EAP A/S HILL'S MEETING WITH FOREIGN AFFAIRS

S E C R E T SECTION 01 OF 03 CANBERRA 000882

SIPDIS

STATE FOR EAP AND EAP/ANP
MANILA PASS KOROR, KOLONIA AND MAJURO
WELLINGTON PASS APIA

E.O. 12958: DECL: 05/23/2015
TAGS: PREL MNUC AS KN CH KS JA ID ARF
SUBJECT: EAP A/S HILL'S MEETING WITH FOREIGN AFFAIRS
SECRETARY L'ESTRANGE

SIPDIS

Classified By: Charge Bill Stanton. Reasons 1.4 b/d.

Summary
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1. (S) EAP Assistant Secretary Christopher R. Hill told
Australian Department of Foreign Affairs and Trade (DFAT)
Secretary Michael L'Estrange on May 17 that there was a

SIPDIS
growing sense of urgency in Washington about the DPRK's
nuclear program. L'Estrange agreed that the current state of
"limbo" could not continue for much longer and that the 6PT
process may have run its course. L'Estrange said that
Australia viewed the elevation of the U.S.-Japan-Australia
Trilateral Strategic Dialogue (TSD) as a very positive
development. The GOA wanted to ensure that the TSD remained
an informal, non-bureaucratic forum where the ministers could
engage in real dialogue. Australia also wanted to be certain
that the TSD did not impinge in any way on AUSMIN.
L'Estrange said Australia's view of China was one of
"optimism, without any illusions." At the same time, the GOA
wanted to reassure Japan that Australia was not blindly
falling into China's thrall, and thought PM Koizumi's more
strategic foreign policy might offer a chance to "reinvent"
Australia-Japan relations. L'Estrange said Australia
believed new Indonesian President Yudhoyono presented an
opportunity, was pursuing a comprehensive engagement with
Jakarta, and hoped for a similar strengthening of
U.S.-Indonesian ties. End summary.

DPRK
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2. (S) In a May 17 meeting in Canberra, EAP A/S Hill briefed
DFAT Secretary L'Estrange (Deputy Secretary-equivalent) on
the latest developments on North Korea. He observed that the
DPRK had in all likelihood used the year-long 6PT impasse to
further advance its nuclear weapons program. L'Estrange
replied the GOA believed the 6PT might have run their course;
unfortunately, there appeared to be no consensus on an
alternate path. Beijing wanted to be perceived as doing
something in order to "keep Washington off its back" and to
keep the matter out of the UNSC -- but not enough to risk
destabilizing the DPRK.


3. (S) Asked about North-South relations, A/S Hill noted that
the two Koreas were holding vice-ministerial level
discussions that day in response to a sudden May 14 request
from the DPRK. Fertilizer would be at the top of the agenda
for the North. In general, Pyongyang's approach toward the
ROK was to try to manipulate emotions in the South to drive a
wedge between Seoul and Washington. The Japanese Government,
meanwhile, was taking a hard line, in part because the
Japanese public was so engaged on the DPRK issue.

Trilateral Security Dialogue
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4. (C) A/S Hill and L'Estrange agreed that the elevation of
the U.S.-Japan-Australia Trilateral Strategic Dialogue (TSD)
to the ministerial level was highly positive. In Australia's
view, L'Estrange said, the logical choice for the first
meeting of the three ministers would be on the margins of the
UNGA in September. The ARF Ministerial in July was another
possibility, although the "optics" of the three countries
meeting separately at an ARF event could be awkward.


5. (C) L'Estrange told A/S Hill that Australia had two major
concerns related to the TSD. First, on format, Australia
wanted to be sure that the frank and informal structure that
had made the dialogues at the deputy-secretary level so
valuable would continue. The GOA had found the purposefully
less structured discussions extremely useful and hoped to
resist the natural tendency toward formality when any meeting
was held at the ministerial level. Australia was wary about
proposals to make the TSD "operational" or
"intelligence-oriented," because the required interagency
coordination could create exactly the kind of bureaucratic
apparatus and process the GOA was hoping to avoid.


6. (C) Australia's other major concern, L'Estrange said, was
to make sure the TSD did not impinge on the annual
Australia-U.S. Ministerial (AUSMIN),which the GOA considered
to be the centerpiece of its bilateral meetings with the U.S.
The most likely AUSMIN dates for this year appeared to be
either immediately before or after APEC in November, which
was why Australia believed the UNGA was probably the best
date for the first TSD ministerial -- to put some separation
between the two events.

China
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7. (C) L'Estrange described the Australian Government's view
of China as "optimism, without any illusions." The GOA had
both economic and political reasons for pursuing good
relations with Beijing, but it also understood that a
benevolent China in the future was not predetermined. A/S
Hill replied that the U.S. too had an investment in seeing
that China evolved in a way that was not antithetical to our
interests. The 6PT might have failed so far in the "main
event" of dismantling the DPRK's nuclear program, but one
positive result had been closer diplomatic collaboration
between the U.S. and the PRC. We planned to keep up the pace
of engagement this year through an ambitious calendar of
summits: President Bush and Chinese President Hu Jintao would
likely meet three times before the end of the year.

Japan
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8. (C) Australia, according to L'Estrange, was trying to
"reinvent" its relationship with Japan, which historically
had been principally a trading partner. While Japan remained
Australia's most important economic partner, the new, more
strategic foreign policy approach adopted by the Koizumi
Government may have opened a door for increased political
cooperation. This was the message that PM Howard had taken
to Tokyo on his recent visit, L'Estrange said. Australia
also wanted to reassure the Japanese that the GOA was not
"standing in the middle of the road blinded by China's
headlights." This was one reason that Australia was
exploring a free trade agreement with Japan even as it
entered FTA negotiations with China.

Indonesia
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9. (C) L'Estrange said the GOA, starting with PM Howard,
considered new Indonesian President Yudhoyono (SBY) to be an
impressive and serious interlocutor. Australia was using the
A$1 billion (US$770 million) it had pledged in post-tsunami
assistance to deepen relationships between the two countries'
officials and private sectors. Good governance would be a
prime focus of the aid. Referring to the
Australian-Indonesian Ministerial Forum that had brought six
Indonesian cabinet ministers and staff to Australia in March,
L'Estrange commented that the personal relationships between
the two governments' officials, especially at the sub-cabinet
level, were making possible real communication without the
"layers of formality" that used to exist. The GOA regarded
Foreign Minister Wirajuda especially highly. L'Estrange said
Australia hoped the U.S. would also see SBY as an opportunity
and increase its engagement with Indonesia.


10. (C) A/S Hill replied that the U.S. was still in the early
phase of forging a deeper relationship with Indonesia, but
that our efforts were going well so far. IMET restrictions
had been lifted. Both Deputy Secretary Zoellick and PACOM
Commander Admiral Fallon had visited Jakarta in recent weeks.
While obstacles to better relations -- such as the Timika
case -- still posed challenges, the U.S. recognized that
there was a window of opportunity, especially because of the
improvement in America's image in Indonesia post-tsunami, A/S
Hill told L'Estrange.

East Asian Summit
--------------

11. (C) L'Estrange indicated that Australia was prepared to
meet ASEAN's demand that it sign the Treaty of Amity and
Cooperation (TAC) in exchange for an invitation to the East
Asian Summit (EAS) later this year. A final decision to sign
would probably come in the next month to six weeks.
Australia had been studying how the South Koreans and
Japanese -- two other U.S. allies -- had acceded to the
treaty. The GOA would take a similar approach, making
certain that signing the TAC did not in any way conflict with
its ANZUS obligations.


12. (C) A/S Hill said the U.S. position on the EAS for the
moment was to wait and watch how the new grouping developed;
it was possible that the forum would not amount to much.
L'Estrange agreed that the future of the EAS was far from
certain -- "PM Howard himself takes a rather jaundiced view
of meaningless summitry" -- but the GOA had concluded that it
was better to be safe and be at the table from the start just
in case the forum did develop into something significant.
Furthermore, participation by countries such as Japan, India,
and Australia would help prevent Chinese domination of the
EAS. And Australia could help advance Washington's views at
the grouping on issues of interest to Washington.

Participants
--------------

13. (U) DFAT Secretary L'Estrange was accompanied by First
Assistant Secretary for the Americas and Europe Jeremy
Newman. A/S Hill was accompanied by Charge, Polcouns
(notetaker),and EAP Special Assistant Koehler.


14. (U) A/S Hill's delegation has cleared this message.

Stanton