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Bush Meets With Australian Prime Minister at White House; Tony Blair Holds Talks With Representatives From Britain's Muslim Community

Aired July 19, 2005 - 11:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

DARYN KAGAN, CNN ANCHOR: Let's look at what's happening now in the news. This hour at the White House, President Bush is meeting with his counterpart from Australia. Prime Minister John Howard has been a staunch defender of the U.S.-led war on terror and his country's role in Iraq. Both men are to appear before the media minutes from now and CNN will have live coverage of that event. That event is now scheduled for 11:50 Eastern, about 20 minutes from now.
Meanwhile, Washington is abuzz with speculation that President Bush could announce a Supreme Court nominee as early as today. The person who ultimately wins Senate approval would replace retiring justice, Sandra Day O'Connor. She's cast a decisive swing vote in several issues before the court, and her successor will ultimately help write President Bush's legacy.

Just last hour, India's prime minister delivered an address to Congress. It's only the eighth such appearance by an international visitor in the past five years. Manmohan Singh applauded the alliance between the two countries on nuclear issues, and vowed that India will never aid the proliferation of nuclear technology.

The Space Shuttle Discovery will remain on the launch pad until at least next week, as technician search for the cause of a malfunctioning fuel gauge. NASA officials say they are no closer to finding the source of the glitch. If the shuttle doesn't go up within the next two weeks, NASA will have to wait until September.

Let's get the latest now on the Supreme Court watch, as speculation builds that President Bush is getting ready to nominate a successor to retiring Justice Sandra Day O'Connor.

Our senior political analyst Bill Schneider is in Washington to provide some insights.

Bill, good morning.

WILLIAM SCHNEIDER, CNN SR. POL. ANALYST: Good morning. And I don't know the name.

KAGAN: Oh. Well then, forget it, we'll just move right on. No, other things to talk to you about. What are you looking for? And who are you looking for?

SCHNEIDER: Well, who is a difficult question. I think President Bush, this is, as you just said, an opportunity to mark his legacy, because a Supreme Court justice serves for life. His father had a fairly controversial legacy. He named two justices, Clarence Thomas, most famously, and also David Souter, who is not particularly admired or trusted by conservatives.

So I think Bush would like to establish a legacy. But the question is, what legacy? He's under pressure from his wife, among others, to name a woman. Because if he doesn't name a woman then that would be considered backsliding. The court would go to two female justices to one. He may want to name a Hispanic justice, which would put him in history as the first president to name a Latino or a Hispanic to the United States Supreme Court, and that could help score gains for his party, among Hispanic voters, among whom he's done actually quite well for a Republican candidate.

Conservatives want him to name someone who's a true conservative. I think even though Republicans have named seven out of the nine judges on the Supreme Court, only three are considered by conservatives true conservatives, Rehnquist, Scalia, Thomas. They're working toward a conservative majority, and they'd like him to add one step along that path by naming a real -- a true conservative justice.

On the other hand, Bush also campaign as someone who wanted to be a uniter, not a divider, and that would point him in a very different direction, naming someone who's a consensus candidate, more of a moderate.

KAGAN: Nomination is the first step, of course. Next it goes up to Capitol Hill. I don't know if you heard Ed Henry's interview with Arlen Specter, but basically he is calling for a moderate.

SCHNEIDER: That's right, and that would be a real step. President Bush, despite his campaign promise to be a uniter, the country stands very badly divided. You have Democrats who are -- could use the filibuster if they find extraordinary circumstances in the person the president nominates to the Supreme Court. Republicans could exercise the nuclear option and ban the filibuster. It could get very divisive, very confrontational, very ugly, because the Supreme Court involves all the most divisive issues in American public life. Does the president want to avoid that kind of bloody confrontation? His nomination will tell us that.

KAGAN: Bill Schneider, live from Washington D.C. I'm sure you'll be watching, right along with the rest of us. Thank you.

And now to the latest on the recent terror attacks in London. Today, officials said there is no new technology they can reasonably put in place right now to screen passengers on the city's underground trains.

Meanwhile, London's mayor was asked if the United Kingdom should, quote, "clamp down on civil liberties," as some believe the U.S. has in the wake of terror attacks. Here is what the mayor had to say about that:

(BEGIN VIDEO CLIP) MYR. KEN LIVINGSTONE, LONDON: I'm not interested in replicating the mistakes that the United States of America has made. I think the problems at Guantanamo Bay, Abu Ghraib and the double standards of banning Muslims without any explanation of why simply feeds that sense in the world that there are double standards at work here. And if the British government is to put measures in place, they'll have to be measures that are seen to be fair.

(END VIDEO CLIP)

KAGAN: And in case you don't know, Mayor Livingstone, an outspoken liberal and has a lot to say, usually, in British politics.

Also in London today, the British prime minister, Tony Blair, holding talks with representatives from Britain's Muslim community.

For more on that, here's CNN's Robin Oakley.

(BEGIN VIDEOTAPE)

ROBIN OAKLEY, CNN CORRESPONDENT (voice-over): On a busy day for Tony Blair, during which he also hosted Afghan President Hamid Karzai in Downing Street, Mr. Blair and opposition leaders from the conservative and liberal democrat parties met Muslim community leaders to discuss what they could do in the wake of the terrorist attacks in London, basically to prevent young discontented Muslims who've rejected perhaps the old country that their parents came from, and not felt fully assimilated into British society from falling prey to the godfathers of terrorism. And it has been agreed among those present that the Muslim community will have to take a lot of the responsibility for what they were emphasizing was a tiny minority, who are prepared to spread evil and hate.

But one of the participants said, it was not in any way a love- in, that there were robust exchanges, and there are some reservations among Muslim leaders about the government's plans, for example, to make the indirect incitement of terrorism an offense. That's targeted at the so-called preachers of hate. But many fear it could interfere with free speech.

Worries, too, about government ideas on having the people, the imams and other people who, through the mosques, get access to young people more closely vetted in future. It was inevitably to some extent a talking shop. But what has been agreed is that there will be a task force set up to deal with the kinds of issues that have emerged, like, for example, a hotline for the Muslim community to be able to communicate any suspicions they have about people in their midst who could be involved in terrorism. There, again, though, an argument about whether that should be staffed by members of the Muslim community, social workers and others, or by police and security services.

So a lot of problems remain to be ironed out. What they've agreed on is the necessity of doing something and soon.

Robin Oakley, CNN, London. (END VIDEOTAPE)

KAGAN: Other news to get to today: a new warning from the FDA. Certain asthma medications may have a greater risk of adverse effects than previously thought. Hear one expert's advice

And we're just minutes away from the president making an appearance with the Australian Prime Minister John Howard. You'll see it live right here.

(COMMERCIAL BREAK)

(STOCK MARKET UPDTATE)

A lot more news, including a new warning from the FDA about asthma medication, coming up in just a moment.

(COMMERCIAL BREAK)

KAGAN: For asthma sufferers, the concerns are enough to take their breath away. Advisers to the FDA say three popular asthma drugs are safe enough to stand the market, but rising concerns of life- threatening side effects should not be ignored. What does this mean? What can be done?

For that, we turn to Dr. Holly Phillips, a general internist joining us from New York. Holly, good morning.

DR. HOLLY PHILLIPS, GENERAL INTERNIST: Good morning, Daryn.

KAGAN: What are the drugs and the warnings?

PHILLIPS: Well, the three drugs that were considered in the FDA were Foradil, Serevent and Advair. Now, basically what they decided was that the drugs are safe and should stay on the market, yet they should carry more severe safety precaution warnings on the boxes.

KAGAN: What goes wrong with them?

PHILLIPS: Well, the thought is that for a rare number of patients, there are some asthma exacerbations and there have been some respiratory-related deaths.

KAGAN: And I think it's especially worse for African-Americans?

PHILLIPS: Yes, the study did show that there was some increased frequency in African-Americans. Again, though, this is a very small number of patients. For the vast majority of patients taking these drugs, they are safe.

KAGAN: Not only safe, but actually help them live better lives.

PHILLIPS: Absolutely.

KAGAN: So there's the balance act. So if you are an asthmatic and taking one of these medications, or your kid is, what should you do?

PHILLIPS: Well, really, I think the best thing to do at this point is to visit the physician and make sure that this is the exact type of medication that is appropriate for the patient. There are two basic classes of medications we use for asthma. The bronchodilator and the anti-inflammatory drugs. So, perhaps, if the patient's not on the exact, right type of medication, we'd want to reconsider.

KAGAN: Good idea to double check with your doctor, anyway.

PHILLIPS: Absolutely.

KAGAN: Dr. Holly Phillips, thank. And to get your "Daily Dose" of health news online, you can logon to our Web site. You'll find the latest medical news, a health library and information on diet and fitness. The address is CNN.com/health.

We're just minutes away from the joint news conference with President Bush and Australian Prime Minister, John Howard. Don't go away, we'll be back to the White House live, after a quick break.

(COMMERCIAL BREAK)

KAGAN: Let's check in on Hurricane Emily. The storm ripped into the Yucatan Peninsula and winds howling up to 135 miles an hour, strong enough to topple trees, twist metal signs and shred vacation plans.

CNN's Karl Penhaul tracked Emily in the Mexican resort of Playa del Carmen.

(BEGIN VIDEOTAPE)

KARL PENHAUL, CNN CORRESPONDENT (voice-over): Storm-driven waves crashed into the Mexican coast as Hurricane Emily began to pound tourist havens along the Yucatan Peninsula. The brunt of the 135 mile-an-hour hurricane battered Playa del Carmen in the wee hours of Monday.

The winds were still howling when buddies Steve Self and Clive Higgins (ph), both from Oklahoma and both with experience facing nature's fury, went to check the damage. With the aid of a flashlight, they see trees had been snapped and palm-leaf roofs ripped off. But it's nowhere near as bad as they expected.

STEVE SELF, TOURIST: These hurricanes, they've got nothing on tornadoes. You can sleep through it.

PENHAUL: Along the beach at the five-star resorts, hotel managers were taking no chances. Hours before Emily hit, guests were evacuated from their rooms to more secure ballrooms and meeting rooms converted into emergency shelters.

Texans Pam and J.D. Chambliss wished this beachside bar would open and serve them a stiff drink after a hard night.

(on-screen): Did you hear it? Could you feel it?

PAM CHAMBLISS, TOURIST: Kind of like a little witch screaming.

J.D. CHAMBLISS, TOURIST: You could hear it howling.

P. CHAMBLISS: And howl.

J. CHAMBLISS: And some things -- it started leaking. The rain started...

(CROSSTALK)

P. CHAMBLISS: Yes, we were a little bit...

(CROSSTALK)

J. CHAMBLISS: It started leaking pretty bad. And things started falling.

PENHAUL (voice-over): They say they were crammed into their hotel's movie theater with some 300 other guests.

(on-screen): Did it get pretty sweaty in there?

P. CHAMBLISS: A little sweaty, yes. We were a little sweaty. No air conditioning.

J. CHAMBLISS: It was hot.

PENHAUL (voice-over): Authorities say trees were ripped up by their roots or snapped. But they reported little major damage to buildings and said nobody was injured.

The wind certainly turned this tourist Mecca into a mess. But workmen say they can complete the clean-up within a week. The Selfs and the Higgonsons (ph) still have a week's vacation left, and they're confident things can only get better.

SELF: I can't call it quits, just because it started out bad.

PENHAUL: And with the hurricane behind them, they and thousands of other tourists are looking forward to another day at the beach.

Karl Penhaul, CNN, Playa del Carmen, Mexico.

(END VIDEOTAPE)

KAGAN: Here are other stories making news overseas this morning.

Police and protesters clash in Gaza. Thousands of demonstrators are protesting Israel's decision to pull out of Gaza and part of the West Bank next month. Police have blocked the protesters from marching toward Gaza, which has been declared a closed military zone.

Turning now to the Toure de France. Lance Armstrong wheeling closer to a seventh straight historic win. Some of his rivals are now calling this a race for second place. Armstrong did not finish first in the 112.2 miles of stage 16, but he's still is in front with an overall lead of 2:46.

Costumes, dancing and beer? About a thousand people flocked to Munich over the weekend for a breakfast like no other. It's the traditional butler's ball. It started about 100 years ago when servants would gather at 6:00 a.m. one Sunday a year for a breakfast blowout. German lawmakers call the ball immoral and banned it in 1904, but that ban was lifted 85 years later.

President Bush set any minute to hold a news conference with Australian Prime Minister John Howard. Let's go live to the White House while we wait for the two leaders to enter the room.

Our Bob Franken is standing by.

BOB FRANKEN, CNN CORRESPONDENT: Neither of the leaders up there now. This is the last mike check, podium check, that type of thing. Many of the leaders in the administration and their Australian counterparts have taken their seats, including the first ladies of the United States and Australia, and Secretary of State Rice, and the others, and as I said, their counterparts from Australia. The president will be coming out with the Australian prime minister, John Howard to discuss the results of their get-together today. There will be a lunch afterwards for the two and their wives and others that will be following at the White House.

And you can expect the questions that come from the reporters, at least on the U.S. side, will have absolutely nothing to do with that. The story of the day is the prospect of a Supreme Court nomination coming possibly as early as today from President Bush. You will recall yesterday that he said that he was working to make that decision in a timely manner.

At the press gaggle this morning, which is the off-camera, but on-the-record news conference that's held by Scott McClellan, the press secretary, he would only say the president is closer today than yesterday. Once again, the very slam bang, definitive description on what is going on. In any case, you can expect the president will be asked about that and he'll tell us whatever he wants to tell us, and whatever he does not want to tell us.

And the questions that have to do with the meeting at hand, which is the one between the Australian leader and the U.S. leader, will be coming up as the questions come from the other side. That is to say the questions from the Australian reporters.

You can see that the leaders are now making their way to the podium, so I'll stop talking.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Thank you all.

Laura and I are honored to welcome Prime Minister John Howard and Janette back to the White House. We're really glad you're here.

We're looking forward to having this time a true family lunch, upstairs. It's a chance for two old friends, friends who happen to be old...

(LAUGHTER)

... to visit and to talk and to strategize and to think aloud about how to work together.

I got to tell you, I admire John Howard a lot. He's a man of conviction. He's got backbone. He's not afraid to make the hard decision, he's not afraid to lead.

And we're really thrilled you're here.

Plus, he married well.

I appreciate a man of vision. I am looking forward to working with him in his fourth term in office for the betterment of our own people and for the betterment of the world.

BUSH: Australia and the United States share a commitment to freedom. We understand we compete against an ideology of hatred, an ideology that murders the innocent in order to achieve objectives.

We know we must be steadfast and strong when it comes to bringing to justice those who would kill innocent life, like those who got killed in New York City and Washington, D.C., and Bali and London and other places around the world.

But we also understand that to defeat an ideology you've got to have a better ideology. And we do: one based upon human rights and human dignity, minority rights and freedom.

And the thing I appreciate about John Howard is he understands that.

I appreciate the commitment of the Australian government to helping the democracy movements in both Iraq and Afghanistan.

We had a good talk today about the way forward in Iraq. And I assured him that our position is one that says, as the Iraqis stand up, America stands down. In other words, we're going to help Iraqis to defend themselves and at the same time promote a political process that will lead to a constitution, the validation of the constitution and permanent elections.

We talked as well about Afghanistan and how important it is for a country like Afghanistan to show the world what is possible when it comes to democratic institutions and freedom.

I appreciated the prime minister's strong advice about Malaysia and Indonesia, two really important countries.

BUSH: And John Howard's got a lot of experience with the leaders in those countries, as well as the political process in the countries.

It's always good to visit with a friend about how he sees the world. We talked about China and North Korea.

I told him that we're committed to solving the North Korean nuclear issue in a diplomatic way, and that we're pleased that the six-party talks has become renewed, and that we're sincere about working with China and South Korea and Japan and Russia to bring some common sense to the leader of North Korea.

We talked about the benefits of the free trade agreement we signed. Our economies are strong and that trade will help our economies stay strong, and that free trade and fair trade is important for the working people in both our countries, and that we're dedicated to making sure the next round of the WTO goes forward.

All in all, we had a really good discussion; kind of discussion you'd expect from friends. And we're looking forward to continuing over lunch.

John, welcome.

JOHN HOWARD, PRIME MINISTER OF AUSTRALIA: Thank you very much, George.

And I say to you, Mr. President, and to your wife, Laura, thank you very much for the great hospitality that you've extended to Janette and to me.

This is not only a close relationship between Australia and the United States, but it is a shared commitment by two peoples who have so much history and so much in the way of common values as the basis for the relationship.

HOWARD: Australia and the United States have never been closer than they are at the present time. But the reason that we are so close is that we are engaged together in quite a struggle against some forces and elements of evil around the world that threaten not only the people of our countries but also the people of other nations.

Terrorists indiscriminately murder people irrespective of their race, their nationality, their religion, their political party or their political belief. And those who doubt that, I invite them to look at the casualty lists of the London underground and of the bus. You will find not 55 people of Anglo-Celtic Protestant composition, but you will find 55 people of different races, different ethnicities, different attitudes and different beliefs.

And I say that to encapsulate the view that I hold very strongly, that to say this is some kind of struggle between the West and the rest is to completely misunderstand and completely misread what's involved.

HOWARD: I want to thank the president and the Congress of the United States for the support that was given so generously to the passage of the free trade agreement legislation; passed through the two houses of the American Congress with, I think, record majorities. And I believe that the economic association between Australia and the United States will be more important to Australia as the years go by, but particularly in the area of services where, because of the commonalities we share in language, in legal systems and in so many other areas, the opportunities are going to be very much greater.

The president and I had a very extensive discussion about the involvement of both of our countries in the Asia and Pacific region; about the critical importance of Indonesia, the third largest democracy in the world, the largest Islamic country in the world, and a nation whose success is immensely importance to the ideological and intellectual debate in relation to terrorism.

HOWARD: Because if Indonesia is a success story, it can be held up as an example to the rest of the Islamic world that the path forward, the path to prosperity and stability is a path away from hatred and extremism and a path of moderation.

Can I say to you, Mr. President, that the personal relationship that we have established on behalf of our two countries means a great deal to me? But it is, as you rightly say, based on a common view of the world: that individual freedom is still the greatest glue that nations and peoples can have, that societies that honor the family as the most stabilizing influence in our community, and also societies that recognize that the basis of national wealth is individual wealth, built on competitive capitalism.

Not everybody in our two countries will entirely share every part of that statement of my philosophical beliefs, but I'm happy to say that in both countries a sufficient number of people in recent times have shared those views to put smiles on both our faces.

HOWARD: And I must say, on a somewhat partisan note, how much I enjoyed my discussion with you on the night of the 9th of October last year and equally the opportunity I had of congratulating you on your remarkable victory after an election campaign that I followed with enormous interest.

I come here as a friend of the United States. I come here as the leader of 20 million people who are committed, as you are, to the great causes of individual liberty and freedom. And together we can work to make a better world.

BUSH: We'll answer two questions apiece.

QUESTION: Can you tell us, as you consider Supreme Court nominees, how important it is to you to replace Justice O'Connor with another woman? And can you bring us up to date on whether you've completed interviewing candidates?

BUSH: First, I'm comfortable where we are in the process. That's important for you to know.

Secondly, I have thought about a variety of people, people from different walks of life, some of whom I've known before, some of whom I had never met before. BUSH: I'm trying to figure out what else I can say that I didn't say yesterday that sounds profound to you without actually answering your question.

(LAUGHTER)

As I say, I do have a obligation to think about people from different backgrounds but who share the same philosophy; people who will not legislate from the bench.

That's what I told the people when I ran for president: I want to be known as the kind of person who does what he says he's going to do, because I believe it's right.

And so I guess the best way to put it is, I'll let you know when I'm ready to tell you who it is.

(LAUGHTER)

QUESTION: Mr. President, Mr. Prime Minister, before the invasion of Iraq, Mr. Howard said that our troops would be there for months, not years. It is now years.

Realistically, how long can the Australian people expect our troops to be in Iraq and Afghanistan? Is it now more years?

BUSH: Well, first, think if you're going to ask how long the Australian troops stay, you ought to ask the person who decides whether the Australian troops go in the first place.

BUSH: I can tell you about the American troops, and that is that they'll be there as long as necessary to complete the mission.

There's a great temptation to get me or John to put a timetable on our actions there, but that doesn't make any sense. Why would you tell the enemy how long you're going to stay somewhere? Why would you -- we're at war and during a war you do the best you can to win the war. And one way to embolden an is to give him an artificial timetable.

Probably timetables need to be answered (ph). I get asked about timetable all the time here.

But the answer, is when the Iraqis are ready to do the fighting themselves. And that's happening on a steady basis and they're taking more and more of the fight to the enemy.

And this is like, I'm sure, in Australia, people in America want to know when the troops are coming home. And as quickly as possible, but we've got to complete the mission. The mission is really important.

We're laying the foundation for peace. A free Iraq, a democratic Iraq, in the heart of the Middle East, is a part of a vision that understands free societies are peaceful societies. BUSH: We're fighting an ideology. And the way you defeat an ideology that is so backward, so evil and so hated they kill innocent men and women regardless of religion is to spread freedom. And that's why it's important we complete the mission in Iraq.

HOWARD: I did make that statement, and I made it in a particular context which I'm sure you will recall.

I'm not going to try and put a time limit on our commitment in Iraq. I'm not.

It will be governed by circumstances, rather than by the calendar, to borrow an expression you may have heard yesterday, when I was at the Pentagon. I thought it was a very good expression. And that's why -- and I won't plagiarize it, I'll acknowledge the source -- that is why I use it.

But I believe that progress is being made. I think we do face a situation where, because of the horror of suicide bombing, there is a constant high level of publicity, understandably, given to that, and to the detriment of the progress that is being made at a political level.

I mean, nothing can answer and deny the fact that 8 million people risked their lives to vote.

HOWARD: Now, that is a stunning personal commitment to democracy that Australians haven't been required to do in my lifetime; or, indeed, the average American citizen either.

Now, I think we have to pay some regard to that. And that is a cause worth fighting for. And it's a cause worth promoting and supporting.

Now, the great burden in Iraq is being carried by the United States. And I feel very deeply for the American people the burden they are carrying. I also pay tribute to the burden that's being carried by the British. Our commitment is significant but, obviously, it's much smaller than that of those two countries.

But we will stay the distance in Iraq. We won't go until the job has been finished.

Now, you've heard me say that before. That's been my view for a long time and it will remain my view.

QUESTION: In light of the concerns that the CIA leak investigation is distracting from your agenda, has Mr. Rove or any of your aides offered their resignation? And what short of a crime constitutes a firing offense?

BUSH: You know, I appreciate you bringing that up.

My answer really hadn't changed...

(LAUGHTER) ... from 24 hours ago. It's the same answer.

Now, I'll be glad to answer another question if you've got one.

BUSH: I mean, I'll be glad to repeat what I said yesterday, which is there's an ongoing investigation and people shouldn't, you know, jump to conclusions in the press until the investigation is over. Once the investigation is over, I'll deal with it.

Have you got another question? I don't want to shortchange you on the...

QUESTION: What do you think of Edith Clement for the court?

BUSH: Oh, well, I think it's important -- let me refer you back to the first question.

(LAUGHTER)

(CROSSTALK)

BUSH: I don't know. This prime minister is a friend. Why would I subject him to -- no.

Do you speak French?

It's unfair I get the last word at the mike.

It's all insider, sorry.

QUESTION: Can I ask you both, please, for your view on China in the coming period?

It seems that Australia views China principally as an economic opportunity and we read increasingly that the U.S. sees it as an emerging military challenge, particularly in light of the comments made by General Zhu just recently at the possibility of a nuclear response on Taiwan. What I want to ask you particularly is what role you both see Australia playing in managing that emerging relationship.

BUSH: That's a great question. Thanks for asking it.

Let me start with our relationship with China. It is a complicated relationship.

We, obviously, have an economic relationship with China that's an important relationship. Our exports to China are increasing.

If you're a soybean farmer in America, you're really pleased with the fact that the Chinese market's open for our soybeans.

I think it's in the world's interest that China grow an open market economy. Open markets and free economies tend to cause people to demand additional freedoms. And so it's in our economic interest and I think it's in the world's interest that we encourage free and fair trade. We have some difficulties on the trade front with China, and one such difficulty is their currency. And we've worked with China to convince them that it makes sense for them to change how they value their currency.

A second difficulty is on intellectual property rights. It's very important for emerging economies to understand that they -- in order to be a fair trading partner that you've got to honor somebody else's intellectual property.

BUSH: And sometimes that's a, you know, hard concept for countries to understand. And so we're working very closely on that issue with China.

By the way, that's the same message that Australia gives. And so there's one area where Australia and the United States can work together to help convince China that intellectual property rights are important.

We have a diplomatic relationship with China, obviously. And that's manifested in the recent six-party talks with North Korea. I view it very important that China be an equal partner in those talks. We've got the capacity to bring something to the table in discussions with North Korea and so does China.

And, therefore, diplomatically we have an opportunity to affect world security and make sure that the ultimate objective of the terrorists is not achieved, and that is the spread of weapons of mass destruction, for example. These are areas where we can cooperate and work hard.

We've got areas of issues when it come to values. For example, I happen to believe religion freedom is very important for any society and that people ought to be allowed to worship freely, worship any way they see fit.

Every time I've met with the Chinese leaders I've, in a respectful way, shared with them the importance I feel for a healthy society to recognize that people think differently and worship differently and, therefore, ought to be encourage to do so.

BUSH: And so our relationship is very important and very vibrant. It's a good relationship, but it's a complex relationship.

I think that Australia, first of all, has got to act in her own interests. And there's no doubt in my mind the prime minister will do that.

Secondly, though, that we can work together to reinforce the need for China to accept certain values as universal: the value of minority rights, the value of freedom for people to speak, the value of freedom of religion -- the same values we share.

And, secondly, I know that Australia can lend a wise message to the Chinese about the need for China to take an active role in the neighborhood to prevent, for example, Kim Jong Il from developing a nuclear weapon.

We've got a lot of common interests. And when those common interests and common values intersect is where we can reinforce each other's message.

HOWARD: I think your question is based on a misapprehension shared by a number of people in Australia, and that is that we are trying to manage a relationship we have with two countries where some kind of conflict between those two countries is inevitable.

HOWARD: And I'm not as pessimistic as that. I am a lot more optimistic for the reasons I outlined in the speech I delivered to the Lowey Institute a few months ago in Australia.

We have different relationships with the United States and China. I mean, of course, our relationship with the United States is closer and deeper than it is with China, because it's a relationship that is based upon shared values and a lot of shared history.

The Chinese understand that. And I think one of the bases of our relationship successfully with China over the last eight or nine years is that I have never disguised that fact in my discussions with the Chinese, and I've encouraged them to accept that our close defense alliance with the United States is not in any way directed against China.

But we have a good relationship with China. It's not just based on economic opportunity. There are a lot of people-to-people ties between Australia and China, and they're growing all the time.

We are going to differ with China on human rights issues.

HOWARD: You've seen recently in the debate over Mr. Chen, you've seen an expression (ph) of view from China. But equally, I think the relationship between our two countries is mature enough to ride through temporary arguments such as that.

I think China sees a growing place for herself in the world, but I think there's a great level of pragmatism in the Chinese leadership.

Now, the economic relationship between Australia and China is different from the economic relationship between the United States and China. And I understand that. And the president and I talked about that today.

But I have a more optimistic view about the relationship between China and the United States. And I know that the leadership of both countries understands the importance of common sense in relation to Taiwan, a recognition that there are differences of philosophy between the two society.

But let us not look at this issue from an Australian vantage point from believing that there's some inevitable dust-up going to occur. I don't believe that. And I share a great deal of optimism that that is going to be prevented.

From Australia's point of view, we don't presume any kind of intermediary role.

HOWARD: That would be absurd.

We have relationships with the United States which I've talked about and categorized in an unambiguous way. Everybody understands the centrality of that relationship to Australia. The Chinese understand it.

But we are unashamed in developing our relations with China. And I'm well pleased with the way the economic relationship has developed. And I'll continue to do everything I can in the interests of Australia to ensure that it develops further.

Thank you.

BUSH: Good job, John.

Thank you all.

MICHAEL HOLMES, CNN ANCHOR: The Australian prime minister and the U.S. president, they've been meeting at the White House. A news conference there. And some familiar questions that we've been hearing fired at the U.S. president over the last couple of days, such as the next appointment to the U.S. Supreme Court, which is expected pretty much at any moment.

Yet again, George W. Bush saying that he is comfortable where we are in the process. He says, "I've thought about a variety of people from different walks of life. Some I knew before. Some I've never met before." And he summed up by saying, "I'll let you know who it is when I'm ready."

OK. The Australian and the U.S. leaders, of course, very good friends. Similar ideologies, similar politics, and a long relationship.

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