** CHECK AGAINST DELIVERY**
Thank you very much indeed, thank you very much for the warm welcome and the overly generous introduction. It's great to be here, particularly on this occasion of the Jeff Bleich lecture.
Jeff Bleich is exactly the right patron you need for this centre, because he is not only a Democrat politically, but he has spent his whole life committed to democracy. In all of his work, whether as the American Ambassador to Australia, his work in California, and state politics and federal politics in the United States, he understands the DNA of politics, the DNA of democracy and has always been in all the years that I've known you Jeff, a great admirer of the singular success of Australian democracy, something we have to cherish.
That's not what I'm going to talk about, I wanted to talk to you tonight about how we survive this new world of disorder that we are confronted with. And you may well ask what's new about it? Hasn't the world always been disordered? Well, that's true to some extent, but we are facing a very very different reality with our great ally and friend the United States of America.
And we have to be clear eyed about this.
For over 80 years, here in Australia and in many other countries, democracies that have been allies of the United States, we have been able to say that we shared the same values as the United States. We didn't always share the same interests. In fact, no one ever shares the same interests, but we shared the same values.
I cast my mind back to 2017 just looking at a statement of values, and our foreign policy white paper, which curiously enough is actually the most recent foreign policy white paper. But I think if you were to write one today, if the current government were to write one, the objectives it set out wouldn't be that different. Do you know of the five objectives that were set out in 2017, in 2017 we would have said the United States more or less shared those objectives because they spoke to the importance of free trade, and open markets and resisting protectionism. They talked about the need to maintain the rule of law and to ensure that strong states couldn't do what they will, and weak states suffer as they must. They talked about the need to support the development of the Pacific and Timor-Leste.
You couldn't say Donald Trump is committed to any of those, in fact he is ‘Tariff Man’, he believes in protectionism, he absolutely does not subscribe to the rule of law, quite the contrary. He believes, and says he believes - and in this respect he's very honest and upfront - he says ’might is right’ and he not only says that repeatedly, he says it in his social media feed. He says his golden rule is “he that has the most gold makes the rules”. He has no concern about using American power, be it economic and access to the American market, or be it military, to advance the singular agenda and interest of the United States. After all, what is his big slogan? “America First”.
So the only one of the five objectives that were set out in that white paper, and they're bit too long to read them out to you or recite them to you, but the only one that you could say today that the United States would share is the one about keeping Australians safe from terrorism. I assume we're all still on the same page there. But the rest we are not. And this is a very very big, sobering issue for us.
We have to recognize that as a medium-sized country, we have a vested interest in the maintenance of what we used to call the international rules based order. In other words, a set of arrangements and understandings and norms and institutions which were designed to prevent the powerful doing whatever they wanted. That is what the United Nations was set up to do, that's in the charter. And there is any number of institutions that are designed to achieve the same thing.
Now, the United States created, sponsored, orchestrated all of those institutions after the Second World War. This international rules-based order was largely, or in large part is probably a better way of saying it, in large part an American creation. But now it is being denied by its principal author. And it would be nice to think, comforting to think, that this will all vanish when Donald Trump's second term comes to an end. And I don't want to get into whether he can find a way to run a third for a third term, let's assume he can't.
Again, this is something we can discuss with the panel later. But when you look at the young people around him, including JD Vance for example, you're looking at people who say quite clearly, and Vance has said this just in the last 24-48 hours in the wake of the American bombing of the Iranian nuclear installations, he is saying that the United States will use its might to achieve its goals, and do so with a singular focus on pursuing its own agenda.
Now, if that agenda is one you agree with, if for example, like I suspect most of us, you think it is a really bad idea for Iran to develop a nuclear weapon, then you might say I'm pretty uncomfortable about the way this happened but the outcome was good. But, we have to recognize that we're living now in a world where ‘might is right’, and where our our great ally and partner who disavowed that proposition in the past, now proudly says they share that view of the world. So what is the difference then in the world view of Donald Trump and Vladimir Putin? They've got different interests, for sure, they've got their own agendas. But each of them believes that ‘might is right’. Remember when Putin invaded Ukraine, and there was that brief period, didn't last very long, when it looked like people were saying the Russians were just going to sweep through and it'll all be over in a couple of days. Donald Trump, not president then of course, described it as a “genius move”. Why? Because he thought he would get away with it. The fact that it was illegal, aggression, it was a breach of every relevant article in the charter of the United Nations was beside the point. But from Trump's point of view, Putin was looking like a winner, and he was going to get what he achieved.
So that creates a very big problem for us here in Australia.
We now have in the US an ally with whom we no longer share the same values, at least as long as this view of the world is pursued in Washington, even though we do continue to share many interests. Again, not exclusively, we never have. And we have very close relations with the United States, and they will continue. They are commercial, they're personal, they're strategic, it's a whole web of relationships, much more than just a couple of leaders getting on or not getting on.
But how do we reposition ourselves? How do we survive in the new world disorder?
And the answer, I think, has to be found in ourselves. We have to recognize that ultimately the only people we can depend on are ourselves. Australia's sovereignty has never been more important than it is today.
There was a time, and people will often try to draw comparisons with this era, when Australia looked to Britain for protection. They will say "oh well we've always looked to a bigger power to protect us." That is actually not a reliable comparison. In the days, and I'm talking about the 1930s and 40s and even into the 1950s, in the days when Australia looked to Britain - and of course felt disappointed when Singapore fell in 1942 - most Australians saw themselves as British and they saw Australia as part of Britain. So they weren't looking to a foreign country to be altruistic and protective of us, they were looking essentially to themselves. They saw Australia as part of a greater Britain. Menzies in 1948 said the boundaries of Britain are not on the Kentish coast but at Invercargill, the southern tip of New Zealand he was talking about there, and Cape York. He was talking about Australia as being part of Britain.
In 1953, Menzies again described the Crown, the Monarchy, as being the symbol that wherever we are in the world we are one people, one British people. So that was a very different world. In a sense, Australians looking to Britain in the 1940s was not that much different to South Australians looking to the Commonwealth of Australia, saying "we are part of a larger whole” and that's why we can look there for our solidarity, our protection, our mutual defence.
We don't have that relationship with the United States, nor do we seek to have it. The United States now, through Donald Trump, is looking at all of its alliances and relationships through that ‘America First’ prism. So just as the United States is putting America first, so we have to put Australia first, and look after ourselves.
So what's the answer to this?
Well let me deal with a couple of examples of this. Ultimately, we have to work with others. If you look at trade for example, back in 2017-18, I was able to persuade Trump, and it took a while, a lot of discussions, but to be fair, they were very intelligent discussions and transactional ones. But I was able to persuade him not to impose tariffs on Australian steel and aluminium because I was able to point out that he had a very beneficial trade relationship with Australia. We have no tariffs, no barriers to investment, no quotas, and the Americans had a big trade surplus. Trump regards a country that has a trade surplus as being a winner, and if you have a trade deficit you're a loser, so he missed out on Adam Smith when he was studying at Wharton.
I was able to persuade him about that, and we went through all the intricacies of the economics of exporting steel to America. But now, we're now faced with a different environment. Our current government sought to make the same arguments, and Kevin Rudd, Albanese and co, and Don Farrell - your fellow South Australian - sought to make those arguments, and they're just as good today as they were then. But the view now has changed. It doesn't matter whether the relationship is beneficial or not. Everybody is going to have to pay a tariff for the privilege of entering the American market, so that is why we now have 10% tariff on everything, and then on steel and aluminium 25% although it's just recently been increased to 50%.
These are extraordinarily hostile things to do to a country with whom you have such close relations, and indeed where you have a free trade agreement. But if you think that's bad, how do you feel if you're a Canadian? It's not so long ago, just a few weeks ago, that Donald Trump was saying Canada should be the 51st state and really shouldn't exist as an independent country. He said the border between Canada and the United States was a fiction. Who does that sound like? Isn't that what Putin says about Ukraine? It really shouldn't be an independent country, the border was just a line drawn by Lenon, it was all a terrible mistake years ago. And of course, massive tariffs imposed on Canada and Mexico in breach of a free trade agreement, long-standing free trade agreement, but one that was renegotiated and re-signed by Donald Trump himself in 2019.
So this is a very different type of administration.
Now in terms of trade, we can't find an alternative to the American market somewhere. And to be honest, our trade, our exports to the United States, are important to us but they are a relatively small part of our trade profile overall.
But what we can do is not give up on free trade. In the very generous introduction, thank you again, you mentioned the Trans-Pacific Partnership. That is a good model for the type of thing that we can do. The Trans-Pacific Partnership was a free trade deal, a very ambitious, modern free trade deal that dealt with a lot more than just lowering tariffs. It dealt with labour relations, it dealt with environmental issues, it dealt with behind the border subsidies, it dealt with intellectual property, data protection, it’s probably the most modern ambitious trade deal extant in the world today. It was an Obama era agenda item, and Barack Obama regarded this as a key part of his pivot to Asia because the parties to this trans-pacific partnership were 12 countries including the United States, and all the major economies around the Pacific Rim: Canada, Mexico, Chile, Peru, Australia, New Zealand, Singapore, Malaysia, Vietnam, Japan and you know and others, Brunei. Tiny Brunei was there. The only major economy in that rim that was not included in it, apart from China of course, was South Korea. But it was a very ambitious deal.
Trump pulled out in the beginning of 2017, and everybody assumed that the deal was completely dead. I felt it wasn't. I was encouraged in this by John Key, the New Zealand Prime Minister. I got mocked for saying it wasn't dead. People were talking about the famous Monty Python sketch with the parrot quite regularly, saying I'm effectively saying ‘it's not dead it's just sleeping’. Bill Shorten said I was on a vanity exercise. He said that about just about everything I did of course, he may have had a point. But I was able to persuade Shinzo Abe to stick with it. He was very very worried about what reaction Trump would have if we kept it going. I was able to persuade him and basically said ‘out of the room out of the deal’, and so we should keep going, and we did. After a few ups and downs, and twists and turns, it was signed.
We lost one country, the US, and we picked up two adjectives so it's now called the Comprehensive and Progressive Trans-Pacific Partnership, something the Canadians insisted on. I have to say for reasons nobody ever really understood, but it was one of those you could must imagine, one of those whatevers moments. Whatever you want, just can we just move on. And that's continued. The United Kingdom has now joined it, and it's an example of America's friends and all of the parties to the TPP now CPTPP were American friends, not all allies of course, but friends, it's an example of what you can do without the United States. So you don't need American leadership for everything.
We have benefited mightily from American leadership but we can do a lot of things with others. Lee Kuan Yew famously said in the 1960s, he used to refer to a Chinese proverb that the big fish eat the little fish, and the little fish the shrimps. He said: well Singapore's a shrimp, so we're going to survive by being a very poisonous shrimp and we're going to make a lot of fishy friends, and we're going to give ourselves our security through our alliances - our alliances and our own ability to defend ourselves.
And the so the CPTPP is a good example of what middle powers can do, that's to say powers other than the superpowers of China and the United States, can do to maintain the values that we still believe in even if the US does not. The value of that agreement has been seen recently with the European Union now seeking to form a close association with the CPTPP. You've seen, and again your very talented Senator Don Farrell has been at the lead here, the European Union who we couldn't get a free trade deal done with recently, it fell over a couple of years ago, an initiative started during my time in fact, but it founded, now the Europeans want to come back to the table. And we're starting to see countries, other than the United States, continuing to work together to pursue those values of free trade and open markets.
So that is, on the economic side on the trade side, the answer is: we have to stand up for ourselves, we have to work with like-minded partners, but we must not just assume that free trade is over. Because, frankly, we have a massive vested interest in free trade. Protectionism makes no sense for Australia, it never did. But it certainly doesn't now. That's why it has, by and large with a few bumps along the way, it by and large has strong bipartisan support.
Let me turn to the more difficult and complex area of security.
The United States has become in terms of security, and again this is overt, this is not a criticism of the United States, this is what it is saying to its allies. It is both more demanding and less reliable. You see this with JD Vance for example, a very good example, he gave an interview in which he talked about Europe and he says Europe should not be a permanent vassal of the United States, security vessel of the United States. And he praised the former French president Charles de Gaulle, General de Gaulle, for having insisted in the 1960s that France retain complete sovereign autonomy over its own nuclear deterrent.
In fact, pulling France out of the NATO integrated command - France is still part of NATO, but French troops if they go into combat take their commands from French officers not from an integrated NATO command - and Vance said de Gaulle was right. In other words he's saying, and Trump has exactly the same view, he's saying not only do you need to spend more, you need to stand on your own two feet.
For the Europeans there is a meeting going on in Brussels now, the Hague I should say, the NATO meeting, the challenge is for them to spend more. Now some people might say ‘well that just means they've just got to spend more, buy more stuff from the United States’. The message actually is: stand on your own two feet because you can no longer count on us. The twist with the Trump message is different from what we have seen in the past because every American president including Jeff's friend Barack Obama has said to the Europeans you've got to spend more, you’ve got to do more, you're not doing enough, why are we doing all this heavy lifting? And that's been a fair criticism. But what Trump is saying is not only you must spend more and do more and stand on your own two feet, not because it's unfair to us, but because you might be on your own. You can't count on us in the way you have. And just to make that perfectly clear, look how Trump has dealt with Ukraine.
This is the war that he was going to bring peace to in the first day, hasn't yet done that, but he hasn't sought to achieve it by bringing pressure to bear on the more powerful aggressor the country that is doing the wrong thing – Russia. You'd think that's what you do. You’d put pressure on Putin to back off. Instead, he's put pressure on Zalinski to the point of humiliating him in the office and cutting off for a period military aid and intelligence sharing to force Zalinski to take whatever deal, the best deal he can get from Putin. So the Europeans have got the memo.
They now have to do more themselves.
They have to be very careful about sovereignty.
Portugal has cancelled an order for the F-35 joint strike fighter because this is American plane, and one of the reasons is because they recognize that they can't fly those planes without continuous American support. People argue there's a kill switch in the F-35 that the American prime could just literally turn them off at a whim at the direction from the American president. That's always denied, but let's assume that's not the case, the Israelis thought it might be by the way, they've got a special deal so their F-35s they can manage themselves. Even if it's not the case, even if there isn't a kill switch, certainly you couldn't run them for long without continued software upgrades and support.
Sovereignty becomes critically important where allies have to be able to do more, and do more in a sovereign way. They can do it. If you look at the European theatre, as Donald Tusk the Prime Minister of Poland often asks: why do 500 million Europeans need 330 million Americans to defend them against 140 million Russians? And the only reason is because they haven't spent the money and they haven't got their act together.
The Europeans are getting the memo and they have the opportunity to defend themselves.
What about us?
I might just conclude on our situation.
Very sadly, Australia sacrificed, reduced its sovereignty considerably just at the time America was beginning to become less reliable. This is with the AUKUS deal. At the time the French Foreign Minister, Le Drian, said "Australia has sacrificed sovereignty to gain security but we'll end up losing both." Well let's hope we don't. You can understand he was very unhappy, but it's a prophecy that troubles me. Because we have gone from a situation where we were building a submarine force in Adelaide with complete control over the IP, we'd acquired all the IP, we were in command of it. Yes they might have cost more, yes they might have taken longer, but if they had it would have been entirely our fault. We couldn't have blamed anyone else for that. That was cancelled, and we now have the AUKUS deal between the UK and the United States, and as you know the central part of that is the acquisition of nuclear powered submarines of naval nuclear propulsion.
You can't buy submarines of any kind off the shelf, but nuclear powered submarines take a long time to build. And they represent the single most valuable part of the United States Navy's fleet. Surface ships as you've seen have become more vulnerable than ever. Look at the Ukrainians. They have succeeded in effectively beating - and winning the naval war in the Black Sea and they don't actually have a navy- with drones, with autonomous weapons, the Russian Navy’s ships have either been sunk or are bottled up in a safe port. So submarines are very very valuable.
The deal with AUKUS involves, in the long term, Australia building - and in Adelaide so that's good - nuclear powered submarines in partnership with the United Kingdom, essentially on a British design. But that design is not yet complete. The most optimistic scenario would be the first boat out of 12 would be available in the early 2040’s. I think all of us who've had experience of defence projects would say you can add a lot of billions. Whatever the number is, add many billions to it, and whatever the years are add many years to that. So this SSN-AUKUS is a very long way off and I'm sure the students here will live to see it either fulfilled or not, but I suspect some of us will never know.
So in the meantime, what do we do between the retirement of our existing Collins class submarines which are getting older, and that was the capability that the Attack Class, the subs we were building with France was going to fill. What do we do? So the proposal was for the Americans to sell us three and possibly five of their Virginia class submarines which are their current Attack submarines. These are really the best, the most important assets in their fleet. The problem is that America is short of these submarines. They have about 20 less in their fleet than they believe they need. The older Attack submarines, the Los Angeles Class, are retiring faster than they can build new Virginias to replace them. Their current rate of production is, according to the Navy, average of 1.1 a year. It's been between 1.1 and 1.2 for quite a while, it needs to be well over 2 to be able to meet the US Navy's needs and our needs.
So this was a risk. The American Congress was so concerned about it that they set that risk out in the legislation. It actually says in the legislation that while the President is authorized to sell submarines to Australia, he cannot do so unless he is able to certify to the Congress, prior to the sale, that the sale will not degrade the underwater capabilities of the US Navy, and a whole bunch of other things as well consistent with American foreign policy and so forth. But this is the key one, and this is the point that has been of great concern to many people in Washington including the Under Secretary for Defence, Bridge Colby, who is undertaking a review of AUKUS at the moment. He has simply made the point if these are the most valuable assets in our navy, the most survivable assets in our navy, if we are already short of them and if we are producing half as many of them as we need to replace retirements, how can we possibly transfer any of these vital assets to another country, no matter how friendly and fond we may be of that nation?
That is a deal, ladies and gentlemen, that our governments, the Morrison government, the Albanese government, signed up to.
What are the Americans getting out of this?
They're getting a big submarine base and a dockyard to support submarines in Perth, which will cost us many billions of dollars - $15 billion, if not more. They're getting $3 billion in cash, these are all US dollars, to support their submarine industrial base. But they do not have an obligation to transfer us any submarines unless effectively they can spare them. And so that is where we've got to.
Now, at this time when we need to be more sovereign, more independent, we're in a position where we are likely to end up with no submarines. Because there will be a big gap between the retirement of the Collins and the arrival sometime in the 2040’s we hope of the new submarines with Britain. We will be this island nation that's been talking about the need to have new submarines for decades, and we could very likely, I would say almost certainly, end up with no submarines of our own. And the challenge that we face is what are we going to do about it? Whether you talk to the Defence Minister, Mr Marles, you talk to the Admirals and so forth - you would have seen some of them on Four Corners the other night - when you say "what are you going to do, what's your plan B?" They give you a glassy eyed look and say "there is no plan B, we're steaming on with plan A."
Unfortunately, Plan A is not under our control, and this is the problem of abandoning sovereignty.
The only people we can count on are ourselves in the final analysis. And in a time when our values are no longer shared with the United States, in a time of the most unpredictable time we've seen for decades in international affairs, optionality, sovereignty, the ability to control our own destiny is more important than ever. And regrettably we've sacrificed that.
The challenge for us, and our challenge for our government, is to reclaim Australian sovereignty. It's not going to be easy.
This is not an anti-American thing, let alone an unamerican thing. The American administration is inviting us to do this. No Australian government that stands up for itself and defends its sovereignty could be criticized by an administration whose vice president praises Charles de Gaulle who did exactly that for France.
Remember, there are two powers in Europe, in Western Europe, that have nuclear submarines and nuclear weapons - France and the United Kingdom. Britain’s – both its submarine propulsion technology and its nuclear deterrent - are completely dependent on American technology support and concurrence. It is not a genuinely sovereign capability. France’s is not. And what is the country and the president that is being praised by JD Vance? Not the British prime ministers that shared their sovereignty with the United States, but the French president who stood up for his own nation.
In an age of ‘America First’ we need to be thinking about Australia first. Sovereignty is more important than ever, and we need to reclaim it. And I hope that particularly our younger guests here today as they move on into great affairs of state and politics, will focus on that because we're counting on you and you're counting on us to stand up for our country, Australia.
Thank you very much.
**ENDS**
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