The 1996–1997 cabinet papers: hopes and hazards for Australia and India (part 2)
21 Jan 2019|

An odd element of Australia–India relations for two decades has been Canberra’s reluctance to push for India to join Asia’s most important economic group, APEC.

The strangeness is heightened by the obvious synergy between Australia’s language of support for India’s economic liberalisation and its expanding role in Asia, plus our championing of APEC’s free-trade vision.

The APEC blank spot has become even odder as Australia’s working construct of ‘our’ region has shifted decisively from the Asia–Pacific to the Indo-Pacific.

Oz diplomats always argue it’s not Australia’s fault. China uses its right to veto new membership proposals and ASEAN isn’t that keen on India joining a club that gives an exclusively East Asian expression to the idea of Asia.

The Canberra origins of the APEC oddity are explained in the 1996 and 1997 cabinet papers released by the National Archives of Australia. My previous post discussed an October 1996 submission by the Department of Foreign Affairs and Trade, which is here.

The submission went to the new National Security Committee of cabinet. The NSC was created by John Howard when he took office in 1996 and it’s one of his enduring contributions to the way Canberra deals with international policy and strategy.

The NSC is both emblem and tool of Australia’s increasingly presidential foreign policy, centred on the prime minister. And in these early months of the NSC’s existence, the PM’s department was asserting its prerogatives.

DFAT and the Department of the Prime Minister and Cabinet had a stoush over Indian membership of APEC and where India stood in Australia’s foreign policy firmament.

Howard’s government was in its first year in office, but attitudes to APEC in PM&C still had deep roots in the era of his predecessor, Paul Keating. Keating had been proud of creating APEC’s leaders’ summit and was extremely reluctant to let new players into the exclusive group.

DFAT recommended that Australia ‘acknowledge India’s substantial interests in the East Asia/Pacific region and agree that Australia should support India’s involvement in Asia Pacific regional institutions where that would not be likely to adversely affect regional cooperation’. The submission noted that Australia had just supported India joining the ASEAN Regional Forum.

DFAT then recommended that cabinet give ‘public acknowledgment of the strength of India’s claims for eventual APEC membership should the APEC moratorium eventually be lifted, and agree that we should continue to encourage India to liberalise its economy consistent with APEC’s goal of free trade and investment by 2020’.

The PM’s department went to war with DFAT in its comment to cabinet, arguing that it was up to India to do much more work. Expanding relations with India would ‘depend foremost on continued economic reforms in India, which are not assured’. And PM&C argued for a tough view of the differences between the regional ambitions of Australia and India:

We note that India’s aspirations to play a greater role in the Asia-Pacific region have the potential to cut across Australia’s economic and strategic interests. While India’s trade and investment links with the region are growing, it is still poorly integrated into the Asia-Pacific economy and will remain so for some years. India’s immediate security preoccupations and its nationalistic outlook will be a stumbling block to its efforts to engage the region more broadly.

In language straight from the Keating APEC handbook, PM&C argued that cabinet should reject the DFAT recommendation:

India does not have a strong claim to membership of APEC, and Australia’s position needs more careful consideration in the context of our overall policy on APEC membership. India is still highly protectionist and is actively opposing consideration of new trade liberalisation issues (such as trade and investment) in the WTO. India would be a drag on the pace of liberalisation in APEC if it were a member. Without publicly opposing India’s membership of APEC, Australia should not encourage its membership hopes.

PM&C won. The NSC decided that ‘Australia should neither promote Indian membership of the Asia-Pacific Economic Cooperation (APEC) forum nor be seen to be vetoing it’.

By the time of the leaders’ summit the following year, it was all about the veto.

In Vancouver in 1997, India was one of 11 countries expressing interest in joining APEC. Only three were accepted—Russia, Vietnam and Peru—and forum membership grew to 21 countries.

The key decision for India was that the APEC leaders announced a 10-year moratorium before any further expansion would be considered.

Closing the APEC door for a decade was a decision that came out of the day-long leaders’ retreat. Howard said he ‘very strongly’ supported the 10-year freeze. At the end of the Vancouver summit, Australia’s prime minister was modest about his own role in ensuring that the moratorium was a decision announced from the leaders’ talks: ‘Well, it came up earlier in discussion and one of the leaders reminded the meeting at the end that it should be included.’

Two decades on, APEC still has 21 members and India is still waiting.