 Good morning I'm Bill Brock. I'm a trustee at CSIS and I'm filling in for our leader Dr. John Hamry who is in Japan Just a couple of preliminary comments first Thank you Thank you for participating in what is an important conversation among friends and Besides both words it is important and we are good friends and that's that's crucial Just to give you a little bit of my own Area of interest in this conversation one personal story I was a National chairman of our party when we won the election with Ronald Reagan and he had lunch over it at the RNC and We thought we're gonna be talking about working together on inauguration. He said Bill What would you like to do? Would you like to be in the demonstration? I said yes, sir He said what would you like and I said I like to be the United States trade representative. He said really he said I thought you Want one of the other cabinet positions and I said well, sir I honestly believe that economics trade Is gonna have more to do with the peace and stability of the world than almost anything else. I Thought that then I think it now in part because this is such a Radically dramatically different world Minister turned to last night mentioned the fact that We can walk around these days with a handheld device that had the power of a supercomputer Not too long ago. I tell these young people when I talk in college None of you had they even started grammar school when the internet came on board In the mid 1990s It changed the world We now have and live in a knowledge-based technology driven Highly competitive level economy and the the economic consequences are just extraordinary We have all the new Economic powers China India Brazil I'm not mentioning Russia yet. We'll see But what's changed what's different is That phrase knowledge-based We have an education issue that not enough countries and certainly not this one are paying attention to because the demands Of the workplace are so dramatically different We have the obvious challenge of cyber security It's been dramatically in evidence in the last year We have the fact that we don't have nation-state issues so much as we do International terror based upon at least I said blend ostensibly on Things like religion as the claim of the basis anyway We had the ability to communicate so rapidly that we're not reading anymore. We get our news From blogs or at least many of us do So we have conversations like this to make sure that these challenges are Something we work together on because we know that we can achieve so much more with mutual effort than we can by unilateral actions whether it's TPP or APAC or the security area I Think the special thing about this particular conversation this morning is the participation. We've got obviously Ambassador Kim Beasley We've got Foreign Minister Julie Bishop we've got most of communications Malcolm Turnbull But we also have managed prime minister Abbott addressing us by a digital link shortly and We have an extraordinary group of participants here and here in the room so Just oh I should add that as My friend Ernie has suggested that CSIS is trying to broaden the conversation to a lot of people but not for here present by a Digital don't what you call it? Broadcast or webcast plus tweeting We have now an opportunity to talk about how we can work on deepening and And broadening a dynamic relationship That has Become more dynamic dynamic as we face more aggressive challenges and the opportunities Are also Rapidly changing and equally dynamic so I want to begin by asking our my friend and colleague to Take this podium professor Bates Gill has worked here at CS to our benefit worked at bookings institution He is our partner as United Head of the United States Study Study Center in Australia, and you also headed the Stockholm Center for Studies on International Peace And I'm glad you succeeded there So professor Gill we thank you for being here. We thank you all for being here, and I will leave the podium to you Thank you. Thank you very much senator senator Brock and thanks very much to CSIS For partnering with us for this for this day and for our discussions on US-Australia relations I want to extend a special thank you of course to dr. Hamry as well as to Mike green and Ernie Bauer who we've been working very closely with over the past several months to Pull this all together special. Thanks, of course to the excellent excellent team That Ernie and Mike have working for them here Let me say as a as an alum of CSIS just how proud I am to be able to stand here today and work with with you in partnership, but also to Extend the heartiest congratulations from me and all of us at the US Study Center in the Establishment of this fantastic new headquarters for a CSIS whatever whatever remarkable building and we're very very proud and honored to be able to be one of the earliest foreign participants to be able to Hold an event here in Washington, DC The US Study Center is in Australia The leading institution concerned with raising awareness and building Understanding about the United States across the full range of issues of concern Not just in foreign policy and defense and security or the traditional issues of of US-Australia Alliance relations, but the full panoply American domestic politics American history American literature American culture media and the arts and I found it just a fascinating opportunity to be able to work At the US Study Center and tap into the depth and breadth of interest That there is in Australia on all things American We hope to be able to build over the coming years to establish an even wider network of relationships Not just in Australia for example in the establishment of the new Perth US Asia Center at the University of Western Australia But by building up our profile in the United States and even across Asia with other Institutions that are equally interested and concerned with raising awareness and understanding about the United States So I see today's event very much a part of our ongoing effort to to strengthen our profile here in the United States And build new partnerships with with institutions like CSIS and others across the country Today we are gathered under the banner of Alliance 21 Which is a multi-year project being led by the US Study Center Which is trying to look across the various aspects of the US-Australia relationship and think forward about how in the 21st century In the context of an emerging Asia our two countries can continue to build and strengthen our Relationship not just on questions of foreign affairs and defense, but across The full relationship to include questions of trade and investment resources and sustainability energy security Working with partners in any in an emerging Asia on questions of education and innovation We've been very fortunate to have the support of a number of key Sponsors that have been behind this effort for a number of years and without their support We wouldn't be able to convene here today. I do want to extend my gratitude to them This includes the Australian federal government But also a number of key corporate sponsors a number of representatives who are with us today from Dow Chemical From Chevron from Conoco Phillips from GE from News Corp from Vizi Morgan Stanley and Ray Theon these are companies that have a significant Presences in Australia that are very very keen to see Strong relationship emerge at all levels between our two countries and I'm extremely grateful for the support They've extended to us. We're also very fortunate in this particular event to be supported by the good day USA this as you all know is the annual set of activities Sponsored by the Australian government and a number of Australian state governments as well They try to across this country Raise the profile and awareness and understanding of Australia here in the United States So we we thank our supporters at good day as well With that I want to then turn the floor over to Prime Minister Tony Abbott who is going to be offering some Welcoming remarks. Let me again. Thank all of you for taking the time Especially given the inclement weather. We're dealing with here in in Washington these days Thank you all very very much looking forward to an excellent set of discussions I'm pleased to send my best wishes to everyone attending the Alliance 21 conference Australians and Americans have a natural affinity for each other We share language values and a long history in peace and in conflict Australia and the United States have two of the most robust democracies in the world and Yet for three quarters of a century this Alliance of ours has been beyond politics We both know in the marrow of our bones that we can do so much more together than apart This alliance is more than a security pact It's a commitment by two like-minded liberal democracies To support the values that underpin our way of life Free enterprise free trade free speech and a belief in citizens ahead of government So I commend the US Study Center for its work driving the Alliance 21 program This conference explores how we can strengthen the relationship during the decades ahead Because this alliance is the bedrock of our security and the power shifts in our region Mean that this will be just as true in the 21st century as it was in the 20th. I Wish you well in your deliberations, and I look forward to learning of the results of this conference Good morning. I'm Michael Green senior vice president for Asia at CSIS. I am Impressed and to be honest a little bit surprised at the good turnout we have this morning We were making contingency plans at 6 30 this morning that were unnecessary I should not have been surprised General Ludendorff didn't stop us at the battle of yens of Amiens the Japanese Navy didn't stop us at Coral Sea North Koreans didn't stop us at the hook the Taliban Taliban didn't stop us with OEF Washingtonians are usually gripped with absolute panic and paralysis at an inch or two of snow But I should have known that US-Australia alliance discussions and ties would have soldiered on no matter what hit us That said We thought we would open today's discussion with a quote-unquote reality check Looking at how the alliance is positioned for challenges that will come in the future Instead of giving the tribute we often and appropriately give to the GIs and the diggers asking ourselves What black swans are out there what challenges might throw us off course not with the expectation the alliance isn't up to it But with the foresight and strategic wisdom that have characterized our relations for many many decades To help us with this stress test or reality check We have two of the most committed and experienced managers of our alliance to join us today The Honorable Richard Armitage is a trustee at CSIS And on the council of advisors for the US Study Center Rich became president of Armitage International in 2005 after Distinguished service as the deputy secretary of state he served previously as an ambassador to a number of problem challenges around the world the key Asia position in the Pentagon under the Reagan administration and a storied period of service during the Vietnam War and Rich is a Mentor and a guide to I was going to say generations, but I didn't want to make him feel old So I'll just say a rising generation of Asia experts in this town All of whom are grateful for his service in his example The Honorable Dr. Brendan Nelson is director of the Australian War Memorial A memorial I visited a number of times as a tourist and also with President Bush when I was working in the White House it is I think and I've worked in war memorials the most moving And honest war memorial anywhere on the globe Brendan came in to public service as the youngest National president of the Australian Medical Association, which if it's like the US American Medical Association is a pretty powerful post indeed He was elected to federal parliament in 1996 and served as the parliamentary Secretary to the Minister of Defense. He led the Liberal Party in opposition in 2007 and served as ambassador to NATO Before joining the war memorial as president and in that position played a key role in broadening Australia's relations with NATO Topic we may come to today because it is absolutely in US interests for our allies to network and strengthen their bonds with each other To stabilize the international system and we'd like to invite and include all of you to participate in the discussion So we have these these are not mutes To control the discussion up here these are clickers that allow you to vote And we've used these in the past. They're not scientific You only get to vote once so don't try to push repeatedly to try to increase your tally you'll find on the clickers that The letters run from a to e and there will be multiple choice questions I think let me look at my technical guys. You have to push this red button to turn it on So there's a small round sort of orange colored button at the top to turn it on and we will ask you to vote on some of the Stress test a reality check questions We want to pose to our two panelists so that they can react to Respond to be educated by or correct the perceptions in the audience But first if I could before we go through through some of these questions I'd like to turn to rich and Brendan and ask them for some for some opening observations on where they see the alliance on this snowy day in 2014 Brendan Thank you very much I always hesitate to add to the introduction, but thank you very much for the generous one But the other thing that I did which is relevant to the discussion I was Minister of the defense for Australia as well along with my esteemed former colleague Robert Hill The alliance of course was born of idealism and forged in reality particularly in the depths of the Second World War I Can tell you that not only at the Australian War Memorial, but throughout the country there isn't a day goes by in Australia We're privately nor probably publicly we give thanks for American sacrifice in the Pacific from 1942 until the end of the war formalized in 1951 we're now of course in the 63rd year and From my perspective, I think the alliance is in very good shape It's growing the fact that there are so many here both from Australia and the United States and perhaps some other countries So to participate in this is in part testimony to that it's historically of course being born of conflict and Been focused predominantly on defense security and foreign policy issues, but it's expanded beyond capability intelligence interoperability and security into economic trade education research energy and other areas of cooperation in part that we're dealing with today if you think about some of the Things that have been testing the alliance in recent times the criminality of Snowden certainly as I said amongst other things and It's obvious that these kinds of events and the transformation in the world It's occurring in the Asia Pacific and the template for the US-China relationship that's being built in it it's clear at least for certainly from my perspective that the alliance is strengthening and Certainly is becoming more relevant in this century than it perhaps it was in the past and having spent three years or so at NATO I can see that Australia and the alliance of the United States is a sick is a has significant potential to leverage in the US influence in the your Atlantic area and to get it focused on the Asia Pacific Thank You rich Well, thank you my god the honor for me is to be sitting next to Dr. Nelson her man who is Defense Minister of Australia was not afraid to make a decision I hope it's catching and I hope I can take some of that back with me Tony Abbott this morning the Prime Minister mentioned that we share language common values Common commitments when President Obama went to Australia recently and spoke to the Parliament Indicated that there's some other things we have in common Australians and Americans some of Whom came to their respective countries of their own choice and some who came in chains but most importantly That we believe that everyone should get a fair go whether you're American or whether you're Australian Now if it's the case that the whole center of gravity of the world has shifted to the Indo-Pacific and I believe it has Then that put us puts Australia right in the middle of it and I thought in the 2013 white paper Australia put a big burden on the United States the burden was that we were expected to maximize cooperation with China and minimize competitive aspects of our beings and also that we'll always be the the implication in the 2013 white paper was that the United States would always be there for Australia. I personally hope that's case I personally would fight for that But to the extent Australia is not seen as doing their share in this alliance And I'm talking about money into the defense budget then this puts a little pressure I think on that the implication that the United States will always be there, so I'm looking forward the discussion today I'm looking forward to the comments that our audience will make or the answers to their various questions And we'll try to give you a good go Thank You rich and I apologize for skipping one of the most consequential parts of your resume Which that was also one of the most consequential periods for our alliance We're going to go back to some of the issues you both mentioned Talk about Directions in US policy and strategy in Asia the pivot and so forth Ask you about the structure of international politics The relative power of the United States how much that matters to Australia The changing dynamics in both our relationships with China and what that means for our alliance energy and trade And security Issues we're trying to strengthen between us to deal with these changes. Let me begin with US policy since we're in Washington and ask you to Prepare your clickers in the audience We Are we ready to go Okay So the first question I'd like to ask the audience and then to enter our panelists on is this one The US rebalance to the Asia Pacific was announced by President Obama in Australia in November 2011 How would you evaluate the success of the rebalance? Today, let's start with with rich and then we'll go to mr. Nelson My view of the rebound I Blew the clickers my apologies rich. We actually need to hear from the audience first We are a democracy My apologies. So if I could ask you sorry about that. So if I could ask you to use your clickers You can see it's a well does the rebalance was well designed and well implemented be well designed, but poorly implemented see poorly designed D not important to the region and he don't know and if I could ask you to hit a through e one of the Letters that corresponds with your view of the administration's rebalance to the Asia Pacific Either we're having technical difficulty or the rebalance has made no impression on anyone. Is it the former? Okay Okay, we're gonna pass on this one. I'll give you a minute or two to see if you can fix it So sorry rich back to you. How do you evaluate the rebalance? Well, I thought rebalancing was an appropriate articulation of our strategic interest and where the important strategic interest lie. However, I think it was poorly done And I think it was poorly designed And it was hastily run out And it left us depending much too much on just the security aspects of Rebalancing and not as I've said before the other arrows in our quiver foreign direct investment trade policy Cultural political educational exchanges, etc. Yeah, I gotta say I tend to agree with rich The rebalance in fact whatever language is used to describe it originally of course, you know it was described as the pivot and I was in Europe at the time dealing with Europeans both the European Union and with NATO and it was they were shall I say perplexed if not flabbergasted about it and It made and makes enormous sense to Australia. It's something that we encourage and support I think rich is right in the sense that it was It was perceived if not portrayed as a security and foreign policy rebalance Without a sufficient emphasis on the other aspects of US presence within the region the other thing that seemed to get across seem to be perceived by those who Aren't all that familiar with the US presence in the region the importance of it the fact that it's it's been as it is For the since the end of the Second World War Was that it? It's just that it's it's a rebalance It's not suddenly that the US is is coming to the region and going to increase its presence in the region in all kinds of ways so but I think Certainly the the right policy But it could have been designed better and it certainly could have been implemented better What has been done by the way in Australia and how it's being? Unpacked in Australia. I think is going very well We're still we're good Okay, let's try this again. I didn't I was going to go to a show of hands, but it occurred to me There are too many diplomats and business representatives For people to actually do this in a non anonymous way. So now will we can click? Let's see what the audience thought People are rebalancing as we go. So I think the administration despite the occasional Criticism in about implementation and branding that rich and I and others have done and some in Australia have done I think the administration should be somewhat encouraged by this response because the number of people who thought it didn't matter or Didn't know about it Is is very very low And it's partly a question of design and implementation. So both of you commented on how it was unveiled Too much military Perhaps too ad hoc. I got in particular trouble with my wife because Yeah You have a different question up well Okay, you may now switch your vote We're gonna do this like a New Jersey election Slightly less favorable for the administration, but in but in terms of the importance of focusing on the Asia-Pacific Generally, I think the consensus in the room is it's it's important And by the way, I think although the American public may not know what the phrase rebalance means polls Over the last two or three years have shown that the American public now considers the Asia-Pacific region the most important region in the world to us interests Decades and decades of polling Showed that American slight Europe was the most important region So I don't think this is just a Washington story in a broad sense. It's a story about US views of their role in the world So we've talked a bit about the past. Let me ask you about the present the Pentagon is Putting the bulk of new assets in the Pacific over 60 percent or up to 60 percent of Navy surface combatants most of the fifth-generation Air Force fighters the Army is creating a four-star billet and Realigning its first core in the West Coast to the Pacific And we're negotiating on TPP. So where do you see the pivot right now? I'm not just about the past, but how do you see the prospects for the follow-through on what? Is perhaps now a more balanced and comprehensive view? Well, I look we're in a lot different place from two years ago when President Obama a year and a half go Announced this and that TPP is well on its way, and I think that's terrific We're not and we haven't caught up on foreign direct investment But I think our Secretary of Commerce is going to be doing this soon. We're in a lot better place and that's what we the Rotation of a Marine Brigade through Darwin a US Marine Brigade through Darwin is a good sign It's a good sign of our cooperation. It's not something that's going to keep PLA military planners up at night The numbers are not sufficient, but as a sign of our cooperation and our willingness to work together cheek by jowl It's a very good thing. So I think we're in a much better place now across the board Yeah, I think it's I think it's going well and the it's not just the presence of Marines in Darwin and Down the top in the north of Australia, of course amongst other things gives Access to the Indian Ocean and through Diego Garcia Leveraging to observation and monitoring of maritime routes across the Indian Ocean, which are extremely important But also the US engagement US Navy US Air Force in Indonesia the combat literal ships in Singapore and then in the context of the presence in Korea Guam Okinawa and the increase Diplomatic effort that's going on in the region. I must say that I said to the Europeans who Who understandably focused even more so on themselves these days than they have been in the past that that diplomacy in Asia is many things but the first of it is turning up and It's a bit like marriage. It's bloody hard but one of the essential prerequisites is to turn up and the presence of senior US officials constantly from the administration in the region Not just focusing on China and India, but East Asian countries Beyond Republic of Korea Japan into the ASEAN is extraordinarily important And I think the US has been doing extremely good job in that regard. So at the moment, it's going well and I think the other thing that's important is most of the ASEAN's and Certainly understand and appreciate the the fact that the United States has been following through on the political rhetoric in relation to the reader once Thank you I earlier started to say I got in trouble with my wife and left that hanging out there So I suppose I should explain the part of the problem I think with the pivot as rich mentioned was the branding it was First we're back in Asia then we're pivoting to Asia then we're rebalancing Asia The first one was particularly bad for me because I spent five years on the NSC staff Disappearing to go off to Asia and explain it to my long-suffering wife that I had an important Diplomatic or advanced trip to make and when the White House announced a few years ago that the US was back in Asia She turned and looked at me very suspiciously said where have you been going? So they've had some trouble on unveiling it. They've had some trouble branding it But as I said earlier, I think there's broad understanding in the American public how important Asia Pacific is the key is to muster the resources and the leadership To follow through which leads us to the second question. You can put it up will our alliance In the post-war era even after Vietnam operated on the premise that US primacy Underlay our cooperation together and as we think about the shifting Power relations both regionally and internationally. We wanted to ask the audience and our panelists And this is mostly for our Australian friends How important is continued US primacy to Australia's future security? So please use your clickers So either very important or some say moderately important and I'm 11% say slightly important That said Let me turn again to you Brandon to start off How important is it and how viable is it from an Australian perspective? Well, look, it's very important and I certainly share the view of the majority of the audience at least in seeing as being very important or moderately important It's We're in a world that we have not we're about to live in a world We've not lived in since the Franco-Prussian war in the Queen dynasty the world of 1500 is about to end and Within a decade or live in a world where the United States is Perhaps not the largest economy and on a number of other indicators will have China exceeding the United States That of course does not mean that the US will no longer have primacy That primacy is important to us because as our Prime Minister said in his introductory remarks we share the view of liberal democracies of political economic religious freedoms Coexistence of faith and reason free academic inquiry free press and all of the other things that define our respective societies But that also is something that is extraordinarily important and increasingly important to the nations and people in the Asia Pacific itself as they emerge from poverty in many cases their economies are growing and they increasingly seeing a lot of issues the way we collectively tend to see them and US primacy in terms of providing continued protection of Maritime passages in the Western Pacific providing support for confidence of countries in the region expressing their point of view and shaping a multilateral I Think for a for discussion in the region is extremely important to us I might also add that it's also important to China that Not necessarily US primacy, but it's also important to China that in terms of its significant challenges Most of which are domestic that the United States keeps the rest of the world in order and that's in our interest, too Well, of course, it's very important to Australia that the United States Maintain primacy, but we don't define primacy if we're talking in the military terms. We're going to be On top for a long time to come our military strength is so enormous But primacy in my view is defined in a lot of ways not the least of which is for instance education And it's it's very important. I think for Australia and all of us that six the top ten universities in the world Are in the United States ten of the top 20 in the world Our economy may be growing at a relatively anemic three three plus percent This year, but we don't have the same headwinds that China has If it's true as I said earlier that the center of gravity has shifted to the Indo-Pacific Australia's right in the middle of it We're in and in another way look at it right in the middle of a cockpit of neuralgia the east China sea the south China sea The backdrop of this is a rising China So I think for a whole host of reasons. It's enormously important that we maintain our primacy across the board We can use the word primacy by the way because we're not the government And we can explore a concept that is pretty essential to international stability and our alliance Let me flip the coin on your rich and ask how important Australia to continue to American primacy from a US perspective I've always had a view of Australia. It's a little different from the view Australians have of themselves first of all I've never been disappointed either I've always found that Australians punch above their weight This has been my experience as a young service man in Vietnam a place called Newie debt or Australians were Stationed it's been my experience working with Many governments for the year so it's very important. I think that Australia makes us have our best game Make sure that we have our game face on in Asia So I think it's extraordinarily important for us and I have found it that way historically in my career so the The biggest change in international relations within the Asia-Pacific region And I think many would argue globally of course and a topic we'll come back to today is China's growing power influence and the complications but also the benefits this brings to both of us and to the region And to the international community There's a thesis many of you are familiar with suppose. I should say a hypothesis in Australia that Australia has to make a choice Between the US and China or perhaps that the US has to make a choice The question we've put up for you is as follows Australia has substantial military ties in the United States and all also robust economic ties with China In 10 years, which of these ties will have strengthened? I'll read it in case you can't see it a both US security and Chinese economic ties be only US security ties see only Chinese economic ties D neither and he don't know and the question is which of these ties will have strengthened over the next 10 years so the majority is well over 80 percent say both One percent it's only a handful of people think that only US security ties will increase So it is a given everyone in the room expects Australia's economic ties with China risk increase I take from that and and then 16% say that only Chinese economic ties will increase so According to international relations theory, you're all wrong and this is not possible But according to reality Brendan Elton is is it possible to walk and chew gum at the same time as we say to have stronger ties with the US on security and other areas but also growing economic ties with China Yes, of course it is and Obviously agree with most of the audience again on this one Australia has Managed our alliance the United States that alliance is deep and broadened. It's growing It's expanded as I said earlier into areas will be on defense and security is reflected in this today in the agenda But we also have a stable And mature relationship with China We have a relationship with China and alliance the United States and there's a difference But we also Chinese People and the leadership are extraordinary pragmatic The key priority amongst them is obviously economic growth and Australia is extremely important to that It's a nonsense. It's a personal view But I think it's a nonsense this argument you get from sections of the Australian commentary that Australia is going to have to Make a choice between the United States and China. I don't believe that at all The Chinese Know where we're coming from in that regard again, I I used to say to the Europeans Exporting your foreign policy into Asia based on Western ideology and preoccupation with Human rights is Understandable to a point, but it will fail in Asia But the most important thing is to be very clear about your own values and clear about Where you stand and who your key relationships are with So I would think over the next decade Australia China is Australia's major trading partner now We don't know entirely what the future will hold, but it's it's Probably the case that that will remain so for the foreseeable period and it's not just in the mining resource sector I think we often forget about education, for example, which is a major export for Australia to China but I think our our ties Deepening in the security front with the US and will continue to do so at the same time that our relationship with China strengthens economically Could I follow up by asking you to shed some light on this for the Americans in the audience to whom this Section of the commentary it is a bit baffling What is it? I suppose putting back on your politicians that what is it in the Australian political body or media elite that makes this Not for the government, but makes us a sort of an attractive thesis. Is it is it just that it's so Unusual or is there something we're missing? Is there something we should worry about? Well, I'm in the situation where the worst thing that can happen to me now as I get sacked So that doesn't worry me too much. Although I do very much enjoyed my job as director of the Australian War Memorial but Look there are some people in Australia in any country and I suspect the United States is the same where It's obvious the world has changed as Paul Kennedy observed just over two years ago from Yale there In fact, we may well be moving into into a new age Not just a changing world as reflected by Malcolm Turnbull last night at our embassy, but a new age and something that we've with the Asia Pacific coming to the center and a whole range of changes that are happening in In terms of Europe and its preoccupation with itself The key instruments of the post-World War two world perhaps not being equipped for the world that is let alone the one that's coming The changes that have happened in global reserve currency and a whole range of other things But there are some people who think well, okay, China is growing economically and in other ways It's already surpassed the US and a number of key economic indicators and many more will happen over the next decade It's military expenditure to the extent we understand it will probably equate to that of the US about the end of the next decade and there are a group of people who say well the world has changed We now have to change our relationships and the priorities we place upon them and There's a there seem to be some elements of our commentary it who think in that case Well, if China is going to be more important perhaps even in the United States Then we Australia need to see that our destiny lies there that increasingly Australians obviously see themselves not only as a part of the Asia Pacific but Perhaps even as a part of Asia itself even though we have a Western political and philosophical heritage And so there are people perhaps who I think will they see the you know things are moving in that direction Therefore we ought to follow it But as I said earlier, but again, it's my own view I think we have to be very steadfast in understanding who we are where we come from our values and our beliefs the way we see our place in the world and be strongly committed to our traditional alliances in shaping our place in our own region and the relationship with the Largest country in it, which is China Thank you illuminating but not to the point you'll get fired. So I appreciate that In this town those arguments resonate Because we have over 1500 think tanks. So there's a lot of room for it to resonate But your answer helps really put it in perspective I would have voted a as well as the majority here did and I think if I were a citizen of a population sparse resource rich country like Australia I Would only have the confidence to have strong and growing economic ties with China if I had a good security relationship With the United States. I think that gives you the the sense of confidence to move forward economically without falling into trap an economic trap perhaps I'm outdated perhaps I'm Anti-diluvian my thinking here, but You know we We all want the same thing with China. I think we want a safe prosperous stable rising China but my view that is only possible in an area of vibrant economies and democracies So in a very real way it makes our ties across the board with Australia even more important than they would normally be So we should not and I would certainly agree with us anticipate a day when like Prime Minister Curtin in 1942 An Australian Prime Minister says we turn from Washington to Beijing for our security I certainly don't envisage that ever happening But certainly no, I don't envisage that's happening but but there is a there is a lemming like effect amongst some people when they see shifts of Current currents of power shifting in different ways And I think some of those people need to be reminded that economic strength in itself is not a determinant of regional or global influence of itself and as I said earlier to that China is actually and all the countries in our region are relying very heavily on US presence in terms of maritime security to ensure continued economic growth and Apart from anything also make the observation the Straits of Malacca and Hamoud sir Rely heavily dependent on the US support for continued security. So I think it's a it's a false argument It's not unhelpful in the sense that teases people to to think in terms of scenarios but Australia look on both sides of politics in Australia People know where we're coming from and then we certainly know who our friends are and I was when I was at NATO I'd often say to some of the flaky ones there. We're Australians. We say what we mean and we mean what we say we Conducted a survey here at CSIS of elites Bates, and I actually ran it at the time of elites in 10 Asian countries asking how they saw the future of Asian order unfolding and The result was quite striking because overwhelmingly The countries in Asia not just the US Australia Japan as you'd expect but Indonesia Indian so forth The response was that the future of Asian order should be built around no conflict in economic cooperation Which you'd expect but also rule of law good governance free and fair elections and protection of human rights China was the outlier But even among the Chinese elite half Agreed with that. So economic power is not the only determinant and Chinese economic power is rising but uncertain But there's a multiplier effect for some of the things that Australia and the US stand for Let's turn to energy, which will be a topic later today And ask about the impact of energy on US Australia relations Energy trade central to Australia's economy and foreign policy and increasingly this will be the case for the US with a shale gas Resolution so we wanted to ask the following Given Australia's important role as a provider of energy resources to Asian markets and the integral US investment in Australian energy extraction What is the future for US Australian? Energy dynamics a the US becomes an export competitor with Australia in Asia be There will be diminished US investment US investment in Australia's energy sector See there will be deepening US Australia joint energy investment to meet growing Asian demand or D Don't know so yeah a is not surprising 22% there are going to be markets Natural gas to Japan and Korea for example where we'll compete to some extent But the overwhelming answer is we're going to work together in joint energy investment to meet growing demands in Asia rich What do you think? I'm on the board of Conoco Phillips We have major investment in Queensland so I would voted C as well if I didn't that'd be off the board But it is it reflects. I think the direction that US industry is going more investment With Australia and it's a fact that the energy and as I understand it that the energy needs of China India others are going to continue to rise In the out years so there's going to be although there's our shale gas revolution in the United States He's going to open up. I hope more export markets for us It's quite clear to me that there's going to be enough market out there for everybody Yeah, the audience I think is reflecting the reality in the way it's going to go and That Australia in part will be a competitor of the United States On a friendly basis, of course The joint investment is probably the more significant way that it's going to go and and it reflects Again the importance in this in this context amongst others of Australia to the alliance and also Australia is being a credible and respected player in the Asia Pacific of and a very reliable supplier of energy to nations in our region of being a Joint partner with the United States makes you imminent good sense It points to one more area. We're not only the US and Australia are going to be more closely knit together In spite of the power shifts and economic shifts. We've talked about but also Logically the whole region should be knit together This is not 1940-41 where a country can grab energy resources through military force. It's a global market requiring global investment so forth Let's end the questions with a question about trade We talked at the beginning in the rebalance about the need to move towards a more comprehensive US Strategy in Asia including not only the military dimensions that featured so prominently a few years ago But also trade and the Trans-Pacific Partnership TPP is Certainly from US perspective and from the perspective of those of us who follow this closely at CSIS really one of the key Questions or variables in how successful the the rebalance and the future of Asia Asian security and stability are going to be in the years ahead. The question we want to ask is As follows American and Australian leaders have made the Trans-Pacific Partnership TPP a central element of both nations regional strategies When do you think TPP negotiations will be completed and when will the TPP be ratified if at all? It's a little complicated because we've got two different things, but let's let's go with oh here. We have Both options in the in the multiple choice. So a TPP will be completed and ratified talking about the US Congress here completed and ratified in 2014 be completed and ratified in 2015 C 2016 or later D. It won't happen parties will not reach an agreement or E parties will reach but not ratifying agreement I'm impressed with the 5% who think the US Congress can ratify this in 2014 And Welcome to Washington But but the sweet spot is ratified in 2015 Or in 2016 or later Of course 2016 is an election year So that Later may may be more likely for number C, but the audience Is generally optimistic although it's noteworthy the 24% And if you include the 5% next to it that you know a substantial minority think this this might not happen at all Let me turn first to rich and get your thoughts on the politics, but also the implications and the prospects You know, I want to start off by protesting we have a former US trade rep sitting right there One who can answer this question in his sleep much more stutely. I think that I can and perhaps even Dr. Nelson can Look I was an article in the paper today that said something like the US Congress can't even play small ball And that's a reference to Japanese style baseball. I have to agree the criticism of Bob Gates of at the present US Congress is is certainly Validated and it leads me to say that there to 2015 or later, I don't see them moving rapidly and trade promotion authority I think they're more intent on tying President Obama's hands than anything else And so I think it'll be 2015 2016 Mike you have pointed out in election year Might be too much of a hot hot issue at that time. So I'll go with 2015 I'm not a trade expert But I know enough about it that to know that it's pretty difficult to predict with any confidence what's going to happen I think it's likely to be concluded. I think that's pretty certain and will probably be ratified But I think it would be particularly ambitious to think that's going to happen this year or next year From our perspective, we certainly hope that it would but certainly the credibility of a number of the countries who are key Participants including the Australian United States will be seriously questioned if it's not ratified That's for sure Thank you. We have a panel at 130 on trade Wendy Cutler the one of the people in the hot seat for TPP will be here. So the moderator might want to Ask her how she'd vote Then being a good USTR official she'll find a way to evade that Let me ask each for a one or two minute Summation of how you think about the answers and the and the comments We see reflected in these polls and the way forward. Can I begin with you rich and we'll end with Dr. Nelson Yeah, I think I just saw Kim Beasley stick his head in and then out again that I'm gonna tell a Kim Beasley story. I was an assistant secretary sitting in my office in Pentagon and Kim was the Minister of Defense for the Hawke government and he called me up and he said mate. We've got a problem So what's that? And he said look here? You've got a $10,000 Item listed in your military construction meeting for a pine gap or one of the joint facilities and a fellow named Desbaugh and a and you is all over it and He's demanding answers from the government and just dragging us into conflict with the Soviet Union, etc And I had no idea what Ambassador Beasley was talking about because our military construction bill was about that thick literally thousands of pages and a $10,000 item doesn't rise to the level of any air breather in the United States knowing it's there so I Researched it and researched it and researched it finally found what it was and it was something like a kitchen renovation Or something that was very non-controversial and I informed Ambassador Beasley or then Defense Minister Beasley And he was able to answer the questions and this problem went away But I later said to Secretary Weinberg. This is very unusual. There's no issue And it's too small to rise to the highest level of the Australian government And I thought that was a pretty good laugh line and I've since become ashamed of it Because I've come to realize that it was be just because Ambassador Beasley and his colleagues cared so much about this relationship and cared so much about keeping it on the right track that even small issues will come to the highest level and they'll resolve it and I wanted to say that in front of Ambassador Beasley there is a way of apology For making a joke at his expense But it's because we've had folks that are willing to work that hard that assiduously to protect this relationship and to grow It that we've gotten to this point and I can only trust that we move forward those who come in after his mic On the US side and after Dr. Nelson on the Australian side will have the same dedication to this relationship Thank You Michael when I fronted the US customs officer at Fort Worth he you know, they're like they're very friendly people and He looked at my passport. He looked at me. He looked at my passport He said we should have an Australian War Memorial in America and by way of clarifying this he said My son came back from Afghanistan last year and I said he said to me those Aussies. They're amazing people and I said to my son. He says to me. He said those Australians Whenever America picks a fight, they're there. They're the first in and the last out. He said, don't you ever forget it? and I thought It's interesting that there's an American customs officer who At least sees Australia and its role in the Alliance Traditionally as I said it in its origins in a strategic defense and security context now expanded something more broadly But in terms of the answers and the future of the Alliance When I took the job of the War Memorial, some of my friends are a bit surprised In fact, one of them said to me you're wasting your life You've got far more important things to do for Australia than rearrange its history and I said to him Actually, it's got a lot more to do with our future Because this is who we are This shapes our values and our beliefs the way we relate to one another and see our place in the world and One of the things that I I think that we can both do which is about our history But also about our future is to see that we present perhaps a little bit more of the American story in our key Institution which I'm intending to do the Australian War Memorial and you should present more of ours in yours The first World War Museum in Kansas does extremely well I'm going on to the Board of Presidents from the World War for the World War two Museum in New Orleans But I think there is a very strong argument for presenting the Australian role in The American story through the 20th century and now this in your museums as much as there is in ours And I can tell you in concluding that every one of those VIPs Some of whom I know from a previous life who come for through our War Memorial when I take them into the Pacific and I present to them Coral Sea and Midway and Cicota and the Philippines and those various The God all can now in all of those places. It's when they walk out of that Memorial They know who we are what makes us tick and they understand why we have an alliance with the United States Very well done both of you. We're going to rearrange slightly the panel to move to the next section We don't have a coffee break yet So please bear with us, but first please join me in thanking our two panelists You