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SUSAN LI: Australia's Foreign Minister Stephen Smith joins us from our New York studios. Now he is in New York, by the way, for the US non-proliferation talks and he's in town to attend the UN Treaty of Nuclear Non-Proliferation Conference. Ok, let's talk about all things in the world right now, Stephen we have so much to cover. Let me first get your thoughts on, and your reaction to, the arrest of a Pakistani National in the attempted Times Square bombing.

STEPHEN SMITH: We need to wait until the authorities have completed their investigations and to see what charges, if any, arise. But as a general proposition the United States, as Australia, takes every precaution against terrorism. We know that this is a global threat, and no nation can be complacent or rest on past efforts. We need to be always vigilant and ever vigilant. But in terms of this particular instance, we are of course grateful that there was no injury or loss of life and we'll wait until the authorities complete their enquiries to see whether there are any wider ramifications. But it would be inappropriate to make any direct comment given that a person has been arrested, but not yet charged or convicted.

SUSAN LI: And very concerned about global terrorism still, Minister Smith, in fact the Non-proliferation Treaty and the discussions over nuclear material that took place recently in DC is to make and ensure that Nuclear material doesn't fall into the wrong hands - how's that going?

STEPHEN SMITH: The Nuclear Security Summit that was held in Washington a few weeks ago was very successful. It does join together two significant issues which challenge the international community, terrorists and the possibility that terrorists could access nuclear materials so the Nuclear Non-Proliferation Treaty Review Conference which is occurring here now is very important - very important for international community efforts on non-proliferation and very important for international community efforts on disarmament. But also very important for international efforts so far as regulating the peaceful civil use of nuclear energy is concerned. The 2005 Review Conference was not successful, but we're cautiously, quietly optimistic that this will be a more productive conference. Australia, together with Japan, has put forward a series of practical measures that the international community could take to advance the interests of non-proliferation and disarmament.

SUSAN LI: Minister Smith, what exactly is a realistic goal for these discussions? As you said, everyone's coming at this topic from different angles, conflicting interests, and really this is a month long meeting with so many conflicting ideas, that people have doubts as to whether this will actually turn into an binding international law.

STEPHEN SMITH: Australia's policy goal is a world free from nuclear weapons where we see complete disarmament. We've seen modest progress in that respect in recent times. We've welcomed very much the recent agreement between the United States and the Russian Federation for the so-called New START agreement to further reduce their nuclear deployable stocks. But we're not starry-eyed; we know that this is a long process and it's not going to occur overnight. We're also very strong supporters of the Comprehensive Test Ban Treaty coming in to effect and we welcome very much the fact that Indonesia has announced in the course of the conference that it will ratify the Comprehensive Test Ban Treaty. But we still need a number of nations to ratify that treaty before it comes fully into effect. But there is a range of sensible, practical steps that the international community can take to advance the cause of non-proliferation and disarmament and we need to be always, and the international community, to advance those interests because there's no greater threat to human kind than the use of nuclear weapons.

SUSAN LI: Absolutely Minister Smith, let me just ask you and highlight India right now, because India is a country that Australia might be signing a Free Trade Agreement with. Let me just ask you about India's stance towards the NPT, the Non-Proliferation Treaty - they haven't signed this deal, I mean is that going to be a stumbling block in further trade relations and negotiations between Australia and India?

STEPHEN SMITH: Not so far as a Free Trade Agreement is concerned. We want to negotiate with India a Free Trade Agreement, but Australia does not export our uranium to a country that's not a party to the Nuclear Non-proliferation Treaty. And India is not a party to the treaty and has made it clear for a long period of time that it is not proposing to become a party to the Treaty. So as a consequence of that, Australia does not export its uranium to India.

But in the last 12 months we've seen of course the so-called US-India Civil Nuclear Arrangement approved by the Nuclear Suppliers Group and that has brought India under the general purview of the international regulator, the International Atomic Energy Agency. Australia supported that development because it does see the international regulator have oversight over India's civil-nuclear program and there has never been a suggestion of proliferation from India. But as a consequence of India's long-standing approach not to join the NPT, Australia does not export our uranium to India.

SUSAN LI: Minister Smith, in fact that's right, Australia does have very strict restrictions in terms of who your country will export uranium to. Now the other name on that list is Russia. How do you feel about Russia considering you saw that historic agreement signed between the US and Russia to actually deplete some of their nuclear resources?

STEPHEN SMITH: Australia has a Civil Nuclear Agreement with Russia. I was in Moscow recently for a series of meetings with my counterpart, Russian Foreign Minister Lavrov and he and I announced at those meetings that Australia and Russia would both now move to ratify the Civil Nuclear Agreement between Australia and Russia. Russia, of course, is a party to the Nuclear Non-proliferation Treaty and Russia, as you correctly say, together with the Untied States has agreed to reduce its own nuclear stockpiles. We will export uranium to Russia on the basis of its membership of the NPT, but also its entering with Australia of a Civil-Nuclear Agreement which ensures that the most stringent safeguards apply to the use of Australian uranium exported to Russia.

SUSAN LI: Now Minister Smith, you also export uranium to China. Let me just bring up China right now - obviously making waves in relations between Australian and China in the past few months is the Stern Hu trial. He was convicted of stealing commercial secrets and we've recently had China coming out with new rules about what stealing commercial secrets and state secrets means in terms of wanting to strengthen protection of it, which includes acquisitions and technology. Let me just ask you, when you look back on the Stern Hu trial, much of it behind closed doors, it was really a quick trial - three days is really all it took. Do you think it was a fair trial to those convicted?

STEPHEN SMITH: So far as Stern Hu was concerned, he was charged with two offences: one was a bribery offence or a bribery charge, the second was an offence of stealing commercial secrets. He was convicted of the bribery charge and our officials had access to that part of the trial, and the advice from our officials was that there was evidence that would lead one to the conclusion that bribery had occurred.

So far as stealing commercial secrets was concerned, our officials did not have access to that part of the trial - it was closed to our officials. As a consequence, I've described that as very much a lost opportunity for China. It didn't give the international business community, the international investment community any clarity so far as what commercial secrets are concerned.

Subsequent to Stern Hu's trial, Chinese authorities did promulgate something of a definition of commercial secrets, or commercial matters or commercial information. Our own view, or judgment of that is that that doesn't necessarily shed much more light on the definition of commercial secrets and doesn't give the clarity to the international business or investment community that Australia believes it needs. So more effort, in our view, is required from China to give that clarity to the international investment community.

SUSAN LI: Okay, now quickly Minister Smith, I'm running out of time here - I wanted to ask you about the super tax levied on resource companies in Australia this week. Some are saying that this is going to deter a lot of foreign companies looking to invest in the mining sector in Australia and really this might be passed on to end users, which are other global economies. What do you say to those concerns?

STEPHEN SMITH: Well what the Australian Government has recently announced is a resources rent tax - a 40 per cent tax on ‘super profits' on the activities of mining companies, on mineral resources projects. For a long time we've had a comparable, or a similar tax, on petroleum resources projects and that hasn't stopped our petroleum resources industry from being very successful. Indeed, in recent times we've seen very large liquefied natural gas export projects approved and get under way, including the so-called Gorgon Project. So this is a tax on mineral resources which is comparable to a tax which we've had on petroleum resources for a long period of time.

There have always been suggestions over the years in Australia by elements or members of the mineral resources industry that a particular tax, or a particular policy change will see the death of the industry. The Australian minerals resources industry has never been stronger and we don't believe that there will be detrimental or adverse consequences as a result of these new taxation arrangements.

It will also see taxation benefits for explorers, for minerals explorers, for exploration. It will also see very large investment in infrastructure, which is something that the minerals resources in Australia needs very much to be internationally competitive. And it will also see a reduction in the general company tax rate, which will be of advantage and benefit to small or medium size Australian minerals resources companies. It's a changed tax arrangement, but we don't think it will have adverse consequences for the Australian minerals resources industry.

SUSAN LI: All right, Minister Smith, thank you so much for sharing your time with us today. That's Stephen Smith, Australia's Foreign Minister joining us all the way from New York City.

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