Rethinking Australia's Maritime Trade

Last week, ASPI released an important new report on Australian maritime trade. This is a critical subject, about which far too little is written. However, the report examines peacetime trade with the expectation that the experience can be directly translated to wartime. This assumption is problematic and has led to some questionable conclusions about the impact of a conflict on Australian maritime trade.

There are a number of very significant differences between maritime trade in peacetime and wartime that need to be factored into any calculations. The first of these is the difference between trade and supply. In a conflict, Australia would not need and would not have much of its peacetime trade. Instead, it would be focused on importing the minimum ‘necessary to keep the country running indefinitely to meet basic requirements’ and exporting key materials essential for Allied war economies.

The second point is that these flows of vital imports and exports would not necessarily come from, or go to, the same places as in peacetime. In the Second World War, Britain was forced to shift away from Middle Eastern oil, and instead rely upon supplies from the Americas. This was not a result of the absence of Middle Eastern supply, but instead was the product of the closure of the Mediterranean shipping route, and the inefficiency of deploying tanker tonnage around the Cape.

A similar pattern would be seen for Australia in the event of conflict today. South Korea is one of the largest suppliers of refined fuel for Australia. If there were a war in Northeast Asia this would stop – not only because of the difficulty of shipping it to Australia, but also because of the challenges for the Koreans to get raw crude, and because of the Korean government’s need to ensure its own energy security.