U/S BURNS' AUSTRALIAN BILATERAL, APRIL 21, 2009

C O N F I D E N T I A L SECTION 01 OF 03 CANBERRA 000413

SIPDIS

STATE ALSO FOR P, EAP, NEA, SA, AND EUR
PACOM ALSO FOR POLAD
NSC FOR J.BADER
SECDEF ALSO FOR OSD

E.O. 12958: DECL: 04/22/2019
TAGS: PREL KNNP MARR PARM PGOV EAID AS
SUBJECT: U/S BURNS' AUSTRALIAN BILATERAL, APRIL 21, 2009

Classified By: CDA Daniel A. Clune. Reasons: 1.4 (b)(d).


1. (C) Summary: Under Secretary Burns held a bilateral
meeting with Michael L'Estrange, Secretary of Australia's
Department of Foreign Affairs and Trade, on the margins of
the Trilateral Strategic Dialogue Senior Officials Meeting
(TSD SOM),in Canberra on April 21, 2009. They discussed the
strategy for restoring democracy to Fiji, aid to the Pacific
Islands, Afghanistan and Pakistan, Iran, Indonesia, Russia,
Japan and the Australian Defence White Paper's view of the
threat posed by China. End Summary.

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FIJI
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2. (C) Secretary L'Estrange reiterated Australia's concern,
expressed earlier in the day at the TSD SOM (septel),over
the vacuum caused by Fijian leader Bainimarama's coup and
subsequent estrangement from other democratic countries.
L'Estrange said Bainimarama was prepared to break all the
rules and was willing to sell himself to the highest bidder,
alluding to China's efforts to exploit the situation.
Australia wanted to press the other Pacific Island (PI)
nations to take a hard line against Bainimarama but the
islands feared recriminations, given their strong linkages
to, and reliance on, Fiji as the major power in the Oceania
region. He disclosed that Prime Minister Rudd and New
Zealand Prime Minister Key had sought to reassure the PI
leaders that Bainimarama likely would not crack down on them,
and had offered assistance in the event he did so. In
addition to the political crisis, L'Estrange added, there was
a serious problem with Fiji's banks, with a looming capital
crisis that was expected to hit hard in the August-October
time frame.


3. (C) L'Estrange worried that the current situation was "all
sticks and no carrots," stressing the importance of holding
out incentives as well as disincentives to encourage
Bainimarama to return to the democratic fold. Bainimarama
needed to see that there was an economic/development benefit,
not simply a political benefit, for restoring democracy.
L'Estrange reiterated his belief that Fiji would be expelled
from the Pacific Island Forum (PIF) at its June meeting,
despite the fact that some Pacific Island countries were
"wobbly," and predicted the Commonwealth would similarly kick
Fiji out. Referring to his earlier bilateral meeting with
Japanese Deputy Foreign Minister Sasae (septel),L'Estrange
said Japan is wrestling with which Fiji official to invite to
its upcoming PALM 5 regional summit. He sadi Sasae told him
the decision is being made at the highest level but that it
was "inconceivable" that Tokyo would invite interim Prime
Minister Bainimarama. L'Estrange praised the strong
statement on Fiji by B. Lynn Pascoe, UN Under
Secretary-General for Political Affairs, in his briefing to
the Security Council the previous day.


4. (C) Secretary L'Estrange suggested suggested the high
Q4. (C) Secretary L'Estrange suggested suggested the high
value Fijian culture placed on international military
deployments could be another point of leverage. Australia
and New Zealand already oppose deploying Fijian soldiers in
any new UN peacekeeping deployments, and had urged the UK to
end its practice of recruiting Fijians to serve in the
British military. FM Smith hoped to have an opportunity to
discuss the issue of Fijian peacekeepers with Secretary
Clinton in the lead-up to the post-PIF Ministerial.


5. (C) U/S Burns agreed the issue of incentives was worth
thinking through carefully and said he would keep an open
mind on the issue. He undertook to consult further in
Washington on L'Estrange's suggestions.

Pacific Island Development
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6. (SBU) Secretary L'Estrange outlined PM Rudd's Pacific
Partnership for Development initiative, an assistance program
with parallels to the U.S. Millenium Challenge program. He
said Australia wished to consult with major donors, including
the United States, New Zealand and France, to develop an
arrangement for maritime security and fisheries that would
complement the development program. He noted French
Calendonia was hosting a France-Oceania Summit in late July,
which French President Sarkozy would attend after a one-day
stopover in Australia. L'Estrange added Australia had urged
France not to invite Bainimarama.

AFGHANISTAN - PAKISTAN
--------------

7. (C) U/S Burns reiterated U.S. gratitude for Australia's
contributions to date in Afghanistan and expressed
appreciation for its continuing efforts to identify further
inputs. He also welcomed Foreign Minister Smith's
announcement of a doubling of Australian assistance to
Pakistan at the April 17 Tokyo Donors Meeting. U/S Burns and
Secretary L'Estrange discussed the worrisome situation in
Pakistan, including its fragile relationship with India. U/S
Burns described U.S. interest in defusing tensions between
the two countries, but acknowledged there were limits to what
the United States could do bilaterally. He shared
L'Estrange's deep concern that another terrorist attack, such
as happened in Mumbai, would provoke a hair-trigger reaction.


IRAN
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8. (C) U/S Burns thanked Australia for its help on Iran, in
particular the advice and assistance from Australia's embassy
in Tehran. L'Estrange noted that Foreign Minister Smith met
Iranian Foreign Minister Mottaki on April 17 and conveyed a
strong message.

AUSTRALIAN DEFENCE WHITE PAPER: CHINA
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9. (C) L'Estrange alluded to Australian press stories that
sought to highlight differences between the Australian
Department of Defence and the intelligence community on the
nature of the military threat posed by China, and claimed
changes to the U.S. defense budget recently announced by
Secretary Gates were based on a perception of a diminished
Chinese threat. L'Estrange dimissed the media speculation,
explaining the Australia press tended to view the Defence
White Paper as either pro-China or anti-China.

REGIONAL ARCHITECTURE: ASIA-PACIFIC COMMUNITY (APC)
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10. (C) L'Estrange said PM Rudd strongly believed in the APC
concept. Singapore remained leery, however, fearing it could
erode ASEAN's dominance. The Prime Minister had planned to
personally reassure the Singaporean prime minister on that
point at the East Asia Summit meeting in Thailand, but
political instability there had forced the cancellation of
the meeting. U/S Burns acknowledged that current regional
Qthe meeting. U/S Burns acknowledged that current regional
architecture did not meet everyone's needs. The United
States had not arrived at a position but would keep an open
mind, he told L'Estrange.

INDONESIA
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11. (C) Secretary L'Estrange, noting he had been encouraged
by the discussion on Indonesia at AUSMIN, urged the United
States to increase its mil-mil engagement with Indonesia,
including with Kopassas. Kopassas was "going in the right
direction," he said, and could be a powerful force for good.
He acknowledged there had been problems with Kopassas in the
past but suggested turnover of personnel had removed most of
the bad elements. L'Estrange reviewed Australia's strong
bilateral relationship with Indonesia, remarking that

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disagreements that would have derailed the relationship only
two years earlier, were dealt with easily today. Indonesia
continued to have problems with corruption and Papua, but
President Yudhoyono was displaying good instincts in his
handling of them. L'Estrange reiterated his belief that
Yudhoyono would be re-elected.

RUSSIA
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12. (C) U/S Burns discussed the new U.S. approach to Russia,
expressing optimism that a post-START agreement could be
reached by the end of the year, if no bilateral difficulties
derailed the process. He cautioned that, while an agreement
was possible, ratification by Congress would not likely occur
by year's end.

JAPAN
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13. (C) Secretary L'Estrange expressed frustration at the
difficulties Australia had experienced getting Japan to
cooperate on counterterrorism. Australia was currently
negotiating a general security of information agreement with
Japan, as there was no mechanism to criminalize leaks.
Australia also had concluded a Joint Security and Defence
Statement, but the constant turnover of ministers in Japan
made sustained progress difficult. L'Estrange said the
bilateral dispute over whaling had the potential to damage
Australia-Japan ties. Australia wanted to fence off the
issue from other aspects of the relationship, but PM Rudd had
made an election promise and the issue was coming to a head.
FM Smith had discussed the issue with Secretary Clinton on
the margins of AUSMIN.

CLUNE