Shaping the next 50 years of Australia–Japan relations

When, 50 years ago, Australia and Japan signed the Nara Treaty, the optimistic hope was that there would be a steady improvement in relations. After all, the two wartime adversaries had only established an agreement on commerce a couple of decades before. The treaty was still controversial. 

Fast forward to 2026, and the relationship is stronger than anyone could have dreamed. The economic relationship is wide and deep. Japanese culture is ubiquitous and popular. Australia has the fourth highest number of Japanese learners in the world. And each year in the Lowy Institute poll, Australians select Japan in the handful of countries they feel most warmly towards — this year, just behind siblings New Zealand and Canada. 

Last month, the ANU celebrated this achievement at its annual Japan Update. It was a privilege to hear from one of the architects of the Nara Treaty, Peter Drysdale, about the thinking of the visionaries involved at the time. 

I was given the difficult task of imagining what the Australia–Japan relationship might look like 50 years into the future.

It is not easy to attempt prediction in an unpredictable world. Over longer time horizons, forecasting is impossible. As Minister for Industry and Innovation Tim Ayres put it at the Japan Update, “we live in a future unimaginable to the Nara Treaty’s authors”.

There is, however, a body of analytical tools to assist long-term thinking known as futures analysis or strategic foresight. Methods like horizon scanning, driver mapping and megatrend analysis are used to generate and stress test future scenarios. The aim is to explore multiple plausible futures rather than trying to decide which is more likely.

I generated scenarios by looking at well-established drivers of change. The UK Ministry of Defence’s influential Global Strategic Trends identifies these as global power competition, demography, inequality, climate change, energy transition and technological disruption.

From this I generated scenarios, leaning into the novel, interesting and “just barely plausible”. First, looking at major power competition, I assessed four pathway scenarios:

• Hot conflict between major powers
• Cold war between rival blocs
• Great power rapprochement
• Continuing turbulence and managed competition

Then, looking the impact of politics, economics, climate and technology, I assessed scenarios of:

• Deglobalisation
• Domestic political instability
• Global catastrophe
• Global ecological and economic justice

The purpose was not to judge which scenarios are more likely. The aim of this thought experiment is to test how much the wider environment is likely to affect the trajectory of Australia–Japan relations.

Is the relationship so robust that it is unlikely to be shifted by external shocks, or is it likely to depend greatly on the international environment in which both countries are operating?

The good news is that in most cases, Australia and Japan remain strong friends. However, as it has for the last 50 years, the wider context of great power relations and stability in the Indo-Pacific will impact on what Australia and Japan can achieve together, with some scenarios making it more difficult to cooperate. In the most positive scenario, Australia and Japan work together to build a region and world order in both their interests.

Table 1: Scenario analysis for Australia–Japan relations

Crisis brings Australia and Japan together

The scenario of a hot conflict between major powers would be catastrophic. It would, however, likely have Japan and Australia on the same side. Looking at long-term flashpoints like Taiwan, the South China Sea or North Korea — or to a range of other potential major wars — it seems likely that, if forced to make a choice, Australia and Japan would both end up bandwagoning with the US.

Different policy choices push Australia and Japan apart

By contrast, a slower bifurcation of trade and technology into rival blocs might conceivably see Australia and Japan on different sides. It would be a genuinely difficult choice to cut oneself off from either US or Chinese technology ecosystems, so they might choose differently or join a non-aligned bloc attempting regional balancing.

Equally, it is possible that Australia and Japan could end up in different camps in terms of the clean energy transition. For example, one might end up a fossil fuel pariah isolated from the rest of the world while the other embraced a new economic model.

Australia and Japan remain friends in a less connected world

Other scenarios suggest a more transactional relationship might form. For example, if the US and China managed their competition through some sort of rapprochement or grand bargain, this would remove much of the impetus for a “quasi-alliance” between Australia and Japan.

Equally, if global catastrophe brings a breakdown in trade and international engagement — for example, extreme climate change, use of nuclear weapons or mass migration — countries may turn inward, looking after their own. As more insular, less externally-focused nations, Australia and Japan would likely remain friends, but interaction would be more transactional. In this scenario, the focus might be on sharing knowledge — perhaps as islands in a sea of turbulence — to support each other.

A turn inwards could also be caused by domestic politics. Given the impact of the global far-right movement, it is possible to imagine an Australian government led by an explicitly anti-internationalist leader. Longer term, polarisation could conceivably cause the break-up of continental powers like the US and Australia. For Japan, it might be a gentle turn away from the world by a superaging society that loses interest in international issues. In these scenarios, Australia and Japan are still friends but less connected to each other.

Australia and Japan work together to create a more conducive world for both

In some scenarios Australia and Japan would work together closely on common aims. For example, continuing turbulence and competition between great powers would encourage them to work together to maintain as much of a rules-based order as possible, such as a free and open international trading system and functioning global governance. They could work together to deal with potential existential risks such as artificial intelligence, nuclear weapons and synthetic biology.

In a scenario where the world turns towards global ecological and economic justice, it is possible that both countries could successfully manage the transition and “dematerialise” their economies to consume less and work less. In this scenario, citizens would spend more of their time on cultural goods and people-to-people contact — an area where Australia–Japan relations are very strong.

This thought exercise suggests that the wider environment will be important to the trajectory of Australia–Japan relations.

This is in line with the last 50 years, where the wider global context has been important. Australia and Japan relations were enabled by a relatively calm security environment (without a world-level war, and the Cold War managed without use of nuclear weapons) and also a period of rapid economic growth (with China’s, India’s and others’ development bringing a massive reduction in poverty and growth in global trade).

But it is also important to see the role of agency in trying to shape the wider environment. One useful futures technique is backcasting — taking the future we like most and tracing back the steps necessary to get there. This suggests Australia and Japan should be actively working towards the scenarios that are best for them.

It's a reminder that the leadership of key individuals in middle powers like Australia and Japan can have enormous impact not just on the trajectory of the relationship but also the wider region. Whether we expect to be here in 50 years or not, we should be as focused on working together for a better future as the founders of the Nara Treaty were.

Melissa Conley Tyler is Honorary Fellow at the Asia Institute, The University of Melbourne.