PM goes for strength in bid to reverse Labor policy

JULIA Gillard is now embracing the proven technique of strong Labor leaders -- picking internal battles to define her right-wing policy credentials and using the ALP national conference to assert her government's status over the party.

The irony is remarkable. The 2011 political year is ending not with Gillard's overthrow as some wrongly predicted but in a likely display of her authority as Labor leader and Prime Minister.

Gillard has seized the issue that had to be seized -- the obsolete contradiction in ALP policy that bans Australian uranium exports to India. The damage from this ban is now serious -- suggesting that Australia cannot succeed with India as a constructive partner. It is a liability that demands removal and the tireless campaign to this effect by Resources Minister Martin Ferguson is finally bearing fruit.

The real issue here transcends uranium: it is whether Labor, left behind on many fronts by events in Asia, can liberate itself from its outdated mindset on a range of energy and foreign policy issues to optimise the dividends from what Gillard calls the Asian Century. Asked by The Australian about the consequences if Labor failed to reverse this ban, the director of the international security program at the Lowy Institute and Indian expert Rory Medcalf said: "(It) would not constitute 'absolute disaster' in relations with India. But a decision to stick with the old policy will convince India's political elites that Labor is never going to be a natural partner for a rising India" and would signal "that Labor simply does not trust India".

India doesn't need our uranium at present but this reversal is about a bigger idea: the decision taken inside Australia's foreign policy establishment to develop for the first time a meaningful Australia-India strategic partnership. Uranium is a means towards a larger end: as Foreign Minister Stephen Smith said, the aim is to place India "firmly in the front rank of Australia's international partnerships". It has not been there in the past and the growing resources trade underpins this aspiration.

This is tied to another coming idea: following the path-breaking US opening to India under George W. Bush the basis exists for a three-way US-India-Australia collaboration, an idea that interests US ambassador Jeffrey Bleich. This platform reversal is highly sensitive because it involves Gillard repairing Labor's mistakes. Not old mistakes but very recent mistakes. It was Kevin Rudd in 2008 who reversed John Howard's policy and imposed the current ban consistent with the ALP platform that export recipients must be members of the Nuclear Non-Proliferation Treaty. (Because India became a nuclear weapon state after the conclusion of the treaty it is not a member.)

The ban was unsustainable and unwarranted. The proof is that in 2008 the Nuclear Suppliers Group (the governing body for nuclear export policy) authorised a waiver to permit exports to India and Rudd backed the waiver. In short, Labor backed other nations selling uranium to India but not Australia. It was the latest in the litany of ideological absurdities over uranium mining, exports and nuclear power that have littered the ALP platform since 1977. It is past time that Labor grew up. In making this move Gillard is acting in the Hawke-Keating realist tradition.

The announcement on the eve of President Barack Obama's visit is timely. This project exists only because of the US, notably the 2008 US-India civil nuclear deal that envisaged a new partnership between the world's two biggest democracies and gave India a new status in terms of non-proliferation credentials.

Gillard has the backing of the ALP Right and the Australian Workers Union. She cannot afford to lose this battle. Assuming she prevails after an old-fashioned punch-up on the conference floor then Gillard will look strong and bold. It is the image she craves.

The truth is that Gillard will be converting Labor to Howard's policy. This is nothing but a humiliating Labor recant. It came to office, boldly repudiated Howard's position and four sorry years later Gillard must play the hero to get Labor to submit to this retreat.

As for Howard, he decided in 2006 that ties with India had reached tipping point. "This was a big prize," Howard said of the export opportunity India offered. Now consider what Gillard said yesterday: "Selling uranium to India will be good for the Australian economy and good for Australian jobs." When did Labor discover this astonishing truth? Only when it decided its ideological fixation was too absurd.

This week Gillard and Obama will travel to Darwin to unveil the long foreshadowed intensification of the military partnership. This is not a shock. It is long canvassed. And it locates Gillard firmly in the pro-US realist foreign policy tradition that reflects Australia's strategic needs and enjoys strong domestic support.

Last year at the AUSMIN talks then US defence secretary Robert Gates said the aim was "enhanced joint facilities" with options including more US force training in Australia, disaster relief co-operation and a greater US naval presence.

Three core realities underpin the Obama-Gillard announcement. First, given the growth of economic and military power in the region Labor's goal is to encourage an enduring US military presence. Second, the utility of such Darwin-based facilities to manage contingencies between the Indian and Pacific oceans will assist Australia's own role, whether for security or disaster relief.

Third, China's rise has provoked strong sentiments from Asian neighbours for a US balancing presence and, in this sense, the alliance is once again a pivot for our deepening engagement in Asia.

The idea that Australia should shun such a move because it might upset China is bizarre and ludicrous. What conclusion would China draw about a country so weak, so confused and so intimidated about such a modest initiative with its principal ally? Gillard, like Howard, operates on the prudent assumption that ties with China and the alliance with America are not mutually exclusive. She grasps that our foreign policy works best when it is both pro-US and pro-Asia.

In domestic terms, Gillard's initiatives with India and the US recall something not sighted for a long time: the good old 1980s vintage Labor Party in action again, rekindling a time when Labor knew what it believed and knew what policies Australians would support. It looks like a distant glimmer from the old Labor success formula that modern Labor was dumb enough to bash and bury. The hostility of the Greens proves Gillard is on the right track. But these are merely the first steps. The truth is that resurrection of the Labor brand is a long, daunting and probably unachievable task. However, Gillard has got nothing to lose by giving it a whack.