International Herald Tribune
Australia's leadership shift
Monday, December 10, 2007

SYDNEY: By signing up to the Kyoto Protocol and attending the UN conference on climate change currently under way in Bali, Australia's new prime minister, Kevin Rudd, has signaled a noteworthy shift in Australia's foreign relations.

In recent years neither the style nor the policies of former Prime Minister John Howard and his foreign minister, Alexander Downer, endeared Australia to many governments other than that of George W. Bush. So last month's sweeping electoral victory by Rudd, a Chinese-speaking ex-diplomat with an internationalist mind-set, is expected to change much of that. He will likely reorient policy as surely as Howard did a decade ago, when Australia's emphasis shifted from Asia and multilateralism to relations with the West and "coalitions of the willing."

Change there will surely be, but it is important to recognize the limits. Australia's ending of official denial of climate change is significant and leaves the United States ever more exposed on the issue. The shift adds to the likelihood that developed countries will eventually make sufficient efforts to reduce their emissions in order to persuade China and India to recognize their global responsibilities.

However, Rudd's belief that he can bridge the divide between developed and developing nations is presumptuous. It will not be easy for him to make Australia sharply cut its own very high emissions and reduce dependence on coal - an industry with strong political connections in his Labor party - at a time when the country has a chronic trade deficit.

On Iraq, Rudd will oversee a gradual exit of Australia's combat troops, but that would probably have happened anyway. Howard's troop commitment was mostly symbolic and, with U.S. support for the war at such a low, Australia's departure will not damage relations. Afghanistan could be more of a problem; Australian deaths there are eroding popular support at a time when more troops may be needed.

Relations with the United States will shift only slightly. Australia's sense of dependence on its U.S. alliance runs deep. Although Howard was perceived to have gone too far in following Bush, there is no electoral mileage in anti-Americanism. A Democratic Washington would find Rudd more on its wavelength than Howard. But he will face difficulties in how to balance relations with the United States, China and Japan.

Australian dependence on the Chinese market for its commodities is high - and rising. Yet China's rise also gives Australia cause to reaffirm strategic links with the United States and Japan, and develop them with India, as Howard had been doing.

Rudd may try to play down Beijing's concerns that Canberra is part of a China-containment coalition. But China's expectations, and Japan's fears, that Rudd will prove especially friendly to Beijing are unlikely to be realized. Rudd's knowledge of the language and a stint as a diplomat in Beijing do not necessarily lead to admiration for China's government.

Indeed, China could become a new focus of Australian fears, particularly if its state investment funds start buying Australian resource companies. Rudd is no radical on economic issues but nationalism lurks below the surface of his Labor party. An offer by state-owned Sinosteel for Midwest, a middle-rank iron ore miner, was announced last week. Moreover, a Chinese bid for the mining giant Rio Tinto, which, though London-based, has a Sydney listing and huge local assets, is a possibility that could thwart the $150 billion offer by Melbourne-based BHP-Billiton.

A free-trade agreement under negotiation with China is making little progress and, from China's perspective, appears more political than commercial in intent. A Rudd government may prefer to push multilateral trade issues. Australia's bigger interest is in global arrangements and in seeing that it is not excluded from any regional arrangements linking Northeast and Southeast Asia.

Closer attention will again be paid to Asia generally, but the Northeast will continue to get more focus than the Southeast, apart from Indonesia. The Association of Southeast Asian Nations is fragmented and has soiled its own nest over Burma. Better relations with a democratic Indonesia should in theory be possible, particularly if Australia eases its war on terror rhetoric. But historical baggage, particularly over predominantly Melanesian Timor and Papua, fears of Islam and negative media attitudes on both sides, will keep the two more distant than they should be.

Melanesia will remain a difficult region and one where a new policy is likely. Australia's close little neighbors will remain a headache for Canberra.

Overall, Rudd's room for policy maneuver is limited. But given his background and interests he will try to make the most of what there is. For now just a change of attitude will go a long way.