The South Pacific is in the world’s focus.

At the Pacific Islands Forum in Auckland, high-level delegates from countries as diverse as Russia and Bhutan convened to lobby Pacific leaders during the four-day September gathering. While the Forum has been criticised for continually sidestepping the region’s big political issues, the 2011 leaders’ communiqué contained at least one element worth discussing. This year’s document stressed the importance of moving toward a ‘blue economy’.

The blue economy is a growth model based around the sustainable use of the region’s considerable marine resources. In many respects, this mirrors the green growth model — which aims to achieve strong economic growth and environmental protection — but with a small-island, developing-state pertinence.

At the 2011 Pacific Environment Forum in Apia, Samoa’s Minister of Natural Resources and Environment captured the region’s sentiment: ‘We in the Pacific are … adopting a “Green Economy in a Blue World” approach — as an inclusive and practical way of promoting the right kind of growth [and] meeting our key challenges’. The Pacific has also succeeded in getting the blue economy into the framework of next year’s UN Conference on Sustainable Development (Rio+20), and discussions in early November at UNESCO in Paris furthered its inclusion.

A blue economy is particularly apposite for the region, with its abundant and underutilised marine resources; the region’s seafloor contains substantial deposits of rare-earth metals, and the Western and Central Pacific tuna fishery is the world’s largest. The region is also undoubtedly blue; Kiribati, for example, has a larger exclusive economic zone than India’s land area. In fact, these nations are better termed large-ocean states than small-island countries.

But despite the model’s obvious appeal to the region, can moving to a blue economy result in sustainable development?

One potential driver of growth is seafloor mining. This has received a lot of recent attention, in part because of a Nature Geoscience paper published on the extent of rare metals in the Pacific’s seafloor. The deposits have gained attention as high prices make extracting stocks economically viable, and China — currently the world’s largest supplier — has blocked trade in the past due to political reasons, making the Pacific an interesting alternative.

But as offshore companies with advanced technology are required for mining, developing strong institutions — particularly foreign investment review mechanisms, resource tax architecture and environmental assessment processes — will be vital for ensuring extraction results in blue economic growth.

The fishing industry is also touted as a driver of the blue economy. It is a key source of revenue for many Pacific island countries, particularly equatorial nations, but largely from foreign fishing fleets paying for the right to fish tuna. This framework is clearly suboptimal, as only five per cent of the catch’s value is estimated to remain in the region. Increasing domestic fishing and processing capacity will lead to less profit outflows, although this will require large investments in domestic fishing fleets and human capital.

For fisheries to contribute more to the region’s economies, institutional reform and strengthening is also necessary. Building regional monitoring capacity to reduce the incidence of illegal and unreported fishing, and developing strong fisheries management to ensure harvests are at the maximum economic yield will be especially important in this context.

In the short term, lobbying for higher access fees to develop nascent domestic fishing industries is probably the best move. But access agreements are locked into multilateral treaties and bilateral agreements, and thus effective diplomacy is crucial for obtaining more than the current five per cent.

With global attention on the back of the Pacific Islands Forum and blue economic growth on the agenda at Rio+20, this is an opportune moment for the region to develop blue industries through pushing for associated development assistance, attracting private investment in a range of blue industries and lobbying for a higher share of fisheries rents. Achieving these alongside deep institutional reform, at both the country and regional level, will ensure that moving toward a blue economy results in economic development and environmental protection.

Benjamin Sims is a Research Associate at the Pacific Institute of Public Policy, and a joint Master of Environmental Management and Development/Master of Diplomatic Studies candidate at ANU.

1. Europe as a model of regionalism in the Asia-Pacific?
2. China’s export-led growth model
3. Vanuatu’s recent economic success: lessons for the Pacific

This century will be America’s Pacific century, wrote US Secretary of State Hillary Clinton in the November issue of Foreign Policy.

As she put it: ‘The future of politics will be decided in Asia, not Afghanistan or Iraq, and the United States will be right at the centre of the action’. Last week Secretary Clinton repeated her message in a speech at the East-West Centre in Honolulu. So where does this leave Europe?

Judging from Secretary Clinton’s words, unless Europe is involved in Asia it will not have a meaningful say in the future of politics. If that is true — and the very fact that US foreign policy is increasingly focused on Asia is a strong indicator of the region’s importance — the prospects for Europe’s role in the Pacific century are not promising. Although she became the EU’s High Representative for Foreign Affairs nearly two years ago, Catherine Ashton is yet to attend a major multilateral meeting in Asia. Ms Clinton’s message should be a wake-up call for Europe’s leaders and policy makers. The EU can and should do much more than it is doing, in order to be seen and heard in the coming decades.

To begin with, it is essential that each year High Representative Ashton attend the ASEAN Regional Forum (ARF). Secretary Clinton envisions a durable transpacific economic and security architecture, in which the US plays a major role. APEC is one main building block for this architecture, dealing with economic issues, and the ARF is another, this time for security matters. Recently, with very active participation from the US, two new building blocks have been added on the security side: the East Asia Summit (EAS) and the ASEAN Defence Ministers’ Meeting+8. In addition, the US-China Security and Economic Dialogue is emerging as the most influential bilateral mechanism in the Asia Pacific region.

Ms Ashton cannot afford to stay away from the ARF, given it is the only major transpacific forum of which the EU is a member. Moreover, not attending the ARF severely limits the EU’s chances of becoming a member of the EAS, which is on track to becoming the primary summit for security affairs in the Asia Pacific. The EU will not be visible in Asia unless it is adequately represented at the ARF and, as soon as possible, the EAS.

The EU should also cooperate closely with the US to strengthen its economic competitiveness. Even though traditionally the US and the EU are economic competitors, they face a common challenge from Asia’s main economic power, China. Competition with China is not limited to rivalry between firms or sectors, but exists also at the level of economic systems. The Chinese government intervenes in the economy far more directly than is the case in the West. In many instances, this increases the competitiveness of Chinese firms vis-à-vis their Western counterparts. Secretary Clinton indicated that it is particularly important for the US to address this issue and other matters related to China’s state-centred economic system and policies. Washington will be able to do so far more effectively if it works closely with Brussels, and vice versa. Western economies will need to find new strategies to increase their competitiveness without resorting to protectionism or entering an economic policy stand off with China.

Ms Clinton also made statements on US security policy in Asia. These, too, are highly relevant for Europe. In this regard the EU should adopt a neutral stance. The US government seems determined to maintain and strengthen its military role in Asia in order to keep pressure on a rising China. This strategy is unrealistic at best, given the high costs involved. At worst, it could lead to regional instability or even an armed conflict between the US and China. In the long run, American attempts to keep China from becoming a dominant power in East Asia are likely to be futile — as would be Chinese short-term attempts at forcing the US out of the region.

According to Henry Kissinger, the US and China should form a Pacific community through co-evolution. This requires Washington to take the difficult step of accepting Beijing as its equal. Given the EU’s large interest in transpacific stability, it must act as a neutral, but visible, observer and commentator on geopolitical stability in Asia. While the EU cannot be a transpacific power, it should strengthen its visibility in this strategically crucial region. For the EU to prosper and be secure in the Pacific century it needs a focused and active Asia policy.

Frans-Paul van der Putten is a Senior Research Fellow at the Netherlands Institute of International Relations ‘Clingendael’ in The Hague.

This is a revised version of an article originally published on Atlantic Community as part of the feature ‘Europe in America’s Pacific Century’. 

1. Australian-American partnership in 21st century Asia Pacific
2. Europe as a model of regionalism in the Asia-Pacific?
3. East Asia Summit: Where is Europe?

Seasoned observers of the Pacific may be experiencing a sense of déjà vu.

Not long after the ‘truce’ between China and Taiwan, suspending their competitive bidding for diplomatic recognition among Pacific island states, the game has seemingly returned. This time a different cast is at play, revolving around the little-known republic of Abkhazia and alleged Russian financial inducements to win recognition for Abkhazia’s secession from Georgia.

In feuding with Georgia, Russia is campaigning for international recognition of breakaway republics it supports (apart from Abkhazia, South Ossetia is another). But things are not going well for Russia. Nearly the entire international community is refraining from recognising these breakaways, and only a small handful have established relations so far — Nicaragua, Venezuela and Nauru.

Nauru, of course, is no stranger to this cash-for-diplomatic recognition game, having already earned a reputation in the earlier China–Taiwan tussle. In scenes reminiscent of those heady days, Nauru Foreign Minister Kieran Keke was courted by Moscow in 2009 with visits to the South Ossetian capital Tskhinvali and an audience with Russian Foreign Minister Sergei Lavrov. Following these visits, a Russian assistance package of US$50 million was announced and, in December 2009, Nauru established diplomatic relations with South Ossetia and Abkhazia.

If the courtship of Nauru seemed uneventful, Moscow’s recent dalliance with Vanuatu proved more controversial. Embroiled in the complexities of elite politics in Vanuatu, Moscow’s fortunes rose and fell as a period of intense political turmoil played itself out from December 2010 to June 2011. The premiership of Vanuatu changed hands no less than five times during this period and, on each change, the recognition of Abkhazia was either on the cards or off. Indicative of the stakes involved preceding Sato Kilman’s eventual elevation as Prime Minister in June, a massive media campaign was run in Vanuatu with full-page newspaper advertisements clamouring for the recognition of Abkhazia. At time of writing, the official word is Abkhazia is yet to be formally recognised, though according to the Foreign Ministry Vanuatu is ‘working towards it’.

This may not be all the government is working towards. Building on the momentum of the Russian deal, Vanuatu appears to be enshrining such swaps as a business model. In dangerous moves potentially reviving the old China–Taiwan rivalry, Vanuatu’s Foreign Minister Alfred Carlot dispatched a letter to Chinese Ambassador Cheng Shuping in July demanding the Chinese government provide US$32 million in return for Vanuatu’s support in the UN. Upping the ante, Minister Carlot announced several days later his intention to visit Taipei shortly, and eventually open a trade development office to foster closer Vanuatu–Taiwan ties.

This apparent return of check-book diplomacy in the Pacific is disturbing. Such practices can prove inherently destabilising and corrosive of governance, instilling corruption and an arbitrariness in policymaking. Of wider import, in stirring already troubled political waters in many nations, such practices may throw an added dimension of uncertainty into relationships between Pacific nations, exacerbating difficulties in advancing the project of Pacific regionalism.

Addressing such practices will be no easy task. What is at root here is more than the rapacious behaviour of a handful of corrupt politicians and officials, or the shenanigans of unscrupulous suitors. There are deep structural drivers feeding the predilection of some Pacific nations to engage in this game. Unless and until these factors are addressed a repeat of these events is likely, with damaging consequences to follow.

Many Pacific island nations face extremely daunting economic prospects with governments struggling to generate sufficient revenues off very small economic bases to sustain expenditure over an expanding range of needs and priorities. Traditionally, gaps have been filled by development assistance from donors. While welcome and extremely significant, Pacific island nations have often made it known that such assistance suffers several shortcomings. Much, for instance, remains project-based and of finite scope and duration. Strict conditions are often attached, leading to the oft-heard complaint that assistance may be more in the interest of the donor than recipient. And, sizable as these flows are for island nations, there is never enough.

In this context, the relative ease with which funds may be obtained by simply selling diplomatic recognition must seem attractive. Indeed, to the extent rival suitors may be played off against each other for this is all the more lucrative and compelling.

Efforts to encourage Pacific nations away from this path must pay heed to this predicament. Controversial questions will have to be considered, addressing the economic fundamentals of these fragile nations, their tenability, the size and structure of government they may realistically support, the aspirations and expectations of their citizenry, and the role of the international donor community. What, for example, might a truly sober and realistic assessment of the future economic viability of these nations say? Given many Pacific nations small economic base, is there a case for examining the ‘right-sizing’ of government? How might citizens’ expectations be managed and their rights protected? And is there a need for the donor community to re-assess its approach to assistance in these island states, nuancing modalities and coordination to better address recipient states’ concerns?

These are difficult questions requiring frank discussion and action. Perhaps when inroads are made on these we may more confidently lay to rest the spectre of check-book diplomacy. But until such a time, the risk remains.

Alfred Oehlers is a professor at the Asia-Pacific Center for Security Studies, Honolulu.

1. Vanuatu’s recent economic success: lessons for the Pacific
2. Glimmers of hope for the Pacific?
3. Kuril Islands dispute: Russo–Japanese relations at their lowest ebb since the Cold War

Fair trade and ‘Fairtrade’ products have become a topic of great interest in Australia and some of its trading partners.

The Pacific Forum Island countries (PICs) are enjoying free market access to Australia and New Zealand under the non-reciprocal South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA).

But many local NGOs like Oxfam and PANG are sceptical about free trade agreements and are instead pursuing and promoting non-WTO committing strategies such as Fairtrade.

Fairtrade is a certification available to products that meet the international Fairtrade principles and standards for producers and traders, set up by the Fairtrade Labelling Organisation. Fairtrade companies pay a ‘Fairtrade Minimum Price’ to producers to cover the costs of sustainable production. This amount is agreed upon prior to production. A ‘Fairtrade Premium’ is also collected and paid to the producer cooperatives that represent the respective farmers. The Premium is used by the cooperative for capacity building in every aspect of life (like education). The increased cost of Fairtrade products is financed by consumers who are willing to pay a higher price for them because of the perceived social and environmental benefits.

Fairtrade proponents use case studies of Fairtrade-participating farmers to show that it is more beneficial to small-scale farmers than free trade.

Some of these case studies have identified higher levels of education and health and greater awareness of social and environmental issues among farming communities operating within Fairtrade cooperatives. Fairtrade farmers also have better access to credit, and studies show instances of higher levels of management and organisational skills which increase productivity, household income and make farmers more influential.

Other assessments of Fairtrade have been more critical. For example, the Adam Smith Institute (ASI) finds that Fairtrade leads to the possibility of increasing income inequalities by offering a minority, which is already better off, access to credit to further their economic advantage.

Other commentators suggest Fairtrade does not improve the labour rights of hired workers, and its contribution to the overall reduction of poverty and development is negligible.

One study concludes that Fairtrade does not help those who suffer the severest poverty, namely agricultural labourers, but helps the landowners instead. In such cases any benefit is built into the price of rent for land.

Fairtrade may add to the productivity of participating farmers by increasing supply, but this lowers the price in the conventional produce market, negatively affecting all non-Fairtrade producers.

According to the ASI, only about 10 per cent of the additional Fairtrade Premium, paid by consumers, actually goes to small scale producers. Farmers claim they do not realise a net gain from these higher prices. There are two reasons for this. The first is the more intensive and therefore costlier management requirements related to Fairtrade standards relative to a free market situation. The second is that the progressive nature of Fairtrade affects the production process, compromising local decision making and control.

Although consumers pay considerably higher prices for Fairtrade products, research finds that a much larger share of the relatively-high retail price remains in the consuming country than in the case of conventional free market commodities. Fairtrade is found to empower processors and retailers instead of the farmers.

Analysis of the PICs suggests that small-scale farmers have particular difficulty in meeting Fairtrade standards. For example, capacity constraints and issues related to traditional culture prevent mainly poor, small scale farmers in Papua New Guinea (PNG) and Timor-Leste from selling their produce (coffee, tea and cocoa) as Fairtrade certified. By supporting Fairtrade, consumers indirectly reject and penalise these farmers in Australia’s neighbouring countries, and instead support more developed, small to medium small scale farmers and land owners outside the region.

On the other hand, free trade as it exists under the SPARTECA arrangement has been highly successful in PNG. For Timor-Leste, Australia’s General System of Preferences has helped the countries’ coffee producers to export to the Australian market. Free trade has reduced poverty through a variety of channels and avenues, as well as providing real market access opportunities for all producers, thus making it truly fair trade. In this context, a more liberalising reciprocal PACER Plus trade agreement currently being negotiated between the PICs and Australia and New Zealand has the potential to be a far more beneficial development tool than Fairtrade.

Uwe Kaufmann is a Economic Research Analyst with the Institute for International Trade and a doctoral candidate at the School of Economics at the University of Adelaide. Di Yuan, Faqin Lin and Altaf-Ul Alam are are doctoral candidates at the School of Economics, University of Adelaide.

1. Interventions to assist the Island Pacific
2. Deepening regional trade links in the Island Pacific
3. G20: East Asian and Pacific countries should pick up momentum of reforms

Australian Prime Minister Julia Gillard was one of the first among world leaders to visit Japan, over 20–23 April, after the nation was stricken on 3 March by the ‘earthquake-tsunami-radiation triple disaster’.

But the Australian government was tactful and realistic in not placing emphasis on progressing bilateral Free Trade Agreement (FTA) negotiations at that time.

The negotiations had resumed in Tokyo over 7–10 February 2011 after stalling for almost a year, but a lack of progress — particularly over agricultural market access — then prompted the trade ministers to call for a high-level political summit to regain momentum. The ‘3-11’ disaster generated more urgent priorities for the Japanese government. Indeed, reversing a commitment to decide this question by end-June, in May the Kan administration announced it would defer any decision about whether to join with the nine nations (including Australia) now negotiating an expanded Trans-Pacific Strategic Economic Partnership (TPP) agreement.

Japan has good reasons to resume FTA negotiations with Australia in the wake of 3-11. The ongoing problems afflicting the Fukushima nuclear power plant north of Tokyo, devastated by the tsunami, have resulted in closure of the Hamaoka plant to the east, as well as delays in resuming operations at other plants while extra ‘stress tests’ are carried out. This means that only 19 of Japan’s 54 reactors are now working, leading to nation-wide efforts to limit electricity consumption and adverse effects on the economy and everyday life in Japan.

Japanese power companies are already major buyers of LNG and other natural resources in Australia, also taking equity stakes in mining developments. Australian producers are expanding production capacity in LNG, for example, responding to indications that Japan would need to boost imports. More demand is expected not just for this year’s summer peak period, but also over the long-term as enthusiasm wanes for nuclear power in Japan, as well as in some other parts of Asia. Concluding a bilateral FTA may well help improve energy resource security for Japan. Especially as countries like China, Korea and now India increasingly vie for Australian resources (such as LNG) — with Australia already negotiating bilateral FTAs with all three of those nations.

Liberalisation of agricultural market access remains a large stumbling block to concluding an FTA with Australia. In theory, the devastation unleashed by the 3-11 tsunami on agricultural capacity in five predominantly rural prefectures could create an opportunity to allow in more Australian imports over the short term. In practice, doing so would strike many Japanese as adding insult to injury to afflicted farming communities throughout the Tohoku region, viewed as exemplifying Japan’s stalwart communitarian spirit. Even accelerating and expanding the policy of direct payments to farmers, in exchange for selling off their most inefficient operations, runs up against the added budgetary stress on the Japanese government arising from the 3-11 disaster. Temporary shortages of foodstuffs after the tsunami have also revived old arguments about the need for greater ‘food security’ in Japan.

Yet, as Aurelia George Mulgan points out, there are some signs of hope — at least over the longer term — for FTA initiatives involving Japan and Australia:

The revival of the regional food industry (interlinking agricultural production, processing and distribution stages) will need the input of technology and funds from the industrial sector, which may contribute to the industrialisation of agriculture in that area and engender greater cooperation between the agricultural and industrial sectors rather than conflict (as in the case of the debate over the TPP).

Other factors may reinforce a shift in the dynamics of FTA discussions involving agricultural market access to Japan. Concerns are often expressed in Japan — by consumers, not just farmers and their political or bureaucratic supporters — about ‘food safety’ of imported goods. Ironically, it is locally-produced goods and safety regulations which are now being called into question — for example, by recent reports of irradiated beef from Tohoku getting into the domestic market. If I were in Japan, as I will be with my family over October–November, I would be limiting my consumption to imported beef. And to several other products from Australia, including even our green tea (particularly susceptible to excess radiation, according to random testing of food supplies being systematically carried out in Japan).

The Australian government should work tactfully but vigorously to re-emphasise the safety of its agricultural exports, like it did in the wake of Japan’s ‘mad cow disease’ outbreak. It can also highlight that Japanese firms have recently invested in major Australian food companies. To further appeal to Japanese consumer interests, and indeed Australian consumers who are also increasingly concerned about product safety issues, both governments should add mechanisms in their proposed FTA that require and facilitate product risk information-sharing.

The shadow cast by the existing TPP negotiations may galvanise Japan to conclude first a bilateral FTA with Australia. The US is reportedly pushing strongly for an expanded TPP agreement, bringing in Japan. Yet, in practice, regional agreements — like AANZFTA — often end up preserving liberalisation measures (such as tariff rates) similar to those agreed in bilateral deals.

A resumption of more active FTA negotiations at any level will depend also on political leadership in Japan. The Japanese government became active in concluding FTAs from 2001, coinciding not just with the collapse of multilateral WTO Round negotiations but also with initiatives taken by then PM Koizumi to centralise decision-making and reduce scope for veto-players such as the Ministry of Agriculture. Unfortunately, support for Prime Minister Kan has dropped significantly in recent months (after a brief uptick after 3-11). Indeed, he has promised to step down soon after enactment of legislation related to disaster relief. Kent Anderson suggests that people in Japan may increasingly view this year’s problems as now more of a regional problem, one that does not imply radical rethinking and institutional change on the scale of the transformations occasioned by the ‘9-11’ disaster in the US. From that perspective, it may end up more like ‘business as usual’ for Japan’s FTA negotiations after all.

A final complication is that Australia’s policy on FTA negotiations has seemingly changed direction, with the announcement of the ‘Gillard Government Trade Policy Statement’. The Statement is a curious mixture of political and economic rhetoric. It blames the previous Howard government for over-indulging in bilateral and regional FTAs, for limited economic gain (presumably those with smaller partner economies, in particular) and/or for geopolitical objectives (presumably, in particular, AUSFTA). The Statement attempts to regain the high ground by urging greater efforts to achieve multilateral trade and investment liberalisation. It draws partly on a Productivity Commission report last December on FTA strategies and policy recommendations, but the Statement also argues that this sounder economic approach was a focus — along with unilateral liberalisation and deregulation — of the Hawke/Keating governments. The new policy direction raises the question of whether this Gillard government will want to press strongly for an FTA even with a very large economy such as Japan.

Another stumbling block in negotiations arises from the Statement’s views on investor-state arbitration (ISA). On one interpretation the Gillard government wishes to eschew completely the incorporation of such protections for foreign investors in all future treaties, even with developing countries. A more contextual interpretation would still allow ISA to be included on much more restrictive conditions than in previous FTAs or investment treaties concluded by Australia. Yet ISA protections are found in almost all of Japan’s treaties, and in the February talks DFAT itself reported that ‘progress on the investment chapter was slower, as key areas of difference remain, including Japan’s priority request to include an Investor-State Dispute Settlement mechanism’.

After 3-11 Japan may agree to exclude or sharply limit ISA protections if Australia presses the point. That seems likely especially now that Australia has been subjected to its first-ever arbitration claim (under its treaty with Hong Kong, brought by the subsidiary of an international tobacco company). More careful drafting of ISA provisions is sensible. But many TPP partners (especially the US, also keen on ISA) will be concerned about the message sent by excluding or watering down ISA provisions in a new major bilateral treaty in the region. And Australia’s stance will certainly slow down the Australia-Japan FTA negotiations. Potential Australian investors into Japan, including now perhaps Jetstar, may also come to regret the omission of conventional ISA protections in such treaties.

Luke Nottage is Associate Professor at Sydney Law School and founding Co-Director of the Australian Network for Japanese Law (ANJeL). This comment is based on his posting to ‘The Conversation’ and the ‘Japanese Law and the Asia-Pacific’ blogs. It draws on research for the project, ‘Fostering a Common Culture in Cross-Border Dispute Resolution: Australia, Japan and the Asia-Pacific’, supported by the Commonwealth through the Australia-Japan Foundation which is part of the Department of Foreign Affairs and Trade.

1. No breakthroughs in the Australia-Japan EPA negotiations
2. Taking the Australia-Japan FTA negotiations to new levels
3. Japan enters TPP negotiations

Recent claims in the media that Australia’s foreign minister has ‘ignored’, ‘neglected’ and ‘taken his eyes off’ the Pacific islands have underscored a number of policy dilemmas facing Australian diplomacy in the region. These have been evident for some time and centre primarily around the approach to Fiji’s post-coup government, led by Commodore Voreqe (Frank) Bainimarama.

Like other western democracies, Australia imposed diplomatic, military and political sanctions on the military-led government after the December 2006 coup. Australia also sought to utilise the Pacific Islands Forum to coordinate a regional approach to Fiji – initially based on engagement and dialogue to encourage an early return to elected government. When this approach failed, the Forum adopted more punitive measures, including suspending Fiji’s Forum membership in May 2009 and excluding it from aid programs provided through the Forum.

The dilemmas facing Australian diplomacy and foreign policy in the region include the obvious ones that have been highlighted in the media debate.

Most prominent is the fact that Australia’s efforts to isolate the Fiji government have encouraged Fiji to actively seek new partnerships, including most notably with China. This has led to the growing influence of China, and what seems to be a commensurate loss of influence by Australia. Another obvious dilemma is that Fiji’s suspension from the Forum has only served to undermine what was once the region’s premier regional organisation and shifted the political focus to other regional and international groupings. Fiji has made it clear it does not seek an early return to the Forum’s fold but is cultivating new alignments – the Melanesian Spearhead Group, the Pacific Small Islands Developing States group, the Non-Aligned Movement and the Association of South East Asian Nations (where it has sought observer status).

There are other policy dilemmas for Australia, which have perhaps been less obvious. The suspension of Fiji from regional policy mechanisms – including security dialogues, intelligence sharing, and maritime surveillance – has not only weakened Fiji’s capacity to manage its external security environment, but created additional security problems for the region, including for Australia and New Zealand.

Intelligence and capability gaps in Fiji’s security apparatus have been created since the coup that cannot necessarily be filled by China, Indonesia or other new partners.

This problem – which is also a regional problem – has been compounded by the loss of experienced military officers from the senior ranks of Fiji’s Military Forces, since the December 2006 coup. This has created what some have called a leadership vacuum in the armed forces and is due in large part to the exodus of senior professional officers into civil service positions in the Fiji government. Junior officers filling these vacated positions in the military no longer have the benefit of staff college training in Australia or other western countries, due to military bans.

As Australian policymakers no doubt grapple with these dilemmas there is inevitably a need to come to terms with a new regional ‘ball-game’. Shifting international alignments and patterns of influence perhaps mean that the ‘old regional order’ – led by Australia and New Zealand – will no longer be tenable. There are new dynamics in train, which may mean more economic opportunities and more political options for some (though not all) Pacific island states. This is not necessarily a bad thing for either Australia or the region. There is now more talk – if not action – in favor of South-South cooperation.

Changing circumstances require a more flexible policy approach in order to harness the possible openings this more fluid landscape provides and adapt to new realities. For Australia this does not necessarily mean abandoning principles in its approach to Fiji, but of mapping a new direction. Fiji’s so-called ‘Look North Policy’ has never purported to be a substitute for traditional partnerships, such as with Australia and New Zealand. Thus the door to dialogue and engagement has never been entirely shut. The challenge, however, is to ensure that both Australia and Fiji recognise the need to keep this door open – especially in the lead-up to Fiji’s anticipated elections in 2014.

Dr Sandra Tarte is Director, Politics and International Affairs Program at the University of the South Pacific in Suva, Fiji.

1. Preventing Fiji from becoming the pariah state of the Pacific
2. Fiji’s search for new friends
3. China’s involvement in Fiji and Australia and New Zealand’s position

The idea of a Trans Pacific Partnership (TPP) trade deal, at least among the nine Asia Pacific countries that are currently signed up for the negotiations, has been hyped up over the last year as the Obama administration declared it to be the way forward on a new American engagement with Asia.

The TPP initiative — which includes Australia, Brunei, Chile, New Zealand, Peru, Singapore, Malaysia, Vietnam and the United States — now tops Washington’s trade agenda barring the unfinished business of FTAs with Korea, Colombia and Panama. Singapore and Australia have long been important American trade partners, but as a group the TPP is no heavyweight. Its merchandise trade with the United States last year was US$170.9 billion, while total American exports and imports combined were US$3.2 trillion. The TPP, in other words, accounted for just 5.3 per cent of America’s trade, and none of the putative partners is in the top 10 of US export markets. If Japan joined in, the total trade involved rises to US$351.8 billion and 11 per cent of America’s total trade. But most of the growth in Asian and world trade is outside that group — in China, India and Brazil.

Where did the TPP idea come from and what does it aim to achieve?

Its original advocates saw TPP as an opportunity to transform a relatively trivial arrangement (the so called P-4 between Singapore, New Zealand, Chile and Brunei) into a trans-Pacific free trade zone. Its benefits were seen to derive from making it a comprehensive deal (covering all goods and services) that was inclusive, both in terms of being open to membership by others and one that would sit comfortably alongside other initiatives in the region. New Zealand saw the P-4 as a way of engaging with the US (with which it has no FTA). Australia joined in the push.

When President Obama signalled interest, things got serious. The need for tangible progress on Obama’s promise to double US exports to help the fix the economy and a big announcement on TPP at the APEC Meeting in Honolulu in November when US eyes turn to the Asia Pacific region, have raised the stakes and expectations in America.

Openness has brought prosperity, poverty reduction and remarkable modernisation of economies in the Asia Pacific. This has come through greater engagement in the global trade and economic system under the WTO trade and open investment regimes. The aim now is to get rid of residual trade barriers on a defined schedule and remove regulatory and institutional behind-the-border barriers to trade in order to reap more benefits from moving towards a single regional economy. It is not to create an inward-looking bloc that retains higher barriers to trade against those outside the group on a range of ‘sensitive’ commodities. The aim is to make it easy for others to join automatically on to the agreement, subject to their acceptance of, and compliance with, its terms.

The TPP is supposed to weld the Asia Pacific region together. It is supposed to deal with ‘behind-the-border’ regulatory (21st century) issues that other preferential trade agreements don’t deal with. Without careful consideration, design and a manageable framework, it will likely do the reverse, excluding key partners and making it difficult for those excluded to join. And, despite the rhetoric, the only ‘behind-the border’ issues on which US negotiators are mandated to focus are ‘labour laws,’ ‘environmental laws’ and ‘intellectual property rights.’ Those are not priority issues for making markets more contestable and efficient.

As Shiro Armstrong says in this week’s lead essay, ‘the risks of a quick deal on the TPP — one that is full of exceptions, allows continued protection of sensitive sectors, and excludes ready accession by others — go well beyond getting just another ineffective trade agreement.’ We’ve had a lot of them in the last decade or two but they don’t matter in the same way as this one will if it is forged on the wrong terms.

What are the risks?

The Singapore negotiations made plain a couple of weeks back what should have been clear for all to see before, that the chances of putting together a TPP deal which is open in the way that was earlier envisaged is a low probability outcome, and an even lower probability outcome the more quickly it is stitched together to meet US political imperatives.

As Armstrong argues: ‘a quick agreement with exemptions and exclusions will mean accession for future members will have to be negotiated separately with each member. That is a laborious and counterproductive process, which will likely build layer upon layer of further exclusions, exemptions and protection. It will leave power of veto for economic, political and whatever reasons with individual original signatories.’ A TPP of that kind will essentially be a series of bilateral agreements (in Australia’s case hardly different from what is already in place with the other partners) cobbled together around the United States. There will be little liberalisation of sensitive markets, and certainly no give by the United States on its cosseted agricultural sectors.  If Japan eventually joined in — an outcome that looks less and less likely day by day — some concessions may be forced by America on agriculture. And there will be no easy expansion of the arrangement to encompass the broader region, importantly China and India. It was never likely that the US would give its individual power of veto away in any event.

And yet, with the WTO’s Doha Round still heading towards the rocks, there will be powerful momentum to doing a deal of some kind no matter what. And the structure of the new US Congress means the ‘free trade’ brand is no longer on the nose in Washington, no matter what the label really covers. If there is some kind of agreement on offer however bad, the smaller partners will find it difficult to refuse, not for any good economic reason, but for political reasons.

So what’s the problem? Does it matter if we get yet another pseudo ‘free trade’ agreement, between the US and group of eight partners who in the total scheme of things are pretty insignificant? It would be more significant, of course, if Japan and Korea signed on, however little that improved the quality of the agreement.

It certainly would matter. A rum deal like this would be of little economic consequence but it would be of considerable political consequence. It would drive a wedge down the middle of the Pacific, not only or mainly economically but also politically — between the United States, its partners and China. It would entrench the adversarial political psychology that is developing in US-China relations in a way that would be very difficult to unravel for a long time. That might matter less if the WTO was not also in disarray. It matters a lot, as that prospect grows daily.

Is there any way out? China could do what some of its leading strategists like Zhang Yunling are now calling for: sign up to join the TPP negotiations. That would cause them to pause and think more carefully about where this is all heading. And Australia, an important player in the TPP push, needs to take time for re-inventing the TPP idea so that it will promote trans-Pacific integration not lead us in the opposite direction, consistent with its newly announced trade policy principles.

Peter Drysdale.

1. Is the Trans-Pacific Partnership idea a dead end?
2. Trans-Pacific Partnership: a real hope
3. The Trans-Pacific Partnership

Media reports indicate that after the 11 March earthquake, Japanese residents of Sendai had a 30 minute warning before the tsunami hit. In a sense, the Japanese had expected this for 30 years. The longer-term question is what will happen in the next 30 years.

In 1980, the Japanese government adopted ‘comprehensive national security’ (‘sogo anzen hosho’) as its security doctrine, and comprehensive security stepped outside US military-centric thinking for the first time. The concept’s distinctive dimension was the prioritisation of non-military over traditional military threats. It was articulated as a merger of three concepts — self-defense, non-military diplomacy and natural disaster response. From today’s perspective, the most interesting aspect of comprehensive security was the inclusion of natural disasters as a major threat. At the time, many observers scratched their heads at the inclusion of earthquakes in a national security doctrine, but today, natural disasters, climate change and pandemics constitute part of the pantheon of non-traditional security threats. Japan now appears to have been ahead of the curve.

Although Japan’s comprehensive national security doctrine faded away, the experience at Fukushima may be a source of new direction and insight for the re-emergence of an updated doctrine. Fukushima has shown the potential depth of the US-Japan relationship, and may initiate a renewed emphasis on resource diplomacy, civil-military diplomacy, and a new political approach to managing crisis.

One of the more striking images coming out of Sendai is the partnership between the Japanese Self Defence Force (SDF) and the US military in ‘Operation Tomodachi’ (‘Operation Friendship’), emerging on the heels of recent military exercises. This joint approach was initially envisaged as a response to a military attack on Japan. Instead, natural disaster has brought the two forces together. Although cooperation is strong now, questions arise as to whether the SDF’s attention will turn inward, and away from Operation Tomodachi, and perhaps whether the US will need to take a stronger lead role, which may lead to bilateral friction. But the original comprehensive security concept reflected, in part, Japanese concern over a perceived slippage in American military power after the fall of Saigon, with a sense that the US would not be eager to come to Japan’s aid. This recent cooperation may have set aside any current doubts.

Comprehensive national security included a focus on ‘resource diplomacy’ (exercised through foreign aid), and the search for alternative energy sources, following the 1974 OPEC oil shock.

Fukushima has already touched off a global debate over nuclear energy. This wrangling may cast fossil fuels from the Middle East in a new light. Japan may have to become more engaged in that region’s diplomacy, especially since its main relationships had been forged with the regimes now being shaken. Resource diplomacy with Africa and other regions may also become more significant. The relationships may be defined by competition with China — which is exercising its own resource diplomacy in Africa through generous foreign aid. This competition for resources may define Japanese foreign policy, with China joining the US as formative twin pillars.

Perhaps the most unexpected outcome of comprehensive security might be the emergence of Japanese-type civil-military diplomacy as an outgrowth of the SDF’s performance in Fukushima. For a self-defined pacifist country with a culture of anti-militarism, this might seem like a major transformation. Actually, the SDF’s role in Sendai, a combination of a US-type Army Corps of Engineers and the National Guard, has been seen overseas paired with civilian relief operations since the late 1990s. The SDF mandate also incorporates international peacekeeping and peace-building, and in Iraq, Japan dispatched a Civil-Military (CIMIC) operation that was neither disaster relief nor peacekeeping. The SDF lessons from Fukushima can potentially find their way to other countries in the future.

Comprehensive national security called for effective crisis management of earthquakes. So far, the political response has been mixed. Prime Minister Naoto Kan deemed Fukushima the greatest calamity since World War II, but he may not survive this crisis politically. The opposition Liberal Democratic Party is thus far rejecting Kan’s effort to create a bipartisan approach. This crisis poses a test for the political system as well as political leaders.

Maybe there was a reason why the comprehensive national security vision came not from political leaders but from an outside commission. This time, without effective leadership, the crisis may have long-term ripple effects on Japanese political culture and result in a new doctrine — comprehensive national insecurity.

Dennis T. Yasutomo is Professor of Government and East Asian Studies at Smith College, Northampton, Massachusetts.

1. Nuclear power in Asia after Fukushima
2. Rethinking nuclear power in Asia after Fukushima
3. Life after Fukushima: the future of nuclear power in East Asia

In November last year the High Court of Australia handed down a decision that has potentially major ramifications for the future of Australia’s asylum seeker policy. The High Court unanimously decided that two Sri Lankan asylum seekers who had arrived on Christmas Island claiming asylum had been denied procedural fairness after being processed as offshore arrivals.

Although Christmas Island is part of Australia, and has been since 1958, the Howard government excised it and other islands across the north of Australia from the migration zone in the early 2000s. Under the Howard government, those who reached these islands were transported to Nauru or Manus Island for processing under the so-called ‘Pacific Solution.’ In early 2008 the Rudd government abolished the Pacific Solution and shifted all offshore processing to Christmas Island.

As Christmas Island was still excised from the Australian migration zone, those landing there were not eligible to apply for any visa. Although, due to Australia’s status as a signatory to the 1951 Refugee Convention, it was required to assess asylum claims and provide protection if the person was found to have a well-founded fear of persecution. This determination was made by a departmental official, and if the asylum seeker was found to be in need of protection a recommendation was made to the Minister for Immigration to lift the ban on applying for a visa. Unlike those who applied for asylum on the mainland, unsuccessful claimants had few options for review.

In response to the High Court decision that this system denied asylum seekers on Christmas Island procedural fairness, the government has announced that it is changing the offshore processing system. These changes will come into effect on 1 March 2011, and will provide those who seek asylum on excised islands more avenues of review and, importantly, the opportunity to appeal to the Australian court system if they receive a negative finding. But it should be noted that there continues to be a slight difference in the process for those seeking protection on the mainland compared to those on excised territories.

The policy of excision was introduced to prevent asylum seekers who did not reach the Australian mainland from gaining access to the various avenues of appeal guaranteed to onshore applicants. The High Court decision has in effect found that those asylum seekers who reach Christmas Island, and other islands that have been excised from the migration zone, should have the opportunity to have any negative findings reviewed. This means that one of the primary reasons for excising islands from the migration zone has disappeared.

Following the High Court decision the opposition continued their calls for the processing centre on Nauru to be reopened and the recommencement of the Pacific Solution. If the government is adamant that they do not want to process all asylum seekers intercepted as onshore applicants, then such a change would achieve this. Of course, this also would mean that asylum seekers are processed in a country that is not currently a signatory to the Refugee Convention (although Nauru has said that it is prepared to become one if needed) and is therefore not bound by its requirements.

However, while the government has been steadfast in its opposition to the reopening of the Nauru processing centre, it has proposed a similar solution. In July 2010, the newly-installed Prime Minister Julia Gillard announced her intention to negotiate the opening of a regional processing centre in Timor Leste, one of the few countries in the region that is a signatory to the 1951 Convention. If this were to get the go ahead from the Timorese government it would mean that asylum seekers intercepted on their way to Australia would be transported there for processing. If found to have refugee status, they would then await resettlement in a third country.

The options for the Australian government appear to be to either accept its responsibilities to asylum seekers as outlined in the 1951 Convention or to continue with the policy of offshore processing and find another country to host a processing centre. Given the government and opposition both continue to view offshore processing as essential, and the High Court has ruled that asylum seekers processed on an excised territory must be provided with the option of judicial review, it appears the government will need to find another country in the region willing to process asylum seekers on Australia’s behalf. Whether this will be a sustainable outcome will ultimately depend on whether Australia and other countries are willing to resettle those asylum seekers found to be owed protection. Otherwise people found to be in need of protection may remain in limbo for years, and Australia will continue to be seen as failing to meet its international obligations regarding refugees.

Andrew Herd is a PhD scholar at the School of Politics and International Relations at the Australian National University.

1. Australia’s refugee dilemma: The Malaysian solution
2. Australia’s asylum-seeker policy after the failed Malaysia Solution
3. The Oceanic Viking and Australia’s refugee dilemma

The over-sensationalising of Australia’s alleged ‘Secret Dealing on Whale Hunts’, in Australian media reports last week drawing on documents released by WikiLeaks, has been correctly criticised by Tim Stephens. Yet his contribution has engendered further public debate over whaling, including the case recently initiated by Australia against Japan (with New Zealand also intervening) before the International Court of Justice (ICJ).

The Japanese government appears confident about winning the case, basically because the Whaling Convention was set up to permit (sustainable) whaling. Rather than withdrawing from the Convention (like Iceland) after the moratorium on commercial whaling, they want to restore the regime to what they see as its original and plain meaning. They got nowhere in International Whaling Commission (IWC) negotiations because a growing number of states have changed their views on whaling since the 1970s. Charlotte Epstein explains carefully how this shift occurred in her 2008 book.

The Japanese government now relies on the ‘scientific whaling’ provision to keep up the pressure. Yet there is a risk for Japan that even sticking to its literal terms will be found by the ICJ to amount to an ‘abuse of rights’. This is the sort of thing the Australian government is gambling on. It could work if their lawyers can appeal to the Court to adopt an interpretation of the Convention which is less bound by its strict terms and original intent, and instead more liberal or ‘progressive’. It is quite a risky strategy even in an international court, where such appeals tend to be easier to make than in national courts like the (current) High Court of Australia.

The situation is reminiscent of the Australian government’s recent comprehensive defeat in the WTO — the ‘apples case’ brought by New Zealand. The government always had a weak case because Australia’s quarantine restrictions, blocking imports based on fire blight in NZ, were similar to those applied by Japan against US apples — which the WTO had earlier concluded were an overreaction and an illegal barrier to trade. But Australia still tried to run an argument for a broader interpretation of certain WTO agreement provisions. This failed before the WTO (both the panel and the appellate body) but the government was (and still is) able to draw out liberalisation of apple market access — a win for domestic political reasons (for example in Tasmania).

A judgment from the ICJ will not truly resolve the whaling issue. The law applies a particular logic to social complexity — viewing ‘science’ through its own lens, for example — which may or may not add much value to the existing public debate. We still need an outcome that balances science, law, ethics, (short-term and long-term) economics, culture, etc.

Perhaps the Japanese and Australian (and indeed New Zealand) governments will be able to reach a negotiated settlement after full submissions have been presented to the ICJ from both sides, and at least some ICJ judges provide a few hints about their preliminary views on the case. A parallel formal or informal conciliation process, facilitated by a neutral mediator, might help too (after all, compromises are quite often reached in cross-border commercial and investment disputes involving Japanese interests). But other IWC states may not approve of a settlement reached among these parties, so further disputes may arise. And the challenges of sustaining marine resources generally require multilateral (or at least regional) responses — although it would also be helpful if citizens around the world could pressure their national governments to stop subsidising fishing fleets even on a unilateral basis.

Luke Nottage is Associate Professor at the University of Sydney Law School and founding Co-director of the Australian Network of Japanese Law (ANJeL).

This article is adapted from a post on his ‘Japanese Law and the Asia Pacific’ blog. It draws on research from the project ‘Fostering a Common Culture in Cross-Border Dispute Resolution: Australia, Japan and the Asia-Pacific‘ supported by the Commonwealth through the Australia-Japan Foundation which is a part of the Department of Foreign Affairs and Trade.

1. Japan and Australia: stalled in domestic politics
2. Whaling a small issue in relations between Australia and Japan
3. Australia-Japan economic partnership – Weekly editorial