SYDNEY -
In the 1960s it was "All the way with LBJ", as Australia
put its US loyalties on the line and went hunting
communists in Indochina. Thirty years later, Asia's
booming Tigers were the flavor of
the month; Canberra was sending corn instead of cannons
and then-prime minister Paul Keating was talking of
watering down the most enduring postwar Pacific security
alliance.
Now the conservative government of
Prime Minister John Howard, which began dismantling
Keating's new regionalism almost as soon as it won
office in 1996, wants it both ways. Howard is lobbying
for inclusion in an expanded East Asian free-trade zone,
but only if it doesn't prejudice Australia's vital
defense relationship with Washington.
The crunch
is that not all of Australia's prospective Asian
partners are prepared to divorce the two issues of trade
and diplomacy, especially as China's hulking presence is
forcing just about everyone to reassess where their
strategic interests lie.
Welcome China
On Monday the 10-member Association of Southeast
Asian Nations (ASEAN) signed an accord with China that
will create an open market of 2 billion people by 2010
to compete with Europe and the United States. The pact
aims to drop most tariffs over the next five years in a
move some analysts have said is a sign Beijing may be
moving to undercut America's vast economic influence
over the region.
The pacts include an agreement
to liberalize tariff and non-tariff barriers on traded
goods and one to set up a mechanism to resolve trade
disputes. The pact will form the first component of a
comprehensive accord planned for completion by 2010 that
will include the full liberalization of the services
sector. If completed on time, the overall ASEAN-China
deal will result in the creation of the world's biggest
free-trade zone, covering nearly 2 billion people.
And on Tuesday, leaders of the ASEAN group
agreed with Japanese Prime Minister Junichiro Koizumi to
start trade talks in April, with the aim of wrapping
them up in two years. The talks will center on how to
cut tariffs between the world's second-largest economy
and ASEAN nations.
Also attending the 10th ASEAN
summit in Laos are the leaders of China, Japan, South
Korea, India, Australia and New Zealand. It is the first
time Australia and New Zealand have been invited to the
event.
India was due on Tuesday to sign "a
landmark partnership document" with ASEAN. The agreement
is significant not just because it allows India to forge
strong economic relations with the group that could
catalyze trade between the two sides from the current
US$13 billion to $30 billion by 2007, but also because
it brings India closer to the region's economic powers,
such as Japan, China and South Korea, as the deal
involves a new ASEAN grouping that includes these three
countries.
Australasia
connection Australia and New Zealand, grouped
together through their own Closer Economic Relations
(CER) trade agreement, are the only non-Asian states
being considered for a free-trade agreement (FTA)
centered on ASEAN.
China, India, South Korea and
Japan are the other likely players in an ambitious push
to establish the world's third major trading bloc, with
the objective of matching the North American Free Trade
Area (NAFTA) and the European Union by 2020.
Preparatory discussions currently are under way
at an ASEAN summit in the Laotian capital, Vientiane,
that began on the weekend. For the first time the annual
gathering includes the Australian and New Zealand prime
ministers.
But how far should integration go?
ASEAN advocates at least a confluence of political
views, and expects its friends to ratify the 1976 Treaty
of Amity and Cooperation, a largely symbolic
non-aggression pact that commits signatories to resolve
security issues peacefully.
China, India, Japan,
Pakistan, South Korea, Russia and New Zealand all will
have signed by the end of the summit, if only to remove
an inconsequential obstacle to a more critical economic
relationship. But Howard, worried about sending the
wrong signal to the United States, has refused.
Canberra and Washington have security
commitments under the Australia-New Zealand-US (ANZUS)
Treaty, reduced to only two parties since New Zealand in
effect opted out a decade ago over its hardline stance
on nuclear proliferation.
But Japan and South
Korea are also close allies of the US, while Singapore
and Thailand have logistical and training arrangements.
All six countries are full participants in the annual
ASEAN Regional Forum (ARF) security talks and cooperate
at various levels in the anti-terrorism offensive.
So why the reticence about ratifying a treaty
that has never been activated and is couched in such
generalized terms that it probably could never be
enforced in the unlikely event that it were ever put to
the test? A likely reason is that Canberra fears being
backed into a corner over ASEAN's blinkered policy of
refraining from making judgments on individual members,
which has ensured that the bloc will struggle to evolve
beyond a limited consultative role.
Article 2 of
the treaty guarantees "non-interference in the internal
affairs of one another", and the right of every state to
"lead its national existence free from external
interference, subversion or coercion".
Given
that the Vientiane summit has broached such sensitive
topics as continuing human-rights setbacks in Myanmar
and the alleged suppression of Thailand's Muslim
minority, the caution is probably justified. Canberra
has not been as forthright as Washington on such issues
as the nuclear standoff in North Korea and the ponderous
pace of democracy in Myanmar. Australia is one of few
Western countries that maintain complete consular links
with both pariah states. But it has nonetheless been
branded a US puppet because of an unguarded moment by
Howard - later reinforced by comments from President
George W Bush - that Washington saw Canberra as its
"deputy sheriff" for security within the region.
Although Howard insists that his comments were
taken out of context, he did not help his cause by later
announcing a preemptive-strike counter-terrorism policy,
under which Canberra reserved the right to take military
action in Asia against perceived security threats.
Realistically, this is never likely to happen.
Canberra lacks the offensive capability to mount
anti-terrorist operations in Asia involving military
units and is unlikely to risk a damaging loss of
economic markets. Yet some ASEAN leaders, mostly notably
Malaysian Prime Minister Abdullah Badawi, see the treaty
as a test of Canberra's deeper commitment to Asia after
decades of alternately riding the sheep's back to Europe
and the resources trail to North America.
The 10
ASEAN member countries account for a modest 13.7% of
Australia's overall merchandise trade and 11.3% of its
export earnings. Only 3.8% of the bloc's combined export
transactions and 2.6% of its imports are with Australia.
But the picture alters radically if data for other Asian
states are included. Seven of Australia's top 10 export
markets are in Asia, eight if New Zealand is included.
The US is No 2 on the list, but is rapidly being
overtaken by India and China.
While Canberra
makes much of its recently concluded FTA with the US, it
has other such agreements with Singapore and Thailand. A
feasibility study is under way for a similar agreement
with China, and there is speculation of a future deal
with Malaysia. A Closer Economic Partnership (CEP)
signed by ASEAN with Australia and New Zealand in 2002
set a target of doubling both two-way merchandise trade
and investment by 2010.
So far the outlook has
not been promising for Canberra: while Australia is
progressively buying more goods, ASEAN imports have
fallen steadily since 2001, contributing to a widening
trade deficit in ASEAN's favor that could become a
diplomatic irritant.
For all of Canberra's
economic commitment to the region, none of its four key
trade-development policies in 2004 has focused directly
on ASEAN. Rather, it is the Asia-Pacific Economic
Cooperation (APEC) forum, dominated by the US, that
takes center stage, though it must be noted that most
ASEAN members are also APEC partners.
In purely
economic terms, Canberra doesn't have a lot to offer
ASEAN. Australia accounted for a negligible 1% of global
trade last year and its domestic market is only about
the same size as Malaysia's. As an investor, it lags
behind such "regional" heavyweights as Sweden, the
Netherlands and Finland.
All this has convinced
many observers that ASEAN might want to get Australia on
board precisely because of its close US ties, which
might give Asia an ear in Washington as the three big
blocs look for an edge in the next multilateral trade
round.
There has already been a convergence in
the farm lobby, with the Australian-led Cairns group of
agricultural exporters providing a buffer between the
hostile US and Western European camps. Several ASEAN
states are Cairns members.
The proposed FTA with
ASEAN will probably proceed whether or not Canberra
accedes to the Treaty of Amity. But in failing to
conform to Asian expectations, Australia will leave
itself exposed to a far greater set of diplomatic
pressures once the serious talk starts on a broader East
Asian agreement.
ASEAN leaders will find it
difficult to justify Canberra's involvement in future
diplomatic summits if it lacks a full commitment to the
bloc's ideals - and its treaty symbols, how matter how
vacuous they may be. Ominously for Australia, its most
vocal Asian critics are Malaysia and Indonesia, arguably
the most influential voices in ASEAN.
As
Indonesian spokesman Marty Natalegawa noted: "There can
be no more efficient and effective way for Australia to
dispel misperceptions some quarters may have of its
intentions in Southeast Asia than to simply accede to
the [treaty]."
Alan Boyd, now based in
Sydney, has reported from Asia for more than two
decades.
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of
the month; Canberra was sending corn instead of cannons
and then-prime minister Paul Keating was talking of
watering down the most enduring postwar Pacific security
alliance. 
