US President Donald Trump’s decision to withdraw from the Joint Comprehensive Plan of Action (JCPOA) agreement with Iran dominated global headlines this fortnight. This move, seen as a blow to the nuclear non-proliferation regime, could have major ramifications for the Indo-Pacific region as well, especially in the context of Trump’s upcoming meeting with North Korean leader Kim Jong-un in Singapore on 12th June to discuss denuclearisation of the Korean peninsula.

Following his much-publicised bonhomie with South Korean President Moon Jae-in at the Panmunjom summit last month, Kim Jong-un made a surprise visit to China and met President Xi Jinping, his second such visit in two months. During the meeting, Kim expressed his hope for the denuclearisation process to be carried out in a ‘phased’ and ‘synchronised’ manner. For its part, China has huge stakes in the proceedings to follow: it is keen to be seen as a powerbroker while at the same time ensuring that it is not left isolated in the event of a potential rapprochement between the US and North Korea. Significantly, Xi and Trump discussed the upcoming negotiations over a phone call where the former stressed the importance of the US maintaining its sanctions until Pyongyang completely dismantled its nuclear programs permanently. US Secretary of State Mike Pompeo visited Pyongyang and called on Kim to take matters further and even secured the release of three American citizens held hostage by the DPRK for a year. North Korea has already begun dismantling its nuclear test site at Punggye-ri, signalling momentum.

In the latest salvo, however, the North Korean First Vice Foreign Minister has issued a statement threatening to withdraw from the negotiation process if Pyongyang was forced to give up its nuclear program in a ‘one-sided’ and ‘unilateral’ affair. North Korea has voiced protest against US National Security Advisor John Bolton’s remarks mentioning US demands for a ‘Libyan model’ of nuclear disarmament for the Hermit Kingdom.

Former Australian ambassador to China, Geoff Raby has stirred a controversy after he called for Foreign Minister Julie Bishop’s resignation over the deterioration of relations between Australia and China in an opinion piece published in the Australian Financial Review. Raby placed the blame of the downward trend in bilateral relations on the policy of ‘strategic mistrust’ adopted by the LNP government. Raby points out that Bishop has not visited China in the last two years and has made several public comments which have offended Beijing and placed relations ‘in the freezer’. The Turnbull government has renounced Raby’s criticism and ‘profoundly misinformed commentary’. This comes days after Bishop sounded a warning to Beijing to refrain from applying pressure on Qantas to adopt its guidelines to refer to Taiwan as a part of China and not as a separate country. She made these comments in response to China’s admonition to several international airlines including Qantas, which the Trump administration has famously called ‘Orwellian nonsense’.

Australia unveiled its new budget in which its foreign aid funding freeze has been extended for another year to save $141million, even as concerns of China’s growing influence in the South Pacific continue to deepen, to Canberra’s peril. Plans to open new consulates in Kolkata, India and Funafuti, Tuvalu indicate the Coalition government’s strategic emphasis on the Indo-Pacific region.

China has been discovered to have set up sophisticated anti-ship cruise missiles and surface-to-air missile systems on three of its outposts in the hotly contested Spratly Islands in the South China Sea. This follows China’s recent South China Sea installation of military jamming equipment meant to render communications and radar systems ineffective, which  significantly amplifies Beijing’s hard power projection capabilities in the region. The latest discovery comes on the heels of US claims of China targeting its planes at Djibouti with laser beams, which the latter denies, marking an increase in friction between the two superpowers in another theatre of the Indo-Pacific.

In what may aptly be described as a tumultuous and unexpected outcome to the Malaysian general elections, veteran politician and former prime minister Mahathir Mohammed won the people’s mandate and ousted the famously corrupt Najib Razak’s government from power. This is the first change of government in Malaysia since its independence in 1957. Significantly, the 92 year-old leader’s election is being seen as a blow to China’s Belt and Road projects in Malaysia as he may renegotiate some deals with Beijing.

Indian Prime Minister Narendra Modi visited Nepal with an aim to rebuild trust with Prime Minister K.P. Sharma Oli’s new government, after relations between the two countries had soured over the last few years. India’s neighbourhood policy has come under considerable strain in recent months in the light of China’s growing influence in the subcontinent and the Indian Ocean Region, through its investments and infrastructure projects.

India has planned to station fighter jets and other combat platforms permanently at the Andaman and Nicobar Islands, for the first time since the Second World War, ‘to create a model for integration of three defence services.’ This move is going to strengthen India’s reach over the Malacca, Sunda and Lombok straits and further into the Eastern Indian Ocean, crucial for Indo-Pacific security.

Significance for Australia

Trump’s unilateral withdrawal from the JCPOA is an unwelcome and profoundly unsettling development for Australia and the region. Prime Minister Malcolm Turnbull and Foreign Minister Julie Bishop joined several world leaders in expressing their disappointment and ‘regret’ over Trump’s decision. Turnbull urged all the parties to maintain ‘restraint’ and to continue with the deal. The bigger implication of this fallout is in the example that is being set for other nations, particularly North Korea, as it shows that the US cannot be trusted even in the event of an agreement being finalised. An even more dangerous dilemma that faces the world and Australia is the erosion of trust and reliability in the US to lead the rules-based order; the long-term reputational costs may prove very expensive to Washington.

Australia would be watching the developments around the US-North Korean summit very closely as things could go either way. Given Trump and Kim’s mercurial personalities and the stakes involved, not to mention the oscillations already underway, it is fair to say that Canberra would be on its guard.

On another front, Australia’s inability to halt its freeze on its foreign aid may disappoint many nations, most particularly in the South Pacific. More importantly, analysts point out that this paves the way for further Chinese encroachment in Australia’s backyard and gives Beijing tremendous strategic leverage, likely to cost Canberra dearly in the long term.

Following the recent revelations of China’s militarisation of the Spratly Islands, Julie Bishop issued a warning to Beijing and remarked that this goes against China’s promises and stated aspirations in the region. This development comes weeks after Australian warships were confronted by the People’s Liberation Army (Navy) in the South China Sea and adds to Australia’s already considerable worries about Chinese intentions in the Indo-Pacific.

Finally, Malaysia’s successful elections and subsequent developments offer hope that the country has finally turned to a ‘vibrant democracy’ ending years of authoritarian rule. Goes without saying, Canberra views this as a most favourable outcome and Mahathir’s election is already said to be on its course ‘to chart new way out of ashes of old relations with Australia.’

Aakriti Bachhawat is a Research Assistant at the Griffith Asia Institute and the Book Review Editor of the Australian Journal of International Affairs.