the South Pacific.  At the same time, Australia values the economic opportunities and benefits offered by a rising China.  As Sino-US competition escalates, the continuity of Australia’s foreign policy will be tested under its new government. 

Historical Evolution of Australia’s Foreign Policy

For years, Australia enjoyed immunity from any serious external threat. Due to her geographical location, Australia’s security rests upon what has been described as “a fortunate combination of circumstances”[1]. While the evolution in Australia’s foreign policy and its increasing engagement with Asia has been evident since the late 1980s, the trend has been accelerated by the rising profile of China in areas of interest to Australia.

As a member of the Commonwealth, Australian foreign policy was defined by British policies and interests. However, former Prime Minister John Gorton (1968-71) drew attention to the relative decline and disengagement of the United Kingdom from Australian affairs and argued that “Australia would increasingly look on its foreign relations with Britain in the way it looked upon relations with any foreign country”. While many Australian foreign policy practitioners were disappointed by the decline of Britain and continued to look towards the mother country, Australia increasing allied with another powerful partner – the US – which had established its influence in the region. This was manifested in Australia’s successful pursuit of the ANZUS Treaty[2] (1951) and its support for US-led military interventions in Korea and Vietnam.
 
Another shift in the Australian policy came when Prime Minister Gough Whitlam of the Australian Labour Party came to power in 1972. While realpolitik concerns regarding security alliances had been the main drivers of foreign policy till then, Australia’s withdrawal from Vietnam and diversification of markets signalled the possibility of a foreign policy less defined by hard power. The Whitlam government emphasised the shift in agenda to engage more with international norms and institutions of in its foreign. Australia’s foreign policy was defined as ‘realist’, with its emphasis on engagement with Mao’s China, Australia’s support for the independence of East Timor, and the ending of the ‘White Australia Policy’.

The consequence of being geographically adjacent to the world’s most dynamic economic region was evident in the 1980s-1990s during the Hawke-Labour and Keating-Labour governments that primarily focused on consolidating strong relations with the economies of East Asia. Japan became Australia’s most important trading partner, while the rapid development of the ‘tiger’ economies of Singapore, South Korea, Taiwan, and Hong Kong provided economic opportunities for Australia. Prime Minister Bob Hawke spearheaded the movement to establish the Asia Pacific Economic Cooperation (APEC) to institutionalise a place for Australia at the Asian economic table. Prime Minister Paul Keating (1991-1996) focused on the pursuit of a formal Australian involvement in the region’s institutions and famously (or polemically) declared Australia a “part of Asia”[3]. However, under the backdrop of the 1997 Asian Financial crisis, the successive Howard governments precipitated a recalibration of Australia’s approach to refocus on the primacy of the American alliance and embracing Australia’s cultural heritage as a Western state.

In speeches over his term, John Howard emphasised commitment to the United States and criticised the previous Labour governments for neglecting Australia’s alliance with the US. Howard declared the 9/11 attacks as a strike on values shared by the US with Australia and invoked the ANZUS alliance, which was conventionally interpreted as applying to military action in the Pacific. The Bali Bombings of 2002 by the radical Islamist group Jemaah Islamiyah that killed 88 Australians were cited among the reasons for Australia’s support for military action in Afghanistan and Iraq. Under the Howard government, Australian foreign policy was focused more on supporting the United States, with ‘security’ becoming the dominant theme of Australian foreign policy.
Arguably, the political trends shifted in Australia with Kevin Rudd’s Labour government. Kevin Rudd and Julia Gillard’s Labour governments changed Australia’s political space, transforming Howard’s ‘realistic foreign policy’ into a ‘creative middle power diplomacy’. Despite the internal dynamics and conflicts between Rudd and Gillard, their successive governments developed a multi-faceted foreign policy that engaged with the Asia-Pacific community at a comprehensive level. The most important manifestation of Rudd’s middle power diplomacy was Australia’s response during the Global Financial Crisis of 2008.  Kevin Rudd is often credited for his efforts in bringing the leaders of the G20 together for their first summit in September 2008, and the G20 becoming the driving centre of the world’s major economies.[4]

When Prime Minister Tony Abbott and the Liberal Party came to power in 2013, his policy was defined as being more protective of immediate Australian national interests and national security, relative to a global perspective. PM Abbott immersed himself in developing critical bilateral relations in the immediate region. The central mantra echoed by the Liberal Coalition under his government was that it would be ‘more Jakarta, less Geneva’.[5]

Australian foreign policy has often been categorised by continuity rather than change on key issues. Despite the internal dynamics that shift the foreign policy depending upon the government, Australia’s political leaders have remained committed to the critical goals of maintaining national security through the alliance with the US, while fostering continued development through economic engagement with the Asian economies and remaining engaged with important institutions of the international community. Despite the difference between rhetoric and substance of the foreign policies pursued by ideologically different governments, relations with the United States have remained central.  The Trilateral Security Dialogue with the United States and Japan was upgraded to the foreign and defence ministerial level in 2006.[6]

Nonetheless, China’s increasing presence with its infrastructure lending under the Belt and Road Initiative (BRI) and growing influence among Asian countries and around the globe - including Australia’s allies - has impacted Australia’s foreign policy. The rising Chinese presence that has steadily challenged America’s hegemony has fundamentally changed Australia’s foreign policy. Concerns about Indo-Pacific stability have pushed the country to intensify partnerships and alliances. Australia’s joining in AUKUS along with the United States and the United Kingdom on September 15, 2021, underlined the Morrison government’s perception of the growing threat from China. The decision prompted a mixed response from neighbours like Indonesia, who were “deeply concerned over the continuing arms race and power projection in the region.”[7] Sticking by its foreign policy tradition, AUKUS represents Australia’s continuing reliance on powerful allies. 

 

The Rise of China

Compared to Australia’s Western allies like France, the United States and the United Kingdom, the threat from China’s rise in the Indo-Pacific is felt more immediately by Australia. In contrast to its allies, Australia under Scott Morrison was less concerned about leading the region and more focused on responding to China’s growing diplomatic and military presence in the Indo-Pacific. In recent years, Australia’s relations with the People’s Republic of China (PRC) has changed dramatically and is undergoing a turbulent phase.

The relations between the two countries are multi-dimensional, with China being Australia’s largest trading partner. Alongside the trade relations, more than 1.2 million Australians have Chinese ancestry and heritage, and under half that number were born in the PRC. However, the strategic trust between them has lagged behind. While relations between the two countries have been strained since the Rudd Labour government, their relations did not deteriorate till a few years ago. Under the Liberal coalition government, Australia took an increasingly direct stance with China over the East China Sea and South China Sea issues, especially when China announced the creation of a new Air Defence Identification Zone (ADIZ) encompassing the disputed Senkaku Islands in 2013. The change in stance towards China was highlighted in the 2017 Foreign Policy White Paper published by the Turnbull government. The Paper emphasised that as China is directly challenging America’s position in the region, Australia needs to change its foreign policy to support its allies from global threats.[8] Additionally, in 2017, Australia rejected a Chinese request for a formal alignment of Canberra’s A$ 5 billion infrastructure fund with the BRI.[9] Unlike New Zealand, while Australia saw similarities between the North Australia initiative and the BRI, it resisted signing the memorandum of understanding with China on cooperation between the two initiatives.

Under the backdrop of the changing relations between Australia and China, the Australian Security Intelligence Organisation became more direct in publicly reporting the concerns about Chinese interference in Australia’s internal politics. Around the same time, Clive Hamilton’s controversial book Silent Invasion: China’s Influence in Australia changed the public perception of China in Australia[10].

Since 2020, Australia has been one of the most vocal countries calling for an investigation into the origins of the Covid-19 virus in China. In retaliation, the Chinese government instructed state-linked traders to stop importing Australian wine, beef, barley, timber, lobster, coal, and other products. The relations between Australia and China became tense when the Chinese embassy in Canberra issued a list of fourteen grievances against Australia, including citing the latter’s decision to scrutinise Chinese investment projects and spearhead a crusade against China in multilateral forums. Beijing’s restrictions on more than US $ 20 billion worth of Australian exports had a direct adverse effect on the Australian economy.

India demonstrated the value of its strategic ties with Australia through its decision to import Australian barley, and later to enter into a free trade agreement with Australia.[11] Since 2020, Australia has been attempting to diversify its export destinations to reduce its trade dependency on China significantly. Under such circumstances, India has also amended its import regulations to become an important trading partner of Australia. For example, India opened market access to Australia by announcing that approval for phosphine fumigation of malting barley and the in-transit cold treatment of fruits. This approval was followed by India’s decision to import 500,000 tonnes of malt barley.[12]  Concerns of both countries about China’s bullying tactics coupled with economic coercion have reinforced their commitment to further enhance their ties through a trade agreement and economic partnership. This further emphasises their mutual decision not to bow down to China’s economic coercion.

China’s Growing Engagement with the South Pacific

Another source of change in Australian foreign policy towards China has been the latter’s involvement in the South Pacific region, which is a strategically important area for Australia. Since the end of the Cold War, Australia’s foreign policy and engagement in the Western Pacific Ocean and Islands has been a critical area of interest for Australia. China’s engagement in the South Pacific[13] has expanded substantially, generating concerns that Australia’s position in the region is threatened. China’s moves have transformed Australia’s relations with the Pacific Island Countries (PICs), with Australia facing resistance in pursuing its security objectives. Earlier, as PICs relied on Australian aid, many among them adapted their domestic affairs to fit the needs of Australia. However, Australia has had to redefine its stance towards the PICs in response to China’s regional engagement.

In the 2017 Foreign Policy White Paper, this adjustment of policy was clearly stated. The paper declared that Australia would engage with the Pacific with greater intensity and deliver an “integrated and innovative policy” to support substantial long-term investments in the region’s development to ensure “robust social and environmental safeguards and avoid unsustainable debt burdens.”[14] Many analysts have argued that the ‘Pacific Step Up’ is Australia’s response to the BRI initiatives that signalled Australia’s tilt towards the traditionalist Australian foreign policy that prioritised security concerns over other considerations. Australian security concerns have been further heightened by the signing of a security agreement between China and the Solomon Islands in March this year, which could potentially encourage and facilitate a Chinese naval presence in the region. This concern was proven right when on August 30, 2022, the Solomon Islands suspended all foreign navy ships from docking at its ports, pending the adoption of a new process for approval of port visits. Before the moratorium, the island chain’s government denied entry to U.S. Coast Guard cutter Oliver Henry and British naval vessel HMS Spey to dock at their port.[15] Prime Minister Manasseh Sogavare of the Solomon Islands argued that the refusals were a result of “paperwork snafus.”[16] The significance of this turn of events should not, however, be underestimated as it has a direct bearing on the position of the United States and its allies in the South Pacific.

Conflict over Taiwan

China’s threatening military drills near Taiwan at the beginning of August 2022, after US House Speaker Nancy Pelosi’s visit to the island, added fuel to the fire in an already unsettled region. Following the largest-ever air and sea exercises close to Taiwan, the danger of China’s military aggression and the possibility of the US-China rivalry spilling over into conflict in the region has become a real possibility. On August 5, 2022, Australian Foreign Minister Penny Wong attended the Trilateral dialogue with Japan and the US and condemned China’s actions, including the launch of ballistic missiles, five of which landed in Japan’s exclusive economic zone. These developments have gravely affected regional peace and stability.[17]

A potential clash between Taiwan and China resulting from the continuous drills of the PLA may involve the US and, subsequently, its allies like Australia and Japan.[18] For Australia, as explained by Deputy Prime Minister Richard Marles, national interests lie in the de-escalation of tensions in the Taiwan Strait. Australia has been carefully selecting the next generation of submarines, so that the country does not have any “capability gaps” in protecting the region from a forceful change of the status quo.[19] The growing tensions over Taiwan have significantly unsettled the relationship between China and Australia. As an important regional ally of the US, any form of rivalry between China and the US directly impacts Australia. Moreover, owing to Australia’s geographical location, the main driver of Australia’s change in foreign policy has been the geopolitical anxiety emanating from increasing Chinese aggression. As a result, over time, Australia’s position on China has hardened.

The Evolving Relations between Australia and India

India is working to strengthen strategic partnerships that balance China’s rise without compromising its strategic autonomy. This is the driving force behind its growing strategic ties with the United States, Japan, and Australia. India and Australia established their strategic partnership in 2009, and bilateral relations have undergone steady development following the revival of regular exchanges of high-level visits since 2014.  A significant milestone in this partnership was the passing of the bill on Civil Nuclear Transfers to India by the Australian Parliament in November 2016.
India and Australia are well positioned to meet maritime security challenges in the Indian Ocean Region. The two countries have cooperated closely in ASEAN-centric regional institutions, including by reinforcing the EAS’s role as the primary forum for consultation amongst leaders in the wider Indo-Pacific region. India and Australia can also focus on targeted cooperation in several multilateral forums they are both members of, including the Commonwealth, Indian Ocean Rim Association, the ASEAN Regional Forum and the ADMM+.

Considering differences in the two countries’ strategic outlooks, political culture, and priorities, building trust requires attention. While India supports the emergence of a multipolar order that is inclusive and protects the interests of all stakeholders, Australia is committed to its security alliance with the United States, which it regards as the leading and dominant power in the region.  However, India and Australia agree to work together to uphold ‘rules-based order’, and are increasingly convergent on the threat to the ‘good order’.

India-Australia relations have developed rapidly since 2014 and evolved into a Comprehensive Strategic Partnership (CSP). Amidst the COVID-19 pandemic, during the First India-Australia Virtual Summit between Prime Minister Narendra Modi and former Australian Prime Minister Scott Morison in June 2020, the two countries signed nine agreements, including a ‘Mutual Logistics Support Agreement’ (MLSA) and a ‘Declaration on a Shared Vision for Maritime Cooperation in the Indo-Pacific’. Through the MLSA, the two countries’ armed forces will have access to each other’s military bases for logistic support, while their Shared Vision on Maritime Cooperation in the Indo-Pacific envisions an Indo-Pacific which is peaceful and stable and is governed by a ‘rule-based’ international order. As such, by June 2020, India and Australia had elevated their ties and opened opportunities to strengthen their bilateral relationship further.[20]

During the 2nd India-Australia Virtual Summit held on March 21, 2022, former Australian Prime Minister Scott Morison underlined that Australia’s priority was ensuring stability and security in the Indo-Pacific. He argued that while the situation in Europe was distressing, “our focus, of course, is always very much on what is occurring in the Indo-Pacific and ensuring that those events could never occur in the Indo-Pacific”.[21] This objective of advancing regional security is not new for Canberra or New Delhi. Owing to the ongoing rebalancing towards Asia, and increasing Chinese territorial assertions in the region, India and Australia are active participants in the Quadrilateral Security Dialogue (QUAD).

The QUAD 2.0 was born at the ASEAN summit in Manila in November 2017 to promote a ‘free, open, prosperous and inclusive Indo-Pacific region’.[22] The first iteration of the QUAD had suffered an untimely demise in 2008, when former Australian Foreign Minister Stephen Smith had affirmed in the presence of his Chinese counterpart [23] that “Australia would not be proposing to have a dialogue of that nature in the future”. The revival of the QUAD[24] and Australia’s desire to re-join the dialogue was a major development signalling a significant shift in the geopolitics of the Indo-Pacific region.

Despite the Australia-India partnership being considered ‘natural’ in the political discourse in either country in recent years, it is only recently that their relationship has progressed on a positive trajectory. Historically, the two countries have had a complex relationship defined by diverging policies and interests. For example, in the 1950s and 1960s, while Robert Menzies was focused on establishing security alliances like the ANZUS and SEATO, Indian Prime Minister Jawaharlal Nehru was focused on keeping India independent from external influences whilst following a policy of non-alignment.

Over time, the relations between the two countries have changed significantly. It has been perceived that the change in US-India relations has positively impacted Australia-India relations. As an essential regional ally of the United States, Australia has looked towards India as a partner and emerging regional power that could help balance China’s rising power in the region. The positive shift in the dynamics of the India-Australia relations has been primarily shaped by their increasing convergences on Indo-Pacific stability.

The rebirth of the QUAD in 2017 at the ASEAN Summit in Manila has given impetus to bilateral relations. The goal of the dialogue was reframed to “promote a free, open, prosperous and inclusive Indo-Pacific region”, which are seen as core national policies of Australia and India. While both India and Australia have stressed that the QUAD is not an anti-China alliance, the context in which the QUAD was revived should not be underestimated. For New Delhi, the QUAD’s rebirth came a few months after its face-off with China’s People’s Liberation Army on the Doklam plateau. For Canberra, as an alliance partner of the US, the rising tension between the United States and China meant that Australia was obliged to counter Chinese expansionism. China’s ‘Strings of Pearls’[25] strategy, aimed at encircling Australia and India, raised concerns in both countries.[26]  Based on their shared vision for the Indo-Pacific region, Australia and India have been intensifying their strategic partnership.

In April 2022, India and Australia concluded an Economic Cooperation and Trade Agreement (ECTA), providing zero-duty access to 96 percent of India’s exports to Australia, while 85 percent of Australia’s exports will have zero-duty access to the Indian market.[27]  It has been estimated that bilateral trade between India and Australia will grow to US$ 45-50 billion from the current US$27 billion over the next five years.[28] 

People to People Connect

The growing Indian diaspora and students in Australia are an essential element in the people-to-people links that enrich bilateral relations. Australia’s world-renowned institutions of higher learning have become attractive destinations for Indian students.

Australia also invites international students and highly skilled migrants from India to work in Australia. The number of Indians moving to Australia for higher education and permanent migration has surpassed that of the Chinese diaspora, making them one of the most significant ethnic groups in the country.[29] This will help strengthen bilateral ties further.

Climate Change Policy

The impact of climate change has become a matter of serious concern for many countries in the Indo-Pacific region. Within their Comprehensive Strategic Partnership (CSP), India and Australia have decided to cooperate in areas such as “hydro storage, cost-effective battery technologies, hydrogen and coal gasification, adoption of clean energy technology, fly ash management and technologies, and solar forecasting and scheduling”.[30]  On February 15, 2022, at the 4th India-Australia Energy Dialogue, India and Australia signed a “Letter of Intent on New and Renewable Energy Technologies.”[31] Bilateral cooperation on common environmental challenges is likely to grow under the new Labour government in Australia. 

Conclusion

China’s growing power and its rising assertiveness have catalysed the relationship between Australia and India, which now stands upgraded to a ‘Comprehensive Strategic Partnership’. As members of the QUAD, India and Australia have assumed an active role in promoting a free, open, inclusive and rules-based order in the Indo-Pacific. Bilateral defence and security ties have been significantly enhanced and a comprehensive FTA is nearing conclusion. Overall, Australia-India relations are far more robust and balanced today, and likely to remain resilient despite changes in the Australian government.
 

 

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