Australia, the US and the rise of the Asia Pacific

CSIS Banyan Tree Leadership Forum, Washington D.C., USA

Speech, E&OE, (check against delivery)

25 April 2012

General Jim Jones, thank you very much for that warm introduction. Senator William Brock, Ernie Bower, Ambassador Kim Beazley, Ambassador and former Prime Minister of New Zealand, Mike Moore, your Excellencies, ladies and gentlemen.

It's always a pleasure to be in Washington. I've got two notions I want to lob out to you straight away like hand grenades.

One is this; the very best of American political leaders are unmatched. The best performers in your leadership, military, politics don't have equals. Your very best are the finest of political or public policy advocates.

And the second thing I want to lob out there is this. This notion I've been thinking of for the last few days and that is that America could be one budget deal away, in the context of economic recovery, one budget deal away from banishing the notion of American declinism. Think about that, one budget deal, an exercise of statesmanship up the road, in the context of an economic bounce-back and all of a sudden, with energy independence crystallising, with technological innovation, resurgence of American manufacturing, people who spoke about American decline could be revising their thesis.

No elaboration on these two concepts, I'm just tossing them out there.

Back to the script.

It's wonderful to be at a centre that applied its focus to the Pacific before the Obama administration fixed its gaze on the region - in its 'pivot', its rebalancing towards the Asia-Pacific for which I congratulated Secretary of State Clinton only yesterday. And this means a great deal to Australia.

This goes to a core Australian anxiety or concern. It goes back well before the ANZUS Treaty of the early 1950s – it goes back:

It goes back to Alfred Deakin, Australia's second and then fifth Prime Minister, one of our founding fathers.

As Australian Prime Minister and Minister for External Affairs – in those days the jobs went together - in the years from 1905 to 1908, Alfred Deakin was forced to ponder the security of this vast continent, with a population of a few million, located a long way from the mother country, newly federated, isolated, sparsely populated, an island continent.

And the fears he had, the anxieties he had were accelerated in the wake of the Japanese-Russian war of 1905.

Concerned to contain the Japanese and also the Germans in the South Pacific, Deakin saw the potential benefits of a geopolitical freeze in the region, a guarantee of existing arrangements.

And he stole from American history. He said he wanted a "Monroe Doctrine for the South-West Pacific" – an echo of a huge American strategic position in Australian foreign policy.

He concluded that "Australia could no longer depend on its isolation for its security".

He believed guarantees from the British Empire, Holland, France, China and the United States could create a zone of security in our region.

And the United States was clearly vital in that thinking.

In response to Australia's request to divert the Great White Fleet to Australian waters, Teddy Roosevelt's Secretary of State Elihu Root wrote, quote:

"Sending the fleet to Australia will be good business, no matter where they go from there. The time will surely come, although probably after our day, when it will be important for the United States to have all ports friendly and all causes of sympathy alive in the Pacific."

Now isn't that a beautiful pre-echo of what the Obama administration has committed itself to – to have "all ports friendly and all causes of sympathy alive in the Pacific".

The Great White Fleet came to Sydney and a million Australians turned out around the harbour to look at them and so filled with inspiration were they by the sight, they resolved that they would set up the Royal Australian Navy. Within a few years, it steamed into Sydney Harbour – ships purchased or commissioned from the British.

That idea of regional security – how do you secure the possession of a vast continent, a young nation, sparsely populated against any potential threat?

In 1935, Australia's tenth Prime Minister, Joseph Lyons, put the case for a "Pacific Pact".

He saw the Japanese devouring China. He saw that the Singapore strategy didn't give us enough security. We were a long way from Britain, a long way for the Atlantic Navy to steam out through the Suez Canal and protect us if Singapore fell.

In 1937, he took the idea of the "Pacific Pact", having promoted it with the United States, to a conference in London – the Imperial Conference in London. But, of course, getting the states of the Pacific to guarantee one another's boundaries was unrealistic in the years when Japan was steadily devouring China.

So the Second World War came and John Curtin, Prime Minister of Australia, in the darkest days of Australia's history, in February-March 1942, after the fall of Singapore, said Australia looks, without compunctions of any kind, notwithstanding our long-term relationship with the United Kingdom, Australia looks to the United States.

There are a lot of ambiguities in that and Curtin spent a bit of time beating a retreat from that because the imperial sentiment in Australia, even in those days, was saying we cannot cut our links with the mother country. But it was the idea coming up – we could only secure our continent in partnership with the United States.

Here's a story. We always grope for analogies and anecdotes to talk about Australian-American friendship.

That story of the Great White Fleet coming into Sydney Harbour has stood me in good stead on about 100 occasions while entertaining visiting Congressmen on a harbour cruise. I think it's always worked. The danger is the frequency of Congressional visits means that there are bound to be people who've heard it five years earlier. The disadvantage of being Premier for ten years is that people hear your best lines.

But here's a story I came across in the last couple of years – it's a new book, a story of an Australian battle ship, the HMAS Perth, called "Cruiser", written by Mike Carlton.

Singapore had fallen in February 1942. And the cruiser Perth had been sent up into the waters of the Dutch East Indies, now Indonesia, to ward off the Japanese navy. And it was in those waters with an American cruiser, the USS Houston, and it was a hopeless task.

They were there with remnants of the Dutch navy. There's no radio interoperability between the Dutch, the Americans and the Australians.

And the Japanese force coming to hit them, the Japanese force coming to get them, steaming down from Indo-China was overwhelmingly superior.

And after the first encounter the allies beat a retreat and, within a couple of nights, these two ships – the Aussie one and the American one – just sailed into the Japanese fleet, into the very heart of the Japanese fleet. They couldn't survive.

Vastly outgunned, the Perth and the USS Houston, side by side, steamed into battle, all guns blazing. And there off the coast of Java, they were sunk.

And both their captains, Hec Waller, captain of the Perth, had survived a lot of battles in the Eastern Mediterranean against the Germans, the fall of Greece, Crete and those battles, and Albert Rooks, of the USS Houston, went down guns blazing with their ships.

And the crews – Australian and American – those who survived were taken prisoner, enslaved to work on the Burma-Thai railway. Now some of them were taken off to Japan for imprisonment there. Only 214 Australians – about a third of the first total crew – ever got back to their homeland.

That for me is a symbol of Australia and the United States, side by side. In that case, in the worst of circumstances, their captains going down together.

Two months after, of course, there was the Battle of the Coral Sea – the 70th anniversary to be commemorated next month. And Ambassador Beazley is deep in planning that.

It was fought in March 1942 and the US Navy, I understand outgunned by the Japanese fleet, succeeded in blocking the southward thrust of Japanese naval power to Port Moresby. This was hugely important for Australia.

So it captured the imagination of Australians and resides in the Australian imagination to this day – that we were saved. We don't know precisely what the Japanese intentions were, were they to capture Port Moresby. We were saved by that American fleet.

This great naval engagement captured our strategic imagination, not least for the extraordinary and successful US intervention thousands of miles from the American homeland.

In 1951, our relationship was formalised in the ANZUS Treaty, which has defined and formalised the relationship to this day.

The point I want to make is that our support for the alliance grows out of a very deep-seated feeling that our continent, where it is relatively sparsely populated, needs security, our people, our nation, need a security alliance with the United States.

We think of the United States - we have for a 100 years - as a cornerstone of our security and only early this month we saw the evolution of this alliance.

Marines in Darwin

The first company of US Marines arrived in Darwin, in Australia's tropical north - the first contingent in a rotational arrangement agreed to between our two countries.

The Marine Corps presence will assist Australia as we improve the amphibious capability of our army and they will be an additional resource to help with natural disasters in the region. And no region has more disasters than the region to Australia's north. Think of the tsunami that devastated Indonesia [and] produced 300,000 casualties.

The Marines are a symbol of the rebalancing in American foreign policy, in American strategic thinking.

And their presence underlines how the security relationship between Australia and the United States is evolving. It is not a dead treaty. It does not speak to the past. It is evolving in the context of our time and pointing the way to the future.

Afghanistan

The alliance is also reflected in Afghanistan. It is reflected in our commitment to working closely with the US, the Afghan Government and our other ISAF partners to see through our joint mission in support of successful and sustainable transition in Afghanistan.

Australia has a national interest in this country not becoming again a safe haven for terrorists.

We are committed to the Lisbon timetables, timelines and strategy. There were headlines last week which confused transition with withdrawal. There has been no change in the Australian position.

The Prime Minister's speech when it was read by General Allen and Admiral Stavridis, both of whom I spoke to in Brussels, found it excellent. They endorsed it, as did Hillary Clinton, the Secretary of State, who I spoke to yesterday and other senior Americans I have met in the last two days.

We are committed to the Lisbon timetable, timelines and strategy, which is for Afghans to have full security responsibility across Afghanistan by the end of 2014.

Australia believes the strategy is working and the Afghan National Security Forces are becoming more capable. We are seeing steady gains in the fight against the insurgency.

As NATO Secretary General Rasmussen has said, we see "emerging agreement for NATO to take on a new mission in Afghanistan after transition".

Australia will support Afghanistan and the Afghan National Security Force beyond 2014.

We are prepared to pay our fair share for a sustainable ANSF.

We will continue our involvement in institutional training.

We will maintain a role in training and supporting police in Afghanistan; and we are prepared to consider a limited Special Forces contribution – in the right circumstances and under the right mandate – for counter-terrorism and to train the ANSF in counter terrorism beyond 2014.

The re-emergence of the Asia-Pacific

In this century, the Asia-Pacific will be at the forefront of global economic growth and rising power.

That doesn't mean that the future belongs to Asia.

This century may not belong to any one country or any one region.

In five years, Asia will still represent only about one third of global Gross Domestic Product.

What we can say is that economic weight and strategic influence are becoming more dispersed.

Some of the poles of power this century will be outside Asia.

But – and this is important - the size and growth rates of Asia's population means the region is likely to be unique in the scale of its economic growth.

In this sense, demography is destiny. The size of population suggests that what will happen in Asia will be unique.

Historically, we are witnessing the simultaneous rise, development and maturation of a number of economically strong nations in the region: Japan, China, India, South Korea, Vietnam and Indonesia and also Malaysia, Thailand, Singapore and the Philippines.

This is not a single narrative that is about competition between the US and China. It is a region that presents us with many narratives. There are many stories here cutting across one another, embellishing one another, reinforcing, contradicting one another.

But the growth of China and India do represent the re-emergence of economic powers – fallen in relative stature to western industrialised nations over most of the last century, but now relentlessly, irrepressibly on the rise, lifting, in their rise, tens of millions of people out of poverty.

I and other Australian leaders have said the rise of China is good for the world, the same of course with India.

There are challenges as well.

In our region, where open sea lanes are critical to global trade, there are many unsettled maritime and land boundaries.

There is the added risk that some countries in our region have access to nuclear arms.

In addition, we face asymmetrical threats, global economic uncertainty as deep as anything we've seen since the Great Depression and vast environmental challenges.

Senator John Kerry told me earlier this week that a committee he sits on – the Senate Sub-Committee on Oceans, Atmosphere, Fisheries and the Coast Guard – commenced hearings on March 10 to explore challenges to the health of the world's oceans.

This year saw the establishment of the Senate Oceans caucus – I understand there is already a House Oceans caucus.

Yesterday, the President of the World Bank, Robert Zoellick told me about the Bank's new initiative – the Global Partnership for Oceans - he announced it at The Economist's World Oceans Summit in Singapore in February this year.

It will bring together nations, scientific centres, NGOs, international organisations, foundations and the private sector to pool knowledge, experience, expertise and investment to help make oceans healthy and productive again.

It is frightening to reflect that there are now 40 huge areas of the world's ocean that are dead - some areas as large as the land area of New Zealand.

What we are doing to the world's oceans seems to be, as we understand it now, what we discovered in the 1970s we were doing to the world's atmosphere – giving effect to a man-made change in the chemical composition, the chemical composition of the oceans being different as a result of human activity.

Only today I learned of the establishment in October last year of the collaboration between the Rockefeller Financial and the Ocean Foundation on investment opportunities that support the health and sustainability of the world's oceans.

In Ambassador Beazley's residence at lunchtime today I spoke to half a dozen American experts in ocean health to look at our agenda for reversing ocean acidification. Seeing the resource on which one billion people depend – one billion people have as their primary source of protein fish from the world's oceans - is protected, is sustainable.

China

Almost 40 years ago – in a pivot of its own - Australia re-established diplomatic relations with China.

It was seen as a bold move and it said something about the maturing character and outlook of Australia in the '70s.

The questions raised then and now being asked about China's peaceful rise.

Secretary of State Hillary Clinton has addressed this point well. In March, she said in a speech commemorating President Nixon's opening to China:

"There is no intrinsic contradiction between supporting a rising China and advancing America's interests. A thriving China is good for America and a thriving America is good for China."

I'd like to say good for Australia as well.

China has every right to seek greater strategic influence to match its economic weight.

The extent to which this can be peacefully accommodated will turn ultimately on two factors.

First, the pattern of China's international behaviour.

And two, the extent to which the existing international order intelligently finds space for China.

Confrontation between the US and China would be a disaster. It would be a disaster for the US, a disaster for China, a disaster for the world.

As a former Australian Foreign Minister advised me, if you want a Cold War in the region, you can get one – easily.

As another said of China's military modernisation: "Great powers do what great powers do".

Dr Henry Kissinger made the same point, writing in "Foreign Affairs" in March this year:

"China's recent military build-up is not in itself an exceptional phenomenon: the more unusual outcome would be if the world's second-largest economy and the largest importer of natural resources did not translate its power into some increased military capacity."

"The issue," continued Dr Kissinger, "is whether that build-up is open-ended and to what purposes it is put."

China's Rise

The full meaning of the rise of China can only be grasped in the context of Chinese history.

In my visits to China – and I imagine this goes for those of you who have visited China - I've been struck by how quickly conversations with officials in government and people in the private sector confirm the Chinese know their history and find draw parallels from it.

"The Tang Dynasty (618 – 907) – that's when China opened to the world and the world opened to China," a party official told me on one occasion.

That's when the world opened to China and China opened to the world. He was thinking of a dynasty from the first millennium.

And here's another quote. "The Tang dynasty – that's when the world had one superpower and the superpower was China." I heard that from a curator who was showing me around a private Chinese art collection and we looked at some statuettes of horses and I said "That's the Tang dynasty" and I said "That's when China opened to the world and the world opened to China". And he said "Yes, that's when the world had one superpower and the superpower was China."

I suspected when I heard it that his view reflected a widespread Chinese optimism about the future.

China's rise today is in fact a re-emergence, a return to the position of strength that China possessed before its decline during the Qing dynasty.

No-one can read about the tumult of China's history, about the history of the Chinese revolution from 1911 without being struck by the huge sacrifices the Chinese people made for their unity and independence.

During the war with Japan, for example, during the two periods of civil war, the 1920s, the war against the war lords, the fall-out between Kuomintang and the Communists, and the civil war after 1945.

Huge sacrifices by the Chinese people, but sacrifices that have yielded stunning successes.

I've argued – and I've argued this hoping to provoke people on the left once - that the only successful revolution of the 20th century was the one that Deng Xiaoping produced - capitalist revolution in China, the one that he unleased in 1978.

And, in fact, 20 years ago – the anniversary being marked in China – in 1992, Deng's Southern Tour gave new impetus to the reform policies that have transformed China.

Looking at this history – think of what has happened to China. It's a faster industrialisation and on a bigger scale than that of America itself in the 19th century. It happened faster, more people are affected, more dramatic effects for the world than even America's rise to industrial dominance.

Few could be unmoved, looking at this, by the scale of this re-emergence of China; few could be untouched by what it means for the Chinese people – liberated from poverty, historic poverty; few could be reluctant to see this renewed China take its place in the councils of the world.

Henry Kissinger made this next point I'm going to make in his recent book: "On China".

But we should allow the Chinese to say it in their own words.

And, therefore, I want to quote an article in "China Daily", by State Councillor Dai Bingguo, summing up the Chinese world view in these words:

"...The more developed China is, the more it needs to strengthen cooperation with the rest of the world, and the more it needs a peaceful and stable international environment."

The more developed China is, the more it needs to strengthen cooperation with the rest of the world.

We need to be alert – as I know this Administration in Washington is alert – to this internationalist impulse in China's foreign policy.

For Australia's part, we also look to strengthen cooperation with our friends, allies and partners in support of a peaceful and stable international environment.

Our strongest partner in securing these objectives is, of course, the US, with which we share fundamental interests and values.

This intersection of interests and values is also largely true of our relationships with Japan, India, Indonesia, Korea and others.

What is clear is that it is in every nation's interest to remain committed to open trade, free markets, pluralism and respect for each other.

Over the past century, Australia and the US have worked hard with other nations to develop a legitimate, transparent, rules-based international system that allows us to effectively co-exist and to resolve disputes.

The East Asia Summit in which ASEAN is central, is – in a sense – the latest confirmation, the latest evolution of this.

And now, with the United States as a member of the East Asia Summit, it has the right mandate and the right membership to discuss and resolve the biggest regional issues we face.

And it was, I'm going to pose, a historic decision by the White House to take America into the East Asia Summit and a precursor of the more explicit rebalancing, repositioning of America that has developed in pace in recent months.

US rebalancing to the Asia-Pacific

So Australia welcomes the strategic rebalancing towards the Asia Pacific. In view of the 100 years of history I started by talking about, we could hardly do otherwise.

Countries across our region – including China and Australia – have unquestionably been beneficiaries of the peace and stability that the US presence in Asia since the Pacific War has supported.

We see American engagement with our region as underpinning and supporting an international rules-based system.

We are clear this is the American rationale.

We are also clear that American power underpins these principles.

The prosperity we've all enjoyed for the past 60 years has seen tens of millions of people lifted out of poverty in our region. I should say hundreds of millions.

It's the clear outcome of sustained and peaceful economic growth.

We're willing to work together on trade liberalisation and reform.

As President Obama has said: "History teaches us the greatest force the world has ever known for creating wealth and opportunity is free markets."

From Australia's point of view, these truths are evident in the rise of Asia over past decades. We believe they will remain just as powerful in the decades ahead.

In addition, we need and are willing to work with the region, on security, economic, and environmental issues.

Conclusion

Ladies and gentlemen, more than a century after Alfred Deakin first proposed the security architecture – that over-ambitious notion of a Monroe Doctrine for the South-West Pacific region in 1905 - the Australia-US relationship that that pre-figured is firmly held to by both partners.

Our alliance is robust and effective.

Those examples I quoted – the marine rotation in northern Australia, the cooperation in Afghanistan even through the hard times – that alliance is forward looking and it works across our full range of interests.

We are committed to a fair, open, respectful international system - one which all nations can understand and participate in.

And this is a world undergoing real change, but a world in which our alliance, and the common values that underpin it, are of genuine strength.

Thank you.

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