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Perspectives on Australian foreign policy, 1994Scott Burchill aa Lecturer in International Relations, School of Australian and International Studies , DeakinUniversity ,Published online: 20 Mar 2008.

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Australian Journal of International Affairs, Vol. 49, No. 1, May 1995

Editorial Note

In 1993 this journal instituted the practice of publishing annual reviews of key issues inAustralian foreign policy. The central feature of Keating's foreign policy since March 1993has been the vigorous pursuit of his conception of Australia's core interests by forging closer,interlocking links with key Asian economic partners and building multilateral institutionallinks to underpin bilateral relationships. Senator Gareth Evans also has laboured in the widerinternational vineyard, developing both regional and world-wide applications of the notions ofcommon and cooperative security propagated in his 1993 Blue Book on reform of the UnitedNations. In 1994, Scott Burchill argues, the logic of Labor policy was the elevation ofeconomic and security concerns at the expense of human rights.

Joan Beaumont

Perspectives on Australian Foreign Policy, 1994

SCOTT BURCHILL*

Of the many diplomatic events and issues in 1994 that are worthy of review, I will confine myremarks to three topics of particular significance for Australian foreign policy: the APECsummit, Australia's human rights diplomacy and the 1994 Defence White Paper.

APEC: a free trade fraud?

For the Australian government, the most important diplomatic event of 1994 was the Asia-Pacific Economic Cooperation (APEC) heads of government summit held at Bogor inIndonesia in November 1994. Holding the second heads of government summit in Indonesiawas designed to placate the Association of Southeast Asian Nations (ASEAN) (especiallyMalaysian) fears that APEC was being hijacked by its Caucasian members, most notablyAustralia and the United States, where the first heads of government meeting had been held.Unfortunately, the venue for the meeting where the leaders were to discuss closer regionaleconomic integration but significantly not human and labour rights, was not well chosen.Amnesty International (USA) reports that, in what Indonesian authorities described as a pre-summit 'cleansing' (Operation Bersih), there had been widespread imprisonment of labouractivists, the arbitrary arrest of political dissidents — some of whom were tortured — and a'dramatic escalation in unlawful killings' by the government. This attempt to silence critics ofIndonesia's human and labour rights record passed virtually unnoticed by the seventeen visitingleaders, though it soon backfired when a number of East Timorese students jumped the fence ofthe US embassy in Jakarta to protest against Indonesia's continuing occupation of Portugal's

* Lecturer in International Relations, School of Australian and International Studies, Deakin University.

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former colonial territory.1 The pre-summit crackdown was described by the Opposition'sforeign policy spokesman as 'masterful', and occurred only weeks after Prime Minister Keatinghad congratulated President Suharto for producing a 'tolerant society' which had brought'stability' to the region.2

To the supporters of free trade, the outcome of the summit was 'probably the mostsignificant achievement of post-war Australian diplomacy'. To its critics, the rhetoricsurrounding Australia's trade policy at Bogor displayed 'a jejune combination of bookishnessand zealotry'.3 Just how the same event can be regarded in such diametrically opposite wayswill be the principal subject of this section.

If the reaction of the Australian media is any kind of indication, the second APECheads of government summit held in Indonesia was an extraordinary success. The eighteenmember states öf APEC, with a combined population of 2.2 billion, gross output of US$12trillion and comprising 41 per cent of world trade, declared their commitment to 'free and opentrade and investment at the latest by 2020'. This would be accomplished in a two stage process,with industrialised countries reaching the target of free trade by 2010 and developing countriesgiven an additional ten years to complete the task. It was up to each member to decide whichcategory they fell into, and the means by which each economy would reach the goal was put offuntil the third heads of government summit in Osaka twelve months later. The declarationsigned at Bogor was a non-discriminatory agreement without internal preferentialarrangements. 'Free trade' was left undefined.

With very few exceptions, the Australian press greeted the Bogor declaration withunrestrained euphoria. It was 'a moment in history', an 'historic victory for free trade' and an'absolute triumph' for Australian trade diplomacy.4 The 'fight for free trade', a battle socourageously waged by Prime Minister Keating, had decisively turned in Australia's favour.Australia could now 'leap' to collect 'the prize of free trade', with 'the key to our future' secureand the population 'all set for a free trading bonanza'.5 Typically effusive in its praise was theWeekend Australian which editorialised that the 'tremendous opportunities' afforded by theBogor declaration would require 'bipartisan political support, union cooperation andcommunity sacrifice' if business was to profit accordingly. 'There will in all likelihood be bigjob losses ... and some social dislocation as unemployment forces some families to relocate ...and workers [are forced] into retraining for new occupations', but this is unavoidable because'the Australian worker will be competing in a less regulated and protected environment'.Recalcitrants 'in declining industries' who fail to appreciate the beneficence of APEC 'will tryto sniff out subsidies and deals', but governments should resist 'pandering to special interests'otherwise the 'rewards for enterprise' will be lost. Needless to say, all 'impediments to growthand competitiveness' such as 'work rules and restraints on the operation of capital will have to

1 Australian (4 November 1994). See also Tightening up in Indonesia Before the APEC Summit, Human RightsWatch/Asia (October 1994) and Indonesia: 'Operation Cleansing', Human Rights and APEC (London: AmnestyInternational, 1994).2 Australian Financial Review (28 November 1994); Australian Financial Review (17 March 1994).3 M. Baker in the Age (16 November 1994); E. Jones in Australian Financial Review (10 January 1993).4 Australian (16 November 1994) (editorial and headline); Australian (17 November 1994).5 Australian Financial Review (9 November 1994); Australian (14 November 1994); Age (7 November 1994) (editorial);Australian (15 November 1994); Age (16 November 1994).

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be reviewed'. An historic challenge indeed if we remember that 'the fight for free trade is neverwon'.6

As one of the principal 'Bogor visionaries', Prime Minister Keating joined the chorusof celebration, declaring the outcome to be 'a triumph for the Asia-Pacific, a triumph for theworld trading system, and a triumph for Australia'. It was a result 'beyond our thought and ourimagination ... the stuff we were only dreaming about two years ago'.7 He was confident that'we will come to see the great post-war changes such as the Bretton Woods agreement or theestablishment of the International Monetary Fund and the World Bank in the same terms aswhat has happened today'. Given his belief that the Bogor declaration was 'the most importantthing I have ever done', it came as no surprise to one observer that the Prime Minister 'lookedlike a new father' ready to celebrate 'the birth of his dream'.8 He had 'seen the future' and'seized it'. Having passed the 'free trade test', Mr Keating's 'place in Australia's politicalhistory has been sealed': this was the dawning of a 'new age'.9

The Prime Minister went on to specify the benefits which would flow to 'Australia'from the second APEC heads of government summit. As a result of the Bogor declaration,Australia would receive A$7 billion in additional income each year and a boost in its economicoutput by 3.8 per cent: this is said to be twice the size of the benefit expected to accrue from thesigning of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) inDecember 1993. An extra 70,000 Australian jobs would also be created as the barriers to freetrade are lowered and Australia's exports to the region increased. Just as importantly, at Bogor¿Australia secured a permanent seat at perhaps the world's most important diplomatic table.Australian prime ministers could now look forward to annual summits with the leaders of themost dynamic economies on earth.10

Before subjecting the Bogor outcome to more critical scrutiny, it is worth brieflyrecalling APEC's short history. By the late 1980s Australia needed to be more fully integratedinto the Asia-Pacific region, where the world's fastest growing and most economicallydynamic states were now located. Given that by 1990 Australia's exports to Japan were morethan two and a half times its exports to its next single-country market (US) and five times itsthird (South Korea), it was obvious that Australia's economic future would become increasinglytied with Asia's.11 The Asia-Pacific region now represents seven out of Australia's ten largestexport markets, it is the source of a quarter of its foreign investment, and is the site for over 20per cent of Australia's overseas investment. In addition, Asians now account for 50 per cent ofAustralia's immigration intake, 43 per cent of its tourist trade, 15 per cent of its tertiarystudents and comprise over 4 per cent of Australia's overall population. Recognition by theAustralian government of its own region's economic importance was belated, but wasnevertheless eventually symbolised in 1989 by the formation of the APEC group of fifteenregional economies which were committed to 'an open, multilateral trading system in theinterests of Asia-Pacific and all other economies' and reducing 'barriers to trade in goods and

6 Weekend Australian (19 November 1994) (editorial); Australian (25 May 1994) (editorial).7 Australian Financial Review (9 November 1994); Australian (16 November 1994); Australian (17 November 1994).8 Australian (17 November 1994); Australian Financial Review (16 November 1994).9 Australian (17 November 1994); Australian Financial Review (16 November 1994); G. Barker in Australian FinancialReview (16 November 1994); Age (16 November 1994).1 0 P. Keating in Australian (17 November 1994).1 1 South Korea has recently (February 1995) displaced the United States as Australia's second largest export market

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services among participants in a manner consistent with GATT principles'.12 A market of twobillion people producing half the world's output could not be ignored forever.

APEC has already passed through a number of phases in its short life. In 1989 it wasostensibly sold to the world as an OECD-type organisation designed to promote both regionaltrade liberalisation and closer economic links between Australia and the fast growing EastAsian economies. The unstated, agenda of the initiative, however, was that if the UruguayRound of multilateral trade negotiations collapsed, APEC possessed the embryonic structure ofa future trading bloc under Japanese leadership. Hence the United States was initially excludedfrom membership of the organisation. Once the United States insisted on joining APEC, andwas accepted for the inaugural ministerial meeting in September 1989, APEC's secondarypurpose was effectively off the agenda.

Since then APEC has evolved, at least in theory, into an open ended free trade zonewith a growing bureaucracy to be based in Singapore and a widening trade and economicagenda which is to be regularly discussed at the heads of government/economy level. From anAustralian perspective APEC is currently seen as a 'GATT overlay' which can work inharmony with the multilateral trade talks, promoting global liberalisation and, some time in thefuture, provide a broad overarching framework that will encompass both an expanding NorthAmerican Free Trade Agreement (NAFTA) and the ASEAN Free Trade Area (AFTA).13

Whether it is possible to have 'free trade' within a regional organisation which does notdiscriminate against non-members, however, is a question that has yet to be answered. AllAPEC members agree that the organisation should not become a trading bloc like the EuropeanUnion, with a common currency and tariff walls to keep out the rest of the world. But the ideaof 'open regionalism' which does not create a preferential trade grouping is difficult toimagine. The alternative, which would give the Europeans a 'free ride' into the Asia-Pacific isequally unattractive to sonie of the major players, particularly the United States.

By 1994 there was already a growing division within APEC between 'developedmembers' (for example, Australia and the US) who were pushing for an early free tradeagreement liberalising trade and investment, and 'developing members' (for example, ASEAN)who were less enthusiastic about lowering trade barriers, and who would prefer to emphasisedevelopment and technical cooperation within the group.14 Although it refuses to explicitlycommit itself, the Australian government still appears to favour preferential trade liberalisation(discriminating against non-APEC members) over a non-discriminatory agreement.15 Attemptsby Australia to consolidate APEC by renaming it an 'economic community' in time for the firstheads of government summit in Seattle were met with fierce resistance by 'developing'members of the organisation, particularly Malaysia.

12The idea of regional economic cooperation is not new, having been previously suggested by Japanese Prime Minister

Nakasone and former US Secretary of State George Shultz, amongst others. The credit for APEC's formation, however, isshared by Prime Minister Hawke who first announced his 'regional economic initiative' in Seoul in January 1989 andmembers of his staff' most notably Sandy Hollway and John Bowan. Andrew Elek, an officer in the Department of ForeignAffairs and Trade (DFAT), also made an important early contribution to APEC's development The fifteen original membersof APEC were later to be joined by Papua New Guinea, Chile and Mexico.

13 For a discussion of the pros and cons of Australia joining AFTA through an integration of the CER with New Zealand,see Australian Financial Review, Age, Australian (8 April 1994).1 4 Australian (5 April 1994). For a discussion of the lack of enthusiasm within ASEAN for trade liberalisation, see H.McQueen in Australian (16 April 1994).1 5 Australian (7 February 1995);,Age (21 February 1995).

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Despite its initial objectives, APEC is said to play an important role for Australia bylocking Japan and the United States into the one free trading structure. However, fears sharedby Australia and a number of developing economies in the region that they could be caught inthe crossfire of a trade war between Japan and the United States have only slightly eased, andthere is little evidence that APEC yet provides a 'circuit-breaking' structure for resolvingongoing US-Japan trade tensions. Similarly, APEC apparently has no role to play in resolvingthe dispute over intellectual property rights between the United States and China, whichthreatens to bring about another 'trade war'. The first heads of government summit (withoutMalaysia's Prime Minister Dr Mahathir), mistakenly held in Seattle in November 1993, waslargely the achievement of Prime Minister Keating who believed the organisation required theinvolvement of heads of government, or in the case of Taiwan and Hong Kong 'leaders', if itwere to be effective in promoting trade liberalisation: according to the Prime Minister, APECneeded the 'horsepower' of political leadership if it were to achieve meaningful progress in thisdirection.

Despite the almost universal praise with which the Bogor summit was received in theAustralian media, the few criticisms of the declaration which emerged centred on the hubrisand hyperbole of the Prime Minister. Neither Mr Keating nor any Australian official couldexplain exactly how the estimates of benefits to Australia flowing from the declaration werereached. Regardless of how imprecise the declaration from Bogor was, it has been assumed thatnew investment and expanding exports would flow axiomatically from a broad regionalcommitment to the goal of free trade. Australian businesses would simply factor into theirinvestment and production estimates the prospect of regional free trade being realised sometimewithin the next twenty five years. Without a roadmap or any firm signposts indicating howAPEC free trade would actually be implemented, business is expected to commence the journeyto a free trade nirvana. Given the fact that few Australian business people had even heard ofAPEC, this was an unlikely scenario to say the least.

No definition of 'free trade' was offered at Bogor, with some commentators suggestingthat anything between 0 per cent and 5 per cent tariffs would technically qualify as free trade:the implications of this for Australia's textile, clothing and footwear (TCF) and motor carindustries remains unclear. Little, if anything, was said about removing non-tariff barriers anddevices such as 'voluntary restraint arrangements', which are frequently used by advancedindustrial states to evade free market rules. It was also difficult to see how the Bogordeclaration would assist Australia to overcome its biggest trade headache — agriculturalsubsidies used with such devastating effect by Europe (Common Agricultural Policy) and theUS (Export Enhancement Program). If anything, increased US subsidisation of its dairyindustry in early 1995, and the threat this poses to Australian markets in the region, againsuggests that the commitment of great powers to free trade is honoured more in the breach thanin the observance.

The means by which states would reach their free trade targets was put off until thenext leaders summit in Japan (November 1995), so the Bogor declaration should be seen at bestas a broad statement of intent rather a binding agreement. Without these details, includingcompliance provisions and sanctions for non-compliance, it is difficult to believe that thebusiness communities of the Asia-Pacific region will start to 'gear-up' for free trade. The valueof a statement of principles which has an effective lag time of 25 years before over half thesignatories are required to meet their goals, with target dates which at least one member(Malaysia) regards as non-binding, needs to be seriously questioned. For some APEC members,

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the 'historic commitment to free trade' actually extends rather than contracts existingtimetables for trade liberalisation.16

There is still no agreement amongst APEC members about the final form theorganisation will have and, since the euphoria of the summit, 'overseas commentators havequestioned the sincerity of some Asian leaders, claiming they joined in the Bogor declarationbut have little intention of implementing it'. Even Senator Evans, the most faithful of truebelievers, doubts that APEC members will reach agreement in Osaka on how to implement thesummit's commitment to free trade.17 For the host country Japan, 'the most basic question is[still] what members think is the definition of free and open trade and investment'.18 Giventhat regional economic integration has been occurring over many years without anyoverarching framework, it is difficult to see the Bogor APEC summit as having anything morethan symbolic value.

Nevertheless, the Bogor heads of government summit was indicative of the form anddirection of Australian trade diplomacy under Mr Keating. Attempts to construct globalinstitutions which entrench free trade as the normal economic behaviour of nation-states arenot new, but they occupy a particularly honoured placé in Australian tradecraft, despite theirconsistent failure over many years. In this sense, regional free trade through APEC should beseen as a natural concomitant to attempts by the Cairns Group (also an Australian initiative) tosecure trade liberalisation at the multilateral trade negotiations. Is this a sensible strategy forthe 1990s?

There is no space here to answer this question in detail.19 However, theappropriateness of a free trade policy needs to be judged against the following criteria:

• Trading conditions in the 1990s have diverged significantly from the assumptionswhich underpin the neo-liberal analysis of how markets and trade actually work. Theinternationalisation of production, the mobility of capital and the dominance of transnationalcorporations are just three developments which render theories of comparative advantageanachronistic.

To elaborate one example more fully, even if tariff and non-tariff barriers weredismantled, the world market would not be 'free' in any meaningful sense, because of thepower of the transnational corporations to control and distort markets through transfer pricingand other devices. The idea of national sovereign states trading with each other as discreteeconomic units is out of date. According to World Bank estimates, over 40 per cent of all tradeis now comprised of intrafirm transactions, which are centrally managed interchanges withinhuge transnational corporations. To talk, therefore, about Australia as a 'trading nation', withthe implication that the population shares a common interest in closer economic integrationwith the region, is both misleading and beside the point.

• A sharp departure from neo-liberal doctrines such as free trade has been a pre-requisite for economic development in the second half of this century. This has been known to

16 H. Hughes in Australian Business Monthly (January 1995).1 7 Age (4 February 1995).18 Australian (9 February 1995).

19 For an elaboration of the points which follow, see S. Burchill, Australia's International Relations (East Melbourne:Australian Institute of International Affairs (Vic.) & School of Australian and International Studies, Deakin University,1994).

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economic historians as early as List and has been more recently elaborated by Gerschenkronand Polanyi.20 Strategic government planning and state intervention, in particular statecoordination of industry and trade policy, have been critical to the 'success' of most East Asianeconomies in the post-war period. The alleged efficiencies of trade are rarely attributable to the'free' market, being more often dependent on state intervention, subsidisation and other"market distortions'. The most successful industrial societies know this, which is why theyusually fail to practise the free market message they preach to others. That Australia coulddraw diametrically opposite conclusions from the East Asian experience is a tribute to theinfluence of the ideology of neo-liberalism within government policy making circles. Togetherwith New Zealand, Australia is one of the few nations to take the rhetoric of economicliberalism literally, and unilaterally subordinate society to the requirements of the market.

• A distinction must be maintained between initiatives that may be regarded as good'for the health of the economy' and government policy which improves the general welfare ofthe society. Often the two are un-correlated. Diplomatic agreements which are designed topromote investment and trade opportunities for the business community are not usually sold tothe public as pacts which will enhance the economic well-being of sectional interests, butinstead are portrayed as being 'in the national interest'. However, in a class-divided society theidentification of business interests with national interests rests on an 'illusion of commoninterests', a doctrine which claims to benefit all but which in reality is favourable to one classonly. Does the community generally have an interest in free trade when some sectors will face'big job losses ... and some social dislocation as unemployment forces some families to relocate... and workers [are forced] into retraining for new occupations', while others enjoy recordprofits and even higher levels of affluence? Clearly not if we are to believe opinion polls, whichsuggest that the overwhelming majority of Australians have been consistently opposed to freetrade for some time. What do the workers in 'declining [manufacturing] industries' stand tobenefit from the 'free trade bonanza' which Mr Keating claims is guaranteed by the APECBogor declaration?21

• Is a policy of free trade consistent with the government's advocacy of environmentalprotection and international humanitarianism? The Australian government has taken a 'leadingrole' in establishing within the new World Trade Organisation (WTO) a review that will targetwhat it sees as the misuse of environmental regulations as barriers to free trade. Such is thegovernment's commitment to free trade that attempts by developing societies to protect their

2 0 F. List, The National System of Political Economy (New York: A.M. Kelly, 1966, a reprint of Longmans Green,London. 1885); A. Gerschenkron, Economic Backwardness in Historical Perspective: A Book of Essays (Cambridge, MA:Belknap Press of Harvard University Press, 1962); K. Polanyi, The Great Transformation (New York: Rinehart, 1944).2 1 Weekend Australian (19 November 1994) (editorial); for opinion polls on free trade see Sunday Herald-Sun (28February 1993 ), Age (23 April 1993) and Age (9 June 1994). Free trade supporters are reluctant to speak about the eflectsof their ideas on community life and class relations. As Thurow points out, 'the theory of free trade admits that there will besharp income-distribution changes within each participating country. Average incomes will go up with free trade, but theremay be millions of losers in each country...The theory assumes that the winners will compensate the losers, so that everyonein each country has an incentive to move towards free trade, but in fact such compensation is almost never paid. Withoutsuch compensation there are individuals who should rationally oppose free trade as antithetical to their economic self-interest". L. Thurow, Head to Head: Coming Economic Battles among Japan, Europe, and America (New York: Morrow,1992) p.82. Despite the correlation between social impoverishment and free trade, the Australian government continues toargue that 'an effective and open multilateral trading system is in the best interests of all countries', despite the fact that boththe OECD and the World Bank concede that free trade produces winners (wealthy industrialised states) and losers (pooreststates). See Australian Financial Review (7 October 1993).

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environments from industrial pollution and degradation will be automatically interpreted astrade protectionism, and therefore declared illegal under new WTO guidelines.22

Similarly, free trade policies threaten hard won human and labour rights, particularlyin the East Asian region. In the months leading up to the APEC summit in Bogor, free tradeadvocates in Australia claimed that the Clinton administration's concerns about declininglabour rights in East Asia were merely protectionist sentiments in disguise. These concernswere not to be raised in Indonesia because incorporating them at Bogor would undermineAsia's 'comparative advantage' in low wage costs, a natural 'factor endowment' which enablesthe developing world to attract foreign investment and trade with advanced industrialsocieties.23

The problem with this argument is that the link between workers' rights and free tradeis made by the East Asians themselves. When the Indonesian government, for example, keepswages in that country artificially low by outlawing freedom of association, banning independenttrade unions, arresting, incarcerating and often murdering labour activists, it is explicitlyviolating the market principles that were being celebrated at the APEC heads of governmentsummit. This policy is really an example of state intervention providing a hospitable climate fortransnational capital, a sharp departure from the neo-liberal doctrines so favoured by theAustralian government and the business press in Australia. It is a policy which regards a tradeunion system to be 'a potential health hazard to [Asian] economies' and genuine concerns inAustralia about declining labour rights in East Asia as 'a strategy that amounts to exportedprotection'. Despite overwhelming evidence of the link between the free play of market forcesand the repression of labour in East Asia, according to Australia's leading business paper,'workers in such countries are best helped by the extension of the principles of democracy, andof fair and transparent markets, in which the "invisible hand" is not guided by cronyism orother corrupt practices': their fate should be the 'inevitable result of market forces', though nobenefits flowing from market liberalisation are cited.24

The sad irony of this is that the basic procedural freedoms and rights whichAustralians take for granted, including freedom of association, the right to organise andcollectively bargain, the right to work in a safe environment, the prevention of forced labour,and so on, are being eroded in a number of developing East Asian societies by marketliberalisation. Industrial 'accidents' due to poor or non existent safety standards are on the risein China and Thailand. Trade unionists are being threatened, attacked, arrested and murderedin Indonesia. Workers' rights in Malaysia and Singapore are denied in the interests of'economic development'. Child labour is exploited in South Korea and China with the tacitsupport of GATT regulations.25 The fact that these infringements are being directly

2 2 Australian (8 July 1994).23 Concerns by human rights groups such as Human Rights Watch about the threat posed by free trade agreements such as

APEC to the labour rights of working people in the region are well documented. See Australian (4 November 1994, 15November 1994, 16 November 1994) and M. Ferguson in Australian Financial Review (19 July 1994) (letters). Australia'scriticism of any link between trading relations and the issue of human rights has also been widely reported. See Age (24 May1994), Australian Financial Review (9 June 1994, 20 June 1994, 5 October 1994, 20 October 1994).2 Australian Financial Review (13 July 1994) (editorial). According to the editor, 'the ultimate effect of linking tradeliberalisation with tighter labour regulations is to bid up the price of labour above the real market value, to the extent whereinvestors may opt to bring their capital — and jobs — back home', apparently an outrageous idea. For a recent analysis oflabour rights in Indonesia, see Labour Rights in Indonesia: What Australian Trade Unionists Need to Know (Sydney:Evatt Foundation & International Union of Foodworkers, 1994).2 5 See B. Toohey in Australian Financial Review (20 October 1994).

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exacerbated by the free trade advocacy of regional players such as Australia is not in doubt.That this advocacy is being led by the political parry which headed the struggle for theminimum wage, the eight hour day and industrial arbitration in the Western world late lastcentury and early this century, is remarkable.

Human rights: from bad to worse

The pattern for Australia's relationship with Asia into the next century has clearly been set bythe Labor government. In countries which are of economic importance to Australian business,human rights will take second place to trade and investment opportunities.

It comes as no surprise, therefore, that in 1994 Amnesty International (AI) launched itsmost scathing attack on Australia's human rights policy in East Asia, arguing that it had beeninconsistent and ineffective in reducing the incidence of torture, political killings,'disappearances', unfair trials and the harassment of critics in territories such as East Timorwhich were illegally occupied by Indonesia. Amnesty argued that statements made by the PrimeMinister, Mr Keating and the Minister of Defence, Senator Ray, that there had been recentimprovements in human rights in Indonesia rested on 'fragile foundations of illusion andwishful thinking': the evidence 'defies any suggestion that the human rights situation isimproving', despite the 'warm friendships' established between Keating and Suharto, Evansand Alatas. Because 'the facts just do not support the assertion' that Australia's policy of 'quietdiplomacy' had worked in any way to improve the human rights situation in Indonesia, therewas a need for 'a re-evaluation of the effectiveness of the human rights policies the governmenthas been pursuing'. According to Amnesty International, international criticism of Australia'shuman rights policy was mounting and the government's credibility as a committed advocatefor human rights was suffering. The Australian government had failed to 'acknowledge thegravity of the human rights situation in Indonesia and East Timor': AI warned that as aneighbouring state Australia 'cannot put profit ahead of principles'.26

Despite additional concerns about growing defence links between the two countries, inparticular the training in Australia of Indonesian special forces which have been linked tohuman rights abuses in Aceh and East Timor, the government's response to these criticismswas to impugn the motives of the messenger. Senator Evans dismissed Amnesty International'sreport as 'a campaign document', a charge not without foundation if the task of improving thehuman rights record of the Indonesian government can be regarded as 'a campaign'. SenatorEvans also claimed Amnesty's report was unbalanced and misleading. Unsurprisingly, thisview was echoed by the editor of the Australian who criticised AI's report for being'unbalanced' and for lacking 'perspective and an authentic appreciation of both Australia'shuman rights record and its international behaviour'. It 'is unrealistic to expect that a countryas poor and complex as Indonesia ... [to be] a perfect observer of all human rights', or eventreat its citizens decently.27

2 6 Age (10 October 1994), Australian (10 October 1994, 12 October 1994). Recently, Senator Evans has conceded that thepolicy of 'quiet diplomacy' towards the Indonesian government on the question of East Timor was not having much impactSee Australian Financial Review (22 February 1995). For an analysis of the human rights situation in East Timor andIndonesia, see Power and Impunity: Human rights under the New Order (London: Amnesty International UK, 1994) andIndonesia and East Timor. AI briefing paper (London: Amnesty International UK, 1994).2 7 Australian (12 October 1994); Australian (11 October 1994) (editorial).

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Regrettably, this approach to human rights issues by both the Australian governmentand a remarkably compliant press became a pattern that was to be repeated throughout 1994.Coverage of the closure of three Indonesian magazines by the Suharto government in June1994 in the Australian, for example, focused on the extent to which this event was a 'tragedy'for Indonesia's (read the Indonesian government) image in the 'eyes of the rest of the world'and the difficulties it would cause the Australian government, which would have to be seen tobe responding to public sentiment — however reluctantly: it was a problem of 'opinionmanagement'. Concern for the people of Indonesia, and their struggle for somethingapproaching a 'free press' and political democracy, came a poor second to the need to protectthe bilateral government relationship. By engaging in élite collusion in this way, the Australiangovernment runs the risk of alienating the Asian societies it is allegedly enmeshing with,including alternative and future political leaders, by being seen as being only concerned withrelations at the official and commercial levels.

The pattern was repeated elsewhere. Gross human rights violations committed by themilitary government in Burma over many years have rarely elicited a strong response from theAustralian government. In 1994 the government abandoned its somewhat half-hearteddiplomatic efforts to isolate the military junta by shifting to a policy of 'lying doggo' on humanrights violations in Burma, in deference to the wishes of ASEAN and for the promise ofcommercial opportunities for Australian businesses.28 Recent reports of torture, detentionwithout trial, extrajudicial executions and disappearances in Bougainville have excited littleinterest in Canberra, other than to reinforce government military support for the Papua NewGuinea defence forces. And so on. This approach to human rights is not only ethicallyindefensible, it is also vulnerable to the charge that, in forging closer ties with the nation'snorthern neighbours, the government is well out of step with domestic public opinion.29

During his visit to Washington in 1994, Prime Minister Keating confused his hosts byadvising them to take a much softer position on human rights issues in China and Indonesia.Not surprisingly, these urgings were rejected by the Clinton administration and the Congress,as they were condemned by Amnesty International, church leaders, the Australian Council ofTrade Unions (ACTU) and the Inter-Parliamentary Union. In February 1994, the Clintonadministration released damning reports on human rights abuses in Indonesia and China, thetwo countries which Prime Minister Keating urged the United States to stop pressuring oversuch abuses only months previously.30 Mr Keating justified his comments by claiming that 'wemust look at the totality of the bilateral relationship, not just the human rights issue'. However,there is little evidence that 'quiet diplomacy', or more accurately appeasement, has met withany success in the 'only region in the world which does not presently enjoy the benefits of aregional human rights system'.31 Again in March 1994, the Australian government urged theUnited States not to link human rights with trade concessions in its negotiations with China, a

2 8 Australian Financial Review (31 May 1994).29 The gulf between government and popular perceptions of Australia's relationship with Indonesia is the obvious example.

At the very moment when public concern about Indonesia's occupation of East Timor was at its height, the government wasinviting Indonesia's armed forces to participate in joint military exercises in the Northern Territory. See Australian (20 July1994). Earlier in the year when DFAT was raising concerns about protesters being beaten and detained in East Timor,Senator Evans was simultaneously praising Indonesia for making 'immense improvements' in the area of human rights. SeeAustralian (12 October 1994).3 0 Age (3 February 1994).3 1 Department of Foreign Affairs and Trade. Human Rights Manual (Canberra: Australian Government PublishingService, 1993) p.84.

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clear indication that regional trade and financial relationships are displacing traditionalstrategic friendships in Australia's foreign policy priorities.32

The fact that the Australian government now regularly berates the US government fortaking a 'hard line' on human rights in East Asia is a measure of the distance 'human rights'has travelled down the priority list of Australian diplomacy. This situation constitutes acomplete role reversal for both parties. 1994 was not a proud year for Australia's internationalhumanitarianism.

Defence White Paper 1994: as you were

Although the 1994 Defence White Paper {Defending Australia) is Australia's first strategicreview since the end of the Cold War, its fundamental principles are remarkably consistentwith the 1987 White Paper: it is almost as if the end of the East-West bipolar conflict was anevent of little significance to Australia's defence planners.33

Readers of the 1994 Defence White Paper (hereafter referred to as DWP 94) will bedisappointed if they are looking for any mention of a 'peace dividend' or even a 'relaxation oftensions' flowing from the end of US-Soviet hostility. Instead, there is a pervasive sense ofnostalgia for the comforts of permanent aggression — the irreconcilable mutual antagonismand reciprocal suspicion which the Cold War provided for over four decades. According toDWP 94, the Cold War produced 'a measure of stability throughout the region' so that defenceplanners could 'assume a degree of predicability in our strategic circumstances'. Now 'with theend of the Cold War. important new uncertainties have emerged about the future strategicsituation in Asia'. Although 'the region is comparatively peaceful ... some of the constraintsare being loosened'.34 For our defence planners, mutual nuclear deterrence, Cold Wartensions, third world proxy wars and the prospect of nuclear annihilation apparently brought asense of reassuring predictability to the region's strategic landscape. The instability andunpredicability of shifting power differentials in the post-Cold War period is clearly a subject ofmuch greater concern.

DWP 94 implies that the presence of external forces (that is, the USSR and US)stabilised the region for forty years, although for much of that period our defence plannersdenied that the Soviet Union was a legitimate Pacific power and therefore had legitimatestrategic interests in the Asia-Pacific region. In fact, Australia's defence policy during the1980s was aimed at removing Soviet influence in the region, particularly in the SouthwestPacific, because it was always interpreted as being malign in intent. To the extent thatconsistency and facts are important, DWP 94 attempts to rewrite the history of Australia'sstrategic outlook during the Second Cold War.

3 2 Australian Financial Review, Age, Australian (10 March 1994). See also Age, Australian (30 March 1994) and Age(31 March 1994) (editorial). Australia's Ambassador to the United States has reiterated his government's opposition to anylinks between trade concessions and labour standards in China and Indonesia made by the Clinton administration. See Age(24 May 1994) and Australian Financial Review (20 June 1994).33 For commentary on the White Paper, see J. Bonnor in Australian Financial Review (13 December 1994); A. Wrigley inAustralian (8 December 1994); P. Dibb in Australian (16 December 1994); and G. Barker in Australian Financial Review(12 December 1994).3 4 Defending Australia: Defence White Paper 1994 (DWP 94) (Canberra: Australian Government Publishing Service,1994) pp.4-7.

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In the decades to come, Australia's security will 'depend on strategic developments inAsia and the Pacific and particularly Asia itself, a fairly obvious and unremarkableassertion.35 What is more interesting is the claim that 'economic growth will increase thepower of nations in the region ... [and] economic growth and technological developmentincrease the strategic potential of countries in the region'.36 In other words, the very basis ofAustralia's economic and trade diplomacy since the early 1980s — recognising East Asia asthe fastest growing economic region in the world — also poses Australia's greatest medium-term strategic threats. Growth in the region may provide Australia's businesses with new andexpanding markets but it will also increase the relative strategic power of the nation-states it isallegedly 'enmeshing' with. This will mean that the policy of 'regional engagement' will needto be a great deal more sophisticated than it presently is. Will it make sense for Australia toincreasingly protect itself (defence policy) against the states it desperately wants to increase itscommercial links with (trade and investment policy)?

There are a number of aspects of DWP 94 which reflect its continuity with the 1987White Paper. Below is a summary of the major points with commentary in italics:

• a renewed commitment to 'defence self-reliance within an alliance framework'.37 Acontradictory notion, but one first introduced in 1987.

• 'Our alliance with the United States does not mean we can expect it to provide forour defence ... Australia's defence alliance with the United States continues to be a keyelement of our defence policy.'38 The alliance has become less important for both sides andthis has been reflected in its declining status in government policy statements since 1987.

• two per cent of Gross Domestic Product should be sufficient for defence needs. Thisamounts to spending $10 billion a year, an amount that is seen as excessive by some critics?9

• 'We believe no country at present has either a motive or an intention to attackAustralia, and we have no reason to expect that any country will develop such a motive orintention. '4 0 A reasonable assertion given a fifteen year time frame.

• a $25 billion weapons acquisitions program. Continuing the tradition of procuringexpensive high-tech weaponry.

The most interesting aspect of DWP 94 is the government's commitment to an activeengagement in the strategic affairs of the region. A desire for strategic engagement is not new,having been first raised in Gareth Evans' Ministerial Statement Australia's Regional Securityin 1989,41 but it remains very vague with references to a 'dialogue on strategic and defenceissues' and 'processes which foster a sense of shared strategic interests'.42 When the eighteenmembers of the ASEAN Regional Forum (ARF) met for the first time in July 1994, it wasobvious to all that a 'community of strategic interests in the region' would not go much beyond

3 5 DWP 94 p.7.3 6 DWP 94 pp.4, 27. See also p.9.3 7 DWP 94 p.13.3 8 DWP 94 pp.13, 95.3 9 See A. Wrigley in Australian (10 February 1995).4 0 DWP 94 p.22.4 1 The statement is reproduced in full in Greg Fry, Australia's Regional Security (Sydney: Allen and Unwin, 1991)pp. 165-216.4 2 DWP 94 p.85.

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'confidence and trust building measures' involving some limited exchanges of militaryinformation. This pessimism was reflected in DWP 94 with the concession that 'we do notenvisage that the arrangements which develop from the present processes will lead to formalmultilateral alliances: the geographic reach and the wide disparities within the region precludethat'. The difficulties of reaching common regional positions on trade and investment policieshas been discussed earlier. The prospect of a new 'strategic partnership' and 'a sense of sharedstrategic and security interests' in the Asia-Pacific region is remote indeed.43 As Wrigley haswritten in response to the publication of Strategic Review 1993:

Australia was proudly placed as a natural member of another 'community of nations' — one 'bound by a common adherenceto a world view that emphasises democratic values, individual liberty, respect for human rights, and free enterprise andmarket economies'. But looking at our prospective regional security community, these qualities are not conspicuous. Kot oneof the ASEAN states is a genuine democracy in which political power changes hands from time to time. South-East Asia'smilitary planners/plotters operate in an environment unrecognisable to ours. Their primary interests are nation-building (forwhich read crushing Muslim demonstrators, labour activists, students and separatist movements), socio-political functions(controlling the workings of government by preventing the emergence of genuine opposition parties, coups and whatever elseis needed), trading enterprises (including illicit arms dealings that undermine peace processes), and various rough and tumbleoperations among ethnic groups across borders ... the gulf between the values of the Australian community and those whoset the agenda of our prospective partners excludes a security community of real substance. **

DWP 94 encourages closer links between the Australian defence community and thedefence communities of its northern neighbours in particular. However, the implications ofcombined exercising, officer training, industry cooperation and closer regional defence linksgenerally, have serious implications for Australia's stand on human rights in the region. Thegovernment's belated conversion to military Keynesianism and its eñbrts to capture a slice ofthe enormous global arms trade has already aroused domestic concern. Its in-principle approvalof the sale of Steyr rifles to Indonesia in January 1995 was consistent with the approachencouraged in DWP 94. However, the government left itself open to the charge that these riflescould be used for the 'internal' security requirements of the state: it was effectively arming theoccupying forces in East Timor. A similar argument could be mounted against the training ofIndonesian military officers in Australia.

It would seem that these closer ties can also distort perceptions of the region's history.Take this example from DWP 94: "The stability, cohesion, economic growth and positiveapproach to the region which have characterised Indonesia since 1965 have contributed muchto the stable and generally benign strategic environment which has prevailed in South EastAsia since the end of the Vietnam war'.45 To suggest to the people of Aceh, West Irian andEast Timor that they had benefited from the 'stability' and 'positive approach' of theIndonesian government during this period is to be disingenuous to the point of cruelty. It is inno one's interests, least of all the people of Australia, to have historical falsehoods andfabrications of this kind appear in official government policy documents. It is difficult toimagine this statement could have been published even a decade ago, before commercialpriorities completely captured Australia's diplomatic agenda.

DWP 94 is an unimaginative document which fails to embrace or even seek anypositive opportunities flowing from the end of the Cold War. It reflects the concerns strategicplanners have always had with 'uncertainty' and 'instability', regardless of whether theseconditions were the predictable outcomes of 'victory' in the Cold War. It is also a document

4 3 DWP 94 p.93.4 4 A. Wrigley in Australian (28 February 1994).4 5 DWP 94 p.87.

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which raises more questions than it answers. Why spend $25 billion acquiring sophisticatedweaponry when 'the region is comparatively peaceful', if no foreseeable security threats can beidentified, and at a time when the government is attempting to construct a collective securityapparatus in the Asia-Pacific? Exactly who is Australia defending itself from in the 1990s?

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