Q: At the ASFA Conference, you spoke of the rising tensions and power struggle between the United States, China and North Korea. On these tensions, what have been the inflection points over the past 12 months? And how could this interplay develop into the foreseeable future?
A: In 2017, North Korea tested its developing missile systems 23 times, culminating in the launch of the HWASONG 15 ICBM. In addition one nuclear test was apparently thermo nuclear. This advancing capability has been identified by the Trump Administration as completely unacceptable. The Obama era of “strategic patience” is at an end. Trump is the first President to be prepared credibly to launch a pre-emptive strike on the North Korean capability accepting the possibility of an immensely destructive general war on the peninsula. The combination of the Trump position and the unexpectedly rapid advance of the North Korean nuclear weapon has energised a global ramping up of sanctions on the North Korean regime. Perhaps fearful of this, the North Koreans showed some signs of a preparedness to negotiate reaching out for the first time in two years to South Korea. At the same time Kim Jong Un indicated they would proceed apace to develop their nuclear systems. Either negotiations produce a pause and further negotiations a solution or there will be war.
Q: You have indicated that future trade will be affected by these global tensions, particularly via reconsideration of existing partnerships and tariffs and increasing resistance to globalisation. What do you foresee on the trade front over the coming years, and what impact will this have on Australian and global markets?
A: The U.S. focus on North Korea has overlaid U.S. determination to renegotiate its trade agreements, particularly NAFTA and KORUS, and reset bilateral trade imbalances with China and Japan. Nevertheless, as the U.S. has researched its strategies and tactics it has developed a suite of options to punish what they see as unfair behaviours by their trading partners and outcomes disadvantageous to the U.S. Trump’s victory programme revolved around trade. His political base is deeply convinced the U.S. has been disadvantaged. It is likely these endeavours will dominate the global trading picture. Concerns of some Americans about the deleterious effects of globalisation resonate in multiple developed countries. Nevertheless free trade approaches are fighting back in Asia and Europe led by governments in both regions. American abandonment of multinational approaches has seen them taken up and pursued by substantial middle powers. Australia is one of them. These contesting dynamics will dominate the global trade scene this coming year.
Q: You said that “Australia is now at the heart of economic enmeshment between U.S. and their relationship with Asia”. Why is this so? Can you explain this statement for those who weren’t in attendance?
A: Australia is a major player in Asian responses to shifts in American policy and is an influence on the United States in return. On the first, Japan and Australia have taken the lead in keeping the Trans Pacific Partnership alive. On the second, Australia is continually referenced by the U.S. on the strategic situation in Asia. There is an opening there for influence. The question is, are we pursuing it?
Q: “Australia is the best ally the U.S. has had in a long time,” you stated. The North Korean Government has said that “disaster” would result for Australia if it continued to support the U.S. What are your views on Australia’s alliance with the U.S.? What are the implications of this alliance for our national security?
A: If war breaks out on the Korean peninsula the confidence of Defense Secretary Mattis that damage can be contained is incorrect, it is likely that Australia’s major markets will be massively damaged to our detriment. North Korea has threatened us with nuclear attacks, a similar threat existed from Russia during the cold war. Current North Korean capabilities make that threat at the moment insubstantial. The American alliance makes Australia affordably defensible. Massive intelligence exchange, the best of new weapons systems and collaboration on future developments all affordable within 2 percent of GDP is what we gain from the relationship. We are also covered by the U.S. nuclear umbrella which obviates our need to develop a weapon. Should that be brought into question life would become very complicated.
Q: You described a meeting that you attended with President Obama and Prime Minister Abbott that encapsulated the essence of the Australia-U.S. relationship. What underpins the strength and longevity of a bond that transcends successive governments and administrations?
A: The alliance does rest on bonds of shared values and history. The Trump administration, which has trashed at the outset the American liberal internationalist post war project, has undermined the former to some degree. That is important as values are important in global diplomacy. However the alliance is also based on interests. The military value of the relationship is unchanged.