Balancing national security and economic priorities: Looking to Australia for inspiration

Dindo Manhit, President of the Stratbase ADR Institute for Strategic and International Studies

Can the Philippines look to Australia for foreign policy inspiration?

After the country netted headline-grabbing sums from the President’s trips to Beijing and Tokyo last October, the Philippines’ relationships with Japan and China have been top of mind topics when discussing our foreign relations. North Korea’s nuclear activities and the impeachment of Park Geun-hye in South Korea has only added to Northeast Asia’s recent dynamism. Across the Pacific, Washington continues to demand our attention, thanks to the new uncertainties brought in by the Trump administration.

Despite all this activity to our north and east, the ongoing debates over balancing our economic diplomacy with our national security might lead us to look in different directions. To our west, other members of the Association of Southeast Asian Nations, whose meetings we’re hosting this year, have long attempted to balance the push-and-pull of major powers in different ways. Apart from looking at ASEAN (Association of Southeast Asian Nations) – Vietnam and Singapore, especially – the Philippines can cast a wider net for foreign policy inspiration; Australia would be a good starting point.

THE AUSTRALIAN BALANCE BETWEEN THE UNITED STATES AND CHINA

In 1995, China was outside Australia top 10 trading partners, and Australia’s exports to China were only a fourth of those going to the US and a third of those going to Germany. As China has grown, however, Australia has greatly benefited from exports of iron ore and other materials to fuel the large economy. Between 2010 and 2015, trade between the two grew at an average of 5.9%.

Twenty years later, China is Australia’s largest trade partner. At face value, the gap between Australia’s exports to China and to the US in 2015 ($346 billion) was double the size of Australia’s exports to China in 1995 ($168 billion). The two-way exchange of goods and services between China and Australia now makes up 22.7% of Australia’s total trade. ASEAN, with 14.1% share, would come ahead of the United States, with 10.5%.

Yet, despite China’s top share of Australia’s trade, Canberra has not echoed Beijing’s views on the strategic environment. Immediately after the international tribunal released its ruling on the Philippines’ case against China under UNCLOS, Australia’s foreign ministry issued a statement that called on China and the Philippines to abide by the ruling and stressed that the ruling is both final and binding. Australia has been consistent on the importance of upholding international law and a rules-based order.

Like the Philippines, Australia is a US treaty ally and those two countries have a longstanding security relationship. Its expansive cooperation with the United States, however, has not prevented Australia from pushing a US-less Trans-Pacific Partnership nor reduced its efforts to conclude an Asia-centric trade deal in the form of RCEP (Regional Comprehensive Economic Partnership). Of course, Australia joined the Asian Infrastructure Investment Bank. So far, Australia has managed a balancing act that has not resulted in it foregoing its strategic interest even as it works to ensure the prosperity and well-being of its citizens.

THE PHILIPPINES-AUSTRALIA COMPREHENSIVE PARTNERSHIP

In 2015, the Philippines and Australia inked a “comprehensive partnership” that made Australia more comparable to Japan and Vietnam (our “strategic partners”) in our foreign policy. Given the “comprehensive” scope of the partnership, the relationship works on many areas of cooperation: political, economic, defense, law and justice, education, and development.

On the back of this partnership, Australia is the Philippines’ second-largest source of grants after the US, providing $567 million in 2015. The aid is said to go to education reforms, disaster preparedness, strengthening institutions, and peace and security efforts, especially in Mindanao.

Security has been an important component – apart from the United States, Australia is the only other country with a Status of Visiting Forces Agreement with the Philippines. Moreover, in 2015 and 2016, the Philippines received two landing craft heavy vessels for the Philippine Navy as a donation from the Australian government; the Philippines bought a further three the year after. Defense and security cooperation has touched a variety of areas, including the Coast Watch South program and the National Coast Watch Center.

Philippines-Australia bilateral trade could be stronger. Although trade has reportedly grown by 65% since the ASEAN-Australia-New Zealand free trade agreement (AANZFTA) came into force in 2010, this growth reflects the relatively low levels of exchange that were in place prior. As of 2015, two-way trade is at $1.3 billion. This made Australia our 17th largest trade partner in 2015.

BALANCING RELATIONSHIPS

The Philippines might be able to take page from Australia’s book when it comes to balancing its relationships with the United States and China.

While the Philippines strengthens its ties with partners throughout the Asian region, the two countries would benefit from building on the milestones of the past. On Thursday, Australia’s Foreign Minister, Julie Bishop, is making a short trip to the Philippines, where she will be discussing strategic realities and challenges in a keynote speech with the Stratbase ADR Institute.

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