Manjeet Kripalani (MK): Good evening. Welcome to the KAS-Gateway House monthly webcast. Today we will be discussing the Quad. On the last KAS-Gateway House discussion on the Indo-Pacific, Rear Admiral Sudarshan Shrikhande posed a very valid question – is it going to be a QUAD or is it going to remain a SQUAD? How can this become the new real multilateral in a new era when all kinds of technological, strategic, global health transformations are taking place. How can we build an undergirding for this multilateral, particularly an economic and technological one?
With us today to discuss this is a fantastic panel, Dr. C. Raja Mohan, Director, Institute of South Asian Studies, National University of Singapore; Dr. Malcolm Davis, Senior Analyst in Defence Strategy and Capability, Australian Strategic Policy Institute; Tetsuo Kotani, Senior Fellow, Japan Institute of International Affairs (JIIA) and Alexander Slater, Deputy Managing Director for India, U.S.-India Business Council. Welcome all of you. Thank you so much Peter for being our excellent partner. I invite you to open this event. So Peter, over to you.
Peter Rimmele (PR): Thank you, Manjeet. Ladies and gentlemen, we are witness to the biggest shift in the international order, since the fall of Eastern Block, some 30 years ago. The old certainty we had that the current international order was here to stay, is no longer so certain. In retrospect, the strains and stresses of the past decades have perhaps had effect on this shift, but the extent to which the current pandemic, the rise of populous and aggressive nationalism have changed our perception of international relations is still breathtaking.
It is difficult to talk about these drastic changes without mentioning China, which seems to have become the linchpin where different threats currently converge. Be it in the snow Himalayas, in Corona infected Wuhan, crisis-stricken Hong Kong, across the strait of Taiwan or across the Indo Pacific, the footprints of the dragon are ubiquitous. It’s becoming increasingly clear that these actions demand credible counter positions. India and her partners in the Quad must be commended for having taken up this endeavor.
Let me give a little look into Germany. The public opinion especially in regard to the relationship with China has followed the world trend in the past month and has largely soured. Even among political decision makers, the ranks of those that call for a more robust foreign and security involvement of our country are now swelling.
But Germany is stuck not in a Quad but a little quandary regarding China. Economically and politically, Germany has long pursued a line between cooperation and confrontation along with being the moderating voice. It is slightly different than the Indian line of coordination and competition.
The grand names of German industry and commerce have established fruitful business links with the red empire of the East lured by cheap labor and easy access. Politically, this was encouraged under the long running motto – Change through Rapprochement. In state, we are now running the increasing risk of being subject to political pressure through this business links. And we must admit that the chorus of those in German politics calling for stronger engagement in world affairs is growing. Luckily, we’re still far from a consensus on that. When Donald Trump won the U.S. presidency, our Chancellor publicly explained that Europe would need to represent its own foreign policy without help from the U.S., responding to long standing calls from our French and international partners.
But still today, the resistance is strong. Germany is not a military power and neither do we want to be one. We’re still too far from the agreed rate of 2% of our GDP for defense spending. Since the Second World War, German civil society has been highly skeptical of armed forces, and this is still how it stands.
Germany cannot become a military power in its own, especially not in the Indo Pacific. Even with our European partners, we can only play a minuscule role in the vast ocean. Yet we understand that these vast areas are of profound importance to us too. Our interests are aligned with those of the Quad countries.
As Europeans, we have an interest in an open, free and balanced Indo Pacific, that provides free trade routes and equal access to all. It has become abundantly clear that India and its Quad partners will become the most important non-Chinese formation in the region quickly. With Australia committed to becoming a net security giver of grand proportion in its own right, and India committed to keeping Chinese ambitions in check, it’s paramount for Europeans to not stand idly by. We need to commit to the Quad, flank its aims and support its mission.
In conclusion, in the quickly changing international environment, it is paramount to realize new opportunities. The Quad countries and Europe not only share common aims and ambitions, but also a deeply held core belief. Japan’s prime minister Shinzo Abe wants the Quad to become a nation arch of democracy. Europe would be betraying its core if it were to stand by and not support the Quad in that endeavor. Still, of course, caution is advised. You need to heed the warnings of history. Aggression cannot be answered by aggression.
If you want to prevent dire consequences, the new multilateralism cannot be an exclusive design, as mentioned by foreign minister of India, Dr. S. Jaishankar. Endeavor will never be a part of one side or the other. We must strive to offer an inclusive vision of a free and open Indo Pacific that provides the same opportunities to everyone and guarantees prosperity to all. Only then can we hope that our shared vision can sustain an Indo Pacific design in the long run. In that way, I would say the Quad could be one of the instruments to avoid a bipolar world. Thank you very much.
MK: Peter, thank you for articulating Europe’s view.
That is a very optimistic and hopeful way of looking at the new world that is unfolding before us and I’m going to jump right into it as it’s an excellent description of the Quad.
Raja, is it necessary for the Quad now to grow beyond the Squad and evolve into a broader multilateral framework, as Peter mentioned? What do you think should or could be the elements of this corporation beyond security?
Dr C Raja Mohan (RM): I think we are beginning to jump ahead of the story at this point. For any institution, the initial phase is really an informal coordinating mechanism that then debates on whether it should broaden and how it should go about it. It’s taken us more than 10 years to get where we are today with Quad.
It’s only in the last two years that you can say it has really gotten regular meetings and regular engagement. So, I think it’s too early to talk about how this must be converted into a dramatic new multilateral framework. I don’t think any of the four countries, see it as an institutionalized mechanism. They’re not talking about creating a secretariat and they’re not talking about creating a coordinating country. At this point, it’s just meetings between them.
We are in a place where there is a certain degree of flexibility and overlapping layers of cooperation and our focus in the near term should be to strengthen this engagement and to develop our understanding of how we must take this forward. Of course, things are beginning to happen, not necessarily through Quad, but there’s already the idea of a Quad Plus in the wake of COVID-19 crisis. There have been regular consultations, at the foreign secretary level between the four Quad countries and other meetings including South Korea, New Zealand and Vietnam have also taken place. There is also the separate foreign minister level engagement that is taking place that has included Brazil, South Korea and Israel in the meetings. There are multiple forums being explored and on top of it, President Trump has talked about a G10, the British have talked about a D10 and Biden is talking about a democracy summit. So, I think at this point, multiple ideas are being debated and we should proceed purposefully. However, I don’t think we have reached the point where Quad has become aa kind of core around which the larger institutions can be met. We must strengthen the Quad itself and flexibly engage different partners at different places. That should be the strategy for the near term, rather than going too far ahead and building unsustainable costs in the future
MK: Thank you, that’s a great way to look at it, Raja. Tetsuo, last week your defense ministry released the defense white paper of Japan 2020, which was pretty bold about China’s activities in the South China Sea. Within the Quad, Japan and India have territorial issues with China and the U.S. and Australia view it through a maritime security lens. What is Japan’s immediate expectations of the Quad and as Raja mentioned the Quad Plus?
Tetsuo Kotani (TK): Thank you very much. First of all, let me thank Gateway House and KAS for hosting me. To answer the question, China has been challenging the administration in the East China Sea (ECS), which is the most important territorial issue at this point. United States is clear in its support to the Japanese position and if a contingency occurs over the islands, we are expecting the United States to support Japan on this.
However, there are some concern within Japan since the Obama administration, as they were committed to the defense of Senkaku, yet President Obama tried to be neutral on this issue. So, Japan was concerned about it but the Trump administration is much tougher on China and are committed. However, The United States under Trump is also tough on its allies (looking at Germany and South Korea). Japan is also concerned about the Trump administration’s way of thinking about allies. Japan and the United States have enhanced joint fighting capabilities but a primary challenge for Japan now is how to maintain the credibility of the alliance.
As for Australia, we expect that Australia would come to support Japan if there’s a contingency in the East China Sea(ECS) as Australia is also a U.S. ally. During the tsunami disaster, Australia provided substantial relief to Japan and so, we have high expectations from Australia.
Australia recently revised its defense strategic vision. We looked at this document with a great interest and are very much interested in Australia’s new focus on the longer-range strike capabilities, offensive cyber-attack capabilities and the anti-submarine warfare capabilities. All of which might be helpful for Japan’s defense efforts if contingency happens in ECS. However, at the same time, Australia is now focusing on its immediate neighborhood as a security concern and we wonder how this new focus would affect Australia’s thinking toward the first island chain defense. With regards to India, Japan doesn’t expect India to be involved directly in Eastern China Sea contingency, but we expect India to provide moral support for Japan. If contingency happens in the ECS, we also expect India would carry out disruption operations in the Indian ocean vis-a-vis China which should in turn help Japan to deal with the situation in the East China Sea (ECS).
So these are the realistic expectations for the Quad members from the Japanese perspective. Beyond the Senkaku Island issue, I think the more urgent agenda for the Quad members is a possible contingency across the Taiwan Strait and we should start discussion on it.
MK: Thank you, that is very thought provoking. Since you talked so much about Australia, we’re going to move right over to Malcolm. Australia has been the most active member of the Quad and has given it the scope and the shape beyond security, specifically with technology to counter China’s digital Silk Road. Can you tell us a little more about what Australia’s been doing and how you view this?
Dr Malcolm Davis (MD): Thank you, KAS and Gateway House for having me on board for tonight.
Obviously, I don’t speak for the Australian government because I’m in a think tank, but if it were up to me, I would have Japan as the sixth eye in the Five Eyes organization. I think that a logical step forward would be to strengthen our relationship with Japan to the level of a defense alliance and that’s where we need to push the relationship. In terms of where Australia is, we’ve seen the release earlier this month of the defense strategic update and the structure plan, which essentially is a new defense white paper replacing the 2016 white paper to a large degree.
The key message that leaps out in that document is that we recognize now that the strategic outlook that we face has deteriorated faster and further than we had anticipated it would in 2016, primarily because of a rising China. Because we have a rising China that is determined to overturn U.S. strategic primacy and impose its own community of ‘common destiny’, it’s an order on the regional, environment. In other words, Beijing wants to end the U.S. led rules and impose its own order on the region and we are determined to push back against that. We need to strengthen our relationship with the United States, but we also need to strengthen our relations with our key partners, and the Quad is really a key part of this arrangement. The defense strategic update and the first structure plan have a heavy focus on the long-range strike capabilities that Tetsuo talked about, and they’re really important and I’m happy to talk more at length on those. But it also had the defense diplomacy dimension, that probably wasn’t as highly publicized by the media. Quad provides the platform to deepen diplomacy dimensions talked about in the paper and boot relationships with the U.S., and extending that into the Quad Plus with South Korea, Vietnam and New Zealand is a logical step.
There’s a strong incentive on our part to work with others, to counterbalance, but not contain China. I don’t think you can contain China but what we can do is decouple our economic and technological structures from China. Here I would like to get into supply chain and technology issues and understand how we can resist Chinese pressure of imposing a digital Silk Road and essentially dominating our electronic communications and information systems. We need to decouple our supply chains from China and that’s critical. At the moment, we rely way too much on products coming out of China and we ignore the potential opportunities not only in Australia, but also in other partners, such as the Quad states, for developing new supply chains and use of supply bubbles, whereby we can explore new approaches to sovereign manufacturing and sovereign development of new capabilities through fourth industrial revolution technologies like virtual prototyping, synthetic simulated design, 3D printing and so forth. All of that could be utilized more extensively by our own countries to be able to ease off our dependence on Chinese supply chains. This would remove a lot of their bite in terms of their ability to coerce us.
In terms of the digital Silk Road, I think Australia has led the way in terms of banning Huawei. We recognized the risks by allowing Huawei to control not only our 5G communications networks, but through that our economy. 5G is not just about having better smartphones, it’s about internet of things, smart cities, driverless cars, manufacturing, stock market exchanges and so forth. If you allow a Chinese company like Huawei or Tencent to essentially provide the infrastructure for all those things, then you give them control and they can utilize that access to gain sensitive information, which they will have to provide to the government as per Chinese law.
So the notion that Huawei wouldn’t engage in intelligence gathering is simply nonsense. And so, we did exactly the right thing in terms of banning Huawei, we made it very clear that they were considered to be a threat to our national security, and we weren’t prepared to accept their control.
The problem is of course that we need to provide something as an alternative. There should be no reason why the Quad States can’t develop their own 5G capabilities to offer as an alternative to regional reliance on Huawei. We need to think about whether the Quad States can develop their own digital systems to provide 5G and ultimately 6G systems down the track. I’m a space policy analyst and I focus very much on space security and space policy, as it relates to defense and national security. One of the features that you’ll notice in this coming decade is the emergence of mega constellations, of large numbers of small satellites in low earth orbit, providing broadband from the sky – internet of things support and constant earth observation. That’s something that really could checkmate 5G down the track, by bringing it down from the sky means that one would have access to faster internet simply by connecting to a satellite.
All of the Quad countries are space powers so therefore all of them could provide mega constellations to essentially checkmate Huawei from space. That would also go a long way towards undermining China’s space silk road which is based around the BeiDou constellation. There are strategies for the Quad States to be able to use technology to checkmate China at its own game and develop alternatives to Chinese dependency for other States.
MK: Malcolm, you’re absolutely right. You have read our mind. China is also in the process of developing its own 6G technology and the Quad should get right to it as well. Given the technological depth and innovation in Australia, Japan, the United States coupled with India’s own software writing skills, I think that we can do a very good job of just leapfrogging technologies.
Which leads me to the big giant – the United States, Alex. The elections are just three months away. Do you see this as putting the brakes on the Quad or having an operational pause? Did it have a nonpartisan acceptance at your U.S.-India Business Council (USIBC) meeting yesterday? What do businesses intend to do to accelerate this process?
Alexander Slater (AS): Manjeet, thank you so much for the question. First I’d like to say that Gateway House has done a lot for putting on this great event. Manjeet, you and I go back a long way and I have seen for some time, the hard work you’ve put in to stand up and expand Gateway House and I’m thrilled to see the impact that it’s having on the current discourse with this work on China, as well as becoming a great forum of discussion, policy development and international affairs in India. So, congratulations.
On your question, we did have our ideas summit over the last two days. I’m the deputy managing director of the U.S.-India Business Council and this is our annual event where we bring together major voices from across the U.S. and India. It includes cabinet ministers, CEOs, and we even had the honor of hosting the honorable Prime Minister Narendra Modi yesterday. What struck me about this year’s meeting was the bipartisan voice in the United States. Yesterday, there was a Democratic Congressman from California, Mark Warner, who was a U.S. senator from Virginia. Mike Pompeo who of course is U.S. Secretary of State in the Trump administration and a former Republican Congressman and Nikki Haley, who is the ex U.S. Ambassador to the UN and a former Republican governor of South Carolina, all took part and all of them endorsed the idea of a stronger U.S.-India partnership on both security and economic issues. And so I think it’s unquestioned at this point in U.S. discourse that the U.S.-India partnership and the Quad are here to stay and we’ll be moving forward with it. Now I know that Dr. Mohan said in his opening remarks that it’s not yet an international institution and I think that’s right in the sense if you think of institutions such as the United Nations or my former employer, the World Bank. However, if you take a more flexible institution as a regularized process of people coming together, showing commitment to it, then, I think the aspects that Dr. Mohan raised are there. There are regular meetings that we’ve had over years in India, in particular meetings of the two plus two. We even have the secretary of foreign affairs and defense coming together to talk on this and eventually this will become a forum for a larger story, beyond defense from politics to economics. The reasons for that are positive ones as it’s not just a strategic reaction to a rising competitor but in fact there are real reasons as to why the Quad itself should have closer relations. They relate to commerce, they have common values and they recognize international borders. Many of the largest markets, even if you exclude China, for years has been India and our members show great excitement for this.
I remember that the biggest companies in the United States are showing great excitement for Bangladesh. Later this year, we’re going to launch a U.S.-India-Bangladesh Business Council in response to the success.
People from Asia, whether they’re Japanese Americans or Indian Americans, are very prosperous in the United States, and have real profile in society. Indian Americans are present in the legal realm, the technical realm, CEOs of companies, and these really create bonds. It makes Americans think nicely of other countries because they understand, and they see people who have come from those places, either as immigrants, or as next generation from immigrants, taking leadership roles in society.
But again, most importantly, I think the Quad is a way to preserve rules-based and values based international order. That is something that the United States wants to see in the world, be it in markets, freedom of speech and expression, or system of openness in terms of transportation.
So, the real question is not if the Quad, not when the Quad, but, what will the Quad be and how fast will it grow?
MK: That brings me to the next question for you. Nisha Biswal, your current President, said that the U.S. was likely to partner with India on 5G. How are you going to create that? Is it possible for U.S. companies, Indian companies, Japanese and Australian companies to actually by themselves create a syndicate where they can work on these technologies without the government. Is there a yearning for them to do it on their own?
AS: That’s a great question. When my boss Nisha was the Assistant Secretary of State, she contributed greatly to the frameworks of South Asia and that is what we see today bearing fruit between the two countries.
On the issue of the five eyes and 5G, we already see this happening. Malcolm referred to it earlier, with Australia having done away with Huawei from its networks. The United Kingdom also recently took steps to, over a longer timeframe, to ensure that Huawei was not part of its 5G networks. Canada, another member of the Five Eyes, hasn’t explicitly done this, but implicitly, its major telecommunications companies have announced that they’re going ahead with other providers of 5G communications equipment and not Huawei.
MK: Can India be part of the Five Eyes?
AS: Let’s go back to what Malcolm said and some of the comments of Tetsuo
Yesterday at the U.S.-India Business Council Ideas Summit, both U.S. Secretary of State Mike Pompeo and Prime Minister Narendra Modi talked about being trusted partners. And I think the idea of trust is at the heart of Five Eyes. Over the last four months in particular, the U.S. and India have worked together to closely navigate the pandemic, whether it was exporting key drugs that were in short supply in the United States, or with the United States sending ventilators India’s way. So you see this happen and many policymakers already see the trusted relationship. I don’t think it’s going to be short term where we figure this out but in the longer term, we’ll have to see. I do think that there’s a lot of opportunities for cooperation between U.S. companies and Indian companies in this area, which I can expand about more in the Q&A.
MK: This brings me to Malcolm since Alex has quoted you so often. Malcolm, technology is dependent on rare earths and China controls 70% of global rare earth production. We really cannot move forward without that. Australia is a very good alternative with its plentiful rare earth supply while Japan and the U.S. have a strong R&D base. India already has a made market and completes the whole supply chain. How can we move forward on connecting these complimentary and critical links?
MD: I think that’s a great idea. We should be doing that. It’s daft that we allow China to have global control over rare earths when you have other sources of supply that could be easily accessed and, reduce China’s ability to use those rare earths as means to coerce other states into doing their bidding. There needs to be a government to government engagement with allies within the Quad and beyond the Quad to talk about how we can best utilize the resources that we have.
Australia has this historical reputation that we’ve lived off our resources whether it’s off the sheep’s back, which is agricultural or off tourism and foreign students, or exporting raw materials and so forth. The most recent trends have gone, but essentially all to China and that’s placed us in a terrible situation whereby the Chinese can now beat us around the head if we do something they don’t like, for example, as calling for an independent inquiry on the outbreak of COVID-19. So we get back to decoupling our economies.
So, we need to identify those critical strategic resources. It’s not just rare earths but it could also could be uranium for example, or it could be our ability to utilize our land mass for large energy generation to export to others.
We need to be smart and look beyond the immediate dollar benefit of trading with China. And we need to recognize that we have a resource that our allies could use for strategic and geopolitical purposes and it’s not doing us any good sitting in the ground.
It also goes to the issue of the sovereign manufacturer. It’s not just providing the rare earths to the U.S. or Japan or the other Quad States but those rare earths can be utilized in Australia to manufacture high technology goods and benefit in an economic sense.
Do we need to constantly offshore our high technology production sectors to China? There is no problem with going to Taiwan. So therefore we need to think about who our friends are, how can we work with our friends and utilize the resources that we have? Not just in terms of digging the stuff up and sending it overseas, but in terms of digging this stuff up and actually using it within Australia to build new sectors of our economy.
MK: Raja, question to you. Given the decoupling from China that is now being acted upon, how can India couple with these economies of the Quad and be part of the new supply chain? We know that we need new regulations, but there’s quite a lot of change already taking place. What geo-strategic and geo-economic shifts do you foresee India leading, and how can India lead a reformed multilateralism under Prime Minister Modi?
RM: When we talked about the Quad Plus, especially in the post-COVID situation, there is a lot of talk in Delhi that we need to be part of the reorient of the supply chains. So, we need greater resilience, we need to be doing more economic partnerships with our friends who are in the Quad. I think that is a declared goal, but to get from here to there, it’s going to take some time. Within that framework, we’ve seen some things already happening. First, India is beginning to de-couple on the digital side. Vietnam trying to break from some of the Chinese dominance in the digital space. We’ve seen all the major U.S. tech companies moving in and ready to work with Reliance today, I’ve seen that Airtel has tied up with Verizon to launch ‘BlueJeans (a video-conferencing service). We are at the beginning of the process where the government needs to facilitate this in a structural way with our friends in the democratic world. I think for all these years we have believed that economic cooperation with China is a good thing. It will transform China and they will become a responsible stakeholder. But what we’ve seen is that most countries now do not want to be dependent on China for a whole lot of things. So therefore the political imperative for redoing the supply chains has just begun.
However, it will need a lot of policy initiatives, especially on the commercial side which is what our commerce ministry is responsible for. We need to get them in order to be able to attract foreign investment, to be able to draw some of the supply chains. And so far, most of the relocation from China on the manufacturing side has gone to Southeast Asia and not come to India. Some are coming and there’s some big proposals in the pipeline, but it’s work in progress. On multi-literalism, India strongly supports the German initiative on the Alliance for multi-lateralism. Today, we are part of the WHO and the whole Quad Plus initiative is about designing new forms of multilateralism.
We are moving to a situation where you need to bring the free world together. There needs to be a coalition of likeminded democratic States that can work together, whether it is in 5G, trade, health diplomacy or management of our digital futures. We are just at the beginning of a big moment, but I would say that it needs much stronger Indian Initiatives to take that forward.
MK: Thank you. The world made a huge investment in China when they brought them into the WTO in 2001. The United States worked very hard to bring China in. The U.S. worked very hard to write its laws. Japan does so much of the heavy lifting. There are constant complaints against India about how India doesn’t do so many things but actually, it hasn’t had much help.
Japan in particular has been very unhappy with India, not signing on to various trade agreements. The U.S. withdrew from TPP (Trans-Pacific Partnership) and India wasn’t in RCEP (Regional Comprehensive Economic Partnership). Obviously, for India to be a productive and a useful member of the Quad, we need to be brought into some of these trade agreements, but we need help.
So my question to you is maybe it’s time for this new multilateral called the Quad to think about new partnerships from the beginning because we have three developed countries with totally different constituencies and one developing country to bring a grouping that binds everybody together with strategic interests, but in everyone’s mutual interest.
TK: Thank you. To answer that question, I have to ask whether the Quad members share the same vision for the regional trade and economic architecture. My answer is very much negative. Japan’s basic position is to conclude the TPP with U.S. in and conclude RCEP with China in, without making, bilateral deals with, U.S.A. and China.
However, now U.S. is out of the TPP and I don’t think they will come back even under the democratic administration. India is now out of RCEP, which Japan was hoping to be counterbalance to China in the RCEP scheme. But, it seems like for India, it is still difficult to join a free trade agreement. Australia has concluded the bilateral agreements with U.S. and China so perhaps that’s the difference between Japan and Australia, and I wonder whether Australia would pursue the RCEP even after India is out.
But in Japan, there’s a harsh discussion whether we should continue to seek the RCEP when U.S. is out of TPP and India is out of RCEP and I don’t think we have reached a conclusion yet. I don’t see a common vision among the Quad members about the regional trade and economic architecture. We have to be realistic and find the realistic agenda for the Quad members. One possibility would perhaps be for the four countries to cooperate for the WTO reform, which is a common agenda for all. There is also room to cooperate on the rulemaking, especially for digital transaction and data management. TPP includes the provisions for digital transactions but it is not necessarily high standard. The U.S. and Japan have deep interest in high standard management, and I would assume Australia and India also have an interest in this.
So perhaps the Quad can be an architecture to promote the rulemaking for digital data management vis-a-vis China’s digital silk road.
MK: Well, that is an excellent suggestion and in fact, with India going to be the president of the G20, some of that work can already begin so that other countries can also buy into it. Several people at the Canadian think tank CIGI have been talking about a digital Bretton woods and a digital stability board. So maybe, these are all very good ideas to look at the commonalities and what we can do together. Yesterday, U.S. Secretary of State Pompeo said that India is also part of a group of likeminded nations when it comes to the Quad. Alex, maybe you can take this on.
AS: I expect that to be the case because yesterday we had numerous democratic politicians and leaders echo that position on issues like the U.S.-India relations and national security. We spoke about how the Five Eyes are not going to use Huawei. So what are they going to use? They’re going to use a technology produced by American, European and South Korean companies. Welcome Intel, Cisco, Nokia, Ericsson, Samsung. That’s where it’s going to come from. The U.S.-India partnership is a great way to ensure that there are common standards, that these companies all unite around here because it brings huge demand, and we’re already seeing it, right?
I think it was referenced earlier that U.S. capital is flowing into, high tech platforms here in India. Google, Facebook and a number of private equity companies have invested over $10 billion in Jio already. Our organization has started a U.S.-India 5G dialogue. We had the chairman of the Federal Communications Commission, Ajit Pai talking with the heads of Indian companies, Jio, Sterling, major manufacturers of fiber technology and we can already see that it’s happening.
MK: Thank you, Alex. We have a very interesting question from one of our audience members and anybody can take it, but I guess this is really directed at the Americans. Why not get SpaceX to get some of the rare earths from the asteroids and accomplish this very easily with a little bit of funding.
AS: Rare earth metals can be extracted much closer to home. The real issue with rare earths is the refining process. What is needed is the infrastructure to refine it and that takes time.
RM: A few years ago, the Japanese tried very hard to work with India when the Chinese imposed sanctions on the Japanese in 2011. We had an opportunity to work together but it really fell through. Therefore, India needs that reform. We have seen some interesting moves on coal where India changed its laws. In fact the recent agreement between Scott Morrison and Mr. Modi also talked about the sector and so there is room for cooperation.
Some of those sectors right now have a monopoly under the department of health. Can we consider ways in which we can work with others, especially with U.S., Australia and Japan? It is natural for the partners in the Quad to be interested but there is a policy bottleneck in India that is blocking it.
MK: Raja Mohan, I’m going to ask you a question from the audience. If Raja Mohan were the foreign minister of India, what would be his three priorities?
RM: I’ve never been in the government, so that’s not going to happen. However, I think the problem is that the foreign office is a management agency where it can bring in ideas in terms of how we relate to the rest of the world. It can coordinate the engagement between the Indian government and other government but it’s not the executive agency. The MEA can’t improve the business environment in India and it can’t deliver the commerce ministry to do better trade deals just as it can’t deliver the defense ministry to come and do things. So, the MEA is a valuable connector of transmission of big, of getting India to connect and engage with the rest of the world better and channel those communications. Our real task is not at the foreign ministry level, which I think on a broad framework we already have. Our problem is on the economic and commercial side and improving our domestic act will automatically create opportunities on the foreign policy side.
The rest of the world is ready to come in. People are waiting for those internal changes in India, which will make it easy for the outside world. I think the more India rearranges itself internally, for its own benefit, the more it will benefit the foreign policy. India has a set structure for foreign policy which has endured since post-Cold war period, there is a sense of boldness and a stronger stance now but more or less, this has worked. We need to focus on the internal domestic framework.
MK: We have a question on Vietnam. How will a communist country like Vietnam be comfortable with joining a coalition?
TK: From a Japanese perspective, Vietnam has a strong potential to become partners for regional affairs. Japan has very high expectations from Vietnam, but approach has been low key due to the different regimes. So, this is not only about Vietnam, but also Southeast Asian countries have some concern on the approach by U.S., Japan and other Quad members, particularly on the universal value. Therefore, it is important to be sensitive to their concern, whenever we talk about the regional issues but also be as realistic as possible.
MK: Now a question for Malcolm. How are you going to get Port Darwin back from China? To add to that, could members of the Quad possibly think of tax and other exemptions for production of technology, for the Quad, by the company situated in the Quad countries.
MD: Yes. The Chinese have signed the document claiming that they own it for 99 years, but the reality is it’s still on Australian territory. So, we can go in and just tear up that document and say, no, this is Australia. You don’t own that part of Australia. So, whilst they might think they own it, they don’t actually own it. We dropped the ball on that when we let the territory government in Darwin signed that deal, and the department of defense failed to do due diligence in terms of assessing the implications of that.
Obviously in a wartime situation or crisis we could simply take it back, but in peace time, it doesn’t set a good example in terms of our partners and allies. The Chinese own the port with a lease for 99 years. So, yes, it’s an issue that needs to be addressed. For the other question, this is probably a little bit beyond my area of expertise. I’m not a business analyst, so I’d be happy to stretch that over to the floor and listen to what they think. Obviously, from a regulatory perspective, the last thing we want to do is impose tax regulations to the point whereby it stifles business.
One of the areas that I deal with in space policy, is how do we ensure the stimulus on the growth of Australia’s commercial space sector? One of the things that we’re focusing on at the moment is how do we prevent government imposing tough taxes on the launch industry in this country that’s just getting started. It could snuff it out before it even gets a chance to get off the ground. So I think that we need to be careful about taxes and so forth.
MK: How do you perceive the Quad Plus in terms of being proactive in the Pacific?
MD: The Quad Plus has real opportunities to build on the success of the Quad, in terms of how we broaden out the dialogue and the discussion. We need to have more regular meetings in terms of track 1.5 track and track 2 throughout the Quad Plus and engage with countries like Vietnam. Taking from the previous question, Vietnam was a communist country but they have similar strategic interests to us and we should be able to work with them, even though they have, shall we say the air of Marxist Leninist perspective in some of their ideological beliefs. I don’t think that necessarily holds to their economics. I think that New Zealand is an important partner in terms of Southwest Pacific affairs. The Quad and the Quad Plus need to be able to look beyond the immediate in the Pacific Quad region in a lookout to the Southwest Pacific, because a key concern of Australia is that China will get a foothold into the Southwest Pacific, and that could lead to commercial facilities, under the BRI that ultimately could turn up into military bases.
So, I think New Zealand is an important player. South Korea is obviously an important player in terms of our ability to work with the South Koreans on managing the Korean peninsula and also engaging with China, at a diplomatic level. The Korean peninsula is an issue that we can’t ignore in terms of the potential risks there. That’s not a resolved crisis. There are ample opportunities there for the Quad Plus to do real good in terms of extending the effectiveness of the Quad as an organization.
MK: Raja, would you like to talk a little bit about the Quad Plus?
RM: I think there are multiple forums being explored. There’s one in relation to COVID-19. There is one at the foreign ministers’ level. The British, as I said that we talked about, for the 5G cooperation. So I think we are at the beginning of a process where the idea of likeminded countries working together, is the new idea that has come on.
What will be interesting to note is the kind of institution form it will take in the next few months. Whether the G7 summit in Washington will happen before elections or after elections? Who are the kind of countries that are going to come? What’s the kind of agenda we’re going to conduct, and how the next administration, if it is the same one or someone else will take that forward?
So I think everyone is now probing around for ideas of how do we restructure a global order within which we have new possibilities. And it is just not going to be done through the UN. Pompeo said it has to be something that is not the UN neither the WTO nor the GATT. It’s a coalition that is willing to work together on a shared value, not just political, but also economic and other. Can we make a difference to setting rules? At the G20 in Osaka, India stayed away from the final declaration. So, we’ve had hesitations of working with our partners, and I think we need to overcome our reluctance in working together with partners. Over the last few months there have been big changes within Quad itself, in Quad Plus and in the Alliance for multilateralism. So I think India is embarking on a very different phase of working with likeminded nations and this is very different from the kind of things we’ve done in the past. So we have to catch up, we have a steep learning curve because other countries have worked on alliances and on groupings. Before, India tended to operate as a lone ranger and today it needs to develop institutional capacities that are to work with partners on sensitive areas where we’ve been walled off in the past. The real challenge is breaking that taboo in Delhi. Our partners are ready, the question is – How do we reframe our capacity to work in groups with other countries? Over all these years of trade, we said that we don’t do bilateral and only multi-lateral. We have to get over that traditional mindset and see coalition building among like-minded countries, and India has to learn to operate in this minilateral institution that has more suited strategic interests near term and long term.
MK: There’s a new marriage maritime global order in the making with renewed interest in the Quad and the Quad Plus and there’s even a suggestion that the tri services command of India, Australia and New Zealand should be the headquarters for the Quad. How would you look at this suggestion and the way forward to add more teeth to this new Alliance since it talks about the Andaman and Nicobar Islands?
MD: Australia is trying to strengthen its Indian ocean role. Obviously, we’re keen to be involved in the Malabar exercises and we’ll be patient and hopefully that will come through. I think that the potential for the Australian and the Indian navies to cooperate and work together is a good thing.
Two years ago I put together a submission to the Australian parliament, where we talked about the possibility of opening up the endowment and opening up the Cocos and Christmas islands as military basis for the Australian Navy, and opening those up to India. In return, India would open up the Andaman and Nicobar Islands to Australia, and we would have a combined ability to operate in the Indian ocean to support maritime domain awareness and for piracy, to counter people smuggling and ultimately, obviously to be able to keep a watch on what the Chinese are doing in the maritime areas of Southeast Asia. I think that is something that would be worth exploring and it also lends itself to what we could do besides the Naval side of things. Well, we could do an awful lot in terms of collaboration on surveillance, with unmanned systems, space-based cooperation in terms of space of balance for maritime and ocean reconnaissance. Australia has just announced in the defense strategic update that is going to invest money in developing an integrated under-seas surveillance system. Look at the maritime straits in Southeast Asia, we’re trying to consent submarines through submerge. So the ability for India and Australia to work closely on integrated overseas surveillance of those maritime straits would be something well worth doing to be able to keep track of what’s happening in those straits.
RM: On the Andaman and Nicobar, I think we’ve been very secretive, possessive and kept it so closed as if it is a closed frontier, and the problem again is on our side. We’re not ready to leverage natural assets that we have for our own development and we have a long way to go before we turn those islands into islands of cooperation between our partners.
MK: That’s a great way to bring to a close this excellent session. May I request ambassador Rajiv Bhatia to give the closing remarks?
Amb Rajiv Bhatia (RB): Thank you very much, Manjeet. Thank you very much for navigating this highly complex subject and its multiple facets. I would first like to do the necessary protocols by thanking Peter Rimmele for setting the tone of this dialogue in terms of emphasizing the basic fact that really wove the entire discussion together when you said that the dragon’s footprints are all over and that we are seeing the reconfiguration of the world.
Now, in that context, we would like, on behalf of the Gateway House, to express our very deep appreciation to Dr. Raja Mohan, Dr Malcolm Davis, Tetsuo Kotani and a dear friend, Alexander Slater. Appreciation is, for the fact that they really shared their insights without holding much back and in the process as they expressed, the perspective based on years and years of research, writing, thinking, and reflection, they really shared some very valuable lessons with us.
Gateway House has been studying the Quad for many years and it is in that context, I think we were able to define the contours of this complex topic very well. I would like here to highlight four or five bullet points, which have emerged from this very rich and stimulating dialogue.
First of all, here are four experts sitting around an elephant, their eyes are covered and they are being asked to define this elephant and they have done a terrific job of it. They raise the question, whether this is just a mechanism or whether it has already become an institution or, on its way to become a major international forum. They also almost agreed that this is a mini-lateral forum, which is already here to stay. So I think the definition is good because that clarifies matters.
The second point is that on the Quad Plus there is also a broad consequence that the Quad does need the support of other countries, both from the region also the extra region countries. The very fact that KAS is our partner on this shows that the European dimension is very important. We would have an occasion to explore that further in depth on another occasion. And here, when we spoke about the regional dimension, we can find ourselves to three or four countries. But, I think even here on this plank as well, there is potential for discussing things in depth on the next occasion involving others.
The third point is with regard to the role and functions of Quad and we noticed very clearly that on the technical cooperation on this whole question of rare earths, uranium, space, etc, there is a fairly striking convergence among the four countries. These are four technologically advanced countries and they’re all space powers. Experts were very clear in pointing out that while the strategic, diplomatic, maritime, defense and security angles bound to be consolidated, it is time to start focusing on real life issues, such as 5G. If, for example, the Quad works to develop a convergent policy on developing 5G, this would be a wonderful outcome of the consolidation.
On the next point, I think it also became very clear that when it comes to trade and economic issues, there is a broad convergence with regard to the decoupling with China, how this decoupling insight would occur is obviously difficult to determine yet. But on the regional trade arrangements, there is a divergence. And I think while the Japanese colleague very clearly pointed out, the difficulty that stems from Tokyo, I must share the scene from Delhi – it is perplexing to understand how Japan and Australia can still think in terms of staying on with RCEP.
If the lesson today is that the Dragon’s footprints are everywhere and that the aim is to counterbalance China, to constrain China in order to allow it to follow international rules and regulations, then maybe the time has come for some of the quite partners to come closer, probably to the U.S. in Indian position. There is a strong political commitment and the voices from the conference yesterday are reverberating in our dialogue today very clearly. It is obvious that there is something in U.S. view that we have to work through a coalition of likeminded countries, but we should also remember what the Indian prime minister and Indian foreign minister said that this is the age of development because the age of expansionism is over. I think all Quad countries need to internalize that and Dr Jaishankar yesterday stressed that the American friends would have to learn to deal with the world, which is completely not just pretty partners. He was not talking about the whole world, he was talking about India.
Just until last summer, December 2019, much of the world was still talking about an inclusive space in Indo Pacific region. I noticed very clearly that no expert talked about inclusivity now. This is the major takeaway from this particular dialogue and I think it is really a constructive and a forward looking dialogue for which we must thank KAS as well as all of our very distinguished panelists and we must also thank our entire Gateway House team which has really worked very hard to prepare for this major and important conference. I thank you and I handed it over to you Manjeet.
MK: Thank you, Rajiv. Thanks to our excellent panelists. I hope we will be able to bring you back again on this platform, maybe a few months from now and I hope even though we’ll not be able to travel, we will still continue our online conversations. Look forward to being with you all again. Good night and thank you very much to the audience and to KAS. Thank you.
This is the transcript of the Gateway House-KAS co-hosted webinar on QUAD or SQUAD on 23 July, 2020.
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