Upon announcing his country’s security pact with Japan in March 2007, Australian Prime Minster John Howard proclaimed, “Japan and Australia have a common destiny in this part of the world.” This new agreement between two major democracies, which calls for increased military ties, has the potential to increase regional stability through cooperation on issues such as North Korea, terrorism and drug trafficking. However, future steps toward greater security ties must not destabilize the region, and care must be taken to avoid accelerating a strategic contest for regional ascendancy.

Australia and Japan have much in common. Both are populous democracies with market economies, and both are major allies of the United States. While it is true that Japanese atrocities against Australian prisoners during the Second World War are still well within living memory, the significant economic bond between the countries makes the alliance not at all surprising. Today, Japan is the largest purchaser of Australian exports, thanks in part to a bilateral trade pact signed 50 years ago when the wounds of the Pacific war were far fresher than they are now.

While the pact does not stipulate mutual defense, its other conditions will put the armed forces on much closer terms. The agreement calls for some joint training of their armed forces, increased sharing of intelligence, and annual meetings of defense and foreign ministers to further the security dialogue. Australia’s pact with Japan does not parallel its alliance with the United States, with which it has a mutual defense treaty, but it is a major step in strengthening ties. It makes Australia Japan’s only official military ally apart from the United States. Japanese soldiers may now train on Australian soil, and conversely, Australia will become more involved in East Asian affairs as it cooperates with Japan on North Korea.

The signing of this pact is consistent with both Australia’s increased military assertiveness abroad and its growing security ties with Japan. It has thousands of peacekeeping troops in East Timor and hundreds in the Solomon Islands. As a US ally, it has participated in operations in Afghanistan and Iraq, where Australian soldiers have provided security for Japanese non-combat personnel. Australia and Japan have also cooperated in East Timor, Cambodia, and on relief efforts following the 2004 Indian Ocean tsunami.

There are worries in Australia that the pact will increase the country’s foreign entanglements. The opposition Labor party leader has voiced concerns that Australia’s fortunes may become tied to the “vicissitudes of an unknown security policy future in Northeast Asia.” The volatility of Sino-Japanese relations has been underscored by several recent controversies, including disputes over revisionist Japanese history textbooks and Japanese Prime Minister Shinzo Abe’s refusal to acknowledge the Imperial Army’s sex slavery practices during the Second World War. Insofar as a military alliance would tie Australia closer to Japanese foreign policy, Australia should rightly be concerned that it may be alienating China, which is its second-largest export buyer.

Most significantly, this pact completes the third leg of a strategic triangle comprising the United States, Japan, and Australia. The United States had long been Japan’s only formal military ally, and US President George W. Bush has referred to Australia as a “sheriff” for the United States in the Pacific. Now the sheriff has a partner. Such an alliance of Asian democracies, with US backing, would provide a counterweight to growing Chinese influence in East Asia.

Both Australia and Japan have vigorously denied that the current pact is targeting China, and the official reasons given for cooperation have included dealing with the threats from North Korea, terrorism, and drug trafficking. The official Chinese response has been measured, insisting only that China has no aggressive designs and that “relevant countries” should be considerate of it in their bilateral security arrangements. But fears of being surrounded may provide an impetus for Beijing to boost defense spending even more and will certainly increase diplomatic frictions.

Shared economic interests will help to mitigate such frictions for now, and the alliance between Japan and Australia has potential to foster East Asian stability. But a full mutual defense pact with Japan, as Howard has mentioned in the past, would greatly heighten Chinese concerns about encirclement. Efforts to contain an anxious China would be detrimental to regional stability, and Australia should avoid haste in pushing toward a deal that might have such results. Closer ties to Japan can certainly help Australia, but it should draw closer only with an eye wary of other possible consequences.