Updated July 12, 2023
Australia: Background and U.S. Relations
Overview
Figure 1. Australia in Brief
Australia’s relationship with the United States, forged as
allies in all major U.S. wars, remains close and focuses
heavily on trade and security cooperation. The United
States and Australia enjoy close people-to-people, trade,
political, cultural, intelligence, and defense relations. As
geopolitical uncertainty in the Indo-Pacific has increased,
the alliance has deepened significantly. Driven by shared
concerns about the People’s Republic of China’s (PRC)
military and economic rise, the governments of Australia,
the United Kingdom, and the United States launched a
partnership in 2021 to provide Australia with nuclear
propulsion technology for its next generation submarines.
The Australia-UK-U.S. (AUKUS) initiative is also slated to
develop advanced military capabilities trilaterally. AUKUS
requires congressional approval and involvement
throughout the implementation. Australia has embraced the
Quadrilateral Security Dialogue (or “Quad”, including the
United States, Japan, and India), further aligning it with
U.S. strategy in the region.

Economics and Trade
Background
The Australia-United States Free Trade Agreement
Australia was first inhabited between 40,000 and 60,000
(AUSFTA) came into force in 2005. The U.S. trade surplus
years ago. The Aboriginal population were hunter-gatherers
with Australia was $14 billion in 2021, a 56% increase
with a complex spiritual culture focusing on creation myths,
from 2020. The United States is Australia’s largest foreign
rituals, and connections to ancestors and the Australian
investment destination. Top Australian exports and services
landscape. Captain James Cook claimed Australia for
include raw materials, energy, agriculture, and tourism.
Britain in 1770, and in 1788 the first European settlement,
Australia is among the world’s top three exporters of
largely made up of British convicts, was established.
energy and resources, including lithium, cobalt, and other
Australia evolved into a pastoral settler society based on
critical minerals. China is Australia’s largest two-way trade
sheep, wool, and minerals, but is now one of the world’s
partner and accounts for approximately one-third of
most urbanized countries. Although geographically in the
Australia’s global trade. Although the two countries signed
Indo-Pacific, Australia continues to have deep cultural ties
a Free Trade Agreement in 2015, China has restricted some
with the West, particularly the United States and Britain.
imports from Australia; some observers say these sanctions
are in response to Australian attempts to curb PRC efforts
Political Setting
to influence Australian politics. Regardless, Australian
Australia is an independent nation in the British
exports to China increased in 2021.
Commonwealth, and is a federal parliamentary
constitutional monarchy. In Canberra, the country’s
Strategic Outlook
parliament is bicameral, with a House of Representatives
Several decades of Australia’s trade relationship with
and a Senate. Elections occur at least once every three
China, and Australia’s strategic relationship with the United
years, but the government can call early elections. The
States, are central to Canberra’s geopolitics. Amid recent
Labor Party and the Liberal-National Party Coalition are the
troughs in Australia-PRC relations, Australia has bolstered
two main political forces in Australia. In May 2022, Labor
the U.S. alliance, and deepened strategic ties with Japan and
Party Leader Anthony Albanese defeated Scott Morrison of
other nations. Since 2017, multiple instances of alleged
the Liberal Party to become Prime Minister (PM) of
PRC interference in Australian politics—as well as China’s
Australia. Labor won 77 of 151 Representative seats, and
sanctioning of Australia following Canberra’s endorsement
the Coalition won 58 seats. Each won 15 out of 40 Senate
of an inquiry into the origins of the COVID-19 disease—
seats. Climate change policy appeared to be a decisive
have degraded Australian public perceptions of China. A
issue, as the election yielded gains for the Green Party and
2023 poll finds that 75% of Australians think China will
unexpected wins for “Teal” independent candidates, known
become a major military threat in the next 20 years; in
for their fiscal conservatism and environmental advocacy.
2018, 45% of Australians believed that prediction.
Australia’s government has taken measures to thwart what
some officials see as the PRC’s undue influence in
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Australia: Background and U.S. Relations
Australian politics and society. In 2018, the Australian
Japan and the Reciprocal Access Agreement (RAA).
parliament passed new laws on espionage, foreign
Australia has upgraded its strategic relationship with Japan
interference, and foreign influence, and the government of
in the past 15 years. In January 2022, the two countries
former PM Malcolm Turnbull blocked China’s Huawei
signed a Reciprocal Access Agreement that establishes
from participating in the Australia’s development of its 5G
procedures for visiting forces from each other’s militaries,
mobile network. Former PM Morrison signaled a change in
allowing for closer cooperation and joint exercises. Japan
Australia’s defense posture with the 2020 Defence Strategic
and Australia also hold regular “2+2” meetings of their
Update. Under this plan, Australia is to increase defense
foreign and defense ministers. Although not as formalized
spending 7% by 2024 to reach US$35.07 billion, which
as the U.S.-Japan or U.S.-Australia alliances, the agreement
would put defense spending at 2.04% of GDP. Since the
allows for enhanced trilateral cooperation. The three
Update, Australia has announced an additional US$28
countries signed a joint vision statement in 2022 and the
billion in defense spending over the decade until 2032-
latest meeting of Defense Ministers occurred in June 2023.
2033. Australian administrations also have responded to
China’s outreach to the Pacific with renewed diplomatic
The Quad. Australia has bolstered its strategic relations
engagement in the region.
with like-minded democracies through the Quadrilateral
Security Dialogue. Initially, the four countries focused on
Strategic Ties with the United States and Other
COVID-19 and global health, infrastructure initiatives in
Partners
the region, the climate challenge, people-to-people
Australia has been a U.S. treaty ally since the 1951
exchanges and education, critical and emerging
Australia-New Zealand-United States (ANZUS) Treaty.
technologies, cybersecurity, and space. The Quad leaders
Australia sent troops to support Allies in the First and
recommitted to “promoting the free, open, rules-based
Second World Wars, and in the conflicts in Korea,
order, rooted in international law and undaunted by
Vietnam, Iraq, and Afghanistan. Australia is also a close
coercion, to bolster security and prosperity in the Indo-
U.S. intelligence partner through the “Five Eyes” group of
Pacific and beyond.” The Quad held its most recent Summit
nations, which also includes Canada, New Zealand, and the
in Japan, May 2023 and—among other initiatives—outlined
United Kingdom. U.S. Marines have conducted regular
the implementation of the Indo-Pacific Partnership for
rotational deployments in northern Australia since 2012.
Maritime Domain Awareness (IPMDA), which provides
The defense relationship includes bilateral and multilateral
maritime domain data to agencies in Southeast Asia and the
military exercises such as the Talisman Sabre, RIMPAC,
Pacific, with plans to expand to the Indian Ocean region.
and Malabar exercises. A 2023 poll found 82% of
Australians see the U.S.-Australia relationship as “very
Climate Change
important” or “fairly important” to Australia’s security. In
PM Albanese’s election aligns Australia closely with the
May 2023, President Biden and PM Albanese issued a Joint
Biden Administration’s climate policy, according to some
Statement to bolster cooperation in key sectors such as
analysts. In 2023, the two governments signed the Climate,
climate, defense, and cybersecurity.
Critical Minerals, and Clean Energy Transformation
Compact. Albanese’s Labor Party campaigned on a pledge
AUKUS. Some observers describe AUKUS as the most
to reduce carbon emissions by 43% below 2005 levels by
significant security arrangement among the three nations in
2030, with a goal of net zero by 2050. Australia previously
a generation. The pact allows for Australia to purchase 3-5
had committed to reducing greenhouse gas emissions by
U.S. Virginia-class submarines in the 2030s, pending
26%-28% below 2005 levels by 2030, and the Morrison
congressional approval. Simultaneously, the three countries
government had resisted pressure to set more ambitious
are to develop an AUKUS submarine based on the UK’s
targets. (The United States has set a target of 50%-52%
next-generation design that incorporates technology from
reductions over 2005 levels in 2030.) The Green Party’s
all three nations, including cutting edge U.S. submarine
and Teal independents’ strong electoral showings allow
technologies. A second aspect of AUKUS focuses on
them a more significant role in the Senate, where seats are
developing advanced military capabilities, including AI,
proportionally allocated, and provide them with influence
cyber, hypersonic, and quantum technologies.
over climate-change legislation.
AUSMIN 2022. The Australia-U.S. Ministerial (AUSMIN)
Projections suggest Australia will continue to experience
consultations remain central to the bilateral relationship.
rising temperatures, more frequent floods, coral bleaching,
U.S. Secretary of State Antony Blinken and Secretary of
ocean acidification, droughts, and bushfires due to climate
Defense Lloyd Austin hosted their Australian counterparts,
change. Australia has one of the world’s highest levels of
Foreign Affairs Minister Penny Wong and Defence
greenhouse gas emissions per capita, and was the world’s
Minister Richard Marles, in December 2022 for AUSMIN
third-largest exporter of fossil fuels in 2019.
consultations. Their Joint Statement emphasized “shared
challenges” and the need to “advance a stable, rules-based
This In Focus updates an earlier version written by former
international order,” language that observers interpreted as
CRS Specialist Bruce Vaughn.
referencing shared concerns about economic and military
competition with the PRC in the Indo-Pacific. The resulting
Emma Chanlett-Avery, Specialist in Asian Affairs
Joint Statement welcomed enhanced trilateral security
Joseph O. Yinusa, Research Assistant
partnership through AUKUS, and discussed Indo-Pacific
cooperation, Australia’s acquisition of nuclear-powered
IF10491
submarines, and technology collaboration.
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Australia: Background and U.S. Relations


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https://crsreports.congress.gov | IF10491 · VERSION 10 · UPDATED

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