MINISTER BISHOP:              Good afternoon. On behalf of the Minister for Defence, Senator Marise Payne, I would like to say how delighted we have been to host US Secretary of State, Rex Tillerson, and US Secretary of Defense, Jim Mattis, for our annual AUSMIN meeting - the Australia-US Ministerial Consultations - held here in Sydney. This is a very important opportunity for Australia and the United States to share perspectives and insights and discuss strategies and ideas and ways in which we can continue to cooperate and work together to promote peace and stability and security in our region and globally. We are the strongest of friends and allies, we have a shared military history going back 100 years, and today we work as closely as two nations can operate in terms of promoting peace and stability and security.

We meet just days after the shocking terrorist attacks in London, and we stand resolute in our determination to fight terrorism and to fight the poisonous ideology that gives rise to these brutal attacks, so often on innocent civilians. We discussed the issue of counter-terrorism activities, given that we are seeing strains of Islamic terrorism in our region; the ongoing conflict in the southern Philippines, in Mindanao, is a matter of deep concern. We also discussed our region - South-East Asia - our relationship with countries in our region.

We discussed challenges on the Korean Peninsula - in particular, the destructive behaviour of North Korea in its nuclear missile weapons testing, and what we can do together and with other nations to curb its behaviour and the risk that it poses not only regionally, but globally. We discussed regional cooperation in areas of maritime disputes - notably, the South China Sea - and we urge all nations to resolve their disputes peacefully and in accordance with the international rules-based order. We had a very productive discussion on the Pacific and how we can work more closely together in the Pacific - our neighbourhood, our part of the world.

In discussing operations and policies and strategies further afield, we focused on our joint efforts in Afghanistan, in Iraq and Syria, where we are determined to restore peace and stability to the Middle East and rid the world of the terrorist scourge that has presented and is evolving. We took the opportunity to discuss a whole range of issues where the United States and Australia have a similar view. In fact, we are like-minded in our worldview, we share values, interests, priorities and outlooks, and this AUSMIN has reaffirmed, once more, the strength of the bilateral relationship between Australia and the United States.

Secretary Tillerson and I also had the opportunity to discuss bilateral issues on trade, on investment, and other areas where Australia-US interests coincide. So all in all, it was a very productive, useful, important discussion between counterparts, between friends, and we look forward to returning to the United States in 2018 for the next AUSMIN meeting. In the meantime, we will continue to work with our counterparts. Rex and Jim have become good friends. We've met on a number of occasions now, and Marise and I are looking forward to deepening and strengthening this already extraordinary partnership.

I'll ask Secretary Tillerson to say a few words.

SECRETARY TILLERSON:      Thank you, Julie, and good afternoon everyone. Let me begin, of course, by thanking Foreign Minister Bishop, Defence Minister Payne, for their hospitality for hosting this session of AUSMIN. Ms Bishop was one of my first counterparts that I met with when she travelled to Washington, and that began a very, very productive dialogue that has continued certainly up through today. Secretary Mattis and I obviously look forward to having dinner this evening with Prime Minister Turnbull, and we know we're going to have a very fruitful exchange in that session as well.

We had very productive meetings today, as Foreign Minister Bishop described to you. We covered a broad range of topics that are important to both of us. Obviously clear that our longstanding friendship with Australia will continue to remain strong. Our shared values of freedom, democracy, a rules-based order, are long bonds that have been formed in the sacrifices that we have made together over the past century through two World Wars, and continuing to stand shoulder to shoulder in upholding these values of freedom, democracy, a rules-based order - evident today in our joint efforts in this fight against terrorism.

Today, we also speak with one voice in calling for North Korea to abandon its illegal nuclear weapons program. China and other regional partners should also step up their efforts to help solve this security situation which threatens not just that region, but really presents a threat to the entire world. The US and Australia also reaffirmed our commitment to freedom of navigation and overflight and other lawful uses of the seas, particularly in the South China Sea and elsewhere, to ensure unimpeded flow of lawful commerce in a rules-based order. We oppose China's artificial island construction and their militarisation that features in international waters.

China is a significant economic and trading power and we desire a productive relationship, but we cannot allow China to use its economic power to buy its way out of other problems, whether it's militarizing islands in the South China Sea or failing to put appropriate pressure on North Korea. They must recognise that with a role as a growing economic and trading power comes security responsibilities as well. Australia and the US will work together to support democracy, the rule of law, and respect for human rights, and that includes defending the rules-based order in which the Asia-Pacific region depends upon.

We are certainly grateful for Australia's commitment to defeating ISIS in Iraq and Syria, wherever else they may show their face - and certainly their face is appearing in the region. Countering violent extremism, stemming the flow of foreign terrorist fighters, and shutting down propaganda arms online remains a shared goal for both the United States and Australia. We reaffirm the strong stated bilateral defence security and intelligence cooperation under our alliance, as well as the strength of our bilateral security relationships with Japan and our commitment to enhancing that trilateral cooperation. I'll leave it to Secretary Mattis to tell you more about these discussions.

We also share with Australia a keen interest in ensuring our economic policies advance prosperity at home, as well as abroad. Australian companies employ almost 100,000 Americans, and American companies in Australia employ about 335,000 Australians. Good trade policies mean good jobs for both of our peoples.

On behalf of the United States, I'm grateful to the Government and the people of Australia for hosting our delegation and for a spirit of cooperation that's benefited both of our nations, and has for decades and will continue in the future. And as Foreign Minister Bishop said, we look forward to continuing the dialogues among our staffs while we make our way to next year's AUSMIN in Washington DC. So again, thank you, and I'll turn it to Secretary Payne.

MINISTER PAYNE:   Thank you very much, Rex, Julie, Jim. Ladies and gentlemen, can I begin by thanking Their Excellencies, the Governor and Mrs Hurley, for their hospitality in enabling us to have this AUSMIN meeting here in beautiful Government House in Sydney.

I'd like to also join Minister Bishop in thanking both Jim and Rex for an excellent day of discussions here for AUSMIN 2017. Jim and I, in fact, have been "hanging out all weekend" at Shangri-La in Singapore, where we met with our key regional counterparts - an excellent preparation, if I might say, for some of the discussions we had here today about our engagement in the Indo-Pacific.

What today's meeting has again underscored is the strength and the breadth of our unique relationship. As my colleagues have indicated, we covered a very wide range of topics, including North Korea, the Middle East, and other matters of global strategic importance, through to the very practical aspects of how Australia and the United States - as defence partners, particularly - can work together to achieve our common goals, both globally and in the region.

In particular, we have reaffirmed our joint commitment to the Force Posture Initiatives in Northern Australia as a tangible contribution to the stability, the security and the prosperity of the Indo-Pacific region. We look forward to continuing to work together on the development of those Force Posture Initiatives and, indeed, to engaging with a number of our regional neighbours in that context.

As I said, both at the Shangri-La dialogue, which Secretary Mattis and I attended on the weekend, and also here today, countering the threat of violent extremism is very much at the front of our minds. The attacks that have occurred in recent days and weeks around the world are further reminders - as if that were needed - of the new reality in which we live. And during today's AUSMIN meeting, we strengthened our resolve to defeat those who wish us harm.

We are both committed to defeating Daesh in Iraq and in Syria, and to preventing its spread around the world, including in the Indo-Pacific region. For us, that means addressing the prospects of returning foreign fighters if that happens, and also in the Australian context, our whole-of-government actions to deal with broader counter-terrorism issues.

As Secretary Tillerson has said, we reaffirmed our condemnation of North Korea's ongoing provocations, which pose a great threat to both global and regional security. We are committed to working very closely together and with our regional partners to impose greater costs on the regime for that destabilising behaviour.

This AUSMIN meeting has been a great opportunity to build upon our already close working relationship with the new US administration. We have met in other international locations, in the United States, and I really want to thank both Secretary Mattis and Secretary Tillerson for travelling to Sydney to join us here today. And we look forward to continuing productive discussions.

MINISTER BISHOP:              Secretary Mattis.

SECRETARY MATTIS:            Well thank you, ladies and gentlemen. As you've already heard, we stand here before you representing the strongest possible military alliance. This is one that has stood together through thick and thin and through generations. And I would just say that Australia has also proven to be a friend that tells us what we need to hear, not necessarily what we want to hear.

And it was heartening today to find that we again share an appreciation of the security situation, both regionally and worldwide. The danger that we have faced over many, many years has built a sense of respect between our forces. I would remind you that, after 9/11, when thousands of innocent people were murdered in America - including Australians - it was the Australians that were first to join us in the desert of Afghanistan in those uncertain days after 9/11. And we remain grateful for Australia's alliance with us.

Today, we still stand together in that fight, and certainly our sympathies, our respects, are with the people of London, of Marawi, Philippines; of Kabul, Afghanistan; of Cairo, Egypt; the list goes on - Jakarta - and we stand together. We do not allow ourselves to be intimidated at all. Australia, as always, punching above its weight in defence of our values and freedom, and these are values and freedoms that we intend to pass on to the next generation intact. And we are committed, again today, to assessing how we are going to work together to do so.

I would add that your 2016 Defence White Paper - we have reviewed it in Washington, and it's a model for other nations coming to grips with today's security challenges. And I am confident that it's a blueprint for keeping the Australian forces at the top of their game. We believe that our Australian-American partnership is a foundation for stability and peace not only in this region, but more broadly. And we are going to ensure, between our forces, that our diplomats' voices are always backed up by skillful, by ethical and by fierce force of arms. But thank you very much, we look forward to your questions.

JOURNALIST:                         Thanks everyone, David Wroe from The Age and Sydney Morning Herald newspapers. Secretary Mattis, you have flagged a different strategy - a different tactic, I should say, in the fight against ISIS – annihilation – and to prevent the escape and return of foreign fighters. I just wonder if you could talk through for us what the practical viewpoint of that tactic is. Are you talking about going into these areas and systematically killing people who may pose a future threat? What happens if that involves a greater risk to civilian casualties, of some other unforeseen outcome which would complicate military tactics? We've always been told that you can't bomb an ideology into submission and you can be certain that on the individuals [indistinct] strengthen the ideology. And just for the Australian side, could you tell us, please either Minister Bishop or Payne, what Australia's view of this new tactic is, what does it mean for our involvement, our military involvement in the Middle East? Does it mean we change our rules of engagement from [indistinct]?

SECRETARY MATTIS:            Well he - President Trump when he came into office, wanted an accelerated campaign against the enemy. This is an enemy against all civilisation. It's a reason where there are 66 nations that have joined the campaign besides the Arab League, the European Union, Interpol and NATO. And in this campaign, where before we were shoving them from one town to another and they're falling back, we now take the time to invest the town and make certain that foreign fighters cannot escape to return to Paris, France, to Australia, to wherever they came from, and bring their message of hatred and their skills back to those places and attack innocent people.

But I would also add that, in the midst of all this, we have changed not one bit of our rules of engagement. We have relented not one bit in terms of trying to do everything humanly possible to protect the innocent on the battlefield, because the battlefield - the way the enemy has chosen to fight - is also a humanitarian field, from our point of view. It is the ISIS that forces innocent people to stay where they choose to fortify. So our intent is to do everything possible to keep them alive, to protect them, but at the same time, we're going to have to take that caliphate down, or the attacks that you've seen going on around the world that you all have reported on will continue. This is not the end state. The end state is where we work together for a reconciliation for what the diplomats will have to do, but clearly the enemy has got to be taken out by military means where they are powerful enough to cause these attacks on others. And we can't sit idly by and let them hold it. I think that answers your question.

MINISTER BISHOP:              The Australian Government has made it clear that any Australian citizen that supports - in any way - terrorist organisations such as ISIS or al-Qaeda or any of their franchises is breaking Australian law and, if they seek to travel to conflict zones in the Middle East, in Iraq and Syria, then not only are they breaking Australian law, they are putting their own lives at risk, as well as adding to the misery and suffering of the people of Iraq and Syria. We have coalition forces supporting, advising, assisting Iraqi security forces and others -- and they are essentially fighting against the coalition, if they continue to support terrorism. Should they survive and seek to return to Australia, they will be monitored, they will be tracked, and they will be subjected to the Australian laws should they return to Australia. I'll ask Senator Payne to add to that.

MINISTER PAYNE:    Thank you very much and David, thank you very much for the question. We absolutely support the approach that the international coalition led by the United States is taking. Our absolute preference is, as far as possible, to ensure that those who have left their countries to fight in the name of Daesh or ISIS in the Middle East, are not able to return to those countries and perpetrate any of their atrocities in those areas. So as far as possible, if we can ensure that, that is our preference. However, we have to be prepared to deal with the eventuality that if - returning foreign fighters, if that arises we would be negligent if we did not turn our attention to that. As the Foreign Minister has said, under Australian law, and under preparations that we have made during recent months - in fact, the last year - we will use all the force of Australian law to deal with those people.

Importantly, however, one of the things that we have also discussed today is the challenge that faces other countries in our region. For Indonesia, Malaysia, Singapore, for the Philippines, and so on. In the context of that discussion, we have indicated to our counterparts, both individually and over the weekend at Shangri-La, that we will support them in their efforts to address the prospect of returning fighters as well. They are - we have the world's most populous Muslim nation to our north. President Widodo and his cabinet exemplify a sensible, moderate approach to - in Islamic terms - in our neighbourhood. Similarly, Malaysians - the Muslim communities in the neighbourhood. We need to be able to engage with them in a constructive way, and make sure that, where possible, we assist and provide tools to enable them to challenge this threat too.

JOURNALIST:                         To Secretary Tillerson, the Australians have spent years of diplomatic effort negotiating pacts with them to address their deep concerns over trade and climate, but the Trump administration tossed those pacts aside. Now, after rejecting of priorities [indistinct], you're here asking Australians to make specific and concrete sacrifices for your priorities in Iraq, Syria, Afghanistan and North Korea. What specific promises have you brought on trade and climate to ensure that Australians do not interpret America First to mean America the selfish, America the boorish, or America the go-it-alone?

And for the Australians, Mr Trump yelled at Prime Minister Turnbull in their first conversation. He pushed aside the Montenegrin Prime Minister at the NATO meeting. He launched a Twitter attack on Germany, one of the US's closest allies. He just insulted the Mayor of London after a terror attack on that city. Do these tactics give you pause in your efforts to improve relations with the US, or have the President's words and behaviour not mattered in international relations?

SECRETARY TILLERSON:      Are you sure you don't have more? Okay. The fact that the Trump administration has examined agreements that were entered into by the prior administration, but never taken to the American people or taken to our own Congress to get an assessment of their view of those agreements, does not define the trading relationships between the United States and Australia, nor other relationships on issues that are of mutual importance - climate change, certainly national security issues as you have heard expressed today.

We have very strong trading relationships with Australia today. I think if you look at the total of foreign direct investment by the United States in Australia as well as our actual trade, we are the largest trading partner by those two measures with Australia. My expectation is that's not going to change and we look forward to continue strengthening those relationships on trade with Australia - already a very important trading partner.

I think the President's decision to exit the climate accord, again, was his judgement that that agreement did not serve the American people well. It did not serve their future economic interest either. But I think the President indicating his desire to re-examine, enter into discussions with others - perhaps a new construct of an agreement - indicates his recognition that the issue is still important and that he wants to stay engaged on the issue. He's not walking away from it, he's simply walking away from what he felt was an agreement that did not serve the American people well.

So again, I think in our relationship with Australia, we will continue to have shared interest in addressing these daunting challenges that face us all. And so that, I think, is how we see the relationship going forward, and there are so many other areas of such strong mutual interest and cooperation that there's no doubt that we will continue to address the two issues that you raise in a very cooperative way.

MINISTER BISHOP:              I should point out that Australia has its own views on our priorities, our interests. As it happens, they align so often with those of the United States. We have a similar world view, we have shared values, shared interests, but Australia always takes our own national interest into account when we, for example, respond to the terrorist threat that is so evident in Iraq and Syria. We take our own interests into account when we're dealing with regional threats and risks, like the behaviour of North Korea. We see North Korea as a threat to our region as much as we see it as a threat globally. And we certainly are absolutely aligned with the United States in supporting the rules-based order, and we make up our own mind about when Australia should act, when Australia should be involved in defence and security operations.

As it happens, the United States and Australia share similar views. In relation to Twitter, I understand that it has a maximum of 140 characters, so we deal with the President, with his Cabinet, and with the US administration on what they do, what they achieve, what their strategies are, and how we can work together in close and deep cooperation to uphold that international rules-based order and to bring peace, stability, and prosperity to our part of the world, as the United States has guaranteed and assured for the last 70 years.

In relation to the Paris Agreement, Australia took a decision in August of 2015 that we would put forward targets in accordance with the Paris Agreement that were environmentally and economically sound for Australia. We will continue to, I believe, meet our targets under the Paris Agreement, but again, it was a decision taken by our Cabinet in the interests of our economy and our citizens. And I believe that through meeting our targets, environmentally and economically sustainable measures, we will be on the path to ensuring affordable, reliable, low-emissions energy for the Australian people. But we certainly appreciate the United States' innovation and ingenuity that allows us to embrace the technologies and the innovative approaches that the United States brings to the area of environmental and energy policy.

JOURNALIST:                         Greg Jennett from the Australian Broadcasting Corporation. I direct this primarily at the visiting secretaries, and it's somewhat broader than Gardiner's question: Can you explain or reconcile to Australian audiences the apparent contradiction in the administration? Your business here today is to build alliances and relationships, and at least there is an impression abroad of isolationism expressed, some would argue, through the climate change decision, or even through statements made by the executive at NATO gatherings.

Secretary Tillerson, do you acknowledge that there are, in this region, pockets of doubt about US consistency and what you do to address them? And Secretary Mattis, you seem to have convinced the Australian Prime Minister, at least on matters relating to the South China Sea. You've made comments in Singapore about finding new sources of leadership to help the United States. The question is, what forms of leadership relating to the South China Sea do you seek from Australia?

SECRETARY TILLERSON:      Well first, let me respond in terms of those concerns. That's why we're here. That's why we travelled to the region, and that's why we engage with our counterparts. I've had two direct engagements already with members of ASEAN in Washington DC. We're going to be very active in the East Asia Conference, also in APEC. The President has already indicated he intends to participate. So in terms of addressing those concerns, this is how we address it, is to travel to the region, to meet with our counterparts, and to talk about the all issues that are important to them, and hear from them concerns they may have about where the administration is positioned relative to whether it be security issues or economic and trade issues.

We have had very good dialogue in all of those contexts. So I think - I hope - the fact that we are here demonstrates that that is certainly not this administration's view or intention, to somehow put at arm's length the other important allies and partners in the world.

SECRETARY MATTIS:            As far as your question, what form of leadership are we looking for from Australia, I would put it in traditional Australian terms. It's adherence to international law. It's the normal leadership by example that Australia has demonstrated really since its founding as a modern nation. It's the sort of thing where people work together to solve problems, where we sit down and define problems and then look at what are the rules of the road and then we abide by them. It's a matter of finding common cause and then finding a way to address everyone's interests in the most productive manner possible. And Australia has proven its ability to do this, to be a beacon of hope for people in the world - I would add, to be a contributor to security in the region, to stability in the region, from the Solomon Islands' effort a few years ago, to all the other humanitarian operations that they've been engaged in. It's mostly a matter of leadership by example would be the short answer to your question.

JOURNALIST:                         Thank you, Bob Burns from the Associated Press. A question for Secretaries Tillerson and Mattis. Something that's unfolded today while you were here in the discussions, which is that the UAE, Bahrain, Saudi Arabia and Egypt have announced they're cutting diplomatic ties with Qatar. And I wonder if you could explain what you believe are the implications of this for the fight against Islamic extremism and also for the [indistinct] coalition against Iran. And could I also ask you about something related to success in the region of all four of you - Afghanistan, which you all mentioned. Secretary Tillerson, as the administration would use its options for how to turn things around in Afghanistan, what is your view on the wisdom of committing more US troops and other resources to a conflict that has been stalemated for years?

And I'd like to ask a question of Secretary Mattis and for your Australian counterparts - you've said that you want to contribute more troops in Afghanistan. I think you're reported as saying perhaps 30 and I wondered whether you would consider going beyond that and other ways in which you could get [indistinct]. Thank you.

SECRETARY TILLERSON:      Well let me just make a brief comment on the late breaking news that you just referred to in terms of diplomatic relations between GCC countries and Qatar. I think, as I understand it, from what I have - the little bit I've read since the actions were taken, I think what we're witnessing is a growing list of irritants in the region that have been there for some time. And obviously they have now bubbled up to a level that countries decided they needed to take action in an effort to have those differences addressed. We certainly would encourage the parties to sit down together and address these differences. And we - if there's any role that we can play in terms of helping them address those, we think it is important that the GCC remain unified. I do not expect that this will have any significant impact, if any impact at all, on the unified - the unified fight against terrorism in the region or globally. All of those parties you mentioned have been quite unified in the fight against terrorism and the fight against Daesh, ISIS, and have expressed that most recently in the summit in Riyadh.

As to the Afghanistan policy - which is still under development and review, so there is no conclusion and I will leave it to Secretary Mattis to answer more directly what the military plans are for this year to stabilise Afghanistan. I think clearly, though, what we do understand is we can never allow Afghanistan to become a platform for terrorism to operate from. So our commitment to Afghanistan is to ensure that it never becomes a safe haven for terrorists to launch attacks against the civilised world, or against any other part of the world or any of their neighbours. So this is really a question of - what is the end state? And how did we reach that end state? That's part of the policy review still under development. So I don't want to go further than I would say the thinking currently in the administration is. But other than to say that we are committed to ensuring Afghanistan does not become that platform from which terrorist activities can be launched. And let me turn it to Secretary Mattis to respond.

SECRETARY MATTIS:            Yeah Bob, in regards to the implications for the counter-ISIS fight, I am confident there will be no implications coming out of this diplomatic situation at all. And I say that based on the commitment that each of these nations that you just referred to have made to this fight. As far as the situation vis-a-vis Iran, I believe Iran's actions speak louder than anyone's words, and they are going to incite the international community in that region to try to block them in the various destabilising efforts they are undertaking right now from Syria, where Assad remains in power today, because of Iran's actions, to Yemen, where they have been contributing in an unhelpful way to a war that is marooning millions of people and leaving them vulnerable to starvation and health problems and violence. So I think it's Iran's actions that will speak most loudly, and the diplomatic situation - it will probably take some time, I don't know how long, but it will be resolved.

As far as Afghanistan goes, as Secretary Tillerson said, the policy is under review, but at the same time, we're up against an enemy that knows that they cannot win at the ballot box. And you think- we have to sometimes remind ourselves of that reality. That's why they use bombs; because ballots would ensure they never had a role to play. And based upon that foundation, that they cannot win the support, the affection, the respect of the Afghan people, we will stand by them. It's been a long, hard fight. Australia has been in this one from the very beginning, and the fight goes on. But the bottom line is we're not going to surrender civilisation to people who cannot win at the ballot box. Thank you.    

MINISTER PAYNE:    Thank you very much for that. I think Jim put that particularly well, if I might say, at the end there. Australia does currently have 270 personnel, both embeds in the NATO mission and trainers, particularly at the Afghan National Officer Academy. And that is, from our perspective, the continuation of our longest contribution to any military campaign in Australia's history. So we regard it as a very significant one. And I want to acknowledge and pay tribute to the Australian men and women of the ADF who are in Afghanistan now, dealing with - no matter what their task is - what is a very complex security environment, as we have seen evidenced again in the last few days. They continue a contribution of which we are very proud.

In terms of the enhancement of that contribution of 30 personnel, as you indicated, that is in general accord with the nature of the request that we received from NATO, which was indeed supported by the United States, and we're very comfortable with that. As a nation, we make the second largest non-NATO contribution to the effort in Afghanistan, and we are in the top 10 for financial contributors to Afghanistan through the Afghan National Trust Fund. So these are a strong indication of Australia's preparedness to be engaged in what is an ongoing international fight against violent extremists and against terrorists.

I agree completely with Jim - they can't win a ballot, so they use weapons to try and fight their way out. That's not something we are ever prepared to see take hold in Afghanistan again. As Secretary Tillerson also said, we can never allow it to be a platform for terrorism, as it was in the past. We'll continue to make that contribution. It's why we made the announcement that we made last week. As the United States and the NATO support mission develop their approach, we will engage in those discussions, as we always do, and we will make our own views known, play our part, and any further decisions are a matter for consideration at that time.

JOURNALIST:                         Secretary Tillerson, I have to ask you what your view was on the wisdom of adding more US troops and resources - I'm aware of the fact that the policy is under review - what is your view on that?

SECRETARY TILLERSON:      I will reserve my answer until the policy review is completed. It needs to be thought of in that context.

MINISTER BISHOP:              Thank you, ladies and gentlemen.

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