In Conversation with Patrick Buchan: Australia in a Turbulent Pacific

A summary of our conversation is available here.

Note: Our conversation took place on the eve of Trump’s “Liberation Day.” Due to Patrick’s connectivity issues, the conversation was conducted via phone call, leading to less than ideal audio quality. The transcript below has been cleaned up and can be referred to for a more polished version of our conversation.

Jersey Lee

Today we're delighted to be talking with Patrick Buchan. So Patrick, could you briefly give us a bit on your background?

Patrick Buchan

Thanks, it's great to be on your podcast. I'm a keen listener to the podcast, and I think you guys do a great job; it's also good to be working with my old outfit, CSIS. My career has been varied across foreign policy. I'm currently working here, in Australia, we've got our big federal election, so I'm working in the campaign for the Liberal Party; today I speak to you not as a member of the Liberal Party, but as a former member of CSIS.

I, like many people of my generation, we grew up in the era when Australia was making its great political and diplomatic entries into Asia. I went to university in the late 1990s where I studied politics and very much focused on those big geostrategic shifts from the Post Cold War era as Australia engaged into Asia, particularly into Southeast Asia, but also deepening our relationships with countries, particularly Japan, which by that stage was our largest trading partner, and also newer countries that we hadn't so much engaged with, like South Korea and so on. But Indonesia was very much the focus of my background. From there I went to the Department of Defence in Canberra, where of course, promptly having studied Indonesia and focused on Indonesian strategic issues, they put me on the Iraq desk.

Jersey Lee

From there, you later moved to the US to work in the Pentagon and then to CSIS, as you mentioned. Is that right?

Patrick Buchan

Well, that's exactly right. I did time at the Department of Defense where I worked on numerous policy teams and issues from Iraq to counter terrorism to ballistic missile defence, a lot on the US alliance engagement.

I worked at the department of Prime Minister and cabinet, where I did work on Southeast Asia, and then in 2014 I went to Washington, where I arrived in the Pentagon, into the office of the Secretary of Defense during the Obama administration. And from there I worked on great power relations, so very much focused on China. At that point, I guess the issues regarding US China relations were not as profound as they are now; we were trying to work out at that point what the US relationship with China is, and what it is not. We were still in the great era of the Global war on terrorism, and those of us working on China and great power relations were still sort of sitting in the 2nd row of policy, as the Obama administration was very much struggling with how to bring the global War on Terror to its finality.

Jersey Lee

Since you've worked both in the Australian and American defense departments, could you give us a bit of a comparison between the two, and what it's like to work in the two?

Patrick Buchan

Obviously the United States system is so much bigger. I think the key thing that I found at the start was, as an Australian official, your focus was very much twofold: it was on the US Alliance and on South East Asia. Once I got to the Pentagon, I had to broaden my horizon, to realize that all of the world's foreign and defense policy problems could only be solved here, that is in the Pentagon or at the White House. So I found myself very much having to lift my gaze. And that did take me a little while, because, again, as an Australian policy practitioner, your whole focus is just primarily focused on the US and Southeast Asia.

Jersey Lee

With Australia facing a new and more challenging era, could Australians have something to learn from this American broader vision?

Patrick Buchan

Certainly, there's no question that that the world is going through a great geostrategic shift. One of the things I would note with U.S. policy in Asia, and what Australian policy practitioners and politicians can learn from, is that most of the Trump administration is very much focused on bilateral engagement, it doesn't do multilateralism. One of the things I think the Australians have done so well for so long, in the post Second World War era, is doing its business through associations such as ASEAN, and now the Quad, but its bilateral engagement has also been world class, in its diplomacy and the way it does its defense diplomacy. So I think we're actually quite well set.

We haven't put all of our eggs in the basket, like many Europeans have, where their primary focus has been working through multilateral systems, be it NATO or be it EU. I think for Australian policy practitioners, that sense of experience and long-term way of doing business bilaterally, which is very much how the Trump administration likes to do its business, sets us up quite well.

Of course, if you're an Australian practitioner, you are certainly not sitting at the top of the great power tree, so there's always going to be a key difference in the way you do business. But I personally think that the Australian system is very well placed to manage this new order that we're seeing.

That said, I actually don't think that the breakdown in some of the systems we're seeing, in the way the Americans have done business in Europe, is as impactful as it is here in Asia. And again, the reason I say that is because the American hubs and spokes model in Asia is very much geared towards bilateralism. So what we're seeing in Europe, with Washington very much—whether they're dismantling it or not, I'll leave that for others to comment—but we're very much seeing NATO fade to a point where it really has to have a long think about how it wants to reinvent itself.

Jersey Lee

Right now, there's a live debate in Australia on AUKUS, that's been brought back by recent moves by the Trump administration, primarily in Europe; people are again debating on whether we should even have AUKUS. That's a parallel debate to what's going on in Europe, where a lot of people are questioning the wisdom of relying on American F-35s, whether there's a potential Pentagon kill switch or some other way in which Americans could use their leverage against European defence; this has really negatively impacted the American Defense Industrial complex. For Australia, given that one of AUKUS's primary selling points has been that it's going to be a sovereign Australian capability going forward, is there some way for Australia to make it even more sovereign, in terms of the system operations, the maintenance and the components manufacturing, such that regardless of what happens to the alliance with America, Australia will have submarines that are fully its own?

Patrick Buchan

I know there's a lot of debate around, in certain sections of the media and in the commentariat, regarding AUKUS and at the heart of it Australia's sovereignty. What I would add to that is what's called full knowledge and concurrence, FK&C. FK&C came about in the early 1960s, during the Menzies Liberal Government of Australia, when the United States proposed very sensitive facilities such as Pine Gap, at the heart of Australia and the United States’ most sensitive areas of alliance cooperation. Full knowledge and concurrence was an Australian caveat which was that no US activities could occur without the full knowledge and concurrence of Australian officials and the Australian government.

That mentality has seeped through the entire Australian defense system establishment, and is very well understood with the Americans. So some of these lines I do hear about AUKUS undermining Australian sovereignty, I'm just not sure I buy that. Additionally, when you look at Australia's most sensitive capabilities, be they aircraft, be they ships, be they satellite systems, the reality is that the overwhelming majority of those systems are US systems anyway, so I'm just not sure I buy this; I know it's a very cute media headline, but I'm not sure I buy this.

The other thing I would add to that is, when you look at our AUKUS partnership, these are Australia's most long-held, trusted defence, political and diplomatic relationships with the United States and the British going back, in the US case more than a century, and in the British case far longer. I'm just not sure that the risk of Australia “losing sovereignty” is actually there. Of course we need to monitor that. But I take the view that the risk of a loss of sovereignty, so to speak, is a little bit overblown.

Jersey Lee

Let’s continue to discuss the alliance with the US. In terms of intelligence sharing, the big recent news has been the Signal leak, which I'm sure you're aware of, and there's some discussion about its implications for the future of Five Eyes intelligence cooperation, given the way America is treating intelligence that comes from its allies. For example, there's been reporting that information from the Signal leak implicated and exposed Israeli intelligence. There's also been some discussion in Washington that's semi-serious, of Canada possibly getting kicked out of the Five Eyes due to the general situation between the new administration and Canada. So what do you think of the future of Five Eyes cooperation?

Patrick Buchan

The first thing I'd say on the Signal leak, look, it was sloppy, there's no other way to put that. I appreciate, having been in that world myself, that it can be difficult at times, based on using highly classified systems, to communicate, particularly those at the political level with each other, without having to jump on their classified systems, what we refer to as high side systems. In that age-old problem of the need for secrecy versus the need for speed and the decision-making cycle, people can get lax, and clearly that happened here. Whether these are fireable or dismissible offenses as well, I'll leave that for others, and ultimately that's going to be something that President Trump would have to decide.

Based on what I have seen in the media and what the Atlantic has published of the full Signal chat leak, I wouldn't say that any great national technical means of intelligence gathering was compromised. I saw Secretary Hegseth's comments about what the strike package looked like, so clearly this was sloppy, there's no way to get around that, no two ways about it. But to draw a bow and say that it somehow compromises Five Eyes intelligence cooperation, I'm not sure about that. History’s littered with leaks; to quote Donald Rumsfeld, that's a known unknown, it's always going to happen. There are going to be leaks in intelligence gathering, of the national security business, there always will be, always has been.

The key is how damaging are those [leaks]; in my assessment this doesn't appear extremely damaging at all, but politically very sloppy.

You talk about there being word around some of the Washington media establishment, about Canada being kicked out of Five Eyes. In the early 1980s, when New Zealand made its decision regarding US visiting nuclear ships to New Zealand (note: banning visits), the United States suspended the ANZUS alliance and its legal alliance obligations to New Zealand; Five Eyes was never impacted. So when you're dealing in this business at the political level, you have to silo relationships. The Americans in the Reagan administration siloed that component of their disagreement with New Zealand, because they made the assessment that the Five Eyes relationship was far more beneficial. I think the same will be happening here.

Obviously, the Canadians and the United States are going through a very turbulent period in their bilateral relationship. I'm certainly no expert in Canada US relations, but I reckon you'd have to go back to the early days of the Second World War to have seen their relationship in such a tawdry state, obviously with the tariffs, and then the tit-for-tat in the media between President Trump and the Prime Minister of Canada. But I wouldn't foresee a circumstance, based on open source information and the media that I'm reading, that that any serious people would be talking about keeping Canada out of Five Eyes simply because it's not in the US interests to do so, that's the first point of call. And we've seen this before, with New Zealand and the ANZUS disagreement. So I would dismiss that as inside the Beltway chitchat.

Jersey Lee

You mentioned tariffs, which were imposed on Canada, obviously there's also tariffs against Australia, despite Australia's trade deficit with America. There’s also the April 2nd “Liberation Day” of global tariffs on every country, presumably including Australia. I'd just like to get your general thoughts on the new global trade framework that the Trump administration brings in, and what it means for Australia and for the Pacific region. We've seen America for example in 2017 walking away from the TPP, which was basically a multilateral trade framework that was arguably designed to keep China out and be a part of America's framework for a pivot to Asia. What do you think of this new approach by the Trump administration to trade and its possible impact on Australia?

Patrick Buchan

This is a personal position, perhaps not a position of my party or others, but my personal position would come down to the fact that tariffs have been a very much a part of the international economic order for a long time. I think the last 20 years in international economies and international political movement has seen tariffs coming down. We have now become accustomed to what is not the norm, that is free trade. I support free trade.

What we're seeing from the Trump administration now has to be seen through a strategic prism. It's not just an America First economic model. I have enough faith in the national security establishment in Washington that many would see this as a way to deny potential adversaries access to key technology. I think we have to read it through that through that prism. But again, I would remind people that this great era of free trade we've seen in the post-Cold War environment is not the norm, tariffs have been the norm for the last couple of 100 years.

Under the current tariff regime that the administration's announced, there has been a marginal impact on Australian exports, particularly in Australia's aluminum and steel industries. I think the key is how does the Australian Government and its officials ensure that there's no further imposition of tariffs in other key exports for Australia, and I think the second thing is to ensure that our other key trading partners, be it China, be it South Korea, be it Japan, that we ensure that tariff imposition “contagion” doesn't spread between other key export markets. Secondly, this administration has only got another 3 1/2 years left to run. Perhaps this is not the new normal. This is just a blip on the radar. So my view is we'd have to wait and see.

Jersey Lee

In regards to China, there's been more than a decade old debate in Australia about balancing trade ties with China, and security and other economic ties with America. Over the past decade both relations have been subject to some degree of turbulence and uncertainty. How should Australia manage these two important relations? Also, is there a “third way”, is this kind of a “false choice”, as people like to say?

Patrick Buchan

Yeah, exactly. That's the great strategic question of Australia's day, and has probably been in the public mind for 10 years, but I know from my own experience, [it’s been] in the mind of Canberra officials for 15 to 20 years: how does Australia walk that high wire act of its strategic, political, military and cultural relationship with the United States, versus its key economic relationship with China. That's the key issue of the day, and I think we saw very interestingly in the Turnbull government in Australia, that they managed to take hard, principled stances.

So the exclusion of Huawei from Australia's 5G network was an example of that: without damaging the economic relationship, whilst also understanding that the United States remains our key strategic and military alliance partner. This so-called balancing act is not new, the Australian political elite have been doing this for 15, 20 years and doing a pretty good job, with the Australian governments, particularly under the former Liberal government, doing a very good job in taking principled values based national interest stances on where they disagreed with China and cooperated where they needed to, particularly in the area of the economy. Going back to those dark days of COVID, then it was the Australian government under Prime Minister Morrison, who led the charge at the World Health Organization.

So this concept of being able to balance without making a third choice: I know people like Professor Hugh White, who's a very well-known Australian international relations scholar, he talks about a third way. I think that's a bit of a false choice in my opinion. I think we can continue to have a productive economic relationship with China, and a productive, deep and broad national security alliance with the United States. Of course, if the balloon goes up—and we all hope that it won't, and through sound and prudent planning and diplomacy, we can avoid that, that is the international system can—if that did occur, that's a very different proposition. But in this current phase of where we are at as a global system, from the Australian point of view, I think that relationship can be continued to be balanced.

Jersey Lee

You mentioned former Prime Minister Morrison during COVID leading the charge at WHO; many people would argue that as a result of this, in the years from 2020 to 2022, economic relations with China were in fact adversely impacted. What do you think those few years showed us: any issues with how we were either messaging or how we were managing this balance?

Patrick Buchan

Yeah, and even earlier [as well]. If you go back to 2013, in the Abbott government, Australia took a strong stance—in a largely forgotten episode in Chinese strategic behaviour, when they declared the Air Identification Defence zone, Australia came out very strongly early on. So I think we've seen that strategic instinct by the Australian government to take stances on its own, or in consultation or at least solidarity with our allies, but where it needed to, it came out hard and early. Huawei, under the Turnbull government, was the real standout where Australia came out strong, hard and early. I believe that will continue, where Australia does call out Chinese behaviour, that it sees not in its own strategic interests, or where it sees that a values-based argument needs to be made to constrain Chinese strategic aggressive behaviour, they will continue to do so. And I applaud them for that.

Jersey Lee

What if Australia takes this strong stance, and China retaliates in a way that they did from 2020 to 2022?

Patrick Buchan

I think Australia rode that out very well, and I think China was surprised about that. Australia was formally issued a list of demands by China, which the Australian government did not kowtow or crumple under. The Australian government rode through those tariff impositions that that the Chinese government placed on Australian imports. From memory, coal and the seafood market was impacted by that. They rode that out and I think China was quite taken aback by that. And we've seen the warming of relations—well, maybe that’s overstating—but we've certainly seen a cooling down of the rhetoric between the Australian Government and the Chinese government. From my reading of the situation, China were quite taken aback, and they realised that what was once called Wolf Warrior diplomacy, which was a very popular phrase thrown about by the media 5 or so years ago, didn't work. I think China is adjusting its diplomatic engagement behaviour, learning lessons, in many ways largely on the leadership stance that the Australian government took under Prime Minister Turnbull and under Prime Minister Morrison.

Jersey Lee

Based on your judgment, you think that China wouldn't attempt something like that again, because at the time, there's lots of reporting in Australian media of agricultural producers and other big exporters to China, they were really suffering during those years.

Patrick Buchan

Yes, they were suffering, but certainly not on their knees. And the reality is there are other enormous markets opening up for Australian exporters; when I think about that, I think of the potential of India, I think of the potential of Indonesia. A Chinese assessment would have been made that, OK, this is clearly not working and Australians do have other options.

A few years ago, when I worked in Washington, we used to speak of decoupling, this potential that the United States will decouple and delink its integrated economy with China, and some of the Australian scholarly and media types picked that up as well. Obviously that hasn't come to pass, and to be frank, I hope it does not. What I think the last few years did illustrate to the hard heads in Beijing was that there are other options, that China's economic centrality to the global system is not as powerful or as essential as perhaps they estimated it was.

Jersey Lee

Recently we also saw a different aspect of the relationship between China and Australia, when China sent a flotilla to do a circumnavigation of Australia.

Patrick Buchan

And occurring now with the Chinese surveillance vessel.

Jersey Lee

Yes, so you can already see a slight repeat of that. Do you think that this is a glimpse into the future for Australia, with a more assertive China and a more uncertain US, and how should Australia deal with more such visits by China?

Patrick Buchan

In your question on my view of the future, I guess I'd quote a former US secretary of defence, who famously said that, when it comes to predictions in international relations, the only thing we get right is we always get it wrong. So I'm not a big believer in making grand predictions on the future, because in my experience, throughout my career working in this business, is that all the big changes that I was told were going to happen did not happen. That's the first thing I'd say, and often you have to deal with events as they as they come, because once you get into that prediction game, it gets very difficult.

China's provocative behaviour by sending a flotilla circumnavigating Australia a couple of months ago, one of the things I noted in my current work in domestic politics was how many voters raised that with us out on the campaign trail as an area of concern, and I just don't think that previously many Australians thought about China in those regards. So from a Chinese diplomatic perspective, if it was intended to intimidate Australians, based on people I’ve spoken to in the street, it didn't work.

Secondly, the Australian system did come together quite well to manage that, and we saw China's flotilla move away. As a bit of a hawk, I would like to have seen a bit more of a robust response from the Australian Government on it. And then of course, we've got this surveillance ship circumnavigating Australia in the middle of a federal election campaign, and I just think those sorts of behaviours don't work, and only run counter to China’s interests; if it is seeking to improve its relationship with Australia, that's not going to do it. And if it seeks to intimidate Australia, I don't think that's going to do it either.

Jersey Lee

You mentioned that you'd like to see a more robust response; given Australia's current capabilities, especially because a lot of reporting during that circumnavigation was that Australia’s Navy was in pretty poor shape, what do you think a more robust would ideally be, given the fact that what the Chinese Navy did is legal under international law?

Patrick Buchan

Maybe it is legal under in international law; many things are legal under international law, but that doesn't mean that they accorded with international norms of good behaviour. I think that was an example of something that did not conform to norms of good behaviour, especially after Beijing had opened up a diplomatic channel to Australia in the last couple of years, and I don't think it was a good way to go about it. But equally it misunderstood the Australian mood.

What I do think would have been a more robust response was to put a larger military presence there to shadow those vessels, both air and naval assets, and to have come out very strongly. And I'm sure it was done, that our diplomats in Beijing made very strong representations to the Chinese Government, but I would have liked to have seen Australian assets deployed, much like you see the United States and the British doing with Russian incursions in the northern hemisphere, when you see Russian aircraft trying to penetrate British or American or US airspace, particularly in Alaska. So I would like to have seen something like that; had I been advising the senior leadership, or been a senior leader myself, that would have been the response I would have taken.

Jersey Lee

In your previous response, you had discussed Australia's ties and Australia’s need to build more ties with countries, especially Indonesia, which was your original background. That's something that almost everyone in Australia agrees it need to do more of, especially people in either the foreign affairs or defense or other such departments. However, beyond the recently signed defense pact, it seems that Australia has been talking about building ties with Indonesia for decades, and not much has really happened on that front. Why has that been the case, and what do you think could be done to change the trajectory, or at least to build on the Defense Pact and expand it to other realms of cooperation?

Patrick Buchan

Now you raise an excellent point. All my life we've been told Indonesia is the next big key relationship in a strategic sense, and in fact, I wrote my thesis on that. What I would say to that question is twofold. The first thing is, it's not through a want of Australia's engagement and its own desires. That's a largely a bipartisan thing in Australia from both Liberal governments and Labor governments, strongly pushing for a deeper relationship with Indonesia, and credit to both sides, they both have feathers in their cap in that regard.

But the important thing to remember, deep in the psyche of the Indonesian political elite runs the strain of the non-alignment. I'm sure many of your listeners are well aware of that post-War, post-colonial, non-aligned movement, of which President Sukarno and President Suharto were key leaders of. I think among the Javanese elite, that strain of sovereign independence and its non-alignment runs very deep. So it’s very difficult for that mindset of such an enormous country to move.

I think the second thing I'd point to is that Indonesia is a country of 17,000 islands, one of the most ethnically and culturally and linguistically diverse countries in the world. Keeping that country together, from a security perspective, is extremely challenging. If you're sitting at the heart of Indonesia's political establishment, your first priority, down to your 50th priority, is how do I keep Indonesia together? We've seen so many times in Indonesian post-independence history where that's been really challenging; whether it was in the 1965 coup, the Timor crisis, so we see that the Indonesians have got to focus primarily on Indonesian sovereignty, on keeping Indonesia together, therefore their international relations suffer as a result of that, and that's understandable.

Jersey Lee

You mentioned that Indonesia has a particular non-alignment mentality, but that's pretty much the same for most other ASEAN countries—there's a few notable exceptions. Given that ASEAN is Australia’s closest and biggest partner—and India also has a long history of non-alignment—all of these powers in Australia's neighborhood, other than China, which is a bit further away, are mostly non-aligned to some extent. Given that's the case of Australia's neighborhood, how should Australia go about this? You could also mention the US as well in their Pacific strategy.

Patrick Buchan

Yeah, that's right. I would point to India and say that under the current BJP, the political incumbents, non-alignment doesn't run as deep as it does in their political opponents, the Congress party. And we are seeing India, compared to its non-aligned movement partners, moving at a more rapid pace in terms of taking its place on the international stage. So that's the first thing I would say there. When you make a comparison between Indonesia and India… if you could remind me of the second part of your question?

Jersey Lee

The second part is basically, you mentioned India, but that's the same for ASEAN as well; also I asked about how the US might engage as well, given that non-alignment is the regional mood, they like to talk about ASEAN centrality, and don't really appreciate potentially having to choose sides between China and the US.

Patrick Buchan

Obviously, Indonesia's focus as a foreign policy actor remains very much through the ASEAN way, the ASEAN model, and ASEAN centrality. We have seen that frayed a little bit. Certain countries in ASEAN, who we won't name on such a reputable podcast as this, have behaved questionably; I do question whether great external power actors have influenced their decision calculus, so I'll leave it at that.

In terms of the United States and the way it maneuvers through the non-aligned movement or even multilateralism in Asia-Pacific, I'd get back to the point that I made earlier, that the way the post-World War Two US Alliance structure was designed in Asia, was very much on that hub and spokes model. It is much easier for the Americans to do political strategic business in the Indo-Pacific, when it comes to security and foreign policy because of that. That hubs and spokes model, that bilateral relationship, whether it's with the Japanese, whether it's with the South Koreans, the Thais, the Australians, the model that exists in Europe through a multilateral prism does not exist in the Indo-Pacific for a myriad of reasons, geography being a large one. The Americans feel far more comfortable as a great power in doing relationship management bilaterally, and they're very good at it. They make mistake, but from my experience in the Pentagon, sitting in many bilateral meetings with key bilateral security partners, the Koreans, the Australians, the Japanese, the Americans do it very well, so I will give them credit on that.

Jersey Lee

In terms of economics or other aspects of cooperation, what can US and Australia offer them? For example, you see Indonesia joining BRICS and also Malaysia and Thailand expressing interest. Is that something that might be a concerning development? Could US and Australia offer more in the way of economic benefits to entice Southeast Asia, to have a better relationship?

Patrick Buchan

The first thing I'd say to that is any economic relationship is and always will be built on mutual interest. That is, you've got to have something that one party wants to buy, and that another party wants to sell. Sometimes that is limited when it comes to separating an economic relationship with a strategic relationship.

The second way you can avoid it is don't go putting tariffs on people, is another good way of ensuring that countries bilaterally can grow their mutual economic interests and trade. What the Australians and the Americans can offer is lowering any barriers to market entry. Again, you've got to do that based on your own self self-interest first and foremost, as any government should. I think it’s those two issues that I pointed to: don't do tariffs and ensure that markets have got goods and services that they seek to sell to the other.

Jersey Lee

We had previously mentioned that Australia faces a challenging environment, especially in terms of security. But there's also economic challenges, particularly flatlining productivity, which everyone's been talking about in the current election. What do you think should be done to boost productivity?

Patrick Buchan

Again speaking and from a personal perspective, I would argue and that much of it does begin with empowering employers to make labor decisions based on need; it is critically important that we have a strong employee employer relationship through a social contract. Obviously we've seen certain unions exploit that here in Australia; a notorious union, the CFMEU, is one that is often pointed to, but if we want to improve productivity in Australia, you have to improve the conditions in which productivity can grow, and so that does start with continued deregulation of labour markets.

I think we have also seen in the post-COVID era—that came as such a cultural and strategic and economic shock to shock to people, and I think we still haven't recovered from that in many ways as a society—the imposition of strong regulations on what people could and couldn't do.

I would argue labour market reform, particularly ensuring that people have that direct relationship between employers and employers without third parties, be they unions or interest groups being in the way of that relationship, is certainly one way that you can start to generate productivity and labor productivity particularly.

Jersey Lee

You've also been to the US recently. Across the West, there's a broader feeling that productivity growth is falling behind, especially compared to countries like China, and that it's just making any potential competition with China that much more difficult, if you are unable to make anything, and you also see the difficulties in trying to reshore manufacturing by the US. Could you briefly comment broadly on this general Western phenomenon?

Patrick Buchan

I think that's a historical byproduct of societies reaching economic comfort, reaching an economic plane and where people don't have to perform manual labor for long hours, for low pay. Through free market ideology, through political liberalisation over 100 or more years, Western societies have reached a certain point. Now if we look at developing economies, let's take China as an example, and also a command economy through a centrally controlled one-party system, through a carrot and stick approach, it does make it far easier to ensure you've got higher levels of productivity. But ultimately that will reach a plane where that's no longer the case. That would be my response to your question.

Jersey Lee

So far, most of what we've discussed has a somewhat pessimistic outlook. From where you stand, what makes you most optimistic in the Pacific region? And I suppose do you have any other concerns that hasn't been raised yet?

Patrick Buchan

Yeah, I am an eternal optimist and I am a big believer that ultimately the United States, after it has exhausted all other options, always does do the right thing. That's point one. Point two, I think that the United States, even under this administration, recognises China, China’s rise and whether to cooperate or compete with China is the central strategic issue of the day, and I am confident that wise heads always do prevail. I'm not minimising the risk that something could go wrong. But I've heard certain commentators putting percentage likelihood risk of conflict with China. That's just ludicrous. Again, all of the big strategic assessments over the last 100 years are always wrong. So my view is that ultimately we may see something like a Cold War 2 between the United States and China. We may see a world in which we have a bifurcated economic system, not as integrated between the US and China as it is now, or indeed two blocs may occur as well, but I don't put an immediate conflict between the United States and China as likely.

Jersey Lee

How do you think Australia should navigate a potential bifurcation as you say?

Patrick Buchan

I think they're doing a pretty good job at the moment. That is, continuing its strategic relationship with the United States—and its economic one well, one of the things I think people forget is the United States is the largest foreign direct investor in Australia, it's not a very well understood fact. Also walking that line with our economic relationship with China.

However, ultimately—and here's the hard headed political analysis—the decision on that will be largely out of Australia's hands, as it will be out of the hands of the vast majority of countries in this world, because ultimately the great powers will set the tone in which the world order will be shaped. What I do hope is that those great powers realize that the post-Cold War system that was created, the so-called rules-based order, has served the interests of all nations whilst minimising the risk of war, has served all nations in the best way possible. So yes, adjust the system, but maintain that system in which the great powers aren't going to war with each other every second or third generation, that would be my assessment.

Jersey Lee

As you say, ultimately this decision is in the hands of the great powers and not in the hands of most countries. But could other countries—for example, there's talk of Australia teaming up with Japan, Korea, the Philippines, other countries in the region to build up a bloc, so that even if America leaves, there's still a credible counterbalance against China. Do you think that's enough to change or deter great power behavior?

Patrick Buchan

Perhaps deter, but not an ultimate decision factor in the end, and this is a personal view. In the end, the great nuclear powers are the ones that ultimately determine the international system. So, keeping the United States engaged in Asia in the Pacific should be the first and foremost and paramount strategic ambition of all those nations you just mentioned. But again, I'm not a pessimist on this. This sort of Chicken little argument that Americans are about to cut and run from the Indo-Pacific—perhaps some would argue that that we're seeing elements of that behaviour in Europe—I just don't personally see it. Why? Because the United States has far too much strategic and economic interests in the region to do so. It would have to be a very significant strategic shock event that the United States would undertake such a decision.

Jersey Lee

I guess you don't think Australia should prepare a Plan B just in case that shock does come to pass somehow?

Patrick Buchan

Oh, no. I never said they shouldn't have a Plan B, and I'm confident that the Canberra based officials do consider that, based on my experience in that world. But I don't think there's any sort of Plan B sitting on a shelf, that is a guideline to that, but certainly those discussions are being had and even today as we speak, former Prime Minister Turnbull has hosted with foreign and defence policy experts in Canberra a discussion on this exact topic, on AUKUS. I think that's a healthy thing to do. It's healthy in a democracy to have debate. But I don't believe there's some sort of Plan B sitting there. But sure, any strategic or foreign policy analyst worth his or her weight sits there and does consider all the options. That's just a good logical way to go.

Jersey Lee

You've worked all your life in defense, international affairs, national security, etc. How does that translate into running a political campaign? Could I run a political campaign tomorrow?

Patrick Buchan

Yes, it does prepare you in many ways; in other ways, perhaps it doesn't. But additionally I've been involved in Liberal Party politics for some time, so I can fuse both of my experiences together. I have enjoyed speaking with you today because I am very much focused on hyper local political issues; it is nice to get back to my primary and first love, which is foreign policy.

Jersey Lee

Finally, you mentioned a few times some big predictions that people made didn't come to pass. What's one that stands out to you?

Patrick Buchan

One that stands out to me is, if you look the 1988 U.S. National intelligence estimate, where all the agencies the United States system come together, none of them picked that in less than a year, the Berlin Wall was coming down, and the Soviet Union would cease to exist in three years. Another one is that no one picked Saddam invading Kuwait. No one picked that Osama bin Laden and his cohort would crash aircraft into the Pentagon, into the World Trade Centre. Those are three big ones where no one predicted, the so-called Black Swan events.

So the only consistent that foreign and defence policymakers can rely on is: one, demographics, which do take a long time to change, so that is one predictor for behaviour, it can rely on. The second is to be always aware that a Black Swan event will happen and the whole game will change on you. Even in my time in the Pentagon, as we're set there focused largely on China and Indo-Pacific, the ISIS event came out of absolutely nowhere. The fall of Afghanistan, how quick and rapidly that occurred took everyone by surprise. So the lesson for practitioners out there, or those in your audience who may be considering a career in that, is always be aware of the Black Swan event, the event you don't see coming, and actually it's good life lesson as well. Many events in your life hit you from the left side, and you never saw it coming. So that's the one constant.

Jersey Lee

Yeah, that's definitely great life advice. Thank you, Patrick, for coming on Pacific Polarity, and we really greatly appreciate hearing your thoughts and your insights on these great and important topics in Australia and around the Pacific.

Patrick Buchan

Thanks, Jersey. I really enjoyed being on your program. To all of your listeners, particularly younger people, I do strongly encourage you to—the systems, the foreign policy and defence systems, whether you're in the United States or wherever you are, your country does need you. We need the best and the brightest going into government, or going into academia, or going into think tanks, to be able to provide advice to our national leaders at a time when the world is in a very precarious strategic situation, and I can also promise you it's a hell of a ride. It's fascinating to be involved in it. So I encourage as many people as possible, if that is your love, do go for it because it's a very rewarding career experience.

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