Australia Launches AUKUS Pact: A Masterclass in Diplomacy or a Diplomatic Disaster?

Australia Launches AUKUS Pact: A Masterclass in Diplomacy or a Diplomatic Disaster?


On 15th September, political leaders from Australia, the UK and the US announced their intentions to set up a trilateral security partnership. The deal, known as AUKUS, represents a commitment to combating China’s growing ambitions in the Indo-Pacific. As part of the agreement, Australia will build a fleet of nuclear-powered submarines in co-operation with the UK and US after scrapping a $90 billion-dollar submarine contract with France. AUKUS represents a revival of historical relations across the Anglosphere and a simultaneous deterioration of relations between members of AUKUS and the EU.   

The Strategic Aim of AUKUS

AUKUS is a significant diplomatic move for Australia. The deal affirms Canberra’s commitment to  strengthening ties with old allies to combat Chinese aggression rather than adopting an isolationist approach. From Washington’s perspective, the deal allows the US to maintain a presence in the Indo-Pacific. Biden aims to strengthen alliances that were neglected by the previous administration, and exert military and economic power within the region. This is important for the US given that the Indo-Pacific has become a political flashpoint in recent years. China has made attempts to expand its influence in the region, claiming much of the South China Sea and continuously threatening to invade Taiwan. Meanwhile, the Indo-Pacific is economically important because it houses emerging economies such as India, Indonesia, and members of ASEAN. The balance of power in the Indo-Pacific has historically sat with the US, as many major allied powers such as Japan, Korea, New Zealand, and Australia, are located in the region. As China continues to rapidly expand economically but possibly geographically also, that balance is increasingly likely to tip in Beijing’s favour. 

The submarine construction project that forms part of the deal represents a much needed step up in Australia’s defence capabilities. The new submarines will be nuclear-powered (SSNs), meaning they can remain submerged for much longer than conventional models, mitigating risk of detection. They are also able to operate more quietly than non-nuclear and can hold thirty years’ worth of fuel

The Diplomatic and Economic Repercussions

For Washington, AUKUS promises significant benefits. As well as forging stronger relations with allies in strategic locations, the deal is an opportunity for Washington to increase intelligence and cyber capability sharing with the UK and Australia, and develop large unmanned underwater vehicles (UUVs) designed to help with intelligence gathering and reconnaissance. 

Australia, however, is currently under diplomatic fire from both France and the EU, as well as China. French Foreign Minister Jean-Yves Le Drian referred to the AUKUS announcement as “brutal”, with European Commission president Ursula von der Leyen indicating that Australia’s actions were unacceptable. Macron feels that France has been betrayed by the announcement and that Australian military officials had claimed to be “extremely satisfied” with the French submarines only hours before the AUKUS deal was announced. In fact, France’s Ambassador to Australia was recalled to Paris shortly after the AUKUS deal was announced

Certain details of the SSNs, including the cost, remain unconfirmed, given Prime Minister Scott Morrison has said that a task-force will work over the next 18 months with American and British partners to best implement the new deal. Moreover, the deal will likely make Australia increasingly dependent on the US and UK for the nuclear technology required to power the submarines. It is also unlikely that they will be available for use soon, with the Australian Department of Defence indicating a 2036-38 date for operational use. This has some analysts concerned, given that conflict in the Indo-Pacific has the potential to occur much earlier than 2036. 

A deterioration in Australia-EU relations may have significant economic ramifications for Canberra given that, in early October, a European official confirmed the decision to postpone long-planned Australia-EU free trade talks assuming to be in retaliation to the cancellation of the French submarine contract. This is concerning for Canberra, given that the EU is Australia’s third-biggest trading partner.

Chinese foreign ministry spokesman Zhao Lijian has said that the deal “seriously undermines regional peace and stability and intensifies the arms race”, while questioning whether Australia is sincere in their commitments to nuclear non-proliferation. Chinese state media outlet, The Global Times, has since referred to Australia as a “running dog of the US”, and indicated that in a situation in which Canberra decides to provoke Beijing, “China will certainly punish Australia with no mercy”. It further states that Australia’s strategy, in siding with the US, confirms their intention to act as an “adversary” to China. It is unlikely, however, that this will result in short-term trade ramifications given China has already applied sanctions to almost every available Australian major export apart from iron ore. Regardless, Australia will need to re-evaluate its long-term economic strategy given China aims to reduce iron imports from Australia and other global importers of Australian oil and gas are looking to restrict use of fossil fuels to meet net zero goals. Given the COP26, the international climate summit, the reduction of carbon emissions is an increasingly pressing goal for many countries.

Given these developments, AUKUS likely represents the biggest risk for Australia out of the three signatories, with Canberra taking on much of the diplomatic and economic onus of the agreement. 

Opportunities Within AUKUS

Despite the risks involved, AUKUS offers a multitude of opportunities for the signatories. The partnership, as per the Joint Leaders Statement, will encourage co-operation on a number of defence capabilities, as well as information and technology sharing. Increased defence spending and the expansion of military bases should encourage open trade between AUKUS partners and provide an avenue for manufacturing and construction for Australian workers.

In the longer term, AUKUS can provide avenues for increased foreign investment between member states, as well as academic collaborations and industrial partnerships. The Australian Strategic Policy Institute (ASPI) is opening an office in Washington to strengthen the relationship between Australia and the US. Meanwhile, the AUKUS agreement includes long-term cooperation between signatories in cyber warfare, artificial intelligence development, and quantum computing. As technology becomes more significant both militarily and economically, Canberra hopes that their close relationship with Washington and London can help defend against new threats such as data theft, foreign cyber interference, and disinformation. We can thus see AUKUS as not only a military agreement, but rather one promoting free trade and trilateral innovation. 

Categories: International, Politics

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