 I'm really keen to get your assessment of how the pivot or the rebalance is going this year, 2013. There's a lot of questions about whether it's on track, whether it's reactive or whether there is in fact a strategy. So I thought we might begin this low ECSIS conversation with your assessment of the rebalance. Are we seeing the rebalance getting back to a strategic focus or is the Obama administration essentially just keeping the thing afloat? What's your view? Well, I think you have to rewind a little bit back to 2009 and 10 when the Obama administration declared it was back in Asia and that we were pivoting to Asia. There was a bit more hype there than was necessary. We never left Asia. And as a natural matter of strategy and geopolitics, the American people have been focused on Asia anyway. Polls about three or four years ago started showing consistently that Americans said Asia was the most important region in the world to us. So there's a certain natural geostrategic inertia to American expanded engagement in Asia. You come to Washington, there are more Asia programs and Asia centers than any other region of the world. So in that sense, it has its own momentum regardless of what specific policies the Obama administration announces or not. In terms of strategy, my sense is that the administration did not really have a grand strategic design. It was largely derivative of the debate in the election about Iraq and the sense that we had underinvested in Asia, which was probably right to some extent. And so it was a shift of emphasis, but that in and of itself is not a strategy. Strategy means defining your objectives, what's the outcome you want, how do you use your means and ways, your tools of statecraft. I don't think the administration ever really put together that kind of broad design and never really came up with a consistent application. So you had for 2012 an emphasis on military, nothing on trade. Now you have an emphasis on TPP downplaying the military. So you know, they do need I think in one way or another to start spelling out what the strategy is. That critique aside, yeah, I was going to say real quick, that said, I do think that the Obama administration can point with some pride to some real shifts in emphasis that will be lasting. And in particular, the focus on ASEAN and Southeast Asia. Look, just to, I guess, butt in there, I think that one of the big questions we have in Australia has been how serious is the military dimension of the rebalance. And I agree with you that in some ways, well, I agree with what I think I'm hearing, which is maybe the military dimension was a bit oversold early on. The fact is the US has been hugely invested militarily in Asia for a long time. And really, there was just a need to emphasise what's already here rather than promise all kinds of new assets in a time of obviously serious budgetary crisis or budgetary trouble. But I wanted to go to the question about strategy versus reaction, if you like, because I guess what some of us have seen this year is a series of reactions, military reactions, to short-term spikes of trouble, whether it's North Korea, whether it's the air defence identification zone that China announced not long ago. Do you think there's scope for something beyond reaction in the military sense going forward? Well, there is and I think it's clear that since the January 2012 strategic guidance that led everyone to call this rebalance instead of pivot, that the Army, the Air Force, the Navy and the Marines are all focusing their best and shiniest new equipment and officers on the Pacific. And that's real. On the other hand, while the Pacific share of the pie is growing, the problem with conducting a strategy is they don't know how big the pie is going to be. They don't know whether the current defence budget trajectories, which are very sharply declining because of sequestration, will continue to decline over the next five years or will balance or maybe even come back up a bit. And it's very hard to conceive of and implement and explain a strategy when you don't know what the resources will be. We could have 10 or 11 carriers in 15 years or we could have seven or eight carriers. That's an enormous difference. So the Pentagon is focusing more on the region, but our budget debates really are undercutting the ability to decide how are we going to execute, explain a strategy. So is it about selling the message in a way to the region that even with some of these reductions, even with some of these adjustments, the United States can still bring really substantial deterrent power to bear when it's needed, that the balance is not actually shifting in the way that some commentators suggest it is. Is it about signaling as much as it's about substance? The reality is an effective American strategy in Asia has to rest on trade. The military component, which is mostly coercive and mostly Navy and Air Force, and then our diplomacy, our values, our alliances. And one problem with the pivot and the rebalance has been it's almost sort of like employee of the month. You know, for one month the Pentagon is the employee of the month, then it's USDR. They've had a bit of a trouble sustaining consistent attention across the board with all the instruments of American influence, diplomatic, military, and economic. There was no trade agenda, for example, in the first Obama administration. Now they're playing that up, which is good, and they're trying to de-emphasize the military. But the problem with that is when China does something like this aid, you find yourself reacting. So I think there needs to be a greater discipline not only in the message but in how the administration thinks about the tools we bring to bear. That is not easy at a time when the president has a lot of other crises on his plate. In the Middle East, for example, at home with his health care program coming apart. And then, as I said, with the defense budget future being so uncertain because of our really dysfunctional domestic politics right now. I personally think we will get our defense budget back on a reasonable trajectory, but no one can say that for sure and there is a lot of uncertainty. Yeah, well, I think the jury's out on that among a few allies. We're all watching very, very closely. But I guess I want to move the conversation a little bit to geography, if I may. From an Australian point of view, of course, we're looking much more clearly at our region now as being a wider Indo-Pacific region, not only East Asia and the South Pacific, where I think much of our focus was in recent years. And this ties in, of course, with the rebalance and with the role of the United States in Asia. Now, as you know, from our previous government's defense white paper issue, defense white paper issued in, I think, May of this year, there was a blunt redefinition of our region, the Indo-Pacific. And it's interesting that the new government, the Abbott government, after a little bit of two and fro on semantics because no government likes to acknowledge that the previous government had a good idea for too long, they've come round to that view. Julie Bishop, our foreign minister, is using that language very specifically. But what maybe is not so clear from an Australian point of view is how serious is the United States about seeing the region as one integrated strategic system, Pacific and Indian Ocean? And how does that fit into the rebalance? So maybe you've got a view on that, Mike. Well, I think the previous government and the current government are right to conceive of the maritime space in Asia as Indo-Pacific, not just because these waters are all connected, but because of the larger balance of power and balance of influence across this hemisphere as Chinese power rises and the dynamics start to shift. If you go to the Pacific command, they will absolutely endorse this concept because their area of responsibility includes the Indian Ocean. In Washington, it's not so clear. The Pentagon announced that they were interested in an Indo-Pacific concept, but it hasn't really gone anywhere. When I was in the White House, I was the senior Asia advisor to President Bush, and my area of responsibility included South Asia and East Asia. And the reason the Bush administration brought India, Pakistan and South Asia into the East Asia directorate, it's usually in the Middle East directorate. But the reason they did it was to conceive of this as a geostrategic space with the idea that India's rise and India's role would be important in the context of all the shifting power dynamics in East Asia, not to contain or balance China, but just to make sure that we had an understanding of the multi-polarity of power relations in that region that's shifting so much. There are now separate East Asia and South Asia directorates in our White House and in the State Department. And so I don't think the Indo-Pacific concept has gained real traction in Washington, but I think in Hawaii at the Pacific Command, it's their backyard and it's quite natural. It is an area where Australia should be a pivotal player, as you face both oceans. And as the U.S. looks at doing more with Australia, particularly in Western Australia, particularly with the Navy and to some extent Air Force and Marines, this ought to be an operating geostrategic concept for us. Yeah, I think it's an unfolding story. It's fascinating to hear from you that there was that degree of whether it was prescience or continuity going back to the Bush administration. And of course, the way we see the Indo-Pacific, it's not only about India, it is about India, but it's also about China because Chinese interests are expanding across the Indian Ocean. And that, of course, is another reason to try to engage China as a constructive player as well as to make sure that there's a stable balance in that wider region.