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Australia’sRoleinEastAsiaKeyQuestionsWhatrolehasamiddlepowerlikeAustraliaplayedinEastAsia?DoesAustralia‘punchaboveitsweightintheEastAsianRegion?WhatrolehasAustraliaplayedinshapingtheregionalarchitectureinEastAsia?WhatrolewillAustraliaplayinthefutureinEastAsia?

AustraliainEastAsiaRequiredReadingsTheofficialwebsiteoftheAustralianGovernmentDepartmentofForeignAffairsandTrade–Pearson.D(2015),Whatmakesforaneffectivefreetradeagreement(Chapter1),in‘ANewParadigmforInternationalBusiness,ProceedingsoftheConferenceonFreeTradeAgreementsandRegionalIntegrationinEastAsia,Springer,Singapore.AustraliainEastAsiaRequiredReadings.JohnMcCarthy.FocussingonforeignpolicyforthesakeofAustralia’sfuture,

17May2019,Melbourne.Speechpublishedin‘EastAsiaForum’.Economics,PoliticsandPublicPolicyinEastAsiaandthePacific.AustraliainEastAsiaForamiddlerankingpower,AustraliahasplayedasubstantialroleinshapingtheregionalpoliticalandeconomicarchitectureinEastAsia.Indeed,onecouldwellarguethatAustralia‘puncheswellaboveit’sweight”inEastAsia.First,AustraliawasafoundingmemberofAPEC–theAsiaPacificEconomicCo-operation–whichcomprises21membereconomies,includingChina,Japan,SouthKorea,ChineseTaipeiandHongKongChina.AustraliainEastAsiaSecond,AustraliawasalsoafoundingmemberoftheASEANRegionalForum(ARF)–aregionalgroupingdesignedtoenhancesecuritydialogueinAsia.ARFdrawstogether27memberswhichhaveabearingonthesecurityoftheAsiaPacificregion.Third,AustraliaisanactivememberoftheEastAsiaSummit(EAS),whichisaregionalleaders'forumforstrategicdialogueandcooperationonkeychallengesfacingtheEastAsianregion.

AustraliainEastAsiaFourth,AustraliahasbeeninstrumentalinenhancingtradingrelationsintheEastAsianregionbyinitiatingthreeimportantbilateralfreetradeagreements(FTAs)–theAustralia-ChinaFTA–(ChAFTA),theJapanAustraliaEconomicPartnershipAgreement(JAEPA)andtheAustralia-KoreaFTA(KAFTA).APEC,ARF,EASandthe3keybilateralFTAsinvolvingAustraliaanditsEastAsianpartnerswillbediscussedinsomedepth.APECTheAsia-PacificEconomicCooperation(APEC)forumwasestablishedin1989.Australiawastheprincipalfounder.

APEC’sprimarypurposeistofacilitateeconomicgrowthandprosperityintheregion,withthevisionofcreatingaseamlessregionaleconomy.APECpursuestheseobjectivesthroughtradeandinvestmentliberalisation,businessfacilitation,andeconomicandtechnicalcooperation.APECAPEChas21membereconomies,whichare:AustraliaBruneiCanadaChileChinamainlandHongKongChinaIndonesiaJapanKoreaMalaysiaMexicoNewZealandPNGPeruPhilippinesRussiaSingaporeChineseTaipeiThailandUSAandVietnam.APECAPECaimstostrengthenregionaleconomicintegrationbyremovingimpedimentstotradeandinvestment"attheborder",enhancingsupplychainconnectivity"acrosstheborder"andimprovingthebusinessenvironment"behindtheborder".

APECendeavourstoimprovetheoperatingenvironmentforbusinessbyreducingthecostofcross-bordertrade,improvingaccesstotradeinformationandsimplifyingregulatoryandadministrativeprocesses.APECAPECalsoassistsmembereconomiesbuildtheinstitutionalcapacitytoimplementandtakeadvantageofthebenefitsoftradeandinvestmentreform.PrivatesectorengagementiscentraltoAPEC'ssuccess.The

APECBusinessAdvisoryCouncil(ABAC),establishedin1995,representstheinterestsofbusinessinAPEC.ABACiscomposedofuptothreemembersfromeachofthe

21membereconomies,withbusinessrepresentativesappointedbyAPECLeaders.

APECTheannualAPECChiefExecutiveOfficer(CEO)SummitandregularindustrydialoguesalsoprovideopportunitiesforregionalbusinessleaderstointeractwithAPECandaddresskeyissuesaffectingbusinessintheregion.

APECoperatesonthebasisofnon-bindingcommitmentsandopendialogue.DecisionsmadewithinAPECarereachedbyconsensusandcommitmentsareundertakenonavoluntarybasis.APECTheAPECSecretariatisbasedinSingapore.Itprovidescoordination,technicalandadvisorysupportaswellasinformationmanagement,communicationsandpublicoutreachservices.TheSecretariatisheadedbyafixed-termExecutiveDirector,appointedforaperiodofthreeyears.

APECTheSecretariatisalsohometotheAPECPolicySupportUnit(PSU).ThePSUassistsAPEC'sdeliberationsbyprovidingresearch,analysisandpolicysupport.MoreinformationonAPEC,includingitsstructure,committeesandactivities,canbefoundon

APEC'sofficialwebsite–.APECAustraliawasafoundingmemberoftheAPECforumin1989andhasbeenactiveinhelpingAPECachieveitscurrentstatus.AustraliahashelpedadvanceAPEC'scoreworkstreamsofregionaleconomicintegration,structuralreformandtargetedcapacitybuildingthroughitsinvolvementacrossmorethan30APECforums.Asnoted,APECmakesanimportantcontributiontothepromotionofopentradeandinvestment,economicdevelopmentandprosperityintheAsia-Pacific,includingandespeciallyEastAsia.

ARFWenowturntothesecondregionalinstitutionwhereAustraliahashadanactiveinvolvement–theARF–ASEANRegionalForum.TheASEANRegionalForum(ARF)wasestablishedin1994.Itcomprises27members:the10ASEANmemberstates(Brunei,Cambodia,Indonesia,Laos,Malaysia,Burma,Philippines,Singapore,ThailandandVietnam),the10ASEANdialoguepartners(Australia,Canada,China,theEuropeanUnion,India,Japan,NewZealand,theRepublicofKorea,RussiaandtheUnitedStates),oneASEANobserver(PapuaNewGuinea),aswellastheDemocraticPeople’sRepublicofKorea,Mongolia,Pakistan,Timor-Leste,BangladeshandSriLanka.EastAsiaiswellrepresentedintheARF.ARFTheARFisakeyforumforsecuritydialogueinAsia,complementingthevariousbilateraltradealliancesanddialogues.Itprovidesasettinginwhichmemberscandiscusscurrentregionalsecurityissuesanddevelopcooperativemeasurestoenhancepeaceandsecurityintheregion.ARFLikeAPECandotherregionalgroupings,ARFischaracterisedbyconsensusdecisionmakingandfrankdialogue.The1995ARFConceptPapersetoutathree-stage,evolutionaryapproachtotheARF'sdevelopment,movingfromconfidence-buildingtopreventivediplomacyand,inthelongterm,towardsaconflictresolutioncapability.ARFDuringitsfirstphase,theARFfocusedonconfidencebuildingmeasuresandmademodestgainsinbuildingasenseofstrategiccommunity.Atthe16thARFMinisterialMeetinginJuly2009,MinistersendorsedanARFvisionstatementthatincludedanundertakingtomovetowardstheARF’ssecondphase-thedevelopmentofapreventivediplomacycapacity.Thiswasfollowedbytheadoption,inJuly2010,oftheHanoiPlanofActiontoimplementtheVisionStatement.ARFThemostrecentARFMinisterialmeetingwasheldinVientiane,LaoPDRinJuly2016.ThemeetingfocusedonkeyregionalissuesincludingSouthChinaSea,CounteringViolentExtremismandtheKoreanPeninsula.

ForeignMinistersadoptedaStatementonEnhancingCooperationamongMaritimeLawEnforcementAgencies,aStatementonRecentTragicTerroristAttacks,andaStatementonStrengtheningCooperationintheManagementofCross-BorderMovementofCriminals.EASWenowturntothethirdEastAsianinstitutionwhereAustraliaisactivelyinvolved–theEAS–EastAsianSummit.Australiaparticipated,asafoundingmember,intheinauguralEASmeetingheldinKualaLumpuron14December2005.TheEastAsiaSummit(EAS)isaregionalleaders'forumforstrategicdialogueandcooperationonkeychallengesfacingtheEastAsianregion.TheEASisasignificantregionalgroupingwithanimportantroletoplayinadvancingcloserregionalintegrationandcooperationinEastAsia.

EASMembershipoftheEAScomprisesthetenASEANcountries(Brunei,Cambodia,Indonesia,Laos,Malaysia,Myanmar,thePhilippines,Singapore,Thailand,Vietnam),Australia,China,India,Japan,NewZealand,theRepublicofKorea,theUnitedStatesandRussia.The18EASmembercountriesrepresentcollectively55percentoftheworld’spopulationandaccountforaround55percentofglobalGDP

[IMFpurchasingpowerparityGDPfigures2014].EASEAScountriesreceivedmorethan77percentofAustralia'stotalexportsandtwo-waytradewithEAScountrieswasworth$460.9billionin2014-15,underscoringhowentrenchedAustralia’seconomicinterestsareenmeshedinEastAsia.ThecenterpieceoftheEASyearisanannualleaders'Summit,usuallyheldback-to-backwithannualASEANleaders'meetings.Inaddition,ministerialandseniorofficials'meetingsareheldduringtheyeartotakeforwardleaders'initiatives.IssuesofimportancetoEastAsiaarediscussedattheEAS.EASForexample,EASleadersadoptedanEASStatementonNon-Proliferation(proposedbyAustraliaandco-sponsoredbyMyanmar);aStatementonMigrantsinCrisisandTraffickinginPersons(proposedbytheUSandco-sponsoredbyMyanmarandthePhilippines);andtheVientianeDeclarationonInfrastructureDevelopmentCooperationinEastAsia(proposedbyLaosandco-sponsoredbyChina).Leadersalsowelcomedtheimplementationofthemeasuresagreedinthe2015KualaLumpurDeclarationtostrengthentheEASasaninstitution.FTAsWenowturntothestrongroleAustraliahasplayedinconsiderablyfacilitatingtradeinEastAsiabyinitiating3keybilateralfreetradeagreements(FTAs)inrecentyears–withChina,JapanandKorea.Toenhanceourunderstandingoftradepolicy,wewillbrieflylookatwhatFTAsare,whycountriesenterintothemandsomeofthefactorsthatmakeforgood/effectiveFTAs.FTAsFreetradeagreements(FTAs)areinternationaltreatiesthatreducebarrierstotradeandinvestment.Asageneralrule,FTAs—

bothwithindividualcountriesandgroupsofcountries—provide:betteraccesstokeymarketsanimprovedcompetitivepositionforacountry’sexportsmoreprospectsforincreasedtwo-wayinvestment,andreducedimportcostsforbusinessesandconsumers.FTAsResearchbyPearson(2015)indicatesthatanumberoffactorsmakeforgoodFTAs:Distance(shippingcosts)GDP(sizeofmarket)Degreeofeconomicfreedominpartnercountry(s)ExistingtarifflevelsNontariffmeasuresPotentialforeconomicreformIntra-industrytradeJudicialanddisputeresolutionmechanisms.EastAsiancountriesmeetalltheabovecriteria.ChAFTATheChina-AustraliaFreeTradeAgreement(ChAFTA)cameintoforceon20December2015.ItlaysastrongfoundationforthenextphaseofAustralia’seconomicrelationshipwithChina.TheagreementunlockssignificantopportunitiesforAustraliainChinawhich

isAustralia’slargestexportmarketforbothgoodsandservices,accountingfornearlyathirdoftotalexports,andagrowingsourceofforeigninvestment.ChAFTAThankstoChAFTA,morethan96percentofAustralia'sgoodsexportstoChinaarenoweligibletoenterduty-freeorwithpreferentialaccess.Forexample,in

agriculture,ChAFTAeliminatedremainingtariffsonAustralianbarleyandsorghum,andwillseearapidtariffreductiononotheragricultureexports,includingseafood,sheepmeatandavarietyofhorticulture.Otherkeyagricultureoutcomesinclude:Dairy:

tariffsupto20percentarebeingeliminatedby1January2026Beef:

tariffsof12to25percentarebeingeliminatedby1January2024Wine:

tariffsof14to20percentarebeingeliminatedby1January2019.ChAFTAChinaisbyfarAustralia'slargestmarketforresourcesandenergyproducts.In2016,Australiaexportedaround$74billionworthof

resources,energyandmanufacturedproducts

toChina.Since20

December2015,93

per

centofChina'simportsoftheseproductsfromAustraliaenteredduty-free,withmostremainingtariffstoberemovedby1January2019.ChAFTAChinaisAustralia'slargestservicesmarket,withexportsinservicesvaluedat$11.3billionin2016.InChAFTA,ChinaoffersAustraliaitsbest-everservicescommitmentsinanFTA.ThisincludesneworsignificantlyimprovedmarketaccesscommitmentsforAustralianbanks,insurers,securitiesandfuturescompanies,lawfirmsandprofessionalservicessuppliers,educationservicesexporters,aswellashealth,agedcare,construction,manufacturingandtelecommunicationsservicesbusinessesinChina.JAEPAWenowturntoAustralia’sFTAwithJapan.TheJapan-AustraliaEconomicPartnershipAgreement(JAEPA)enteredintoforceon15January2015.TheAgreementprovidespreferentialaccessforAustralia'sexportsanditwillsupportfurthergrowthintwo-wayinvestment.JAEPAisbyfarthemostliberalisingtradeagreementJapanhaseverconcluded.AustraliaandJapanarenaturalpartnerswithhighlycomplementaryeconomies.LikeChAFTA,JAEPAwillunderpinastrongeconomicandtradingrelationshipformanyyearstocome.KAFTAWenowturntotheAustralia-KoreaFTA.TheKorea-AustraliaFreeTradeAgreement(KAFTA)enteredintoforceon12December2014.KAFTAprotectsandenhancesthecompetitivepositionofAustralia’sbusinessesinSouthKorea.Australianexportersgainsignificantlyimprovedmarketaccessingoods,withtariffeliminationonnearlyallAustralia’scurrentexportsbyvaluebyfullimplementationoftheAgreement.UnderKAFTA,AustralianservicesprovidersreceivethebesttreatmentKoreahasagreedwithanytradepartner.InvestmentcommitmentsintheAgreementprotectandenhanceinvestmentinbothdirections.WhatrolewillAustraliaplayinthefutureinEastAsia?GivenwhatwehavejustcoveredonAustralia’sdeepengagementinEastAsiaineconomic,securityandpoliticalspheres,letusnowturntothefutureandaskwhatrolewillAustraliaplayinthefuture.Theshortanswerismoreofthesame–indeedalotmore,accordingtoaformerAustralianAmbassadortoJapan,IndonesiaandUSA.Threekeythemesarelikelytodominate-Australia’srelationshipwiththeregion;Australia’sreputationasanation;andtheimportanceofafunctioning,rules-basedinternationalsystem.WhatrolewillAustraliaplayinthefutureinEastAsia?Bywayofbriefhistory,AustraliaassumedcontrolofitsforeignanddefencepolicyfromBritainonlyin1942.Shortlyafter,theUnitedStatesreplacedBritainasthecountry’sprotectiveumbrella—andthishaspersistedtothepresent.

Ananxietytopreservethatprotectiveumbrellahasbecomeentrenchedinthecountry’sstrategicthinking,leadingtoAustralianinvolvementalongsidetheUnitedStatesinwarsfromKoreatoIraq.Indeed,withtheexceptionoftheSecondWorldWar,Australianhasnevertrulyhadtothinkofpursuingafullyindependentforeignpolicy.WhatrolewillAustraliaplayinthefutureinEastAsia?NowAustraliadoes.TheTrumpadministrationhasactedtothedetrimentoftheinternationalstructureofalliancesandinstitutionstheUnitedStateswasinstrumentalincreating.Coincidingwiththat,China’spursuitofregionalsupremacyinAsiaandglobalequivalencewiththeUnitedStateshasacceleratedandassumedamuchsharperedge.Thishas,unfortunately,hardenedaUSdeterminationtothwartChineseambitions.WhatrolewillAustraliaplayinthefutureinEastAsia?Australiansnowhavetoconsiderthepossibilityofhowtodealwithaconfrontationbetweenthecountry’stopsecuritypartneranditslargesttradingpartner.AustraliansareunusedtothinkinginthesetermsaboutexternalpolicyandarejustbeginningtoenterintoaseriousnationaldiscussiononasetofdecisionsarguablymoreimportanttoAustraliathananysincetheSecondWorldWar,includingthoseonimmigrationandtheeconomicreformsundertakenbyformerprimeministersHawke,KeatingandHowardinthe1980sand90s.WhatrolewillAustraliaplayinthefutureinEastAsia?Theexternalpolicieswhichthecountrywillneedtoadoptwillnotbesimplisticchoicesbetweensecurityandeconomicinterests.Theywillinvolveaprocessof

navigation.Inconfrontingfuturechallenges,thegovernmentwillhavetobepreparedtoforthrightlyandhonestlyengagethecountryasawhole—itsinstitutionsanditspeople.Inotherwords,Australiawillhavetodevelopanewstrategicpersonality.WhatrolewillAustraliaplayinthefutureinEastAsia?NoattempttodealwiththeexternalchallengesthatlieaheadwillsucceedunlessAustralialooksatitsrelationshipswiththeAsiaandthePacificregion.ForAustralia,atleastasimportantasitsrelationshipswithWesterndemocraciesarethosewithcountrieswithtotallydifferenthistoricalandethnicbackgrounds.ThismeanstheculturaldimensionofAustralia’sexternaloutlookisproportionatelymoresignificant(orshouldbe)comparedtoitsclosestpeersinEuropeandNorthAmerica.WhatrolewillAustraliaplayinthefutureinEastAsia?WhiletheworkdonebysuccessiveAustraliangovernmentsinbilateralandregionaleconomicandsecurityarrangementshasbeenthoroughandforwardlooking,thecountryhasbeenlesssuccessfulinreducingitsculturaldividewithmuchoftheregion.ThisshortcomingadverselyimpactsAustralia’soveralldealingswithitsregion.WhatrolewillAustraliaplayinthefutureinEastAsia?ThefactisAustraliainvestsmoreinNewZealandthanintheASEANcountriescombined.ThestudyinAustraliaofAsia,includingAsianlanguages,hasactuallydeclinedinthepast30years.FormerprimeministerJuliaGillard’s‘AsianCentury’WhitePaperprovidednofundstoimplementitssensiblerecommendationsandwhenthecurrentcoalitioncametopowerin2013itremovedtheWhitePaperfromtheDepartmentofForeignAffairsandTradewebsite.WhatrolewillAustraliaplayinthefutureinEastAsia?ThefactsarethattheimportanceofAsiatoAustraliawillincrease,notdecrease.TheriseofChina,andIndiaandIndonesia’sincreasingeconomicprominencearenowfactsoflife.Moreover,thecompetitionforpre-eminenceintheregionisapictureofrelationshipsinvolvingtheUnitedStates,Chinaandallthestatesinthewiderregion.

Whenthepictureisshaken,theshapeschange.WhatrolewillAustraliaplayinthefutureinEastAsia?Thismeansthatthediplomatictaskinvolvedintheregionisdaunting.

Itcanbeundertakenproperlyonlywithadequatediplomaticresources.

Thesehavebeenlackingforageneration.AsformerUSsecretaryofdefenseJamesMattisargued,moneyspentondiplomacysavesmoneyonbullets.AustraliahastomakeavailablerealresourcestoimplementthesortsofrecommendationsthatappearedintheAsianCenturyWhitePaperinvolvingeducationofthecommunityasawhole.WhatrolewillAustraliaplayinthefutureinEastAsia?Athirdthemethatrequirescommunityconsiderationisnationalreputation.ItisgenerallyacceptedthatAustraliansareagreeableenough,relativelywealthy,goodatsportandincertainsectorsverycompetent.Butthereareseveralblotsonourreputation:

Australiansareoftenareseenasputtingdomesticpoliticsaboveseriousinternationalinterests;asblowinghotandcold;aschangingprimeministerstoooftentomaintaingoodgovernance;andasnotindependentfromtheUnitedStatesonsecurityissues.WhatrolewillAustraliaplayinthefutureinEastAsia?ThepointhereisnotwhetherothercountriesintheAsiaPacifichavemajorproblemswithAustralianpolicy.

Mostdonot.Rather,thereisdoubtaboutthecountry’sabilitytocometoitsownforeignpolicypositions.Acountrywillbemorecredibleinternationallyifitsownsystemworks.Ifitspolicystatementsa

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