 Good morning. I'm Ernie Bauer, the Senior Advisor and Director of the Southeast Asia Program at the Center for Strategic International Studies. We're very fortunate to have with us this morning the Ambassador of Australia to the United States, Kim Beasley. Thanks for joining us. Good to be with you, Annie. You, congratulations. You've got a new government down in Canberra. And I wanted to ask you, how did that government get formed? And could you talk a little bit about the personalities? You got a new Prime Minister, a new Foreign Minister. We'd love to hear how that process went, please. I detected a certain irony in your congratulations, Ernie, and I find that irony is totally appropriate because we are an uncharted territory in Australian politics. We've not had a minority government in these circumstances in Australia in its history. There have been minority governments before, but the numbers of independence on whose votes a government had to rely were much smaller in number than is the case here. So this is a minority government that has been formed, a government which will have to conduct itself with a great diplomatic skill over the course of the three years if the parliament is to run its full course. We're going to be negotiating with forces or with groups or individuals of very different ideological persuasions, some to the left of a government, some to the right of a government, some indeed in some circumstances to the right of the opposition. And then there's the opposition. I think you're going to see lots of new phenomena in Australian politics, aside from the negotiation with the independence. I think it probably will be over the government and negotiate with the opposition too. So there's going to be a level of consensus building in Australian politics that there's never been before. What's going to be the impact on Australia's foreign policy if you're dealing with, as you say, you're into new territory here? Well, I'd like to be able to say that the impact would be negligible. If you take a look at the majority, if you like, of the parliament, the overwhelming majority of the parliament is supportive of the American alliance, for example. Probably the overwhelming majority of the parliament is supportive of the policies that both parties have pursued towards engagement with or enmeshment with the Asian region around Australia. These are things which have become pretty heavily settled in principle in Australian politics, if not necessarily in detail. Having said that, there has been an indication by the government of a willingness to allow some of the minority parties or individuals, the Greens, for example, a willingness to put into the parliament foreign policy and defence matters for debate. That is not for resolution, but for debate. And in the House of Representatives, as opposed to the Senate, which is all for most of it, the time I've been actively interested in politics has been a Senate in which the government's in a minority. In the House of Representatives, foreign policy and defence policies have really been debated in Australia. Well, they will be debated now. And so that will be provided an opportunity, I guess, for more diverse views than have been heard in the House before to be heard. Such as Australia's engagement in Afghanistan, for instance. I think the government is very supportive of the government's engagement in Afghanistan. It's recently been effectively renegotiated with the Americans in the light of the withdrawal of the Dutch from the Ariskan province. That has involved a step up by the Australians in their engagement in Ariskan. And they've also indicated a pretty long-term commitment for the government in regard to that. I don't think that's going to change. That won't change. But the willingness to discuss it here, alternative points of view, that will occur. Historians and analysts could point to a period of time where you actually put the importance of the alliance with the United States on your shoulders and needed to sort of remind the body politic of Australia that how important that was. Is that a fair statement? And might we need that sort of leadership again? That was a long time ago. When I was doing that sort of thing, I was then defence minister. I had the distinction of being the last Cold War defence minister in Australia. I was there when the Berlin Wall came down as defence minister. And the last few years of the Cold War were pretty fraught. And the source of often angry debate inside the communities, particularly in the anti-nuclear movement. Because we host and still do joint facilities with some relevance to the American deterrent. The overall nuclear posture that certainly drew a degree of hostile attention in the public. It's up to the defence minister to defend it. I think alliances always have to be refreshed. I think they change the character as the political dynamic of global politics changes its character. And it is and has in the aftermath of the Cold War. Then you need to keep before the public all the time the value that the relationship has. One of the problems you've got with doing that with Australians is that an awful lot of what we do that makes the American alliance critical to Australia is done with reasonably high levels of classification. When I became ambassador, one of the things I discovered is that we're probably now vastly more intensively engaged with the American intelligence services and were important though our connections were at the time when I was defence minister. I also find too that the revolution in military affairs has produced a quantum leap in the value of the ability that we have to acquire American equipment and the mechanisms with which it operates. And so that is even more important to Australia now. While that can be discussed publicly it's not easy to discuss it understandably. So that's something that is going to be there on the plate of the defence minister and to a lesser extent the foreign minister now. But in a sense I don't think the dynamics of Australian politics have changed that much. It's really the broader external circumstances which have. An issue that I'm getting at is I think when the Obama administration came into power the Asia policy team probably could have taken for granted the relationship and the alliance with Japan that they thought that that was sort of a rock to build on and that they would be dealing with sort of an emergent China. Turns out that we are dealing with an emergent China. But the alliance with Japan was not an easy issue to sort of cope with. And is there any chance based on sort of the new political dynamic in Australia that the United States needs to up its game in helping to describe that value or underline that value to Australia? I think it's always important for the United States to pay its mind and to engage us and to take seriously the views that we express and to express to us in turn the serious views of the United States. It is always useful for the United States to brace its allies and say what it expects of them. And I have noticed that they're pretty good at it. I think it's true to say that Clinton administration has been more deeply engaged in South East Asia than any American administration in recent memory. You mean the Obama administration? Sorry, the Obama administration. The Clinton secretary has been more deeply engaged and the Obama administration more deeply engaged than anyone that I can reflect on or recollect in recent times which is a very gratifying thing. I think I actually find at the moment now that Australian political leadership will be quite pleased with the directions of the Obama administration and the engagement they've had with one exception. I want to see the President. So there will be a bit of a push on, I suspect, over the next months to try to get the President's proposed visit to reject. Yeah, well I guess in that sense there may be a little tension if the President visits Indonesia in November. Originally he planned to visit Indonesia and Australia together on several of the attempted past trips. Is that going to be a problem in Australia? That will require explanation, even when that occurs. And if that were to happen, naturally we'd love him to come on from Indonesia to Australia. But these things are always open to discussion and settlement. Above all, what we'd want would be a really good visit. Right. In terms of new issues, or not new issues, but issues that may have a different, a bit of a different angle between the Rudd government and the Gillard government, is climate change going to be any different now that the Green Party has exacted some promises from Julian Gillard? Yeah, I think the dynamics will change a little. I think I would be realistic about that. Already the Gillard government has said that they will enter into a discussion with the Greens about the committee is being set up, the committee is going to look at carbon pricing and other things. And that is, I think you're going to see not absolutely change from the previous government, but the climate change issues drifting back into centre stage again. They were at centre stage for a period of time under the Rudd government. Never really left centre stage. The effect of Copenhagen were to cause a bit of breathing. So the high priority will be sustained, but with a slightly different political dynamic. Could you talk a little bit about the new cabinet lineup? I think some of the key ministers, obviously the foreign minister is not a new face, and of course the previous foreign minister has moved over to defense. Could you talk about some of the key positions and how you think that team dynamic will work? Well, firstly you've got the new prime minister, Julian Gillard. She's a known quality in Washington. She's been here several times as deputy prime minister. She's a friend of the education secretary here. That goes with the previous portfolio. She is appreciative of the American alliance. She has some level of foreign policy expertise herself, and she will want to play a central role in the character of the relationship between the United States and Australia. So she'll be there. She's, of course, chairman of the National Security Committee of the Cabinet. Then there is the foreign minister, Kevin Rudd, who's a formidable presence in our region and in relationships with the Obama administration, and his visit recently, I think, redemonstrated that. Then you have the trade minister. In our system, the Department of Foreign Affairs and Trade are a combined department, Craig Emerson. He is an absolutely top-notch economist. He is a formidable intellect in himself, and there was a... I've just had him here also over the last couple of days on trade issues. And one has a little suspicion that trade issues might become quite prominent in the next year or so. As the new Congress emerges and things which have been held off the agenda suddenly come pretty firmly on the agenda, like the Trans-Pacific Partnership, like the Korean Free Trade Agreement, and hopefully, from our point of view, the DoFo around. So those two. Then on the defence side, Stephen Smith was the foreign minister, now the defence minister. Stephen Smith comes from Western Australia, as I did myself. Western Australians are natural defence ministers because we're natural botherers about the security of the country. Then the junior minister in the defence portfolio, Jason Clee, is one of the rising stars of the Labor Party. And the junior minister always has a special responsibility in the area of procurement, and so they really test themselves out in that. This is a potentially very powerful national security team. And you'd like to think, with the caveats that I've already put on it in terms of the debate on Afghanistan and that sort of thing, that by and large national security policy will be, as it has been historically, a little off to one side of the mainstream of the political process in Australia, where while it would be unreal to say that the two sides strive for absolute bipartisanship, they do strive for sufficient bipartisanship, and therefore there's not too many challenges to the capacity of the relevant national security ministers to do their job. So domestic politics and that survival instinct to keep a tenuous coalition together won't detract from what we've come to expect here in the United States as a very forward deployed, thoughtful Australian foreign policy. Can I make one thing absolutely clear? There is no coalition. There is a minority government. And that is a bit different actually. A slightly different dynamic. Australians want to be forward. It's a thing not well understood about modern Australia, but modern Australia probably is more deeply engaged than most other countries of an equivalent economy. Just to cite one statistic, I suppose, which would be helpful in seeing that. I guess the percentage of our GDP, which is made up of foreign trade, would be twice that of the United States. And we are now, where do we make our reputation? We're now the world's biggest coal exporter. The world's biggest uranium exporter. ConocoPhillips, who's gradually effectively Australianising its operations, believes that in the next 15 years will be the world's largest natural gas exporter. We have the third or fourth largest amount of funds under management in the globe, but we have only one and a half percent of the global economy. So we have to massively invest overseas. We can't invest all that in Australia. And the United States is our location of choice on investment. So for the first time last year, Australian direct investment in the United States surpassed in that year, new investment, American direct investment in Australia. And we heavily invest in the Australian states and the region around us. Australia is probably, I would say, the mind of the average Australian is far more internationally engaged than the mind of the average American. That's the point I was going to ask you. As party leader and leader of the opposition, you would know, in our country, I think it's a gap between policy and politics. But you're saying in Australia, the Australian's, the man in the street, he's wired to support this sort of forward deployed policy. Yeah, he is pretty much. Don't let me sell you a bill of goods here. We're talking here comparatively. If you ask the average Australian and the average American, what worried him or her? Well, it's the family. It's the neighborhood. It's the community. These are the things, the day-to-day struggle for human existence. These are the things which concern them. But there's no real difference. But Australians relate that to them? Australians relate those issues, maybe their job to the world market, whereas an American might not. Much more so. I see. So there'll be at least, but if you ask them, I'll tell you, you're talking out of the back of your hat. Oh no, we're not interested in that. We're interested in what's going on down the street. But the reality is they are. Let's go back to the national security team, including particularly maybe the prime minister and the foreign minister. These are two people that you know well. The three of you sort of led your party. Can they get along in managing foreign policy and who shows up where and all that good stuff? I actually think that it'll probably be a little easier for them. It was for President Obama and Secretary Clinton. And both of them have done magnificently. You know, there's no doubt about it at all. He's a deeply engaged president, including in foreign policy matters, and a deeply engaged secretary of state, and they're moving in tandem, not in collision. The Australian system is not the same. The Australian system does not pit alternative leaders of a party in bitter dispute right around the nation saying the most terrible things about each other during the course of a primary election campaign and then have to smooth it over if subsequently a rival is included in the administration that emerges. The challenges for President Obama and Secretary Clinton are infinitely greater. The challenges for Prime Minister Gillard and Foreign Minister Rudd, because they're in the Westminster system, where the people vote not for individuals, but for the party, and where the party then subsequently and is caucused determines who will lead. How is the Labor Party after these elections? You know the inner workings of it very well. Is it healthy? How does it pull itself back together? Well, I think there is an appreciation on both sides in politics, both the Labor Party and the Liberal Party. The Liberal Party you nearly won. Actually got the same number of seats as the Labor Party. But what is required over the next three years is extraordinary discipline. Discipline beyond the experience of any of them. And you're going to get a very disciplined opposition and that is going to in turn produce a very disciplined government. Good to hear it. Earlier this week, Foreign Minister Rudd visited Washington and he said the trade minister was here also, as well as a team for defense-related discussions with the Americans. Can you tell us a little bit about those visits and what's on the agenda? Yes, well, there's a very good visit by Foreign Minister Rudd. Very good discussions with Secretary Clinton and with assorted other American officials both in the White House and in the intelligence services. It was an opportunity for the Foreign Minister I think to sort of roll out again that he is back in town. So all the things you'd expect to have been discussed, you know, from the regional affairs to some of the sort of issues that the President is specifically concerned himself with, like the G20 nuclear proliferation, these sorts of things. All of them were rolled out again for discussion as the Foreign Minister was there to assure Americans that the things that are important to them were basically still in place. He was graced, the President graced the visit by turning up when he was seeing the National Security Advisor, General Jones, which was lovely. It was good that that occurred. So I'd say things from there looked in pretty good shape. The officials' discussions were a feature of a regular commitment that we have to for what they call poll mill talks. These tend to canvass the array of strategic concerns that the two sides have a chance to exchange views. The discussions in the Australian and American case always operate at a high level of sophistication. And with considerable intimacy and considerable knowledge in advance of what each other is likely to say because we inform ourselves well about each other at that level. They were not as significant a set of talks as what will occur and was announced during the Foreign Minister's visit. And that is the so-called Osmin talks on the 8th of November. That's 2 plus 2, Secretary Gates, Secretary Clinton, Foreign Minister Run and Defense Minister Smith. They're going to be pretty important. They tend to reflect the essential military character of the alliance. The alliance is in the first instance. Not an alliance simply of people who are hailed fellow, think alike or look alike or whatever. And have like-minded attitudes. It's basically a hard-nosed military alliance. So you tend to find that the hard-nosed military issues are there on the table, which gives the defense area a slightly higher prominence in diplomacy than it usually gets. So last question. If you could sort of sum up, what's different now between the Rudd government and now the Gouard government? What's changed and where are we headed? What's different is uncharted political waters. That's what's different. In policy terms, there is no difference. At least none that I've been able to discern at this stage. In debate terms, there is a bit of difference. There will be more issues debated in the House of Representatives. Where this leads is how long this parliament will last. Well, these are things that I can't draw your attention to historical precedents to give you advice. The only thing that one can do is to advise by inference and common sense. The government will, as will their opponents and the Liberal Party side, be incredibly disciplined. Because if they're not incredibly disciplined, they'll be incredibly dead. And let's say there's no margins. There's no margins for indulgence and no margins really for error. And so in those circumstances, you might actually get quite a good government. Well, thank you, Ambassador. I appreciate you joining us today and we hope to have you back regularly. Thank you for joining us.