Circle The Wagons Around Drag on Hole

An Australian perspective on strategic developments in the Indo-Pacific.

 

- James Goldrick

THE curse that ‘may you live in interesting times’ hit with a vengeance in 2016. From the unexpected result of the Brexit referendum to different manifestations of a global rise of populism as reflected in the elections in the Philippines and the US and the continuing turmoil over free trade agreements, managing the geostrategic environment is becoming increasingly challenging for a medium power like Australia. The future of China and its coercive behaviour in the South China Sea provide more uncertainty as Australia seeks to balance close economic relations with the Middle Kingdom and its alliance with the US.

Perhaps the greatest immediate concern for Australia will be the Trump administration’s unpredictability, given the President-elect’s predilection for ‘one-liners’, whether in interviews, speeches, or tweets. As has already been demonstrated in the phone call between the President of Taiwan and Mr Trump, it will not always be easy to distinguish between naivety, opportunism and well-considered policy.

However good its intent, much of what Australia can achieve will be constrained by the financial situation, both global and local. The country itself is faced with the need to reshape the national economy after the end of the boom in the market for natural resources that had been driven greatly by China’s rapid growth. Whether that reshaping will work depends as much on external developments as internal effort and Australia will have to work hard to ensure that the benefits of international free trade are not eroded in the interest of protectionism. This is not something wholly new in Australia’s relationship with the United States. Although such voices will be loud in the new administration, the US has always had a strong protectionist element, most notably in agriculture.