AUKUS to Push Forward With Expansion Despite Quarrels Between Allies

Earlier reports had indicated that the administration of US President Joe Biden was pushing hard to gain momentum on the AUKUS Pillar 2 stage before the US elections in November. It was also noted that Japan and Canada were in line to join the second – non-nuclear – pillar of the trilateral security partnership.

The US is pushing for Japan to be included in Pillar II of the AUKUS agreement, despite disagreements that have plagued the trilateral pact, the Financial Times reported.

The defense ministers of the United States, Britain and Australia are expected to issue a statement on Monday announcing the start of talks on new members joining the security pact. The talks would be on the non-nuclear Pillar II of the trilateral security agreement, insiders were quoted as saying. Expansion of Pillar I is not on the table, they added.

The statement comes ahead of a meeting between US President Joe Biden and Japanese Prime Minister Fumio Kishida at the White House on April 10. The two sides are expected to announce closer military cooperation as Japan’s prime minister pushes a massive defense buildup rationalized by US-driven claims of alleged threats from neighboring countries. A trilateral meeting between the US, Japan and the Philippines will follow on Thursday.

Pillar II involves the sharing of a range of technologies, including underwater robotics, quantum electronics, cybersecurity and electronic warfare capabilities, hypersonic weapons, and defenses against them.

Announced on September 15, 2021, the AUKUS trilateral partnership between the United States, United Kingdom, and Australia promised to bolster Australia’s fleet with nuclear-powered submarines and increase defense cooperation among countries in the Asia-Pacific region. The deal led to a diplomatic rift between Australia and France after Canberra reneged on a $66 billion contract with Paris to develop 12 advanced conventionally powered attack submarines.

Under the three-phase deal, Australia is expected to buy at least three Virginia-class nuclear-powered attack submarines, with an option to acquire two more in the early 2030s. Before that, Canberra would host the “rotational force” of US and British submarines from 2027. In December 2023, the US Congress passed the National Defense Authorization Act, which authorized the transfer of the Virginia-class submarines to Australia.

From the beginning, there has been talk of other countries joining the Pillar II of AUKUS, with Japan being dubbed “Jaukus” for its potential membership. US Ambassador to Tokyo Rahm Emanuel wrote in the Wall Street Journal on Friday that Japan was “about to become the first additional Pillar II partner” in AUKUS.

A Politico report in March quoted diplomats as saying that the Biden administration was “pushing really hard to get some things on AUKUS pillar 2 done now, before the US election” in November. The rush was apparently prompted by fears that if ex-President Donald Trump retook the White House, he might decide to either roll back or scrap the AUKUS agreement.

But the upcoming announcement on the possible expansion is a “compromise between the allies,” the outlet noted. Both Australia and the UK have reportedly balked at the idea of inviting Japan to join AUKUS. As it stands, the trilateral security cooperation pact faces complications that need to be ironed out, the report read.

Australian Defense Minister Richard Marles indicated in February that AUKUS was “very much focused on working on new innovative technologies amongst the three countries” before any new members joined.

US Deputy Secretary of State Kurt Campbell admitted that the US side was finding it “challenging to trilateralize” some of the development and co-production with the UK and Australia.

Canberra and London have also previously raised concerns about Tokyo’s lack of security systems to protect highly sensitive information. “Japan has taken some of those steps, but not all of them,” Campbell stated.

As for Australia, it sees the nuclear submarine program as a priority before expanding Pillar II, an insider was quoted as saying.

As the Washington architects of this de facto anti-China alliance show an eagerness to expand it, with reports suggesting South Korea or New Zealand as likely candidates, opposition to the pact has grown. From the outset, China has denounced AUKUS as a demonstration of a “Cold War mentality.” AUKUS could turn the Pacific into “an ocean of storms,” Chinese Foreign Ministry spokesman Wang Wenbin warned last year.

Russia expressed concern about the pact, saying the partnership would have a destabilizing effect on the Nuclear Non-Proliferation Treaty (NPT) and undermine international security in general.

Incidentally, with respect to Pillar II, the Australian Strategic Policy Institute’s (ASPI) June 2023 assessment update suggests that China is ahead of the US and its allies in 19 of the 23 technologies relevant to that stage of AUKUS.

“China has become a serious competitor in the foundational technologies of the 21st century: artificial intelligence (AI), 5G, quantum information science (QIS), semiconductors, biotechnology, and green energy,” as per the statement.

AustCham China welcomes tariff removal on Australian wine, vowing to explore new business opportunities

Bottles of Australian wine on the shelf of a supermarket in Hangzhou, East China's Zhejiang Province on November 27, 2020 Photo: VCG

Bottles of Australian wine on the shelf of a supermarket in Hangzhou, East China’s Zhejiang Province on November 27, 2020 Photo: VCG

The Australian wine industry is eager to return to the Chinese market while continuing to serve markets that were developed while the tariffs were in place, said the China-Australia Chamber of Commerce (AustCham China) in response to China’s decision to cancel anti-dumping and anti-subsidy tariffs levied on Australian wine effective on Friday.

The lifting of tariffs on Australian wine is a highly positive development, signaling a step forward in resolving trade tensions and benefiting both economies. For Australia, it means the revitalization of the wine industry, protection of jobs and restoration of market access to China, which has been a significant export destination, AustCham China said in a statement sent to the Global Times on Saturday.

China’s Ministry of Commerce on Thursday announced that the country would lift anti-dumping and anti-subsidy tariffs on Australian wine starting from Friday.

Given the changes in the wine market in China, it is no longer necessary to impose such tariffs, the ministry said in a statement.

The anti-dumping tariffs were imposed on March 28, 2021 for a five-year period.

This will be a win-win outcome for Chinese consumers and Australian wine producers, said AustCham China, welcoming the decision. 

It is indeed very heartening to see Australian companies returning to China after a long period of absence to meet with stakeholders, business partners and their China-based teams and to explore new business opportunities in the Chinese mainland market, it said.

However, experts believe that it will still take a long time for Australian wine to reclaim its market position in China. 

Australia was once the largest source of wine imports in China, a status achieved through years of deep cultivation of the Chinese market. Now, with the market share of Australian wine reduced due to anti-dumping and anti-subsidy tariffs, wines from other countries have taken over, and consumer habits will be difficult to change back, Chen Hong, director of the Australian Studies Center of East China Normal University, told the Global Times on Sunday.

Australia should cultivate the Chinese market’s confidence in Australian wine again, Chen said.

China has been Australia’s largest trading partner for 15 consecutive years. It is both Australia’s largest export destination and its largest source of imports, according to the Chinese Embassy in Australia. 

Bilateral trade maintained strong momentum last year, as widely expected, with year-on-year growth of 9.8 percent in yuan terms, according to data released by Chinese customs.

On March 20, Member of the Political Bureau of the CPC Central Committee and Foreign Minister Wang Yi held the seventh China-Australia Foreign and Strategic Dialogue with Australian Foreign Minister Penny Wong in Canberra, Australia.

Wang said that China is ready to work with Australia to further prepare for high-level exchanges, fully restart and make good use of consultation and dialogue mechanisms established in various fields, fully leverage complementary advantages, and further tap the potential of cooperation in such fields as new energy, digital economy, green development and climate response, on the basis of consolidating and developing cooperation in traditional areas of strength such as energy, mining and agricultural products, so as to constantly make the pie of common interests bigger. 

Chinese companies operating in Australia reported steady growth in 2023, with 57.5 percent of firms surveyed being profitable and 45.4 percent of surveyed companies said that they plan to expand their business presence in Australia, China Council for the Promotion of International Trade revealed on Friday.

Over half of Chinese companies in Australia profitable in 2023: CCPIT report

China Australia File photo

China Australia File photo

Chinese companies that have operations in Australia reported steady growth in 2023, with 57.5 percent of firms surveyed saying they made a profit last year. Meanwhile, they called on the Australian government to provide a sound business environment for foreign companies and ensure fair competition, according to a report by the China Council for the Promotion of International Trade (CCPIT) published on Friday.

China and Australia’s economies are highly complementary, and share great potential. Australia is an important overseas market for Chinese companies, Yang Fan, a spokesperson for the CCPIT, said at a press conference in Beijing on Friday.

A report conducted by the council showed that the operations of Chinese-funded enterprises in Australia showed steady growth in 2023, with 57.5 percent of the companies surveyed saying that they had reported a profit, Yang said. Meanwhile, about 45.4 percent of the surveyed companies said that they plan to expand their business presence in Australia.

Over recent years, Australia has rolled out a series of policies in terms of industrial innovation and digital capability, which contributed to the improvement of Australia’s business environment. In the survey, 37.6 percent of Chinese companies said Australia’s business environment is relatedly good, according to the report.

Chinese companies said that they expect the Australian government to enhance the fairness of rules of standards in areas including market entry of foreign enterprises, anti-monopoly and cyber security, and lower the entry threshold and compliance cost for foreign enterprises, it said.

In addition, they also called on the Australian government to improve access for foreign investment, and use trade remedy tools reasonably to build a sound business environment for foreign enterprises, said the report.

With 2024 marking the 10th anniversary of the establishment of the comprehensive strategic partnership between China-New Zealand and China-Australia, the CCPIT plans to organize entrepreneurs to visit the two countries to promote trade and investment activities, Yang said.

China’s Ministry of Commerce (MOFCOM) announced on Thursday a decision to cancel anti-dumping and anti-subsidy tariffs levied on Australian wine, effective on Friday.

Since taking office in 2022, the Albanese government has remedied its predecessor’s irrational anti-China policies, prompting a positive response from the Chinese side. Hence, bilateral ties have gradually bottomed out and stabilized.

During Chinese Foreign Minister Wang Yi’s latest visit to Canberra, he said the two sides should build on the sound momentum of bilateral relations, “work together for the future,” and take a more active attitude to jointly build a more mature, stable and fruitful comprehensive strategic partnership.

“Independence should also be an important principle of Australia’s foreign policy. The development of China-Australia relations does not target any third party, nor should it be influenced or disturbed by any third party,” Wang said.

Global Times