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One of Australia's main policy interventions in the South Pacific since the end of the Cold War was sanctions on Fiji in response to the latter's December 2006 coup. Dubbed 'Smart' sanctions, this policy was not only designed to pressure Fiji to return to democracy, but also to sustain Australia's longstanding regional leadership aspirations, aspirations which went hand in hand with its 'strategic denial' of unwelcome geopolitical challengers (Hawksley Global Change, Peace & Security, 21(1) 115-130, 2009). There has been little analysis of the unintended consequences of sanctions, namely, whether 'Smart' sanctions ironically contributed to greater strategic competition in the South Pacific, weakened regional security and prompted expressions of Pacific regionalism that excluded Australia. In the years after the coup, Canberra achieved its primary aim of being, and being seen to be, the dominant power in the South Pacific. However, during this time, Fiji "Looked North" and Pacific Island Countries (PICs) developed greater confidence in the 'New Pacific Diplomacy', thus providing the opportunity for China and other powers to expand their influence in the region (Fry and Tarte, 2015). To the backdrop of growing concern about Chinese influence, the failure of 'Smart' sanctions against Fiji shows the constraints of sanctions as a foreign policy tool. The fact that sanctions are no longer a palatable policy option has not been adequately canvassed in the literature. In this context, in order to counter Chinese influence, Australia requires greater soft power resources and a sustained effort to listen to the concerns of PICs in order to achieve Australia's interests (Newton, 2020b). In the 'New Pacific Diplomacy', threatening sanctions is likely to be counterproductive. [ABSTRACT FROM AUTHOR]