TOM SWITZER: Good evening and welcome. My name is Tom Switzer. I'm from the Centre for Independent Studies here in Sydney and I'd like to acknowledge from the outset former Prime Minister, Malcolm Turnbull, the US Ambassador Culvahouse and distinguished guests, ladies and gentlemen. It's a great privilege for the Centre for Independent Studies to host this event today. I want to say also that we should pay our respects to the victims of the El Paso, Texas shooting a few moments ago. Our thoughts and prayers are with them. CIS is a public policy research organisation that is committed to promoting the principles of classical liberalism, but we're also strong supporters of the US Alliance, which has been for nearly 70 years, is and will continue to be the centrepiece of Australian foreign policy. In a moment we'll hear from the Secretary of State and afterwards we'll have a conversation for 10 minutes. To introduce the secretary. I like to call on our next speaker. Marise Payne is the Foreign Minister of Australia. She's a former Defence Minister for three years from 2015 to 2018 and she's been a Senator of the state of New South Wales for the last 22 years. Ladies and gentlemen, please welcome Marise Payne.
MARISE PAYNE: Thank you very much Tom. Ladies and gentlemen, let me begin by acknowledging the traditional owners of the land on which we meet this afternoon and pay my respects to their elders past, present, and emerging. Good afternoon and thank you very much Tom for your introduction and thank you to you and your staff at the Centre for Independent Studies for hosting us here today, although perhaps more appropriately, I think we should be thanking State Librarian John Vallance for hosting us here in these beautiful surroundings this afternoon. To my counterpart with whom you will speak soon, US Secretary of State Mike Pompeo - thank you for our fruitful discussions that we've had earlier today during this year's AUSMIN, and Susan - you are very, very welcome here in my beautiful home city of Sydney in the great state of New South Wales as well. May I acknowledge many parliamentary colleagues, current and former, but particularly my good friend and former Prime Minister Malcolm Turnbull, and the leader of the Opposition in the Senate, Penny Wong who is here with us today, also Shadow Foreign Affairs Spokesperson. To the Secretary of my Department of Foreign Affairs and Trade, Frances Adamson, their Excellencies of many who I here this afternoon but particularly Australia's Ambassador to the United States, Joe Hockey and the United States Ambassador to Australia, A.B. Culvahouse, and the very many distinguished guests who are here this afternoon. It is indeed a distinguished audience and a most appropriate audience to hear the very important words of my counterpart Mike Pompeo. We have a lot of US friends here in my hometown of Sydney this weekend and this is a city which has played host to many key moments in the long friendship between our two nations. And I wanted to share just one story because our Australian/American connection goes back to the very beginnings of this city's European history. In fact, we are told that the first European, broadly speaking, to fish in Sydney Harbor was an American. Jacob Nagel was from Redding, Pennsylvania. He fought in the American Revolution against the British both at the Battle of Brandywine and in George Washington's artillery at Valley Forge. After transferring from the army to the navy, he was ultimately captured by the British and taken to Saint Kitts in the Caribbean in chains. He was then freed by the French Navy, but went on to serve in the Royal Navy and including alongside Lord Nelson in the Napoleonic wars. But it was with the British that he arrived in Sydney as part of the First Fleet, just a stone's throw from where we meet now at what is now known as Circular Quay. Of course, just five months after the First Fleet arrived in 1788 the American Founding Fathers were ratifying their new Constitution. Nagle lived here in the colony for three years and fascinatingly, his original memoirs, the manuscript handwritten itself remains housed in this building right under our feet. They paint a compelling picture of life in the new colony and they remain a seminal part of the story of how European Australia began. The US Constitution of course, is an enduring document now, some 231 years old and still enshrines those values of freedom of speech, freedom of political assembly, the right to due process, the separation of powers, amongst others by which we live and abide. Indeed, our own Constitution’s framer, Andrew Inglis Clark was strongly inspired by the American founding document. Today with Secretary Pompeo we have underscored the values that we share in our joint statement following the AUSMIN discussions, and in 2019 they form the basis of our common effort to shape an Indo-Pacific region that is open, rules-based, and inclusive, a region in which countries enhance stability, adhere to international law and respect one another’s sovereignty. We will do this by working together, but also by raising strong partnerships across the Indo-Pacific. Our values are the fabric from which these deepening partnerships will be woven and we must therefore remain committed to them even when we and they are challenged. Today, we of course discussed the US/China relationship, clearly the most important bilateral relationship of the coming years. Both of these major powers are tremendously important to Australia and it's not in our interests for those relationships to become confrontational. But we do have to recognize that we are in an era of strategic competition and we must play our part in protecting our interests and advancing those values. As Prime Minister Morrison has said, this means we must sometimes be up front about the concerns raised by the US -they are legitimate, they are shared, such as intellectual property theft and industrial subsidies. At the same time, we have to also be clear that protectionism is not the answer. As the Prime Minister also said recently, US/China trade tensions should be resolved in a way that is consistent with the rules based order and doesn't undermine the interests of other parties including Australia. And where the rules based order is incapable of dealing with new or evolving practices, we have to evolve with it and evolve it to both repair and maintain that rules-based system so that it can respond adequately. Rules adapt to circumstances, changing technology for example, but values endure. Ladies and gentlemen, it's my great pleasure to introduce Secretary Pompeo, a West Point graduate, first in his class, served in Germany before the wall came down, graduated in Harvard law, practice law in Washington DC for a few years, then moved to Kansas to start his own business with a few buddies, I’m told. Ran for Congress, served several terms, then was asked to become the director of the CIA. For me, Mike Pompeo is a vital counterpart, a strong leader, values focused and a good friend. Please welcome Secretary Mike Pompeo.
[Transcript skips to guided discussion]
TOM SWITZER: Now listen, I know you did an event recently in Bangkok two days ago, you did a Bloomberg event similar to this and you talked about North Kore, trade, Hong Kong. I want to focus more on Australia and the US/China relationship. Start with some breaking news. A few hours ago the new Secretary of Defense said this afternoon that since missiles treaty has expired, the US is keen to explore getting missiles in around allies in Asia. Does that mean that that allies like Australia should expect missiles in Darwin?
MIKE POMPEO: Well, what I think Secretary Esper was referring to is we decided that leaving the INF treaty was necessary, after years of work trying to convince the Russians to come back into compliance. When only 50% of a two person treaty is complying, it's a really odd place to find oneself for years. And so President Trump made the decision to recognise the reality. And so, we've now begun to take actions which will begin to catch up with where the Russians are so that we too can have the ability to perform the functions that are with those. As for where we'll put those, frankly, decisions on forced deployments, missile deployments, all of the things we do around the world are things that we constantly evaluate. We, we want to make sure that we're protecting our partners, protecting American interests. I think our efforts to deploy our resources, our defence resources to create a deterrence and stability around the world are something we're always looking at. And we're happy to do it. And we will do so with deep consultation with every partner.
TOM SWITZER: These missiles have a five and a half thousand kilometre range. Shanghai to Darwin is 5,000 kilometres in range. How would Beijing feel if Australia had missiles in Darwin, Foreign Minister?
MARISE PAYNE: Well, I think it's important to remember that the US has had a strong military presence characterized in a number of ways throughout our region for a very long time now. And we have welcomed that, we have engaged with it, we have worked with it. But I think it would be unfortunate to characterise it in the way that you have. We obviously respect and support the US’s withdrawal from the INF treaty. The Secretary makes a very good point about a treaty with two parties in it where only one is pulling forward. But for us, these are strategic decisions for the United States and I'm sure there'll be made in consultation with key partners is the Secretary is outline.
TOM SWITZER: Okay. Now you mentioned the Confucius Institutes on Australian campuses and as you well know, the Australian Government of Prime Minister Turnbull rejected Huawei and the 5G network. That's been a very tumultuous relationship between Beijing and Canberra. Mr Secretary, how worried should Australians be about the rise of China as a great power?
MIKE POMPEO: It's really straightforward. We have, in the United States, deep economic relationship with China. We think there's real opportunity there. But we have to be very, very careful. I think the world frankly watched for too long. We were sleeping at the switch as China began to behave in ways that it had not done before. So whether that's efforts to steal data across networks, which you just referred to in terms of the decision Australia made, or militarise the South China Sea, something President Xi promised the world he would not do, or engage in activities where they foist money on nations that are desperate for resources and leave them trapped in debt, debt positions, which ultimately aren't about commercial transactions, but are about political control. Those are the kinds of things that I think everyone needs to have their eyes wide open with respect to. The United States certainly does. And we welcome China's continued growth. But it's got to be right and it's got to be fair. It's got to be equitable. It's got to be reciprocal. They have to behave in a way that ensures that the value sets that Australia and the United States have continued to be the rules by which the entire world engages.
TOM SWITZER: So you mentioned the militarisation of the South China Sea three years ago. Last month, the Hague rule the China's conduct in the South China Sea was illegal. Minister, you mentioned China's illegal conduct in the South China Sea, and the Governments of Australia, American and Japan put out just recently a trilateral statement calling out China over its coercive unilateral actions and also supporting cooperation in the Pacific. If China's conduct is so outrageous, Minister, why hasn't Australia done follow up freedom of navigation patrols through that contentious 12 nautical mile zone in the South China Sea?
MARISE PAYNE: Well, Australia makes our own decisions about how we engage in the region, of course. But I think that any examination of the ADF participation and engagement in the region would show you a very significant high level of activity and a level of activity which clearly prosecutes our case for freedom of navigation and freedom of overflight according to international law in this region. And in fact, more broadly. Most importantly, we have been consistent in pursuing the application of international law, the application of the UNCLOS in relation to any of the disputes in the South China Sea, to which we are not a party and nor do we take sides on, claimants and their interests. But we have consistently advocated for the application of the UNCLOS in international law. We have reiterated that at every opportunity, including as recently as my participation in both the East Asia summit and the ARF in Bangkok this week. And in every other opportunity, we have terms of making public comment. So Australia is a very consistent messenger on this matter. We are a consistent partner with our friends, the United States. We work very closely together, but we'll always make our own decisions in Australia's national interest.
MIKE POMPEO: May just add something there. Sometimes I'll hear folks talk about trade and economic issues as separate from national security. Let's make no mistake about it. China's capacity, the People's Liberation Army’s capacity to do exactly what they're doing. It's a direct result of the trade relationships that they developed there. They grew their country on the backs of a set of unfair trade rules. So they were able to grow the economy at a high rate of speed and to steal technology and to force technology transfers. Those very same economic tools that President Trump is so focused on fixing are what also have enabled China to do all of the things they're doing with their military all around the world. It underwrites their capacity to build a military.
TOM SWITZER: On Thursday night in Canberra, CIS is hosting a debate in front of about 500 people. Professor John Mearsheimer, a West Point graduate like yourself, University of Chicago, he'll be debating Professor Hugh White, some say, one of our leading strategic thinkers. Let me put a few whites argument to you; China buys double what our next largest customer, Japan buys from us, the Chinese economy will grow much bigger than Americans in coming years, our China trade saved us from the global financial crisis as a result. And this is Hugh White’s argument - Canberra would be unwise to support Washington in a confrontation with China that America probably cannot win. Mike Pompeo.
MIKE POMPEO: Yeah. Look, you can sell your soul for a pile soya beans or you can protect your people. Our mission set is to actually do both because we think it's possible achieve both of those outcomes. So we think it's possible to have trade with China and yet require them to behave within same set of rules. A Chinese company that wants to invest in the United States has one set of rules vs an American company that would like to invest in China. No. No country, no civilization permits to this kind of imbalance in rules for an extended period time and survives. And so our effort is to restore that reciprocity or restore that balance. You don't have to give up all those good things that China does by us selling and trading with you. I will tell you this too. We have a lot of trade here too. We invest an awful lot in foreign, investment here, and I know these business investors would love to do more. Just do it with in the same set of rules.
TIM SWITZER: Does Washington still believe unequivocally that the ANZUS alliance obliges Canberra to America's side in the event of a conflict. The ANZUS alliance, does that oblige us to Australia's participation in any conflict?
MIKE POMPEO: Yeah, the ANZUZ alliance is unambiguous.
TOM SQITZER: Okay. But 15 years ago, Minister, your predecessor Alexander Downer, said in Beijing to an ABC journalist, “Washington could not expect Australia to automatically side with the US if China attacked Taiwan”. Is that your view?
MARISE PAYNE: You can expect me to be responsible for a lot, Tom, but I'm not sure you'd expect me to be responsible for Alexander Downer’s statements 15 years ago.
TOM SWITZER: Isn’t Downer reflecting a segment of opinion that says increasingly Australia should be worrying about getting too close to America in the event of a spat with China? Mr Secretary?
MIKE POMPEO: The idea that somehow we're close to conflict in the military sense with China, is what I think those who don't want to actually confront the real challenges that China present raises the spectre. This is not the mission set. The mission set is very, very different from ours.
MARISE PAYNE: And can I say, Mike and I haven't spent the hours between eight o'clock this morning and four o'clock this afternoon discussing the depth and breadth of the US relationship, to bring it to a point like that. I mean, we have spent so much time today across a vast range of policy areas and engagements which illustrate exactly the observation that Mike just made. There is so much to this relationship predicated in a hundred years of mateship. If you ask my friend Joe Hockey, I was enthusiastic about pointing out that we're in the second century now of that a hundred years of mateship, which makes me feel old apart from anything else. But there is so much more to the Australia/US relationship. It's so much more to the values that underpin it and so much more to the alliance.
TOM SWITZER: Okay. Final point. The US Government has flagged the prospect of Australia joining an international coalition to protect shipping in the Persian Gulf. Secretary, how can Canberra play a more important role as an ally partner in Asia and doing these freedom of navigation patrols in the South China Sea, for example, when it's constantly pulled back to the Middle East?
MIKE POMPEO: Well you have to get goods from A to B. And if A happens to be the Middle East, you've got to get them through the Strait. And so we're asking every nation to join, this is the deterrent against the bad behaviour that the Islamic Republic of Iran has undertaken. They pulled the British ship already. They've mined and took on six other ships from other countries, one of them, a European ship, Norwegian flagship. We're asking every nation that has energy needs, that has goods and services passing through to contribute to our effort, which is deterrent, creates stability in the Strait of Hormuz. So we were asking every nation, Australia and everyone to come join us in that effort. Every country will contribute something different, information sharing, ships at sea, communication systems, ISR, all the elements of delivering this defensive deterrent posture in the Strait of Hormuz. We’re welcoming every country to join us in that effort.
TOM SWITZER: Secretary, thank you. So unfortunately, ladies and gentlemen, we are out of time. The Secretary and the Foreign Minister are on their way to their next schedule. Please join me in thanking Marise Payne and Mike Pompeo.
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