America no longer enjoys military primacy in the Indo-Pacific and its capacity to uphold a favourable balance of power is increasingly uncertain. The combined effect of ongoing wars in the Middle East, budget austerity, underinvestment in advanced military capabilities and the scale of America’s liberal order-building agenda has left the US armed forces ill-prepared for great power competition in the Indo-Pacific. America’s 2018 National Defense Strategy aims to address this crisis of strategic insolvency by tasking the Joint Force to prepare for one great power war, rather than multiple smaller conflicts, and urging the military to prioritise requirements for deterrence vis-à-vis China. Chinese counter-intervention systems have undermined America’s ability to project power into the Indo-Pacific, raising the risk that China could use limited force to achieve a fait accompli victory before America can respond; and challenging US security guarantees in the process. For America, denying this kind of aggression places a premium on advanced military assets, enhanced posture arrangements, new operational concepts and other costly changes. While the Pentagon is trying to focus on these challenges, an outdated superpower mindset in the foreign policy establishment is likely to limit Washington’s ability to scale back other global commitments or make the strategic trade-offs required to succeed in the Indo-Pacific. Over the next decade, the US defence budget is unlikely to meet the needs of the National Defense Strategy owing to a combination of political, fiscal and internal pressures. The US defence budget has been subjected to nearly a decade of delayed and unpredictable funding. Repeated failures by Congress to pass regular and sustained budgets has hindered the Pentagon’s ability to effectively allocate resources and plan over the long term. Growing partisanship and ideological polarisation — within and between both major parties in Congress — will make consensus on federal spending priorities hard to achieve. Lawmakers are likely to continue reaching political compromises over America’s national defence at the expense of its strategic objectives. America faces growing deficits and rising levels of public debt; and political action to rectify these challenges has so far been sluggish. If current trends persist, a shrinking portion of the federal budget will be available for defence, constraining budget top lines into the future. Above-inflation growth in key accounts within the defence budget — such as operations and maintenance — will leave the Pentagon with fewer resources to grow the military and acquire new weapons systems. Every year it becomes more expensive to maintain the same sized military. America has an atrophying force that is not sufficiently ready, equipped or postured for great power competition in the Indo-Pacific — a challenge it is working hard to address. Twenty years of near-continuous combat and budget instability has eroded the readiness of key elements in the US Air Force, Navy, Army and Marine Corps. Military accidents have risen, aging equipment is being used beyond its lifespan and training has been cut. Some readiness levels across the Joint Force are improving, but structural challenges remain. Military platforms built in the 1980s are becoming harder and more costly to maintain; while many systems designed for great power conflict were curtailed in the 2000s to make way for the force requirements of Middle Eastern wars — leading to stretched capacity and overuse. The military is beginning to field and experiment with next-generation capabilities. But the deferment or cancellation of new weapons programs over the last few decades has created a backlog of simultaneous modernisation priorities that will likely outstrip budget capacity. Many US and allied operating bases in the Indo-Pacific are exposed to possible Chinese missile attack and lack hardened infrastructure. Forward deployed munitions and supplies are not set to wartime requirements and, concerningly, America’s logistics capability has steeply declined. New operational concepts and novel capabilities are being tested in the Indo-Pacific with an eye towards denying and blunting Chinese aggression. Some services, like the Marine Corps, plan extensive reforms away from counterinsurgency and towards sea control and denial. A strategy of collective defence is fast becoming necessary as a way of offsetting shortfalls in America’s regional military power and holding the line against rising Chinese strength. To advance this approach, Australia should: Pursue capability aggregation and collective deterrence with capable regional allies and partners, including the United States and Japan. Reform US-Australia alliance coordination mechanisms to focus on strengthening regional deterrence objectives. Rebalance Australian defence resources from the Middle East to the Indo-Pacific. Establish new, and expand existing, high-end military exercises with allies and partners to develop and demonstrate new operational concepts for Indo-Pacific contingencies. Acquire robust land-based strike and denial capabilities. Improve regional posture, infrastructure and networked logistics, including in northern Australia. Increase stockpiles and create sovereign capabilities in the storage and production of precision munitions, fuel and other materiel necessary for sustained high-end conflict. Establish an Indo-Pacific Security Workshop to drive US-allied joint operational concept development. Advance joint experimental research and development projects aimed at improving the cost-capability curve.
The 30th round of the Australia-United States Ministerial Consultations (AUSMIN) will soon take place amid immense global disruption and unprecedented domestic pressures accelerated by the spread of SARS-CoV-2 (also known as coronavirus or COVID-19). Our Indo-Pacific neighbourhood should be at the top of the agenda. It is hard to imagine a more urgent time for the Australia-United States alliance to provide strong and collaborative regional leadership — and to bolster the resilience of the Indo-Pacific across all of its dimensions: from health security and economic development to the balance of military power and strategic resilience. It is equally hard to imagine a more difficult environment for our alliance to concentrate its energies on regional policy. With the United States enduring a pandemic-fuelled health crisis, nationwide social unrest, escalating national debt and a general election in November, and with Australia still tentatively emerging from the first wave of the pandemic, both countries have pressing and politically-charged distractions at home. Nonetheless, our shared national interests in fostering a healthy, stable and resilient Indo-Pacific region cannot be postponed and must be wholeheartedly embraced at AUSMIN 2020. Three principles should guide this year’s deliberations. First, helping our Indo-Pacific neighbours to sustainably recover from the pandemic is the most urgent priority and is in all of our interests. With more than 600,000 cases of COVID-19 throughout the region — coupled with a rapidly deteriorating health, economic and developmental outlook that will see regional growth fall to near zero per cent while 24 million people remain in poverty — the scale of the crisis in our region vastly outstrips our current capacity to respond. This places a premium on the need to invest more alliance resources into human security challenges, both at present and preventatively, and to pursue innovative, high-quality solutions to developmental challenges, including through better industry partnerships. As our economic and security interests hinge on the health of stable, resilient and sovereign regional nations, supporting their post-pandemic recovery will assist our own. Second, strengthening the alliance’s contribution to deterring aggression and coercive statecraft in the Indo-Pacific must proceed in spite of the pandemic. In recent years, the strategic landscape has been rapidly deteriorating due to the United States’ declining capacity to uphold a favourable balance of power and China’s increasingly assertive use of coercive statecraft backed by its growing conventional military power. The pandemic is only exacerbating these trends. New economic burdens are limiting the capacity of regional nations to counterbalance Chinese power: putting downward pressure on defence budgets, placing the imperatives of domestic recovery ahead of geopolitical concerns and leaving some more vulnerable to Beijing’s strategic largesse than before. In the United States, the tumultuous health, economic and socio-political consequences of the pandemic are sharpening preferences for self-strengthening at home and will quicken the decline of resources for defence. Beijing, by contrast, is taking advantage of regional distractions to advance its expansive geopolitical agenda from Hong Kong and the Sino-Indian border to Northeast Asia, the South China Sea and the Pacific. This situation calls for the alliance to invest more heavily in supporting its regional partners through collective defence initiatives and to urgently prioritise the Indo-Pacific relative to outdated security concerns in the Middle East. Finally, signalling Australian and American policy preferences for how our respective Indo-Pacific strategies should evolve over the coming years is critical for domestic and regional audiences. This will entail a focus on differences as well as shared interests within the alliance. Although the United States and Australia have many common objectives in strengthening a stable, prosperous and rules-governed regional order, they have quietly diverged in recent years on multilateralism, global institutions, international trade, regional diplomacy and other issues. Differences over China policy are perhaps the most sensitive. Whereas Washington has adopted an increasingly strident public tone in casting China as an ideological threat, Canberra seeks a less politicised approach and has publicly supported engagement alongside a firming of China policy settings. These distinctions do not undermine our alliance solidarity. Indeed, as Australia’s internationalist outlook is more in keeping with regional preferences in Southeast Asia and the Pacific, Canberra should lean into it during and after AUSMIN 2020 — using current points of difference with Washington as markers for how Australia would like to work with the United States in the future, and how it will continue to work with the region until then. With this forward-looking agenda in mind, the United States Studies Centre has assembled a list of ten policy recommendations for the upcoming AUSMIN meeting. Drawing on the expertise of our researchers, including from their published and ongoing research projects, these recommendations combine analytical judgements with new policy thinking in an effort to stimulate bilateral discussion around a mix of achievable and moon-shot initiatives. This collection does not purport to be a comprehensive agenda but aims to provide a useful contribution to the policy planning process around bolstering the resilience of our Indo-Pacific region at this critical juncture.
Technology is now the defining element of the Trump administration’s self-professed “strategic competition” with China. Washington is highly attuned to the long-term consequences and links between scientific progress, technological adaptation and national power in burgeoning US-China competition. Policymakers are attempting to balance efforts to maintain the open and global foundations of US and allied research and development systems, while deterring those that abuse its accessible and integrated nature. While President Donald Trump has been highly inconsistent on technological issues, Congress and the executive branch have slowly moved forward in executing the 2017 National Security Strategy and protecting what it termed the US National Security Innovation Base. Congress and the Trump administration have embarked on a ponderous — and at times heavy-handed — effort to protect America’s technological advantage across multiple domains and through actions by several branches of government. Congress has expanded the powers of the Committee of Foreign Investment to review non-controlling investments in technology companies. New export controls are being rolled out which feature vastly more expansive definitions of “foundational” and “emerging” technologies, broadening their scope and potential reach. The Department of Justice has launched a major criminal justice campaign labelled the “China Initiative”, with the goal of prosecuting technology theft and enforcing existing regulations in every US state. Draft bills indicate the likely expansion of Congressional reform to halting the flow of US government funds flowing to overseas partners also involved in joint high-tech research and development (R&D) with China, affecting third parties like Australia. Australia will be significantly affected by Washington’s unravelling of the US-China technological relationship, owing to its deep enmeshment with America’s scientific infrastructure. To navigate these changes in the national interest, Canberra must consider the following. Australia will face growing pressure to limit its science and technology interaction with China in critical dual-use fields in order to maintain technological collaboration with the United States in some emerging technologies, and may even be required to adopt restrictive export control policies. Australian research by universities, defence industry, business and government agencies will be seriously impacted by the United States’ expanded export control reform. Canberra should continue to lobby US policymakers on solutions, such as providing exemptions under the National Technology and Industrial Base framework. As the global technological ecosystem becomes more nationalised, securitised and difficult to navigate for industry and governments alike, Australia should implement a national research and development strategy that builds its own technological ‘counterweight.’
Deterring the use of armed force and other forms of coercion is central to the maintenance of order in the Indo-Pacific. Yet from the Taiwan Strait and the South China Sea, to space, cyberspace, and the rules-based order itself, deterrence is becoming increasingly difficult to sustain in the face of major power competition, new grey zone challenges, emerging military technologies, and a rapidly shifting regional balance of power. The United States and Australia are determined to offset these trends by pursuing more integrated strategies for the Indo-Pacific. In recent months, the Trump administration has emphasised long-term strategic competition with China, placing renewed focus on technological dominance, geoeconomic statecraft, nuclear modernisation, and military readiness. In Australia, concerns over Chinese strategic policy, foreign interference, and the durability of American power and leadership have sharpened the focus on collective security and whole-of-government approaches to regional strategy. To advance a robust bilateral policy debate about the key role of deterrence in Indo-Pacific strategy, the United States Studies Centre and Pacific Forum hosted a Track 1.5 US-Australia Indo-Pacific Deterrence Dialogue in Canberra in December 2018. Both institutions thank the Australian Department of Defence and the Carnegie Corporation of New York for their generous support of this initiative. The following summary reflects the authors’ accounts of the dialogue proceedings and does not necessarily reflect their personal views. Nothing in the following pages represents the opinion of the Australian Department of Defence or any other officials or institutions that took part in the dialogue.
During the 2016 presidential campaign, Donald Trump complained that the United States’ “military is a disaster” and promised to make it “so big, so powerful, so strong that nobody – absolutely nobody – is gonna mess with us”.1 So far the president has not delivered on his rhetoric. Although Trump has requested additional funding for defence, the magnitude of the increase falls well short of his promises. Republican defence hawks are advocating for additional resources above the president’s request. But a combination of ongoing spending caps imposed by the Budget Control Act (BCA) and political gridlock in Washington will prevent Congress from passing more than a modest increase in defence spending for 2018. Washington’s inability to return the defence budget to pre-BCA levels is having a serious impact on America’s global strategic presence. As Chairman of the Joint Chiefs of Staff General Joseph Dunford warned in June: “Without sustained, sufficient, and predictable funding, I assess that within five years we will lose our ability to project power; the basis of how we defend the homeland, advance US interests, and meet our alliance commitments.”2 His comment was more than a bureaucratic bid for extra funding. Ongoing conflicts in the Middle East and growing operational demands in Europe and Asia are taxing the military’s ability to procure, train, repair, and deploy its forces at sustainable levels. The US military cannot continue to modernise and fix these “military readiness” problems without greater political certainty and a commitment to higher spending. While there is no solution in sight to the defence budget crisis, there are signs that America’s strategic presence in Indo-Pacific Asia will be prioritised in this budget cycle. Congress has emphasised the need to strengthen regional capabilities in response to Chinese and North Korean challenges, including by increasing cooperation with allies and bolstering extended deterrence. Like the White House, Congress is allocating resources to some readiness issues – though not at levels that will satisfy the Pentagon – as well as supporting advancements in space, cyber, electronic warfare, and ballistic missile systems. Australia should welcome this sustained military engagement in the Indo-Pacific, but remain cautious about Washington’s ability to reverse the impact of budget uncertainty on the American armed forces.
The United States’ National Technology and Industrial Base (NTIB) is a congressionally-mandated policy framework that is intended to foster a defence free-trade area among the defence-related research and development sectors of the United States, Canada, Australia and the United Kingdom. To date, however, the NTIB has only managed to facilitate limited bilateral cooperation between some members, falling well short of its goal. The US defence export control regime is one of the biggest barriers to NTIB integration. Specifically, bureaucratic fragmentation, its failure to treat trusted allies differently from other partners and its leaders’ reluctance to attempt politically costly reform are significant barriers to progress. Canberra’s ability to maintain its own competitive military advantage and to serve as an effective ally of the United States in the Indo-Pacific is threatened by real and growing opportunity costs in an age of rapid strategic and technological change that Australia and Australian industry face as a result of slow NTIB implementation. Australian leaders should elevate NTIB progress to the political level and accelerate efforts to make a strategic case in Washington as to why extensive and ambitious implementation of NTIB’s original vision is urgently needed.
The United States is facing multiple challenges to sustaining its military-technological edge in the Indo-Pacific: The proliferation of advanced missiles, submarines, satellites and other technology has raised the costs and risks for the United States in a regional conflict. Access to advanced technology and innovation has spread, raising the importance of the private sector in maintaining military superiority but also generating new centres of technological progress.The United States’ current defence strategy and capabilities are increasingly economically unsustainable, and its defence budget is stagnating due to political polarisation in Congress. The Third Offset is a set of strategies that aims to bolster US conventional military power by mobilising innovation, new technologies and institutional reform: The United States is placing ‘bets’ on a series of new technologies, from artificial intelligence to hypersonic weapons, that will allow its military to project force in contested environments. Some of these technologies will, in theory, allow for more economically sustainable military operations and capabilities. Reforming US defence institutions to prioritise innovation, and seeking ways to take advantage of new technologies in the private sector, are attempts to embed and sustain US military advantage. The direction of the Third Offset, and its success or failure, should inform Australia’s strategic outlook. Canberra should seek to expand engagement with the Third Offset, particularly through the following institutional aspects: A United States-Australia Defence Technology Workshop should be established to generate new ideas around Indo-Pacific technological trends, investment and new military concepts. Canberra should explore the possibility of hosting, or jointly funding, an international Defence Innovation Unit Experimental Office, providing strategic coordination on technological developments, resourcing and opportunities for Australian defence firms. Australia needs to expand its engagement with the United States on the testing, exercises and simulations that will form new Third Offset military concepts.
The 30th round of the Australia-United States Ministerial Consultations (AUSMIN) will soon take place amid immense global disruption and unprecedented domestic pressures accelerated by the spread of SARS-CoV-2 (also known as coronavirus or COVID-19). Our Indo-Pacific neighbourhood should be at the top of the agenda. It is hard to imagine a more urgent time for the Australia-United States alliance to provide strong and collaborative regional leadership — and to bolster the resilience of the Indo-Pacific across all of its dimensions: from health security and economic development to the balance of military power and strategic resilience. It is equally hard to imagine a more difficult environment for our alliance to concentrate its energies on regional policy. With the United States enduring a pandemic-fuelled health crisis, nationwide social unrest, escalating national debt and a general election in November, and with Australia still tentatively emerging from the first wave of the pandemic, both countries have pressing and politically-charged distractions at home. Nonetheless, our shared national interests in fostering a healthy, stable and resilient Indo-Pacific region cannot be postponed and must be wholeheartedly embraced at AUSMIN 2020. Three principles should guide this year’s deliberations. First, helping our Indo-Pacific neighbours to sustainably recover from the pandemic is the most urgent priority and is in all of our interests. With more than 600,000 cases of COVID-19 throughout the region — coupled with a rapidly deteriorating health, economic and developmental outlook that will see regional growth fall to near zero per cent while 24 million people remain in poverty — the scale of the crisis in our region vastly outstrips our current capacity to respond. This places a premium on the need to invest more alliance resources into human security challenges, both at present and preventatively, and to pursue innovative, high-quality solutions to developmental challenges, including through better industry partnerships. As our economic and security interests hinge on the health of stable, resilient and sovereign regional nations, supporting their post-pandemic recovery will assist our own. Second, strengthening the alliance’s contribution to deterring aggression and coercive statecraft in the Indo-Pacific must proceed in spite of the pandemic. In recent years, the strategic landscape has been rapidly deteriorating due to the United States’ declining capacity to uphold a favourable balance of power and China’s increasingly assertive use of coercive statecraft backed by its growing conventional military power. The pandemic is only exacerbating these trends. New economic burdens are limiting the capacity of regional nations to counterbalance Chinese power: putting downward pressure on defence budgets, placing the imperatives of domestic recovery ahead of geopolitical concerns and leaving some more vulnerable to Beijing’s strategic largesse than before. In the United States, the tumultuous health, economic and socio-political consequences of the pandemic are sharpening preferences for self-strengthening at home and will quicken the decline of resources for defence. Beijing, by contrast, is taking advantage of regional distractions to advance its expansive geopolitical agenda from Hong Kong and the Sino-Indian border to Northeast Asia, the South China Sea and the Pacific. This situation calls for the alliance to invest more heavily in supporting its regional partners through collective defence initiatives and to urgently prioritise the Indo-Pacific relative to outdated security concerns in the Middle East. Finally, signalling Australian and American policy preferences for how our respective Indo-Pacific strategies should evolve over the coming years is critical for domestic and regional audiences. This will entail a focus on differences as well as shared interests within the alliance. Although the United States and Australia have many common objectives in strengthening a stable, prosperous and rules-governed regional order, they have quietly diverged in recent years on multilateralism, global institutions, international trade, regional diplomacy and other issues. Differences over China policy are perhaps the most sensitive. Whereas Washington has adopted an increasingly strident public tone in casting China as an ideological threat, Canberra seeks a less politicised approach and has publicly supported engagement alongside a firming of China policy settings. These distinctions do not undermine our alliance solidarity. Indeed, as Australia’s internationalist outlook is more in keeping with regional preferences in Southeast Asia and the Pacific, Canberra should lean into it during and after AUSMIN 2020 — using current points of difference with Washington as markers for how Australia would like to work with the United States in the future, and how it will continue to work with the region until then. With this forward-looking agenda in mind, the United States Studies Centre has assembled a list of ten policy recommendations for the upcoming AUSMIN meeting. Drawing on the expertise of our researchers, including from their published and ongoing research projects, these recommendations combine analytical judgements with new policy thinking in an effort to stimulate bilateral discussion around a mix of achievable and moon-shot initiatives. This collection does not purport to be a comprehensive agenda but aims to provide a useful contribution to the policy planning process around bolstering the resilience of our Indo-Pacific region at this critical juncture.
United States Studies Centre at the University of Sydney
Published Date
ISBN 10
1742104975
ISBN 13
9781742104973
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