Canberra’s foreign policy orientation has shifted inexorably towards the Asia-Pacific region over the last quarter century. Into the 1970s, Australia viewed itself as in, but not of, Asia. The demise of ’White Australia’ notwithstanding, Canberra remained the capital of a far-flung European outpost. Today, that geopolitical identity seems quaintly archaic. Australia is unambiguously an Asia-Pacific country. Its chief trading partner is Japan; its main ally is the United States; and its strategic analysts’ main focuses are Indonesia and China. Within this broader regional context, Canberra considers North-East Asia, South-East Asia, and the South Pacific as sub-regions of particular concern for Australian foreign and defence policy. But what about South Asia, an area conventionally defined as encompassing India, Pakistan, Bangladesh, Sri Lanka, Nepal, the Maldives, and Bhutan? What role do these countries play in Australia’s international relations? Do Australian policy-makers perceive them as important? Have Canberra’s links with the subcontinent traditionally been characterised by amity or enmity? What is the nature of these relationships today?

The closeness of the John Howard and George W Bush administrations is a commonplace of commentary on that era; one uncritical account even describes the relationship between the two countries and leaders as a ‘partnership’, although Howard only appeared three times in the former president’s memoirs, published in 2010. Prime Minister Howard’s invocation of the ANZUS (Australia New Zealand United States) Treaty in 2001, his determination to participate in the Iraq invasion and occupation, and his scepticism on anthropogenic climate change were all of a piece with the mood that prevailed in Washington. In February 2007, US Vice-President Dick Cheney visited Australia expressly to record Washington’s gratitude for Australia’s consistent role in the ‘global war on terror’. So close was Howard’s identification with Bush that his judgment of what bounds should be observed in commentary on domestic US politics was compromised. Thus in February 2007 he took the unprecedented step of criticising presidential candidate Barack Obama’s strategy on Iraq by claiming it served the interests of al Qaeda.

The machinery of Australia’s foreign policy-making was transformed during the first decade of the twenty-first century, perhaps more profoundly than at any stage since the creation of an independent Department of External Affairs in November 1935. Until that time, the foreign affairs function of the Commonwealth government had been administered from within the Prime Minister’s Department. From its modest beginnings in 1935 in a clutch of rooms on the ground floor of Canberra’s West Block administrative building, the Department of External Affairs, then Foreign Affairs, then Foreign Affairs and Trade (DFAT) grew steadily in size and confidence. When DFAT moved into its imposing new headquarters on the edge of State Circle in 1996, it symbolised a coming of age of a powerful, confident bureau of state with full and independent stewardship of the nation’s foreign affairs. While prime ministers from Sir Robert Menzies to Paul Keating may have felt strongly about particular international causes, few questioned that DFAT and its ministers played the central role in initiating and implementing policy across the full suite of Australia’s international interests.

Beginning with the floating of the Thai baht on 2 July 1997, a regional crisis unfolded that saw the magic disappear from the economies of East Asia. What appeared initially to be merely the sharp devaluation of a single currency turned into an economic free-fall that rippled across neighbouring economies and eventually the entire region. By early September 1997, the Malaysian ringgit had fallen to its lowest level against the US dollar since 1971; in the space of six months the Thai stock-market had lost 38 per cent of its value; Malaysia’s lost 44 per cent, the Philippines’ lost 35 per cent; Indonesia’s lost 17 per cent; and Japan’s lost 4 per cent. By year’s end, the Indonesian and South Korean economies had been brought to their knees, and speculation had begun that East Asia would drag the global economy into a bout of chronic deflation.

Over the period 1996–2000 the handling of ’Asia’ as a theme in Australian foreign relations altered radically. The change could not have been easily predicted at the beginning of the tenure of the Coalition government in 1996. The new administration agreed with the previous one in insisting that the ’Asia Pacific is the region of highest foreign and trade policy priority’ for Australia, and predicted that East Asia would become ’even more important to Australia in trade and investment terms’. In addition to this, the new government ministers who were concerned with Asian relations – the Foreign, Trade, and Defence ministers – were obviously diligent in the way they set about their business in the region. Although there were a number of differences in emphasis between the new government and its predecessor, some offering genuine advantages, former prime minister Paul Keating himself noted the continuities, and these continuities remained predominant until 1999.

The period 2001–05 represents a landmark in Australia–China relations. During these years, the bilateral relationship deepened and broadened to an extent that few observers had foreseen. The foundation of the burgeoning relationship was undoubtedly the enormous expansion of trade. By 2005 China had emerged as Australia’s second-ranking trading partner and replaced the USA as Australia’s second largest merchandise export market. Bilateral trade continued to grow strongly, driven by China’s booming economy and its surging demand for Australia’s energy and mineral resources. In May 2005 the two countries began negotiations on a free trade agreement that, if concluded, would further bind the two economies. Underpinned by strong trade ties, bilateral political, security, and cultural relations also strengthened and broadened significantly. These were marked by increasingly frequent high-level visits in both directions, institutionalised dialogues on political, defence, and security issues, and greater people-to-people contacts. During the period under review both sides sought to elevate the relationship to a ‘strategic’ level.

In the early 1990s, scholars talked about Australia’s neglect of South Asia, in particular Australia’s failure to understand the rising importance of India. We spoke of indifference, blind spots, missed opportunities, general indifference and even ideological differences between the two countries that began with Jawaharlal Nehru and Sir Robert Menzies. During the last ten years, Australia’s engagement with South Asia has changed dramatically – Australia has been involved in a counterinsurgency war against the Taliban in Afghanistan intermittently since 2002, and India has emerged as Australia’s fourth largest export market. The paradox that this chapter addresses is the way in which Australia’s strategic engagement with South Asia was dominated by Afghanistan while Australian commercial national interests lay with India. These two relationships have overwhelmingly defined Australia’s connection with South Asia. The focus is on Kevin Rudd’s period as prime minister of Australia (2007–10) and his subsequent role as foreign minister (from 2010), because the Rudd years capture the essence of Australia’s new relationship with this part of the world where some two billion people live.

On Tuesday 18 March 2003 the Prime Minister John Howard moved a motion in the House of Representatives, in order to advance the government’s claim that Iraq’s ‘possession and pursuit of weapons of mass destruction’ constituted ‘a real and unacceptable threat to international peace and security’, that Australia’s commitment of military forces to the Gulf with the intention of disarming Iraq of weapons of mass destruction as a response to this threat was justified, and that this action was legitimised by successive UN Security Council resolutions, most notably Resolution 1441. The Opposition response was to oppose the motion on the grounds that while the disarmament of Iraq was a desirable objective, unilateral means were to be rejected in favour of entrusting the task to the United Nations.

The period 1996–2000 was a relatively difficult and turbulent time for Australia’s defence decision-makers. They had to deal with a number of unforeseen events and crises, adjust their policies and practices to changing political and social expectations, defend themselves from criticism from a range of quarters, and continue to do ’more with less’. The department was forced to acknowledge that it did not have the resources to complete its existing, let alone planned, equipment-acquisition program. And the Australian public was both entertained and appalled by a series of incidents and events that attracted unusual, and increasingly critical, media attention. These included a protracted public brawl between the Minister for Defence and his politically appointed civilian head; continuing revelations of sexual harassment and other misdemeanours within the armed forces; accounts of departmental ineptitude; and the spectacle of the current Secretary of Defence publicly lambasting his department and some of its senior officials.