While much of Australia was still thinking wistfully of the beach, Foreign Minister Penny Wong and Defence Minister Richard Marles kicked off the 2023 foreign policy year, braving the late-January European winter for “2+2” talks with France and the United Kingdom.

Wong also went to Brussels for consultations with the European Union High Representative for Foreign Affairs and Security Policy, while Marles travelled on to Washington to see US Secretary of Defense Lloyd Austin and talk submarines.

It is impossible to forecast the foreign policy year ahead with any certainty, particularly at such a febrile time in global affairs.

Still, the early travel by Wong and Marles is a good enough place to start, not least because it illuminates some of the most significant issues on the government’s plate.

Defence and deterrence to the fore

Defence and national security will dominate the year’s opening. The government shortly will receive a report from a defence taskforce on the “optimal pathway” for acquiring nuclear powered submarines. 

There is talk of Prime Ministers Albanese and Sunak travelling to Washington in mid-March for an announcement by the AUKUS partners. The extraordinary cost and complexity of any of the nuclear options to replace Australia’s elderly Collins class submarines make this the most consequential decision of Albanese’s Prime Ministership, with the implications reverberating for decades.

Albanese will also soon have in his hands the independent review of Australia’s defence force structure and posture he and Marles commissioned to “ensure that Defence has the right capabilities” to meet “growing strategic challenges”.

Marles says Australia needs a more “hardnosed” approach to defence, arguing (as the Morrison government did) for a more lethal, resilient and “ready” Australian Defence Force, including through powerful long-range naval and air strike capabilities.

In short, the government wants a defence force better able to deter potential adversaries. It is comfortable identifying China’s rapid military modernisation and assertiveness in the Indo-Pacific as the primary driver of Australia’s security concerns.

The shift Marles advocates for will be expensive, challenging to implement, and take more time than our strategic circumstances might allow. Still, a recent decision to buy naval and land-based missile systems points the way.

The Quad comes to Australia

The defence and deterrence agenda in the first half of the year will be complemented by summitry that is also driven by concerns about China, notably the hosting of Quad leaders in Sydney. The timing of the meeting will be determined in the main by President Biden’s availability, so a date in May, around Biden’s visit to the G7 summit in Japan, is possible. 

This will be perhaps the Prime Minister’s most important international engagement over the year – a rare, home-ground, high-octane opportunity to profile the Quad and its agenda to deliver public goods in the Indo-Pacific, as well as the strength of Australia’s bilateral relations with top-tier partners the United States, India, and Japan.

Speaking of summits, with close partners chairing the G7 (Japan), G20 (India), Association of Southeast Asian Nations (Indonesia), APEC (United States), and the Pacific Islands Forum (Cook Islands), 2023 will be another big year of international meetings for the Prime Minister and his foreign policy team.

Albanese looks set to visit India twice this year – in March for a bilateral visit and then again for the G20 summit.

The Prime Minister will also be hoping to visit China (see below). 

The program for senior inward visits is less clear, beyond the Quad, but it is Australia’s turn to host the annual Australia-Indonesia leaders’ meeting, and the 50th anniversary of diplomatic relations with Vietnam this year suggests a high-level visitor from Hanoi.

Managing contradictions

The early prominence of the Quad and defence agenda in 2023 neatly encapsulates the government’s principle foreign policy juggling act.

A great deal of Australian diplomacy in the Indo-Pacific is geared towards securing what the foreign minister calls a “strategic equilibrium” where “countries can make their own sovereign choices”. Implicit in such a construct is the desire to avoid hegemony by any single power, and especially by China.

At the same time, Albanese and foreign minister Wong have invested heavily in strengthening Australia’s independent relations with our most important near neighbours in the Pacific and Southeast Asia, reassuring them that they are valued in their own right, and that Australia too wants peace.

In the current era, this is a necessary contradiction in Australian foreign policy: managing it in 2023, as the government re-shapes Australian defence and hosts the Quad, will require more of the energetic diplomacy we saw last year across the Pacific and Southeast Asia.

The Prime Minister will have an opportunity to set out his own Indo-Pacific vision when he delivers the keynote speech at the Shangri-la forum in Singapore in June. 

A new economic era

2023 will also see the government continuing to grapple with a world characterised simultaneously by interconnectedness and separation – an “old world” of rules-based trade, globalisation and ongoing inter-dependencies, and a “new world” of partial decoupling from autocracies, trusted supply lines, and investment in strategically-important industries.

The government wants progress in its trade diversification agenda, including the free trade agreement with the European Union and converting the interim trade deal with India into a more comprehensive agreement.

Special envoy Nicholas Moore will hand the government a new Southeast Asia economic strategy, probably mid-year. And Australia has been working hard behind the scenes to pump life into the US Indo-Pacific Economic Framework (IPEF) initiative. The Biden Administration would like IPEF to be up and running this year, but there’s a way to go to convince some partners, especially in Southeast Asia, that there is enough in it for them. 

China

The stabilisation of ties with China will continue to be a priority for the Albanese team.

Any number of issues could knock the relationship back off the rails. China vehemently opposes AUKUS, for example, and especially the idea of Australia acquiring nuclear-propelled submarines. It’s none too keen on the Quad, for that matter. 

Still, there is a reasonable prospect of further cautious, incremental progress over the year. China has welcomed the government’s more disciplined messaging on the relationship, but has its own reasons, including an under-performing economy for wanting to warm ties.

What should we look for? Wong’s dash to Beijing in December to meet her Chinese counterpart secured agreement to “commence or restart” bilateral dialogue in areas such a trade, consular affairs, climate change, defence, and regional and international issues.

Bringing this kind of once-routine diplomatic engagement back to life is a positive sign. More positive again would be an invitation for Prime Minister Albanese to visit Beijing.

After a very long break, the Australian and Chinese trade ministers are back to talking, and Don Farrell is likely to visit Beijing soon. Still, it is not yet clear if or when China might end all its coercive economic actions against Australian exports, and what it might want in return. Partly with foreign investment rules in mind, Commerce Minister Wang Wentao has “urged” Australia to provide a “fair” and “open” environment for Chinese companies.

Expecting the unexpected

Finally, the government inevitably will be mugged by international events that come out of the blue (like Chinese surveillance balloons …) or are foreseeable even if they are not certain.  

The list of possibles here is long, but includes: another Taiwan Strait crisis if the new US House Speaker, Kevin McCarthy, visits Taipei, as is expected; a nuclear weapons test by North Korea; a shift in the grinding stalemate in Ukraine, or in the equally grinding conflict in Myanmar; and a global recession (the International Monetary Fund is more hopeful of the outlook for 2023 than it was last year, but worries still about a suite of downside risks).