The U.S.-Australia relationship has never been stronger. Nor, paradoxically, has it ever been so threatened. Australia's place in the world is undergoing a profound transformation that could eventuate in the first material divergence of interests between the two close allies and friends in history. The transformation of Australian maritime security represents a notable factor in this shift and illustrates the potential for tension in the future relationship. Island nations live and die by their mastery of the sea. An island continent with 40 percent of its GDP reliant on international trade, Australia is no exception. Yet Australia has until recently relied on others for trade and security. During the Industrial Revolution, Australia was one of the primary sources of raw materials for the British Empire, in both wartime and peacetime. The empire sought to protect its interests in Australia by assuring maritime security. This was a doubly profitable arrangement for Australia, guaranteeing the nation a market for its goods in the "home country," covered by the security blanket provided by the British taxpayer in the form of the Royal Navy. Yet wealth did not come without sacrifice, as the disproportionate number of Australian war dead (per capita) in the service of British, and later American, strategic interests attests. Indeed, with the exception of the campaign in the Pacific in World War II, all of Australia's military deployments have been largely tied to its historical and cultural allegiances. These deployments had less to do with narrow national interests or pragmatic calculations of geopolitics. At the outbreak of World War I, World War II, the 1991 Gulf War, and the Global War on Terror, Australian forces were immediately dispatched to the Middle East, a region hardly within Australia's immediate strategic orbit. Explaining this anomaly furnishes some insight into Australia's emerging strategic dilemma. While Australia's key trading relationships have rapidly shifted from historic partners (UK/U.S.) to geographical partners (China), its strategic posture is still largely premised on historical, demographic, and cultural linkages. For a variety of global and local reasons, this situation is rapidly becoming untenable. The wartime prime minister, John Winston Howard, has said that he sees no need to choose between Australia's strategic military alliance with the United States and its strategic trading alliance with China. He might be right in terms of the immediate political cycle, but a longer view suggests this assumption might prove dangerous. To fully explore this dilemma, this paper will examine Australia's competing maritime priorities between culture and power. It will determine whether Canberra will be forced to choose between a rising China and its traditional alliance with the United States in maritime matters. And, the paper will recommend strategies and policies that Australia should pursue in order to strike a balance that accommodates both Washington and Beijing. The paper thus will have immediate policy relevance in Canberra and Washington. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]