Australia's Foreign Economic Policy and ASEAN

4. Australia and the Formation of ASEAN

4 Australia฀and฀the฀Formation฀฀ of฀ASEAN The foreign economic policy stance of the Australian Government (and the protectionist coalition) towards Southeast Asia in the postwar period was in essence contradictory. On the one hand, Southeast Asia has always been a strategically important region for Australia because of its geographical proximity. This was etched in Australian consciousness by the Japanese invasion of Southeast Asia during the Pacific War (Waters 1997, p. 42). Its importance intensified soon after the war: the end of the war meant the gradual end of colonial rule by European powers and the foundation of independent countries in the region. Under these circumstances, political and security considerations imbued Australia’s relations with the Southeast Asian region with great significance. Australia supported the economic development of these newly independent countries. Economic development of these countries was thought to be the key to achieving stability in the region and to strengthening countervailing power against communist penetration. On the other hand, World War II had strengthened the policy idea of the 04฀AFEP&A.indd฀฀฀96 12/16/09฀฀฀10:33:25฀AM Australia฀ and฀ the฀ Formation฀ of฀ ASEAN฀ 97 protectionist coalition. Australia accepted the non-discrimination and MFN principles and became an original member of the GATT. Yet Australia secured the right to maintain tariffs for protective purposes in the mid-1950s. Assisting the economic development of newly independent countries in Southeast Asia and, at the same time, maintaining high levels of protection and assistance for Australia’s domestic industries were potentially mutually exclusive tasks. When these new countries developed sufficient industrial capacity to export their products (most likely to be labour-intensive manufactured products given their relative abundance in labour over other resources), it was at least to some extent inevitable that they would demand that Australia open up its markets to their exports. This contradiction in foreign policy stance did not matter much until the 1970s because the competitiveness of the Southeast Asian economies remained limited and their trade was mainly dominated by primary commodities. The fact that most of the newly independent countries in the region struggled in their nation building in the early period and had conflicts with each other did not provide favourable conditions for economic development. The establishment of ASEAN in 1967 was an attempt to build stable relations within Southeast Asia with an agreement to settle disputes peacefully through consultation and by promoting economic, social, cultural and other cooperation. In such an improved regional environment , each member could work on national political and economic development with less external interference. The establishment of ASEAN did not have an immediate effect on its members’ economic relations with Australia and Australia’s foreign economic policy towards the region did not change until the early 1970s. But it laid the foundation for a fundamental change in the relationship later in the same decade. This chapter explores how the establishment of ASEAN in 1967 and its early development through the 1970s were interpreted by the dominant protectionist coalition in Australia and how Australia’s policy towards the region was affected. 04฀AFEP&A.indd฀฀฀97 12/16/09฀฀฀10:33:25฀AM 98฀ Australia’s฀ Foreign฀ Economic฀ Policy฀ and฀ ASEAN I.฀ AUSTRALIA’S฀STANCE฀TOWARDS฀SOUTHEAST฀ASIA฀ AFTER฀WORLD฀WAR฀II Political฀and฀Military฀Commitments a)฀ Showing฀Understanding฀of฀the฀Independence฀Movement:฀฀ ฀ Liberal฀Foreign฀Policies฀in฀the฀Early฀Post-war฀Period In Australia, the ALP remained in power from 1941 to 1949. Prime Minister Ben Chifley and Minister for External Affairs H. V. Evatt adopted the strengthening of alliance relationships with the United Kingdom and the United States as the theme of Australia’s post-war foreign policies, but they also sought the reinforcement of multilateral frameworks (international organizations, multilateral rules, etc.). Evatt, especially, emphasized the role that could be played by the newly established United Nations (UN) and devoted himself to the expansion of the power of the UN General Assembly in order to avoid the domination of the UN by the permanent members of the Security Council (Lee 1997, pp. 51–53).1 The idea held by Evatt and others that states’ external behaviour could be controlled by securing all states’ (including major powers’) commitment to multilateral frameworks was based on the principles and beliefs of liberal institutionalism (Waters 1997, p. 40).2 For Australia to become an influential actor in international society, contribution through such multilateral frameworks was thought to...