India, Japan and Australia -The need for Asian Triad
Following the escalating tensions between India and China at Eastern Ladakh region, and not so congenial relations between China and Australia, it has been felt that there is a need for greater cooperation between India, Japan and Australia on strategic issues as well as developing a common understanding on regional security aspects. The three countries have already had worked on it through official mechanisms, and there has been Track II dialogue process which has been ongoing since the year 2014. During the Track II dialogue, three different think tanks/institutes from the three countries have been meeting regularly to discuss issues related to regional security, economic, investment and trilateral relations. The discussion under the Track II process have propelled Track I interactions while acknowledging the fact that the trilateral initiative should explore possibilities in the areas of trade and investment, defence cooperation and technology collaboration through joint ventures, and developing a comprehensive understanding on emerging security challenges in the Indo-Pacific theatre.
India has been looking for diversifying its investments and also looking for participation from Japan and Australia in furthering its trade and commerce with the other two important strategic partners of the Indo Pacific region. In fact after the withdrawal of the US from the Trans Pacific Partnership and India's withdrawal from the Regional Comprehensive Economic Partnership(RCEP) negotiations, it has been observed that there is a need to engage the two economies of the region namely Japan and Australia through trade, commerce, infrastructure projects, finance and investment initiatives in third countries. Japan has clearly indicated that it will be going to subsidize its companies and promote their shifting of investment from China to India, thereby looking for a unique ecosystem of trade, investment and infrastructure finance between Japan and India.
Australia has been facing Chinese annoyance in relation to the US-China tensions. Australian exports to China are going to bear the brunt of it. As already China has been penalizing Australia in terms of reducing imports from Australia and has been looking for furthering its footprints in South Pacific in islands such as Kiribati, Vanuatu, Tonga and Fiji. Japan, has been slightly annoyed by the fact that India has withdrawn from the RCEP in the pretext of not opening its economy to Chinese cheap exports through implementing strict Rules of Origin(ROO) criteria, and thereby trying to protect domestic producers. In order to compensate Japan with which India has a Comprehensive Economic Partnership Agreement (CEPA), the possibility of exploring the similar tariff structure (like RCEP) to Japan can be explored. Australia, which was on the verge of concluding a free trade agreement with India was also looking forward for the participation of India in the RCEP and subsequent concessions that India will provide to all the partnering countries under the regional trade agreement. However, this could not happen and therefore Australia would like that India should resume work on the bilateral trade agreement at the earliest convenience.
India has been looking for exploring the option of alternate resources in case of its pharmaceutical, iron ore and other materials which it has been importing from China. Both Japan and Australia can look forward for a joint collaboration with India on promoting manufacturing and also search for alternative sources of critical raw materials in the sectors such as pharmaceuticals, solar panel, industrial chemicals and electronics. Few of the countries which might be an alternate source of raw materials might be countries in Asia as well as in Africa. Some of the critical raw materials which India has not been exploring because of the cheap imports from China might be procured from other regions sensing the fact that India wants to ride the wave because of the COVID vaccine which is much in progress. While China has been the most preferred source for pharmaceutical raw materials because of its least-cost status, the other options can also be explored in the same light now when China and India trade are on a downward spiral.
The trilateral countries namely India, Australia and Japan have certain structural agreements with regard to defence cooperation and also looking for better regional security in the Indian Ocean region. Australia has already signed mutual logistics support arrangement (MLSA) expressed its desire to use the facilities in the Andaman and Nicobar Islands and in reciprocity it will be providing the same facilities to Indian maritime surveillance aircraft in the Coco Islands. India and Japan are also keen on signing the Acquisition and Cross-Servicing Agreement (ACSA) which will facilitate better logistics and maintenance cooperation with the Indian armed forces. This also provides basis for the annual Malabar exercises in which Australia may be invited as a regular participant. India has also been looking for facilities across Indian Ocean which includes Japan’s Djibouti base and Australian bases across Indian Ocean.
In structural terms the complementarities that exist between India, Japan and Australia can be listed in four different areas. This includes the export and import of semi finished products, raw materials and other associated inputs. While the three countries can pool their resources together and look for viable sources of raw materials, it would depend much on how these three countries can work on developing trade and commerce relationship among themselves. It has been stated time and again that the Quad is a semi-formal military partnership but in order to support the Quad framework there is a need for a better understanding among the three powers which can based on cooperative mechanisms through economic investment, finance and trade.
While the US, Japan and Australia have been the members of the Blue Dot network (aims to finance and build quality infrastructure projects), and India is studying this concept, it needs to be seen how India would collaborate with these three nations in working on the gold standard of infrastructure investment and finance in the underdeveloped regions of Asia and Africa. It has been seen that India looks into capacity building, training and personnel management while countries like Australia and Japan can bring in more entrepreneurship and technical expertise to promote manufacturing in those areas which are less developed but have very good cost advantages in terms of capital land and labour. Furthermore, the US has been looking for building relationship between its allies and strategic partners in Asia so that China can be controlled and managed within Indian and Pacific Oceans. Very lately the US secretary of state has expressed its trust with regard to India emerging as a net security provider in IOR.
The big question which needs to be addressed at this point of time is whether this relationship between the three countries can bring about dividends or not. It has been seen that the development in the Indo-China region and also the underdeveloped economies in Africa where both India and Japan have been undertaking initiatives under the Asia Africa Growth Corridor Australia can be a willing participant. Australia has also expressed that it can work with India and Japan in developing and also harnessing the resources which can be found in countries such as Myanmar, Cambodia, Indonesia, and Vietnam. This would ensure that the other alternative modes of production manufacturing can be done which can thereby connect with the supply chain with the Japan, Australia and India.
The possible areas of cooperation which might be explored and would be discussed in the next few years are in the field of maritime security, anti-piracy missions, space, cyber,encrypted communication networks, composite materials research, nano particles and developing high quality medicines. The three countries might also work jointly on exploring rare earths and new materials which would undermine Chinese strength in the global markets in these sectors.
Pic Courtesy- Greg Rosenke at unsplash.com
(The views expressed are personal.)