Weird speech makes Obama odd man out

G20 Brisbane 2014.

THE United States embassy in Canberra advised President Barack Obama not to make the provocative, anti-Abbott speech on climate change which he made at the University of Queensland in Brisbane.

That the President acted against the advice of his own embassy reveals a deeply divided and in part dysfunctional Obama administration, unable to reconcile its foreign policy objectives and its domestic imperatives.

The speech was not only damaging for Tony Abbott, as it will be used by all his opponents on climate change up until the next election, it was a disaster for US foreign policy, because the gratuitous climate change remarks completely overshadowed all the regional and security content which Obama’s foreign policy team wanted to be the main point of his major address on his Asian tour.

Obama’s self-indulgent folly was in striking contrast to the masterful performances of China’s President Xi Jinping and India’s new Prime Minister Narendra Modi. Xi and Modi have both achieved almost everything they wanted from Asia’s season of summits. Obama has achieved almost nothing.

The other big winner from this summit season was Abbott. Despite the damage Obama inflicted on him, Abbott emerged from APEC, the East Asia Summit, the G20 summit which he hosted, and the separate bilateral visits of so many world leaders, with huge structural wins.

The free trade agreement with China has the potential to be transformative for Australia. It locks the two nations much more closely together. It contains a host of immensely important specifics, and was accompanied by numerous side agreements.

But the transformative potential lies in the door it opens for Australian business into China’s future. Don’t think for a moment that resources will cease to be at the centre of Australia/China trade. The anti-coal propaganda is fanciful nonsense, believed only by Green dreamers.

Coal will be at the heart of China’s energy generation for decades ahead.

Nonetheless, China is transforming. Coal and iron ore are about building cities. China has now built its cities on a vast scale. Cities are occupied by middle class people. They need high-quality food and high-quality services. The China FTA opens up the services sector in an unprecedented way. That is the future.

The Indian visit also offers to be transformative. Modi likes Abbott. But of course such likes and dislikes are never the real engine of history.

Modi wants India to develop. Modi’s closest friend and partner internationally is Japan’s Shinzo Abe. Abe is Abbott’s closest collaborator in Asia. It was Abe who advised Modi that Australia was a country to take seriously and that Abbott was a PM who could deliver.

Modi believes Australia can be a big part of India’s development.

I attended a small business gathering with Modi in Melbourne. He made a few comments about the need for greener energy, but he also said: “India will have massive requirements for coal and iron ore.” Just in case his interlocutors missed the point, he repeated it: “Whatever we do, we will still need massive amounts of coal and iron ore.”

But Modi understands that India also needs foreign investment and expertise. Since the turn of the century, India has been the second fastest growing economy in the world. Tens, hundreds, of millions of Indians will enter the middle class over the next decade. They offer the same opportunities as the Chinese middle class. Trade Minister Andrew Robb describes the India relationship as being where the Chinese relationship was 15 years ago. Robb is right. The potential, like China 15 years ago, is enormous.

The ambition to complete a free trade agreement between India and Australia by the end of next year is heroic. But it is not impossible. Indeed, one FTA helps produce another. Australia’s success in securing an FTA with South Korea helped motivate Japan. Canberra’s success with Tokyo helped motivate Beijing. Part of India’s motivation is not to be left out of the east Asian economic success story. So the string of north Asian FTAs Robb has concluded helps us with New Delhi.

Here we need a note of caution. Each one of these relationships — the US, China and India — is intensely complex, influenced by many factors beyond Australia’s reach and there are many ways these ambitious plans could fall short, if not fall apart.

Take each in turn.

Obama’s speech was deliberately designed to hurt Abbott. This may not have been its primary purpose, but it certainly was a significant effect. Historians of the relationship cannot cite a single similar example of a visiting president going out of his way to wound an Australian prime minister.

The speech was bizarre in many ways and deserves proper analysis as a pointer to the divisions and dysfunction within the Obama administration, features which will only get worse as power, and a sense of responsibility, ebb away from Obama in the less than two years he still has in office.

There was also an element of cowardice in the speech. Obama would never have given that speech at home before the congressional mid-term elections. There would have been some courage in such a speech delivered, say, in West Virginia, or Ohio, a week before the mid-terms.

What was Obama’s purpose? Can one more celebrity orgasm really be more important to the President than maintaining his relationship with his closest ally in Asia? Was Obama preparing for his post-presidential life, as a new and improved Al Gore?

In truth, there are much deeper divisions within the Obama administration, on Australia, and on Asian policy more generally.

The official US attitude to Australia is always complex and consists of many parts. That is as true today as it ever was. The Pentagon loves us. As always, it is our best friend in Washington. Australians get higher level access in the Pentagon than they do in other agencies.

Two US geographical military commands — PACOM in the Pacific and CENTCOM in the Middle East — are especially close to their Australian partners. They remain the core Australian constituency in the US government.

The State Department is typically friendly too. That is less the case now. In Bob Carr’s Diary of a Foreign Minister, he records the Australian ambassador, Kim Beazley, in cables to Canberra ­lamenting the lack of ­interest in Australia that John Kerry exhibited. Beazley recalls Kerry, as a senior senator, refusing to see Kevin Rudd when Rudd visited Washington as foreign minister. Beazley also expressed the universally held view in Asia that Kerry had no real interest in Asia.

The senior Asia official in the ger State Department is Danny Russell, the Assistant Secretary of State for East Asia. Russell has three problems in that role. He is not Kurt Campbell, his charismatic predecessor. Russell has no personal charisma and no personal traction in relationships. And above all, Russell has no juice with anyone of consequence in the administration, neither with Kerry, nor with Obama, or any of the other principals.

Obama’s National Security Adviser, Susan Rice, is a remarkably abrasive woman with virtually zero background in Asia whom the Congress flatly refused to consider as a secretary of state, the position Obama wanted to put her in. She has the true religion on climate change, as do many of Obama’s domestic advisers, and in years of intermittent attendance at the Australian American Leadership Dialogue has been socialised into demonising Abbott by her friends on the Australian left.

Evan Madeiros, the NSC’s senior Asia official, is the NSC’s version of Danny Russell.

In his speech in Brisbane, Obama noted that many people in Asia had been sceptical about the Obama administration’s pivot to Asia. In the first Obama administration, credible officials like Hillary Clinton and Robert Gates led the pivot. But they are gone and their legacy is disappearing. Other senior US officials lament that the pivot is often seen in excessively military terms.

The reason for this is simple. The military is the only part of the US system that really performs well in Asia. Kerry is a constant presence in the Middle East and seldom seen in Asia. Obama himself has a long record of cancelled visits to the region.

It is notable that Obama’s signature initiative in Asia, the Trans Pacific Partnership trade pact, seems to have made meagre progress during his regional trip. Now he must wait for the Japanese elections to be completed. If Obama does not bring the TPP to fruition soon, it will get tangled up in looming US presidential elections.

Finally, other senior Americans put it to me that many high-level figures in the administration, in so far as they think about Asia at all, think only of China. They fail to understand that a successful China policy has to be embedded in a successful Asia policy. This contributes to their taking close ­allies for granted. Virtually all senior Asia hands in Washington outside the administration agree that Obama has never really paid attention to managing alliances.

This was evident in the fact that the Obama team decided to do the speech at the last minute, insisted it be to a university audience, never gave their Australian hosts any hint of what the President was planning to say, and refused to offer the Australians either a text or a summary of the speech before it was delivered. All of that is truly a bizarre way to treat an ally.

Nonetheless, Obama’s self­indulgence will not cause the Abbott government to back away from co-operation with the US. The ­alliance is much bigger than Obama and Australia participates in the alliance because it is in our interests and reflects our values.

The vacuum created by Obama in Asia is partly filled by Xi, ­although other formidable Asian leaders such as Abe and Modi also occupy important strategic space.

Xi, like most Chinese leaders, is a super hard head with little sentimentality. He is the most powerful leader in modern China since at least Deng Xiaoping. He offered an ambition to make China more democratic in his beautifully crafted speech to parliament, but in truth he has suppressed what little liberal space formerly existed in China.

Nonetheless, Xi is genuinely an economic reformer, which is one reason he undertook the FTA with Australia. Xi’s climate deal with Obama is another masterstroke. It commits him to nothing of substance, nothing he was not doing anyway, but, with Obama’s benediction, will help insulate Beijing from the type of criticism it suffered after Copenhagen.

Xi spent a lot of time in Australia and devoted a lot of attention to us. This speaks well of him, and of Abbott. But again, we have to be a bit careful of assessing Chinese policy, even Chinese policy towards us, in a narrow Australian framework.

This past few months, Xi has been on a charm offensive with everyone. He even kissed and made up with Abe. As well as his climate faux agreement with Obama, Xi agreed to various confidence-building and military consultation measures with the Americans, which Washington has wanted for years.

Nor is it quite true to say that Australia is the first advanced economy with which Beijing has done an FTA. Xi finalised an FTA with South Korea just before the one with Australia.

All of this is in stark contrast to the aggressiveness Beijing has displayed over the past few years in the South China Sea and the East China Sea. Intelligence agencies in the US and Australia are flat out trying to work out whether this friendliness is the new paradigm for China, or, as one senior American put it to me, “a judo move”, that is, moving back for a second in order to trip the opponent up.

China’s behaviour in the disputed maritime territories over the next few months will be critical in determining the answer to this question.

Abbott convened a trilateral leaders’ dialogue with Obama and Abe. The official communique was full of concern over Russia, Islamic State etc. It didn’t mention the main actual topic of conversation — China, or another topic of conversation, Canberra’s ambition to buy Japanese submarines and install US weapon systems on them.

And finally Modi’s India. Modi offers India its best hope in decades for breaking free from poverty and achieving sustained, socially transformative economic growth. But just as analysts are pondering Xi’s true intentions so they are asking one central question about Modi — can he tame the Indian bureaucracy and produce results? This astonishing two weeks of summits has given Australia a great deal of benefit, but left huge and intriguing questions for the ­future.