E&OE
3 March 2009
Interview - Ashleigh Gillon, Sky News AM Agenda
Subjects: global financial crisis and free trade, Afghanistan, Iran, Israel
ASHLEIGH GILLON: Well, today interest rates are likely to be cut again but not by as much as we've seen in recent months. It comes as the Government prepares to receive the national accounts data which may show Australia has suffered a period of negative growth in the December quarter.
Joining me now from Sydney is the Foreign Minister, Stephen Smith. Minister, good morning.
STEPHEN SMITH: Good morning, Ashleigh.
GILLON: Yesterday the Treasurer made the point that seven out of Australia's top 10 trading partners are now in recession. Is it inevitable, do you think, that Australia will follow considering that so many of our global trading partners are suffering so much?
SMITH: We certainly know it is inevitable that we're going to face tough economic times. We've been of the view that Australia is better placed than most other countries, if not all other countries, to try and absorb that shock. But so many of our key trading partners are now in economic difficulty: Japan, China, the United States and also the ASEAN economies, with whom we've recently signed up an Australia-New Zealand Free Trade Agreement. So all of our trading partners are, effectively, in trouble but we're doing everything we can to avoid the worst effects of that, doing everything we can to ensure that our domestic economy continues to be stimulated and doing everything we can to try and remain within positive economic growth.
GILLON: You mentioned there have been some positive signs recently in terms of free and open trade. How important is it that countries don't revert to protectionism at this time?
SMITH: We believe it's absolutely essential. We think the lesson of history is that in difficult global financial times that the worst thing the world can do, the worst thing individual nation-states can do, is retreat to protectionism. That's why we were very pleased that my colleague, Simon Crean, recently signed up the Australia-New Zealand-ASEAN Free Trade Agreement.
The ASEAN countries now make up nearly 20 per cent of Australia's overseas trade so it's very important to it but that sent a very big signal throughout our region and to the world, to the international community, that the last thing our region wanted to do was to retreat to protectionism. So we're very pleased about that and these days one of the strengths of Australia's economy is the diversity of our trading partners and the ASEAN countries, our South-East Asian neighbours, now form a very important part of that. So that sent a very good signal and we're very pleased about that.
But we do need to do everything we can, regionally and internationally, through the WTO, the World Trade Organization, to keep on mounting the argument that the worst thing we can do in these difficult economic times is to retreat to protectionism. That won't help stimulate domestic economies and it won't help jobs either in Australia or elsewhere.
GILLON: If the national account data tomorrow does show Australia suffered a period of negative growth, will that be a bad reflection on the Government's stimulus plan?
SMITH: On the contrary. We've been making the point that both with our stimulus package in December and the package that went through the Parliament recently that we have to do everything we can to stimulate our domestic economy. The last thing we can do is to sit on our hands and do nothing and so trying to stimulate our domestic consumption, stimulate our domestic activity is very important. We're doing that in a staged way, firstly through our fiscal stimulus in December, trying to ensure that domestic consumption remains positive. But also in the more recent package, the $42 billion package, also looking at longer term infrastructure or structural changes, making sure that we, in addition to stimulating our domestic economy, do leave a long term productive benefit, whether that's improving schools or improving insulation in houses.
GILLON: Okay, well, on another matter, I understand you've got an announcement to make about aid funding to Afghanistan. What are the details?
SMITH: Yes, I'm announcing today that we're providing an additional $5 million for mine clearance in Afghanistan. Our contribution to Afghanistan is not just a military contribution. It's also a civilian contribution whether that's through humanitarian assistance or development assistance. And one of the things that we have done in Afghanistan is to make our contribution to clearing mines.
We know that historically Afghanistan has been a country that has suffered from conflict for a long period of time. There are many thousands of mines still scattered in Afghanistan. Very many of those from the Russian invasion or the Russian conflict so we're, in response to a request from the United Nations, today contributing an additional $5 million to mine clearance in Afghanistan. One of the important things that does, of course, is it opens up more land for agricultural production in Afghanistan and in addition to mine clearance, which is one of the humanitarian things we do, one of the other civilian capacity building things we do in Afghanistan is to help on agriculture. So we think it's an important contribution.
Australia's got a very good record in mine clearance, contributing, over the last decade or so, some $75 million internationally in countries like Afghanistan and Cambodia to clear the remnants of mines which are a terrible hazard to civilians.
GILLON: When the Prime Minister goes to Washington in the next couple of weeks to meet with the President, Barack Obama, do you expect that the US will ask Australia to send more troops to Afghanistan?
SMITH: Well, we haven't yet received a formal request. It'll of course be of no surprise if we do. But I think a couple of points are worth…
GILLON: So you're expecting that to happen in the next couple of weeks?
SMITH: Well, I'm not expecting it to happen. I say it won't be any surprise if at some stage we do receive a formal request. There are a number of points I think that are worth making.
Firstly the United States, the new Administration, has made it clear that it does see the need for additional contributions, not just by the United States but by the international community. Secondly, they're conducting a range of military and political reviews. There's an overarching review known as the Riedel Review, which the international community is contributing to, including importantly Afghanistan and also Pakistan. But in the context of that overall review it won't be of any surprise to the NATO countries or to international contributors like Australia if requests are made for additional contributions.
We'll consider those requests on their merits if and when they arrive. As I said earlier, our contribution to Afghanistan is not just a military one – it also includes civilian capacity-building. And I've made it clear in the past that that is one of the areas where certainly Australia sees itself as being in a position to make an additional contribution on the humanitarian or the nation-building front.
GILLON: A senior US military official now says that Iran has enough material to build a nuclear bomb. Do you think that's credible?
SMITH: Well, what we do know is credible is that the International Atomic Energy Agency, the international regulator, in its most recent report has said that Iran continues to be in breach of United Nations Security Council resolutions so far as its uranium enrichment is concerned.
That opens up the prospect at some point in the cycle, unless Iran desists from its current program, that it may well end up with a nuclear capacity. So there are varying assessments about its current potential. What we do know is that one of the most significant international threats or concerns is the potential for Iran to have a nuclear capacity.
That's why Australia strongly supports those Security Council resolutions while we also have sanctions on Iran against its nuclear program. I think one of the most difficult and important issues that the new United States Administration will confront in the course of this year, is its relationship with Iran and its efforts to bring Iran's nuclear program under control and consistent with United Nations Security Council resolutions and consistent with the requirements of the international regulator, the International Atomic Energy Agency.
GILLON: Well, how worried are you that the new Likud-led government in Israel might be more hawkish and launch, perhaps, a pre-emptive strike as this becomes more of an issue?
SMITH: Well, we certainly very strongly believe that this is an issue that we need to resolve diplomatically, both through the United Nations and through regional and bilateral diplomatic pressure. That's certainly Australia's very strong view. But we need to wait and see which government emerges from Israel.
Mr Netanyahu has been commissioned by the President to try and form a government and he's currently in negotiations with potential coalition partners. But irrespective of the shape of the Israeli Government, whether it's a Netanyahu-led government or some other combination, that's entirely a matter for the Israeli democratic and political processes. But whichever government or whatever the shape of an Israeli Government emerges, I think that government will, in conjunction with the new US Administration, have to throw itself very strongly and very firmly into the Middle East peace process, but also has to deal with the international community so far as the threat of Iran's nuclear capacity is concerned.
GILLON: Minister, just finally, in his first couple of weeks in office, President Obama lifted a restriction on overseas aid money that prevents funds being spent on family planning and abortion. Early last month you said a decision on this is imminent here in Australia, Australia's position on this.
When can we expect to see any progress on that?
SMITH: In the very near future. Our consultation is just about complete so I expect in the very near future to be able to make an announcement about that matter.
GILLON: And do you agree in principle that our aid funding shouldn't have those sort of restrictions placed on them?
SMITH: Well, I've never indicated in advance of making the formal decision what my personal attitude or approach is. I think it's been very important for me to conduct the consultations and the deliberations without indicating one way or the other what my own view might be.
It's an area where there are strong views firmly held. I respect the various views that have been presented to me and I expect, in the very near future, to be able to make an announcement about that matter on behalf of the Government.
GILLON: Foreign Minister Stephen Smith, thank you for your time.
SMITH: Thanks very much.
[Ends]
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