Institute for National Security Strategy
The Indo-Pacific and the Rules Based Order
Speech, Wednesday 18 April 2018
Thank you for inviting me to speak here today.
I wanted to talk about several themes.
Firstly: the significant shifts that are shaping the Indo-Pacific region and the world.
Secondly: Challenges to the international rules-based order and what we – Australia and the Republic of Korea – can do to promote the rules-based order.
Thirdly: Given the upcoming summits, I want to talk briefly about the specific challenges posed by North Korea.
A contested world
Before I speak about Australia’s views on the use of the term “Indo-Pacific”, I thought I’d give a brief overview of the key dynamics we see shaping our region and the world.
The United States remains the most powerful country, but its long dominance of the international order is being challenged by other powers.
The post-Cold War lull in major power rivalry has ended.
China is an emerging superpower. In parts of the Indo-Pacific, including in South East Asia, China’s power and influence is exceeding that of the United States.
By some measures China’s economy is already the largest in the world. China is the most important trading partner for most of the region’s economies.
China’s military modernisation is rapidly improving the capability of its armed forces. It has the largest navy and air force in Asia.
Like all great powers, China will seek to influence the region to suit its own interests.
But it is also challenging the US on ideology. It has what might be called a planned market economy. It is also an undemocratic political system.
President Xi is now championing the Chinese system on the global stage.
As Xi’s speeches at Davos and the Boao Forums underline, China is increasing its confidence in leading, not just economically. But China is also increasing its confidence as the leader of an alternative system to that of the United States.
President Xi has announced his China 2025 strategy and talks often about the Chinese dream.
As China grows, it will compete directly with the United States regionally and globally.
The United States will continue to be the wealthiest country in the world, and the world’s leader in technology and innovation.
We are already seeing a revival of the US economy, driven by the unconventional gas revolution, or fracking, and fiscal stimulus.
The US continues to deliver revolutions in technology that change the way we do things.
But the margin by which the US leads will narrow.
In this dynamic environment, competition is intensifying, over both the power and the principles and values on which the regional order should be based.
We are seeing shifts in relative power between nations.
The rules-based order is being challenged by some nations seeking short-term gain, or promising the false hope of protectionism and isolationism.
Maritime and land border disputes will continue to create friction. The region’s seas and airspace are becoming contested. Freedom of navigation is under challenge in parts of the region.
We are already seeing this in places such as the South China Sea, where China is using its power to stake a claim in maritime waters it says are its own.
The future balance of power in the Indo-Pacific is uncertain.
Even though the US is likely to remain the world’s only superpower in the decade ahead, we have never been in an era where there has been a powerful China, Japan and India at the same time.
What is undeniable is that it is in the Indo-Pacific region where we will see the sharpest contest of power and influence.
To a large extent, the prospects for continued peace and stability depend on our capacity to manage the consequences of rising prosperity and wealth.
This provides the backdrop to my discussion about the “Indo-Pacific”.
I understand that this term has created much debate in Korea, especially following the US President’s use of the term during his Asia visit at the end of 2017.
We also have Japan’s conception of a “Free and Open Indo-Pacific”.
For Australia, I want to make clear that the Indo-Pacific is a term we have been using since at least 2013.
We referred to the Indo-Pacific region in successive Defence White Papers in 2013 and 2016.
Australia’s Foreign Minister, Julie Bishop, has delivered many speeches about the Indo-Pacific region since she took office in 2013.
The term “Indo-Pacific” reflects the strategic and economic reality that the most important part of the world for Australia is embraced by these two oceans.
While the US-China contest will shape our region, it is also a reality that India is an increasingly significant feature of our regional outlook.
That flows naturally from India’s status as a major player in our region and one of the fastest growing economies in the world.
As China’s strategic reach expands westward, and India’s eastward, this region will be increasingly competitive and contested.
For Australia, our western shores straddle the Indian Ocean.
Our east coast is on the Pacific.
It is only natural to consider the important role of the Indian Ocean nations as well as the Asia Pacific.
So for Australia, it is a reality that the most important part of the world is embraced by these two oceans.
The Indo-Pacific is the context through which Australia is shaping its approach to the region.
There is also the media speculation that the Quadrilateral dialogue (Quad) which comprises the US, Japan, Australia and India reflects a single common Indo-Pacific strategy.
There are also suggestions that the Indo-Pacific and the Quad are containment strategies for China.
Let me clear. From Australia’s perspective, the Indo-Pacific is not about containing China.
I would suggest that it would not be possible to contain China, even if we tried.
The Quad is only one line of effort of many in Australia’s Indo-Pacific strategy.
Australia, the US, Japan and India have common values and share a strong interest in supporting an open, secure and prosperous Indo-Pacific.
But we have not come up with a shared Indo-Pacific strategy. Each country defines the term in its own way.
What Australia is seeking to do is to look at the opportunities and challenges in the Indo-Pacific region.
Last November, the Australian Government published our Foreign Policy White Paper — it’s the framework that we expect to guide our international engagement for the next decade and beyond.
The White Paper identifies that strengthening, promoting and defending the international rules-based order in the Indo-Pacific is our highest priority.
The importance of the international order — underpinned by the evolving network of alliances, treaties, institutions and conventions under international law - cannot be overstated.
In the post War War 2 period, the world has benefited significantly from an international order shaped by US power.
The international rules-based order is the web of alliances, treaties, institutions, international laws and norms developed to guide the behaviour of nations towards each other.
This set of institutions and rules has been a manifestation of our collective will to ensure that the world never again descends into the dark years of global conflict.
It is true that there have been times when the international rules-based order has been challenged.
But it has proven resilient, and the peace it has brought to the world has seen the greatest expansion of prosperity in human history, with hundreds of millions lifted out of poverty and misery.
The need to promote the rules-based order
Arguably, the Indo-Pacific region is the region which has benefited the most from the rules-based order.
Not only the ROK and Australia, but also China, and the ASEANs have experienced remarkable growth underpinned by this set of rules.
The rules-based order seeks to regulate rivalries and behaviour, and ensure countries compete fairly and in a way that doesn’t threaten others or destabilise the region.
It protects the rights of small and large countries by preventing stronger powers from arbitrarily imposing their will on less powerful countries.
It avoids a scenario where might is right.
The rules-based order provides mechanisms that allow states to settle disputes amicably, through dialogue and according to agreed processes – regardless of their size.
It is in our long-term interests to defend the international rules-based order, so individual countries, and the region as a whole, continues to rise economically and – as importantly – peacefully.
What Australia is doing
I would now like to talk about what Australia is doing to promote the rules-based order.
Australia is well placed to play a constructive and influential role in promoting the rules-based order in the Indo-Pacific.
We are an open, liberal democracy, committed to freedoms, the rule of law and democratic institutions.
We are an open, export-oriented market economy, trading our goods and services around the world.
We are entering our 27th consecutive year of uninterrupted economic growth – a world record.
We are the 13th largest economy in the world, and we are living in the most economically dynamic region in the world.
Although we do not seek to impose our values on other countries, Australia will remain a vocal champion of and advocate for respecting international law, free societies and open economies, underpinned by strong independent institutions and the rule of law.
We have a long-standing alliance with the only superpower in the world in the United States, the roots of which are deep and continue to grow.
The role of the US in the Indo-Pacific has been vital in establishing and maintaining the rules-based order.
Australia seeks to encourage and support the strongest possible economic and security engagement by the US in our region.
At the same time, Australia has a Comprehensive Strategic Partnership with China.
Thirty per cent of our overall trade is with China – notably this is even higher than the ROK’s trade relationship with China.
We actively seek ways to work with China, itself a major Indo-Pacific power and a vitally important partner for Australia.
A strong, stable and constructive relationship between the US and China is essential to the ongoing health and strength of the rules based order.
Australia will also continue to strengthen its cooperation with like-minded Indo-Pacific partners including the Republic of Korea, Japan, Indonesia and India.
Our White Paper on Foreign Policy identifies the ROK and the other large regional democracies as being of first order importance for Australia.
Australia will do more bilaterally and across these partnerships, to promote the rules-based order, including in small groups.
Australia also places a clear priority on our relations with Southeast Asia and ASEAN.
ASEAN convenes the Indo-Pacific’s most important strategic forums such as the East Asia Summit.
So we will work to ensure Australia remains a leading economic, development and security partner for ASEAN and its members.
For example, we held the historic ASEAN-Australia Special Summit earlier this year, which was a clear demonstration of our ambition for deep, distinctive and enduring ties with the countries of Southeast Asia.
We will also continue to work in facilitating an outward looking regional economy.
We must do more to ward off the threats of protectionism to ensure that trade can continue to drive regional and global growth.
This brings me to the Republic of Korea.
In my view, Korea underestimates its own ability to influence the region.
It is true that in the past, Korea has been, to an extent, a victim of circumstance and geography.
For centuries, it was a “shrimp between whales”, with a foreign policy necessarily focused on its more powerful neighbours.
But this no longer accurately describes Korea’s place and relative power in the world.
It undersells Korea’s ability to impact and influence issues on the global stage.
Like Australia, the Republic of Korea is a G20 economy, a vocal participant in international organisations, and an open, liberal democracy that believes in free trade and the rule of law.
Korea is now in a position it has not been in before. It has the political, economic and cultural power to forge new partnerships and build institutions that support its interests and amplify its messages.
It has the capacity to change and shape the regional environment.
We have seen this in Korea’s campaign to take the lead on DPRK issues.
And over the past months, the DPRK has signaled its willingness to discuss denuclearization.
This is a testament to the Republic of Korea’s strength in the region.
And Korea’s creative diplomacy.
But I think Korea can do more on other issues – issues like free trade, human rights, and advocating for the international rules-based order.
To do this, Korea needs look beyond the US, Japan, China and Russia.
Korea must diversify who it sees as potential partners.
This is why Australia welcomed President Moon’s diversification agenda, including the New Southern Policy.
President Moon has recognised the need to diversify Korea’s international relationships.
Upon his election, he sent Presidential envoys to Australia, India, ASEAN and the EU for the first time ever.
These are positive first steps, and there is much more countries like Australia and Korea can be doing together to promote our joint interests.
We look forward to further details emerging about the ROK’s New South Strategy, and the potential overlap with Australia’s Indo-Pacific strategy.
Finally, let me touch on the challenge to the international rules-based order posed by North Korea.
North Korea, is a relic of the age of ideology and has outlived its own era.
The world around North Korea has changed profoundly in the decades since the armistice was signed in 1953.
Yet North Korea is still mired in its unique ideological prism, a mix of communism, militarism and hereditary succession.
That might not be a problem, except that it manifests itself in actions that go against the express will of the international community.
And so for decades, North Korea has presented one of the most egregious challenges to the international rules-based order.
It has done this in numerous ways, through its flagrant disregard for universally accepted human rights, to its provocative behavior along the DMZ, and on the inter-Korean maritime border.
But perhaps the greatest challenge is posed by its pursuit of illegal ballistic missile and nuclear weapons programs.
Over the years the five Permanent Members of the Security Council have disagreed on many issues but they are unanimous in their condemnation of North Korea’s behaviour and in their belief that diplomatic and economic sanctions must be imposed on North Korea to compel it back to the negotiating table.
And now North Korea has signaled that it wants to talk.
This is a credit to the unity of purpose of the international community.
And to the leadership of South Korea in dealing with North Korea.
We must be optimistic for a diplomatic pathway out of this looming crisis, but we must also remember this is not the first time North Korea has come to the negotiating table.
North Korea has a long history of failing to abide by its commitments to cease its missile and nuclear development programs.
A litany of broken deals and ignored international commitments.
Since Kim Jong Un assumed power, North Korea has continued nuclear tests, is developing increasingly sophisticated and longer-range ballistic missile technology and has demonstrated its cyber capability.
The history of failed negotiations on the Peninsula is disturbing.
It would be tempting to dismiss out of hand this latest round of talks.
But the stakes are now too high for that.
We are dangerously close to the point where the United States could decide that the costs of not acting militarily against North Korea's nuclear program outweigh the costs of intervention.
President Trump has said repeatedly that all options are on the table.
US concerns about the gravity of the strategic threat posed by a nuclear-capable North Korea are real.
We must take them seriously.
And there is always the danger of a miscalculation or misstep, leading to hasty retaliation and unplanned escalation.
A conflict would have terrible consequences for the people of the Korean Peninsula.
It would also be grave for the wider region and beyond.
That is why Australia is such a strong advocate of ensuring that diplomatic efforts and sanctions succeed.
Our objective has been to change Pyongyang's basic calculus that nuclear weapons would guarantee the survival of the regime and the dynasty.
We may be getting closer to the point where Pyongyang realises that the opposite is the case - that its pursuit of nuclear weapons is making it less secure.
That is why we must sustain maximum pressure on Pyongyang.
It is why Australia places so much importance on sanctions being fully implemented and properly enforced.
Engagement has an important role
We won’t understand Kim Jong Un and his regime if we don’t talk to them.
But Australia believes that we should not relieve pressure until we see concrete steps towards denuclearisation.
What happens in the weeks and months ahead with respect to the North Korean situation is crucially important to the Indo-Pacific and the world.
With the current situation on the Korean Peninsula, Korea’s focus is understandably on the US, China, Japan and Russia.
These relationships are obviously important.
But I hope that in focusing on the immediate challenges of the DPRK, Korea does not forget the importance of the broader regional dynamics – the developments in the Indo-Pacific.
On this point, I’ll draw on what former UN Secretary-General Ban Ki Moon recently wrote in an article in Chosun Ilbo.
또한 남북한 분단의 비극적 상황에서 우리들의 시야가 북한 핵, 국내 정치 등에 함몰돼 정지되어 버림으로써 드넓은 세상에 대한 안목이 결여돼 단기적, 근시안적 수준에 머무르고 있는 현실이 안타깝게 다가왔다.
It is more important than ever that our countries work in unison to amplify our ideas and messages about the challenges in our region.
This is as relevant to the North Korea issue as it is with other major challenges in the region and the world, such as the territorial disputes in the South China Sea, or responding to the recent chemical weapons attack in the UK.
If we work together, we will be able to better secure our shared interests through bilateral and multilateral networks that work beyond the interests of the major powers.
We need to enhance our cooperation to maintaining and defend the rules-based order that has underpinned our shared peace and prosperity.