Australian Leader Urges Trump to Stay Involved in Indo-Pacific

(Bloomberg) -- Australian Prime Minister Scott Morrison wants President Donald Trump to keep the U.S. engaged in the Indo-Pacific region as China's rise challenges the status quo.

“A strong America — centrally engaged in the affairs of our region — is critical to Australia's national interests,” Morrison plans to say at an Asia Society speech hosted by Bloomberg in Sydney on Thursday, according to prepared remarks distributed to reporters. “We support the strongest possible U.S. political, security and economic engagement in the Indo-Pacific.”

Morrison, who took power in August after party infighting led to Malcolm Turnbull's ouster, will take his first step on the global stage during summits in Singapore and Papua New Guinea later this month. Trump plans to skip the meetings and send Vice President Mike Pence instead, a move that has raised questions about the U.S.'s long-term commitment to the region.

Morrison's speech -- his first address on foreign policy since becoming prime minister -- shows he's not about to abandon Australia's decades-long crucial military and diplomatic links with the U.S. despite Trump's “America first” rhetoric. Still, it's not clear how long Morrison, 50, will be in power: His ruling coalition is trailing in opinion polls ahead of an election due next year.

Balancing Act

Like other Australian leaders, Morrison is attempting to walk a diplomatic tightrope by keeping strong relations with the U.S., his nation's most vital ally, and China, its biggest trading partner. That balancing act has become more fraught as the U.S. and China engage in a trade war and tensions rise over Taiwan and the South China Sea.

“China is the country that is most changing the balance of power, sometimes in ways that challenge important U.S. interests,” Morrison plans to say. “Inevitably, in the period ahead, we will be navigating a higher degree of U.S.-China strategic competition.”

He added: “In the long run, this risks strategic instability. And it risks unimagined damage to economic growth and the global order. Damage where no one benefits. Lose-lose.”

Australia's relations with China took a hit under Turnbull. In December, the former leader blamed Chinese meddling in Australian affairs -- including in the government, media and universities -- for compromising national security and driving him to push for anti-foreign interference laws that were passed in June.

Concern has also mounted in Canberra and Washington that China's state-backed infrastructure projects in the Pacific could eventually lead it to establish a military presence in the region. While Pacific countries have traditionally been seen as Australia's diplomatic turf and its biggest recipients of foreign aid, China has been increasing loans to small, indebted island nations.

“China, in particular, is exercising unprecedented influence in the Indo-Pacific,” Morrison said in the speech. “The government I lead is committed to the Pacific as one of our highest foreign policy priorities, because this is where we live. This is a relationship that I want to be more than the annual acquittal of aid. I want it to rise to a new level of respect, partnership and appreciation.”

Morrison said he's set out to “recalibrate” Australia's relationship and engagement in the Pacific and will make further announcements about those plans in the weeks ahead.

On Wednesday, Morrison's government ratified a trade deal among 11 Pacific nations -- once envisioned as a check on China's clout but abandoned by Trump -- that will kick in on Dec. 30. Australia is also expected to finalize a free-trade deal with Indonesia later this month.

While Morrison said Australia recognizes there are “valid concerns about the protection of technology and the rules governing the involvement of governments in markets,” he took a subtle dig at Trump in saying those issues are better resolved at “the negotiating table – not tariffs.”

“Many of our partners globally -- from our most important partner and ally the United States, to others in Europe and elsewhere -- are debating the value of free trade and worry about the costs and risks of their global commitments,” Morrison said.

“Our response must be grounded confidently in our beliefs and in a hard-headed view of our interests,” he said. “Australia is committed to ensuring the peaceful evolution of our own region without compromising our beliefs or eroding the fundamental principles on which its prosperity and cooperation have been based.”

To contact the reporter on this story: Jason Scott in Canberra at jscott14@bloomberg.net

To contact the editors responsible for this story: Ruth Pollard at rpollard2@bloomberg.net, Daniel Ten Kate

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