SCENE SETTER FOR YOUR VISIT TO AUSTRALIA

C O N F I D E N T I A L SECTION 01 OF 03 CANBERRA 001683

SIPDIS

SIPDIS
NOFORN

FOR PM ACTING A/S STEPHEN D. MULL FROM AMBASSADOR MCCALLUM

E.O. 12958: DECL: 11/27/2017
TAGS: PREL PGOV OTRA AS
SUBJECT: SCENE SETTER FOR YOUR VISIT TO AUSTRALIA


Classified By: Ambassador Robert D. McCallum for reasons 1.4 a,b,and d.

SUMMARY
--------------

1. (C/NF) Your visit comes on the heels of Australia's
November 24 federal election in which voters decisively
rejected John Howard and his Liberal/National coalition
government after more than eleven years in office, and
embraced opposition Australian Labor Party (ALP) leader Kevin
Rudd. Rudd, a former diplomat and longtime Shadow Foreign
Minister, campaigned on a platform of new leadership with a
focus on such domestic issues as labor laws, climate change,
education and health. Rudd will not announce his cabinet
until later this week, likely during your visit, but the
general outlines of his foreign policy are known.


2. (C/NF) We expect a Rudd government to exhibit strong
continuity with the Howard government in many foreign policy
issues of strategic interest to us, and to reflect close
parallels in the U.S. approach and thinking to major global
challenges. Rudd and the ALP are committed to the alliance
with the United States, including a continued close defense
and intelligence relationship, but have signaled that
Australia will adopt a more independent stance towards us
than John Howard. Issues on which Rudd's policies are likely
to diverge from those of his predecessor and the United
States include Iraq, climate change and China. He is likely
to be strongly supportive on tough arms control and
nonproliferation issues, including denuclearization of North
Korea and Iran, but he has flagged his opposition to the
U.S.-India civil nuclear agreement because India has not
signed the NPT. We can expect Australia's continued
contributions to military operations targeting the Taliban
and al-Qaeda in Afghanistan. End Summary.

U.S. Alliance
--------------

3. (C/NF) The Australian Labor Party (ALP) takes credit for
establishing the alliance with the United States during World
War II, which ultimately led to the 1951 Australia-New
Zealand-United States (ANZUS) Treaty, and the ALP continues
to include support for the U.S. alliance as one of the three
pillars of the party platform. Rudd, a former diplomat, has
made clear his personal commitment to the alliance, and was
quick to reach out to the United States in his election
victory speech - the only foreign country he mentioned. Rudd
stressed in his campaign that he would be more independent
from the United States than his predecessor, however, and has
already flagged some key policy differences.

Iraq
--------------

4. (C/NF) The first test of the Rudd government's handling of
the alliance will be on Iraq. Rudd has pledged to withdraw
approximately 550 combat troops comprising the Overwatch
Battle Group from southern Iraq, while leaving in place a
100-man security detachment for its diplomatic mission in
Baghdad, an Army training team of similar size, and naval and
air patrol assets based in neighboring countries that support
operations in both Iraq and Afghanistan. While the
Australian combat troops have a passive, back-up role to
Iraqi security forces, rather than an active combat role,
QIraqi security forces, rather than an active combat role,
they have served as an important symbol of Coalition unity
and of Australia's support of the U.S. in the Global War on
Terror. Rudd has nuanced his withdrawal pledge, promising to
consult in advance with the Iraqis, the United States and
other allies. Beyond the issue of the combat troops, the
Australians are keenly interested to work with the U.S. and
Iraqis as the Iraq UN mandate lapses to ensure their forces
in Iraq remain under
a legitimate authorization, whether it is a follow-on UN
mandate, or some other agreement the U.S. negotiates with
Iraq.


5. (C/NF) Rudd realizes that an unstable and insecure Iraq is
not in the world's interest or Australia's. We believe that
Rudd will be sensitive to the potential adverse consequences
to Coalition unity and will be willing to consider
alternatives that allow him to keep his campaign promise
while minimizing the potential harm of any Australian action.

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For instance, Rudd has indicated he is open to increasing
the training contribution in Iraq, even as he withdraws
combat elements, so we need to press him to follow through on
that.


6. (C/NF) We will encourage Rudd and his senior ministers to
visit Iraq as early as possible to see for themselves the
positive developments, especially on the security front. Such
a visit will allow them to understand better the dimensions
of the tasks that remain. We can then argue more effectively
for the assumption by Australia of other supporting roles,
such as the expansion of its Army Training Team or the
creation of an Australian Provincial Reconstruction Team.

Afghanistan
--------------

7. (C/NF) With respect to the War on Terror, there has been
bipartisan support in Australia up to now for its troop
commitment in Afghanistan. The Labor distinction between
Iraq and Afghanistan is supposedly based upon the training of
the Bali bombers in Afghanistan and the impact of the Afghan
drug trade on Australia, as well as on the lack of a UN
mandate for Operation Iraqi Freedom. We can expect Rudd to
reaffirm Australia's commitment to its mission there,
although Australian public opinion may begin to turn against
Afghanistan, too. Three Australian soldiers have been killed
in Afghanistan over the past two months. There is a
possibility that, if Rudd withdraws combat troops from Iraq,
some could be redeployed to augment the Australian force in
Afghanistan. As with Iraq, we will press for Rudd and his
senior ministers to make an early visit to Afghanistan to
assess conditions on the ground, and urge him to consider a
larger security role and additional reconstruction assistance.

Climate Change
--------------

8. (C/NF) The second area of major disagreement by Labor with
U.S. policy is climate change, a topic that resonates
strongly in Australia where many see a direct causal link
with a series of recent, very severe droughts. Rudd may want
to distance himself publicly from the United States on this
issue, as we are widely - and mistakenly - viewed in
Australia as being opposed to meaningful greenhouse gas
reductions, but a Rudd Government will almost certainly want
to continue close cooperation with us on effective ways for
meaningful progress in the future. Beyond a pragmatic desire
to find the least costly way to address climate change,
Australia should continue to be a valuable partner in
international fora because of its dependence on coal for
domestic electricity production, significant coal exports,
and desire to continue its remarkable economic growth.


9. (C/NF) A new Labor government is committed to immediate
ratification of the Kyoto Protocol. Ratification is
relatively cost-free because Australia will come very close
to meeting its Kyoto targets. Rudd has announced that he
will personally head up Australia's climate policy and will
attend the Bali meeting in early December to begin the
process of hammering out a post-2012 climate change
framework. Rudd has pledged that Australia would not sign a
post-Kyoto framework that does not include commitments to
Qpost-Kyoto framework that does not include commitments to
reduction targets by developing countries such as China and
India. Current GOA climate change negotiators do not expect
to see a significant departure under the new Rudd government
from the Howard government's key positions at Bali, and
believe that close cooperation between the U.S. and Australia
would continue in that process.

China
--------------

10. (C/NF) A third dynamic in the U.S. relationship with a
new Labor government is China. Rudd will almost certainly
bring the issue of China's role in the region and beyond into
his early discussions with us. He, as most Australians,
views the Chinese export market as a critical component of
Australia's growth now and well into the future. In
addition, Rudd is a Mandarin-speaking former diplomat who
served in Beijing. He is thought likely to be more sensitive
to Chinese concerns on issues ranging from regional security
to human rights. He objected to the Howard-Abe March 2007

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Joint Declaration on Security Cooperation with Japan and to
quadrilateral discussions between the U.S., Australia, Japan
and India because of sensitivities toward China. However,
Rudd shares our position that China needs to be encouraged to
be a responsible stakeholder in the international system, and
Rudd has previously expressed support for the U.S. in any
conflict over Taiwan. Judging by his public statements and
private assertions, Australia's relationship with China is
unlikely to change with Rudd in power.

Defense Cooperation and National Security Policy
--------------

13. (C/NF) Australia is a large consumer of U.S. defense
hardware and technology, consistent with its objective of
interoperability. It has selected the Aegis Combat Control
System for its three air warfare destroyers that will come
into service in 2013. The F/A-18 aircraft is the principal
combat aircraft of the Royal Australian Air Force (RAAF),
backed by the U.S.-built F-111 strike aircraft. Australia
will acquire 24 Boeing F/A-18F Super Hornet fighters to
maintain an interim strike capability between the phase-out
of the F-111s by 2010, and the projected acquisition of up to
100 F-35 Joint Strike Fighter aircraft during 2013-2020. The
RAAF has purchased four C-17 strategic airlift aircraft, and
is acquiring Boeing's Airborne Early Warning and Control
system as the airborne platform. Recent sales to the Royal
Australian Army include the M1A1 tank, as well as Hellfire
and JAVELIN missiles. A current focus of joint efforts is to
prepare for implementation of the U.S.-Australia Defense
Cooperation Treaty, signed by President Bush on the margins
of APEC, which seeks to ease transfer of defense equipment
and technology.


14. (C/NF) Except for Iraq, the incoming ALP government has
not yet developed a detailed defense and security agenda.
While in opposition, however, it generally supported the
defense and security posture developed by the Howard
government, including most big ticket defense expenditures
and military interventions to restore order in East Timor,
the Solomon Islands and Tonga. In recent remarks, Rudd has
reiterated his commitment to a strong Australian Defense
Force, maintaining military dominance in the immediate
region, keeping defense spending at a minimum annual growth
of three percent, and supporting a force structure that will
enable Australia to contribute to global operations with
friends, allies and the United Nations. He has called for an
update of the 2000 Defence White Paper to re-assess strategic
requirements and to ensure that military expenditures are in
line with the desired force structure. The White Paper will
examine deteriorating circumstances of Pacific Island states,
the long-term trajectory of militant Islamism and associated
terrorist groups in Southeast Asia, and WMD proliferation in
the Asia-Pacific region. At this point, it is not clear how
the study may impact on planned defense acquisitions. Given
the ALP's general lack of expertise on military issues -
Shadow Defence Minister Joel Fitzgibbon previously held
QShadow Defence Minister Joel Fitzgibbon previously held
economic and finance portfolios - we expect the new
government will take some time to get fully briefed on the
broad range of bilateral defense issues, with possible delays
in some programs.

Other Issues
--------------

15. (C/NF) Finally, Australia under Rudd will likely continue
to be a strong ally of the United States on
counterproliferation and arms control issues. He is likely
to continue Australia's support for our position on the North
Korea and Iran nuclear issues. However, he has signaled his
opposition to the U.S.-India civil nuclear agreement and to
Howard's policy decision to sell uranium to India. Rudd
argues that the policy undermines the Nuclear
Nonproliferation Treaty, which India has not signed. Of
particular concern to us is that the Rudd government may
block consensus in the Nuclear Suppliers Group to the 123
Agreement, a precondition for the civil-nuclear deal.

MCCALLUM