Who is the partner of choice for developing states?

The European Union have provided development and trading partnerships with nations from every corner of the globe. In doing so, the EU promotes democracy and human rights by attaching social provisions and human rights conditions to their agreements. For example, EU development partnerships in the Indo-Pacific or Central Africa will be subject to clauses regarding the internal affairs of a country.

Comparatively, China’s programs and partnerships do not bind political clauses to agreements. China promotes norms of ‘unconditionally’ and ‘win-win’ economic outcomes and will turn a blind eye to the internal affairs of the countries it partners with.  This approach allows China to be increasingly viewed as the development partner of choice as they are willing to meet the immediate economic needs of states.      

The Global Financial Crisis of 2007-2008 further elevated the status of China’s economic model.  Responding to the crisis, China unleashed substantial stimulus packages through the state-controlled financial sector and aided regional neighbours. China’s trade surpluses and currency manipulation have also led it to accumulate the world’s largest foreign currency reserves, thus becoming a central part of the international political economy. China’s performance, when juxtaposed with Europe’s response which was largely confined to bailing out poorly regulated banks, positions China strongly to extend its normative power throughout the developing world.            

The European Union’s strict criterion for its membership and programs rests on principles of democracy and the rule of law. While developing countries have traditionally been willing to make concessions in their internal affairs in return for economic benefit, China is providing ‘no strings attached’ partnerships and an economic model that outperforms that of the EU. Therefore, the EU’s normative influence to promote democracy throughout the world is waning significantly.   

To maintain a normative presence which continues to push developing nations closer towards democracy and the recognition of human rights, the EU must do more to acknowledge the role of China by allowing reform in areas of traditional EU development initiatives. Greater flexibility and inclusion in EU programs will enable a balance to be struck between economic and social development. This will also reduce the appeal of China’s development program which often leaves countries devastated by national debt and forced to maintain deferential stances towards the grand strategy of the CCP.

The Australia-UK FTA could become a blueprint for socially conscious trade

What should the Australia-UK FTA include?

1)   A Freedom of Movement Agreement (FOMA) for British and Australian citizens which could be modelled after the Trans-Tasman Travel Arrangement (TTTA) between Australia and New Zealand

2) Prior to the signing of the FTA, Australia should insist that the UK adopt the following amendments to its Modern Slavery Act 2015 to bring it in line with Australia’s Modern Slavery Act 2018:

2.1) to establish a publicly accessible register of all modern slavery statements submitted by businesses to promote greater accountability for non-compliance;

2.2) to mandate reporting requirements for the British public sector to ensure that supply chains utilised for tendered government activities do not facilitate modern slavery;

3) Australia should propose that existing visas granted by the Australian and UK governments with tied conditions be stripped of employer reporting obligations to strengthen the protection of migrant workers against labour exploitation;

Australia and the UK have began the initial stages of negotiating an FTA. This agreement presents an opportunity to remove unnecessary barriers that have restricted trade and travel between our countries. Sharing a rich historical and cultural affinity with one another, the FTA provides the UK and Australia with the chance to deliver an ambitious FTA that not only boosts economic growth and prosperity but also seeks to address the risks of modern slavery that arise through global trade.

In 2011, The Cameron government introduced immigration reforms aimed at reducing non-EU migration which significantly restricted Australians’ ability to work in the UK. These measures have led to a 49% decline in the number of working visas granted to Australians annually: down from 37,375 in 2005 to 19,134 in 2017.

A freedom of movement agreement (FOMA) between our countries would ease current visa barriers and grant Australians and Britons reciprocal rights to live and work abroad. The economic benefits of immigration are clear—free trade leads to a more efficient labour market and allocation of resources. This results in higher average incomes and lower prices for consumer goods. People are also freer to choose between lifestyles, jobs, political jurisdictions and environments.

This arrangement could be modelled after the Trans-Tasman Travel Arrangement (TTTA) between Australia and New Zealand which forms part of our Closer Economic Relations (CER) partnership. The TTTA allows citizens of both countries who meet minimum health and character requirements to travel between, live and work in both countries.

Any reluctance to accept a FOMA based on migration issues arising from the UK’s experience in the EU can be easily addressed as the proposed relationship is not analogous to EU membership. Australia and the UK are sovereign states, committed to the rule of law and able to apply strict border controls. Similarly to the TTTA, the UK and Australia would retain sovereign control over immigration and could exercise the power to reject entrants based on public safety, national security or public health considerations. 

Australia and the UK also have similar GDP per capita, meaning that pull factors that motivated citizens of poorer EU member countries such as Bulgaria (where GDP per capita is 9,272.63 USD)  to migrate to the UK in search of higher paying employment will not be a concern in an Australia-UK FOMA. Australia and New Zealand’s TTTA provides a proven framework for promoting sustainable migration between comparable developed countries that share a head of state, the rule of law and equivalent standards of living.

Despite the economic and social advantages of an Australia-UK FOMA, such an ambitious proposal is unlikely to be adopted in the short-term. A preferential visa system akin to the American E-3 visa could be established in the interim. This system would grant Britons and Australians reciprocal working rights upon receiving relevant job offers. The E-3 visa, an integral part of the Australia-US FTA, permits an annual quota of Australians to enter the US, requires minimal paperwork, and is one tenth of the cost of a comparable visa.

Alternatively, were the UK and Australian visa systems to remain unchanged under the proposed FTA, at the very least, the vulnerability of migrant workers could be addressed by abolishing tied visas such as the 417 Working Holiday Visa in Australia and the Domestic Overseas Worker Visa in the UK. Many Australians and Britons travel between our countries on working holidays, often utilising tied visas. These visas require employers to sign off on the visa conditions of migrant workers, exposing our citizens to risks of exploitation and modern slavery. For these reasons, at minimum this FTA should address the vulnerabilities of migrant workers under the tied visa system.   

Increases in the movement of goods, services and people due to the Australia-UK FTA will heighten modern slavery risks. As our countries have both enacted Modern Slavery Acts and share a commitment to combatting human trafficking, the FTA presents a natural opportunity to encourage a ‘race to the top’ on modern slavery social policy.

Under the Australian act, the Australian Public Service is required to report modern slavery statements and a central repository containing modern slavery statements is publically available. Unlike Australia, the UK public sector is not required to report modern slavery statements and modern slavery statements from the private sector are not publically accessible. Given these inconsistent standards, Australia could request that prior to signing the FTA, the UK align its laws with Australian legislation to increase accountability and awareness of links to modern slavery in British supply chains.

If the Australia-UK FTA manages to liberalise unnecessary visa barriers while improving migrant-worker protections and supply chain oversight, it will become a blueprint for socially conscious trade. 

The value of a strong US-Australia alliance

The enduring alliance with the United States remains Australia’s most important defence relationship. Close economic and cultural ties between the nations also continue to flourish and significantly benefit Australia and the US. The historic US-Australia partnership is unique, resilient and enviable among other nations. 

Former Australian prime ministers Malcom Fraser, Kevin Rudd and Paul Keating have each consistently argued for a recalibration of our alliance with the United States. Fraser, a former Liberal prime minister who passed away in 2015, was a major critic of Australia’s military alliance with the US and the implications for our relationship with the People’s Republic of China. Fraser called for Australia to forge an independent strategic posture apart from the US, arguing that the defence risks of our close relationship with the US outweighed any possible benefits. Likewise, previous Labor prime ministers Rudd and Keating have both asserted a need to scale back our alliance with the US government, in favour of stronger relationships within Asia. 

Though the positions of these outspoken former prime ministers might indicate division within Australian foreign policy community, our most recent Foreign Policy or Defence White Papers reflect the Morrison Government’s clear commitment to deepening Australia’s long-standing alliance with the United States and keeping this relationship at the centre of Australian security.  

Australia’s relationship with the United States is based on a robust relationship underpinned by shared democratic values, common interests and strong cultural affinities. The US-Australia partnership is formally recognised in the ANZUS treaty, which has seen significant military coordination between the two nations. The relationship extends much further, however, securing an economic boost for America and Australia and a wealth of cultural exchanges in areas such as health, science and education. For these reasons, Australia should continue to foster and strengthen close cooperation with the United States to secure a safe, prosperous and enlightened future for our country.  

Defence and Security

The history of Australia’s relationship with the United States is based on a close military alliance which has served both American and Australian national interests. The ANZUS Treaty, concluded in 1951, is Australia’s foremost security treaty alliance. While the ANZUS Treaty was created in the wake of World War II when the risk of invasion from Japan was still live in our collective memory, our military relationship has since deepened due to the ANZUS Treaty and ensures that Australia continues to develop its military alongside the strongest in the world. The US-Australia Force Posture Agreement signed in 2014 and the 2015 Joint Statement on Defence Cooperation have instructed the annual rotation of US Marines to Darwin and enhanced rotations of US aircraft to Australia. The Talisman Saber is a biennial military endeavour between the two militaries, enhancing our respective combat readiness and interoperability of our forces. This project reflects the progressive, forward- thinking military relationship that America and Australia have managed to create that is responsive to modern security threats. 

Our relationship with the strongest military in the world provides Australia with privileged access to information and high-end military equipment. This has allowed Australians to foil at least a dozen domestic terrorist plots since 2014, break up transnational crime networks, and stop money laundering and illicit trafficking of drugs, weapons, and people. Our military alliance with the US assists the Australian Defence Force as it responds to security threats and provides an added edge for us within the Pacific region. As China continues to rise, pursuing an aggressive foreign policy agenda, the muscle of the US Armed Forces can be leveraged as a counter-balance to China and shape a stable, prosperous Indo-Pacific region. Australia is a small population, with limited military force in a culturally diverse region. For this reason, it is important that hubris does not stain foreign policy, leading us to think we are better or more powerful than we really are. Our military relationship with the United States has ensured that Australia remains a secure, free and open state in a region where this is not the status quo.  

Trade and Investment

Australia and the United States are not only strong military allies. Our economic partnership is critical to our interests. While Australia’s trade relationships, particularly in the Asia-Pacific region, has lead to unprecedented growth and prosperity, the United States remains Australia’s most indispensable economic partner. Our economic relationship encompasses extensive two-way investment supporting production, growth and jobs in both countries. The United States-Australia Free Trade Agreement (FTA) has served as the basis of our bilateral trade relationship since the agreement came into effect on January 1, 2005. Under the FTA, all tariffs have been eliminated for products exported from the United States to Australia. The FTA has led to the growth of trade and investment in both countries. The United States is the largest foreign direct investor in Australia, accounting for nearly 25 per cent of foreign investment – more than the next two countries – Japan and the UK – combined. The foreign capital provided by the United States is a crucial driver of employment, economic growth, and also the ability to export. Ultimately, foreign investment facilitates Australia’s trading relationships by providing the necessary capital and know-how for production of goods and services.

Innovation and Cultural Exchange

Australia and the US have successfully established and maintained partnerships that benefit both states. As part of the Australian National Innovation and Science Agenda, the Australian government has established a ‘Landing Pad’ in San Francisco to facilitate cooperation by US and Australian entrepreneurs. Australian scientists, researchers, and innovators enjoy maximum access to America’s world-class innovation ecosystem, and US academics and researchers travel to Australia to share their findings and learn from Australian counterparts. US and Australian government agencies also work together to advance global environmental goals. Zoos and universities in the United States and Australia are working collaboratively to save threatened species, such as the iconic Tasmanian Devil.

The United States and Australia also share best practices, personnel, and technology and equipment to combat wildland fires. In 2017 Wildland Fire Management Agreement was signed, building on 15 years of close collaboration. The United States and Australia also work together to build and strengthen health system capacities, including addressing antimicrobial resistance, human resources for health, and infrastructure within the Asia Pacific region. A recent example of this strong coordination was demonstrated in a call between US Secretary of State Mike Pompeo and Prime Minister Scott Morrison indicating plans to coordinate responses to the coronavirus in the Pacific. With President Trump’s recent decision to halt funding to the WHO this may make further funding available to strengthen bilateral and regional health coordination between the United States, Australia and their allies.  

A special relationship worth preserving

US presidents and officials have often referred to Australia as America’s closest friend and most trusted ally. This reputation is consistent with the special treatment and benefits Australian’s receive within the United States. For instance, the E3 visa is a United States visa only available to Australian citizens created by an Act of the United States Congress. Approving 10,500 slots for Australians each year, this visa is exceptional and signifies America’s appreciation of our alliance. In 2013, Ireland called for the E3 visa to be shared among Australians and the Irish, but these calls have so far been resisted in Congress. Then-Australian Ambassador Joe Hockey and the Embassy’s congressional liaison team successfully advocated for a change in the language of the first version of the proposed E3 amendment to ensure this outcome. Australia succeeded in Congress because of our historical defence bond and strong relationship with America.

Nonetheless, the narrative that Australia must choose between China and the United States has gained considerable traction in the media in recent years. At the heart of the story is the notion that Australia is economically beholden to China—a perception that China encourages. While there is no denying that escalating competition between China and the United States carries risks, Australia can continue to enjoy a strong, multifaceted partnership with the US whilst trading with China. The argument that Australia is at a cross-roads and somehow at the behest of China is weakened by the fact that China and the US have closer economic independence than China and Australia. Australia’s significant trade with China provides few, if any channels for the PRC to coerce Australia economically. The Chinese are not purchasing Australian commodities because they want to cultivate a friendship or drive a wedge between Australia and the United States. We are a supplier of choice to the Chinese as we have proven ourselves to be an efficient and reliable supplier by international standards. If China does not buy our commodities, someone else will. Research by Shiro Armstrong on the China–Japan relationship—a relationship marked by deep mistrust and periodic heightened tensions concluded that “trade has not been diminished or disturbed by politics to a significant extent”.

If Japan and a host of other countries in our region including South Korea, Singapore, Vietnam and Taiwan can enjoy growing trade with China while maintaining a strategic relationship with the US, surely Australia can do the same. Australia’s foreign policy debate needs to progress beyond an unhelpful focus on binary alignment choices toward a deeper dialogue about the practical challenges that China’s influence poses for alliance management. In saying this, it would be beneficial for the US and Australia to build a more resilient coalition where we discuss areas of divergence in our approach to China. This will secure productive, US-Australia relations and a united front on future foreign policy.  

Shared history, values, and prosperity have allowed the US-Australia alliance to thrive for the better part of a century, furthering both states militarily, economically and culturally. It is within our interests to maintain and grow the US-Australia partnership to ensure both nations can work together to tackle geo-political challenges with force and unity.