 Good evening ladies and gentlemen and welcome to Bly Street. I'm Michael Fully Love, the director of the Lowy Institute and I'm pleased to welcome you all to the fifth Owen Harries lecture to be delivered by Jake Sullivan. Before I introduce Jake I'd like to acknowledge Owen Harries. Owen is not able to be here with us this evening but he asked me to pass his compliments on to everybody, especially the Harries lecturer. And of course we in turn send out best wishes to Owen and his wife Dorothy. Owen is a dear friend to many of us at the Institute. He was an advisor to the Fraser government, he served as Australia's ambassador to UNESCO and in 1985 he, along with Irving Crystal, founded the National Interest, a journal that Jake and all of us know well. And when I was appointed director of the Institute I wanted to recognise Owen's remarkable contribution to our field and his decade-long association with the Institute as a non-resident fellow and my chairman Frank Lowy agreed that we should establish the Owen Harries lecture. The Harries lecture every year is given by a prominent commentator on global affairs. Previous Harries lecturers have included American diplomat Kurt Campbell, one of the authors of the Pivot to Asia, Steve Hadley who was National Security Advisor to George W. Bush, Ambassador Charme Saran, the former head of the Indian Foreign Ministry and the French diplomat Jean-Divide LeVit who was an advisor to three French presidents. And this year ladies and gentlemen we are lucky to have another truly outstanding Harries lecturer. Jake Sullivan holds degrees from Yale and Oxford where he studied as a Rhodes Scholar. After his studies he clerked at the US Supreme Court and worked in the Senate where he came to the attention of Hillary Clinton. Jake worked on Hillary's 2008 presidential campaign before joining her at the State Department as her officially, her Deputy Chief of Staff and Director of Policy Planning, unofficially I think his job titles were Brains Trust and Confidant. In 2012 Jake undertook commenced really the secret negotiations with Iranian representatives on what became the Iran nuclear deal. In President Obama's second term Jake served as National Security Advisor to Vice President Biden who addressed the Lowy Institute last year and more recently Jake has returned to Yale Law School to teach. I first met Jake at Oxford when we were on the same scholarship and took the same degree. He arrived with a formidable reputation having already been research assistant to Les Gelb who was then the President of the Council on Foreign Relations, effectively the shop steward of the American foreign policy establishment. Jake is 40 years old that means that if I count backwards he was a Principal Advisor to the Secretary of State at the age of 32. He initiated and really helped to run this extraordinary US diplomatic initiative on Iran at the age of 36. It's pretty remarkable. It's often said that you know you're getting old when policemen start looking young and I'm at the point now where major figures in global politics like Jake are starting to look young to me. Jake tries to soften the blow when his age is raised saying things like in the dog years of a campaign I'm about 80 but I'm not convinced. He really has had a remarkable career so far. Of course Tempus Fugit Jake this happens to all of us and I think the new President of France probably looks young even to you. Ladies and gentlemen Jake's biography doesn't quite capture the regard with which he is held in Washington on both sides of the aisle. He's known for his intellect, his policy touch and his capacity for hard work. He was always the last person on Hillary's plane working on the next speech, the next policy document and just as important as all those things he has a reputation as being a really good guy. Minnesota nice as they say. So we are fortunate indeed to be hearing tonight from one of the top young thinkers on American foreign policy. Jake is in Australia as the 2017 Telstra Distinguished International Fellow. I'd like to thank Telstra for sponsoring Jake's visit to Australia. For the past four years Telstra has supported this fellowship which allows us to bring a distinguished leader to Australia for a week or two and gives them the opportunity to contribute to the Australian debate and also to learn a bit about Australia. So we're very grateful to Telstra for that and with that let me ask Jake Sullivan to come to the lecture to deliver the 2017 own Harry's lecture. Jake. Thank you Michael and thanks everybody for coming tonight. I look forward to giving some remarks and then having an opportunity to have a conversation with all of you. I just want to start by really paying tribute to the Lowy Institute and to Frank Lowy's vision for this intellectual center that obviously sits here down under but really has influenced the world over and especially under Michael Fully Love's leadership has a profound impact in debates in Washington in New York at the United Nations in Europe and elsewhere everywhere I turn someone is talking about Michael Fully Love in the Lowy Institute and I keep trying to explain to them that I knew this guy at Oxford and he's really not that great you know so he shouldn't pay that close of attention. But no seriously and honestly the work that Michael and his team do here with the leadership and guidance of the Lowy family is something that everyone should be proud of and that I know I personally have benefited from and will continue to in the years ahead. And I have to say I'm humbled to be giving a lecture today that's named in honor of Owen Harry's. For those of us who grew up during the Cold War but learned and practiced international relations in the post Cold War era Owen Harry's is a giant. He did more than just contribute to the conversation on the appropriate role of the United States in the post Cold War world. He shaped that conversation. And while his views didn't always prevail even his critics have to concede the remarkable consistency subtlety and strength of his arguments. I'm not sure what Owen Harry's would make of Donald Trump. On the one hand Trump gives voice to some of the doubt that Harry's has about contemporary US foreign policy and and about the basic outlook of the foreign policy establishment. On the other hand Trump is well he's Trump which brings me to the subject of my lecture today. I'm here to talk about US foreign policy in the Asia Pacific in the age of Donald Trump. Now we have an expression in our country which goes other than that Mrs Lincoln how was the play. As many of you know one of our greatest presidents Abraham Lincoln was assassinated in a theater and while watching a play and the expression comes in handy when someone ignores an obvious catastrophe and focuses instead on more prezeic matters. Given Donald Trump's basic assault on decency on democratic institutions and on the rules based international order my talk could easily be retitled other than that Mrs Lincoln how was the play. But the world presses on this region presses on and so we have to press on and and we have to ask what does the direction of US foreign policy in the Asia Pacific portend for the future of this region and for the future of our country's relationship with it. We're approaching the five month mark of the Trump presidency for those of you keeping score there's more than 1250 days to go in the first term. So it's early days yet. Here's what we know so far. If pivot was the word that described President Obama's approach to the Asia Pacific so far the word that most aptly sums up the Trump approach is wobble. China was a currency manipulator. Then it wasn't. The Japanese were in the dog house alongside the Germans. Then they were the first in line at Mar-a-Lago. We were revisiting the one China policy with respect to Taiwan. Then we weren't. And then of course there's the US Australia alliance in his dealings with Donald Trump. Prime Minister Turnbull has certainly seen this wobble in action. There's an intensely unpredictable quality to US policy in the Asia Pacific. The band of outcomes is incredibly wide. We could see continuity in the status quo. We could see neglect and drift or we could see catastrophe. All of these are possibilities. So given all of this uncertainty how do we make sense of things? Where does this all end up? Anyone who can tell you for certain or comes to you and says I've got the answer. This is how it's going to be is not being straight with you. Even if you inhabited Donald Trump's head you wouldn't know where you were headed with respect to US policy towards the Asia Pacific in the years ahead. So what we have to do instead is look at the markers the key indicators that suggest which direction we're headed. And in my view the outcome of the American policy towards the Asia Pacific in the years ahead of us will be dictated by yet unknown answers to five key questions. And that's what I want to spend the rest of my time this evening talking about. I can only pose the questions and provide some thoughts. Time will answer these questions. The first concerns the most urgent security threat in the region today. North Korea. Is there any path forward that does not either lead to war or to living with the North Korea armed with nuclear weapons and intercontinental ballistic missiles. Put another way the question Washington is asking right now is can we find an alternative to either hitting North Korea or leaving them in a position to hit us. This is a vexing question if Hillary had won we would have been struggling with it as well. But let's look at how Trump is approaching this. Right now America's Asia policy is basically a North Korea policy. The North Korea issue for Trump blots out the sun. That's partly because Kim Jong Un has been keeping his attention with a steady stream of provocations. It's also partly because President Obama made a big impression on Trump during the transition when he brought him into the Oval Office and told him that North Korea was going to be the paramount security concern he faced right away. That had a major impact on Trump's thinking about the region and about how great a priority North Korea was going to have to be. Now as soon as Trump took over he and his team immediately started attacking Obama for failing to constrain North Korea. They declared quote the era of strategic patience is over. There's a certain deja vu quality to this. President Bush came into office saying the era of strategic patience is over. President Obama came into office saying the era of strategic patience is over. Essentially each president who comes in after the previous president sums up their doctrine with a sentence that goes something like I don't know what the bozos who came before us were doing but we're going to solve this thing. Then eight years later the next president does exactly the same thing declaring that your predecessors policy hasn't succeeded and you're going to find something that works. That's the easy part. The hard part is what exactly is the thing that works. The Trump administration has said all options are on the table including the use of force. That's a reasonable public position as a means of shaping Chinese behavior and North Korean expectations as well as reassuring our allies. But let's be honest. The military option is to use what I think is a technical term. It's a crappy option. Secretary Defense Mattis has publicly highlighted the extraordinary risks that come along with any military action against the North. First you have the problem of intelligence of knowing what it is you're even striking. And then there's the obvious and paramount issue of retaliation. Millions of civilians in Seoul live within dozens of miles of the DMZ. And just on the other side of the DMZ are long range North Korean artillery positioned to wreak havoc and destruction not just on South Korean civilians but also on thousands of American troops who are stationed in Seoul. So upon closer examination this doesn't seem like a particularly appealing option. So what are the other options. The best might be to get China to agree to work with us in South Korea over time towards a new leadership in South in North Korea less obsessed with weapons of mass destruction. But this is unlikely in the foreseeable future for a long litany of reasons. China's historical ties to its communist neighbor its concerns about the risks of regime collapse its mistrust of American motives and the uncertainty in its relationship with South Korea even under a new president. The next option would be for China to cut off or at least severely curtail its commerce with North Korea which accounts for 85 to 90 percent of the North's external trade. To do this and to coerce North Korea to restrain its behavior. Presumably this is what President Trump proposed to Xi Jinping after they had that delicious slice of chocolate cake at Mar-a-Lago. But China is unlikely to go that far as well right now for the same combination of reasons. That leaves us with the less satisfying option that the previous administrations have had to pursue which is some form of carrots and sticks diplomacy. But we can't just rerun the old playbook. There's a growing recognition that that's not going to work. Neither will a poorly prepared summit between Trump and Kim Jong-un a prospect that Trump has floated from time to time and some of you may have seen that Dennis Rodman is on his way back to North Korea right now maybe he's laying the groundwork for such a summit we'll have to see. If we're going to pursue carrots and sticks diplomacy with North Korea we've got to try something different. And I would submit to you that that means it's right to play the China card but not the way that it's been played before. It's not enough just to say to China please put pressure on North Korea to set up a negotiation between the United States and North Korea and then step back and let us figure it out. China has to be a part of that negotiation too. In the past China stood by while the United States has paid somewhere on the order of half a billion dollars to purchase restraint first in the Clinton administration and then in the Bush administration. In the next round of diplomacy China's got to be right in there at the table and it's China not just the United States who should be paying for North Korea to halt and roll back its nuclear and missile programs. The basic trade would be Chinese disbursements to Pyongyang as well as potentially security assurances in restraint in return for constraints on North Korea's program. This idea is no more of a silver bullet than any of the others that have been put forward. It doesn't answer the question of how you actually get verifiable enforceable durable constraints on the North. But North Korea is the land of lousy options and I would argue that this is probably the best of them. Will the Trump administration pursue this particular strategy or will they simply go down the line of trying to get the Chinese to increase the level of economic pressure on the North. Time will tell but it certainly seems as though Trump is interested in some kind of diplomatic negotiation and he knows that the way that they have been run in the past have not ultimately succeeded over time. So perhaps he may get interested in this potential approach. This brings me to the second question. How long will the Trump Xi honeymoon last? If it lasts what does that mean? If it doesn't what happens then? A colleague of mine who spends his life studying China was recently asked the following question. Which is it? Does Xi Jinping think he's got Donald Trump's number? That he has him right where he wants him? Or does he go to bed at night nervous about what Donald Trump might do? My colleague replied the answer to your question is yes. Yes he thinks he has Donald Trump's number. Yes he goes to bed at night worried about what Trump might do. You see she figured out two things early on and preparing to meet with Trump at their first summit in Mar-a-Lago. The first he learned from Vladimir Putin. That Trump responds very well to praise. You say nice things about him. He thinks nice things about you. The second is that North Korea was so central to Trump's thinking about Asia that she could essentially trade relative quiet on other issues for the promise of cooperation on the DPRK. So far this is played out in China's favor. Trump is effusive in his praise of Xi, respectful in his tone with respect to China, which is an astounding reversal from his campaign rhetoric. And Trump has thus far taken a less confrontational policy line than any of us might have expected when it comes to issues like trade or even the South China Sea. Now on this latter issue, Secretary Mattis and Secretary Tillerson, of course recently here on Australia, have made tougher soundings of late. And the Navy has conducted its first freedom of navigation operation under President Trump. But I have my doubts about the degree to which Trump has really invested in these other aspects of US Asia policy beyond getting some form of Chinese cooperation on North Korea. The thing is that Trump's transactional way of doing things, his focus on immediate tangible wins. In the end, it plays into the hands of a Chinese foreign policy that really looks at the long game. And the result is that as long as we continue on this current course, I would say in the dynamic between Xi and Trump advantage Xi. China will avert a trade war and the instability that would bring to its debt-laden economy. It will have a clearer path to achieving its regional objectives from the Belt Road to the South China Sea. But of course, things might not continue on the current path. The honeymoon might end. Trump could conclude that China is taking him for a ride in North Korea. He could push the envelope on restrictive trade measures that set off a cycle of escalation. China could overreach or misstep in the South or East China Seas. And then there are the fundamentals which I think it's important for us to spend a moment talking about, not just personalize this to the leaders. The bottom line is that the basic strategic dynamic between the United States and China remains fraught. Graham Allison just came out with a book called Thucydides Trap, where he refers to the Greek historian Thucydides' observation that it was the rise of Athens and the anxiety it caused Sparta that led to the Peloponnesian War. What Allison did was he looked at 16 cases where an established power had to deal with a rising power in history. 12 of those cases resulted in war. So without careful management there are a lot of structural forces pulling the United States and China towards confrontation. Now it was with this in mind that China developed a tagline for the relationship a few years back. They called it a new model of great power relations. The idea that this would allow the U.S. and China to avoid Thucydides' trap. President Obama bought into the tagline and he and President Xi went out and announced this quote, new model at a summit in Sunnylands, California in 2013. The problem was these same words, new model of great power relations, meant very different things to Obama and to Xi. For Obama, a new model meant that China rises into a U.S.-led order and plays by our rules. For Xi, a new model meant you stay on your side of the Pacific and we'll stay on ours. So the terms sort of fell out of use fairly quickly, at least on the American side. In any event the basic strategic dynamic that produced the idea of the new model remains. The inherent instability generated by a competition between a rising power and an established power. Now, Owen Harris was right when he warned about, warned against containment of China. That is a self-defeating policy, but so is acquiescence. We need to strike a middle course, one that encourages China's rise in a manner consistent with an open, fair, rules based regional order. This will require care and prudence and strategic foresight and maybe even more basically it will require sustained attention. It may not have escaped your notice that these are not an ample supply in Washington right now. Now amidst this discussion of US-China relationship, let's not forget that where China is headed at home remains a very real question mark. Analyst predictions for the Chinese economy range from doom and gloom to an inexorable upward rise. Most fall somewhere in the muddy middle where a range of risk factors lurk. How things play out inside China will have a significant impact on the long-term future of the US-China relationship. And then of course, especially being here in Australia, we cannot forget and have to underscore the importance of the role of the rest of the region in responding to China's rise. Will the region essentially accommodate or will they seek to draw the United States in to provide a durable counterweight? Different countries over time will supply different answers. How ASEAN looks at this will be different from how India or Japan or Korea or Australia look at it and even within ASEAN there are going to be different perspectives. I do expect though that over time our friends and partners in the region will worry about the possibility of a 19th century style sphere of influence in Asia in which China slowly nudges the United States out and consolidates its power and influence in a way that will ultimately force regional countries to supplicate. However this plays out it is a good reminder that America's China policy needs to be about more than just bilateral ties. It needs to be about our ties to the region that create an environment more conducive to a peaceful and positive sum Chinese rise. This leads us to a third question, which is will America's alliances in the Asia Pacific stay solid with Trump in charge? Our treaty alliances have been the basic foundation upon which our engagement in the Asia Pacific is built. Just think about the US Australia alliance. It's a model of mutual commitment. We fought and bled together. We've worked to maintain peace and stability in this region for decades. We've stepped up together in times of disaster. We've supported the emergence of new democracies. We've promoted dynamic economic growth. Will Trump come to see over time the need, the merit of these alliances? It runs counter to his basic instinct going back to the 1980s that our allies are essentially free riders who bring more burdens than benefits. Now I think this is an absolutely silly proposition but he keeps coming back to it. As recently as a few weeks ago, he was complaining about how South Korea wasn't ponying up for the missile defense system that is in the process of being installed there. Sort of implicitly threatening to alter our missile defense posture on the Korean Peninsula as a result. And despite his current state of goodwill with Prime Minister Abe, he has persistently raised questions about Japan. On the campaign trail where I spent my life over the past two years, I would hear him say just eye-popping things about Japan. At one point, he said, you know, we've been paying too much for the Japanese. If they want to go ahead and get nuclear weapons, that would be just fine. And if they want to use those nukes in a war in Northeast Asia, quote, go ahead, enjoy yourselves, folks. So he hasn't repeated that as president just yet, but it gives you a sense of where his instinct lies on these issues. And when we look across the Atlantic, Trump has said in the past that NATO was obsolete and is that position keeps peeking back out. It was there just last month lurking beneath his harang of NATO leaders in Brussels. Now what's interesting is that the idea that alliances are obsolete, this basic instinct of Trump's, sort of lines up with an argument that China has been pushing for years. One of their central cases to American diplomats is that we need to set aside our alliances because they're Cold War relics and obstacles to some kind of US-China condominium in the region. And meanwhile, even as we speak, China is working overtime to pry the Philippines and Thailand away from an American embrace. So the question is, will Trump be beguiled by this argument from Xi? Will he start making more demands and placing further strains on our alliances the way that he has done with our NATO alliance? Even if he doesn't go that far, will our allies come to believe that they can't trust Trump even as they try to adapt and play nice with him? And if that happens, will that fundamentally change how they see US policy in the region and how they hedge with China? It's difficult to answer these questions at this point, but the fact that they are questions for those of us who believe strongly in alliances, the foundation of American engagement in the world is cause for alarm. The erosion of our alliances, in my view, would strike a brutal blow against American leadership in Asia. Right now is the time we should be doubling down on our allies, making our alliances more dynamic to face the threats and challenges of the 21st century. And let me be clear, that's not about containing China. It's about reinforcing the very foundation of regional stability that has, among the other things, facilitated China's remarkable rise over the past several decades. Of course, our alliances and our other partnerships in the region are not just about security, they're also about economics. And this leads to the fourth question. With respect to American economic policy in Asia, is there life after TPP? I've been thinking about this question a lot, given the fact that Hillary herself came out against this deal. In the closing weeks of the presidential campaign, I actually pulled together a team of Asia hands and economic experts to think about what a comprehensive economic strategy for Asia would be, assuming the TPP failed. We talked about dispatching senior diplomats to all of the TPP member capitals to discuss how we could move forward in its absence, because we recognized how crucial this would be to sustaining a positive American role in Asia. Now, Trump killed TPP without any idea for what to do in its place. The fact is, he doesn't like multilateral deals of any kind. In fact, he pitched a bilateral trade deal with Germany. The Germans had to explain to him that actually they're part of the European Union and so that wouldn't be possible. But he just doesn't accept and maybe doesn't even quite grasp the logic that a multination deal can set new rules and standards that shape economic engagement, not just in Asia, but beyond, and that if the United States is not participating with our partners in setting those rules, they will be set elsewhere and probably to our disadvantage. Ultimately, Trump's metric is not how effective the rules of the road are at promoting fair and balanced growth across Asia or elsewhere. His metric is trade deficits. He has focused almost exclusively on reducing them. And for those of you who have some experience with international economics, of course, trade deficits are a little bit of a funny metric. But to understand Trump's approach to trade and to international economics, you've got to understand that what he wants to see by the end of his four years is the trade deficit with China and with Japan and with Mexico going down. And he is going to look for ways to do that to the exclusion of basically anything else significant in his economic policy in Asia. He really just doesn't have much of an economic agenda beyond that, not on trade, not on other economic efforts like the Belt Road Initiative or RCEP or the Asian Infrastructure Investment Bank. Now, all of this is a challenge for the United States in the period ahead because of the centrality of economics to the future of the Asia Pacific. But I don't think it's fatal. There will be life after Trump and I don't think that the window will close permanently on American economic leadership in the meantime. Taking the long view, I actually believe deeply in the fundamental strength and resilience of the American economy. We have assets to influence the future of the economic order globally and, yes, in Asia. If you think about it, American capital is still very much helping power regional growth. We're the largest investor in Australia, for example. We're the largest investor in many of the countries in this region. The American market is absolutely vital to the export economies of Asia. America's capacity to support technological innovation in the region is unparalleled. So our economic leadership is not fundamentally about capacity. It's about will. Now, I know that Australia and the rest of the region are not just going to wait for us. China certainly isn't. So our challenge now, from my perspective, is to use this period to do the hard and creative thinking about the best path ahead so that we're prepared to hit the ground running when we get a chance again. Of course, there are scenarios more dire than simply a period of US drift and neglect. We could end up with more extreme economic policies that lead to a race to the bottom. This is a non-trivial possibility, from my perspective, even if the odds seem lower than they did a few months ago when President Trump took office. Again, here, the range of potential outcomes is much broader than it would be with a conventional president. Now, Trump's unconventional approach is relevant to the fifth question. How will the president's conspicuous rejection of values as a guiding force in our foreign policy affect the advance or retreat of democracy and human rights in the Asia Pacific? The fact is, the trend lines were already pointing in the wrong direction. Duterte is pursuing an alarming agenda in the Philippines. Thailand isn't returning to democracy anytime soon. In Indonesia, the Christian governor of Jakarta has been tossed in jail. Intolerance in India is rising. The plight of the Rohingya continues to tug at the conscience. Without the United States as an active supporter of core liberal values, these trends are likely to accelerate. Trump would probably say, fine, as long as I have partners to work with, what's that got to do with the United States? But what he doesn't factor in is that the acceleration of authoritarian and illiberal tendencies will create more brittleness and fragility in domestic systems and more instability in the regional order. Owen Harris did not believe in exporting democracy, but neither did he believe that we should remove all moral principles from foreign policy. Now, I should emphasize that this question of the future of a values-based community in Asia does not turn on US policy alone. It turns on whether our allies are partners who share values of openness, democracy, and human rights. Countries like Australia, Japan, Korea, step up and lead in defense of these values. I hope we'll see more of that in the period ahead. Because our model right now is under pressure. Our competitors, our adversaries are waging a sustained ideological struggle to discredit our model, to undermine it, and to roll it back wherever they can. One recent report summed this up in saying authoritarianism has gone global. Through propaganda, through cyber operations, through the weaponized use of corruption, authoritarian states are attacking democratic institutions in countries around the world. And they're not slowing down. They're accelerating because they see that it's working in many places. Now, I know that Australia is trying to steer a course that sustains a strong security relationship with Washington and a strong economic relationship with Beijing. That's understandable. That makes sense. I would argue, however, that Australia has a deep and abiding interest in a values-based community in Asia and has the capacity to contribute greatly to it, even if the United States is less active on this mission over the next few years. Now, beyond these five questions, of course, there is the looming issue of what will happen to Trump's political fortunes back in the United States. Obviously, his domestic standing is going to have impact on his decision-making abroad. The key things to look at, what do the numbers look like in the run-up to the 2018 midterm elections? What kind of progress do the FBI and Congress make on their investigations into the Trump campaign's ties to Russia? Where does the investigation into possible obstruction of justice end up? Do prominent Republicans break with the president in any kind of decisive way on policy or on Russia or on anything else? These are the things to look out for to sort of see the extent to which this is actually putting a squeeze on his capacity to govern at home and what kind of impact that we'll have on foreign policy. If things break bad for Trump, you can expect at least two consequences for our policy towards the Asia-Pacific. First, he'll be distracted, so he'll be paying less attention. And since he's failed the staff, the State Department or the Defense Department at the level of Assistant Secretary and above, you know, the normal functioning of the US government is only going to be more anemic. And second, he will likely then be prone to more dramatic and potentially destabilizing moves as a means of compensating for or otherwise finding a balance to any travails he's having on the domestic front. And by the way, before I close, I would just say the impact of domestic politics on foreign policy in the United States goes beyond whether Trump is up or down. We are once again facing the possibility of a debt ceiling crisis or a government shutdown. And while I think neither is likely to happen, both of them are distinct possibilities. I was traveling in Asia with Secretary Clinton in 2011 when the US credit rating was downgraded during a previous debt ceiling debacle. So I know what kind of impact this can have. And the fact that we are right back here in this soup again in terms of our credibility and our leadership in the world, it's at stake once more. That's about Trump to a certain extent because he's president now, but that's a problematic feature of the US domestic political system right now that bears continued attention. You know, there's a lot of moments these days watching American politics and things happening on the world scene where I'm not sure whether the appropriate reaction is to laugh or to cry. But I do want to end on an optimistic note. America has a remarkable capacity for reinvention and self-correction. And there is still a strong foundation of support in both political parties for an active engaged dynamic role in the Asia Pacific. For as much as the American people are nervous about and skeptical of military intervention in the Middle East and investments in certain activities abroad, there is a residual sense that America's engagement, America's role in the Asia Pacific is something that is important to us and to our security. And I think at the same time there is still a strong demand signal in the region. We've been in tight spots before in the United States and we've come out the other side stronger and more dynamic and I think that we're going to do so again. And when we do, I know we can continue to count on a vibrant alliance with Australia working with confidence and common purpose towards a shared future. So I've shared with you my questions, my, the things that I'm looking at to determine what the course of American policy towards the Asia Pacific will be going forward. And now I'd be eager to answer yours. Thank you for taking the time to listen. Well, Jake, thank you. Thank you for a really worthy Harry's lecture. One that I think will last. One that revealed your trademark acuity. And thank you also for agreeing to take some questions from the audience. I'm going to take the Chairman's prerogative and ask you the first one. As I think you're aware at the Shangri-La dialogue a week ago, I asked Secretary Mattis a question about the global order. You've been talking to us about the Asian regional order but I asked him about the global order. And I quoted the title of Secretary of State Atchison's memoir Present at the Creation. And I asked why, given all the decisions over the past few months, the comments on NATO that you referred to, the decision on Paris, all the comments about alliances, why should we not fret that we are present at the destruction of that US-led world order? And General Mattis gave a very interesting response, and one that's been widely reported, and he responded by paraphrasing a quote which is often attributed to Churchill. And Mattis said, bear with us, once we've exhausted all possible alternatives, the Americans will do the right thing. So I'd like to ask you two questions, actually. First, what did you make of Mattis' response to that question? And secondly, how would you respond to the question? Is there perhaps something deeper at work here? You've spoken a lot about Mr. Trump's deficiencies but are there other factors, subterranean factors, to do with defects in the US political system? Do we see it a little bit in the caution that Obama brought to the presidency? Are there trends that will be accelerated, perhaps, by Donald Trump that could lead to the fraying of this order that has benefited all of us for so long? Well, just starting with your question about what I made of Mattis saying this, it's like one of those moments in a hostage video where he's trying to signal the world something by saying this and it was quite remarkable that he would kind of put this on the table and say, I know, I know, world, I know, I get it and we'll get there, don't worry. I'm not as confident as he is that we will. You know, I was on the campaign trail at some point last year and I made reference to the liberal international order and someone came up to me at the end of the talk and says, I don't know what the liberal international order is but I don't like any of those three words. So I do think it is important for us in answering this question to define what we're talking about and what we're talking about is a system of rules and institutions that are basically seeking to accomplish three things, to manage disputes between countries, to mobilize collective action to solve shared problems and to govern conduct in key areas, what you can do and what you can't do. And I'm less confident than General Mattis, Secretary Mattis that we will ultimately do the right thing under the Trump administration on these issues because all three of those require above all initiative. They require the active exertion of effort and influence by the United States to pull together countries to be able to achieve these things. Now there is no major problem in the world today that the United States can solve on its own, not even close but there's also no major problem in the world today that we can see readily how the United States' complete absence won't make it more difficult to solve. There would not have been a Paris climate agreement in the first instance without the United States putting a lot of effort into bringing the Chinese on board, the Indians on board, getting the Europeans to come along, et cetera. If you think about the other challenges that we are likely to face in the years ahead, that the international, the global order has to be able to deal with, they will look like that. And if the United States is basically laying back and saying, ah, that's not really our business, we've got a big problem on our hands and I think that that is, the fact that Trump hasn't staffed up this administration seems like a bureaucratic issue but at the end of the day it's something deeper than that. It is an attitudinal issue about whether the US should even really be doing a lot of this stuff. Now the other aspect to your question is, is this really about him or is it about the American people? I've wrestled with this a lot because I do believe that as a card-carrying member of the foreign policy establishment we have missed some things. We had a story about America's role in the world throughout the Cold War that was based on a defined enemy and a defined mission. Since the end of the Cold War, that tank has been running down towards empty and now we're basically out of gas and we need a new story to tell the American people in the world, what is it that this is all about and I don't think we've done that yet. But I believe that the American people want a story that they can buy into where they think the ends are the means are sufficient to achieve the ends where America's interests are being looked after as well as a larger common interest. I think they still believe that. The only thing the American people have basically said no to in my view is taking and holding territory in the Middle East. Everything else remains on the table and active engaged American leadership role remains on the table but it is incumbent on those of us who care about it and think about foreign policy on a daily basis to go back to first principles and actually explain once again a new why we do what we do. And I think we have something to learn from that as the foreign policy establishment. We got caught asleep at the switch over the last couple of years. Let me ask you another question. Let me ask you to take off your philosopher hat and put on your staffer hat and give us some advice about how you think other world leaders and allied leaders should behave towards Mr. Trump given all the quirks in his personality you described. You mentioned how Xi Jinping has taken the root of flattery. When we look at allied leaders we see one model which is Theresa May which is basically to act as though nothing has changed. Essentially it's the old playbook invite him for a state visit for example even though I gather he's not interested in that until the Brits welcome him. And then on the other hand you have the Macron-Merkel approach where they are actively putting daylight between themselves and President Trump. And in Macron's case I mean I would say actively trolling him in all sorts of ways. Taking off your Hillary hat if you had to advise say Prime Minister Turnbull or another leader how would you deal with this dilemma? Because all these countries have interest with the United States. We all depend on US leadership to solve these problems and yet there are elements of Mr. Trump that are politically toxic that are frankly personally objectionable. What would your advice to a leader like Mr. Turnbull be when he has these interactions with someone like Mr. Trump? Well I would say first of all I would probably behoove him to declare himself dictator of Australia if he wanted to effectively get on Trump's good side because I think Trump generally likes authoritarian figures much more than he likes democratic leaders and there's a reason for that. It's because he sees democratic leaders as kind of annoying. They're nudging him the way that liberals in the United States nudge him on things like climate change and issues that he finds just frustrating to deal with. He would much prefer a basic transactional conversation about economics and security. So if you take removing the glibness of that initial answer I would say recognizing that basic dynamic is important. Lecturing Trump on the importance of the Paris climate agreement and pushing him hard on the issue as the European leaders did at the G7 in Italy is not a successful strategy. Coming into it through the back door by talking about the economic opportunities in it for the United States is probably a better way to go. See what is interesting about Donald Trump is that he fundamentally rejects what has been a core American proposition of foreign policy which is that the US national interests can be advanced at the same time the national interests of other countries can be advanced, a positive sum mentality. Trump has a zero sum mentality. He thinks that if someone else is doing well then they're taking us for a ride. And so figuring out how to inhabit that basic frame not to give in to a zero sum conversation but rather to show Trump that something is going to come out of it for him has to be part of the equation. So the Saudis show up in the United States and they come with a presentation that is all about domestic investment in America that can be converted into jobs figures. Chinese come and talk about what they can do on North Korea. The Turks come and talk about what they can do on ISIS. So to the extent that Trump can come to recognize that his participation in some broader effort that doesn't immediately obviously benefit the United States is attached to things he knows he tangibly is going to get the happier he will be. And I wasn't joking by the way as frivolous as it sounds about the praise issue. When people say nice things to Donald Trump he thinks nice things about them. That is a proven fact over the course of many years. All right now let me give an opportunity for people to ask a question to Jake. Yes I saw that gentleman over there. Let me ask you to wait for the microphone. The usual conditions apply please limit yourself to one question not a comment and keep your question short and to the point sir. Yes John Connor in relation to North Korea have you ever heard advanced or has thought been given in the US to the prospect of a neutral Korean peninsula with the neutrality guaranteed by the US, Japan, China let's say and the effect that could have in terms of going forward. It obviously doesn't provide to immediately for security for the North Korean leadership but maybe a nice sinner in Switzerland would do it. But has that been thought about because I've indirectly and unreliably heard that that has at least been thought about in China. So it has been thought about, it has been talked about. I say all that in the diplomatic passive voice because it's a delicate conversation. Insofar as it's something that has to proceed obviously in close consultation with South Korea since you don't wanna be bargaining over the future the Korean peninsula without them. I think the fundamental stumbling block on that particular proposition, the idea basically being let's get, let's work towards a unified Korean peninsula in which American troops are removed, the peninsula ends up essentially neutral. There are two big stumbling blocks to getting to that particular outcome. One of them is telling the South Koreans you no longer get to choose your alliance relationships you're gonna have to go with this. So maybe in the end they choose that because they think it's the best outcome. The second I think is more profound which is that while the Chinese could entertain that concept in the abstract way out down the road in the future they have not yet been prepared to actively engage the conversation about the long-term future of the Korean peninsula in a circumstance in which you don't have this same North Korean regime in power because they worry about opening the door to some kind of North Korean regime change. They see the possibility of dramatic instability on the peninsula and so their willingness to actually have a concrete conversation about the disposition of the Korean peninsula in the event of regime change and reunification, their appetite for that is very low right now. So I don't know how you break through that. I don't know how we actually get a strategic conversation going along the lines that you describe but as I said in my remarks I think the best option would be one in which whether or not it's that precise outcome or a cousin of it, we head in that direction. That is the most sensible way for this whole thing to get resolved. It is a long-term play but what we have found over the past few years is that Chinese scholars, Chinese think tanks will float versions of this but actually having the Chinese government do serious discussion on it is something that kind of crosses a line that they have yet to be willing to cross. Herve Lemmer here from the Institute at the back. Thanks very much. I'm Herve Lemmer here at the Institute. My question to you is at the same time that the Shangri-La Dialogue took place and that Secretary Mattis was being questioned by Michael. The Chinese didn't actually send the delegation this year. They were in Brussels. There was an EU-China summit taking place on a very different conversation. One of the future of the economic order in Asia as opposed to the future of the security order in Asia. Now we know the Europeans have taken a different approach to Asia and in particular China even under the Obama administration. So for example, in decisions like joining the AWIB, being a bit more proactive on one Belt One Road, we know that the Chinese are very interested in the 500 million consumers that the European Union has to offer. And we know that since Trump came to power, there's been a further alignment between Europe and China, particularly on issues to do with climate change but global governance in general. What would your advice be on Europe and do you think there are merits in taking the approach and what's the risk? My advice to Europe on this. So number one, I think engaging the Chinese on economic issues, on climate issues, on this whole range of transnational issues is a no-brainer from the perspective of the Europeans. It absolutely makes sense. It would have made sense even if Hillary Clinton had been elected president. The Chinese still would have and should have shown up in Brussels to have these conversations. And as you say, the increasing economic engagement is something that's happening sort of irrespective of political dynamics in Washington. I also think the Belt Road initiative is an intriguing proposition if it's done right. What worries me to a certain extent is that any given decision seems small, but the collection of decisions over time can add up to a big consequence. If all the Belt Road initiative turns into or the European-Chinese economic relationship turns into is the advancement of a long-term kind of spheres of influence project or the Chinese ending up through a combination of influence and corruption dominating the economic space between China and Europe, I think that that redounds to everybody's detriment, frankly, ultimately, including China's. So I think that the Europeans do have to think very hard about taking a larger role in a project that the United States has been engaged in for some time, which is doing everything we can to both facilitate and encourage China's economic rise and to support it. Because a thriving China is good for Europe, it's good for the United States, it's good for Asia, but at the same time to be clear about the parameters of the system within which China is rising. And I worry that the Europeans have basically allowed the United States to do that bit of it without really doing it so much themselves. And as they take on a larger role in the relationship, it is important that they step up on those issues as well. Can I ask you, Jake, about the U.S. approach to Asia in the Obama administration, the pivot or the rebalance with which Secretary Clinton was heavily involved? President Obama announced that pivot to the Australian Parliament in 2011. But especially, I would say in his second term, the rebalance came in for a fair amount of skepticism and criticism in the region, in regional capitals where people said that there wasn't enough meat there, that the reality didn't match the expectation. Do you think it's, is it fair to say that when you look back on the pivot was it oversold at the time? And what is left for the next president, the first post-Trump president to pick up from the pivot and run with? Because my fear is that this idea which was intended, I think, to be a strategic doctrine for the ages at the moment looks like it hasn't survived a single presidential transition. Yeah. Look, it's under a lot of pressure because it requires sustained effort and attention. And with neglect and drift, it's, you know, we will end up essentially losing the heart of the rebalance if current policy continues. So I am very worried about it. You know, I'm biased, but I think, look, when you declare a term like pivot or rebalance, you're almost begging people to say it didn't live up to the hype. And I understand that. But I think that a fair and honest accounting of U.S. engagement in Asia during the Obama administration would have to acknowledge some pretty profound gains in the security domain. I mean, if you look at the distribution of the U.S. force presence, places that we have been shut out of that we are now engaged with security partnerships that were enhanced over time, alliances that were deepened and strengthened, it looks pretty good. If you look at the institutional aspects of the Asia Pacific, the U.S. joined the East Asia Summit. The U.S. in trilateral and quadrilateral mechanisms has strengthened cooperation, both between it and a number of its partners, but also among its partners, which is more dynamic now in part due to U.S. encouragement. I think the big place where obviously the United States, the gaping hole in this strategy, which is maybe the asterisk that swallows the whole thing is the economic side. Had TPP gone through, we'd be having a much different conversation. It didn't. Hillary Clinton came out against it. I myself have profound questions about the actual details of the agreement. But what we were intending to do was come up with a replacement for that that would be some kind of comprehensive economic strategy for the region. This president has not done that. That's why I posed it as one of the core questions here facing the future of U.S. engagement in Asia, because unless we can figure out an answer on the economic side of the equation, then the pivot of the rebalance is always going to be deeply incomplete. And right now, I don't see what that is going to be. But I don't think, again, that it's because somehow China is becoming so economically powerful and the United States doesn't have enough to offer. I don't actually buy that argument based on the assets that we have to bring to bear that people just already assume and take for granted. I do think that it is going to require a level of creativity and leadership that does not appear to be present right now. Let me take one last question here. If you could just wait for the microphone, Bruce. Thank you. It's in the context of Michael's first question of whether the US is losing leadership in the post-war world. But also because of American politics, the country is divided, more divided than ever before. And the Democrats are moving left. So my question is, what does democratic foreign policy look like in the next election? It's a great question. In fact, we were talking about this beforehand. I think that there will be trends within the democratic primary debate in 2020 that feel kind of Trumpian. We heard that occasionally on the campaign trail from Bernie Sanders, who himself sort of questioned NATO and the alliances and what's this all about. But one interesting thing about Donald Trump, maybe a silver lining in the cloud, is that by taking the positions that he is taking on some core aspects of American policy, on allies, on values in particular, on those two issues, it's actually had a galvanizing effect for Democrats. I would have worried more had you ended up with a Rubio, or a Kasich, or a Bush in the Oval Office right now about where the long-term trajectory of foreign policy for the Democratic Party was headed. Because I think it would have steered much more in the retrenchment direction. But because Trump has exposed some of the deficiencies and challenges with these positions, he's created a space even for people on the more progressive end of the spectrum who may end up running for president to take the position. You know what? The United States has to play a principled leadership role in the world based on alliances and based on values. And I think the area where you're likely to see continued reticence, continued withholding will be on this question of American military deployment. I think that is a place where it's almost an article of faith within the Democratic Party, the idea of the United States going abroad and engaging in the taking and holding of territory in other countries is going to be off the table for someone running in the Democratic primary. But I am hopeful, actually, that while some candidates will carry the standard of retrenchment and even isolationism, that there will be a strong current of reclaiming the mantle that actually is going to appeal to a lot of Democratic primary voters. That all may be wishful thinking, by the way, since I've sort of exposed my bias. I mean, the truth may lie somewhat further down. But I will tell you, I spent a lot of time on the Hill with Democrats right now. People who two or three years ago would have had, if they've got two voices on their shoulder, one the kind of base constituents who say, what are we doing with all this foreign policy stuff? And the other sort of their instinct of their idea of who America is as a country, this voice of who America is, what we represent, what we should and can be at our best, is speaking louder right now, thanks to Trump. And I think that will have an impact on where the party ends up on these issues. Jack, I'm going to ask you the last question. And I feel I need to ask you one question about the campaign. I've just read, for my sins preparing for this, I read that first campaign book Shattered. And I know you wear the scars of that campaign, but for those of you who haven't read it, Jack is about the only person who comes out of it well. But you have, as you said, you've spent, I mean, you said you spent two years on the campaign, but you've spent a lot longer in a way. What did you learn on the campaign trail in 2016? How has it changed your views on politics and has it made you more determined or, well, what's it done about to your determination, really, or your view of politics as a way of effecting change? So I think we've got to move to a couch for this portion of the conversation. So the first lesson I learned is, don't work on presidential campaigns. That would be, one, honestly, I still am in a place where I'm pretty dejected and disillusioned about what I saw the last two years. I mean, I think at the end of the day, I believe deeply in something I mentioned in my speech, which is our country's capacity for reinvention and self-correction. It was only eight years ago that we elected Barack Obama, the first black president of the United States. That was only eight years ago. So I haven't lost all confidence in American politics or in being personally involved in the political process. But you can't spend two years watching the horrors unfold as we did and not come away just feeling pretty bruised and battered. And I'm still in that place six months later. And I'd just say three things. First, I still lie awake at night thinking, oh, if only we had done that, or said that, maybe this would have come out differently. And when you lose by 70,000 votes across three states, any little decision was the difference between winning and losing. And there were thousands of little decisions over the course of the campaign that I was involved in. So to the extent I have been less than articulate tonight, it's because I have lost a lot of sleep over the last few months. The second thing is that I actually feel it's important for all of us who participated in this campaign to step up and take responsibility and say, we could have and should have done things differently. But I also think it's important to recognize some of the structural factors that were at play. And one that I don't believe that gets enough attention is the sexism that was deeply embedded in this campaign. I have not read the book Shattered. But I've been told that one of the core theses of the book is that Hillary Clinton could never answer the question, why are you running for president? Well, it's an interesting question. But it is a question, if you think about it, that really is only posed to a woman candidate. Nobody asked Barack Obama, why are you running for president? Nobody asked Donald Trump, why are you running for president? It's like, well, of course you're running for president. You're a big man. You're running for president. But they asked Hillary Clinton. I think that's just one of many examples of what she faced. And I think we all collectively need to figure out what does that mean for us and for our politics, not just at the presidential level, but at every level. And then the third thing that I would say is that the nature of the political conversation in our country today, as somebody who believes deeply that I don't have a monopoly on good ideas or perspectives that Democratic Party doesn't, that other people have points of view we have to acknowledge and accept, it's profoundly depressing how Balkanized the political conversation has become. People who live in the right wing media ecosystem have one vision of reality that is totally different from people who live in the left wing media ecosystem. And never the twain shall meet. And I honestly don't know what the solution to that is. But until we come up with the solution to that, we are going to be struggling with not just partisan polarization, but a fundamental divide in really the core question of who and what is America. And that makes me quite nervous. I am, at the end of the day, someone who believes that we will come out the other side OK. But that is a big, big problem that I can only admire without have any useful solution to. So those are some disconnected thoughts on how all of this played out. And I also think while American institutions and American political culture is resilient, I think we are seeing a degradation of it. And I make jokes and say glib things about Trump. But there are aspects of it that I find, frankly, deeply disturbing. And I think good people need to step up in a nonpartisan, nonideological way and make sure that we're defending the core instruments and institutions of our democracy and of our way of life. And that's something that matters deeply to me. And I may not be the best vessel or messenger for that as somebody who spent two years trying to stop him from getting into office. And he did anyway. But I have been really gratified to see a lot of my peers, people my age, throwing their hat in the ring for 2018, thinking about what they can do to fight back. And I think that that's really, really important. I would just ask for our good friends in Australia and friends around the world to see the United States for what it is, a big, complex, messy place that is bigger than any one person or even any one president. And that we have to all face some collective challenges, not just to US democracy, but to the question of what's going to happen with advanced economies the world over, with democratic institutions the world over. And like-minded people from democracies around the world need to come together to come up with the solutions to these challenges so that we can produce a better future for ourselves and for our children. So that was probably more than you wanted to hear from me. But there you go. Well, ladies and gentlemen, thank you for coming along this evening to listen to Jake Sullivan's Harry's lecture and to listen to him ask and to put questions to him. Jake finished on a note of sadness and in a way that's completely understandable. But if I can say, Jake, that the very impressive nature of your speech and the thoughtfulness and honesty with which you're addressing these issues on a stage like this is actually a cause for optimism for those of us who are great admirers of your country. And to me, you are really a remarkable example of the best kind of American public servant. So I think in your honesty, you've actually given us more cause for optimism than pessimism. It reminds me of a story that I've read that your former boss, Hillary Clinton, once recounted about telling her husband Bill Clinton that she'd just employed you. And she said something like, as she said the following, when Jake Sullivan first came to work for me, I told my husband about this incredibly bright rising star, a Rhodes Scholar Yale Law School. And my husband said, well, if he ever learns to play the saxophone, watch out. We know that President Trump's victory has had implications for your career in the short term. But like Hillary Clinton, we all, I think, have enormous confidence in you as someone who's going to continue to be a very influential voice in the American debate and indeed in the global debate. So let me thank you very sincerely for coming to Australia as the Telstra Fellow and for giving this evening, for giving really a great Owen Harrys lecture. Jake Sullivan, thank you. Thank you. Thank you. Thank you. Thank you.