Shape of the future

KEVIN Rudd has decided to press ahead with his initiative for a new Asia-Pacific community based on an interim report on progress and options from his envoy and former Department of Foreign Affairs and Trade chief Dick Woolcott.

Woolcott has visited 16 countries and spoken to 162 people, including heads of government, ministers, and senior and former officials. In the new year he will visit the US, Russia and Canada and he has put out feelers for meetings with US president-elect Barack Obama and Prime Minister Vladimir Putin.

Rudd told Woolcott that on the basis of his interim report one option can be dismissed: abandonment of the initiative. Rudd's passion for and commitment to this idea are now beyond question. The Prime Minister has taken heart from Woollcott's report and from the soundings Rudd has taken with heads of government.

It is now apparent that Rudd has embarked on one of Australia's most ambitious foreign policy initiatives for some years.

Woolcott's game plan is to complete a 21-nation visit schedule (including New Zealand twice, given its change of government). This includes all Asia-Pacific Economic Co-operation forum members (except Taiwan and Hong Kong) and all Association of Southeast Asian Nations members, except Burma. Rudd has discussed the idea with a wide range of leaders and raised it with Obama in a phone call before the US election.

Woolcott has recently written to Obama's new ambassador to the UN, Susan Rice, a participant in the Australian-American Leadership Dialogue who will have cabinet ranking in the new administration, to canvass the possibility of meeting secretary of state-designate Hillary Clinton and the president-elect.

Given Woolcott's regional meetings, he will have valuable intelligence for an Obama administration keen to deepen its institutional ties in East Asia. The pre-election argument Rudd put to Obama is that the US needs more political involvement in East Asia and that his Asia-Pacific initiative dovetails into this. It can help US efforts to revamp its image in Asia and send a message of commitment. Woolcott's report is positive about China. He says China is open to an Asia-Pacific community based on co-operative principles. But China doesn't want existing institutions to be downgraded, a pointer to its tactic to keep ASEAN Plus Three (China, Japan and South Korea) as the region's main decision-making body.

"In my view the reaction to the Rudd initiative is encouraging," Woolcott says. "The sense of a power shift from West to East only gives it more momentum. This has been reinforced by the economic crisis."

There is no doubting the hazardous nature of Rudd's initiative. It offers risks as well as gains for Australia because it aspires to change Asia-Pacific arrangements. Rudd's vision is for a new regional community by 2020 that can encompass all issues, economic, security and political. As a foundation it must include the US, China, Japan, India, Indonesia and Russia. Although there are many regional forums, none meets these overall tests.

Woolcott puts five options to Rudd in his interim report. Cutting through the detail, the best prospects seem to lie in expansion of the existing East Asian Summit by the inclusion of the US and Russia or, alternatively, seeking to create an Asian group of eight or 10 that would begin meeting on the margins of APEC or the EAS.

Woolcott suggests that a G8 could comprise the US, China, Japan, Russia, India, Indonesia, South Korea and Australia. A variation would be a G10 that had the present, past and future ASEAN chairs. This variation takes account of Southeast Asians, the potential losers from Rudd's concept. Any G8 takes ASEAN out of the regional driver's seat. Rudd and Woolcott recognise that ASEAN must be supportive of any new architecture to ensure it is viable.

It is significant, however, that Malaysia told Woolcott it has no objection to the US and Russia joining the East Asian Summit. For the US to join the EAS it would have to sign the ASEAN Treaty of Amity and Co-operation, with its non-aligned ethos, which was initially an obstacle for the Howard government until it saw the greater prize.

Woolcott's report tracks its way through a litany of regional sensitivities. While an obvious option is to use APEC as the basis of the new community, this generates a host of problems. For China, there is the insurmountable difficulty of Taiwan's APEC membership. The main omission from APEC is India but its inclusion creates other problems. The Latin American APEC members would want more nations from their continent to match India's inclusion, with Colombia and Costa Rica floated and Brazil in the background. In addition, APEC was constituted as a meeting of economies, with the limits this imposes on security issues.

One issue is inclusion versus effectiveness. Ideally, a new community-based forum would be smaller (G8 or G10) than either the existing APEC or EAS, both of which include the 10 ASEAN members. But this raises the vexing issue: who to exclude and on what basis? For Rudd, the lethal issue then becomes to ensure that Australia makes the cut in any smaller, more heavyweight group.

Rudd would look foolish if the debate he started leads to an outcome that diminishes Australia's influence. For Rudd, the safer option is a bigger group. This puts a premium on regional inclusion, makes the politics easier with ASEAN and ensures Australia's place. The unwritten assumption is that Pacific island nations will not be participants.

Several nations told Woolcott they favoured a smaller group for utility. On the other hand there is little appetite for creating a new body (the reason Woolcott suggested a G10 meet on the margins of the existing forums).

Most of Southeast Asia wants to retain the primacy of the ASEAN Plus Three group, but the community Rudd envisages is an overarching system that would not initially supplant ASEAN Plus Three.

One option is a complex arrangement with an umbrella-type link between APEC and the EAS under which APEC covers the economic issues and the EAS the security issues.

Some of Woolcott's options are more about process: either convening a 2009 regional conference in Australia to refine the new architecture (a danger, as the outcome would defy prediction) or merely maintaining a regional dialogue about the idea. It is noteworthy that a couple of nations said that 2020 was too remote a deadline and that the present crisis meant there was need for greater urgency.

"There is a recognition that as economic and political influence shifts from West to East that effective regional arrangements are needed," Woolcott says. "I have found wide acceptance that none of the existing institutions (APEC, ASEAN, ASEAN Plus Three, the EAS, the ASEAN Regional Forum and the Shanghai Co-operation Dialogue) as currently constituted include all countries of the region or cover all the issues. This is a forward-looking initiative that Kevin Rudd sees as a step-by-step process."

Woolcott thinks bipartisanship is vital. With Rudd's agreement, he has briefed Coalition foreign affairs spokeswoman Helen Coonan and is about to brief Opposition Leader Malcolm Turnbull.

The reality, however, is that when Woolcott delivers his final report next year, Rudd must take some hard decisions. Being determined to press ahead, Rudd must settle on his model and how to build it.

Woolcott will be indispensable to that process and decision.