Trilateral co-operation affirmed at Kuala Lumpur talks

Foreign policy experts and strategic thinkers met in the Malaysian capital in November 2010 for the third annual ASEAN-Australia-New Zealand (AANZ) Track II dialogue.

With a population of more than 560 million and accounting for NZ$4.4 million worth of New Zealand exports (year ended June 2010), the ASEAN countries remain a key partner for this country.

Against the backdrop of a recent trilateral FTA, discussions of ASEAN as the driver of regional economic integration were of particular interest. Sessions were dedicated to major Asia-Pacific strategic issues and the relations among state powers and regional institutions against the backdrop of shifting power balances. The importance of interpersonal and diaspora links was stressed, in discussions that covered the benefits as well as challenges of cross-border people flows.

Asia:NZ executive director Dr Richard Grant led the New Zealand delegation and provided the following commentary on the 2010 dialogue outcomes.

This was the third meeting in this series. It continued the pattern of discussion of major strategic issues in the Asia-Pacific region, and also provided time for discussion of the relationship between ASEAN and Australia and New Zealand (commonly referred to as the ASEAN 10 and the Tasman 2).

There was representation from think-tanks in all ASEAN countries associated in the ASEAN ISIS framework. Australia and New Zealand brought strong teams from a range of institutions in each country.

The Australian and New Zealand ambassadors to ASEAN were invited to attend in their personal capacities.

The opening session was given over to a discussion of ASEAN’s economic competitiveness. Against the background of the recently concluded Australia/New Zealand/ASEAN FTA, this was of considerable interest.  

It was pointed out that, despite a general view that ASEAN was matching the growth rates of China and India, this was not the case.   There was uneven growth across ASEAN countries, and, in general, ASEAN’s infrastructure needed improvement.  The internal drive to an ASEAN economic community by 2015 also needed boosting.  Integration into global production networks was the key to faster and greater growth. What was happening in China, and to a lesser extent, India, was driving this, especially in the recovery from the global economic crisis (GEC).

The discussion touched also on how Australia and New Zealand fitted into, and expanded, the area covered by the FTA. There were divided opinions on the relative value of FTAs: on the whole, Australian and New Zealand participants saw them as more valuable than ASEAN contributors, although the liberalisation effects of the FTA, particularly in behind-the-border and services areas were a stimulus to ASEAN itself to get its act together.  It was clear that, in the absence of progress in the Doha round, bilateral and/or regional FTAs were an attractive option.  

Most agreed that FTAs had a strategic as well as an economic value.   In other words, there was support for the view that Australia and New Zealand added something significant to the ASEAN economies beyond being a major trading partner (for instance, ASEAN is now New Zealand’s third largest trading partner.)

People-to-people relations were the subject of one session.   The discussion focussed on youth and education in particular.   Participants wanted to see more two-way flows between the ASEAN 10 and the Tasman 2: at present, the education flows are heavily weighted in favour of in-bound into Australia and New Zealand at all levels.   More New Zealanders and Australians need to study in ASEAN countries, particularly at the tertiary level.   Leadership exchange, tourism, cultural and public diplomacy all have their part to play.   It was emphasised also that there were plenty of existing networks which could be better exploited to increase the exchanges.   Funding from Australia and New Zealand needed to be increased.
The people-to-people topic showed that all participants agreed that this was an area that was a valuable part of the relationship, but that there was plenty more to be done to get the sort of benefits for all sides that are inherent in it.

The major powers in the region

This was a central issue for all countries at the table.   The discussion focussed on the United States, China, India, and Japan.   Central to the discussion was the acceptance that China was now the centre of attention for all countries in the region, not just the ASEAN 10 and the Tasman 2.   There were various views on how China would express its power, both in the economic and the security sense, and how this impinged on the inter-action between the four major powers discussed (and also, as one participant said, Russia). 

Both the Tasman 2 and the ASEAN 10 were aware that the region was changing dramatically, and that all countries were trying to re-calibrate their relationships with the major powers.  Japan’s relative decline raised as many issues as the rise of China, and the role of the United States was being re-thought in Washington.  Most participants encouraged the United States to adopt a forward-looking stance.  

There was some doubt expressed about India’s willingness to get involved in regional discussions, preferring a policy of dealing with other powers such as China and the USA instead on a bilateral level.  The predominant view was that India was increasingly an economic player in East Asia, but not yet a significant participant in security interactions.

ASEAN’s role in regional institutions had been confirmed by the expansion of the East Asian Summit (EAS) to include the United States and Russia and by the creation of ASEAN Defence Ministers’ Meeting  Plus (ADMM-Plus). 

It was clear that the establishment of new regional institutions, or, at least, the elaboration of existing institutions, was a way to get ASEAN into a position of influence in the region.   But whether the major powers would see that ASEAN centrality was essential to the broader regional architecture was not clear.   There was some optimism expressed in the new alignment in the EAS as a mechanism for sustaining dialogue with the major powers.

Defence cooperation was a topic for discussion as well. The nature of this cooperation between Australia and New Zealand on the one hand, and ASEAN on the other, had changed a lot over the last 40 years.  The creation of the ADMM-Plus had created a new forum.   There was a feeling that security issues in the region – that is, in the wider ASEAN region – had become less concerned with direct border conflicts and more with maritime disputes, and non-traditional security issues. 

Both Australia and New Zealand had recently released Defence White papers which addressed the strategic environment seen from those countries. The Five Power Defence Arrangements in which Australia and New Zealand were partners were seen as a useful instrument of cooperation.   It would not attract other ASEAN countries to join, but it was relevant to both Malaysia and Singapore.

There was considerable interest in the item on human trafficking, a phenomenon which affects all the  countries around the table. The difference between trafficking and lillegal migration was made clear, and the ways in which different countries were differently affected by them.  There was universal agreement that these problems could not be solved except  through a cooperative approach involving source countries, transit countries, and destination countries.   The Bali Process was acknowledged as a valuable international approach.  Destination countries like Australia and New Zealand were urged to do more to explain the issues involved to their respective domestic public.

The final session on current developments in Australia and New Zealand led to a lively discussion on the attitudes in those two countries to greater involvement in the Asian region.  Australian and New Zealand participants said that public polling in their countries was largely supportive of this policy direction.   The Free Trade Agreement between ASEAN and Australia and New Zealand was a positive, particularly if it led to greater economic integration, as well as greater trade. 

Conclusions

From the discussions over a day and a half, there were certain common threads:

  • There is a strong sense that the region is evolving quickly in terms of both economic and political relations. The evolution is centred on the relations of the great powers.

  • The view that great power issues and pairs of issues can’t be dealt with on their own but need to be integrated together to get a fuller picture of regional dynamics.

  • There is no consensus about the future development of the power transition. There are still many uncertainties.

  • The importance of understanding the differing domestic environments across the ASEAN 10 and the Tasman 2, in which issues (such as people smuggling) play out.

  • The view that there was a distinct 10+2 common interest in dealing with a changing power balance in the region, and the need for ASEAN and Australia and New Zealand to exchange views on best ways of doing so, in Track II meetings like this one, as well as in traditional Track I channels.

  • Both Australia and New Zealand value the role of ASEAN in various regional institutions and issues.  ASEAN members are supportive of the involvement of Australia and NZ in the region, where both sides’ interests coincide.

  • The re-emergence of traditional security issues – alongside non-traditional ones – in the developing East Asia region, with a special emphasis on maritime security issues, traditional and otherwise.

  • The integration of the Closer Economic Relations (CER) economies - Australia and New Zealand - into the ASEAN economy would be a positive factor for all. In this process, Australia and New Zealand had to pay particular attention to the less developed Mekong countries.

This is the third consecutive year in which the AANZ trilateral has been held. The next round of discussions will occur in 2011.

The New Zealand delegation, led by Dr Richard Grant, consisted of Dr. David Capie, Senior Lecturer in International Relations, Victoria University of Wellington; Dr Jian Yang, Senior Lecturer in International Relations, The University of Auckland; Professor Robert Ayson, Director of the Centre for Strategic Studies, Victoria University of Wellington; Brian Lynch, Director of the New Zealand Institute of International Affairs, and Asia:NZ young leader Jordan Green who attended as an observer.

We would like to acknowledge ISIS Malaysia as host of the trilateral, Asialink as a key co-organiser, and Dr David Capie for his photos of the event.

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Last updated: 18 February 2011