Australia and President Trump: Four Risks and Twelve Opportunities


Editor’s Note: This installment in our special series, “Pacific Pundit,” is adapted from Against Complacency: Risks and Opportunities for the Australia-US Alliance, recently published by the University of Sydney’s U.S. Studies Centre.


Ask any American foreign policy official to list the strongest U.S. alliances and Australia will be at or near the very top. Looking back at history and into the future, there are good reasons for this: Australia has fought alongside American troops in every major U.S. conflict since World War I. And today Washington is newly focused on Asia, Australia’s neighborhood. The United States seeks like-minded partners to maintain a balance of power and bolster existing rules across the Indo-Pacific region. It also benefits from longstanding allies who combine the will and capacity to join American military efforts and deter threats from emerging.

As in much of the world, Donald Trump’s electoral victory took Australians by surprise and occasioned unusual reappraisal of the alliance and Australia’s place in a Trump-led world. With questions hanging over the Trump administration’s approach to the Indo-Pacific region, alliances in general, and Australia in particular, Australians are asking what to expect in their close ties with America.

Prime Minister Malcolm Turnbull offered reassurance after election day, emphasizing the alliance’s long future and observing that those wishing to reconsider the countries’ ties “fail to recognise that a strong, trusted, forthright Australia is a powerful force for good whether it is on the fields of conflict or in the corridors of power in Washington.” Penny Wong, the Labor Party’s foreign affairs spokesperson, stressed Australia’s bipartisan support for the alliance, but called for reconsideration all the same. “Defining an independent foreign policy within an alliance framework,” she said, “is now a more complex task. It is one for which we need to consider a broader range of scenarios than was previously within contemplation.”

Other views have been more direct and more mixed. Former Prime Minister Paul Keating called after Trump’s election for his country to “cut the tag” with the United States, end the alliance, and conduct an independent foreign policy in Asia. Angus Houston, who served as chief of Australia’s defense forces, countered this view, saying, “Now is not the time for Australian policymakers to change ANZUS or imply we are ready to move away from the US alliance. We need it more than most people realize.” Hugh White, a former defense official and prominent security scholar, observed that, “the issue for Australia today isn’t whether we should step back from our alliance with America, but whether America is stepping back from its alliance with us.”

The predominant view was perhaps articulated by Peter Varghese, Australia’s former top diplomat. “Many have rushed to give us the answers in the short period since Mr. Trump’s election,” Varghese observed, “but the reality is we will simply have to wait to find out.”

As the new U.S. administration takes shape and begins providing those answers, it is worth recalling that Australia is singularly attractive as an American ally. Canberra is boosting its military strength and regional activism on top of a century of work alongside the United States in diverse corners of the globe. It is tightening its web of security ties, including with American allies and partners, and seeks to enhance the already-close defense and intelligence links with the United States. It also shares U.S. concerns about the long-term evolution of the Indo-Pacific region as well as a commitment to uphold the rules-based order that has benefited both countries.

The result is that Australia may today figure more prominently in the thinking of American policymakers than at any time since World War II. The Australia-U.S. alliance is deeper, closer, and healthier than ever before, and it is newly relevant to a region in which both countries discern their most vital future interests. Given Britain’s troubles in Europe, observers in Canberra and Washington alike have begun to describe the alliance as the Anglosphere’s new “special relationship.”

As a result of the presidential campaign and its attendant uncertainty, it’s natural for both Americans and foreigners to think anew about U.S. alliances. This means considering their risks and downsides in addition to the shared histories and future benefits. In the case of Australia, the risks to fruitful cooperation come not from a lack of host-nation support for American bases and troops or from an Australian disinclination to share burdens or take action.

Instead, the risks come from complacency at a time when ambition should be the watchword. For all its successes, the alliance has not been tested — at least since the Vietnam War — in the region where it matters most. And it is in Asia that tests of the alliance are likeliest to arise, where there is the greatest divergence between Australia’s national security establishment and public opinion, and where the United States and Australia will face a series of difficult choices with implications for their bilateral ties.

Australia and the United States share democratic political values, key national interests, and a conviction that the rules-based international order is worth defending. Both countries possess the will and the capacity to act beyond their shores for the common good and a history of taking on challenges together. And each will be led by an atypical, conservative politician with a background in business and a slim legislative majority.

In this new political era, it’s worth asking — what’s the U.S.-Australian alliance worth? What could our leaders do together, if they so choose?

An Allied History

Formalized in the 1951 ANZUS Treaty, the U.S.-Australia alliance was established on a half-century foundation of military, economic, and cultural ties. To this day, political leaders on both sides are prone to invoke the bravery of ANZACs and Americans fighting for the same side in World War I or the “greatest generation” battling tyranny in World War II. Britain, with whom the United States enjoys a “special relationship,” did not join the Vietnam War alongside America, but Australia did. As noted above, it is often remarked — but still remarkable — that only Australia has fought alongside America in every major U.S. conflict over the past century.

Today the two governments enjoy extraordinarily close defense and intelligence ties backed by patterns of cooperation that stretch across numerous operating theaters. The U.S. and Australian militaries are highly interoperable, with shared technology and experience training and exercising together. Both countries are members of the “Five Eyes” intelligence sharing relationship, and they share an enormous range of information and assessments. U.S. Marines have a rotational presence in Darwin, American military aircraft use Australian bases, and American and Australian naval vessels use their counterpart’s ports. In an exceptional demonstration of allied ties, a two-star Australian army general based in Hawaii today has direct command of American troops.

Beyond the military and intelligence dimensions of the relationship, the alliance’s supporting elements are also strong. The United States is Australia’s third-largest trading partner, second-largest source of imports, and top source of foreign investment. More Americans — over 100,000 — live in Australia than vice versa, and from a population of 23 million, some 1.2 million Australians visit the United States each year. The alliance enjoys strong bipartisan support in both countries among their populations and political leaders.

For all the enthusiasm behind it, however, it is worth remembering that the alliance is not an end in itself but a means.

The rationale for the alliance on the American side is straightforward. Australia has the world’s 12th-largest economy (larger than Russia’s) and the 13th-largest military budget. It couples an ability to project power abroad with a broad definition of its national interest. Over 50,000 active-duty military personnel comprise its army, navy, and air force, and the defense forces possess both an expeditionary capability and a growing amphibious capability. The Australian military, while hardly the region’s largest, is one of its most advanced and – almost uniquely for the Asia-Pacific region – possesses a wealth of combat experience.

Ties with Australia anchor the U.S. presence in the southern Pacific and Indian Ocean, areas of increasing strategic competition and interest to Washington. Australia offers territory for training and prepositioning close enough to Asia to be geographically relevant, but still out of range of most Chinese anti-access and area denial defense capabilities. Australia also remains a highly reliable ally, joining American efforts in countless military contingencies and diplomatic efforts.

The Australian rationale is different but similarly clear. The alliance with America provides a security guarantee from the world’s most powerful military. As a result, it reduces not only the degree of threat facing Australia, but also the defense spending that would otherwise be required to deal with it. Canberra enjoys access to cutting-edge defense technology and unparalleled intelligence information and assessments, as well as a direct line to high-level U.S. policymakers.

Since the Vietnam War, the alliance has focused on issues that largely fall outside of the Pacific. The past 15 years have seen a particularly intense tempo of allied operations in the greater Middle East. After 9/11, Prime Minister John Howard invoked the ANZUS Treaty for the first time and pledged Australian assistance with any American response to the terrorist attacks. Australian and American troops then fought together in Afghanistan and Iraq, and Australia was the first country to support the American military campaign against the Islamic State, dispatching some 600 troops. Pilots from both countries today carry out airstrikes on Islamic State positions in Syria, while their navies cooperate on maritime security in the Gulf of Aden. Australian troops are training Iraqi security forces on the ground, and an Australian brigadier serves as deputy commander of the land force in Iraq.

Yet discrete and operational cooperation in the greater Middle East is far different from deterring and potentially acting against a peer adversary in Australia’s home region. Both Washington and Canberra are increasingly focused on threats and opportunities across the Indo-Pacific region, and it is in Asia where the alliance’s greatest importance and most difficult tests will likely arise.

Four Risks to the Alliance

While the Australia-U.S. alliance generates benefits on a daily basis, enthusiastic policymakers on both sides have failed systematically to analyze and address a series of mid- to long-term risks to it. Not all of these risks are equal in magnitude or probability, and they range from the potentially existential (a permanent Chinese wedge between the two countries) to the temporary but still possibly significant (an economic downturn). Policymakers should turn their attention to them and consider whether and how each might be mitigated.

Risk #1:  A Chinese wedge

Australia’s close and growing economic ties with China have fueled domestic prosperity, but created worrying asymmetric vulnerabilities. A third of Australian exports go to China, a higher percentage than any other G20 country, and China buys more than half of its exported iron ore from Australia. Chinese investment in Australia is on the rise, including in infrastructure projects, one of which recently prompted the government to reject a Chinese bid for a major electricity grid in New South Wales on national security grounds. China is the largest buyer of Australian government debt, and one million Chinese tourists visited Australia in 2015.

As Foreign Minister Julie Bishop has pointed out, never before has Australia’s chief ally and top economic partner existed in a highly competitive relationship. Complicating matters significantly is Beijing’s habit of employing commercial tools to punish perceived transgressions among its economic partners. Following the presidential election, Australians have heard semi-official warnings from China not to side against Beijing and with the incoming Trump administration.

The first set of challenges would result from Australian actions and policies that are consonant with America’s but which would anger China, such as conducting freedom of navigation operations in the South China Sea. A second set of challenges would arise from a significant policy or operational disagreement between the United States and Australia. Such a scenario unfolded when Australia and the United States found themselves on opposite sides over whether to join the China-led Asian Infrastructure Investment Bank. A third set of “China wedge” challenges would unfold not because of a policy disagreement between the allies, but amid an outright clash between the United States and China. In this, Australia would be required to choose sides – or sit on the sidelines.

Already, differences exist in the amount of risk each ally is prepared to absorb in its relations with Beijing. In order to mitigate this risk, the Australian government and business sectors need to develop a clearer understanding of specific vulnerabilities based on the pattern of trade and investment, intelligence about Chinese intentions, and the history of Beijing’s recent action.

Political leaders on both sides should promote a clearer understanding of Australia’s diversified portfolio of commercial partners to ensure that an overestimation of the China factor does not inhibit Australia’s sense of foreign policy independence. And Australians — and where appropriate, their American allies — need to engage in honest conversation both publicly and privately about how much risk they are willing to assume in order to help push back against Chinese actions.

Risk #2:  Domestic Politics

The second area of risk to the alliance stems from potential changes in Australian domestic politics. The U.S. alliance remains very popular among Australians in the abstract, but support falls off when the public is queried about concrete policy choices, such as joining the United States in Japan’s defense or pushing China from militarized sea features. The gap between public opinion and the national security elite — and between popular opinion and government policy — presents a risk to the alliance, since it not inevitable that elite views will always trump popular ones when the two clash. Both governments could mitigate the risk of public opinion swinging away from the alliance by more clearly articulating to their own populations the concrete benefits that close ties generate.

Risk #3:  Costs

Unlike NATO and the alliances with Japan and South Korea, the U.S. alliance with Australia has not fallen prey to the charges of free riding and worse that featured so prominently in the 2016 U.S. presidential campaign. Still, when such concerns are shared by both Barack Obama and Donald Trump, the two governments should tackle cost concerns head-on. Australian government officials stress that their ten-year defense plan is fully costed, for example, but do not claim that it is fully funded. Yet a downturn in the economy, should it occur, would almost certainly wreak havoc on Australia’s carefully thought-out defense plan, with significant implications for the alliance. The recent cost-sharing agreement related to the U.S. Marine deployment in Darwin is a positive sign after months of stasis, but the two sides will need to endeavor to clear such future blockages as quickly as possible.

Risk #4:  American decline, denial or dysfunction

The perception that the United States is in long-term relative decline and is ambivalent about continuing its traditional leadership role in Asia is today increasingly common across the region. Sequestration-era defense budgets have cut deeply into the U.S. military’s modernization efforts, readiness, and end strength. To Australian worries about America’s “strategic distraction” and focus on numerous Middle Eastern conflicts, Washington added a new preoccupation with Europe in the wake of Russia’s intervention in Ukraine. The end of support for the Trans-Pacific Partnership trade agreement has heightened concerns about whether the United States seeks to exercise economic leadership in Asia, and the broader uncertainty surrounding the Trump administration’s coming approach has heightened worries. The percentage of Australians who see the alliance as very or fairly important to Australia’s security has fallen nine points over the past year, and the new administration will need to take charge of the strategic narrative.

Twelve Opportunities

It is a sign of the alliance’s depth and longevity that the most obvious opportunities for bilateral cooperation have long been seized. The United States and Australia work closely in a vast range of areas in the defense and intelligence spheres, and economic and diplomatic relations are similarly close. Nevertheless, the team taking office in January should seek additional ways to strengthen the alliance, and to ensure that it remains a key pillar of continuing American efforts to rebalance toward Asia. The Trump administration can build on past successes by pursuing 12 opportunities.

Enhance Bilateral Ties

Opportunity #1:  Homeport U.S. Navy vessels in Australia. Despite several years of discussions, there has been little progress in exploring a significant increase in expanded access arrangements for U.S. naval vessels in Australia. Doing so would make a significant contribution to maintaining rules and security in the neighborhood and beyond. As a 2012 congressionally mandated study observed, the HMAS Stirling base on Australia’s west coast offers direct access to the Indian Ocean, an extensive offshore exercise area, submarine facilities, and docking for surface vessels. Basing U.S. vessels at Stirling would require significant investments, but the two governments should be ambitious in examining the possibilities, including planning for forward basing an aircraft carrier strike group in Perth. At a time when the President-elect has vowed a major expansion in the U.S. Navy, homeporting in the region could expand its effective Asian presence.

Opportunity #2:  Expand amphibious exercises. Australia is acquiring significant new amphibious capabilities, including landing helicopter dock ships described as a “quantum leap in capability” for the Australian Defense Forces. These advances will enable the Australian Army to conduct full-spectrum expeditionary operations, and they are taking place in parallel with Japan’s development of similar capabilities. As with the possibility of homeporting U.S. naval vessels, expanding amphibious exercises can represent a meaningful contribution to the regional stability on which Australia’s security and economic interests depend. As Japan stands up its new amphibious rapid deployment brigade and acquires new platforms, the United States and Australia should join Tokyo’s Self-Defense Forces in trilateral amphibious exercises aimed at ensuring maximum interoperability among the three.

Opportunity #3:  Boost space cooperation: The United States once maintained seven different deep space tracking stations in Australia, but now only fields one: Tidbinbilla, a station located outside of Canberra used by NASA to communicate with deep space probes. The two governments should take a fresh look at bilateral ways to develop new commercial space opportunities and scientific expertise in both countries. The Australian government, for instance, should explore establishing a space coordinator position that would integrate the government’s disparate space-related efforts, while Washington should encourage commercial space enterprises to link with potential Australian collaborators. The International Aeronautical Congress, which will take place next year in Australia, provides a natural venue to launch a bilateral cooperation initiative.

Opportunity #4:  Quantum computing cooperation. Australia maintains centers of excellence in quantum computing, which uses the properties of quantum mechanics to vastly increase computing speed compared with classical computers. Both the University of New South Wales and the University of Sydney host cutting-edge quantum computing programs, and a portion of Australian university-based quantum research is carried out with funding from the U.S. National Security Agency. Potential applications in the field range from advances in signals intelligence, cryptography and encryption, and satellite security. With China having recently launched the world’s first quantum satellite, the impetus is at hand for closer U.S.-Australian collaboration in an area that holds the potential to transform fields as disparate as banking, cybersecurity, and defense.

Opportunity #5:  Establish an alliance coordination mechanism and a foreign investment dialogue. Given the increased complexity associated with managing an alliance focused on long-term security challenges in the Indo-Pacific, Australia and the United States should establish a formal alliance coordination mechanism. Such a mechanism could be based on the structure established between the United States and Japan during their 2015 revision of bilateral defense guidelines. The coordination mechanism would bring together senior officials on both sides to strengthen long-term planning as well as policy and operational coordination on military issues, particularly in Asia.

At the same time, in light of the surge of Chinese investment into both Australia and the United States, the two countries should establish a bilateral dialogue on inbound foreign direct investment, with an emphasis on China. The participants should aim to share information on existing and potential investments, operations of the Committee on Foreign Investment in the United States (CFIUS) and Australia’s Foreign Investment Review Board (FIRB), lessons learned on each side, and ways in which to limit potential vulnerabilities to infrastructure, critical technologies, and democratic politics.

Focus on Southeast Asia

Opportunity #6:  Midwife closer ties between the United States and Indonesia. Australia and Indonesia, despite episodic strains, enjoy increasingly close relations in the security and economic spheres. The two countries are negotiating a comprehensive economic partnership agreement and cooperate in counterterrorism and other security areas. Australian officials have long encouraged Washington to build closer ties with Jakarta, and some privately express disappointment that Indonesia-U.S. relations have not captured the same sense of possibility so characteristic of the historic transformation in Indo-American ties. Canberra can play a more active role in bringing the two together in various configurations. A highly intriguing possibility resides in trilateral (or quadrilateral with India) defense cooperation in the Cocos Islands. This Australian territory, which stands in strategic proximity to the Indian Ocean and the South China Sea, could become the locus for a consortium of unmanned surveillance platforms that provide enhanced maritime domain awareness to the participating parties.

Opportunity #7:  Stitch together efforts to build partnership capacity. An increasing focus of American and Australian security cooperation is on building partnership capacity in Asia. This year, Washington inaugurated its five-year $425 million Southeast Asia Maritime Security Initiative, which aims to establish a shared maritime domain awareness architecture through which countries can identify threats, share information, and build patterns of cooperation. The focus countries include the Philippines, Vietnam, Indonesia, and Malaysia. At the same time, Canberra has transferred vessels to Malaysia and the Philippines, is renewing its defense agreement with Indonesia, and boosted security ties with Vietnam.

Efforts have also begun to coordinate U.S. and Australian efforts, which by necessity include not only partner navies, but also coast guards and law enforcement agencies. Yet this remains an area ripe for bilateral long-term strategic planning, with Canberra and Washington sketching out shared objectives and then collaborating to secure resources necessary to build maritime capacity across the region.

Work Across the Region

Opportunity#8:  Prepare a “Plan B” for regional trade. The strategic case for the Trans-Pacific Partnership (TPP) is well-known on both sides of the Pacific, and perhaps no government has been as articulate in pushing for U.S. approval than Australia. Yet the President-elect’s announcement that he will withdraw from the pact signals its demise, at least in the near term and as far as Washington is concerned.

Still, boosting regional trade with the United States remains a key way to anchor America’s standing in Asia, signal its long-term engagement in the region, strengthen America’s economy and those of its partners, and diversify their trade in a way that leaves them both stronger. The United States and Australia should begin consultations on moving beyond the TPP impasse.

One option would be for the other TPP members to proceed without the United States, creating a framework into which Washington could enter if and when it is ready to do so. Alternatively, given the President-elect’s stress on bilateral deals in place of multilateral agreements, the United States could pursue negotiations with key economies with which it lacks free trade agreements (such as Japan). This could preserve the opportunity to one day link new bilateral pacts with existing ones (such as the FTAs with Australia and Singapore) in a larger regional effort.

Opportunity #9:  Spur closer cooperation between Australia and Japan. Canberra and Tokyo have made significant strides in security cooperation over the past several years, beginning with the 2007 Joint Declaration on Security Cooperation and followed in 2014 by the launch of a “special strategic partnership.” Today, Tokyo’s closest non-American security partner is Australia. Yet Canberra’s decision to procure submarines from France rather than Japan shocked the Tokyo security establishment and raised doubts about the geopolitical importance Australia attaches to closer ties with its northeast Asian partner.

This difficulty is deeply understood among Australian policymakers, and they have endeavored to reassure Tokyo of their continuing commitment. Here Washington can play a quiet “marriage counselor” role, encouraging both capitals to maintain the forward momentum. An early opportunity to do this would be to push Tokyo and Canberra to approve a reciprocal access agreement on defense services and supplies that would facilitate bilateral military cooperation.

Opportunity #10:  Reenergize the quad. The promising Quadrilateral Security Dialogue, which included Japan and India, met a somewhat ignominious death when the Rudd government ceased participation, reportedly over concerns about China’s reaction to it. Given the shared concerns about bolstering regional rules, a resuscitation of quadrilateral cooperation is overdue. This should include a regular ministerial-level dialogue as well as active defense cooperation in areas such as maritime domain awareness. Washington should also push for Australian inclusion in the next Indian-led Malabar naval exercise.

Opportunity #11: Build on the breakthrough in relations between the United States and New Zealand breakthrough. The visit this fall of a U.S. Navy warship to New Zealand marked the end of a 30-year period of security estrangement and a final thaw in the anachronistic frostiness between Washington and Wellington. It also represents an opportunity for the United States to deepen cooperation with New Zealand, which has its own special relationship with Australia.

New Zealand has a population of just four million, with a defense budget around one percent of GDP and a military force made up of fewer than 15,000 personnel. And yet it is growing more confident in its international role, given its temporary seat on the U.N. Security Council, aggressive approach to trade liberalization, and a military engaged in operations as far afield as the Gulf of Aden and Timor-Leste. Closing the outdated nuclear divide is the first step in an enhanced U.S.-New Zealand partnership in which Australia could play a key role.

Canberra and Washington should examine the array of regional diplomatic meetings, military exercises, and gatherings that do not currently include New Zealand and consider extending invitations to them. More ambitiously, the two could encourage Auckland to one day participate in key overflights or freedom of navigation exercises and even begin contemplating the eventual resuscitation of ANZUS.

Opportunity #12:  Coordinate human rights promotion. Australia and the United States should leverage their roles as globally engaged democracies to promote together human rights in lands where basic freedoms are lacking. This could take a number of forms, including coordinating aid to bolster Myanmar’s emerging democratic system, encouraging the private sector to enlist in the effort to help refugees, and pressing the government of Vietnam to better respect liberties at home. One significant opportunity would have Australia and the United States partner with governments committed to the free flow of online information and the multi-stakeholder model of internet governance. At a time when the online environment is highly contested and subject to government-driven censorship and monitoring, Canberra and Washington should coordinate efforts to persuade still-ambivalent emerging Asian economies to embrace internet freedom rather than a state-centric model.

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Seventy years ago, in a speech one week before federal elections, Prime Minister Robert Menzies admonished his countrymen not to “sit at home huddling about ourselves the garments of mere safety.” “We need to avoid a purely defensive conservatism of mind,” he said, for “nothing can be more disastrous for a young country than to live on old ideas.”

Australia never has, and neither has America. Perhaps it is for this most basic reason that the alliance has been so successful, and it is on this principle that it will best endure. Not to be shaped by events so much as to shape them; not to react to a changing region but to lead it; not to rest merely on appeals to the freedom and prosperity guaranteed thus far but actively to secure them for generations to come. This is an Australian-U.S. alliance worthy of the 21st century, of their leaders, and of the peoples of two proud nations that give it such active life.


Richard Fontaine is president of the Center for a New American Security and served as the inaugural Alliance 21 Fellow at the University of Sydney’s US Studies Centre.

Image: U.S. Marine Corps photo by Lance Cpl. Osvaldo Ortega