AUSTRALIA needs to move beyond obsessing over its diplomatic balancing act between the US and China, and focus more on its relationship with south-east Asia, according to former foreign ministers Alexander Downer and Gareth Evans.
Mr Evans, who served as foreign minister in the Hawke and Keating governments, said Australia's relationship with the region would improve if it could shake off ''the lingering perception'' around Asia that Australia plays ''deputy sheriff'' to the US.
Mr Downer, who served in the Howard government, said Australia should ''move past the glib generalisations about engaging with Asia'' and recognise that the continent is not homogeneous and that wide cultural differences existed between different parts of Asia.
With south-east Asia on our doorstep, he said, Australia's political and security policies would always be built around the 10 ASEAN member countries, including Indonesia, Thailand, Malaysia and Singapore.
''That's where our regional diplomatic strategy should start. From there we can successfully build outwards,'' Mr Downer, who is now a director of Chinese telco giant Huawei and for Gina Rinehart's Roy Hill Holdings, commented in a new Asialink report.
The report, edited by Anthony Milner and Sally Percival Wood, said the Gillard government's Asian Century white paper, while singling out Indonesia as one of five key Asian countries to focus on, said ''surprisingly little'' about the value of Australia's relationship with ASEAN.
Speaking at a separate event in Melbourne, the Indonesian consul for economic affairs, Sri Dewi Kuntarti, said misperceptions persisted between Australian and Indonesian business people.
''Most of the businessmen in Indonesia assume that Australia is a small country and it is difficult to deal with business with the citizens in this country,'' Mrs Kuntarti said.
The Indonesian vice-consul, Maradona Runtukahu, said despite the geographic proximity between the two countries, Australian investment into Indonesia, and two-way trade was ''rather small''. ''The way we see it is, lately, business relationship between Australia and Indonesia is underdone,'' he said.
Trade between Australia and ASEAN member countries reached $88.4 billion last year, accounting for a substantial 14.5 per cent of Australia's global trade. By comparison, trade with China was $121 billion, or 20 per cent of global trade.
But the average rate of growth in trade with ASEAN countries in the past five years, at 4.6 per cent, lags dramatically behind the Chinese trade growth rate of 20 per cent.