Going Their Own Way: Western Australia’s Asia Strategy

Constitutionally, external affairs are under the powers of the federal Australian government. In 2019,  however, the Western Australian (WA) state government launched the 2030 Asian Engagement Strategy. Such a comprehensive foreign engagement strategy was a milestone for an Australian state government.

The engagement strategy document lays out the state government’s plan to capitalize on economic, social, and cultural opportunities in the Asian region. The strategy was released under the new portfolio of a “Minister for Asian Engagement,” which the incumbent WA state government created upon taking office in 2017. In doing so, it became the first Australian state government to create such a portfolio.

While the constitution lists external affairs under purview of the federal government, absolute exclusivity is only reserved for treaties and free trade agreements. State governments can generally conduct international engagement activities providing they do not interfere with the federal government’s realm. Activities (such as those outlined in WA’s Asian Engagement Strategy) that seek to improve and encourage economic and cultural opportunities are allowed, providing they do not infringe on federal laws or international legal requirements.

In any federal system, there are always subnational entities that, over time, have carved out a separate identity (for example, Texas in the United States and Quebec in Canada). Running a federal government is difficult and requires balancing conflicting demands from different states; inevitably some states are going to feel more isolated than others.

Being home to one of the most isolated cities in the worlds and at the other end of the country from the other major capital cities, WA too has at times been such a product of a federal system. Until recently, the state was in a long-term battle with the federal government to gain a more reciprocal share of the GST (goods and services tax). Western Australia is also the only state to have had a secession referendum in 1933 (which passed, but was rejected by the U.K. Parliament). More recently, a WA secession motion was discussed at a major political party conference in 2017.

Western Australia’s geographical position is advantageous for seizing opportunities in the Indo-Pacific region. It is quicker to fly to parts of Indonesia from WA than it is to reach some of Australia’s east coast cities like Brisbane, Canberra, and Sydney. Bali remains the most popular international direct flight from Perth – in fact, the Indonesian tourist hotspot is a more popular direct flight destination than most other major Australia cities. The head of Australian’s Foreign Affairs Department has recognized this, labeling Perth as Australia’s Indian Ocean capital and noting that its geographic location made it vital to securing economic activity.

Western Australia’s economy is also different compared to other states. Look at a comparison between WA and Victoria: WA’s top three goods exports are iron ore and concretes, natural gas, and gold. For Victoria, however, the major exports are wool, meat, and edible products. Additionally, when comparing the top three export markets, both states share China as the top export destination. For Victoria, the next two export destinations are the United States and New Zealand; for WA, they are Japan and Hong Kong. In fact all of WA’s top five export markets are in the Asian region. It is a well-known fact that Western Australia’s economy relies heavily on mining and mineral resources, and Asian economies (like China) are receiving the majority of WA’s mining exports. It’s no surprise, then, that WA would want to use its Asian Engagement Strategy to engage demand for these sectors.

The promising economic trend of the Asian region also helps explain why Western Australia would want to take advantage of the fast-growing region. The combined GDP of the 11 largest economies in Asia is predicted to grow more than four-fold to $109 trillion by 2050, at which time Asia is expected to represent over half of the world’s population. In addition, a booming aspirational consumer class presents the Asian region as the future. Trading blocs from across the world (like the EU) realize the importance of the Asian region and work strenuously toward agreements. Western Australia finds itself in a position to make use of its geographical advantage to engage in the region. In addition, previous federal governments have already done the hard work of negotiating several FTAs with Asian economies. West Australian organizations are now able to make use of these conditions.

Moreover, over the past 20 years, the proportion of the West Australian population born in Asia has doubled. Engaging with another region also requires cultural and social literacy and having a diverse population would help WA in this sense. The new strategy also includes plans to support programs that teach Asian languages as well as improving institutional literacy.

The challenges of federalism sometimes mean subnational entities need to work within the legal constitutional provisions to further promote their interests, even at the level of foreign engagement. It also sometimes means that the majority of the complex work needed to smooth these activities (like FTAs) has already been taken care of. With its geographic proximity to a booming Asia, Western Australia faces a unique opportunity to use this engagement strategy to its benefit.