Australian Foreign Policy: A Turn(bull) for the Better?

On 14 September, 2015, Malcolm Turnbull defeated Tony Abbott in a leadership spill within Australia’s Liberal Party. For much of his tenure, Abbott was not a popular politician; according to The Age, the Abbott government had the worst opinion poll start for a new government in 40 years. Now, despite a 2009 loss to Abbott in the party leadership elections, Turnbull is set to become Australia’s fourth Prime Minister in just a little more than four years.

Image courtesy of Office of the Official Secretary to the Governor-General (Commonwealth of Australia) © 2015, some rights reserved.

Image courtesy of Office of the Official Secretary to the Governor-General (Commonwealth of Australia) © 2015, some rights reserved.

Abbott’s foreign policy record was filled with gaffs. He has been accused of running a ‘scare campaign. ’ During one incident at the Australian Security Intelligence Organisation headquarters, classified documents showing the geographic origins of Australian fighters who joined the Islamic State were shown on television, allegedly for political reasons. Famously, after being briefed on the circumstances of an Australian soldier’s death in Afghanistan, Mr Abbot responded ‘sh*t happens.’ But aside from hopefully avoiding the gaffs which plagued every aspect of the Abbot government, how different will a Turnbull foreign policy look? The easiest way to answer this question is to break it down, issue by issue.

China

Because of its location in the Asia-Pacific, the growing maritime threat of China has weighed heavily in Australian security calculus. Over the past few years, China has moved very aggressively in the South China Sea, moving an oil rig into Vietnamese waters, building artificial islands on pre-existing reefs to house military installations, and harassing American P-8 maritime patrols, all in an attempt to shore up claims of sovereignty in the area. But Abbot refused to let maritime security concerns disrupt Sino-Australian relations, saying ‘I would rather focus on the strength of the friendship rather than on hypothetical possibilities in many, many years time.’

Turnbull, on the other hand, has already criticised Chinese actions in the South China Sea, saying that ‘pushing the envelope in the South China Sea has had the consequence of exactly the reverse consequence of what China would seek to achieve.’ While these remarks drew criticism from the Chinese Ministry of Foreign Affairs, various pundits expect Turnbull to follow a more ‘China-centric’ foreign policy. He has referred to China’s economic rise as ‘the great geopolitical transformation of our time’ but also reminds that ‘The construct of the Western Pacific as a lake in which there are only two players—the US and China—is just dead wrong.’ So perhaps calling Turnbull’s foreign policy more China-centric is less correct than referring to it as more ‘Asia-centric.’

Mr. Abbott signed a landmark China-Australia Free Trade Agreement (ChAFTA) on 17 June, 2015 which had been under negotiations for ten years. He could hardly afford to do otherwise: China is a major economic partnership for Australia, and one of its largest export destinations. According to the Department of Foreign Affairs and Trade, China accounts for nearly a third of Australia’s exported goods and services. But parliament has yet to approve the treaty, and has stated that it will not begin to do so until mid-October. Thus, while the negotiation for the treaty took place under the Abbott government, the enabling legislation required for it to go into effect will occur under Turnbull. And things don’t look good: both the Labour party and the Greens are not in favour of the agreement. Turnbull has already held talks with Bill Shorten, the Leader of the Opposition, in hopes of finding compromise.

In short, Turnbull’s comments suggest a mixed picture: an increased focus on the Asia-Pacific combined with a reassurance that Australia’s ties with the US remain strong. The parliamentary fight for enabling legislation for ChAFTA will provide the chance for Turnbull’s actions to clarify his position.

A Falling Australian Dollar

The Australian dollar has been on the fritz since last year. Much of this decline is connected to a slow-down in Chinese growth: China’s manufacturing, as well as its imports, have dropped significantly. Australian exports are heavily dependent on commodity exports to China, and since the early 2000s, a massive iron ore mining boom has reshaped both the economic landscape, and the literal landscape of Western Australia. Since then, Australia has become the world’s biggest exporter of iron ore and The Economist reports ‘bottomless appetite for steel has sustained Australian growth over the past decade.’

However, a declining dollar is likely to be beneficial to Australia: a weak dollar will stimulate exports, hopefully leading to a diversification in exports industry which may cushion the coming end of the mining boom. The decline began in the Abbott government, but it is unclear what plans Turnbull has for the dollar. The election of the former Goldman Sachs executive brought with it a brief jump in the trading value of the dollar. Only time will tell whether Turnbull’s perception as being more ‘market friendly’ will have a substantive impact. But it is clear that the dollar is likely to feature heavily in Mr. Turnbull’s political calculations.

Immigration

Abbott’s immigration policies, which he usually framed as security issues, were notoriously hard-line. His government reintroduced immigrant processing facilities in Nauru and Papua New Guinea. Under the military-led ongoing Operation Sovereign Borders, naval patrols have been turning boats filled with refugees back to where they come from. The Department of Immigration and Border Protection has stated

‘Australia’s change of Prime Minister does not change Australia’s policy to safely turn back boats or transfer people to other countries for processing and resettlement. The Prime Minister stated there will be no resettlement of the people on Manus (Papua New Guinea) and Nauru in Australia – they will never come to Australia.’

It seems like Australia’s immigration is here to stay. Despite being described as ruthless, the policy has achieved a fragile bipartisanship. Turnbull in particular is unlikely to change the policy, having been quoted as saying ‘the fact is if you want to stop the people smuggling business you have to be very tough.’

The Collins-Class Replacement

Lastly, the replacement of Australia’s aging fleet of Collins-class submarines has been a major feature of the defence and foreign affairs debate in Australia. The 2009 Defence White Paper called for a fleet of twelve submarines, which will make the Collins-class replacement the most expensive Australian defence acquisition to date. A major domestic debate is whether to build the submarines domestically or abroad. A recent RAND report suggests that domestic production would be 30-45% more expensive than international production. Mr. Abbott had made his preference clear for the Japanese Soryu-class submarine, built mostly abroad between Mitsubishi Heavy Industries Ltd. and Kawasaki Shipbuilding Corporation. Since the leadership spill, however, Defence Minister Kevin Andrews has appeared receptive to a pitch by French shipbuilder DCNS where roughly 20 billion AUD of work would be done in South Australia. German shipbuilders ThyssenKrupp Marine Systems have also advanced a tender which would include a large amount of domestic construction. These domestic proposals appear to have gained favour since Turnbull took over.

With regards to policy towards China and a reaction to the falling dollar, it is still uncertain which direction the Turnbull government will take. Australia’s immigration policy will likely remain the same, but it looks more and more like Australia’s biggest defence acquisition in history will be manufactured mostly domestically. Given Australia’s position in the rapidly evolving Asia-Pacific region, no doubt Turnbull’s foreign policy will be a highly studied area.