“India now sits in the front rank of Australia’s international partnerships,” said Ms Susan Grace, Australia’s Consul-General for South India in Chennai. She was initiating a discussion on Australia’s Foreign Policy White Paper-2017, at the Chennai Chapter of Observer Research Foundation on 16 June, 2018.
Australia and India have much in common, particularly being pluralist democracies, with strong education links and a growing Indian Diaspora in her country, Grace said. More importantly, their security interests are seen as being increasingly aligned towards ensuring stability and openness in the Indo-Pacific region, where both are interested in upholding international law, freedom of navigation and maritime security, she said.
“The Foreign Policy White Paper,” writes Australian Prime Minister Turnbull, “shows Australia to be focused on our region, determined to realise a secure, open and prosperous Indo-Pacific, while also strengthening and diversifying partnerships across the globe.” It defines the Indo-Pacific “as the region ranging from the eastern Indian Ocean to the Pacific Ocean connected by Southeast Asia, including India, North Asia and the United States”.
In context, Grace pointed out how in the evolving geo-strategic scenario, power balances are changing and how there is a dramatic shift towards the Indo-Pacific. “By the year 2030, Asia will deliver two-thirds of the global growth,” she said adding that the focus, therefore, is very much on the Indo-Pacific. Stability and resilience in this region are fundamental to Australia, she added.
The US is for Australia, the pre-eminent power in this region, the speaker said. “Our alliance with the US is definitely at the core of our approach to the Indo-Pacific,” Grace said. However, it is also clear that China’s influence in the region is growing and challenging America’s position.
In this regard, Grace stated unequivocally that “it is impossible to contain China, nor are we interested in containing China, nothing we do is aimed at China.” Engagement with all partners, at all levels, is important for stability in the Indo-Pacific. In this regard, Grace stated unequivocally that “nothing we do is aimed at China.” Engagement with all partners, at all levels, is important for stability in the Indo-Pacific. “We engage China at all levels.”
The future balance of power in the Indo–Pacific will largely depend on the actions of the US, China and major powers such as Japan and India. The responses of major South-East Asian states, such as Indonesia and Vietnam, will also be important, she added.
Turning to Australia’s relationship with India, Grace emphasised that India is an important strategic partner with strong maritime capabilities and interests. Co-operation between the two countries at present is definitely the highest ever it has been, especially in areas such as maritime security, cyber security and cyber co-operation. Both countries face a range of security threats, but more importantly their interests are congruent in the Indo-Pacific region.
Australia wants to work with India as both countries invest in enhanced naval capabilities. Grace also mentioned that Australia is keen to deepen joint exercises, to collaborate on maritime safety and security, and build maritime domain awareness with India. Particularly, Australia is keen to deepen naval co-operation through joining in naval exercises such as the Malabar exercise.
While earlier, the two nations addressed shared goals and security interests through forums like the UN, East Asia Summit (EAS) and the Indian Ocean Rim Association (IORA), Grace pointed out how these institutions are now facing constraints owing to inadequate agility. She felt that smaller groupings with like-minded regional partners provided greater flexibility and agility. Smaller grouping could also prove more effective to navigate strategic challenges faced in the Indo-Pacific.
Grace recommended, in this context, smaller and overlapping groupings. “No one grouping will be effective, we need them all.” She explained that Australia is open to working with its Indo–Pacific partners in other ‘pluri-lateral’ arrangements. Australia also remains strongly committed to trilateral dialogues with the US and Japan and, separately with India and Japan.
Looking to the future, Grace said that while strategic engagement has been deep, economic engagement is still lagging behind. Trade is definitely an area that had great potential but had remained under-explored. Currently, trade between the two countries stood just at $ 20 billion. Australia believed more integration is better than protectionism, remarked Grace.
The White Paper argues: “Any significant rise in protectionism globally could create strategic friction, damage economic growth and undermine the rules that support flows of trade and investment.” In this context, Grace was disappointed that the free trade agreement had not been worked out between the two countries. Australia, she said, is ready to negotiate.
Australia promotes freer trade with India, both through bilateral FTA negotiations, as well as regionally through the Regional Comprehensive Economic Partnership (RCEP) arrangement. The RCEP has the potential to contribute to the development of a region-wide trade and investment zone, and therefore Australia is committed to a successful outcome to the RCEP negotiations.
Grace also referred to the ‘Indian Economic Strategy Paper’ that had been commissioned by Prime Minister Turnbull, which was geared towards deeper economic engagement between the two countries by the year 2035. The perception was that India is not an easy place to do business. This Paper sets out India’s strengths in services, technology and innovation, while also identifying specific States for key sectors, which the government hoped would encourage Australian businesses to come and take a closer look at these opportunities.
To conclude, Grace reiterated that the Indo-Pacific would remain the key focus, and Australia would promote adherence to rules, open markets and free trade in this region. Geo-economic rivalry would throw up challenges and these needed to be met with a stand against protectionism and more importantly engagement on all fronts. The US would remain a key power in this region.
Simultaneously, Australia would continue to build strong and constructive links with China, continue to engage, both bilaterally and in smaller groupings, like-minded partners such as India, South Korea and Japan –which are seen as important bilateral partners in their own right and as major regional democracies that will influence the shape of the regional security architecture. Finally, increasing efforts at deepening security, economic and development partnerships with South-East Asia is a key area of focus, said Grace.
This report was prepared by Dr. Vinitha Revi, Research Associate, Observer Research Foundation, Chennai Centre
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