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    The QUAD Goals Against Chinese Aggression

    Editor, TRANSFIN
    Mar 12, 2021 5:53 AM 5 min read

    What would one say is the most unexpected geopolitical reality of the 21st Century so far? 9/11? The wars in Iraq and Afghanistan? Donald Trump's election as the President of the United States? Brexit

    These were episodic events of singular nature. Alternatively, an organic and overlooked reality that has reached great significance in the last two decades is related to China. There was an idea that the participation of China within the global economy would make it a more open political system. That it would be an economically content nation with a sublimated strategic power (much like Japan)! 

    That idea was wrong. Wrong to an extent that we are witnessing a return to the days of protracted military and economic alliances to counter China. One such alliance being the "Quad", which is slated to have its first summit meeting on March 12th 2021. 

    Let us take you through the Quad's broader economic and political significance and the reason why it has taken a centre-stage in the larger geostrategic narrative. 

    History of the Quad 

    The Quad stands for The Quadrilateral Security Dialogue between three countries of the Asia-Pacific Region (India, Japan, Australia) and the USA. It was conceived primarily as a military partnership in 2007 with a wider objective of securitisation in the Indian Ocean. 

    It has been called by multiple names: the "Asian Arc of Democracy", "The Asian NATO" - all hinting at the aspiration of a pan-Asian inclusion of countries in the future who are positioned peripherally to China. 

    It was abandoned in 2008 owing to changing geopolitical events: protests from China, election of a Beijing-friendly regime in Japan and softening diplomatic approach of India towards China etc. And revived in 2017 during the ASEAN Summit in Manila. 

     

    Quad 2.0 

    It is important to understand that the Quad is still an informal forum. The flex that comes with treaty bodies or codified agreements is still alien to this partnership (so much so that they even refuse to use the word "alliance"). But the symbolism of coming together in resistance against a common antagonist has earned it great political mileage. 

    Since 2017, the Quad has gained greater strategic importance. Even though this convergence is widely believed to run parallely to risks posed by China, the member countries have repeatedly stressed that economic cooperation is high on the agenda of this group. Fostering lasting bilateral and trilateral trade is its vital focus, said Australian Foreign Minister Marise Payne. Although, it is unclear whether this cooperation is meant to be all-expansive or targeted with moving global supply chains away from China. 

    Let's see what are the prerogatives of each country behind entering the Quad.

    Australia

    Australia's appeal to launch independent inquiries into tracing the origins of the pandemic almost lit a match under the Chinese seats of power who were quick to retaliate with punitive beef and barley tariffs on the former. Not to forget, this was a blatant violation of the WTO guidelines for free trade agreements (in this case, RCEP) to which both Australia and China are parties. 

    Relations between the two countries hit rock bottom when evidence of Chinese meddlings into Australia's internal affairs were uncovered in November last year. This was reason enough for the former to accept a partnership within the Quad. 

    Japan

    This one has a relatively moderate policy against China even though it is the most impacted by Chinese maritime expansions. Last year, Japan increased its military expenditure to 3.3.% of its annual budget which is unprecedented in the post-World War passive defence strategy of the nation. 

    The bigger issue for Japan, however, is its intricate trade relationship with China (c. $350bn annually). Efforts have already begun to mitigate this, starting with the ¥30bn ($277m)-large resource allocation by the government to incentivise Japanese firms into exiting from its Asian neighbour.

    USA 

    Presently, the US-China relationship remains in its prologue. After four years of increasing hostility and embargoes against Chinese trade, the Biden administration is expected to move away from the Cold War-style containment strategy that has evolved under his predecessor. Having said that, dictating collective action to gain strategic primacy is characteristic of USA's foreign policy which may very well shape the future of the Quad. 

    India 

    Our long-standing aversion to geopolitical alignment died a slow death under China’s rising border intimidation. The "Indo-Pacific" concept gained fresh currency with the entry of India. Besides, India has the most to gain economically from this partnership. Our GDP could expand by nearly 2% ($23.5bn) annually if the Quad formalises a lowered and renewed tariff policy. 

    In any case, growing Chinese incursions into the South and East China Seas, increasing trade tensions between China and the USA, the Belt and Road Initiative and debt-trap diplomacy furthered by the Chinese regime and its overall expansionist policies have all contributed to the culminating interests of Quad nations and the creation of a fend-off approach towards China. The pandemic hasn't helped much either.

     

    Economic Possibilities Offered By the Quad 

    Chinese mercantilism has cemented itself across the Asia-Pacific region with the launch of the Belt and Road Initiative, RCEP and the inroads into "debt-trap diplomacy" in the littoral countries of South East Asia and Africa. While Tokyo and Canberra are already parties to the RCEP (and India is under heavy temptation to join), it is unclear whether the Quad has what it takes to emerge as a potentially competing trade bloc. 

    But, there is massive potential. The four countries with a 1.8 billion global population represent over $30trn in combined GDP with intra-Quad trade exceeding $440bn. Diplomatic flexibility in their approach to NOT formally acknowledge a resistance to China makes sense from a strategic point of view. What makes greater sense is the possibility of formulating an economic cooperation, if not a military agreement among themselves. 

    The place to start would be through bilateral cooperation like the Basic Exchange and Cooperation Agreement (BECA) which enables geospatial intelligence sharing between India and the US. Similarly, furthering on US-advocated "Quad Plus" policy by enlisting cooperation from other regional powers (e.g. New Zealand, Vietnam, Indonesia, Malaysia, Philippines etc.) could prove effective. While China is digging its way through Ladakh, the Quad expanding its Arc across the Indian Ocean can help pulverise Chinese shipping routes which depend on mobility across the Malacca Straits for 80% of their oil imports.

    A positive effort in this direction was made with the creation of a resilient Supply Chain Initiative involving India, Australia and Japan in September 2020 to diversify input and volatility risks in production across sectors like semiconductors, pharmaceuticals, automobiles and telecom. 

     

    A Coalition Without Commitment? 

    The informality and lack of institutionalism of the Quad is what prevents it from becoming a closed or exclusive club. No doubt that diplomatic networking aside, India has significantly upped its bilateral and multilateral engagements with Quad nations. 

    However, with two of its members deeply entrenched in trade with China and another with a historical reputation as a fair-weather ally, it remains to be seen whether the Quad is successful in forging commitment to the cause it was conceptualised for. 

    FIN.
     

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