 Hello and welcome back to the Lowy Institute's digital conference, the Indo-Pacific Operating System – Power, Order and Rules for the 21st Century. I'm Hervé Lemmeier, I'm the Director of Research here at the Lowy Institute and I'm delighted to be chairing the panel discussion on new rules for the Indo-Pacific. In this panel we'll be exploring the durability of the current rules-based order. Is the existing order fit for purpose? Should the region's institutions, rules and norms be defended, modified, supplemented or entirely replaced? And if so, in which areas, by whom and to what effect? A lot to tackle in an hour and 15 minutes, but very fortunately we have a stellar lineup of experts to discuss this with us. Joining us from Tokyo is Professor Akiko Fukushima, Senior Fellow at the Tokyo Foundation for Policy Research and Non-Resident Fellow at Lowy Institute. In Melbourne we have Dr. Beck Strating, Executive Director of La Trobe Asia and also in Melbourne Richard Maud, Executive Director of Policy and Senior Fellow at the Asia Society Policy Institute. Thanks to all three of you for joining us today and a very warm welcome. Thanks, Hervé. Good to be here. Thank you. Glad to be here. So before we get started I'd really like to encourage the audience to submit their questions as discussions proceed. We're keen to make this discussion as lively, inclusive and wide-ranging as possible. I'll read some of those questions to our panelists as we go along. We're also joining us. If you're joining us online you should also now see a screen in front of you with pop-up polls. We'd love to take your views on these issues. The poll questions relate to how important is free trade to regional order, how important are liberal democratic values to regional order, and does the Pacific need new rules mostly to prevent conflict, promote economic growth, promote sustainable development or it doesn't need new rules. So we're keen to get your views on that now, if possible, and we'll weave that into our conversations as we go. But now directly to our panel, I think there are really two overarching questions for this discussion in my mind. The first is, is the point of creating new rules one of accommodating and enmeshing China within this Indo-Pacific system or is it about balancing China's power? And the second relates to whether we need new rules or whether the challenge before us is one of adherence to the existing set of rules. So that is, I think, something that should weave its way through our conversation in the next hour and 15 minutes or so. But let me begin by going to Richard Maud. Do we need new rules to accommodate China's rise? And if so, what are they? Yeah, I think so. I think so. It's a great pleasure to be here and to share the stage with Beck and Kiko. Look, I don't think that we need new rules for China to play a role in the region commensurate to its size and power. If that's what you mean by accommodating its rise, nor I think that we need a whole bunch of new rules to ensure peace and stability in the region. What we really would like is for China to adhere to rules to which it itself has already agreed and in some cases has actually helped negotiate. So the UN Convention on the Law of the Sea is, of course, a prominent example. But from an Australian perspective or from the perspective of many countries adhering to international trade law and World Trade Organization rules and disciplines would also be pretty helpful. And we also want China to adhere to existing norms and principles to which it's made solemn commitments. For example, when it exceeded to the Treaty of Amitya and cooperation or another example when it signed the declaration on the conduct of parties in the South China Sea. And there's a pretty, I think, useful, perfectly fit for purpose set of principles in those documents, non use of force or threat of force, peaceful settlement of disputes. I'm quoting here from the from the Treaty on Amitya of cooperation, not a young document that this seems very contemporary, the right at every stake to lead its national existence free from interference, subversion or coercion, you could have in those words today. The other thing about those principles causes is that they were set by the region itself. They're not ones imposed by or perceived to be imposed by the United States or by the West more broadly. So that macro level, I don't think we need new rules. We just would like China to adhere to the ones it's already agreed to and committed to. There is a caveat to that. Of course, there's a whole bunch of significant issues on which in an ideal world rulemaking and standard setting will be done jointly with China. So you think about rules and standards around new technologies like 5G or AI, the operation of internet, the management of space, longstanding problem areas in trade law like how to deal with state owned enterprises in trade law or state subsidies. And if you could find common ground in those areas, it would help economic growth. It would be more efficient. It would reduce parallel sets of standards and rules being set up and it would also reduce friction in the international system. But the space for finding convergence on those issues is now very small indeed if it exists at all. And that set of rulemaking really just embodies the clash of interest and values between China and the rest of us that's writ large at the moment. So those kinds of new new rule makings would be useful, but they're now an arena of competition much more than they are one of cooperation. That's interesting. Just a quick follow-up question, Richard, given your note of pessimism. In 2017, DFAT produced a foreign policy white paper, which you were the main author of. There was an interesting or an intriguing line here I'm quoting directly, quote, the institutions that support global cooperation must accommodate the greater weight of emerging powers and that Australia would quote therefore contribute constructively to the reform of international institutions, end quote. Is that still your view? What is the scope for reforming existing international institutions to accommodate in some sense or reflect the greater weight of emerging powers? Not necessarily only China, by the way, there's India and a number of other players here as well. And if that is still your view, how do we go about practically doing that? Because there wasn't very much detail in the white paper about how Australia would do that. Yeah, a couple of quick thoughts. Look, I think it still is desirable for institutions to reflect today's world. And as you rightly said, that's not just a China story. There's a big debate, for example, about the makeup of the Security Council and it looks anomalous that India is not on the Security Council. So, you know, as a matter of principle, I think Australia remains supportive of having institutions that reflect contemporary balances in the global order. On the rules, there was a caveat to that quote that you have from the white paper which you didn't read out. But in the paper, it says that we'll do that. We will remain open-minded to it. But we will do so through a prism of Australia's values. So we will not support, for example, changes in rules that are illiberal in nature and that we will also be guided by broader national interests. So no country, you know, will give anyone, can't blanch or an open invitation to rewrite rules in ways that cut across our interests and values. And I think that tension has become much sharper in the four years since the white paper was published. No doubt about that. Beck, let me turn to you now. The law of the seas is an area where China's challenge to the rules-based order seems sharpest, given what we've seen in the South China Sea and elsewhere. But how black and whites are those rules, really? Would new rules or tightening existing ones help to create greater adherence or is this a lost cause? Well, it's great to be here. Thank you for the invitation, Lowy. I have to say, coming from a political perspective, I would say that international law is never black or white. It is also not ideologically neutral and the rules-based order is very much connected in with a power-based order. So starting from that point, I would have to agree with some of what Richard said in his initial comments. I mean, the maritime domain is interesting because it is governed by the United Nations Convention on the Law of the Sea, or UNCLOS, and what makes this kind of different, in a way, is that unlike some of the other key institutions that underpin the liberal international order, China was at the negotiating table for this. So that in itself, Richard's point about China complying with the rules that it itself has signed up for, is a really pertinent one when we're talking about law of the sea. And it was a really remarkable achievement in the sense that the negotiations had to reconcile some competing views about how states see the appropriate use and governance of the oceans and the distribution of the resources in those spaces. But even within the UNCLOS framework, there's room for different interpretation. One of the most consequential, I think, is around Article 17 on Innocent Passage, which states that ships of all states enjoy the right of innocent passage through the territorial sea. This is a foundational norm underpinning the principle of freedom of navigation, which many states in the region support in their declaratory and operational policy. But what this article does not do is state whether it includes warships. So what arises from this is that states might argue that innocent passage relates only to commercial ships and not to military freedom of navigation. Therefore, they have the right to restrict innocent passage of warships, whether it's through requiring prior notification or in China's case in the South China Sea, prior authorization of warships travelling through that maritime domain. So this in essence is an exploitable gray area. And a number of states in the Indo-Pacific, not just China, seek to test some of the boundaries of what they can claim under international law of the sea. US freedom of navigation operations, for example, they're not just conducted against China in the South China Sea, although a lot of the attention in Australia is focused on those sorts of operations, but also against other so-called like-minded states. Japan, South Korea, India, Taiwan, you know, they're also targeted for phone-ups because the US thinks that they make excessive maritime claims in some areas. Even Australia makes claims in the maritime space that the US doesn't agree with. And so I think the question really is, it goes back to the theme of this panel, is how much flexibility is there in the maritime rules-based order? How much difference in interpretation can the rules-based order accommodate? And what is the difference between something that's interpreted differently compared to something that is a deliberate flouting of international law? And I think that's where it's useful to distinguish between grey areas and the grey zone. Richard mentioned some of this in his presentation, but China's assertion in the South China Sea extends, I think, beyond a difference in interpretation. The use of lawfare strategies which are supported by operational grey zone tactics provide this kind of quasi-legal rationale. And the nine-dash line is itself a work of strategic ambiguity. It's not really clear what China is claiming, yet it's refused to abide by the 2016 arbitral tribunal ruling, which invalidated its historic rights claim within the nine-dash line. So I think that there's the issue of the grey area, but then there's the issue of just, you know, ignoring some of the key points in unclossed in order to advance interests. I think the other issue, but before I hand it over, is that China's vision of the maritime order, in my view, is not really clear beyond the South China Sea. For example, China might want to restrict freedom of navigation in the South China Sea for others, but doesn't want to restrict its own freedom of navigation in other maritime areas where it can't claim an EEZ or a territorial sea by virtue of geography, and I think as it rises as a naval power, it too will have an interest in the principle of freedom of navigation. So we should be really careful about applying what's going on in the South China Sea to other maritime domains and to the maritime order more generally. And in terms of your point on adherence, I mean, I think it would be great to see China clarify its claims in the South China Sea. It would be great for the United States to ratify the UNCLOS, but I think for non-Great Powers, there's value in working together to align their interpretation. If these shared principles of freedom of navigation are so crucial to the Indo-Pacific, then reaching some more common ground on this stuff will be useful and avoid China talking about the hypocrisy or double standards of other states. It's interesting. I mean, so much of the talk of either existing rules or clarifying existing rules or new rules rubs up against the reality of power politics and superpowers have more privilege in this space by the nature of their power than many other players. I wonder, I mean, given how much rules and values are now the center of intensifying competition between Washington and Beijing, and that, for example, President Joe Biden has said that America's abiding advantage is in the rule of law, the power of example that the United States set. And yet there are other maritime domains. And you could point to, for example, the base on Diego Garcia, for example, where the US seems to be conveniently ignoring the international law's application on the sovereignty of the disputed sovereignty, I think, given that Mauritius claims sovereignty over that. Do you think that this is, I mean, there are real strategic, on the other hand, imperatives for why the US and its allies should have a foothold there. Do you think that there is a risk, though, that we risk destroying the rules-based order in order to save it, in other words, and that that might only just reinforce China's vision of a world in which the weak suffer what they must? Do you have a view on that? I have a view on that. Yes, I do. I'm really glad that you asked this question. And I think it gets back to a central issue in the relationship between power and rules and whether what China is doing in the South China Sea is a version of maritime exceptionalism, which might be expected of great power states when they carve out exemptions for themselves under international law because they can. And the US has done it, not just in not ratifying unclos, but in a range of other areas affecting international law or whether this is a form of maritime revisionism where what we're talking about is a whole-scale revision of the rules. Now, the point that you make about Diego Garcia in the Chegos Archipelago is a really interesting one, because that's really, I think, the UK, which claims sovereignty over the Chegos Archipelago is prepared to take the hits on its reputation in order to preserve its control over that base and over that particular area, which also comes with attendant maritime zones, which have also been contested under an arbitral tribunal under the United Nations Convention on the Law of the Sea. And so I've got a theory about this. The UK is prepared to accept that hit as long as its strategic interests or its view of its strategic interests remain where it remains prepared to maintain its stake within the Chegos. If it sees the reputational damage as outweighing its interests in maintaining Chegos, then maybe it would change its policy. But at the moment, it's really about where the UK sees its strategic interests and its interests are with aligning with the United States and continuing to have that base in order to support US and UK strategic interests in the Indian Ocean. It's not necessarily with being demonstrating that it is able to follow the rules-based order. So much like what Australia did in the Team or Sea dispute and Australia eventually did change its policy on the Team or Sea, the UK finds creative ways of trying to demonstrate that its actions do fit within the rules-based order, even though there are these advisory opinions that suggest that its sovereignty is illegitimate and therefore the sorts of activities that are done in the maritime space, such as creating a marine protected area, are also not valid under international law. Hmm, interesting. Now, Professor Fukushima, let me turn to you and turn to the question of multilateralism as a source of sustaining and creating new rules. ASEAN looks a little bit weaker lately than perhaps a decade ago. It looks as if the ability to uphold or ASEAN's ability to uphold a rules-based order that is capable of tying both superpowers to the region is fraying somewhat. So how should we recalibrate multilateralism and multilateral mechanisms in the Pacific in light of the weakening ASEAN-led process? And what's Japan's view in this as well? Thank you. Thank you for this opportunity to join the discussion. Despite the criticisms on shortcomings and lack of results by ASEAN-led regional cooperation, I think we all know the region owes a lot to ASEAN for leading regional cooperation or leading regional architectures. Up on hindsight, Asia was said to be an infertile ground for regional architectures. But with the initiatives of ASEAN, we now have multiple layers of regional architectures. Some have dubbed regional architectures in the region as spaghetti bowl or soup or oriental noodle soup. I would like to compare regional architectures here in the region with lasagna rather than spaghetti bowl because I see them very multi-layered. Now, in responding to your specific question of re-care relation, in the view of the title of this conference, we'd like to look at the Indo-Pacific. I think Indo-Pacific is a home to Sino-American competition. It is also a home to numerous cooperation needed for the time. And the region has attracted the tensions of residents as well as non-resident states due to the share of world GDP, share of trade, as well as sea lane for shipping and other things. And in order to make the Indo-Pacific a region for cooperation or at least to enhance its cooperation, as you pointed out, we have to develop regional architectures and regional cooperation further. And I think we should do it with ASEAN countries. For Japan, ASEAN is quite an important player in the region and this is reflected in the visit of our Japanese Prime Ministers earlier in their tenure to ASEAN member countries. Prime Minister Kishida, our current Prime Minister, didn't have a chance to do so as he's still new to his position. But I'm sure he will visit ASEAN countries as soon as he can. And I think we should look at multilateralism here in this region, not to create brand new multilateralism for Indo-Pacific, but rather would like to utilize some of the architectures we have in the region. I know it would sound cool if I can bring in brand new multilateralism in the region, but the reality is, I think we have enough architectures to capitalize on. I have some specific options or ideas to share, but I don't know whether you would like to do it now or later. No, no, please go ahead. Two are based on existing, what I call, inclusive multilateralism. And the third is using rather exclusive multilateralism or mini-lateralism. The first is APEC. Australia and Japan were quite instrumental in launching APEC. And APEC includes the United States, China and Taiwan. And we might be able to cultivate this architecture to adhere to existing rules as well as adopt or create new rules, as has been mentioned by Richard for new areas like cyber, digital and space. Second idea is to capitalize on East Asia Summit. East Asia Summit includes ASEAN member states plus eight countries. And we might be able to look back to the vision groups recommendation on East Asia Summit and take advantage of some of the ideas launched there, for example, alternating chairmanship between ASEAN and the plus countries. Third option is to utilize some of the exclusive multilateralism that we have in the region. Examples are CPTPP or the QUAD. If I may use the example of the QUAD, I agree with Mr. Kurt Kellner, who said that the QUAD may wish to concentrate on deepening partnership among the four for the next few years. But I also agree that it is very important for these QUAD members to deepen the partnership for the purpose of peace and stability of the region. But at the same time, when I read leaders' joint statement in announcing September this year, I had an impression that the leaders are also interested in providing global or regional public goods, such as vaccination, health, climate crisis, critical and emerging technologies, including 5G and other digital, regional infrastructure, cyberspace, education, adherence to international law and others. These are regional or public international goods, and these can be worked out as a QUAD plus those countries who are interested, depending on each challenge or agenda. And in the leaders' joint statement, they welcomed ASEAN outlook on Indo-Pacific as well as EU strategy for cooperation in the Indo-Pacific. This suggests to me that leaders will be open to more expanded form of a QUAD corporation for these challenges, which is worth working with other members who are interested. So these are three possible ideas that I would like to share with you. But these are something that I conceived overnight after receiving your questions last night. Thank you. Thank you, Professor. I'm very happy that that's led to some concrete proposals and thoughts. I mean, it strikes me that the the main tension here is one between the emergence of minilateralism, smaller groupings of like-minded countries and the challenges presented to broader versions of multilateralism. Now, I think the understanding, at least in my mind, was that there was a division of labor. So from Australia's standpoint, groupings like the QUAD were primarily built with the intent of deterring China rather than shaping rules. Groupings like ASEAN and broader forums allowed for cooperation between a more broad-ranging or broad church of countries, not all of whom are strategically aligned, but all of whom may agree on some lowest common denominator in terms of the need for there being rules. I think the question here is, can those two worlds intermarry, so to speak? And I think I'll get to any of the panelists, but maybe perhaps beginning with Richard. Are these emerging ad hoc coalitions, such as the QUAD, capable of setting rules, of being rulemaking bodies as opposed to simply upholding existing rules and seeking to deter China from breaking those rules? Yeah, thanks, sir. They this is a really a really good issue, I think, to dig into just quickly right across the panel. Akiko set it up brilliantly. I really love her lasagna metaphor because I do think with the acceleration in the development of the QUAD, we are really now seeing parallel institutional structures in in the Indo-Pacific one, as Akiko said, is inclusive. It's as the unscented. It's about dialogue, confidence, building, cooperation where that's possible. It's about regional resilience. The other is exclusive democracy centred. It is about balancing, as you said, it's about protecting space for democracies. Public goods, again, Akiko mentioned, and then that agenda that's very hard edged on cyber critical technologies and minerals. So one of your questions is, can the two coexist? I think they can. And from an Australian perspective, it's really important that they do find a way find a sort of productive coexistence because neither can be a substitute for the other. I think we shouldn't underestimate the level of anxiety in some capitals in Southeast Asia about this development, about ASEAN, perhaps remaining central, but less relevant and have been bypassed. So both sides are going to have to work hard at this. ASEAN has to accept that countries like Australia, India, Japan, and America, we are going to balance and we're going to push back harder than most of ASEAN is comfortable with. You know, this is our foreign policy. They have to accept that. And the Quad countries, they have to really understand the concern in Southeast Asia about not being caught up in a conflict, about not being smashed between the major powers. And they want, above all, to be engaged as much as possible in their own, in their own right for their own value, not just as a kind of swing region in the great new great game. And we still don't get that right all the time. And so Quad countries have got to work hard at that together. Now, can the Quad be a genuinely rulemaking body? I think the jury's out on that. The Quad talks a lot about rules and norms and principles, including with the strong values dimension to it. But as you said, a lot of that is where I began. It's about calling on countries in the region to support current rules, institutions and norms. You know, all the way from non-use of coercion through to how to manage debt, for example, where they call on G20 principles. So there's a body of existing rules and norms that the Quad wants to support. The Quad does talk at a rhetorical level about rulemaking in those new areas that we've been discussing. But it's not yet clear, I think, whether the Quad will become a kind of unique for-country pioneering or leader on the creation of standards and rules in those areas, or whether the Quad will reflect a broader kind of democratic grouping that we've seen emerge around those sorts of issues. Bec. I just wanted to make it a couple of points on that. I also love the lasagna analogy. It's appropriate and it's lasagna. So, but I did want to add that it's Apache lasagna. And I think that we still have a tendency to talk about East Asia when we're talking about the Indo-Pacific, because actually the rules and the norms and the principles and the institutions are not sort of equally distributed across this area that we now call the Indo-Pacific. And the one in the particular that is important here is the Pacific, you know, that has the Pacific Islands Forum as its own regional organisation. There's rules and norms and principles in that particular region that don't necessarily apply to other parts. And so while there is this lasagna, I don't think it's still quite a segregated region in some ways. And the second point that I would like to make is that the issue of what we mean by rules is really important when talking about what some of these many lateral organisations might be able to do because regional organisations have been creating rules. Like the TAC that Richard mentioned earlier is an example of this. The code of conduct that is being negotiated between China and the 10 ASEAN states, that might lead to a new set of rules that may actually undermine other forms of international law, depending on what the states agree with and depending on whether an agreement is negotiated at all. So some of these rules can actually stand in tension. But I think that's why it's interesting to think about what we mean by the rules-based order and not a law-based order. Because I think when we're talking about international law, we're talking about, you know, multilateral forms of law, you know, unclassed, for example, but that there's not necessarily any reason why these smaller mini-lateral organisations can't negotiate agreements among themselves that then become a part of this very broad rules-based order that we talk about. Yes, no, absolutely. And I think you're all broadly on the same page here when it comes to those questions. The one question we pose to the audience, and I would encourage the audience online to continue to submit questions, as we will want to pose them to our panellists later on. But the one polling question was, how important are liberal democratic values to regional order? I'm not sure if you're able to see the responses on the panel, but let me read them out to you. 35% suggest over a third say it's very important, but the majority, 56% says it's only somewhat important, with only 5% saying it's not important at all. So I'm wondering, is there a space for values in our regional order, in these rules which are meant to have broad traction to secure adherence? And if so, should they be liberal democratic values? So where does the values debate play into this question of new rules for the Indo-Pacific operating system? Beginning perhaps with Professor Fukushima. Thank you. This is a very difficult question, isn't it? I think liberal democratic values are quite important for Japan, and that's something we have been emphasizing. At the same time, when we talk about rules and norms and principles, it is more on, I think, I don't know whether pragmatic is the best term to use here, but if we agree on rules, norms and principles, it is very important to observe them, or as Robert said in the very beginning, how we adhere to those rules or norms and principles are very important. We may need to develop new rules, or we may need to adopt existing rules to the current situations, for example, space or digital or cyber, but in doing so, it is very important that we agree on these rules. What I mean by that is if we interpret rules differently, or if we try to have multiple rules, that would lead us to a chaotic situation as Henry Ball said earlier in his Anarchical Society. What I mean by that is if we have cricket games and baseball games, players cannot play together because their rules are very different. When we have baseball and softball, players cannot play together because their rules are different. It seems they have a similar setup for the games, but they cannot play together because rules are different. For example, I don't know how many of you are fans of a baseball match, but a Japanese baseball player, Shohei Otani, is playing in American Major League this year, and he won most valuable player prize this year. So he's a great player. However, he cannot play in softball games. So we need, I think it is very important for us to have rules agreed and followed. And for that, we need multilateralism, I believe. And for your earlier question on multilateralism and minilateralism, I agree with Richard that they can coexist, but their functions are somewhat different, isn't it? Minilateralism can be very prompt in responding to specific challenges or new emerging challenges rather than inclusive multilateralism. So I think we need to be very clever in using both. Thank you. Richard, did you want to add something, particularly on the question of values when it comes to rules or rule creation? Yeah, I think I would approach this in three ways. One is, I'd say as a starting point that certainly from an Australian perspective, we should approach the region confident about who we are and what we stand for. And where we can, we should build space for democracies, respect for human rights, good governance, international law and so on. I mean, that's who we are. And we're also in an era where constellations of democracies are going to work more together in pursuit of shared goals. I think all of that is appropriate and fitting for a country like Australia. But, and here's my second point. I think when you look at regional order, which is really about the focus of this conference, that is, can one come up with an agreed set of governing principles for the region as a whole? Very hard to do, of course, in this era. I don't think you can do that with an agenda that's led by a liberal democratic values. The region's too diverse for that. It's not interested, especially in Southeast Asia, in a system of a competition of systems. And if you had any doubt about how the region feels about that, you only have to read the four or five excellent essays that were commissioned for this project to be hit between the eyes on that. So I've argued that the better foundation for that effort might be in vain, but let's have a go at it for a set of governing principles or rules is actually to talk about shared principles rather than shared values and go to the principles that are embedded in those foundational documents that I mentioned, the Treaty of Amity and Cooperation, the Declaration on the Conduct of Parties in the South China Sea. More recently, the ASEAN outlook on the Indo-Pacific. That's a terrific norm-setting document. And that is fighting on ground if I can use that metaphor that reflects a regional perspective, not just a kind of Western one loosely defined or liberal democratic one. And then my third point is, I think that holds true for regional order. But of course, when you really drill down into that emerging agenda of new very specific rulemaking that we've been talking about, especially around technology is a great example. Here I do think you see, and appropriately so, values playing a part in how countries like Australia think about issues like AI or broader technology standards or the internet or even contemporary views about human rights. It's those very specific sets of rules where it's appropriate for us to reflect our values and also to push back against illiberal attempts to reshape those rules. And is that because those rules apply to not just the conduct of states in the international space, but also have implications on the running of democracies in terms of our domestic resilience and welfare. So cyber, the governance of the internet, these are questions which pervade the domestic space and in which perhaps there is then more room to actually approach those questions with our values first and foremost in mind as opposed to say the law of the seas. Yeah, that's absolutely right. I mean, these are essentially standards that we want to apply at home. Of course, we'd love to see them reflected as broadly as we can internationally, but they are, as you say, as much domestic issues as they are international ones. And Beck, do you feel the same way in terms of the balance of values and pragmatism in terms of our pursuit of a rules-based order? Yeah, look, I have to say, Richard, I think, has summarised the issue really nicely. And before we came on live here, we actually had this discussion about the value of the rules-based order narrative. In my view, I had thought that the reason why a country like Australia had really started to use the concept of the rules-based order is because it is kind of neutral around political systems and values. And that has an advantage in a region where not all countries have the same political values or the same political systems. But I do think that that is starting to change as not just Australia, but the United States and other countries start to talk more about maritime democracies. There's the Summit for Democracy and democracy is becoming a more central feature, I think, of Indo-Pacific discourses, which may actually kind of, I guess, undermine some of the benefits of the more neutral language that we can talk, which encapsulates some of the shared principles that Richard was talking about. I want to turn our attention now to the question of creating rules in the trade and economic environment of the Indo-Pacific. This was the subject of a second polling question, which was to do with, so let me just try to read it out here, how important is free trade to regional order? And here overwhelmingly 80% of our audience agrees that it is very important. Now, there seems to me to be multiple, to use the Lasagna analogy, multiple layers and perhaps even alternative models of creating a rules-based trade environment. There is the narrow but deep approach of, for example, the CPTPP with the 11 remaining members of the original Trans-Pacific Partnership minus the United States, that includes both Australia and Japan. And then you've got the broad, but shallow, if I can characterize it very briefly, original Comprehensive Economic Partnership, which again is an ASEAN-centered initiative, more great, many more players, including China. Which model, can the models coexist? Which model do you think reflects the future in terms of the way in which the rules-based trading system will be run? And can these narrow but deep forums actually set the rules for the rest of the region or is it just about setting rules between the member states within those smaller groupings? So I might actually turn my attention. I'm looking for any active interest here. I don't know if anyone wants to volunteer a reply first, but I will go to each of you on this one, so there's no escaping. Perhaps I will begin with Professor Fukushima. Thank you. We do have CTPPP and RCEP, as well as bilateral FDAs and EPAs. Australia and Japan have bilateral free trade agreement. And first point I would like to make is, I think it is necessary for us to, how should I put it, reinvigorate the WTO so that the WTO can function as an institution to promote global free trade. And there are new rules required, like digital trade, data flow and others, and we need that. We end up having these regional FDAs and bilateral FDAs, in my view, because of the failure of WTO in launching or in agreeing rounds of negotiations. And this should be rectified. And secondly, I welcome this agreement of CTPPP, as well as RCEP or RCEP, or whichever you call it. As you pointed out, CTPPP has very high standards for trade. And this is something I feel very strong about it. And CTPPP has a mechanism to add new members to the group. As a matter of fact, the United Kingdom, China and Taiwan have a pride for membership. And if CTPPP can accommodate new members and such rules and standards are shared by many, I think that would be a plus for our trade. However, at the same time, not limited to CTPPP or other things, if, including WTO, if we end up allowing too much exceptions, we may undermine high standards. And that's something I would like to avoid very much. And therefore, as we have, how should I say it, as we have made up, we weakened WTO by these regional trade agreements or economic agreements. We should enhance those and keep the rules and principles that we have agreed with a lot of energy and time. And it is quite unfortunate in my view that the United States decided to leave TPP. And I hope U.S. will decide to come back on the same token for our SEPP. I hope India will join eventually. But I think that these rules should be shared by many interested in free trade and prosperity. And otherwise, these arrangements wouldn't be very meaningful. That's my take. Back over to you. Yeah, I think it makes excellent points around the value of those economic multilateral organizations and also a really important point to be made about how much exceptionalism can the system tolerate before the system just erodes. But I wanted to point out that another and alternative model again is about road initiative. And part of, I think, these forums is about providing smaller and middle power states the opportunity to try and shape some of these rules. And that's really the history of the CPTPP is that it wasn't necessarily driven by the great powers. It's driven by regional and smaller powers. And that I think it's important that these forums exist for these states to try to collectively work together to shape the nature of the rules that are governing economic and trade relations. Richard, we also had a similar question, particularly from John in the audience who's asked about China's application for the CPTPP. I think this comes back down to the first overarching question which I mentioned, which is, are these new rules intended to enmesh and socialize China within the Indo-Pacific system? Or is it meant to be a means of balancing against China's asymmetric economic clout in this case? So China has exceeded or made a formal request to exceed to the CPTPP via New Zealand. I believe that was made in September 2021 that does pose challenging questions for the future of the club. I mean, simply put, just in terms of China's GDP is significantly greater than the combined GDP of all 11 existing CPTPP members. So that fact alone plus China's trade centrality in the region suggests that China could undermine or weaken some of the existing commitments once a member of a club if it makes it that far. And if not, exact strong leverage in negotiations. There are others in Australia and elsewhere who are saying actually this is a good thing in terms of engaging China on CPTPP. There's scope to negotiate with China on these questions and it would be useful to have more cooperative economic ballast in relations even as other areas of our bilateral relationship, the Australia-China relationship are deteriorating and even as China continues to undermine and challenge the rules-based order in other domains such as maritime, such as the maritime space. So how would you answer, how would you, but if you were still a DFAT, what would your recommendation be in terms of engaging China or not on the question of CPTPP accession? Well, my recommendation would be actually to do what the government's pretty much done, which is to put the ball back in their court for China to demonstrate their sincerity and seriousness. So no Australian government will contemplate Chinese accession to CPTPP. By the way, Akiko, I find that as hard to say as you do and we should blame the Canadians for that. No Australian government will contemplate Chinese accession to the TPP while we're subject to trade coercion. And why would we? Of course we won't. So if China would like to lift the multiple economic actions that it's taken against Australian exports, perhaps we can have a conversation. In those circumstances, yes, I think there's nothing to be lost from Australia sitting down with other members of the TPP and having a discussion about the agreement. Now, I am just not sufficiently expert to know to what extent China can really meet some of the requirements in the agreement. But I would note that other countries like Vietnam have some exceptions in the agreement. And in the form of Vietnam, you have at least one one-party state that operates major state-owned enterprises inside the agreement. So there would be a test to see just how much China would be prepared to accommodate the current requirements in the agreement and just how much the existing membership would be prepared to grant it carve-outs in order to access that or get better access, as you said, to that giant market. But right now this is just a massive issue of trust. If we can't trust China to abide by its current commitments, there must be doubt about future commitments. I think just quickly on your first question, which is the bigger one, I think sometimes it probably confuses things when you're thinking about the region's operating system or order to talk about trade rules. Because for me, these trade agreements are, they're about rules, of course they are, but they're actually institutions. And the rules are just part of the institutions. They're platforms within which the region convenes. Singaporean Prime Minister has made this point a number of times. And they're also platforms for the region's economic integration. And America has taken itself out of that game, both at an institutional level and potentially at an integration level. And it'll be interesting to see, as we get into these agreements with RCEP coming into force next year, how value change shift, for example, does that tie the region back to China or is China moves up the value chain and produces more of an integrated value chain inside China? Do the value chains start shifting and actually you get strong integration to Europe or America? That'll be fascinating to watch. And that will really be much more fundamental to the shape of the future regional order than who signed up to what rule in what agreement. And I had a follow up question to that, which was the extent to which we should welcome extra regional players in initiatives such as the CPTPP. Obviously the United States has pulled itself out of that agreement, but we do have a number of other European parties who may be interested in the UK most specifically. What role and then more generally is there for, for example, a normative superpower such as the European Union to play in advancing rules or clarifying rules or ensuring greater adherence to rules within our region? Is that sufficiently factored in to Australian foreign policy? And is that more than just rhetorically, it always sounds great, but is that something that can concretely actually deliver results, the participation of other extra regional powers, particularly the Europeans? Or does that simply complicate the narrative in Asia given that there are more Westerners joining the table? And it looks as if these changes are being driven by outsiders rather than from within the region. So I'm looking towards Professor Fukushima here for your reaction to perhaps Europe's role in this. Bek, if you could, Dr. Strating, if you could explain from the Australian vantage point whether there is any consideration or enough consideration being given to normative external strategic actors other than the United States when it comes to rule formation. And then Richard, of course, if you want to add anything to those two comments, to those two sets of reactions, that would be appreciated as well. So beginning with Akiko. Thank you. On CPTPP, I think Japan will welcome any interested parties or countries or institutions to join the agreement so long as they're willing to abide by the rules and cooperate with other members in promoting trade. There is no reason why Japan should decline, for example, the EU, if they so wish, to join the agreement. But at the same time, as I said earlier, I think it is important for us to update or strengthen the WTO if Australia and Japan and others are interested in doing so because as a person who has been researching on multilateralism, the shortcomings or the weakness of the WTO bothers me very much. Their well-known mechanism to solve disputes are not functioning today and those should be rectified in future. At the same time, if CPTPP has a potential to include others and be a good rule-making body, I think that would be another avenue to trade enhancement, which the participants have also agreed that they are very important. Richard might be able to speak more specifically to how Australia perceives the European Union in entering the trade institutions. I'm sort of less well-versed in that, but I'm glad that we've gone an hour without talking about office because more generally, I think we see that Australia is keen to have so-called like-minded partner states who are in the region forming coalitions in order to be able to push back against some of, particularly some of China's challenges. And we see this in the maritime domain. The seas of East Asia are getting full of warships doing maybe not US-style freedom of navigations, but transits and joint activities in order to signal to China that it's not just regional states, but it's extra-regional states who are concerned about the rule-breaking or the differences in the interpretation of rules that are sort of destabilizing some of the maritime rules-based order. So I think Orcus is a demonstration of Australia's commitment to the UK, but also the European Union is another actor that can play a part in pushing back against some of the assertions that Australia sees as particularly problematic to regional order. Richard, is the EU more than simply a nice gesture? I mean, is this gesture politics or is it something more substantive and can it offer something more substantive? And is that message likely to be well received, for example, within Southeast Asia, the fact that there are more Western external strategic actors getting involved in upholding the rules-based order here in our region? Look, I think probably depends a bit on who you ask, but do they have something to offer? Absolutely, I think they have a lot to offer. If you look at the excellent Institute for Southeast Asian Studies annual State of the Region Survey, you'll find that Europe is a trusted partner for Southeast Asia, for example, very high levels of trust. They have very substantial economic relations with the region, and to the extent that in their engagement they support the norms and principles that we believe will help keep the region stable and support economic growth, then to my mind that's valuable. I think, you know, in principle, the TPP is open to all countries. I would say that all trade negotiations are hard, but trade negotiations with the EU are quite hard because even though they negotiate as a block, of course, there are many different national perspectives rolling around in that negotiation. And on top of that, the EU, and I make no value judgment on this, I just point out that the EU brings a particular perspective on a range of non-trade related issues that often they like to have reflected in trade arrangements, whether it's labor standards or environmental standards or indeed increasingly climate change. So that would be one hell of a negotiation. I suspect Australia is very tired and hard-pressed trade negotiators would want to stay under the doona for that one. Sure, sure thing. So we've got about just under 10 minutes left in this session. I wanted to squeeze one more economics-related question in from the audience and put that to you, which relates to this very sort of prototype or nascent Indo-Pacific economic framework, which the White House, the Biden administration has been floating in recent weeks, which it promises to develop further in the course of next year. And it seems as if the US, given its pronounced and well-recognized anti-trade tilt in domestic politics, is looking instead of joining either CPTPP or RCEP to deliver on issues such as supply chains, digital economy, climate tech and infrastructure. So there's secondary economic pieces and advanced rules on those issues. What do each of you make of the potential that that Indo-Pacific economic framework has? It's obviously suboptimal, I would assume you would all agree. But could it be useful? Let's begin in reverse order this time. Let's begin with Richard. We just don't know yet, Herve. The administration is talking about it, but I find it very hard to grasp exactly what it is. And it's potentially got some good components. People in the US have been pushing the administration on a digital trade agreement, for example. So that could be one element of it. But it does look so far hard to grasp insubstantial. It risks being a grab bag for a bunch of things that doesn't really get the region's attention. And it's a poor or very accurate judgment about the domestic politics in America being dead against any shift of policy on TPP anytime soon. It's a poor second to that because of that point I made about the region seeing these trade agreements as not just about tariff schedules, but about institutions, about convening platforms, about mechanisms for integration. Akiko or Beck, would you like to add anything? Do you disagree? Or I suppose there's just not enough information out there really to make a judgment? I think I'll just jump in because, yeah, I don't really have that much to say, but I have to say I agree with Akiko's earlier point. Like, if the US are really serious, they would change their policy on the CPTPP. But the domestic politics is, you know, that's something that the US has to negotiate. But, yeah, I think there's a lot of people in the region who would probably prefer to see the US engage in that way. I agree with Richard and Beck's comments. I don't know sufficiently enough to comment on this Indo-Pacific economic framework if it includes important elements which have not been covered in our rule making in the past, for instance, digital trade or infrastructure. That's something worth studying. But at this point of time, I don't have enough information to make an appropriate comment on the concept itself. Yes, I think many would probably agree with you on that front and perhaps the onus is on the White House to explain and deliver in substance what they say in rhetoric. The final unexplored component of new rules is as it relates to conflict, really. And I think there was a question from the audience, does the region have the right institutions and rules to prevent arms racing and security tensions escalating to conflict? And I thought I might begin with you, Beck, on that question. And I should also mention, just as you think about your answer, that the third polling question was, does the Indo-Pacific need new rules mostly to and then it gave several choices, prevent conflict, economic growth, sustainable development, etc. 55% of the overwhelming majority agreed that new rules were needed to prevent conflict. So it does suggest that there is a need there waiting to be addressed. Yeah, it's a really interesting question. And we have sort of, we have covered, and particularly Richard has talked about some of the agreements that are already in place in the region that are designed to do that, that are designed to govern or mitigate the use of force when disputes arise. And I also mentioned the code of conduct that is currently being negotiated between China and the ASEAN states, which is not designed to resolve the disputes that relate to sovereignty and maritime issues, but are designed to manage the disputes that might arise. And so part of that is about those states coming together to try to, I guess, figure out a pathway to avoiding conflict. But of course, the issue for other states is that they are excluded from this process. And so that's one thing that is, that's one area of negotiation that's going on at the moment that is related to the use of force and conflict resolution. In terms of the other question, I mean, there are lots of gaps in international law that I think need to be addressed in my area of law of the sea, because when UNCLOS was negotiated in 1982, there were environmental and technological developments that the drafters did not foresee. And so it's not about rewriting UNCLOS as a document, but it's about finding agreements or developing new laws or rules or interpretations in order to counteract the gaps that emerge. There's one area in particular in the environmental space that I've been working on with Professor Joanne Wallace from the University of Adelaide. And that's the issue of rising sea level in the Pacific and the effect that rising sea level has on the maritime entitlements of low-lying coastal states, essentially under international law and the theory of ambulatory baselines. If a state loses its territory, it also loses its maritime entitlements. And that's something that Pacific Island states have been doing a lot of work in their ocean diplomacy to try to come up with new consensus on their capacity to fix maritime boundaries so that if they do lose territory or the territory of roads, that it doesn't have a negative impact on their maritime boundaries. So that's an example of where the international law really needs to catch up in a way to environmental challenges that were not perhaps foreseen back in the 70s. Yes, so both traditional and as well as non-traditional security threats could use a bit more updating in the rules with which the international community goes about them, goes about addressing them. Now, we're basically out of time. We've got one minute to go. So I thought rather than answer that question in particular, which you're free to do with your 20 seconds of closing remarks, but I would also invite you to sort of more broadly summarize your view on this session, whether new rules are needed, whether it's about adhering to the existing rules, whether it's about accommodating China or balancing China. So just a very quick verdict from the three of you as we close the panel, beginning with Richard and then Akiko and ending with Beck. I think so. Well, I probably end where I began, which is that what we principally need in order to preserve stability and therefore economic prosperity is for China to adhere to existing rules and norms. We have a good set for managing the circumstances in which we find ourselves and that's our primary problem and where new rules are being created. At a technical level, they are often about perhaps not balancing China but responding to some of the particular risks and challenges of having a country that's not just now very powerful in the region, but much more authoritarian, more nationalist and has an extra territorial approach to its ideological security. Thanks. What we aim at in the Indo-Pacific is peace, stability and prosperity and therefore I strongly feel that we should make much of rules and norms and principles that we have already agreed and it is important for us to make sure that such rules are abided by. And for areas where we need new rules, such rules should be made by all who are interested. Here it's not a question of balancing or accommodating but it is very necessary to involve those interested and keen to pursue the road for peace, stability and prosperity to work together. For example, climate is often cited as a place where people can work together but devils are in the detail and there are elements that we disagree. So we need wisdom to work together, both balancing and accommodating. Thank you. It's complicated and I don't think there are easy kind of either or answers here but I think I'll end where I began as well and part of the challenge with international law and rules is that they're sometimes contradictory. There's different interpretations. States will use international law to their advantage and great powers are able to do it more than others but I think the rules based order is also just a reflection of power and that's essentially what we're concerned with here. It's not just that states flat the rules, it's that bigger powers can do it unilaterally in a way that contradicts or that threatens the legitimate entitlements of smaller and middle power states and that's a real problem for Australia and many other states in the region. One that will likely continue to be a growing problem I imagine as well. Thank you very much all three of you. I think it's been a fascinating discussion. We'll have to see whether the rulemaking environment in the region is truly a lasagna or risk becoming something more of a tower of Babel perhaps as a counterpoint. The balkanization of the rulemaking environment into splinter groups is also a real risk that we have to contend with but I want to thank my three esteemed guests Richard Moll, Executive Director at the Asia Society, Policy Institute, Professor Fukushima, Senior Fellow at the Tokyo Foundation and Dr. Beckstraiting Executive Director at Latrobe Asia. It's been a fascinating discussion. Thank you the three of you. Thank you. So that concludes the conference proceedings for us today. Please join us tomorrow for the keynote address by Australia's Defence Minister Peter Dutton followed by a panel discussion on hard power and regional order featuring Evan Laxmana at the National University of Singapore, Lisa Curtis at the Centre for New American Security and the Secretary of Australia's Department of Defence Greg Moriatti. That will all get underway at 12.40 p.m. Australian Eastern Daylight Time. Thank you for joining us today. We hope you've enjoyed the discussions and we look forward to seeing you again tomorrow. Bye for now.