AAP February 20, 2012, 11:33 am
Mr Smith said he and Mr Gusmao, on an official visit to Canberra, Sydney and Melbourne, talked about improvement in East Timor's domestic security over the past three-and-a-half years as well as security preparations for the upcoming elections.
"We discussed future bilateral defence co-operation, up to and after East Timor's national elections in coming months, and discussed the continuing, step-by-step transition of full security responsibility to East Timorese authorities," he said in a statement.
"The transition process will be closely coordinated between East Timor, Australia, New Zealand and the United Nations."
Almost 400 Australian soldiers plus a 70-member New Zealand force remain in East Timor as part of the International Stabilisation Force (ISF) which has operated since 2006. The mandate of the UN Integrated Mission to Timor-Leste (UNMIT) expires later this month.
Presidential elections are set for March 17 and the parliamentary elections for mid-year.Australia's mission in East Timor is tipped to conclude later in the year although there's likely to be continuing defence cooperation.
"Prime Minister Gusmao and I look forward to further building Australia-East Timor defence engagement on the basis of shared security interests and mutual sovereignty," Mr Smith said.
"We discussed possible future capacity-building activities to be delivered as part of Australia's Defence Co-operation Program (DCP) with East Timor." The DCP supports East Timor's defence force and secretariat of defence through training, mentoring and exercises.
Mr Gusmao arrived in Australia on Friday and leaves on Wednesday.