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Daniel Flitton and Tim Lester

May 18, 2012

  • How Gillard-Rudd drama affected talks with China

Plans with Beijing stalled amid leadership crisis, rejected asylum seekers getting back on boats and WA mining royalties to go to future fund, Tim Lester reports.

THE Labor leadership feud stalled for more than a year the creation of an annual summit to strengthen Australia’s brittle relationship with China.

Broad agreement was struck during Prime Minister Julia Gillard’s visit to China in April 2011 that would see key ministers from both countries, including the leaders, meet each year to manage ties between Canberra and Beijing.

But progress on the talks was stymied – not because of Chinese concern over Australia’s close alliance with the United States but because Ms Gillard, Kevin Rudd and Wayne Swan could not agree on a format.

Illustration: Ron TandbergIllustration: Ron Tandberg

Mr Swan would not tolerate an arrangement under which Mr Rudd was leading discussions, similar to the role US Secretary of State Hillary Clinton plays in the US-China talks on which the talks in question are modelled.

A compromise to run two separate meetings – one on economic issues and another on strategic issues – was proposed but never finalised.

With the logjam now cleared after the political bloodletting in February that followed Mr Rudd’s shock resignation as foreign minister, the talks with China are now back on.

New Foreign Minister Bob Carr confirmed to The Age that a strategic ”architecture” for more regular meetings was discussed this week during his trip to north Asia.

”I think a more formal, regular, structured dialogue would have some benefits,” Senator Carr said. He said Foreign Affairs Department chief Dennis Richardson would go to Beijing shortly to settle details.

Sources familiar with the agreement said the departure of Mr Rudd had allowed the talks with China to be put back on the agenda.

Such a forum for regular contact would have given Australia another chance to explain to China the decision to base 2500 US marines for six months each year in the Northern Territory –

a move China has made clear in recent days it sees as a concern.

Mr Rudd described himself as a ”brutal realist on China” and in 2009 warned Mrs Clinton to be prepared to use force against China ”if everything goes wrong”.

After Mr Rudd’s resignation, Mr Swan lashed the former Labor leader for too long putting his own self-interest ahead of the broader labour movement and ”the country as a whole”.

The tensions between Mr Rudd, Ms Gillard and Mr Swan over the China talks predate Senator Carr’s entry to Parliament and were not apparent at the time he spoke to The Age from Tokyo.

He said relations with China were comfortable and flagged the prospect the seven-year negotiations with Beijing over a free trade deal could be finalised by the end of this year.

”I’m not setting a deadline here, but it would be a very happy celebration around about the time of the 40th anniversary of Australian diplomatic relations with China in December this year. That would be a happy thing,” he said.

Senator Carr said the challenge was whether the agreement would go beyond commodities and agriculture and be comprehensive, with Australian businesses wanting access for investment and services.

Concern over the deployment of US marines to Australia had been raised by two ministers and a People’s Liberation Army general during his visit to Beijing, he said.

”They registered the fact that there was closer defence co-operation between us and the United States and they’re entitled to do that. I’ve got no objection to that at all.

”I see it as confirmation of the comfortable relationship we have with the Chinese, a friend and great economic partner, that they can say something like that, and it gives me an opportunity to explain why it is that the American treaty relationship is part of Australia’s DNA,” he said.

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