Bloomberg Television, Singapore - Interview with Haslinda Amin

JOURNALIST: Australia is looking to reshapeAustralia's foreign policy over the next ten years. Let's get the perspectivefrom Australia's Foreign Minister Julie Bishop. She joins us today. Minister,good to have you with us. Now, later today you'll be delivering a keynoteaddress looking at change and uncertainty in the Indo Pacific region. What arethe biggest challenges, and how do you see Australia navigating all of them?

JULIE BISHOP: We are going through a period ofextraordinary change, and over the last 12 months there have been unprecedentedevents: Britain exiting from the European Union; the successful campaign ofPresident Trump in the United States. There are also challenges to ourassumptions on the international rules-based order that has been the frameworksince the Second World War for the prosperity and security of our part of theworld in particular. All of this is under challenge at present and so I'll bespeaking about the challenges, but also the opportunities I see, and the rolethat Australia can play to continue to advocate for that open rules-based orderthat has enabled countries, particularly in our region, to prosper in recenttimes.

JOURNALIST: How concerned are you that economicsand trade have been muddled into geopolitics?

JULIE BISHOP: There's been a rising sentimentembracing protectionism. We've seen strains of economic nationalism incountries and so countries such as ours, and Singapore, that have benefitedfrom an open rules-based order when it comes to trade – market economies,export-oriented market economies – should make and remake the case for thebenefits of open competition and globalised trade. Australia has benefitedenormously from being able to sell our goods and services around the world. Sowe must argue against this rising protectionism that would only see economiessuffer if it were to roll out across the globe, and indeed the region.

JOURNALIST: There is a big question mark when itcomes to the US foreign policy in Asia. The 'Asia Pivot' is as good as dead.How do you think, under Trump, how do you think US policy will be in this partof the world?

JULIE BISHOP: Australia has been engaging veryclosely with the new Trump Administration. I visited Washington recently and Imet with Vice President Pence and Secretary of State Rex Tillerson and theirnew National Security Advisor General McMaster, and our other ministers havemet their counterparts. I'm reassured that the United States understands verywell the need for leadership, the need for the United States to remain engagedin our part of the world. They will continue to do so and I think somehigh-level visits here in recent times, and some that are pending, willreinforce the view that the United States is committed to the rules-basedorder, including in trade and in security, that has served us so well in recenttimes.

JOURNALIST: But there have been growing callsfor the US to show more aggression when it comes to China. There have beengrowing calls for Japan and Korea to foot more of the defence bill. Surely thatmust worry you?

JULIE BISHOP: Well, in fact with the growingeconomies in Asia and Southeast Asia, we've seen an increase in militarybudgets, and that's commensurate with their growing economic weight. There'sbeen growing defence weight, in fact, the military budgets of Asian countriesare growing faster than anywhere else in the world. But we need to ensure thatwe continue to put peace and prosperity at the top of our agenda, and thatmeans the United States remaining engaged in our part of the world, and I haveevery confidence that they will continue to be a leader and deeply engaged inAsia, South East Asia in particular.

JOURNALIST: The new US Secretary of State, RexTillerson, is due out in North Asia. What are you expecting from that?

JULIE BISHOP: It will be very reassuring for SouthKorea and Japan for the Secretary of State to visit and Secretary Mattis, theDefense Secretary, was there recently. And I've travelled to South Koreasubsequently and they were very reassured by the interest and the level ofengagement from the United States, and the fact that Secretary Tillerson isvisiting will also send a very positive sign that the United States is here, isengaged, and will continue to be so.

JOURNALIST: And despite what you say, somepeople also are concerned about the lack of leadership in this part of theworld. I mean, the US pulling back. Do you see China playing a bigger role? Isthe world ready for China to play a bigger role?

JULIE BISHOP: It's inevitable that China willcontinue to grow economically, and militarily. It will become increasinglystrategically important. And the question is whether China will be aresponsible global player, and that is yet to be seen.

JOURNALIST: What would you like to see?

JULIE BISHOP: Well, I would like China to becommitted to the rules-based order; abiding by the international rules thathave guided countries' behaviour since the Second World War. China and othercountries should commit to that through the institutions that have served uswell, but also, when China branches out in other areas like the AIIB – theinfrastructure bank – its One Belt One Road policy, that it's for the benefitof our region, not just for one country.

JOURNALIST: One of the issues here, of the SouthChina Sea. Has Australia shifted its policy when it comes to the South ChinaSea?

JULIE BISHOP: Australia has been consistentthroughout. We are not a claimant state. We recognise that there are a numberof competing claims in the South China Sea, and we urge countries to deescalatetensions, to negotiate their differences peacefully. And we recognise theirright to seek to turn to international bodies, such as under UNCLOS, shouldthey need to arbitrate, or conciliate.

JOURNALIST: Do you see any resolution in sight?

JULIE BISHOP: We believe that countries shouldcontinue to exercise their rights of freedom of over-flight, freedom ofnavigation, and have unimpeded access to trading routes. After all, Australiahas a deep interest in this. A majority of our trade to North Asia passesthrough the South China Sea. So we call for parties to deescalate tensions, notdo anything that would be likely to escalate into any form of conflict.

JOURNALIST: A lot of talk about a potentialUS-China trade war. How real is that threat to you?

JULIE BISHOP: I believe that both sides have toomuch at stake for there to be a trade war. The United States has issues withChina, China has issues with the United States, but I believe that they can beresolved by high-level consultation and discussion, and I'll hope that we willsee that. And the opportunities will arise, such as the East Asia Summit, aforum where China, Russia, the United States, Australia, the ASEAN countriescome together to discuss economic and strategic issues. And I think the EastAsia Summit, later this year, would be a great opportunity for President Trumpto come to the Philippines, where it will be held, and for the other leaders tomake their views known at that time.

JOURNALIST: Minister, just one final question:is this the new normal?

JULIE BISHOP: I suspect that the increasing anxiety,the increasing challenges, the sheer scale and pace of change, are going to bewith us for a very long time.

JOURNALIST: Alright. Uncertain days ahead.Minister Julie Bishop we thank you for insights today.