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Pacific Partners Outlook Summary

Core Content

This issue of Pacific Partners Outlook provides an overview of key developments in Australia, New Zealand, and the Pacific Islands in November 2011, with a focus on political, economic, and security-related events. The publication highlights the strategic importance of the U.S.-Australia alliance, regional trade agreements, and the broader implications of these developments for the Asia-Pacific region.

Main Points

U.S.-Australia Strategic Visit

• Event: President Obama's long-awaited visit to Australia on November 16 and 17.
• Purpose: To strengthen the U.S.-Australia alliance, particularly through enhanced security and military coordination.
• Key Agreement: The U.S. and Australia agreed to increase troop access to three Western Australian bases, facilitating military exercises and equipment pre-positioning.
• Symbolic Significance: The visit coincides with the 60th anniversary of the ANZUS treaty, a Cold War-era security pact that has grown stronger since the Soviet Union's collapse.
• Locations: The president will visit Canberra and Darwin, the latter being historically significant as the site of the first Japanese air attack on Australia.

Regional Security and Trade Agendas

• East Asia Summit (EAS): The summit in Bali on November 18 will test the partnership of the U.S., Australia, and New Zealand, with a focus on security and economic cooperation.
• APEC Forum: The U.S. will host the APEC forum in Honolulu on November 11-12, which will serve as a backdrop for discussions during the Australia visit.
• Korea-Australia FTA: A free trade agreement with South Korea is nearing completion, expected to boost jobs in agriculture and mining and enhance Australia's competitiveness against the U.S.

Domestic Developments in Australia

• Qantas Strike: Qantas grounded its entire fleet in a labor dispute, causing significant disruption to the economy and international events.
• Interest Rate Cut: The Reserve Bank of Australia cut interest rates to 4.5%, signaling concerns over the global economic slowdown and its impact on inflation.
• Refugee Policy Shift: The Gillard government abandoned a plan to send asylum seekers to Malaysia and will process them on Australian soil, increasing political polarization.
• Student Visa Cancellations: Over 15,000 student visas were canceled due to violations, primarily from Indian students.
• Carbon Tax: The Clean Energy Bill, which introduces a carbon tax, passed the House of Representatives and is expected to be enacted by the Senate, despite opposition from the Liberal Party and the public.

New Zealand Developments

• Elections: New Zealand's elections are scheduled for November 26, with economic concerns dominating the agenda.
• Oil Spill: The Rena oil spill has caused significant environmental damage, with over 1,000 birds killed and wildlife affected.
• Security Engagement: A report suggests New Zealand should increase its defense involvement in Southeast Asia, as ASEAN values its contributions but seeks more robust engagement.
• Rugby World Cup: New Zealand hosted the Rugby World Cup, which brought in $1.2 billion in long-term economic benefits, though it cost $400 million to organize.

Pacific Islands

• Tuvalu Water Crisis: Tuvalu faces a severe water shortage due to La Niña and rising ocean temperatures, with international aid deployed to address the issue.
• PNG Relations: The 20th Australia-PNG Ministerial Forum in October 2011 discussed economic cooperation and political reforms, with optimism about improved ties under the new PNG prime minister, Peter O'Neill.

Key Information

• Strategic Partnership: The U.S.-Australia alliance is a cornerstone of regional security and economic cooperation, with the ANZUS treaty being a key historical reference.
• Economic Challenges: Australia and New Zealand face economic pressures from global slowdowns, trade agreements, and domestic policy changes.
• Environmental Impact: The Rena oil spill and Tuvalu's water crisis highlight the vulnerability of Pacific nations to environmental threats.
• Political Dynamics: Domestic issues such as labor disputes, refugee policy, and immigration reforms are shaping political landscapes and influencing regional relations.

Conclusion

The November 2011 issue of Pacific Partners Outlook underscores the evolving role of Australia and New Zealand in the Asia-Pacific region, emphasizing their strategic importance, economic interdependence, and shared security concerns. The U.S. visit to Australia marks a pivotal moment in reinforcing these partnerships, while domestic and regional challenges continue to test the resilience and adaptability of these nations.