TRANSCRIPT: INTERVIEW WITH JACOB GREBER, BLOOMBERG NEWS
TRANSCRIPTION: PROOF COPY E & OE
DATE: 15 NOVEMBER 2011
TOPICS: Global Force Posture Review; China; Uranium exports; Labor National Conference.
JACOB GREBER: Stephen Smith, thanks very much for talking to us.
STEPHEN SMITH: Pleasure.
JACOB GREBER: Minister, what can you tell us about the purpose behind increasing American involvement in Australia?
STEPHEN SMITH: Well, Australia takes the view that the United States engagement in the Asia Pacific has been a most significant cause of peace and stability and prosperity in our region since the end of World War II, and we want to see that continued. Indeed, we want to see an enhanced engagement.
So, doing more of what Australia does with the United States - we do a lot of training, there's a lot of access to our facilities, a lot of exercises - to us it does two things. It reflects the view that the whole world is moving to our part of the world but it also consolidates and expands what we naturally do as part of our Alliance or relationship.
JACOB GREBER: You mentioned that it's something you've been working on. How long have you been working on that? And I guess the second question is who initiated that?
STEPHEN SMITH: Well, the United States regularly do what they describe as Global Force Posture Reviews, and their most recent Global Force Posture Review they announced the commencement of that in early February 2010.
In November of 2010 at the Melbourne AUSMIN meeting, we agreed that we would establish a joint working party to look at whether there are any shared interests, so far as Australia and the United States were concerned, in the United States Global Force Posture Review. We thought it was a good thing to do.
So, whilst it's the case that the United States obviously initiated their own Global Force Posture Review, I don't think it's fair to attribute the start to any one particular nation. It just struck both countries, both parties at AUSMIN as a sensible thing to do, and we've been working on that now for the more than 12 months period since the Melbourne AUSMIN.
In September, in San Francisco, at the 2011 AUSMIN we reviewed the work we'd done. We were very pleased with progress. We asked officials to do some further work and there's now plenty of speculation about an announcement in the course of the President's visit about what we might actually do.
JACOB GREBER: So that speculation has described this as being, I guess, like a lily pad for the US, enabling them to ramp up or ramp down as they require. How would you describe it or make sense of it?
STEPHEN SMITH: Well, how I would describe it would be people should now just patiently wait for the next couple of days to see what the President and the Prime Minister actually announce. I could be coy and say what, if anything, the President and the Prime Minister actually announce but I'll just put that to one side.
How I describe the work we've been doing is in the following way. On the one hand it will be a continuation of the access to facilities, of the training and the exercises. But on the other hand because, as I put it, the whole world is moving in our direction - the rise of China, the rise of India, the rise of the ASEAN economies combined, the ongoing deep significance and importance of the United States, the ongoing strength of the Japanese economy - because the world is moving our way, enhancing those arrangements will be, in my view, the single biggest practical cooperative change that we've made, or addition that we've made, to the Alliance relationship since we agreed on the joint facilities process in the 1980s.
We don't have United States bases and there's no proposal to have United States bases. We have joint facilities, and Pine Gap is the obvious and the best example. And so this will be an extension of the training and the exercises and the access to facilities, the training grounds, and the like.
But for the precise detail on how people analyse that, we should wait for the next few days to see how that unfolds.
JACOB GREBER: To what extent does the proximity of big resources projects like Chevron's Gorgon, Port Hedland iron ore facility play a role in the thinking about these issues?
STEPHEN SMITH: Well, I don't necessarily think they have a role so far as the United States Global Force Posture Review is concerned. But I've commissioned our own Australian Defence Force, Force Posture Review and commissioned two former Secretaries of the Department of Defence to guide that study. That will report to me in the first quarter of next year and I'll use that to feed into our next White Paper which is due in the first quarter of 2014.
But one of the points I made when I announced that was Australia has to get the positioning of its Defence Force right as well. When you look at the work that we've done with the United States, they haven't looked at anything south of the Brisbane Line. What do I mean by that? They've been looking at the north, the north-east, the central-north, and also west to the Indian Ocean. And Australia, in terms of the disposition of its own Defence Force assets, needs to do the same thing. And one of the points I've made about our own Force Posture Review is we now do have growing petroleum resources, energy belt to the north-west and to the central-north in my own state of Western Australia and the Northern Territory, and as well a lot of potential for energy on the north-east with coal seam gas from Queensland.
So there is a realistic prospective in the not too distant future we will have an energy security belt there which does require us to think about its protection more than just the protection of individual physical installations. Now, that's a fair way down the track but in my view it is for the future a relevant material consideration.
JACOB GREBER: And I imagine that will only grow as those resource- [indistinct]
STEPHEN SMITH: Absolutely. Just as the need to make sure we've got the need to make sure we've got the disposition of our forces right. This was last done in a very serious way by Australia back in the 1980s when we moved a third of our Navy to the west for Indian Ocean purposes. And that will only grow.
Everyone sees the rise of China, the rise of India and the Indian Ocean Rim continues to be under appreciated. So as India rises, and the Indian Ocean Rim becomes more important, there'll be a natural strategic reason to, in the first instance, have more of our naval assets in the Indian Ocean, but secondly, it will also fall - our HMAS Stirling, our Fleet Base West, as we call it, will naturally fall for that to potentially be the subject of more traffic from friends and partners and our Alliance partner, the United States.
JACOB GREBER: All this talk that we've had in the build up to this meeting with Obama this week, what are your views on how China is observing this, from their point of view?
STEPHEN SMITH: Well, I always make the point that - we call this the Asia Pacific Century. It's not just the rise of China. It's also the rise of India, the rise of the ASEAN economies and the ongoing importance of Japan, the emergence, for example, of Indonesia as a global influence, not just a regional influence. And also some people think that because of the rise of China, somehow the United States is magically disappearing. Well, it's not. The United States has made it crystal clear that it will continue its presence in the Asia Pacific, indeed enhance it. And it's not going away anywhere economically either.
So we think it's very important that the United States and China have a positive bi-lateral relationship. And in the course of this century, I see the key bi-lateral relationships as being the United States and China, the United States and India and India and China. In very many respects, they'll be, in the course of this century, the three leading super powers. So positive, constructive, comprehensive bi-lateral relationships between those three will be singularly important. And in the first instance, it will be the United States and China.
What we do strategically is not done as a result of any one particular country. So what the outcome of our White Papers, for example, are, what the outcome of our Force Posture Reviews that we do ourselves, these are neither aimed at, nor are they driven by, one particular nation. It's driven by what we regard as an unfolding security, strategic, political, economic influence in our part of the world.
JACOB GREBER: I just wonder though, given they're our biggest trade partner today, and the US used to be, but isn't now, do we worry or do you worry at all about how China might take this?
STEPHEN SMITH: Well, I say to Chinese friends, whether I'm meeting with counterparts or officials, that we have a very strong view that it's possible for Australia to have an Alliance relationship with the United States and a comprehensive, very important bi-lateral relationship with China. This is not a zero sum gain. For the United States and for China, this can be win-win. And for Australians, it can also be win-win.
We started our modern relationship with China through our early recognition of China, when the Whitlam Government recognised China in the early 1970s, when it wasn't quite so fashionable to do so.
Since then, we've seen a growing economic relationship driven in the first instance by minerals and then petroleum resources.
But now, our relationship is comprehensive. As Australia's Foreign Minister, I conducted the first strategic dialogue with China's Foreign Minister Yang. And so our relationship now is comprehensive, including defence to defence military to military. And so we have practical exercises and training with China, we've done a first live fire exercise with China in a naval context. We have regular high level meetings. And so it's not - the two aren't mutually exclusive.
And I say on a regular basis to Chinese interlocutors that just as it's absolutely important for China and the United States to have a positive bi-lateral relationship and a comprehensive one, including defence to defence and mill to mill aspects of that, it's also possible for Australia to have an Alliance relationship with the United States and a comprehensive bi-lateral relationship with China.
JACOB GREBER: What's your perspective on China's need to make its own sea lanes secure for its own energy needs and how that relates to the Americans in particular.
STEPHEN SMITH: Well, Australia is a maritime continent. China and the United States both have large slabs of their borders abutting the oceans. So in that respect all three of us value very much free lanes of traffic so far as sea navigation is concerned.
And it is inevitable that in the sweep of history and in the modern day, we will, from time to time, have maritime or territorial disputes. The only thing that Australia asks is that these maritime disputes or territorial disputes are resolved amicably and in accordance with international law.
And China is not the only country which has a maritime or a territorial dispute with other countries. This is not necessarily unique. All we ask is that whatever issues arise are resolved amicably, in accordance with international law and don't become a cause of concern or conflict either in the region or generally.
JACOB GREBER: Is it perhaps time to revisit or rebuild a South East Asia Treaty Organisation to address that issue?
STEPHEN SMITH: Well, we are very pleased with the way in which the ASEAN-related regional architecture has developed. We became ASEAN's first dialogue partner back in the 1960s. And I don't think ASEAN itself would have envisaged that from the handful of countries that formed ASEAN, back in the 1960s, that we'd now see the expanded East Asia Summit. So with the expanded East Asia Summit, you have the ASEAN Ten, plus eight other countries, including the United States, including China, including Japan, including Russia, including Australia, sitting around the table at the East Asia Summit, whether it's a leaders format, Foreign Ministers format or Defence Ministers format, having a conversation about peace and prosperity, but also security. And that's a very good thing.
And so the ASEAN architecture and the ASEAN-related architecture has worked very well. And I think that the addition of the United States and Russia to the East Asia Summit in all of those formats will be in time regarded as a deeply significant change to the regional arrangements allowing the United States, China, India, other countries to sit down on a regular basis and discuss issues of peace and security, but also investment and prosperity.
JACOB GREBER: I wanted to ask you about a specific issue which is China developing missiles that can apparently remove America's Sea and Air Force capabilities, certainly within the South China Sea area and Japan. How does Australia regard that kind of development? Is that an alarming thing? Does that weaken America's ability to protect its allies?
STEPHEN SMITH: Well just as a general proposition without responding to any particular alleged or real development in capability, as a country's economy grows, as its place in the world grows, a country is perfectly entitled to develop and to grow its military capability to reflect its economic prowess. The United States has done that. The United Kingdom has done that. Australia has done that, and China is now doing that.
All we ask is that China is transparent when it comes to its strategic intention. And China consistently and repeatedly says in respect of its military modernisation and its capability that is has no expansionist ambitions. It's not interested in expanding. It is simply interested in having a modern military capability which reflects its economy and reflects its place in the world.
JACOB GREBER: Minister, moving on to today's announcement by the Prime Minister, some of your own party members have said that selling uranium to India means that there's more uranium available for them to put into their weapons programmes or military uses. How do you overcome that sort of objection?
STEPHEN SMITH: Well let's go back a step or two. Australia has consistently said that we won't export uranium to a country unless that country is a member of the Nuclear Non-Proliferation Treaty, and also signs up a separate bilateral safeguards agreement with Australia.
And for many years we put that view to India. India made it very clear to Australia and to the international community that it wasn't proposing to become a party to the Nuclear Non-Proliferation Treaty. The whole game changed in 2008-2009 when a nuclear suppliers group and the International Atomic Energy agency resolved to support and authorise the United States-India civil nuclear arrangement. That essentially enabled the United States and other countries who are now doing it like Canada to supply, under the auspices of the international regulators, India with civil nuclear material, whether that's uranium or technology.
India made a number of undertakings in advance of those decisions. Firstly, to keep its civil and its military uranium strictly separated; secondly, to not engage in nuclear testing, and thirdly, to effectively open its books to the International Atomic Energy Agency (IAEA) to track the delivery and use of its nuclear materials for civil purposes.
There's also an under riding point which is there is no evidence whatsoever of India proliferating its civil nuclear capacity. India currently does not have a shortage of uranium for civil purposes. And when I spoke to Indian officials at the time, I said what's more important to you? A strategic endorsement of the United States-India Civil Nuclear Agreement given the green light by the international regulators, or uranium from Australia? And the answer was obvious; we want to have the international community recognise that we won't become a party to the Nuclear Non-Proliferation Treaty, but there is a different way in which we can satisfy the concerns of non-proliferation.
It is a necessary - in my view, a necessary and logical consequence of the decisions made by the Nuclear Suppliers Group, and the IAEA that uranium countries will export to India. And I frankly think that the argument that if you supply uranium to India you free up uranium for military purposes, is a fallacious argument.
Regrettably, there is more than enough fissile material around to fall into the wrong hands and for nation states to use them, and that's why again, Australia has been at the forefront of efforts to see nuclear disarmament occur throughout the world.
JACOB GREBER: So, a question about the timing; why now? You alluded to the need for India, China, America, Australia to cooperate. Is this - does this fit into that picture?
STEPHEN SMITH: The timing has all to do with our National Conference. Our National Conference is in early December. Traditionally, a Labor Government has said we respect decisions of our National Conference. We respect our party platform, but in the run-up to a national conference, ministers, members of parliament, prime ministers are entitled to put a view about change.
So this is simply a timely way of saying to our National Conference delegates; saying to the Australian Labor Party that at National Conference, you can expect a debate about whether there is now a need to change policy. I very strongly have a view that there is a need to change policy.
From time to time, Australian Labor Party National Conference gets the chance to make a decision that will have long-lasting and deep strategic significance for our country, and this is one of those opportunities.
JACOB GREBER: What kind of a business opportunity does it represent for Australian uranium miners and [indistinct]
STEPHEN SMITH: Well India - over the last half-a-dozen years India has become our fastest growing trading partner. Yes, off a low base, but nonetheless, India has become a very important growing trading partner to us.
I come from Western Australia. We had the Commonwealth Heads of Government meeting in Perth recently. I think there the scale from people's eyes, that to the west of our continent, on the Indian Ocean, Perth our Indian Ocean capital, there's enormous potential for trade to India and to Africa. So yes of course, this opens up trading and employment opportunities.
I don't personally believe that that'll occur quickly or in the short term. For two reasons, one there will be a range of work that we need to do in terms of a bilateral safeguards agreement. But secondly, and more importantly, India currently has no shortage of uranium for its civil nuclear industry.
JACOB GREBER: So the royalties from the additional sales may not be of much use for the budget balancing in the next few years?
STEPHEN SMITH: Well no, I don't regard them in that context at all. What potentially is of deep significance is the expansion of the Olympic Dam mines; we'll see Olympic Dam in South Australia become the largest uranium mine in the world. And frankly, it's modestly hypocritical for Australia to say we're prepared to countenance the largest uranium mine in the world, but we're not prepared to export that uranium to the world's largest democracy, India, who has never indicated an intention or any fact of proliferation of any nuclear materials for military purposes.
JACOB GREBER: Minister, it's a busy week for you and I can hear your voice is slowly wearing out. Thanks very much for your time.
STEPHEN SMITH: Thank you. Thanks very much.