Australia Doubles Down on Southeast Asia

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In this article published by the Center for Strategic & International Studies, Kathryn Paik and Gregory B. Poling write about the challenges of deepening Australia-ASEAN relations.

Despite being near neighbors, Australia’s engagement with Southeast Asia, especially in the economic domain, has not been as robust as might be expected. Australia’s trade and investment ties with Southeast Asia are modest compared to those with Northeast Asian and Western partners, and in fact Australia foreign investment in New Zealand, which has a population of just over 5 million, is significantly more than its investment into Southeast Asia, which has a population of almost 700 million. Australia’s total trade in goodswith Southeast Asia was $87.3 billion in 2024, compared to the United States, which traded $489 billion with the region that same year. The United States invests more in Southeast Asia than it does in China or India and ranks among the top five sources of foreign direct investment for almost every country in the region; Australia, in most cases, trails far behind not only the United States, China, and Japan, but also several European states.

Annual surveys of elite and public opinion across Southeast Asia show that Australia, while viewed favorably, is not thought of as being in the top tier of strategic partners—the ISEAS-Yusof Ishak Institute’s State of Southeast Asia 2025 report found that, when asked to rank countries by their strategic importance to ASEAN, Southeast Asian respondents ranked Australia fifth, behind China, United States, Japan, and the European Union.