ASEAN-Australia Relations: Working Out Hard Issues for Regional Stability

Over the past five decades, the strategic relationship between ASEAN and Australia has evolved significantly. Marked by deepening cooperation and partnership across a broad spectrum of issue areas including security, economic development, education, and cultural exchange, this relationship is underpinned by shared interests in promoting regional stability, prosperity, and addressing transnational challenges. Both ASEAN and Australia are part of various bilateral and multilateral frameworks aimed at enhancing regional architecture and fostering a conducive environment for open dialogue and mutual benefit. Australia now recognises ASEAN’s centrality in the Indo-Pacific.

Yet even after the recent 50th anniversary celebrations at the ASEAN-Australia Special Summit held from 4-6 March 2024, ASEAN and Australia continue to face heightened risks as the international order veers towards multipolarity amid polycrisis.

ASEAN member states (AMS) are wary of the upgrading of U.S. formal alliances and the advent of minilateral groupings such as the Quadrilateral Security Dialogue (comprising Australia, Japan, India, and the U.S.) and the trilateral Australia-United Kingdom-U.S. (AUKUS) arrangements. These trends intensify the risk of conflict between U.S.-led alliances and groupings versus China.

To ASEAN, the rationale is clear: such U.S.-led minilaterals could undermine its centrality and any cooperation with these minilaterals would rile China. While the AMS cannot wish away minilaterals, they can nevertheless leverage these arrangements to their national benefit and regional stability. 

There is a sweet spot here. After years of testy relations with Beijing, Australia is rebalancing its relationship with China, taking a more pragmatic turn towards trade normalisation. This would lead to greater regional stability, which ASEAN appreciates. However, Canberra and its formal allies — in particular, the U.S. and Japan — want to continue to manage the more assertive aspects of China’s regional behaviour. There is simultaneously a desire on the part of some AMS (read: Vietnam and the Philippines) to stand up more to China on matters of sovereignty amid territorial disputes, especially in the South China Sea (SCS). 

Speaking in Melbourne on 4 March 2024, Philippines President Ferdinand Marcos Jr. said Manila had “No choice” when it came to defending its territory against Chinese encroachments in the SCS. His foreign minister, Enrique Manalo, called on regional countries to stand together to uphold international law in the contested area.

In the authors’ view, Australia and Japan can help the AMS “plug and play” into a robust deterrence framework involving the Quad and other similar arrangements to improve regional stability. This does not mean that Australia and ASEAN will see eye-to-eye on China or that any AMS would join the Quad. Rather, Australia can ask AMS to draw upon Australia and the Quad’s resources to engage in straightforward, functional interactions in the interests of the region.

Military interactions between individual AMS and the Quad already take place. In September 2023, Singapore was part of a large-scale Super Garuda Shield exercise conducted by Indonesia and the U.S. while Brunei, Malaysia, and the Philippines participated as observers.

Singapore, which already has a deep security relationship with Australia, has significant air force detachments Down Under. The island republic plans to welcome Australia’s new class of AUKUS submarines to call at its base in the future.

In November 2023, Australia and the Philippines conducted their first-ever joint patrols in the SCS, days after Philippine forces conducted a three-day air and sea exercise with their U.S. counterparts in the Philippine’s exclusive economic zone in what it calls the West Philippine Sea. Philippine Defense Secretary Gilbert Teodoro indicated that Manila will conduct more iterations of such activities with the U.S. and other allies.

On the sidelines of the 50th anniversary celebrations, Canberra and Hanoi announced that they had upgraded their relationship to the highest Comprehensive Strategic Partnership level. This will indirectly plug Vietnam into the Quad framework. Canberra is already providing an effective backchannel for Hanoi to cooperate with Washington on sensitive matters such as intelligence sharing and maritime security without angering Beijing.

It is still a long way before ASEAN, Australia and the other Quad countries reach strategic alignment, if ever. Yet doggedness and humility can go a long way. On the AUKUS issue, for example, Australian officials clocked up air miles and made about 60 calls to leaders in Southeast Asia and the Pacific to convince them of the merits of the agreement. This effort turned somewhat negative initial responses by Malaysia and Indonesia into cognisance of the need to work for a better regional balance of power.

Australia’s trading relationship with ASEAN has been constant over the last two decades, but the country has lagged in the economic league tables.

Besides strengthening political-security partnerships, both sides must emphasise and pay equal attention to nurturing the economic relationship. Australia’s trading relationship with ASEAN has been constant over the last two decades, but the country has lagged in the economic league tables. In 1980, the size of Australia’s economy was 85 per cent of ASEAN’s economy but today, the combined economies of ASEAN are twice as large as Australia’s. ASEAN is Australia’s second-largest trading partner whereas Australia is ASEAN’s eighth-largest trading partner. ASEAN’s share of Australia’s total trade in goods is 14.6 per cent, whereas Australia’s share of ASEAN’s trade in goods is only 3.4 per cent in 2022. Australia is also an FDI featherweight, with total foreign direct investment (FDI) to Southeast Asia declining from 6.3 per cent in 2017 to 2.9 per cent in 2022.

The Australians recognise the need to step up. As part of a suite of initiatives announced at the recent Special Summit, Australia will establish a A$2 billion facility to boost investments to Southeast Asia. Along with the ASEAN-Australia-New Zealand free trade agreement (FTA) upgrade inked at the Summit and Australia’s keen interest in pursuing cooperation in the green economy, sustainability, climate, food security, and digitalisation, there is promise of renewed relevance to the ASEAN-Australia economic relationship.

However, Australia needs to work hard to figure out how to tap into its engagement in two major FTAs that ASEAN is leading: the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). Australia has been one of ASEAN’s steadiest multilateral trade partners but has yet to draw fully on the benefits of this trading club. At the 50-year mark, the ASEAN-Australia relationship holds comfort and promise of a better, more inclusive future but only if both sides are willing, in former Australian premier Kevin Rudd’s words when describing the Australia-China relationship, to be zhengyou (诤友) – that is, a friend who dares to voice unpleasant truths and counsel caution. The same exhortation applies to Australia’s relations with ASEAN.

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