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14 NOVEMBER 2010

Subjects: APEC leaders declaration, President Obama, Trans Pacific Partnership, Cancun, climate
change, Thailand, Mexico, Vietnam, banking competition

PM: The APEC Summit has drawn to an end and I wanted to take this opportunity to summarise what has
been achieved. Australia was proudly a founding member of APEC, because we saw the economic
advantages of greater trade and economic engagement in our region.

Here we are 21 years later and having APEC has made a difference. To just give you one statistic
which tells the story, in the period from 1994 to 2009 trade within the APEC region tripled. Now
what that means is more trade, more economic opportunities and more jobs for Australians.

At this APEC Summit we have built on APEC's earlier successes. We have done a stock take against
the Bogor Goals and worked out how much progress has been made and reflected on what more we need
to do. And a great deal of progress has been made in reducing tariffs and barriers on trade between
APEC nations and economies.

Now we need to keep building on that work. We have noted that against the Bogor Goals there is
still work to do, particularly to liberalise sensitive sectors like agriculture. And building
beyond those goals, we want to now move from talking solely about tariff protection and free trade
to an even greater focus on the behind the border barriers. The behind the border barriers of
different regulatory regimes, different ways of working that can prevent trade investment and the
creation of jobs.

The communiqué, the leaders declaration from APEC deals with all these matters. In addition it
reflects the communiqué of the G20. APEC has also committed itself to engaging in a framework for
growth, making sure we life growth, in what is still a difficult time in the global and regional
economy. Making sure that that growth is balanced and we address some of the issues that give rise
to imbalances between nations including imbalances on the current account. And APEC had said that
it too wants to show leadership on the hard grind of structural reforms that economies need to do
as the world economy turns to growth. This has been a successful meeting and the leaders
declaration is now available for all to see.

In addition today I attended a meeting convened by President Obama to bring together the nations
that are joining the Trans Pacific Partnership discussion. We are holding true to a vision of free
trade and economic integration across our region. The Trans Pacific Partnership is another stepping
stone to get there to greater economic liberalisation and integration.

The original four countries in the Trans Pacific Partnership were present at the meeting convened
by President Obama and those nations are Brunei, Chile, New Zealand and Singapore. Now we, Peru,
the United States and Malaysia have already indicated we want to be involved in the Trans Pacific
Partnership and today Vietnam announced formally that it also wanted to be involved in the Trans
Pacific Partnership.

Significantly Prime Minister Kan of Japan joined the discussions in a status of consultation, but
the fact that Prime Minister Kan was there in the room for the Trans Pacific Partnership
discussion, I believe is a good sign, building on the earlier good signs of his statement about
taking a more liberalised approach to trade and particularly dealing with the sensitive subject of

The nations in the room talked about their ambition for this agreement. President Obama indicated
that he did want to see a good degree of progress by the Honolulu meeting of APEC next year and so
nations in the room are aiming to progress this agreement as quickly as possible, with a view to
showing that work is achieving by the APEC meeting of next year.

Finally today, I did have the opportunity to engage in two bilateral meetings. One was with the
Prime Minister of Thailand, Prime Minister Abhisit. One was with the President of Mexico, Mexican
President Calderon. I spoke to the Mexican President particularly about outlooks for Cancun; he is
as President of Mexico the host of that important discussion on climate change. I had the
opportunity to talk to the Prime Minister of Thailand across our full range of engagement, we are
obviously engaged with Thailand in our region on economic matters, we have a strong partnership
with them in a number of multilateral forums.

He raised with me the question of people movement in the region and the stress that does put on
Thailand. We briefly discussed my proposals for a regional protection framework and regional
processing centre and agreed that talking about those proposals should be the subject of further
bilateral dialogue and dialogue in the Bali Process.

So all in all, in conclusion as the APEC summit comes to a close, I believe that both the G20 and
APEC have done good work, good work to coordinate what is happening in our economies, while the
world economy is still in a fragile and difficult stage.

Yes, the world economy has moved to recovery, but the recovery is fragile and it needs to be
nurtured and harnessed, it needs to be built upon through freer trade, economic liberalisation and
the hard work of structural reforms including addressing imbalances in economies, that's what the
discussion over the two summits has been about.

For people in their homes in Australia, that quickly becomes a proposition about our nation's
prosperity, about their jobs and their prosperity into the future. I'm very happy to take

JOURNALIST: Prime Minister, can I just clarify on Vietnam, did they become one, in addition to the
four that signed up, or just involved in talks?

PM: So, yes, it's the original four, plus the four that had already indicated they wanted to
formally join in the talks. So you've got the agreement for the four and there are discussions
about broadening that agreement to others. We had already indicated that we wanted to be in those
discussions about broadening and today Vietnam also indicated it wanted to be in those discussions
about broadening. So it's not, it's not signing on to the agreement in its current form, it's a
dialogue about broadening the agreement with more partners in it.

JOURNALIST: After your meeting with President Calderon are you any more optimistic that something
real can be achieved at Cancun to combat climate change?

PM: Having talked to President Calderon, his discussions with me are built on earlier streams of
advice to me, including through Minister Combet. The focus in Cancun will very likely be on fast
track financing, that is getting assistance to developing countries, to deal with climate change
matters and focus will very much be on forests, on the loss of forests and the impact that that has
on the climate, on carbon generally. So they are likely to be the things were we will see
developments in Cancun.

JOURNALIST: So no talk of targets or anything like that?

PM: President Calderon is very clear about where he wants to take this discussion, he believes that
important measures and progress were achieved at Copenhangen, but he does understand that
expectations have been built very high and whilst the Copenhagen accord was a good step forward,
because expectations were so high, many were disappointed by progress, he understands that. However
he believes the important purpose of Cancun is to build on that earlier progress and he wants to
particularly build on it in fast track financing and in the forest measures.

JOURNALIST: Given the modest goals that seem to be taken forward to that summit and what's happened
in the United States are you confident that you can retain the momentum for implementing a carbon
price in Australia?

PM: I will be, as Prime Minister, doing everything I can to generate community and Parliamentary
consensus for change in our economy. We need it and we need to remind ourselves that around the
world as these international talks continue to happen, around the world economies are changing to
deal with climate change and deal with a different future when it comes to using carbon.

We cannot risk being left behind as economies adapt and become low pollution economies. My argument
about working out a way through the question of pricing carbon is: it's good for us to be dealing
with the adaptation our economy needs for the future. It's in our national interest to build the
low pollution economy we will need in the future and let's just be very clear about President
Obama's position here, President Obama is responding to the domestic political circumstances he
faces, he sponsored a cap and trade scheme, he didn't get through the Senate, it wasn't going to
get through the Senate. We know a bit about what it can be like to face hostile Senates, we've got
that in common and following the mid-term elections, now the prospects for any such agreement are,
for any such legislation going through both the House and the Senate is nil and President Obama has
responded to that.

JOURNALIST: On Thailand, is the President of Thailand aware of your regional processing centre and
did he give any indication of what he thought of the idea?

PM: He raised with me the issue of people movement and some of the pressures that that puts on
Thailand. I, you know, well they do have Burmese refugees in particular in large numbers pressing
on their borders and into Thailand and they've experienced those flows for quite a long period of
time and this morning we were talking about circumstances in Burma, so I'm sure you can image what
occasions those flows of people into Thailand.

So he raised the issue of people movement with me, I'm not a mind reader, but I anticipate he would
have done that against a background of knowing that Australia had the propels and discussions in
train about a regional protection framework and a regional processing centre.

Our officials have been consulting extensively across the region and so the discussion proceeded on
the basis that we were both acknowledging that there was a real issue here, it's an issue that
affects both of our nations, we're looking for solutions. Australia has put forward this proposal
and he wants to keep discussing it bilaterally and we have the Bali Process for that.

JOURNALIST: Prime Minister, just back on climate change, the APEC declaration today doesn't touch
on pricing carbon, it does talk about a lot of practical measures and you seem to be suggesting
that the President of Mexico is also talking about practical measures in Cancun. Do you feel that
he's still committed to reintroducing an ETS, or a price on carbon given the deadline of the 23rd?

PM: Well, first and foremost let's not create a straw man here, there was never any suggestion that
this declaration was going to deal with a price on carbon, you know we're here for APEC, which is
predominantly, overwhelmingly focussed, as the name would imply, on the economic agenda and in
dealing with the economic agenda then it does bring you into a discussion of climate change, but
that's not what this meeting is about.

Second, we should remind ourselves that around the world, nations are taking measures to deal with
climate change. Many important places in the world price carbon, to give just one example
California. If California were a country it would have a seat at the G20 table, it has an emissions
trading scheme, it prices carbon. And it's just one example and when we look around the world,
through measures that are being taken, shadow prices are being put on carbon, carbon is effectively
getting a pricing in some economies.

So against this movement around the world, against the preference of consumers, increasingly being
more sharply expressed, that they want live in a greener way and want to make their own
contribution to cutting emissions, we can't just sit still and pretend that our economy can deal
with what is going to be the way the world economy focuses in the future and consumer preference
focuses in the future.

We need to work our way through the adaptations our economy needs to be a lower pollution economy,
it's why the government is talking through the multiparty Climate Change Committee and directly
with business and stakeholders about pricing carbon.

JOURNALIST: Prime Minister, I saw you having a fairly animated chat with Barack Obama before the
leaders declaration, I was wondering what you were talking about?

PM: We were having an animated chat about our political systems and differences in them, for
example how we have question time and the fact that I am flying through the night to return to one.

JOURNALIST: Next week the Greens, or in the next fortnight the Greens will put forward legislation
to see the banks hold their interest rates, or follow the RBA's lead for the next two years, is
this something that the government will support?

PM: The Government will have its own package of measures to deal with competition in the banking
sector. Wayne Swan has been working on them, as has been publicly known since October, when it
comes to dealing with something as important as the banking sector you want to get it right, Wayne
Swan is working to get it right, we will bring forward and support our own package.

JOURNALIST: Is that still in December, Ms Gillard?

PM: Wayne Swan has been very clear it would be next month.

JOURNALIST: The OECD's analysis of the Australian economy today was released and it is very
critical in terms of the changes that were made to the RSBT and saying that the MRRT should be
broadened, the rate increased, and (inaudible) the negotiated agreement that you came to, what do
you say to the OECD's findings about the MRRT?

PM: I entered an agreement with Australia's biggest miners about the way in which this tax would be
constructed, we've got the policy transition group working on the detail. I'm certainly intending
to hold to the agreement that I made, we have obviously worked through to get a consensus in
difficult circumstances and I will hold to that consensus.

JOURNALIST: Prime Minister, part of that Greens package on bank reform is the removal of the $2
transaction fee on ATMs, I understand that you're not going to support the Green's legislation and
you have your own package, but would you support that?

PM: The Government will bring forward its own package of measures on banking as heralded by the
Treasurer Wayne Swan and building on our earlier competition reform.

Am I discriminating against you Malcolm, so badly, you've just given up?

JOURNALIST: All my questions have been asked.

PM: Oh, ok. If you don't go there early then - I was actually talking to the Canadian Prime
Minister who has introduced a list system in his press conferences.

JOURNALIST: He doesn't like journalists.

PM: I'm picking up tips as I travel.

JOURNALIST: The journalists in Canada went on strike.

PM: We'll they'd better be back working now.

JOURNALIST: Prime Minister, just on the TPP talks, can you give us a sense of the friction, and
those APEC members in the approach of ASEAN, those three (inaudible) TPP was the much friction on
those talks yesterday?

PM: No, no, there's not friction. There is an understanding that there's a number of things that
are happening and an understanding that we need to share information, so people can understand as
these various potential agreements develop that something isn't happening in one area which isn't
complementary with another area.

So there's an information sharing tasks that needs to go on, but not any friction expressed because
of the different forms of agreement that are being pursued and my view, clearly, is we need to have
the global round come to conclusion, the Doha Round, and that was expressed very clearly at the

We need to pursue further trade liberalisation in our region, both on the question of tariffs but
also these behind the border measures that we've discussed and given how difficult this is we won't
have all our eggs in one basket, we will take opportunities to press forward on free trade and
economic liberalisation in a number of areas.

JOURNALIST: Prime Minister, on the TPP, can you talk more about what the goal is over the next
year? You said that there was a goal to reach by Honolulu one year from now, does that mean signing
up to a more firmly, does that mean getting (inaudible)

PM: I think the goal here is to see an agreement that is comprehensive, that is it's not just
dealing with goods, but also dealing with services, that has a level of ambition in it.

This has been referred to as a next generation free trade agreement and I believe that terminology
is referring to the comprehensiveness of the measures that parties are looking to in the agreement.
We will do everything we can as a country to push these talks along and clearly President Obama has
expressed a level of ambition, both in terms of what's in the agreement, but also progress by the
time he hosts the G20 in the US.

JOURNALIST: Prime Minister, given Prime Minister Kan's comments and his attendance at the meeting
today, how realistic are the prospects of a bilateral free trade deal now, are you heartened,
encouraged, and what were your thoughts on kabuki theatre?

PM: I'm heartened, heartened by what had happened in the last few days here in Japan. I was
heartened by the Prime Minister's statements on his government's approach to free trade. I was
heartened by the fact he came to sit in the meeting about the Trans Pacific Partnership.

So they are good signs, but I'm not underestimating the journey from here, free trade, questions of
agriculture have been very politically sensitive in Japan and difficult. I think Prime Minister Kan
has taken some courageous steps but there is a lot more to do. On kabuki, I hadn't seen any before,
so I've learned something.

JOURNALIST: I know we're overseas, but I just wanted to get what your priorities will be for the
final sitting weeks of the year?

PM: You will no doubt hear about those long and loud in question time tomorrow, so I will see you
back in Canberra for that. Thanks you.