Newsletter from America: Opportunities in the Pacific Triangle

1 August 2007

By Lincoln Parker

The search for Australian export markets can take companies into some interesting places.
A bit of lateral thinking about market sectors, locations and enabling business links can come up with suggestions like this one.

Over the next few years the United States Marine Corps (USMC) will relocate over 8,000 Marines from its base in Okinawa, Japan, to the island of Guam.
This will require over US$14 billion in new construction and procurement for infrastructure as well as services to support the enlarged base, and will provide significant opportunities for Australian contractors – particularly those who have US partners.

As part of its post 9/11 strategy of repositioning global military bases, from foreign countries to its own territories, the US is developing a “lily pad” strategy that involves a series of in-host-country facilities to service expanded military bases in territories which the US considers to be its own.
Guam will become an integral part of the “Pacific Strategic Triangle” and “America’s Unsinkable Fleet” concept that will see Guam linked with the other key Pacific Ocean military bases of Hawaii and Alaska.

This substantial build up will include expanding the Marines Corp base and training area, extending Andersen Air Force Base, refurbishing Naval Base Guam to enhance its capacity to transit nuclear aircraft carriers, and building an Army base at Radio Barrigada for a Patriot Ballistic Missile Defence (BMD) task force.

The BMD facility, expected to be constructed by 2012, will give the Army the capacity to intercept and shoot down incoming missiles aimed at critical military assets on Guam.

These assets are expected to include nuclear-powered aircraft carriers and Trident submarines, Global Hawk unmanned spy planes, and the latest F-22 (Raptor) fighter jets, among the plethora of naval and marine ships needed to support the forces positioned on the island.

Australia: a natural fit
Only four hours (commercial) flight time from Cairns, Guam has become inextricably linked to Australia since the recent AUSMIN (Australia United States Ministerial Consultations) agreements, to foster closer co-operation in intelligence matters and improve joint training and interoperability of our military forces, were put into place.

The key outcome of the AUSMIN 2004 meeting was to establish the Australian-US Joint Combined Training Centre (JCTC) in which Shoalwater Bay plays a major role but is not the only facility.

In 2005, AUSMIN signed a Memorandum of Understanding (MoU) which specifically linked the Talisman Saber exercises (June of this year) to Guam.
The MoU states that the US needs to conduct exercises at Shoalwater Bay Training Area (SBTA) because it is “rebalancing its force presence in the Asia-Pacific region, including through the rotation of US strategic bomber aircraft through Guam”.

Under these agreements, Australia has become a major training ground for US troops and weapons systems operating in the north-west Pacific.
According to the Strategic Policy Institute at the Australian National University, Guam is directly linked to Shoalwater: “The more aircraft they base on Guam the more important it is for them to have access to the kind of large continental training areas Australia can provide”.

Opportunities for Australian Industry: why not?
In 200 years Australia has never been aligned more closely with the US, and with this good will and close cooperative environment there ought to be corresponding business opportunities for Australian industry in the upgunning of Guam.

As stated above we are intricately linked to the success of Guam as a military base and fortunately we are much closer geographically than the US in terms of providing the needed resources and construction that will be required.

This October (8th and 9th) the US Department of the Interior is holding its fourth Secretary’s Conference on Business Opportunities in the Islands (for more details see: www.businessopportunitiesconference.com/2007conference/index.htm).
Given Australia’s current and future links with Guam this would be an ideal time for Australian industry to attend and build relationships with the US Military, local government leaders and contractors.

Colonial history: from Magellan to McKinley
It’s always good to know a little background on any new market you want to enter.
But being somewhat hazy on the recent history of Guam I had to consult Wikipedia.

I found the following information on Guam’s colonial past over the last 500 or so years.
Portuguese navigator Ferdinand Magellan, sailing for the King of Spain, reached the island in 1521 during his circumnavigation of the globe.
General Miguel López de Legazpi claimed Guam for Spain in 1565. Spanish colonisation commenced in 1668 with the arrival of Padre San Vitores, who established the first Catholic mission.
Guam, along with the rest of the Mariana and Caroline Islands, was treated by Spain as part of their colony in the Philippines.

The US, under President William McKinley, only took control of the island after they defeated Spain in the 1898 Spanish-American War.
During World War II the US fought the Battle of Guam on July 21, 1944, to recapture the island from Japanese military occupation. Since then Guam has become an unincorporated organized territory of the US.

Time is ripe
Opportunities come and go and this one could present Australian industry with a chance to get in on the ground at the earliest possible stage to cement a long term presence in a rapidly expanding niche market close to our shores.

Lincoln Parker works for the Victorian Government Business Office in the United States: Lincoln.Parker@diird.vic.gov.au