PATRICIA KARVELAS: Tensions between the US and China boiled over at the weekend, derailing the APEC Leaders' Summit in Papua New Guinea in spectacular fashion. A stinging speech by US Vice President Mike Pence accused China of drowning Pacific countries in debt and warned them to protect their sovereignty.

Efforts to produce a joint communique failed, but Prime Minister Scott Morrison says he's not surprised.

[Excerpt]

PRIME MINISTER MORRISON: Oh, I would just caution people not to get overly excited in their commentary about these sorts of things. The G20 will be coming up; we'll see where that goes. And I think there's a clear frustration that has been expressed by many of the other countries around the table and economies around the table at APEC, but these matters need to be resolved …

[End of excerpt]

PATRICIA KARVELAS: Foreign Minister Marise Payne had ringside seats to the diplomatic dust-up. Welcome back to RN Drive.

MINISTER PAYNE: Good afternoon, Patricia. Great to be here.

PATRICIA KARVELAS: Does it matter that there was no final communique after APEC?

MINISTER PAYNE: Well, I think APEC was in fact a very successful summit. And first of all, we should be acknowledging the efforts of the Papua New Guinea Government and the extraordinary amount of works that they put into developing the successful summit. We are disappointed at the failure to reach agreement on some of those important issues. But I think the decision to issue a Chair's statement in this case was an appropriate way to go.

PATRICIA KARVELAS: Against this backdrop of tensions, Australia confirmed it's partnering with the US on a number of Pacific projects. This afternoon, China announced an investigation into alleged dumping of Australian barley; is this retaliation?

MINISTER PAYNE: Well, no, I don't think so. I think it is in fact a notification that we received some two weeks ago or so now about a concern by their ministry of commerce, and that is in accordance with the WTO rule. We'll work very closely with the Australian barley industry following that announcement. They can take some time, at least up to 12 months, that's what we would expect. We have a very strong and growing trade relationship, but that's not to say that we don't occasionally have differences and this would be one of those.

PATRICIA KARVELAS: Well, you're working on a reset. We know that the dynamic has been frosty and you've been working on a thawing of those relations; was what we saw over the weekend going to make that more complicated?

MARISE PAYNE: Well, I had a very productive visit to Beijing myself just ten days ago and a very constructive meeting with State Councilor and Foreign Minister Wang Yi; my counterpart there. We acknowledged the depth of the partnership. It is after all, a Comprehensive Strategic Partnership between our two nations. It has many, many years of Chinese engagement in Australia, and Australian engagement in China behind it.

We are working very productively with our counterparts; the Prime Minister had a good meeting with Premier Li Keqiang in Singapore in the sidelines of the East Asia Summit. Whilst we recognise that there are concerns, particularly between the United States and China, Australia is pursuing our national interests, as I think every Australian would expect us to do.

PATRICIA KARVELAS: Scott Morrison met President Xi briefly on the sidelines of APEC; what was the tone of that meeting, and were concerns about dumping raised?

MINISTER PAYNE: I understand it to have been positive, but I was not with him at the time. And I don't have the details of the discussion. I think it was a brief interaction, and they look forward to meeting again.

PATRICIA KARVELAS: Scott Morrison says it's not surprising tensions between the US and China flared in this way; what did you make of the tone of Mike Pence's speech? Was it the right tone?

MINISTER PAYNE: Well, I don't think it's for me to adjudicate the Vice President of the United States' speech in relation to tone…

MINISTER KARVELAS: [Interrupts] Well, is it a tone that Australia thinks is the right tone?

MINISTER PAYNE: Well, I think that the United States have been consistent in raising a number of their concerns; particularly around trade engagements. So, whilst we support efforts to improve and to strengthen the WTO, we also recognise some of the frustrations of the US and other countries with the organisation. I think the Prime Minister referred to it today as needing a service, given its age, its longevity; and that's probably a good way to put it. And we would support those necessary reforms.

PATRICIA KARVELAS: Mike Pence was particularly critical of China's investment in the Pacific.

[Excerpt]

MIKE PENCE: Know that the United States offers a better option. We don't drown our partners in a sea of debt and we don't coerce or compromise your independence. The United States deals openly, fairly. We do not offer a constricting belt or a one-way road; when you partner with us, we partner with you, and we all prosper.

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PATRICIA KARVELAS: Is China drowning Pacific nations in debt?

MINISTER PAYNE: Well we have been very clear Patricia that from Australia's perspective and certainly from our own engagement, we are very focussed on ensuring that any of our development support and assistance supports sustainable development; that we want to see infrastructure investment that's transparent, that is not discriminatory and is open.

There are certain standards that we expect those sorts of investments to deliver and they would include long term benefits that meet the genuine needs and the genuine priorities of the countries with which international partners are engaged. And also to avoid unsustainable debt burdens.

PATRICIA KARVELAS: Okay. So do you think China is giving these nations unsustainable debt burdens?

MINISTER PAYNE: Well I think that those decisions are sovereign decisions of the nations concerned. But what we want to make sure of is that we are being very clear about the expectations we have around development assistance, both within the Pacific and more broadly. And that we expect other partners to engage in similar approaches, whether it is the United States or China, or any of the European nations, or the international development community; there are certain standards that we expect to be observed.

PATRICIA KARVELAS: Mike Pence also flagged more freedom of navigation exercises in the South China Sea; has Australia been asked to do more in this area?

MINISTER PAYNE: Well we have been doing a great deal more in recent years already and I think you and I have spoken before about the work of our task groups. In 2017, the ADF sent the largest task group into the region in 40 years — Indo-Pacific Endeavour 17.

This year we sent a similar task group into the Pacific region and visited a number of key ports and communities in that process before heading to the RIMPAC naval exercise. So this is business as usual for us and in terms of our approach to freedom of navigation and to freedom of over-flight, we have consistently indicated right across the government that that is an approach we support, consistent with international law and the rules-based global order and we most certainly have not taken a backward step on that.

PATRICIA KARVELAS: I have to pivot to another part of the world — the Middle East. Indonesia and Malaysia have warned Australia against moving its embassy to Israel. Is this an issue other countries are raising with you?

MINISTER PAYNE: Well certainly a number of those conversations have been made public in recent days both by the Prime Minister and counterparts. But we have a very clear process underway and the Prime Minister has indicated that we are going to allow that to take its course over coming weeks and we expect that to be completed by the end of the year. Most importantly, I want to restate that it will take full account of our record of support for a two-state solution and of the conditions that are required to progress that. It will report to the NSC through the normal Cabinet processes, it will also recognise UN Security Council resolutions that apply in this area.

PATRICIA KARVELAS: Government MPs now appear quite divided on this issue. Some argue strongly in favour, others against; what's your personal view?

MINISTER PAYNE: Well I'm not going to engage in a discussion of my personal views because we do have a process underway and I think it's very important that the government sees that process through.

PATRICIA KARVELAS: Okay. But we've heard from many other of your colleagues about that. In fact Steve Ciobo last night told me on National Wrap on ABC News that he was personally opposed to this happening now. Do you also have reservations?

MINISTER PAYNE: There's a wide range of views on the matter Patricia, you've just referred to one. I'm not going to engage in a discussion of my personal views because there is a process underway. I respect that process and I look forward to it coming to finalisation now in December.

PATRICIA KARVELAS: Do you urge your colleagues to keep their personal views to themselves as well then?

MINISTER PAYNE: Well I always think discretion is the better part of valour Patricia.

PATRICIA KARVELAS: Why?

MINISTER PAYNE: Well because I think it's an appropriate way to behave.

PATRICIA KARVELAS: What's wrong with canvassing their own personal views though given this is clearly a really contested area?

MINISTER PAYNE: Because we do have a process underway and it's a process that the Prime Minister and the government has set in train and I think it is important to enable that process to be implemented to its full glory.

PATRICIA KARVELAS: Minister, thank you so much for your time.

MINISTER PAYNE: Thank you very much Patricia.

ENDS

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