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C O N F I D E N T I A L SECTION 01 OF 07 CANBERRA 000057 
 
SIPDIS 
 
FOR VICE ADMIRAL JOHN BIRD FROM AMBASSADOR ROBERT D 
MCCALLUM JR. 
STATE FOR EAP AND PM 
 
E.O. 12958: DECL: 01/15/2019 
TAGS: PREL OTRA AS
SUBJECT: SCENE SETTER FOR CDR USN SEVENTH FLEET VADM J. 
BIRD VISIT TO AUSTRALIA JAN 23, 2009 
 
CANBERRA 00000057  001.2 OF 007 
 
 
Classified By: Ambassador Robert D. McCallum, Jr. for reasons 1.4(b) an 
d (d) 
 
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PLEASE DELETE ALL REFRENCE OF CABLE 
RESUBMITTED UNDER CANBERRA 00061 
 
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SUMMARY 
------- 
¶1.  (C/NF) Australia is the closest of our five treaty allies 
in the Asia-Pacific region and has deployed forces with the 
United States in every major military engagement since World 
War I, including most recently in Afghanistan and Iraq. 
Relations intensified dramatically in the wake of the 9/11 
attacks in the United States, which prompted President Bush 
and then Prime Minister John Howard to invoke the mutual 
defense provisions of the 1951 ANZUS Treaty.  In national 
elections in November 2007, the Australian Labor Party swept 
John Howard's Liberal/National coalition from power after 
more than 11 years in office.  The new government, led by 
Kevin Rudd, moved quickly to reaffirm its commitment to the 
U.S. alliance as the first pillar of its foreign policy, 
ahead of its two other major policy goals:  greater 
commitment to multilateral organizations, and deeper 
engagement with Asia.  Just 13 months  into his 
administration, Rudd's government continues to enjoy high 
approval ratings, driven by his early action to fulfill 
campaign promises, including rolling back the previous 
government's controversial industrial relations legislation, 
signing the Kyoto Protocol and withdrawing Australian combat 
troops from Iraq.  Importantly, Rudd has kept combat elements 
in Afghanistan and has committed to remaining there for "the 
long haul" as the largest non-NATO troop contributor.  It was 
one of only five countries beside the United States whose 
non-combat forces were invited to remain in Iraq beyond the 
expiration of the UNSC mandate on December 31, 2008.  Rudd 
commissioned a comprehensive defense review that is due for 
public release by mid- 2009, but we expect the result will 
broadly endorse our bilateral defense cooperation. 
 
¶2.  (C/NF) The economy is in its 17th year of straight growth 
but will likely slide into recession later this year as a 
result of the global financial crisis.  Compounding these 
financial pressures are concerns of unemployment and possible 
high costs associated with a greenhouse gas emissions trading 
scheme.  Prime Minister Rudd made some initial foreign 
relations missteps, notably with India and Japan, but also in 
his dealings with The White House.  His failure to consult 
with international stakeholders, including the United States, 
before announcing major foreign policy initiatives on 
regional architecture and nonproliferation generated 
additional criticism.  He signaled a determination during the 
election campaign to be a more critical partner of the United 
States than his predecessor, tapping into widespread unease 
over the extent of U.S. influence on Australia's foreign 
policy, particularly over Iraq.  An advocate of "middle 
power" diplomacy, Rudd can be expected to continue to 
challenge the U.S. to do more on climate change, arms control 
and disarmament.  Policy differences aside, Rudd is strongly 
committed to Australia's alliance with the United States, and 
Qcommitted to Australia's alliance with the United States, and 
his endorsement of ongoing collaboration with us across the 
broad range of shared issues highlights Australia's 
determination to be a reliable partner.  End Summary 
 
U.S. ALLIANCE 
------------- 
¶3.  (SBU) Support for the U.S. alliance, underpinned by the 
1951 Australia-New Zealand-United States (ANZUS) Treaty, is 
foremost among the three pillars of Rudd's foreign policy 
(the others are cooperative engagement with multilateral 
organizations such as the UN, and deeper engagement with 
Asia).  Rudd has made clear Australia's 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.  One of Rudd's first visits abroad was to the 
United States in March, where he met the President, Secretary 
Rice, Secretary Gates, Secretary Paulson and many other 
senior level officials.  In these meetings, and in a 
telephone call with President-elect Obama soon after the U.S. 
election, he reaffirmed the primacy of the relationship with 
the United States. 
 
¶4.  (C/NF) Rudd stressed during his election campaign that he 
would be more independent from the United States than his 
 
CANBERRA 00000057  002 OF 007 
 
 
predecessor, John Howard, who was seen by the Australian 
public to have been in lockstep with President Bush over such 
unpopular issues as Iraq and the five-year confinement 
without trial in Guantanamo of Australian citizen David 
Hicks.  While Rudd withdrew 550 soldiers comprising the 
Overwatch Battle Group from Iraq by June 2008, he did so only 
after consultation with the Iraqi, U.S. and UK governments. 
Since the expiration on December 31, 2008 of the UNSC mandate 
and the signing of a Memorandum of Understanding with the 
Iraqi Government, Australia has reduced troop levels to 120 
embedded and administrative officers.  Australia was selected 
by the Iraq government as one of only five countries other 
than the United States permitted to have a military role in 
Iraq after the UNSC mandate expired.  One area where the Rudd 
government's policy diverges from the Bush Administration's 
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.  PM Rudd ratified the Kyoto 
Protocol within hours of being sworn in, and his government 
in December as promised announced an emissions cap and trade 
system that, despite the global economic downturn, is due to 
be implemented in 2010.  The plan has been praised by 
industry and criticized by environmental groups for only 
requiring a 5% cut from 2000 emissions levels by 2020. 
 
¶5.  (SBU) Rudd's extended political honeymoon with the public 
was given new life by his decisive response to the global 
financial crisis, particularly his pledge that the government 
would guarantee all bank deposits, regardless of size, for a 
three-year period, and the distribution of more than A$10 
billion to families with children, pensioners and other 
struggling groups.  At the same time, the Opposition has 
started to right itself after the election defeat.  While 
Rudd still holds a commanding lead as preferred prime 
minister, the recently installed Opposition Leader, Malcolm 
Turnbull, has begun to claw back some ground. 
 
ECONOMY 
------- 
¶6.  (SBU) With the sharp downturn in the global economy 
following the intensification of the global financial crisis, 
Rudd's principal economic challenge is trying to prevent a 
recession in Australia.  Australian banks remain sound, and 
Standard & Poor's have said Australia's AAA rating is not in 
jeopardy; Rudd's government extended deposit and wholesale 
funding guarantees in response to similar moves in other 
countries.  But Australia's commodities-based export sector 
and its overall economy are heavily exposed to recessions in 
key trading partners like the U.S., Japan, and New Zealand, 
and the dramatic slowdown in growth in its number one export 
market, China.  The Reserve Bank of Australia, turning 
quickly from its early 2008 concern about rising inflation in 
a then-over-heating economy, aggressively slashed Australian 
interest rates from 7.25% to 4.25% (an all-time low) between 
September 2 and December 2.  In October, Rudd and Treasurer 
Wayne Swan announced an A$10.4 billion fiscal stimulus 
package aimed at families and pensioners; this package, equal 
Qpackage aimed at families and pensioners; this package, equal 
to 1% of GDP, was distributed to Australians in early 
December.  Key economic indicators such as business and 
consumer confidence, unemployment, and job advertising are 
sharply worse in late 2008 over 2007.  The Rudd Government is 
now considering another stimulus package, and are preparing 
the public for the idea that because of necessary stimulus 
spending and reduced revenues, Australia will soon have a 
budget deficit; initial predictions for FY2008-09 were for an 
A$22 billion surplus.  Australia has not had a recession 
since 1990-91; even if it manages to avoid one in 2009, 
growth will be sharply down. 
 
¶7.  (SBU) Rudd was aggressive in pushing for a G-20 response 
to the global financial crisis.  He clearly sees Australia as 
having a role to play in the international effort.  There 
have been no serious calls in Australia for raising 
protectionist barriers due to the global financial crisis; 
the GOA even rejected calls to delay a scheduled cut in 
automobile tariffs despite the problems of its domestic auto 
industry. 
 
¶8.  (SBU) The United States and Australia enjoy very close 
economic relations.  The centerpiece is the U.S.-Australia 
 
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Free Trade Agreement, which went into effect in January 2005. 
  In 2008 the U.S. enjoyed a trade surplus with Australia of 
over $10 billion.  We are Australia's third largest trading 
partner (after China and Japan), and by far the largest 
foreign investor in Australia.   Australia is our 
14th-largest trading partner, and we are Australia's top 
overseas investment destination.  We concluded an Open Skies 
civil aviation agreement with Australia, which was signed 
during Prime Minister Rudd's visit to Washington last 
March/April. 
 
MISSTEPS ON FOREIGN POLICY 
-------------------------- 
¶9.  (C/NF) While Rudd served as a diplomat early in his 
career, and is fluent in Mandarin, his government has made 
some misjudgments in the foreign affairs area.  Foreign 
Minister Smith angered India -- and raised eyebrows in Japan 
and the United States -- with his public announcement, 
standing next to his Chinese counterpart, that Australia 
would no longer support a Quadrilateral Strategic Dialogue 
with India -- a short-lived offshoot of the 
U.S.-Japan-Australia Trilateral Strategic Dialogue - in 
deference to China's sensitivities.  Rudd irritated Japan 
with his government's threats to take legal action against 
Japanese whaling, coupled with the release of official GOA 
photographs of Japan's whaling activities, and his failure to 
include Japan, a major security and trade partner, on his 
first major overseas trip.  He leaked to the press details of 
a telephone conversation with President Bush, which resulted 
in a story which mischaracterized the President's comments, 
and a confidential Bush request to consider resettling a 
small number of Uighurs from the Guantanamo Bay detention 
facility also ended up in the press.  Moreover, Rudd 
encountered international criticism for the hasty manner in 
which he rolled out two major foreign policy initiatives in 
June 2008.  His vision for a European Union-style Asia 
Pacific Community by 2020, unveiled on June 4, and his June 9 
announcement that Australia would establish an International 
Commission on Nuclear Nonproliferation and Disarmament to 
shape the outcome of the 2010 Nuclear Nonproliferation Treaty 
Review Conference, were both launched without internal 
vetting or consultation with the stakeholder countries whose 
support would be needed for the success of these 
undertakings.  Senior officials have ascribed the lapse to 
Rudd's rush to fulfill foreign policy promises made during 
the election campaign and the "talismanic" importance of 
nuclear disarmament to the Australian Labor Party, but Rudd's 
inclination to rely on his small inner circle of advisors 
rather than on his bureaucracy, and his evident need to 
dominate the headlines may also explain his actions. 
 
COMMITMENT TO MULTILATERAL ORGANIZATIONS 
---------------------------------------- 
¶10. ( C) To further the GOA's engagement with multilateral 
organizations, the second pillar of his foreign policy, PM 
Rudd announced Australia would seek a seat on the UN Security 
Council for the 2013-2014 term, and he has traveled to 
Brussels to reinvigorate Australia's ties with the European 
Union.  While in opposition, the ALP supported international 
QUnion.  While in opposition, the ALP supported international 
military action to overthrow the Taliban in Afghanistan in 
2002 but opposed the invasion of Iraq, partly because the 
latter action lacked a UN mandate.  Rudd's vision for an 
EU-like Asia Pacific Community by 2020 also builds on his 
commitment to address international challenges through 
multilateral fora. 
 
COUNTERTERRORISM 
---------------- 
¶11.  (SBU) Australia is a full partner in our 
counterterrorism efforts and aggressively leads efforts to 
combat domestic and international terrorism, particularly in 
Southeast Asia, where addressing the threat of Jemaah 
Islamiyah remains our highest common priority.  Australia 
provides significant assistance to Southeast Asian countries 
to improve their CT capabilities, promotes regional capacity 
building through the APEC Counterterrorism Task Force (CTTF), 
and advocates coordination and expansion of donor CT 
assistance in Counter Terrorism Action Group (CTAG) meetings. 
 On September 5, 2008, Foreign Minister Smith announced the 
appointment of former Ambassador to Thailand William (Bill) 
 
CANBERRA 00000057  004 OF 007 
 
 
Paterson as Australia's Ambassador for Counter-Terrorism. 
 
DEFENSE COOPERATION 
------------------- 
¶12.  (SBU) The Australian Defence Force (ADF) numbers 
approximately 52,000 active duty personnel, with planned 
increases to 57,000 within the next decade, including an 
increase in the Australian Army from 26,000 to 30,000. 
Recruitment and retention, especially for technical personnel 
with skills also sought by the mining industry, has long been 
challenge for the ADF.  However, with changes in recruiting 
methods and incentives, coupled with rising unemployment as 
result of the global financial crisis, recent data show 
increases in recruiting and declines in attrition.  The GOA 
has stated its commitment to three percent annual real growth 
in defense spending through 2018 to ensure the ADF is able to 
meet capability and interoperability goals. 
 
¶13.  (SBU) The Royal Australian Navy's (RAN) front-line fleet 
currently includes 12 frigates, including four of the 
Adelaide class and eight Australian-built ANZAC class.  In 
August 2004, Australia selected the Aegis Combat Control 
System for its three air warfare destroyers (AWD), which will 
start coming into service in 2014.  A decision on a fourth 
AWD is expected in early 2009.  The F/A-18 fighter, built in 
Australia under license from the U.S. manufacturer, is the 
principal combat aircraft of the Royal Australian Air Force, 
backed by the U.S.-built F-111 strike aircraft.  In October 
2002, Australia became a Level III partner in the U.S.-led 
Joint Strike Fighter (JSF) program.  Additionally, the 
Australian Government signed the JSF Production, Sustainment 
and Follow-on Development MOU in 2006. Australia is projected 
to buy up to 100 JSF aircraft with deliveries starting in 
2013 and running through 2020, with its decision on the JSF 
expected in June 2009.  The F-111 strike aircraft are 
scheduled to exit service by 2010 and will be replaced by 24 
Boeing F/A-18F Super Hornet fighters, with deliveries 
commencing in 2010, to provide interim strike capability 
until the arrival of the JSFs.  The Royal Australian Air 
Force (RAAF) took delivery of four Lockheed C-17 strategic 
airlift aircraft in 2007-2008.  In addition, Boeing has 
agreed to provide the Commonwealth of Australia's RAAF with 
the "Wedgetail" Airborne Early Warning and Control (AEW&C) 
system based on the Next-Generation 737-700 aircraft as the 
airborne platform, although the project has been plagued by 
delays and cost overruns.  Recent U.S. sales to the 
Australian Army include the M1A1 AIM tank, as well as 
Hellfire and JAVELIN munitions. Future opportunities include 
CH-47 helicopter replacements, navy helicopter replacements, 
light and medium cargo aircraft replacements and artillery 
systems. 
 
DEFENCE WHITE PAPER 
------------------- 
¶14.  (C/NF) The Rudd government has ordered a comprehensive 
review of Australia's defense policy, including review of 
some major defense acquisitions from the United States, that 
has slowed or postponed bilateral cooperation in some areas, 
such as missile defense.  While the Defence White Paper will 
not be completed until at least April 2009, we have been 
Qnot be completed until at least April 2009, we have been 
assured privately not to expect surprises in the overall 
strategic assessment, and we expect defense cooperation to 
proceed with little interruption.  We can expect Australia's 
continued contributions to military operations targeting the 
Taliban and al-Qaeda in Afghanistan, and a continued 
non-combat role in Iraq.  The small size of its military and 
demands of deployments elsewhere mean Australia will be hard 
pressed to increase substantially the level of its 
deployments for some time to come.  We believe it could 
deploy up to 1000 additional troops to Afghanistan, although 
public support for Australia's involvement in Afghanistan has 
gradually begun to erode.  Despite this, we are confident 
Australia will remain one of our closest allies and most 
reliable security partners for the foreseeable future, and we 
expect the GOA to remain the largest consumer of U.S. defense 
hardware and technology in the Asia-Pacific area. 
 
DEFENSE TRADE COOPERATION TREATY 
--------------------------- 
¶15.  (SBU) The U.S.-Australian Defense Trade Cooperation 
 
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Treaty is awaiting approval by the U.S. Senate.  In a letter 
to Secretary Rice in September, Senators indicated that 
questions remain about the agreement and accompanying 
Implementing Arrangements.  The Australian Defence Materiel 
Organisation estimates a 50 percent reduction in export 
licenses required following treaty implementation. 
 
ENHANCED DEFENSE COOPERATION 
--------------------------- 
¶16.  (S/REL AUS) As discussed between President Bush and 
former PM Howard on the margins of APEC in Sydney in 
September 2007, and as reconfirmed during the February 2008 
AUSMIN meeting, our two governments have agreed to strengthen 
combined capabilities in three areas:  enhancing the Joint 
Combined Training Capability; prepositioning equipment for 
Humanitarian Assistance and disaster relief (HA/DR) 
operations in the region; and strengthening Intelligence, 
Surveillance and Reconnaissance (ISR) access and cooperation. 
 Subsequent discussions have made significant progress in 
joint cooperation on the JCTC and increasing ISR initiatives. 
 The idea to preposition HA/DR equipment concept was shelved 
in favor of improving HA/DR combined C2 capability and access 
to HA/DR asset information. 
 
Trilateral Strategic Dialogue 
-------------------------- 
¶17.  (C/NF) The Rudd government has reaffirmed its strong 
support for the U.S.-Australia-Japan Trilateral Strategic 
Dialogue (TSD), which has grown from a deputy secretary/vice 
ministerial level exchange of strategic assessments in 2002 
to regular ministerial and senior officials dialogue with 
separate tracks addressing defense cooperation, 
counterterrorism, intelligence, Pacific Islands and 
humanitarian assistance/disaster relief (HA/DR).  Australia 
has engaged actively in the defense cooperation track - the 
Security and Defense Cooperation Forum (SDCF) - since its 
initiation in 2007, participating in P-3 surveillance 
aircraft exercises, HA/DR strategic airlift seminars, and 
exchanges on maritime security and peacekeeping.  Australia 
has used the SDCF to engage Japan more deeply on bilateral 
defense cooperation, but shares our frustration at Japan's 
political fragility and bureaucratic impediments that made 
operational cooperation difficult.  SDCF cooperation is also 
hindered by issues related to Japan's classified 
information-sharing.  While the Australian government's 
posture on further engagement with the United States on a 
ballistic missile defense program will be spelled out in its 
forthcoming Defence White Paper, it participated in a TSD 
trilateral Ballistic Missile Defense Forum in September 2008 
in Honolulu. Japan has expressed some unhappiness with the 
GOA's reluctance to move forward more quickly on BMD. The 
next SDCF is scheduled for February 5, 2009. 
 
ARMS CONTROL, DISARMAMENT AND NONPROLIFERATION 
----------------------------------------- 
¶18.  (U) Australia historically has had a strong record on 
arms control and disarmament, and has signed and ratified all 
the major regimes, including the Nuclear Nonproliferation 
Treaty (NPT); the Comprehensive Test Ban Treaty (CTBT); the 
Chemical Weapons Convention (CWC); the Biological Weapons 
Convention (BWC); the Ottawa Convention on landmines; and the 
QConvention (BWC); the Ottawa Convention on landmines; and the 
Convention on Certain Conventional Weapons (CCW).  It was a 
founder of the IAEA, and is member of its Board of Governors, 
and has been a close partner with the U.S. on export 
controls, particularly MANPADS.  Australia is a member of the 
Zangger Committee, the Nuclear Suppliers Group (NSG), the 
Australia Group, the Proliferation Security Initiative (PSI), 
and the Missile Technology Control Regime (MTCR).  Australia 
was the 2008-2009 MTCR Chair and hosted the 2008 MTCR Plenary 
in Canberra in November. 
 
¶19.  (SBU) In June 2008, in fulfillment of another campaign 
promise, PM Rudd announced the establishment of an 
International Commission on Nuclear Nonproliferation and 
Disarmament, intended to address the deterioration of the NPT 
regime, in light of the number of non-NPT states that have 
developed nuclear weapons, and to shape a successful outcome 
at the 2010 NPT Review Conference.  The Commission, 
co-chaired by Gareth Evens, a former Australian foreign 
minister, and Yoriko Kawaguchi, former foreign minister of 
 
CANBERRA 00000057  006 OF 007 
 
 
Japan, identified three areas of study for the Commission, 
including: 
 
-- strengthening compliance with the NPT by requiring all NPT 
signatories to adopt IAEA-designed monitoring provisions 
(i.e., Additional Protocols); 
-- developing an international system to manage the nuclear 
fuel cycle; and 
-- adopting a process to bring the Comprehensive Nuclear Test 
Ban Treaty (CTBT) into force. (Note: On May 12, Foreign 
Minister Smith publicly called for the nine countries that 
have not ratified the CTBT, including the United States, to 
do so to bring the Treaty into force.) 
 
Former U.S. Defense Secretary William Perry represents the 
United States on the Commission, and former Secretary of 
State and National Security Adviser Henry Kissinger serves on 
the Advisory Board. 
 
IRAQ 
------- 
¶20.  (C/NF) Fulfilling a campaign pledge, Rudd withdrew 
approximately 515 combat troops comprising the Overwatch 
Battle Group, plus the 100-strong Australian Army Training 
Team, from Iraq in June 2008, leaving in place approximately 
1,000 defense personnel, including a 100-man security 
detachment for its diplomatic mission in Baghdad, and naval 
and air patrol assets based in neighboring countries that 
support operations in both Iraq and Afghanistan.  Despite the 
withdrawal of combat forces, Rudd agreed to allow Australian 
forces embedded or seconded to units of other countries 
including the U.S. to deploy to Iraq in combat and combat 
support roles with those units.  The Iraqi government 
identified Australia as one of only five countries other than 
the United States whose personnel have been permitted to 
remain in Iraq after 2008, but under the terms of the 
negotiated MOU, only Australian forces embedded with U.S. 
forces were provided adequate legal protection, resulting in 
a further reduction in the number of personnel in-country to 
120 troops. (Of those 120, the approximately 80-strong 
Embassy security detachment is considered administrative and 
technical staff of the Embassy, and is covered separately 
under the Vienna Convention on Diplomatic Relations.) 
Australian aircraft operating in Iraq will follow normal air 
space procedures and Australia's frigate guarding Iraqi oil 
platforms has been redeployed to international waters in the 
Gulf.  The Australians plan to remain engaged in Iraq in 
reconstruction and other non-combat roles, and the GOA is 
considering proposals for additional training and technical 
assistance.  We have asked Australia to contribute 
specialists to serve in U.S. PRTs. 
 
AFGHANISTAN 
----------- 
¶21.  (C/NF) Unlike Iraq, there has been bipartisan political 
support in Australia up to now for its troop commitment in 
Afghanistan, and the Rudd government has reaffirmed that it 
plans to remain in Afghanistan for the "long haul."  Support 
for Australia's combat role in Afghanistan is linked in part 
to the presence of al-Qaeda and the Taliban, who trained 
bombers that killed 202 civilians, including 88 Australians, 
in Bali in 2002, as well as to the impact of the Afghan drug 
trade on Australia, and the fact that the October 2001 
incursion was mandated by the United Nations.  The Australian 
Qincursion was mandated by the United Nations.  The Australian 
government deployed an Operational Mentoring and Liaison Team 
(OMLT) to Afghanistan in November to help train the Afghan 
National Army and provides additional civilian development 
assistance, but is not currently contemplating increasing its 
combat forces.  Eight Australian soldiers have been killed in 
Afghanistan since 2002, including six within the past 18 
months.  Recent polls show Australian public opinion has 
begun to turn, with a slight majority now opposing 
Australia's continued military role in Afghanistan. 
 
CHINA 
----- 
¶22.  (C/NF) An important dynamic in the U.S. relationship 
with the Rudd Labor government is China.  China is now 
Australia's largest trading partner, and the Chinese export 
market is a critical component of Australia's growth now and 
 
CANBERRA 00000057  007 OF 007 
 
 
well into the future.  PM Rudd's background as a 
Mandarin-speaking former diplomat who served in Beijing has 
led some to believe that he might be overly sensitive towards 
China, but he has demonstrated a balanced view.  Rudd shares 
our position that China needs to be encouraged to be a 
responsible stakeholder in the international system, but 
cautions that the international community needs to be 
prepared for the possibility that China's rise might take a 
"malign" turn. Moreover, the GOA shares our concerns about 
China's military modernization, lack of transparency about 
its military budget, and abuse of human rights.  Rudd spoke 
out strongly to protest China's crackdown in Tibet during his 
first official visit to China.  A GOA spokesperson recently 
denied a press story alleging that Chinese pressure played a 
part in Australia's decision not to accept for resettlement 
from Guantanamo a group of Uighurs - Muslims from northwest 
China whom Beijing regards as terrorists who should be 
repatriated to China. 
 
INDIA 
----- 
¶23.  (C/NF) The Rudd government has moved to intensify 
Australia's relationship with India, and has signaled its 
intent to engage bilaterally on shared strategic interests, 
including maintaining stability in the Indian Ocean area and 
matching Australian resources to India's energy supply needs. 
  Australia played a positive role in supporting an exception 
for the U.S.-India civil nuclear agreement in the Nuclear 
Suppliers Group and the IAEA, but has indicated that it will 
not export uranium to India because it has not signed the 
Nuclear Nonproliferation Treaty. 
 
INDONESIA 
---------- 
¶24.  (C/NF) Australia's relationship with Indonesia has 
improved markedly in the last few years and it appears to 
very satisfied with President Yudhoyono's performance to 
date.  The GOA consistently portrays the relationship as one 
of Australia's most important, encompassing political, 
security, commercial, cultural and people-to-people links. 
In February 2008, the Lombok Treaty between Australia and 
Indonesia came into full force and provides the framework for 
bilateral cooperation on counterterrorism efforts in law 
enforcement, capacity building, border control, maritime and 
transport security, legal assistance, financial monitoring, 
defense and management of chemical, biological, radiological 
and nuclear terrorist threats. 
 
MCCALLUM