Australian Embassy
The Philippines

Australia and the Philippines in an Evolving Region

‘Australia and the Philippines in an Evolving Region’

Philippines-Australia Dialogue

H.E. Steven Robinson AO, Ambassador of Australia

18 July 2019, Holiday Inn, Ortigas

 

 

Welcome and acknowledgements

I would like to start by thanking Pathways and the Griffith Asia Institute for organising this conference and for their commitment to promoting dialogue between the Philippines and Australia. 

 

I would particularly like to thank Professor Aileen Baviera, President of Pathways, and Professor Caitlin Byrne, Director of the Griffith Asia Institute. On behalf of the Australian Embassy, I would like to express my gratitude for the work that you and your colleagues have done to bring this event together.

 

My thanks also to Ambassador Villacorta for his introduction and very warm welcome.  I would also like to acknowledge panelist Professor Herman Kraft and our moderator for the afternoon Julio Amador.  

 

Ladies and gentlemen, it is a real honour to have been asked to speak this afternoon.

It is increasingly common for Australian foreign policy commentators to describe the current period as one of unprecedented change for Australia and the region. We are told that Australia faces challenges on a scale unrivalled in thirty, fifty or even seventy years. This change and the challenges we face have led to calls for a reassessment of our national interests and how our foreign, defence and security policies can be shaped to deliver a secure, stable and prosperous region now and in the future.

 

To be frank, much of what is being said comes down to two fundamental points. The first is that China’s power is growing and some might view its outreach and approach with concern. Some may indeed ask – will China behave like a responsible international actor?  The second point is that the US appears less willing to accept Chinese policies and practices, and is more willing to confront a country that it now views as a strategic competitor.

 

When Professor Baviera invited me to deliver this address, she asked me to speak about ‘Australia and the Philippines in an Evolving Region’. But, she was clear about the underlying issues that she wanted me to cover. She suggested I focus on:

·         the geopolitical competition between the US and China;

·         Australia’s role in regional security architecture; and

·         the importance of Philippines-Australia relations in this context.

I will make these three points the framework for my remarks. However, at the outset I would like to emphasise an important point. Australia will not sit back and passively await our fate in the face of a major power contest. Instead, we will play our part to shape the type of region that we want. And, with seven decades of shared history, we are hopeful – and confident – we will be joined in this by the Philippines.

 

Professor Baviera’s first point – about US-China geopolitical competition – serves to set the scene. But, it is a scene that hardly needs setting. In the past two years, this competition has really intensified, both in rhetoric and in concrete terms. As the Australian Prime Minister, Scott Morrison said in a recent speech, “the world’s most important bilateral relationship – the US-China relationship – is strained”. It is indeed.

 

We have seen China expand its military presence in the South China Sea, ignore appeals for it to exercise greater restraint, state that it does not accept the decision of an impartial arbitral tribunal, and challenge freedom of navigation in this vital international waterway.

 

In December 2017, US President Trump labelled China a strategic competitor. In October 2018, US Vice President Pence catalogued US concerns about China’s behaviour, particularly unfair economic practices, and outlined a more robust US response.

 

Beginning in 2018 and continuing this year, each country has imposed tariffs on the other, causing disruption to global trade and economics. The G20 Summit may have led to a truce, but it is far from certain it is going to hold.

 

The shift from strategic engagement to strategic competition is troubling. China’s economic growth in recent decades, made possible by engagement with the US and the wider global community, launched one of the world’s greatest economic miracles. China’s economic rise has not been a zero sum game. This is especially true for Australia, but also for the countries of our region, including the Philippines and the US. This is why Australia has always, and will continue to, welcome China’s economic growth.

 

However, ladies and gentlemen, the ground has shifted. The US no longer believes that the current rules-based trading system can address aspects of China’s economic structure and policies that are unfair and cannot be justified. This is one part of why the US now views China as a strategic competitor.

 

An increasingly antagonistic relationship between the US and China matters to us, because it could have serious implications for our region.  It is in no-one’s interest to see the more competitive relationship become more adversarial in character.

 

In November 2017, the Australian Government released its Foreign Policy White Paper, which addressed these worrying trends for our region. Most of you will be familiar with the White Paper already, but for those who are not, it provides a comprehensive framework for how Australia will advance its security and prosperity in a contested and competitive world. It is likely to provide the framework for how we approach our foreign policy for the next five to ten years. The 2017 Foreign Policy White Paper was the first in 14 years.

 

The White Paper observed that “the Indo-Pacific’s stability depends more than ever on the actions of, and relations between, two of Australia’s most important partners – the United States and China”. In a measured way, the White Paper then mentioned divergent strategic interests, tensions over trade and economic issues, and friction arising from different interests, values and political and legal systems.

 

To choose examples from this region:

·         we can see the divergent strategic interests of the US and China playing out in the South China Sea and in ASEAN-centred forums;

·         few could have missed the tensions over trade and economic issues;

·         discussions about the type of Indo-Pacific we want highlight different interests, values and political and legal systems – although we are pleased that ASEAN’s Outlook on the Indo-Pacific fits well with Australia’s conception of the region and we strongly support President Widodo’s vision and leadership in this regard.

It is in this context that Australia and the Philippines must decide on the foreign, defence and security policies that they will use to advance their national interests.

 

For Australia and the Philippines, regional architecture provides part of the framework in which these policies are applied.

 

Turning to Professor Baviera’s second point: what is Australia’s role in the regional security architecture?

The regional security architecture includes the network of formal defence alliances established after World War II, which includes the US-Philippines Mutual Defence Treaty and the ANZUS Treaty between Australia, New Zealand and the US. Interestingly, those two documents were signed just two days apart.

 

This network of alliances is complemented by less formal defence partnerships, like the one between Australia and the Philippines. Although we are not treaty allies, our Status of Forces Agreement, the SOFA – signed in 2007 and ratified by Congress in 2012 – and Defence Cooperation Program facilitate close cooperation between our armed forces.  And I should point out, that the only other country to have a SOFA with the Philippines, is the United States. That’s pretty significant.  It says a great deal about the nature of the relationship between the Philippines and Australia.

 

Another part of the regional security architecture is ASEAN and the ASEAN-centred forums, including the East Asia Summit. The Philippines was a founding member of ASEAN and Australia was ASEAN’s first dialogue partner. We are both members of the East Asia Summit and ASEAN Regional Forum.

 

There are also smaller groupings of states, with varying degrees of formality, which meet to discuss issues of common concern. For Australia, this includes the trilateral and quadrilateral strategic dialogues, the South West Pacific Dialogue, and thematic subgroupings on terrorism, people smuggling and other issues. The Philippines also participates in minilateral discussions about security issues, including the South West Pacific Dialogue, trilateral discussions with Indonesia and Malaysia, and sub-regional discussions about terrorism.

 

The Foreign Policy White Paper outlines the links between this architecture and key parts of Australia’s foreign policy:

·         There should be no doubt about our commitment to the ANZUS treaty. As the Australian Foreign Policy White Paper says, “the web of US alliances in the Indo-Pacific, especially US alliances with Japan, the Republic of Korea and Australia, makes an essential contribution to regional security. Australia will continue to ensure the strength and vitality of our alliance.”

·         ASEAN also features prominently in the Foreign Policy White Paper, because, “ASEAN’s success has helped support regional security and prosperity for 50 years” and because of “ASEAN’s central role in convening the region’s strategic forums such as the EAS”. In recognition of ASEAN’s central role, the White Paper committed Australia to enhanced engagement.

·         The Foreign Policy White Paper also commits us to working with smaller groupings of countries, which share our values and are committed to a region governed by the same principles.

Perhaps at the most fundamental level, in the face of unprecedented change, Australia continues to support and defend the existing security architecture in our region, because it has delivered so much in terms of stability and prosperity over the years.

 

In recent decades, Southeast Asia has avoided serious interstate conflict, relying on ASEAN and on international law to manage a wide range of differences. The resulting peace has paid significant dividends.

 

The economies of ASEAN countries have grown at world beating rates. Look at the Philippines at the current time, GDP is racing ahead at 6%, with a forecast over the next ten years to maintain annual 6% GDP increases.  And, collectively, ASEAN is now one of the largest economies in the world. ASEAN member states have also opened their economies to trade, including through the ASEAN-Australia-New Zealand Free Trade Agreement signed in 2010. That’s reducing our tariffs down to zero, a process that is progressing remarkably well.

 

Of course, while we are committed to the existing architecture, we recognise that it must respond to changed circumstances. If ASEAN failed to respond to changes in the region, it would eventually become irrelevant. Fortunately, as in the past, ASEAN is up to the task. We welcome the agreement reached by ASEAN member states on an Indo-Pacific Outlook. This is a significant achievement, which sets out the type of region ASEAN members themselves want. Thankfully, it is also the type of region we want, that Australia wants – with ASEAN at its core.

Other parts of the regional architecture may also need to respond to changed circumstances. This might lead to new minilateral groupings. For the Philippines, it might mean discussing with the US how the Mutual Defence Treaty will apply to new and emerging challenges.

 

The third point that Professor Baviera asked me to address is arguably the most interesting: what is the role of Philippine-Australia relations in this context?

 

Now I could answer this by pointing to our shared membership of the East Asia Summit, the ASEAN Regional Forum, the Expanded ASEAN Maritime Forum, the South West Pacific Dialogue, and thematic subregional groupings on terrorism and trafficking, and by explaining the way that we cooperate in these forums. I could also point to our respective defence alliances with the US and our active military-to-military cooperation.

 

All of that matters but I am not going to talk about that.

 

What I would really like to look at is how Australia and the Philippines take it ahead from here – what do we do into the future.   Our relationship is already strong, but where do we go from here.

 

It goes like this, I believe:

 

Our region is changing rapidly. Over the past seven decades, we have built a strong and mutually beneficial relationship. However, faced with an increasingly complex and challenging region, we need to look for opportunities to deepen our ties and advance our common interests. Our relationship is robust enough – and yes strong enough to agree to differ on particular issues, if you look over the last couple of weeks - but we are also nimble enough to adapt to new circumstances.

 

·         We should build on our Comprehensive Partnership, which was signed in November 2015 and which provides a high-level framework for how we will work together.  It commits us to build on our political, economic, defence, law and justice, education and development cooperation. But new issues have become prominent since 2015. For example, the Comprehensive Partnership is silent on the following issues: cyber security, automation and artificial intelligence. It says nothing about environmental degradation, which poses significant risks for both our countries. We need to think more about what more we can do through the Comprehensive Partnership to address these issues together.

·         Marawi highlighted the benefits of our existing defence cooperation. Now, we are working to put our defence relationship on a sustainable footing for the longer term. This will place us in a better position to contribute to regional security alongside our other partners and within the web of US alliances that have been so essential to regional stability.

·         As two countries with large maritime domains, dependent on seaborne trade, and facing maritime threats ranging from transnational crime and terrorism to environmental degradation and the collapse of fish stocks, we should look to increase cooperation on maritime security as well.

In addition to concluding negotiations towards the Regional Comprehensive Economic Partnership (RCEP), we can do much more to build our trade and economic ties.

As a matter of fact, our trade ties are remarkably small and that’s surprising to me, having been here six months.  The trade between the Philippines and Australia currently rests a little below five billion Australian dollars, and that seems completely out of kilter with the nature of our relationship.  If you compare where the Philippines sits in terms of the list of trading partners, the Philippines sits at number 23, and it should sit somewhere around number 10.   The same place that Singapore, Malaysia, Indonesia, Thailand sit on the ranking.

More than 300 Australian business have operations here and this number is increasing, and that’s really positive, and they are attracted by the Philippines region-leading economic growth, that I mentioned earlier, and the large consumer market. We are particularly interested in expanding business ties in areas of the future economy, like digital finance and data analytics, science and technology, innovation, and reciprocal investment.

 

Interestingly there is a large number of Filipino firms looking at Australia as an investment destination, and I encourage that wholeheartedly.

 

With the 75th anniversary of our diplomatic relationship approaching in the next couple of years, (in 2021 we reach 75 years of our diplomatic relationship), this is one of our longest standing diplomatic relationship.  Now is the time for us to seize these opportunities.

 

To bring all this together, recent years have left no doubt that Australia and the Philippines are in a region that is undergoing profound change, becoming more complex and more contested. Unfortunately, events suggest that it is evolving in unwelcome ways: towards increased tension and competition and away from the type of region Australia and the Philippines might want. It is in no-one’s interest in the Indo-Pacific to see an inevitably more competitive US-China relationship become adversarial in character.

 

The Indo-Pacific is our region. It is where our people made great sacrifices when our peace was threatened. We share its future. We should not just sit back and passively await our fate in the wake of a major power contest. Rather than be passive bystanders, we must play our part to shape the region in which we live. We want an Indo-Pacific that is open, inclusive and prosperous, consistent with our national interests.

 

Our approach will be based on our commitment to open markets with trade relationships based on rules, not coercion. Through practical steps, we will build on resilience and sovereignty. We will advocate for respect for international law and the peaceful resolution of disputes without threat or coercive power.

 

Australia is committed to the regional security architecture that embeds these principles. ASEAN is central and we strongly support the ASEAN Outlook on the Indo-Pacific, which shares similar principles. We are confident that the Philippines is committed to these principles too.

 

We will continue to work with groups of states that share our values and want to see the Indo-Pacific region managed based on these principles.

 

We are committed to our alliance with the US, which is the bedrock of our security. We will continue to work with the US, while also making our own contribution to regional security through our wide-ranging defence engagement in the Indo-Pacific. We are working with many countries in the region to bolster their ability to respond to disasters and humanitarian crises, respond to terrorism and violent extremism, and improve their ability to manage external threats. We are also working to build the capacity of other US allies, like the Philippines, to enhance our collective security.

 

We will also further enhance our relationship with China. Our relationship already has many strengths, underpinned by our Comprehensive Strategic Partnership which was signed a few years ago. Of course, there is more that we can do, which is why we established the National Foundation for Australia-China Relations earlier this year.

 

And of course, we will work with others, such as Japan, India, South Korea and the EU, to promote a more secure and prosperous global order based on agreed rules. We will deepen patterns of cooperation and play our part. This is the surest path to an open, stable and prosperous Indo-Pacific.

 

Our relationship with the Philippines is an important and vital part of this. Confronted with a more complex and contested region, we will look to expand our bilateral engagement under the Comprehensive Partnership, on defence and on terrorism, maritime security, development, and economics and trade.

 

We firmly believe the Philippines will continue to stand alongside Australia as an active participant in efforts to shape a stable and prosperous Indo-Pacific region. And we look forward to this robust partnership with the Philippines with relish.

 

Thank you very much.