By Richard Maude, Executive Director of Policy.

The Albanese government’s first year of foreign policy has been assured, energetic and positive. Labor’s foreign policy is defined by clear philosophical underpinnings, a track record of achievement, and a commitment to rebuilding Australia’s capacity for statecraft.

It’s an impressive start. Still, things get harder from here. 

Ideas

In her own telling, Foreign Minister Penny Wong had a long time in opposition to think about the ideas that should animate Australian foreign policy. No politician is fond of the opposition benches, but this time for reflection is being put to good use.  The Foreign Minister is taking Labor’s traditional trifecta of priorities – the Alliance, the region, and the multilateral system – and adapting them for a very different world.

Foreign policy is underpinned by a healthy dose of pragmatism. The government says Australia must respond to the realities of the current era or fail: “we confront the world as it is, not as we would like it to be”.

In particular, there are no delusions about the challenge of dealing with Xi Jinping’s China. The optimism of Labor’s last major foreign policy document, the 2012 Australia in the Asian Century White Paper, is consigned to the past.

All governments want a foreign policy with agency. But for Labor, there is more at stake than just getting things done. Self-reliance and sovereignty are embedded in the concept. Wong says often that Australia cannot “just leave it to the big powers to decide our fate”, a message she takes into Southeast Asia and the Pacific.

The government has crafted a positive foreign policy narrative abroad, especially in our region. It wants Australian diplomacy to be effective, of course, but also respectful and quieter. In part, this is about being a good partner: “we are here to listen”. But Albanese and Wong also want to project the “modern face” of Australia. They see this reflection of the nation – diverse, pluralistic and dynamic – as essential to Australia’s regional standing.

First Nations perspectives have more prominence.  The government has appointed an Ambassador for First Nations People to support First Nations’ rights globally and promote First Nations’ trade and community connections.

Action

The Albanese government inherited a foreign policy from the Coalition that, inevitably, was dominated the need to respond to challenges from an assertive and authoritarian China.

From this, the government has kept much – the good and the necessary – while addressing areas of neglect or even disarray, in the case of the open hostility of the Australia-China bilateral relationship.

The government’s modest objective for ties with China – “stabilisation”– is cautious and realistic. Even so, the political relationship has improved more quickly than Albanese and Wong likely expected. This serves Australia’s interests but the trick is sustaining it over time without conceding on matters of policy or principle. Pulling punches is an inevitable temptation of better relations. Beijing already seeks leverage from the very idea of stabilisation.

Coal and timber trade restrictions have eased, but elsewhere China is dragging its feet. The government has offered a face-saving way to restore trade in barley and wine, if Beijing wants it. Without a breakthrough soon, the fight against these coercive trade measures will continue in the World Trade Organization and business patience may begin to wane.  Meanwhile, lobster growers also still wait in the wings.

Alongside efforts to stabilise ties with China, the government has built on solid foundations in the Alliance with United States and in Australia’s top-tier partnerships with India and Japan. Prime Minister Albanese has been effective in his leader-level summitry, and these three bilateral relationships, along with the Quad and an ambitious re-shaping of the Australian Defence Force, are central to the government’s policy of supporting a favourable balance of power (“strategic equilibrium”) in the Indo-Pacific.

Elsewhere, while the government carefully avoids the US narrative of a “competition of systems” with China, the Prime Minister has nonetheless sustained Australia’s important and now closer engagement with the leading institutions of the democratic world, especially the G7 and NATO.

Senator Wong has thrown herself into the Pacific and Southeast Asia, developing strong personal relationship and racking up an impressive tally of policy achievements in short order. Her first solo overseas visit – to Fiji – was just five days after the election and she has now visited all Pacific Islands Forum (PIF) countries and every country in Southeast Asia except for Myanmar, an extraordinarily gruelling schedule.

The government wants Australia to respond more effectively to regional priorities as a trusted partner, but competing with China inevitably looms large over policy. This is driving new investments in aid, trade, and security and economic cooperation. A more ambitious approach to climate change helps in the Pacific, although Australia’s love affair with exporting coal remains point of contention. There’s more policy to come, including a major re-fresh of the aid program and a Southeast Asia Economic Strategy.

On the trade front, the India Economic Cooperation and Trade Agreement (ECTA) and Australia-UK Free Trade Agreement (both clinched by the Coalition) are through Parliament and up and running.

Looking ahead, cramming substance into the Biden Administration’s Indo-Pacific Economic Framework (IPEF) and keeping Southeast Asia inside the IPEF tent are high priorities for Trade Minister Don Farrell. Other tests include landing long-running and politically-sensitive trade agreement negotiations with the European Union, and the government’s ambition for a full, or “comprehensive”, free trade agreement with India.

Statecraft 

Foreign Minister Wong places considerable weight on deploying “all elements of national power” in coordinated statecraft. But she also wants diplomacy to be pre-eminent in responding to a challenging international environment.

Wong is now turning her attention to serious gaps in the capabilities of the Department of Foreign Affairs and Trade (DFAT). Rebuilding will take time, but in a tough budgetary environment the minister has won additional resources for her long-neglected department.

The aid budget has been topped up. There is funding for more staff, and even an upgrade to Australia’s notoriously antiquated and cranky secure communications system. Additional resources will go to rebuilding the skills needed to design and manage complex aid projects.

The government has wound back the creeping Americanisation of Australia’s diplomatic service, making fewer political appointments at the ambassadorial level in favour of career foreign service officers.

Now for the hard part

Things get harder from here.

Agency is easier to say than achieve in the current world disorder. It’s not quite a Cold War, but Australia’s space to manoeuvre is constrained by adversarial US-China relations.

Australia can’t expect (and the government doesn’t) any break from an extremely challenging security and economic environment. Penny Wong’s speech to the Press Club on 17 April reflects anxiety about the state of US-China relations and the risk of miscalculation or conflict, especially over Taiwan.

Managing these risks will be high on the agenda for the rest of the government’s term. In particular, the government has not yet articulated a convincing strategy for navigating the sharp security dilemma that China’s rapid military modernisation and aggressive regional posture, and US-led responses to this, are creating.

Dealing with the tensions and contradictions now building inside Australia’s foreign policy is another priority.  

The government wants Australia to be sovereign and self-reliant yet is deepening the Alliance in ways almost unthinkable when Labor was last in power, including through AUKUS and larger and more frequent rotations and visits of US troops, ships and planes.

Australia wants strong, direct relations with Southeast Asia and the Pacific, independent of either great power.  Yet Australia is also now committed to supporting US efforts to strengthen the fabric of military deterrence in the Indo-Pacific.  Our partners in the region are for the most part somewhere between ambivalent and decidedly uneasy about these endeavours.

Similarly, the government wants to keep ties with China stable and to manage bilateral differences “wisely”, but runs a foreign policy heavily geared to the search for a favourable “strategic equilibrium” in the Indo-Pacific in which “no country dominates and no country is dominated”.

It is common for states to juggle contradictions and competing national interests in foreign policy. The tensions in policy noted here reflect the times Australia is navigating, not poor choices. Still, they are evident, sharp and consequential. Managing them will consume larger amounts of Australian diplomatic muscle in coming years.

There are more long days ahead for the Prime Minister and Australia’s hard-working Foreign Minister.