The US Studies Centre's Geoffrey Garrett briefs the Foreign Correspondents' Association and Australian media following the announcement that Obama's visit to Australia and Indonesia has been postponed. The audio, video and transcript of the media brief are available below.

Transcript:

GEOFFREY GARRETT: Thank you, good morning to everybody, and my thanks also go out to the Foreign Correspondents Association for your support in making this event happen.

Of course it's a different event than we might have had even 24 hours ago. I gave a speech in Canberra where the first question was the obvious one, will he, or won't he? And my reaction to that actually doesn't have to change very much from last night to this morning, with the news overnight, which is to say that I think the most important thing that people in Australia, and in the region, should take away from the President's decision overnight, is not that this is any kind of snub to Australia, Indonesia or Asia, but it's rather a mere recognition of the enormous tipping point that is about to happen in Washington, on President Obama's domestic agenda.

So let me unpack that in two simple ways. On the domestic agenda, for 2010, I think President Obama would like to be able to do two things. The first one is to pass healthcare legislation that he will argue is the greatest change to American healthcare, and probably to American society, since Lyndon Johnson in the 1960s, and a great society, so Obama wants next week, or the week after, to say, I have added 30 million Americans to the roles of Americans with access to healthcare, and at the same time, I'm saving $150 billion, cutting $150 billion from the US budget deficit in the next 10 years, and $1 trillion from the US deficit in the next 10 years after that.

So it's a perfect now one, two punch, for the Administration, being able to say, I've cut the deficit and increased access to healthcare. Surely no-one could oppose that.

Obama then wants to use that, if it is passed, as a platform for what for the rest of 2010, will be a jobs, jobs, jobs agenda, unemployment in the US is sitting at close to 10 per cent, nobody thinks it's coming down any time soon, what the President needs to do for the rest of the year, is to show the American public that he's trying everything he can to reduce American unemployment.

Now there are two other big legislative items on the Obama agenda that will still be there after healthcare passes. The first one is climate change and energy, there is a new bill in the US Senate, that doesn't look a lot like the emissions trading scheme focus that we saw from the administration last year, and that we've seen from Kevin Rudd in Australia, it actually looks a little bit more like what Tony Abbott has been proposing in Australia, focused efforts to reduce emissions in specific sectors, and of course with this additional element that the Obama Administration is now saying, that nuclear power should be part of the solution to the climate change and energy problems.

The second thing that's on the American legislative docket, is financial services reform, there is a bill out there now in the Senate, that Connecticut Senator Christopher Dodd announced on Monday, and the Senate Finance Bill does two fundamental things. It empowers the US Federal Reserve to - not only to monitor banks, but to monitor hedge funds and private equity, and parts of the American financial services industry that are considered responsible for the financial crisis. And the second thing it does is it brings in real consumer protection, so that Americans would not be so badly burned by the excesses of the financial industry.

Now whether climate change or financial services can pass in 2010, is a whole other question. I would expect that the US will likely just be involved in healthcare and jobs in 2010, and that financial services and energy and environment will spill over into 2011, and obviously with enormous implications for climate change talks at the end of the year, and what the G20 will do with respect to the financial architecture.

So that's the US side, it's a domestic story. Why is this not a snub? I think the non-visit, the cancellation of the visit this time, the rescheduling of the visit to June, it's not a snub, because it is apparent that the President, and the administration, went about as far as they could in making sure that the visit would happen. Cutting the time in Australia to under 24 hours, again I wouldn't view that as a negative, it would show you just how committed - I would argue that it shows you just how committed the President was to coming.

Now why is that? I think the simple answer to that question is that Obama is committed, as he has said, to being America's first Pacific President.

Now, what does that mean? I think the big story there is that President Obama wants to do two things on the Asia Pacific. The first one is to move Asia up the foreign policy agenda in the US.

A lot of people say, I think with some justification, that Asia policy has been on the back-burner for too long, it's a big back-burner, but it's been on the back-burner. Obama wants to bring it closer to the front.

So why would Australia and Indonesia matter? Indonesia matters because Obama can talk about his support for a Muslim majority country that has had a successful, peaceful transition to democracy, and is emerging as a vibrant, pro-market economy. That's exactly the kind of story that Obama would like to support, not only in Indonesia, but in the rest of Asia, and around the world.

Where does Australia fit in? Australia fits in, I think, because the US has to think about the - about maintaining its traditional security relationships in the region, including the alliance with Australia, in an environment where the US approach to Asia, has been arguably too bilateral-based, like the alliance with Australia.

So the trick for the US going forward, is going to be one in which maintaining alliances with Australia and with Japan et cetera, will be very important, but the US must become part of - must turn what has been Asian regionalism in the last decade, into Asia Pacific regionalism, that is, the US will become a big player in regional arrangements.

So, I think that's why the President thought this trip was so important, and it was very powerful - it could potentially have been a very powerful statement, and will be in the future a powerful statement that he wants to deliver on this - the notion of being America's first Pacific President.

In terms of the things that might have been on the agenda for the visit in Australia, there are obvious areas where Australia and the US appear to be very much on the same page. Afghanistan strategy, I don't think, would have been an issue. Australian and the US, Rudd and Obama can both say they're committed in Afghanistan and backed that up with the facts.

Nuclear non-proliferation and disarmament, obviously both President Obama and Prime Minister Rudd have made not only powerful statements but some significant initiatives in non-proliferation and disarmament; they would have talked about that.

I think there is some less obvious things though, that probably would have been on the agenda and will be on the agenda going forward. So let me just conclude by saying a few words about each of those.

I think that trade will be a big Asia-Pacific story for President Obama in 2010. He's committed to expanding American exports by 50 per cent in the next five years. He has to deliver a pro-trade message in an environment where he probably will find it very difficult to get the Doha round of global trade talks ratified by US Congress, where something like the Korea-US free trade agreement is also going to be difficult.

So Obama wants to signal pro-free trade credentials in the Asia-Pacific. How's he going to do that? I think the acronym that we'll hear much more about, going forward, is TPP, Trans-Pacific Partnership, which essentially is an effort by Australia, the US and six more free traders in - among the APEC Group - to tie a big multi-lateral ribbon around what is already a dense network of bilateral free trade agreements. Australia has free trade agreements with four of the other seven TPP negotiators, and I think the same is true for the US.

So Trans-Pacific Partnership, why will we hear more about it?

One, it's a multilateral, high quality free trade group in that it doesn't try to include the big Asian players in the first instance, Japan, Korea, China, but it could provide a framework that those countries subsequently would join.

So if you think that the Doha round is going to stay in suspended animation for a long time, TPP might be the biggest Asia-Pacific - it might be the biggest game in town where trade is concerned.

But the second reason that the Asia-Pacific region isn't - that TPP's important, concerns Asia-Pacific regionalism. So, as I said before, I think that President Obama would like to balance the US's traditional bilateral political, military alliance focus by becoming a more active player in shaping the direction of Asia-Pacific regionalism going forward and ensuring that regionalism isn't quote, unquote, Asia only.

Now there might be another candidate out there which is Prime Minister Rudd's notion of the Asia-Pacific community, but I don't believe it's likely in the foreseeable future that the US will be a strong supporter of the APC notion as Prime Minister Rudd has developed it.

So you - if you're Obama, I don't think you can come out and champion APC, but you can say that new forms of Asia-Pacific regionalism are really important and we're committed to them. But let's start with what's more realistic and achievable and Trans-Pacific Partnership for free trade is a good place to start.

So I think I'll end there. My three summary points would be this.

It's not a snub. This is about American domestic politics.

Point two. Obama is committed on his Pacific President self-stylisation.

And point three; you would expect American engagement in regionalism beginning with trade, to be an increasingly important story.

I'd - that's all I wanted to say. As food for thought, I'd be more than happy to - now to take some questions and engage in a conversation with you all.

QUESTION: Yes it's Linda Mottram in Canberra. Can you hear me okay?

GEOFFREY GARRETT: I can hear you. Can you hear me Linda?

QUESTION: Yes, we can. There are three of us here, Kerry-Anne is from Xinhua News Agency and Elizabeth Byrne is from Australia Network and I'm, of course, from Radio Australia. So just so you know who's listening.

I just wanted to ask you the sort of bigger question again, I suppose, that - and I take your point that it's not a snub, the domestic agenda is extremely pressing, but you've also outlined what is an enormous and really only part of an enormous foreign policy agenda for Mr Obama. Is it not going to be the case that what we've seen with the health care policy issue here we're going to see with a lot of other issues as well domestically?

The domestic agenda is impinging on the Obama administration's ability to get what it needs to get done internationally.

GEOFFREY GARRETT: I'm not sure Linda, actually, that I'd agree with that characterisation. It's, you know - so look, let me cut it in a couple of ways.

The first observation is a critical one about Obama's domestic agenda. You'll recall that he and his chief of staff, Rahm Emanuel , said during the financial crisis, that it was too good a crisis to waste and what they meant by that was that the - things would be doable in American politics because of the crisis environment that would be not doable in other circumstances.

So instead of just dealing with the crisis, last year Obama wanted to load up the legislative agenda including health care. So in retrospect it looks like that was probably a bit too ambitious and so now what we have is several large jumbo jets, legislative jumbo jets, circling around trying to land in the US. And as I said, I think the sequencing there has health care in 2010 and probably puts off energy and climate change and financial services until after the mid-term congressional elections and may puts off things like the Doha round, or big trade deals into a second Obama term. So that's true.

Has that reduced Obama's commitment to engagement with foreign policy, ability to get things done internationally? I don't see that. I think that the theme for Obama has been one that Steve Walt at Harvard has called [indistinct] or solvency to American foreign policy. And by solvency, Walt says it's not as if the Obama administration will reduce its ambitions, in fact, it might in some ways be thought of as being more ambitious than previous American administrations. It will try to do it at somewhat of a lower cost. Now what does lower cost mean? Two answers to that.

The US Defence budget projections talk about something in the next decade akin to the peace dividend of Bill Clinton after the end of the Cold War. So, with pretty considerable cuts to the defence budget in the US, why does the US think it can do that? It's for the reason that Secretary Gates says, which is that we don't need to think about fighting big conventional wars any more, we have to think much more about counter-insurgency and that means more human intelligence and the like, and less military hardware. Whether Obama can deliver on that, I don't know, but it's clearly a theme that is there in the statistics with respect to the defence budget.

The second thing, of course, that solvency would mean, is asking what of the US's allies? And I think there, you know, Obama has clearly wanted that; let's take Afghanistan as a lead example. But at the same time he's pretty - he's pretty pragmatic about the realities. So in the Australia case, we seem to have a clear don't ask, don't bother equilibrium on more Australian involvement in Afghanistan, even with the collapse of the Dutch Government and the likely withdrawal of the Dutch from southern Afghanistan, the US has already said it would take the leadership role back in southern Afghanistan.

So yes, the domestic agenda has to occupy all this time. Maybe Obama has over-reached there. It's going to take longer, but I don't think it's zero sum with his international engagements. Yes, it is [indistinct] like a visit to Australia and I think more broadly there's a bigger story about solvency and American foreign policy going on.

QUESTION: Hi, it's Elizabeth Byrne from Australia Network.

GEOFFREY GARRETT: Okay, so likely…

QUESTION: You just said about…

GEOFFREY GARRETT: …I have - I have all these…

QUESTION: …Americans…

GEOFFREY GARRETT:...all the hands in the room and I noticed they were staring down looking at a phone here. Perhaps I could traffic cop and now take a question from the correspondents who are in the room and then I'd like to come back to you on the phone after the next one.

QUESTION: Sorry, Geoff. Thanks.

GEOFFREY GARRETT: Okay.

QUESTION: [Indistinct] majority to go through this health care bill or any of the other [Indistinct]

GEOFFREY GARRETT: Such a good question, and I think the simple answer to it is to acknowledge that Congress is not like Parliament in parliamentary systems. The Democrats - the Democrats who comprise Obama's majority are typically moderate to conservative Democrats. The way they got elected was not by being card carrying members of the Democratic Party it was by appealing to their state or their constituency, and once you're trying to push into areas that are quite Republican the way to beat the Republicans is to be a conservative Democrat.

So what's happening right now on health care, what happened last year on health care, what happened on fiscal stimulus, what would happen on climate change? It's all the same, it's trying to convince ten Democratic senators and 30 or 40 Democratic house members to vote for something that they think is a little too progressive.

So yes the Republicans have a strategy today of just saying no to everything the Obama administration proposes, but that puts all the action on the President and the leaders of the house and senate to convince those centrist Democrats to go along. That's been the big challenge in health care.

And that's why I think a very important thing happened overnight which is when the Congressional budget office, which is an independent organisation, came out and said that Obama was right and that his healthcare bill would cut $150 billion off the deficit, that now gives them some cover to say that they're doing something that isn't just a handout to those poor Americans, parathetically who tend not to vote who don't currently have healthcare, it's also about cost containment in an environment where the American budget is bleeding red ink, and healthcare cost containment is a critical issue.

So I think that's the big story. This is a separation of power system. Obama doesn't control those marginal Democrats, and they're pretty conservative.

Question from Canberra.

QUESTION: I just want to go back to what you said about leadership in Oruzgan in Afghanistan. Yesterday in the Senate the Defence Minister said that NATO was considering what - a new partner, but he said I won't pre-empt that decision yet. Whereabouts - I just want to check with you whereabouts America has said that it's - it would take over that leadership role?

GEOFFREY GARRETT: It was a pretty immediate Defence Department statement to - he didn't say that - I think you just said the US was keen to take over that leadership role. I don't think that's what the Defence Department said. It said listen this is really important to us, so if necessary and if all the other NATO allies would agree we'd be happy to - we would step into the breach if a crisis in leadership occurred with a Dutch pull out.

You know that underscores what to my mind is the very interesting development in 2009 with respect to Afghanistan which is it became Obama's war and America's war. As you know the American troop presence in Afghanistan will have gone from what in the 30,000s to over 100,000s in the first year that Obama was in office, now dwarfing the contributions of the other NATO allies.

So it is America's war, and the big story there of course is that Obama has said I'm both going to surge now and withdraw soon after. How that strategy is going to play out remains to be seen, but America's involvement in the war obviously has gone up enormously in the past 12 months.

A question in the room. Yes.

QUESTION: [Inaudible question]

GEOFFREY GARRETT: I'll try to - maybe the easier thing is I'll try to repeat the - summarise the questions before I answer. Yes.

QUESTION: [Inaudible question]

GEOFFREY GARRETT: So the question concerns Australia, China and the US. Obviously an extremely important set of relationships. What would I say there? Two things. First it's clear that there are some stresses in both of those bilateral relationships at the moment. Australia, China with the Stern Hu trial about to start, and US China in the context now not of geopolitical things but of economic things, concerns about - or a heating up in this debate over whether China artificially keeps down the value of the RNB. So yes real tensions in both of those bilateral relationships.

A question that's often asked rhetorically is should Australia, particularly with a Mandarin speaking Prime Minister, try to play a mediating role in US China relations? I don't think that's necessary or called for. At the moment with the strategic and economic dialogue between the US and China you have essentially half the Cabinet of both countries meeting twice a year. That's a pretty intense bilateral diplomatic relationship.

The Australia China relationship is also very important but I don't see that becoming triangular in any real sense any time soon. Obviously Australia and the US must think about what rising China will mean, not only this year, next year but for the coming decades. That's a story that's going to play out over a long period of time, but I think the idea that Australia would be the honest broker, the mediator in US China relations is probably a little overdrawn.

Is there another question [indistinct]

QUESTION: Geoff it's Linda again. I just wanted to ask you about, since we've got you, about G20 and whether - I guess in a sense it's the same as the last question, you know, how much energy the US has to pursue the issues it wants to pursue with the G20 and the importance of Indonesia in the G20. Where all of that is at. So that's very imprecise, but I hope you get some sense of what I mean.

GEOFFREY GARRETT: Okay so the - let me duck the Indonesian one but I would like to mention what I think is an important comment or a couple of important comments about G20. And this certainly matters both to Australia and to the US and really to the world.

With the problems at Copenhagen plus the ongoing inability to restart or conclude the Doha round, I think it's fair to say that old style large end multilateralism is looking decreasingly plausible as a global governance model going forward.

What the world probably now needs is a representative but smaller body that can make essentially proposals to a UN sized group of nations that they can accept or reject. But essentially it's a global proposal making body for a new global architecture or for any of the big issues on the agenda. You'd think that a grouping like the G20 is the best hope going forward there.

The first issue however in making that work is is the G20 legitimate on a global stage? And it seems to me that the biggest opposition to the G20 comes from Africa where the African countries say listen South Africa is an important state but it shouldn't speak for all - it shouldn't and cannot speak for all of Africa in the G20.

So that's a legitimacy concern. Can that be allayed? Maybe it can.

But the second one which I think is a more internalist G20 problem is that the G20 was - the leaders meeting at least was created on the fly in the white heat of the financial crisis as a crisis management institution. Now it has to go from being reactive of crisis management to being a leadership organisation charting a big agenda going forward, obviously with something like global financial reform as the lead agenda item.

And that's going to be a difficult pivot to make. I think it'll be interesting to see in the two G20 meetings this year whether some of the air goes out of the G20 balloon because essentially the worst ever crisis is over, and other issues and other problems re-emerge, or that the G20 now can deliver on this - on the self-style notion that it's the leading institution of global economic governance.

That strikes me as just being a really big issue if Copenhagen and Doha show us that getting 200 countries to sit in a room and come up with a deal that they can all sign is decreasingly plausible.

Question in the room - yes, Robert.

QUESTION: Robert Millikan(*) from [indistinct]. Geoffrey, just following on from the question about China, how much do you think there's an element in President Obama's preparing himself for [indistinct] and making this visit if Indonesia and Australia do - is making much of the fact that they're both strong, democratic regional allies. How much is that driven by America's worry about relying on China, and [indistinct].

GEOFFREY GARRETT: The question now from Robert Millikan concerns how much of Obama's Pacific presidency is driven by a concern about the rise of China. Obviously an extremely big question - and let me give you my biggest picture answer to it, which has two elements. The first one is that really, for 20 years now, beginning with George H. W. Bush all the way to President Obama, American China policy has essentially been the same - which is economic engagement with China is the most important thing we can do.

It is not only good for the Chinese economy, it's not only good for the American economy, it's good for the world economy, point one. Second, if one's concerned about old-style military conflict between the US and China, one of the best ways to minimise that possibility is to increase economic ties between the two countries. And third, if you're concerned about a political liberalisation in China, the best way to create preconditions for political liberalisation is to have a large Chinese middle class that consumes, and is connected with the west.

So I think that there's remarkable continuity in American policy to China now for two decades. And it says economic engagement is the big story.

Having said that, the US is now in a place where it might feel that there's a bit of a mismatch between its Asia strategy, its Asia diplomatic strategy which has been bilateral alliance based. And this dynamism of Asian regionalism in the past 10 years in particular, since the Asian financial crisis - so the US has not been involved in that, was not asked to be involved in that, and hasn't asked to participate.

I think Obama would like to change that, but he'd like to change it not by trying to make the US a member of, for example, the East Asian Summit, the ASEAN plus six grouping, but rather to come up with something different. And that's as I said why the relatively modest and pretty arcane and under-understood at the moment Trans-Pacific Partnership, the TPP, is potentailly much more important, because it's an economic intergration base strategy for the Asia Pacific that has pretty high entry barriers.

You've got to be a free trader. You've got to agree to behind the border liberalisation, et cetera. That's the kind of way I think that the US would like to get back into the Asian and regional game.

Is there a question from Canberra?

QUESTION: Yeah. It's Linda again Geoff, just on the TPP.

It does seem though that's it's going to be a very long drawn out process. I mean, we had officials meeting in Melbourne this week on the TPP draft and the beginning of what could be a structure to begin negotiations down the track. I mean, can you really put that much stock in the TPP, and it's got such a small membership. And surely be definition without the large Asian players in it, it's - there's got to be questions about it.

GEOFFREY GARRETT: Absolutely. Is the glass half full or is it half empty I think is the right question to ask about TPP. And your scepticism I think is well founded. I mean, if you were to ask me of a point prediction of when might the Trans-Pacific Partnership among the eight countries, by the way, which aren't all tiny and small. You have Australia. You have the US. You have Chile, Peru, Vietnam - these are significant players. Some free traders - Singapore, Brunei, New Zealand. I think that's the group.

Can that deal be done in the next year? No, I think the smart money would say that the ratification of TPP probably couldn't happen until what would be a second Obama term, and maybe that would end up being the third Rudd term.

You know, we're talking 2013, something like that. So is Trans-Pacific Partnership today the most important thing going in trade? It's probably not. But I think if you were President Obama, it's the best hope you've got to kill two birds with one stone, which is to say that you're serious about - you have a pro-active free trade agenda in an environment where the other things that are on the table with respect to trade are just too hard at the moment.

Doha, Korea.

So yes. I'm a free trader, and TPP has all the attributes I like. And then the second one is that it also fits a regional integration strategy that starts, if you like, in a sort of old-style European integration model.

It's a relatively modest agreement, and it's narrowly functionally defined in terms of trade, so you know, I don't know, this won't be an enormous reach.

But here's a way you might think about it.

The Europeans had the European Coal and Steel Community in 1951. In 2010, there are 27 countries in the European Union.

It had to start somewhere. It started small and focused. You know, that's an oversell of TPP. But I do think that in the pragmatic constraints that Obama must - the heavy pragmatic constraints that Obama is operating under today, it makes sense for him to make more of Trans-Pacific Partnership than we might otherwise have thought.

And of course on the Australian side, what we've noticed from Trade Minister Simon Crean is that he hasn't - he used to have a Doha is the only thing I want signed approach to free trade, the sort of, the classical approach that says only a global deal on trade is a good idea, and smaller trade agreements get in the way essentially of the global deal.

Simon Crean, I think it's fair to say in his recent speeches, has softened that approach and said, Doha's important, but we need to keep pushing ahead on every trade agenda we can - and TPP should be one of those.

Another question in the room. Yes, the gentleman at the end of the table.

QUESTION: [Inaudible question]

GEOFFREY GARRETT: No, no, look, you know, obviously that's the kind of question that Australians would ask about this. How important are we?

And I think the right answer begins by saying - listen. There are no problems in the US Australia relationship. It's a rock solid foundation. So there's nothing to be fixed there, or nothing to be developed. It's an incredibly mature relationship with lots of dimensions to it.

Are there big international issues, you know, from the global ones like non-proliferation to these regional architecture ones, regional trade - are there those kind of issues where Australia and the US need to talk about the way forward? Yes. But there's no relationship to be built, and no problems in the current relationship, so it - you know, so that's a different situation from Indonesia.

You know, Americans are often saying, I think it's fair to say, that Indonesia is the most important country America knows least about. So President Obama wanted to make a very big statement that he wanted to reverse that, and I think it's perfectly understandable that he wanted to reverse that.

No such statement needs to be made about Australia so I just wouldn't read anything into the shortness of the visit. I'd go the other way and say that when it was down to the 18 hour visit, Barack Obama was going to be pretty bleary-eyed and tired, but he was pretty committed to making the speech in Parliament and to doing a joint press conference; and that's a positive, not a negative.

Is there another Canberra question?

QUESTION: Just one more. I hate to be a cynic, but don't you think that groups like ASEAN will provide a fatal sort of stop to any final outcome on the TPP taking over and having some sort of over-arching role in the Pacific, given that - oh, in the Asia-Pacific region. But also given that groups like ASEAN have sort of used their structures to actually exclude those outside. So there's a lot to break down there, isn't there?

GEOFFREY GARRETT: Well, there is, I mean, I don't want to quibble with your rendering because, in general, I think it's about on point. But obviously the ASEAN Plus notion has been a very important development. So ASEAN Plus Three, adding China, Korea and Japan, and then ASEAN Plus Six, adding New Zealand, Australia and India to that to create the East Asia Summit, that's a pretty important development. Is it ASEAN-centric, or are the ASEAN countries trying to - navigating a changing dynamic with big regional players in Asia-Pacific? I don't know which way to go there. But, yes, ASEAN has been at the core of that.

But if you're in the United States and if you're Barack Obama, the thing you notice about it is the absence of the US. So the US wants to think about Asia-Pacific regionalism rather than Asia-only regionalism. And my sense is that the US's interest in Asia-Pacific regionalism has actually gone up considerably in the past six months or so with the triggering events of the new Japanese Government; a new Japanese Government that's concerned about the future of America's military bases in Okinawa and is als… and has a Prime Minister who's also said in public that it might be time for Japan or he's thinking about looking west to China rather than to the West for Japan's future.

So Asia-Pacific regionalism has got to be more important for Barack Obama than it has be… than it was, let's say, for George W Bush. Can he get it done? I don't know, but there are clearly incentives for the US to move that forward, but you don't want to do it in a clumsy, sledgehammer, unilateral kind of move. And I think not wanting to say that that's what Asia-Pacific community is, but for the US to endorse lock, stock and barrel, something like an Asia-Pacific community idea in an environment where Asian countries have been reticent to endorse that idea, that would just be - that would be over-reach for Obama at the moment, which is why I think he's not going in that direction.

Yes, sir?

QUESTION: Yes, my name is Ronnie(*) [indistinct] Swiss Bank [indistinct]. You have already mentioned the Doha round and a few weeks ago the Trade Minister signed agreements about the foreign correspondence and, whilst, again he pointed out how important the successful round would be. So what do you think [indistinct] backed from the Americans at this point?

And my second question, if I may, will be, why are we seeing Kevin Rudd get so little support for his APC [indistinct] and from the emissions [indistinct]?

Thank you.

GEOFFREY GARRETT: Okay, so there were two questions. The first one concerned what are the prospects for ratification or a completion of the Doha round with American leadership, let's say in 2010?

My answer to that question is the prospects are really not very good. In the current environment in the US, it would be extremely hard to ratify any trade deal in the Senate and particularly a trade deal that attached the Holy Grail of subsidies to American agriculture.

You know, Simon Crean, for good economic reasons and because of Australia's power as a bigger competitive agricultural exporter, of course, wants to push completion of the Doha round. It is very important to the developing world. There are difficulties, obviously, in getting it through in Europe, getting it through in Japan, but in the US in 2010 I think it's just impossible and that, as I said before, I think that holds true also for something tangible and very important, the Korea-US free trade agreement that's sitting there. It's been negotiated, but it hasn't been voted on in the US and I don't see its being voted on in the US any time soon.

The second question was why not more enthusiasm for Kevin Rudd's Asia-Pacific Community?

I think part of the answer is the one that I guess Linda from Canberra was referring to, which is the notion that there's been a lot of Asian regional dynamism, but a lot of it - it's been said that intercontinental Asia, if that's a legitimate term.

So now the Prime Minister has been pushing something that isn't centred, that it's not an Asian initiative, it's an Asia-Pacific initiative. So I think there's an understandable reticence as a result of that. I'd just like to underscore with respect to the US at this point, that the US hasn't been involved in the Asian regionalism.

[Indistinct] want to move forward on an Asia-Pacific approach, but doesn't want to do anything that looks too diplomatically clumsy. And it seems to me that very strong support and endorsement of Asia-Pacific community would be too clumsy; going for something that's a little more modest, that's focused on trade, it has a bunch of players who are already very supportive, like the Trans Pacific Partnership, makes more sense.

On rotation, we're back to Canberra again. I don't know whether you've - whether I've said anything that's going to please you yet Linda, but…

QUESTION: [Laughs] No, look, I'll bow out at this stage, just…

GEOFFREY GARRETT: Just talked you into the ground Linda.

QUESTION: [Laughs] Don't tempt me. [Laughs]

GEOFFREY GARRETT: Are there any more questions in the room, sitting? Yes?

QUESTION: [Inaudible question]

GEOFFREY GARRETT: Very important question. The question, it concerns the future of Japan in the context in which there have been diplomatic problems between US and Japan and between Australia and Japan.

So in Australia-Japan, we have Antarctic whaling and in the US case we have the Okinawa military bases.

I think there is a - there are two issues here. The first one is the new Jap… do we know - there's a lot of unpredictability about the new Japanese Government and that unpredictability really matters, because Japan is such an important country, both to the US and to Australia. To the US, mostly for political, military reasons. For Australia, political, military, but also economic.

So uncertainty about the direction of the Japanese Government is really important. But I think there's a bigger question which is where is Japan headed in the next several decades? So what do we know about Japan?

We know that Japan has been arguably more adversely affected by the global financial crisis than any other country in Asia, in an environment in which Japan's saddled with 200 per cent public debt, has an old and declining population, so Japan's economic future is in question.

But it's been [indistinct] democratic and political, military ally of the US in Asia for several decades. So we - what the future of Japan is, as an economy and a country, and then the role, the reasonable role that Japan plays is surely a very big question for the US and Australia. And that's beyond the uncertainties of the current government.

I would think, if I was advising the Japanese Government, I would say to them that yes, you're

economic future is increasingly tied to China and continental Asia. But in that environment, it's arguably the case that you're political military relationship with the US will be even more important to you in the decades coming, than the decades past.

So I think for Japan, as for Australia, the biggest go-political challenge going forward is how does - how do both countries maintain and enhance their values and interest-based alliance with the US in an environment where - in which their economic futures are increasingly tied to Asia? That's the challenge.

So there's - so Japan has just added a big uncertainty to that environment with the election of a new government and that some of the policy decisions, you know, policy musings that the new Japanese Government is coming out with.

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