Australia may allow US military surveillance drones to be based on its strategically important Cocos Islands, according to reports from Washington.
The US is considering using the islands, located in the Indian Ocean off Australia's north-west coast, to launch unmanned surveillance aircraft, according to a widely cited article in the Washington Post.
The Cocos islands are reportedly being looked at as an expansion for the overcrowded US airbase at Diego Garcia in the Indian Ocean, and are considered an ideal site to launch Global Hawks, unarmed, high-altitude surveillance drones.
Aircraft based in the Cocos would be well positioned to launch spy flights over the South China Sea, Australia's Fairfax media wrote.
Australia is a strong US ally, and the two recently agreed during Barack Obama's visit Down Under to increase defense cooperation in the region. But Canberra also counts China as its biggest trading partner and has been careful to try not to antagonize Beijing.
Prime Minister Julia Gillard, speaking at a Nuclear Security Summit in Seoul, appeared to confirm Australia was in discussions with the US over the proposal.
"Look, I'm not going to play a rule-in, rule-out game about something that's been discussed at officials level," she said, Sky News reported. She added that there had "not been any substantial progress" made on many of the matters discussed with the US in November, during Obama's visit.
Australian Defense Minister Stephen Smith, meantime, told the Australian Broadcasting Corporation that expanded use of the Cocos Islands was "a possibility ... it's a long-term prospect."
He said there had been no talks on the issue, and that, "Australia should not get ahead of itself," adding that the Cocos airstrip would need to be upgraded to be able to launch the drones.
"It's not currently ideal because one of the first things that we would have to do, and this has been agreed between me and my counterparts, is a substantial infrastructure upgrade, particularly so far as the airfield is concerned," he said.
Australia's priorities, he said, were the rotation of US Marines through the Northern Territory, greater air access and more access to HMAS Stirling in Western Australia, he said.
Stirling is reportedly being eyed by the US for use by aircraft carriers and nuclear-powered submarines.
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