Radio interview with Fran Kelly - ABC RN Breakfast

FRAN KELLY: The debate overChinese influence in the Pacific will be further fuelled today by a new reportthat shows the Beijing will soon overtake Australia as being the biggest donorto the region. China has showered more than $1 billion on Pacific nations since2011 but has pledged almost $6 billion more. While Australia remains the numberone donor by a long way, aid from Canberra has decreased over this same period.Foreign Minister Julie Bishop will release this report today at a meeting ofthe Pacific Islands Forum, she joins us from Samoa. Julie Bishop, welcome backto Breakfast.

JULIE BISHOP: Thank you Fran. Good to be with you.

FRAN KELLY: Before I come to the Pacific, the UnitedStates has determined that Russia did use chemical and biological weapons inviolation of international law and will impose sanctions on Russia. You'vepreviously said that the illegal deployment of chemical weapons like this couldhave "global security ramifications". Here they are starting to flow. WillAustralia follow suit when it comes to sanctions?

JULIE BISHOP: This is a very serious matter and we willneed to assess the full consequences of it. But you are absolutely right, Ibelieve the use of these weapons at any time, any where, under anycircumstances is abhorrent. It cannot continue, it cannot continue withimpunity. In response to the March nerve agent attack in Salisbury, we didexpel two Russian undeclared intelligence officers. So did 28 other countriesplus NATO, so about 153 Russian diplomats were expelled. We will certainly takeon board the new US sanctions on Russia and consider our circumstances. Wealready have a range of sanctions on Russia in relation to its breaches ofsovereignty in Ukraine and Crimea, and of course we have an ongoing issue withRussia over the role of Russia in the downing of Malaysia Airlines MH17, when 38Australians citizens and residents were killed. So we will assess theimplications of the United States decision and the sanctions that they'veimposed on Russia.

FRAN KELLY: Let's come to the Pacific and the Lowy Reportthat you're releasing today. We have traditionally been the most significantdonor in the Pacific, it is on our doorstep, we still are, but as our aidreduces, China's has been increasing. Are we at risk of losing our influence inthe region as that process unfolds?

JULIE BISHOP: It is not correct to say that our aid hasdecreased in the Pacific. In fact, it is now at record levels. While our aid budgetelsewhere has been more focused, we have ensured that our funding to thePacific has either remained the same, but now has increased. Over the periodthat I have been the Foreign Minister, I have ensured that aid to the Pacifichas not decreased. In fact, this year our contribution will grow to $1.3billion, the largest ever amount of funding from Australia to the Pacific, whichreflects our commitment to increase our engagement with the region. Australiaremains the largest donor to the Pacific. We provide 40 per cent of all aid tothe region and together with New Zealand we are responsible for over half ofall aid to the region. It also shows that-

FRAN KELLY: China is on the march though. As you,yourself, have commented in recent times, China we know has made $4 billionworth of commitments, major infrastructure projects like ports, roads, most ofit loans which have to be paid back, and you have been concerned about that. Imean, you have warned that these nations don't lose their sovereignty, don'tget trapped into unsustainable debt outcomes. These are your words. We areconcerned the consequences of entering into these financing arrangements willbe detrimental to their long term sovereignty. How worried are you about Chinaentrenching and encroaching on the sovereignty of some of these South Pacificnations?

JULIE BISHOP: My words are also that we welcome the roleplayed by all donors, including China, to support development in the Pacific, andmy words are also that no single country can meet the region's significantlong-term development challenges. According to Lowy, China was the fifthlargest donor in 2016, which is a significant contribution. The challenge forall development partners is to ensure that investments support sustainable economicgrowth and that they don't impose onerous debt burdens on regional governments. That applies to all donors.

We welcomecontributions from all partners to meet the Pacific's significant developmentchallenges. As the region's major development partner, Australia encourages investmentsthat ensure local communities are sustained, that local labour forces are used,and as I have said, do not impose onerous debt burdens on the localcommunities.

FRAN KELLY: It's not just about money, is it? Well, moneyin terms of hard loans for infrastructure. This week the Prime Minister of Vanuatuhas asked Australia to resume short wave radio broadcasting into the Pacificregion, saying lives could be lost in natural disasters without the ABC service.Do you agree, because China is now moving into this sector as well?

JULIE BISHOP: Yes. We did not support the ABC closing itsshort wave radio transmissions to the Pacific, that was not a decision of theAustralian Government. In fact, today in Samoa, I will be launching a new radiotransmission here to support natural disaster management, humanitarian relief andother domestic issues here. Under the aid program, we are in fact funding atransmissions facility in Samoa through the Radio 2AP. It is an infrastructureredevelopment project and Australia is providing funding to support that. I clearly see it as a matter of significanceand we do have a media assistance scheme primarily in Fiji, Samoa, SolomonIslands, Tonga and Vanuatu to ensure that radio transmission can continue. Butthe ABC, I would certainly encourage the ABC to continue short wavetransmission in the Pacific.

FRAN KELLY: Well, perhaps that funding should have goneto the ABC? I mean, that was a funding decision at the time?

JULIE BISHOP: The ABC determines its priorities. I don'tdictate the ABC's priorities. That is not something available to me I'm afraid.We do provide funding for the ABC, the funding is delivered to the ABCInternational Development and so the announcement I am making today is in factAustralia's assistance being delivered through the Australian BroadcastingCorporation.

FRAN KELLY: Can we move to the relationship more broadlywith China. The Prime Minister gave a speech this week which has generally beencharacterised as a bid to re-set Australia's fractious relationship with China.The PM has said that the rise of China should not be feared as a threat,basically. Beijing has welcomed the tone of the address as positive. Does thissignal a softer line by Australia on China?

JULIE BISHOP: What it does is outline our actual engagementwith China. It is deep, it is broad and something that both countries welcomeas being in our interest. The Prime Minister emphasised the Government'scommitment to advancing our Comprehensive Strategic Partnership with China. Therelationship is deep, it is characterised by great opportunity and potential.We have got a large and growing agenda of common interests on which to pursuecollaboration and it is a partnership that benefits both sides, and that wassomething that Foreign Minister Wang Yi recognised in his meeting with me onSaturday in Singapore at the ASEAN related foreign ministers meetings. He saidboth sides have more to do. Of course, we have differences, but we have tomanage them. It is a dynamic, complex relationship. It engages a range ofnational interests. I think the Prime Minister's speech set out, very well, ourcurrent relationship with China and what more we can both do to ensure thatthis is a relationship that endures.

FRAN KELLY: Was it an effort though, to get therelationship back on track? As you say, the relationship is deep and broad butit has been fractious. The Prime Minister said, "It is understandable thatChina would seek a more confident and assertive voice. China need not be fearedas long as the international rules-based order was preserved". So, that is thecaveat then? Last year Australia accused China of breaking some rules when itcomes to its use of money and soft power in our political parties here, in ouruniversities, when it comes to cyber security activity and hacking and in the SouthChina Sea. Do you believe China is abiding by the rules?

JULIE BISHOP: The Prime Minister used the opportunity ofthe speech to make some important points about Australia's relationship withChina. He emphasised the Government's commitment to the Comprehensive StrategicPartnership. He talked about the enduring strength of the relationship, itscontinuing potential. He specifically talked about the contribution ofAustralians of Chinese heritage to our nation, he talked about our commitmentto working with regional partners including China to protect the security andadvance the prosperity of the region.

FRAN KELLY: Was this aneffort to amend relations, because relations have been, certainly seems to havebeen in the deep freeze of late?

JULIE BISHOP: That is not how I would describe it. That iscertainly not how China describes it.

FRAN KELLY: Well, how long since you've had a visit toChina?

JULIE BISHOP: I have met with Foreign Minister Wang Yi Ithink on 10 or 11 occasions and we are planning my next visit to China. Myvisits to China are every two years because as the foreign ministers meetingdictates, one year it is in Beijing, the next year it is in Canberra. It is myturn to go to Beijing this year and I had a very positive discussion withForeign Minister Wang Yi about that. But Australia's relationship with China isstrong –trade, investment, education and engagement and two-way travel are allat record levels. The Government is building on the foundation we committed todo so in the Foreign Policy White Paper that we released last year. It was agood opportunity for the Prime Minister to talk about how we engage with Chinaand how we continue to pursue a consistent approach to China. We do havedifferences of opinion from time to time but it is about how we manage themthat counts. Both sides recognise that this is a partnership that benefits bothour national interests.

FRAN KELLY: Foreign Minister, I know your time is tight,thank you for coming out of your meeting for this interview. Can I just ask youbriefly about another sanctions story this week, the imposition of the US sanctionson Iran and his threat of "severe consequences for companies continuing to dobusiness with Iran." Now, there is a growing number of Australian companiesdoing business with Iran, will Australia try and protect them through some kindof legislation in a way the EU is trying to bring in laws to protect Europeancountries?

FRAN KELLY: The Australian Government has beenconsidering the sanctions that the United States has placed on Iran. They haverestarted sanctions that were previously lifted as part of its agreement to theJCPOA. Other US sanctions are going to be reapplied we understand. What we areseeking to do is speak with businesses who may be affected by this. We are notconsidering new sanctions. We have also advised Australian exporters to seeklegal advice on the effects of international sanctions on their tradingactivity, and we will certainly keep the matter under review depending uponwhat the United States seeks to do, but the point is that the AustralianGovernment is not considering imposing new sanctions. While we certainly holdconcerns about Iranian activity in the region, and I had a recent meeting withIranian Foreign Minister Zarif - on Saturday in Singapore - and discussed Iran'sbehaviour, I also indicated that we want to see Iran hold to this nuclearagreement and continue to abide by it.

FRAN KELLY: Julie Bishop, thank you very much for joiningus.

JULIE BISHOP: My pleasure.

FRAN KELLY: Julie Bishop is the ForeignMinister, joining us from Samoa.