Q&A, Hudson Institute, Washington DC

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PATRICK CRONIN: Over the next few minutes, we want to have just a structured conversation about a few of the topics that came out of your talk. Maybe starting with the issue that you talked about, grey zone operations – this isn't code for warfare – I just call this total competition. But whatever it's called, is it understood in the Australian body politic? And is there a lag in public opinion, in terms of this shared perception, as this is a complex challenge, and it’s growing and it's largely non-kinetic. So how is this understood, do you think, in the Australian community?

MINISTER REYNOLDS: I think it's a growing perception and a growing awareness. Some of these tactics have taken a little while to see that they happened in plain sight. And it takes a while to actually appreciate what we're seeing and what we're understanding. But Australia has been very forward leading in protecting our sovereignty. So with the introduction of very strong foreign interference legislation, also taking steps on 5G. And we're now looking at other measures to identify and also to deal with these changing tactics, these grey zone tactics. It is an evolving process. But we are seeing things in new ways, seeing things that perhaps have been there for a little while, but we're taking it step by step.

PATRICK CRONIN: Yes. I think this speaks to one of your questions about the China policy. We just here at Hudson have hosted Secretary of State Pompeo, giving a speech up in New York and Dr. Weinstein had a conversation with the Secretary afterward. We're talking about both the challenges that China poses, but also the opportunity of a constructive relationship really emphasise I think the same, Minister Reynolds, in terms of wanting both sides of that relationship and dealing with the challenges but at the same time looking for cooperation. Australia is a bit up front from the rest of the region on these issues. And I take on board everything you said about we need to be in this alliance of the region, for the region. But do you feel like the United States and Australia are ahead of the region, when it comes to trying to stand up for rules based order against coercion?

MINISTER REYNOLDS: I think we're working very well together, I think the first point I'd make is I think that there's much more that we can do to synchronise what we're doing in terms of working with regional countries. Two key takeaway points, I'd say on the Indo-Pacific region, in dealing with what you're talking about, is what I mentioned about tone, and also about sovereign respect. Those are two critically important issues, because whether you're a country of 5,000, a small little island nations of 5,000 people, or a larger nation, you still want to be treated, and have the right to expect to be treated, with respect, and have others listen and partner with you. So we still have work to do to achieve that right tone and that right approach, but we've got to be there, and to do that we've got to be present. And we are perhaps not as present as we should be.

PATRICK CRONIN: Indeed. I think I heard that the President will not be attending the East Asia Summit, in that they'll be sending others. Is that sending the wrong signal? I don't want to put you on the spot. But I mean…how can we rephrase that question? How can the United States ensure that our presence is sort of holding up to the standard that's expected in the region? What are the things that we need to do?

MINISTER REYNOLDS: Well, let me answer this two ways. First of all, is saying it's not my place to advise the United States government on how it engages regionally. However, secondly it may have been a topic of conversation between myself and Secretary Esper yesterday about the importance of East Asia Summit.

PATRICK CRONIN: So if you're going to share an Indo-Pacific strategy that it's important to be there and to engage in all the sort of institutions that it offers, I think the question about Australia’s defence capabilities – and I’m reminded that the entire Australian Armed Forces because they're punching above their weight globally, they can fit them in one single arena. And so it's important for Americans keep that in mind, and yet tremendous defence commitment, $200 billion dollars of new defence modernisation. What does that mean for the actual force structure that we're going to be seeing in Australia emerge over the next 10 to 20 years?

MINISTER REYNOLDS: We're kind of going through a Force Review process, to actually consider force structures and force composition. So we're in that process and the Department of Defence – our Chief of Defence Force and the Secretary of Defence are joining us here today – will be providing advice to me early in the new year for government consideration. But how do we deal with all of the extant threats that still exist? How do we prepare for high end warfare? Again, to keep countering terrorism, and not just in the Middle East, but also, as I've said, in our own region. And also, how do we deal with now threats to and from space, emerging technologies like hypersonics, with increasing missiles threats now in our region. Cyber not to mention. We are going through that process at the moment, and having a look at what changes we need to make, to make sure that we – a small force, but a very capable force – that can deal with all that range of increasing threats.

PATRICK CRONIN: One of the new partnerships that your country has developed in the past decade, and in particular, is Japan. What is the status of your relationship with Japan on the security front? And do you see this being replicated with other potential partners?

MINISTER REYNOLDS: Yes I do. The defence relationship with Japan has grown exponentially over the last three to four years, I've had a number of discussions with Minister Kōno, the new Defence Minister. In fact, I will be going there next month to further deepen and to formalise a new defence arrangement with Japan. I see the trilateral defence relationship between Australia, US and Japan, as a very important one to further develop the region. But that said, we're also working closely with Indonesia. I know both nations are talking to India as well about renewing and further strengthening defence relationships. And it's also important for us with our defence relationships in Melanesia. I’ve spent time already in Papua New Guinea, the Solomon Islands, Timor Leste, so a lot of regional countries as well to make sure that we have strong and respectful defence relationships right across our region.

PATRICK CRONIN: In the Pacific Islands, in Melanesia, Micronesia and Polynesia or– all of the islands that are spread out across this mass swath of the earth, what is the challenge there? And what are the kinds of challenges that you're seeing develop that you're most concerned about in Cabinet?

MINISTER REYNOLDS: What we are most concerned about is to ensure that we, country by country, no matter how big or small it is, we listen, we're there we're present – we listen to what is important to those nations. And that, as a partner, we provide options. And as a partner of choice – to seek infrastructure support, defence cooperation, and to provide what's actually required, and to do so in a way that respects their sovereignty and does not lead them into debt traps.

PATRICK CRONIN: And that's especially difficult for a small economy, a small island nation, where there may be only a very thin bench of leaders, very dependent upon tourism or a single type of economy. So are the United States and Australia, as well as Japan and others, stepping up as well on providing financing that goes beyond the remit of the defence ministry?

MINISTER REYNOLDS: Yes, we are. In Australia, what we've now done is recognition that this is not a defence solution, per se. We've taken a whole of government approach. So in my portfolio, one of my junior ministers is now jointly sworn into the Defence portfolio but also our Foreign Affairs – the State Department - portfolio, to make sure that whether it’s ODA funds, or whether it's from the Department of Communications or Defence, that it's joined up, it is coordinated, and it's actually delivering what these nations require.

PATRICK CRONIN: Well, very important, whether it's through development assistance or the media communications again, I go back to my own study on the total competition that China poses. I think about something like the strategic support force that China has organised and stood up in the last couple of years, but it really organised everything from psychological warfare to cyber warfare across the spectrum. And that kind of integration is a very big challenge for democracies like Australia, United States to figure out – can they organise? When you think about the technology challenge that our democracies are facing in this digital age and the fourth industrial revolution that's occurring, is there an AI arms race? What are the big game changers that really could surprise us if we're not maintaining our competitive edge on these technologies? What should we be fearing, in a sense, if we're not going to maintain that edge, what could surprise us here?

MINISTER REYNOLDS: I guess that's the thing about new, emerging technologies. Sometimes they do sort of come out and surprise us. But I think all of the things that you have mentioned, areas that we're now deepening our cooperation on science, technology and research with the United States – hypersonics in particular, AI, and cyber, and of course, space capabilities. So they're all areas that we're working much more closely on and things that we do need to do more work on, to make sure we don't get left behind.

PATRICK CRONIN: Absolutely. I think space is particularly intriguing. We're going to be doing a special program with our Japan (inaudible) in a couple of weeks, looking at the future of space and space cooperation with key allies. We will be talking especially about Japan and India. But I think we need to be talking increasingly about the Australian cooperation on space because if we're blinded in space, everything changes, it seems to me, in terms of our ability to operate.

MINISTER REYNOLDS: It does. A lot of people don’t realised that Australia's had a very deep space industry for many years, mostly in the civilian space. The partnerships with NASA, the European Space Agency, and a lot of space-based research has been happening for a long time, but we've come rather late to the party with an Australian Space Agency, which has now got very close links with NASA, and also other organisations here in United States. So we are a little bit behind on that journey, but we're catching up fast.

PATRICK CRONIN: I know, Minister Reynolds, you said it’s not your place to give us advice. But if I'm asking you for personal opinion maybe, on what it is that the United States can do? You mentioned tone is important. But what is it that the United States can bring to the Indo-Pacific vision, to standing up for the region, working so closely with likeminded allies that we're not already doing enough of? What else should we be trying to improve upon?

MINISTER REYNOLDS:As I said in my speech, I think it is working more collaboratively with Australia, with Japan, with France and the UK – to all work across the Indo-Pacific, and making sure what we do is joined up, and it is comprehensive. But ultimately, it is what is required in each and every nation. And I think, as I've said, it's more listening, more being present. And it also requires more flexibility too, because as much as we ‘love’ bureaucracy in our government departments, they can be a little slow in terms of approving funding for particular projects. So it is accountability, and more flexibility to deliver things locally.

PATRICK CRONIN: This is where we need some of what Herman Kahn calls unconventional thinking of having procurement and reduce bureaucracy. But we fully approve of your conventionality, if you will, in terms of the strength of this enduring alliance. I wonder about Australia’s relationships with Indonesia in Southeast Asia but with Indonesia just having a new cabinet and Jokowi, the Indonesian President, has just won a second term. He's put in place a …the opposition have, in terms of a defence portfolio, Prabowo is now the defence sort of leader in Indonesia. That's problematic for the United States, for engaging from Capitol Hill’s perspective, for instance, how would you sort of think about engaging such a strong Defence Minister out of Jakarta, in this Jokowi government? I mean, does this change things?

MINISTER REYNOLDS: No, I don't think it does change things. I had a very warm phone conversation with Minister Prabowo last week. And he is a very strong supporter of the United States and Australia and of closer defence engagement between our nations. There are always hard decisions to be made in terms of our international relations, but the fact is Indonesia is a democracy. It is a very strong democracy. And it shares, with some differences as we all do, but it is committed to democratic principles. It is committed to peace and prosperity, just as we are. And it might be a little challenging in some areas, but we are certainly going to be engaging with the new Indonesian government and the new minister, because it's in our national interest to do so.

PATRICK CRONIN: Minister, you've been very generous with your time. I know you have a full schedule of appointments. We are deeply appreciative.