Interview by Peter Hartcher of the Sydney Morning Herald

QUESTION: I wanted to start if I could with the -- start narrow on the Australia stuff and then broaden out.

SECRETARY RICE: All right.

QUESTION: Did you have a chance to eyeball the new leader of the Labor Party?

SECRETARY RICE: Well, unfortunately, I was off at the ministerial.

QUESTION: Oh, were you?

SECRETARY RICE: Yes. Yes, right. (Laughter.) You know, the ministers have a problem: Our leaders are doing various things, but we also have to do the ministerial, so I was at the ministerial.

QUESTION: So you weren't at that meeting, all right. Well, let's start then. I'm sure you're familiar with the Labor Party's policy on Iraq.

SECRETARY RICE: Yes.

QUESTION: What's your assessment? Is that a responsible policy for a country to take?

SECRETARY RICE: Well, first let me start by saying that Australia has been a stalwart in supporting these young democracies. And one of the most heartening things that I've done while I was here was we had lunch with the Australian Defence Forces. The Australian Defence Forces are known worldwide and especially by our military for their courage and their valor and their toughness and their honor. And you know, it's not just that they've served in places like Afghanistan and Iraq, but also in really helping to stabilize this region in East Timor and the work that's been done in places like the Solomon Islands. So that was a real joy. And I hope Australia is duly -- I know Australia is duly proud of the Australian Defence Forces and what they've done.

Now, as to Iraq, I would just hope that any Australian prime minister would make a decision on Australian defense commitment based on what it would take to get the job done, because ultimately that's what we're there for. We're not there to count the number of troops. We're not there to say how many we'll have now and how many we'll have later. We're there to ask the question of what does it take to do what we've started. And so I would just say that, that I would hope that that would be the criterion.

QUESTION: So with their position of seeking a -- in consultation with the U.S., to draw down Australian combat troops in negotiation, and on the next rotation, do those parameters give you confidence that it couldn't -- that it could make the --

SECRETARY RICE: Well, I -- look, there's no reason to speculate. I think, first of all, the Australian people haven't taken their decision yet and until they have, we are -- we deal with the Australian Government and its current policies. And so I don't think it's fair to speculate. I just -- I think we all have to keep our eye on what we're doing here.

I was just in Iraq and -- in Anbar, and this is a place that a year ago was given up for lost to al-Qaeda, where we sat now at a table with brave local Iraqi leaders who have taken back their streets from al-Qaeda -- by the way, making us more secure in the bargain, because after all, as al-Qaeda is defeated in Iraq, that's good for the war on terror. And these allies, new allies of ours, were asking only that, you know, we help them provide security and that we help them get into a position where they can reconstruct their province and connect with their government so that they can be part of a democratic and stable Iraq. And when you're there, you realize that the commitment that we've made (inaudible) to people like that, and that they in exercising the kind of courage and bravery that they are exercising, are, in effect, making us safer.

QUESTION: The reports -- of the reports that I've seen of the GAO and the Jones report point to serious flaws and shortcomings in the Iraqi security forces and political system. Does that give you confidence that the Iraqis will be able to stand on their own feet anytime in the next decade?

SECRETARY RICE: Look, I've come from a political system where, in my lifetime -- and I am not that old -- in my lifetime, black people couldn't be assured to vote in my hometown in Birmingham, Alabama. So when one talks about a six-year-old -- no, a four-year-old political system that has emerged on the ruins of one of the worst tyrannies in the 20th and 21st century, I frankly think they're doing pretty remarkably. Yes, there are shortcomings. Yes, there are difficulties. It is not easy to build democratic institutions, to build an army that is going to be capable, but yet democratically inclined. It's not -- it's hard for police to overcome sectarian differences in the past. Yes, those are all difficult. But you know, I've talked to the people who did the -- from the Jones report, and yes, there's a lot more work to do, but particularly in the army there has been progress, and these are problems that can be fixed.

Now, do the Iraqis need help and will they need help for some time to come? Yes. But that is not to say that they are not getting better; they are. That is not to say that they won't reach a place at which they can sustain themselves, I think they'll do it. But they need assistance in the meantime and they're not the first young democracy to have needed assistance to get to a stable, prosperous future. Now, we just met with the President of South Korea, a country that, of course, still divided, but after the Korean War, we committed to helping that part of Korea that was free develop and emerge. It took a while. But it's now the tenth -- tenth or eleventh largest economy in the world.

So Iraq has a lot going for it. It has the resources, it has smart people. It has had very, very difficult political circumstances. But when it works its way through those political circumstances with our help, it can be a pillar of stability in a different kind of Middle East, and that will be good for all of us.

QUESTION: Can I ask you a couple of China-related questions?

SECRETARY RICE: Sure.

QUESTION: One proposal -- I don't know whether you've seen this -- that Kevin Rudd has floated that he expressed concern that we see a nuclear arms buildup by China, has suggested that it's the responsibility of the countries, the other countries of the Asian-Pacific, to urge China and the U.S. to conduct high-level negotiations about a reduction in nuclear missile capability, along the lines of the Soviet-era negotiations between the U.S. and the Soviet Union. What do you think of that as a concept?

SECRETARY RICE: Well, I hadn't heard it and I probably -- I can't comment because I don't know the full range of what he might be talking about. Of course, there's a significant difference in the relationship between China and the United States and what was the relationship between the United States and the Soviet Union. The relationship between the United States and the Soviet Union was implacably hostile. I think the only thing we agreed on was that we didn't want to annihilate one another. We were talking about tens of thousands of nuclear warheads. It's a rather different scale than the China problem. And of course, there's a regional dimension to the China issue that's quite different than the global dimension of the U.S.-Soviet competition. So I don't want to comment further. There are considerable differences in the circumstances.

Now, what we've concentrated on with China is to encourage China to be more transparent about what is intended in its military buildup. We have been very active in pursuing military-to-military exchanges with China because we think that's a way to increase transparency. We have also, of course, been very active in -- if you think about a rising China and it is going to be influential, it is influential, it can be influential for good or it can be influential for bad. And we believe that the engagement with China in organizations like APEC, and that’s why I’ve supported accession into the WTO; that the embedding of China in these international and regional institutions can channel Chinese influence in a positive direction.

That doesn't mean that we don't have many differences: on human rights, on religious freedom, on a variety of issues. But we have, I think, the strongest relationship with China that the United States has ever had. It's complex, it has its difficulties, but it seems to me that's the way to deal with the -- what may be negative aspects of a increasingly influential China, even on the military side.

One thing to remember about arms control the old-fashioned way, and by the way I was an arms controller, is it was kind of in the absence of a political relationship. It was the political relationship. There's a reason that every time the American President and the Soviet -- the General Secretary of the Communist Party of the Soviet Union got together, that the highlight was the arms control treaty that they signed. It was almost as if that became the surrogate for a political relationship, and I think there's some lesson in that.

When we were in a different kind of political relationship with Russia with President Putin and President Bush, the Moscow Treaty, which committed to reducing deployed nuclear weapons dramatically by the United States and Russia, is about that big -- you know, several pages --

QUESTION: Yeah.

SECRETARY RICE: -- as opposed to volumes and volumes and volumes that accompanied the arms control treaties. It says that one should pay attention to the political relationship as well as to the military relationship.

QUESTION: Well, on that subject, on China and then on Russia as well, are you getting the -- in this meeting, the (inaudible) meeting, are you getting the sort of cooperation that you need from China to come to the positive outcomes and the sort of (inaudible) for an aspirational target on reducing carbon emissions?

SECRETARY RICE: The issue is still being discussed. We very much support the Sydney declaration on climate change. We believe that Australia has struck the right balance in terms of the economic needs, the emphasis on technology, the importance of the relationship between developed and developing countries, the commitment that, you know, there isn't going to be a kind of one-size-fits all solution. These are all things that we're very supportive of. And we think the Sydney declaration has struck the right balance and we're encouraging others to sign it.

QUESTION: Does that include a specified aspirational target for reducing emissions?

SECRETARY RICE: Oh, we believe that the -- we -- there's a specified target on energy intensity. And we'll see what happens to others. But we think that this is going -- the negotiations are going well, definitely.

QUESTION: Energy intensity which is an energy efficiency measure based on --

SECRETARY RICE: GDP. That's a GDP one. But it's one of several elements to the (inaudible) -- and I'll not get ahead of them and say what's in the document. But it's -- I think it's going well. We're very supportive of what's there.

QUESTION: Well, okay. And on Russia, there's been a lot of commentary about the new assertiveness of Russian foreign policy in recent times. What's -- and I know Russia is your background. What's your assessment of this sort of foreign policy that we see Russia waging at the moment?

SECRETARY RICE: Well, on some global issues, I think it's constructive. It's constructive on proliferation. It's been constructive on Iran. It's constructive on terrorism. Many areas in which we and the Russians and our allies have great cooperation.

The areas of disagreement have largely been concerning those newly independent countries that are on Russia's periphery, some of which used to be part of the Soviet Union. There is still some sensitivity there. We've tried to convince Russia that this is not a zero-sum game, that we expect Russia to have strong relations and these new democracies on Russia's borders will be positive influences. Similarly, we have had some concerns about internal developments in Russia in terms of free press and countervailing institutions to the Kremlin.

But all in all, even when we have difficult issues like we've recently had about missile defense, we find a way to talk about them, we find a way to pursue cooperation as we're going to do through our experts. And I think that most of the world would say that that's the experience with Russia, that there are some areas of disagreement, but that this is certainly not the Soviet Union. On balance, it's -- there are some constructive relationships.

QUESTION: I certainly never saw any Soviet leader take his shirt off in a public place.

SECRETARY RICE: No.

(Laughter.)

QUESTION: What do you -- what was your interpretation of the deal that Vladimir Putin oversaw yesterday with Yudhoyono in Jakarta?

SECRETARY RICE: In Jakarta. Well, I don't know enough about the details, but look, relations between Indonesia and Russia need to be good relations and they need to be deep relations. You know, we have never -- there are no circumstances in which the United States encourages countries not to have a good relationship with Russia. We're seeking to have good relations with Russia. And so, you know, I don't know the details, but it's unproblematic from our point of view.

QUESTION: There's a former Deputy Secretary of Defence here, Paul Dibb, who says that rather than Russian Kilo-class submarines, they should be American submarines; that Indonesia should be buying from the U.S. or from the West rather than from Russia.

SECRETARY RICE: Yeah, but look, isn't it interesting that we have been strengthening our military-to-military relationship with Indonesia? And as a matter of fact, President Yudhoyono is a graduate of an American military college. So we have been strengthening our relationships and I think we will continue to. Again, it's not a zero-sum game. It doesn't mean that Russia shouldn't strengthen its defense relationships also.

QUESTION: And what's your response to the criticism that the U.S. has been so preoccupied with Iraq that it hasn't paid sufficient attention --

SECRETARY RICE: Well --

QUESTION: -- to Asia? I know it's --

SECRETARY RICE: Yeah.

QUESTION: -- something that gets thrown at you from time to time.

SECRETARY RICE: Yes, and I find it peculiar. First of all, this is the second trip for the President to Australia, my third trip. The -- if you look at our relations in the region, we have modernized our defense relationship with Japan, we have modernized our defense relationship with South Korea. I don't think that we have ever had stronger relationships, military relationships and political relationships, with those two countries.

We have enhanced our relationship with India. It's the best relationship that we've ever had with India. We have enhanced our relationship with China. It's the best relationship we have had with China. We have a trilateral -- trilateral discussions between Australia, Japan, and the United States. We've also had them -- United States, Japan, South Korea.

All in all, I would put it simply: We have good relations with China, Japan, with Russia, South Korea, India, all at the same time. And when I was an academic, many Asianists said that couldn't be done.

Now, there's a reason, and that's because we've been engaged and active and pursuing those relationships. And they haven't improved while we were off doing other things; they've improved because of the active engagement of the President and of myself and, before me, Secretary Powell with this region.

If you add to that the free trade agreements that we've done in the region and if you add to that that we have turned the six-party talks into a Northeast Asia mechanism that is on the verge of real progress in the peaceful denuclearization of the Korean Peninsula, I'd say it's a pretty good record in Asia.

MR. MCCORMACK: (inaudible), I think we have time for one quick question.

QUESTION: Okay. I had a couple more.

MR. MCCORMACK: You're (inaudible.)

QUESTION: Well, I have to -- well, I guess one thing is --

SECRETARY RICE: Yeah.

QUESTION: You know, we're sitting here in Sydney and there's lots of people turning out to protest tomorrow.

SECRETARY RICE: Yeah.

QUESTION: Who knows what they're protesting about, globalization --

SECRETARY RICE: Right.

QUESTION: -- Iraq war, lots of stuff.

SECRETARY RICE: Yeah, lots of things.

QUESTION: Well -- but beyond the -- above and beyond the protestors, what would you say to the people in Sydney who have -- you know, there's a lot of moaning and griping that you hear about, the inconvenience and the lockdown and all that stuff.

SECRETARY RICE: Yes. Well --

QUESTION: Is there a message you'd send to Sydney's --

SECRETARY RICE: Look, the President said it when he said, you know, we're all sorry for it. Look, I wouldn't like being tied up in traffic either and I understand that the security measures that attend not just the President's visit, but something like APEC, can bring inconvenience for the native population of a city. I hope that people recognize -- the people of Sydney recognize what a great opportunity it's been to show off this terrific city and, you know, that people will want to come back without the security measures at other times to, you know, to go to the symphony in this great symphony hall, to, you know, go along this wonderful -- these wonderful waterways. This is a fantastically beautiful city.

And there's a reason that an organization like APEC -- which, by the way, represents or is represented above or has within it some of the most vibrant economies in the world -- come to places like Sydney. It's a great showcase for this wonderful city. But I know it --

QUESTION: So you'll be back in your post --

SECRETARY RICE: Oh, absolutely.

QUESTION: -- Administration career?

SECRETARY RICE: It's very high on my list of things to go -- countries -- cities to go back to. But yes, the inconvenience is real, and I think we're all sorry for that.

QUESTION: Thanks.

SECRETARY RICE: All right. Great to see you.

QUESTION: Likewise.

SECRETARY RICE: See you next year at APEC.

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