The other ‘special’ relationship: Australia

A signature accomplishment of Secretary Lloyd Austin’s tenure at the U.S. Department of Defense has been a meaningful tightening of America’s alliances in Asia. Yet even against that backdrop—the strengthening of U.S.-Japan operational ties, the easing of Japan-Korea tensions, the reopening of basing facilities in the Philippines, and the tightening of U.S.-Japan-Korea trilateral diplomacy—the U.S.-Australia relationship stands out.

There’s not supposed to be a hierarchy among America’s alliances, but informally there is. Among our myriad major non-NATO allies, Israel stands out for the scale of U.S. support and exposure, and the domestic resonance of the relationship. Among NATO allies, there’s the “special relationship” with Britain, built on constant intelligence flows and myriad instances of joint action. And now in the Indo-Pacific, the depth of ties and joint capacity with Australia makes that relationship stand out as well.

Deepening ties

Over the past decade and a half, the United States has been developing ever closer ties to Australia, one of its most reliable allies. The 2021 Australia-U.K.-U.S. (AUKUS) agreement to share the most closely guarded military technology in the U.S. arsenal, nuclear propulsions for submarines, cements—not starts, cements—Australia’s place in the innermost circle of the U.S. alliance system. That dynamic looks set to grow—irrespective of the outcome of the 2024 U.S. presidential election.

Several factors make this so. The AUKUS agreement was portrayed as a bolt from the blue; in fact, it built on a steadily deepening set of arrangements. 

• Australia (and the United Kingdom) has a two-star admiral integrated into the exercising and decision-making structure of America’s Indo-Pacific Command (INDOPACOM). If you meet with the commander at Camp Smith, outside of Pearl Harbor, and if he brings his core team, you’ll be meeting an Australian and a Brit as well. These are not mere liaison officers, as many NATO and non-NATO allies have with U.S. Central Command; these are officers integrated into the analytical and command functions of America’s largest combatant command.
• Australia has long been a member of the “Five Eyes” (whose formal document is the UKUSA Agreement); a grouping of five World War II allies (the United States, U.K., Canada, Australia, and New Zealand¹) that continued to share highly compartmentalized intelligence even after the war ended, and throughout the Cold War. Australia has also been part of highly secret signals intelligence collection programs like ECHELON, in part through the joint US-Australia Pine Gap satellite facility. Australia’s geographical position has meant that, among the Five Eyes, Canberra has played a key role in intelligence collection and sharing in counterterrorism operations in Southeast Asia.
• For decades, Australia has hosted or co-hosted vital U.S. military installations, most importantly, Naval Communication Station Harold E. Holt—originally a U.S. installation, then by 1974 a shared facility with an Australian deputy commander. NCS Holt is one of a string of facilities around the world through which the United States maintains secure communications with its submarines and surface fleet, using very low frequency radio transmissions. The existence of this facility has meant that the United States has long seen Australia as a vital piece of its Indo-Pacific capabilities, including in submarine warfare.
• The relationship is being built out in the maritime domain; for example, the United States and Australia are also now collaborating on a revitalized naval base in Papua New Guinea.

The AUKUS agreement itself also deepens integration between key U.S. and Australian defense assets and industry. Beyond the decision to purchase nuclear-powered, conventionally-armed Virginia-class submarines from the United States, its key elements include:

• Australia making a several-billion-dollar contribution to the U.S. and U.K. submarine industrial base.
• Australia hosting U.S. and U.K. submarines at HMAS Sterling, near Perth, and planning to establish there the Submarine Rotational Force-West, with the U.K. and the United States.
• The co-development of a suite of cognate technologies in the realm of quantum, undersea communications, and long-range missiles.
• The co-development with the U.K., and with significant input from the United States, of the SSN-AUKUS, a next-generation nuclear-powered submarine that shares with the Virginia-class the world’s most advanced sonar and quieting technologies (or most of them; the United States will keep a few secrets for itself).

The costs of partnership

All of this secures Australia’s place at the very heart of U.S. strategic planning for the Indo-Pacific realm—and yes, for potential conflict with China. And this has generated sometimes heated debate in Australia (and to a much lower degree, in the United States). There are two primary Australian concerns: costs, and a loss of sovereignty to the United States, just as tensions are rising between Washington and Beijing.

The cost of AUKUS to Australia is indeed eye-wateringly high—between $268 billion and $368 billion between now and the mid-2050s, and that’s just for the submarines (the so-called Pillar 1). That’s on top of the annual defense budget, which is also growing—and being geared increasingly toward building out Australia’s maritime capabilities. This reflects Canberra’s mounting concern with two realities: the growing challenge of maintaining stable relations with Beijing, with or without Washington’s input; and Australia’s near-total dependence on sea-based imports and exports. For example, Australia imports more than 90% of its oil (all of it by sea) and is the world’s largest exporter of iron ore (again, all of it by sea—and ironically mostly to China, where it’s a key ingredient in Chinese PLAN shipbuilding). 

AUKUS is tying Australia more closely to the United States but the two countries are already tightly interwoven in the defense and strategic realm in Asia. Some in Australia have argued that AUKUS might put Australia in China’s crosshairs in the event of a crisis. Too late; Canberra is already there.

The situation is analogous to that of the United States and Canada during the Cold War. Canada, sandwiched between the two superpowers, often worried about being caught between them in times of crisis. But early in the Cold War, it became clear to Ottawa that Canada was going to be caught in the fallout even if it attempted to distance itself from Washington; far better, Ottawa concluded, to help the United States contain the Soviets. The result was NORAD, the North American Aerospace Defense Command, a genuinely shared asset (the commander of NORAD reports equally and simultaneously to the U.S. president and the Canadian prime minister) for early warning satellite information about Soviet nuclear launches. The establishment of NORAD brought Canada into the inner circle of U.S. strategic planning for dealing with the Soviets (alongside its Five Eyes role).

Does AUKUS increase the odds that China would target Australia in a crisis? Arguably, at the margins, but the odds were already high that Australia would be targeted in a fight. At least now Australia is making an important contribution to the most vital domain of action for deterring a crisis with China—the maritime sphere, and specifically the vital undersea warfare domain, the one realm where the United States and the West still hold China significantly at lop-sided risk in a western Pacific crisis.

With shared or co-located defense assets and close cooperation on space, intelligence, and now the undersea realm, Australia, alongside the U.K., moves into a very special alliance category indeed.

These relationship features should help insulate Australia from excessive turmoil associated with U.S. political change, if it comes. The Biden-Harris administration is deeply committed to AUKUS and the relationship with Australia, and that sentiment is widely shared across the Democratic Party. The Republican Party is increasingly divided on foreign policy, between would-be Reaganites and so-called “restrainers,” but deep suspicion and antagonism toward China is shared across those two strands of thought—meaning that U.S. defense capabilities in and with Australia will only grow in importance. And while former President Donald Trump himself is unpredictable, it seems unlikely that he would target AUKUS,  as it is precisely the kind of burden-sharing arrangement that Trump constantly touts, where the ally in question pays its own way and then some. The fact that Australia is actually contributing several billion dollars to the U.S. submarine industrial base should go a long way to reinforcing its merits in Trump’s mind, should he return to office. Delays in submarine production in the United States also cause concern, including in Washington, about early transfers of Virginia-class boats, but rejecting Australia’s financial injection in the submarine industrial base would only make things worse.

Australians are understandably worried about U.S. political dysfunction and turmoil. But the very broad consensus in the United States about the need to rapidly reinforce defense capabilities vis-à-vis China, and the specific features of AUKUS—not just cost-sharing but cost-contributing—should help insulate AUKUS and the wider Australian alliance from the vagaries of the coming American turbulence.