On Saturday, the United States and the Taliban signed a peace deal that may finally end America’s – and Australia’s – longest war. The war in Afghanistan is almost twenty years old. It has led to the deaths of more than 100,000 Afghans, and almost 2400 US troops. Australia joined the war at the outset. More than forty Australians have since died there, and tens of thousands have served. Today, there are still 200 Australian soldiers stationed in the country.

It has been a costly and inconclusive conflict. US-led forces quickly drove al-Qaeda out of the country but the counterterrorism mission then transformed into a protracted war against the Taliban. There is no guarantee that the latest peace deal will hold.

An end to the war in Afghanistan will also mark the end of an era for Australian foreign policy. Australia’s standard defence equation – supporting America’s foreign battles in return for its promise of security in Asia – is quickly changing. As China rises, and tensions in Asia increase, Australia will want to keep its troops as close to home as possible. At the same time, these changes are weakening the value of the United States’ security guarantees.

In 2001, when Australia joined the war in Afghanistan, China was the world’s fifth-biggest military spender, behind the United States, Japan, the United Kingdom and France. Today, China is the second-biggest spender. Since 2001, China’s military spending has increased ninefold to US$250 billion, while US spending has slightly more than doubled to US$649 billion. The other spenders in today’s top five are Saudi Arabia, India and France.

China’s new strength allows it to assert its interests more forcefully – to create artificial islands in the South China Sea and to send fighter jets across the unofficial midline in the Taiwan Strait that separates Taiwan from China, as it did again last month. This encourages other nations in the Indo-Pacific to push back and to invest more in their defence. And, as Asian countries become wealthier, they have much more to spend.

Australia has one of the region’s strongest militaries and the world’s thirteenth-biggest defence budget, but it needs to choose its defence priorities carefully. This is why, for instance, there is debate about whether Australia should focus on buying a large fleet of submarines, which could protect its maritime approaches, or more surface ships, which could stage more offensive offshore missions. It cannot afford both.

As risks in the region increase, Australia will be less able to afford alliance-building commitments that do not directly boost its security. At its peak, Australia’s presence in Afghanistan amounted to more than 1500 troops, from a total force of about 60,000, and the command of an entire province. This was not a token deployment.

Meanwhile the United States, too, is starting to reconsider its willingness to risk lives and spend money on foreign conflicts. It will increasingly ask more of its allies, particularly as the costs of a confrontation with China grow. Australia will need to prepare for a scenario in which tensions in Asia continue to rise and the usefulness of the US alliance in addressing them diminishes. Australia will not want to pay as much for US support if it receives less in return.

Canberra does not typically air its concerns about the future value of its alliance with the United States. But it is willing to admit that rising tensions in Asia require it to avoid overcommitting to distant conflicts.

This much was evident from Scott Morrison’s limited commitment last August to the US-led effort to protect shipping through the Strait of Hormuz. Morrison deployed a surveillance aircraft for one month and a frigate that was already due to be in the region.

Announcing the deployment, Morrison was asked whether Australia should be focusing its defence resources on the Indo-Pacific region rather than on the Middle East.  “Well,” he responded, “I’d say this is a very constrained commitment … One of the reasons I’ve put so much emphasis on our Indo-Pacific relations … has been to extend, strengthen, and further build the alliances, the relationships, that exist across the Indo-Pacific”.

Australia is still taking part in distant US operations, but with more restraint, and with an eye on events much closer to home.