The Department of Foreign Affairs and Trade, Australia

29 MAY 1996

AUSTRALIA AND THE UNITED STATES: A VITAL FRIENDSHIP

Speech by Mr Alexander Downer, MP, Minister for Foreign Affairs, to the Australian Centre for American Studies, Sydney, 29 May 1996


Introduction
I am very pleased to accept the Australian Centre for American Studies' invitation to speak about the Government's approach to Australia-United States relations.

Since the Centre was launched by President Bush in January 1992, it has been an invaluable asset in the Australia-United States relationship.

In a letter to the US diplomatic representative in 1908 which foreshadowed an invitation to the American Great White Fleet', former Australian Prime Minister, Alfred Deakin, wrote `...I doubt whether any two peoples are to be found who are in nearer touch with each other or likely to benefit more by anything that tends to knit their relations more closely.' Deakin was ahead of his time. He not only recognised the US Navy's future importance to the Pacific region's security, but also rightly assessed the enduring value of Australia and the United States forging a close relationship.

Recently, US Secretary of State Warren Christopher described the Australia-United States relationship as 'one of the most formidable, impressive cooperative relationships in the world'. I have no difficulty in agreeing with that assessment. Our countries interact and cooperate in a truly astounding array of areas and overwhelmingly that contact involves working together to achieve shared objectives, globally and in our region.

A Tradition of Shared Values
The range of contacts between Australia and the United States are based on an understanding that we have strong shared values and substantial trade, security and political interests. I will look at these shared interests and the way in which they shape our relationship with the US bilaterally, the region and in relation to the global agenda later in my speech.

But first I want to discuss those values which provide the core of our relationship. From the very first, Australia and the United States shared similar federal constitutional experiences and a sense of shared destiny as young, vigorous democracies. Over time, we have forged a strong commitment together to shared political and social values such as liberal democracy, freedom and basic human rights. We have demonstrated a shared commitment to the goals of world peace and stability, and to the institutions of the post War period such as the United Nations and the WTO in seeking to achieve those goals.

These shared values provide the foundation for cooperation at all levels - not only in the context of our bilateral relationship, but on a global and regional scale as well. They inform our shared interests and underpin the belief that our peoples should stand together to uphold core values and principles.

The Bilateral Relationship
That great President and foreign policy realist Theodore Roosevelt once said that Australia and the United States were the warmest of friends. I agree with the depth of his sentiment and the cool-eyed realism with which he viewed our relationship. Australia's relationship with the US clearly reflects a realistic assessment on both sides of overwhelming mutual interests and shared benefits which it brings.

As Australia expands its trade and security links with new partners in the region, the bilateral importance of the United States to Australia takes on new significance for both countries.

Trade and Investment
Despite fundamental changes in our trading profile in recent years, Australia's commercial relationship with the United States has remained one of our most important trading relationships. The figures speak for themselves. The United States is Australia's second largest trading partner. Merchandise trade alone was worth more than $21 billion in 1995.

The United States is a key export market for Australia. It is an important destination for Australian goods as varied as beef and motor vehicle parts, bauxite and office equipment. It has remained a major destination for our traditional agricultural exports. At the same time, the US has become Australia's second largest market for our fast growing exports of elaborately transformed manufactures.

The United States is also Australia's largest investment partner - both our largest source of foreign investment and as the single largest recipient of Australian investment.

The lions share of US investment in Australia has been in the manufacturing sector, an area of our economy which has undergone substantial change over the last decade.

Several major US companies, all of which will be well known to you have chosen Australia as their regional headquarters. They include IBM, Coca Cola, American Express, Amdahl and Phillip Morris. These regional headquarters in Australia bring substantial employment, new ideas and technologies, and export benefits to the Australian economy, knitting together Australia, the US and East Asia. Australian investors are increasingly successful in perhaps the world's most competitive investment market. Not surprisingly, many of Australia's largest companies have established a strong presence in the US. Among them are household names such as BHP, CRA, CSR, AMCOR, Westfield and News Corporation.

The trade and investment relationship with the United States offers considerable promise for Australia. It must be acknowledged, however, that the bilateral balance of trade has tilted significantly in favour of the United States in recent years.

Part of the reason for this is the relatively low level of complementarity between Australia's export mix and the US's import requirements. Furthermore, Australian exports of some products have switched to new, more profitable markets elsewhere, particularly in Asia.

But as a nation Australia should be seeking to export to as many markets as possible. That points to a need to tackle vigorously the domestic impediments to our export performance, an objective to which the Government is firmly committed. Industrial relations reform, responsible fiscal policies, microeconomic reform and an activist and creative trade policy are all key components in our approach. They are all necessary if Australia is to address squarely the constraints to Australia's longer term export capacity and the Government is determined to see them through.

Of course, there are areas - in the sugar, beef and dairy sectors, for instance - where Australian access to the US market are severely limited by US barriers. And our serious concerns with US agricultural export subsidies are well-known.

My colleague, the Minister for Trade Tim Fischer, will soon be releasing a major review of the Australia-US trade and investment relationship. It will look at where the links are now and where they are going in the future. It will set out the problems and the prospects for trade. It will also outline a framework for the longer term trade relationship, including a number of practical and concrete steps to build on the strengths in the relationship and to work at minimising the tensions.

But, above all, it will look at ways in which Australia might develop the bilateral trade relationship so that it best serves Australia's national economic interests.

Security
Australia and the United States have a long history of close defence and security cooperation. Australian and American forces have served alongside each other in both world wars, Korea, Vietnam, the Gulf war and Somalia.

The ANZUS Treaty, so skilfully negotiated my predecessor Percy Spender in 1950-51, has symbolised and formalised a close alignment of enduring strategic interests between Australia and the United States.

ANZUS is, however, much more than symbolic. It also provides a framework for practical cooperation between Australia and the United States in areas such as defence technologies and logistics, intelligence and support arrangements. As an important component of the alliance, the Joint Facilities contribute to global peace and stability, including through treaty monitoring and arms control. Australia provides support for US deployments in the Asia-Pacific and the Indian Ocean regions. Australian and US forces train and exercise together on a regular basis, while the US is an important source of high technology equipment for Australia, contributing to Australia's self-reliant defence policy.

The scope and need for such cooperation has increased in recent years with substantial changes both in the regional security environment and in our domestic defence policies. This Government is committed to examining practical ways in which to reflect these changes by enhancing Australia's defence links with the US under ANZUS.

Political

Enhancing links with the United States at all levels is something this Government sees as vitally important.

I have been concerned for some time that Australian Ministers have not represented our interests strongly enough in Washington.

I am going to Washington next week to meet with key members of the US Administration, including Secretary of State Warren Christopher, Defence Secretary William Perry and National Security Adviser Anthony Lake to discuss a range of foreign policy and security issues of mutual interest. My colleague Minister for Trade Tim Fischer is also visiting Washington next week for wide ranging discussions with his counterparts.

In late July the Prime Minister, Mr McLachlan and I will hold talks on the relationship with Secretary of State Christopher, Secretary of Defence Perry and Chairman of the Joint Chiefs of Staff, General Shalikashvili.

The talks - known as AUSMIN - are extremely important for Australia and the Government will be using them to underline Australia's commitment to the relationship and to working closely with the United States to move forward a number of issues on the bilateral, regional and global agenda.

Australia and the United States In The Asia Pacific Region

Shared Interests
I now want to discuss the ways in which the special relationship between Australia and the US makes a difference to security and prosperity of the Asia Pacific region.

As trading nations, both Australia and the United States want to see an Asia Pacific region characterised by a commitment to free trade and open markets.

Both countries have an interest in the region avoiding any breakdown in regional order, which might lead to the use of force, the threat of force or coercion.

And we both have an interest in seeing the region free of domination, a region which is stable and which is conducive to economic development.

Shared Challenges
A vital Australia-US relationship is defined by a host of post-war changes which both countries, acting together or separately to pursue their interests, will have to manage.

The increased wealth and the newfound capabilities of Asia, together with the breakdown of the old bipolar structures of the Cold War which underpinned Asia's strategic environment, mean that the Asia-Pacific is facing new challenges - challenges in managing an evolving strategic environment characterised by increasing uncertainty and a rapidly changing regional economic order.

Asia is in the process of transformation from a region the security structure of which had been dictated by the two superpowers and by the sheer size of a third, to one in which five powers - the United States, Japan, China, Russia and India - will all be key players. And as Asia changes, and as new relationships evolve, the regional environment will continue to be fluid.

Whatever the policies of its new leadership might be, China will, through its sheer size and rate of economic growth, be an increasingly important force in the region. Japan will undergo continued internal change and face a radically altered external environment. Russia will still face an unpredictable future. And a wealthier and more populous India will remain predominant in one part of Asia and become a more active player in broader regional affairs.

Four of the five strategic powers in Asia have nuclear weapons. There is a significant build up of conventional arsenals in the region.

In short, the rise of Asia will provide enormous opportunities for the Pacific Basin, but it will also lead to a measure of strategic uncertainty.

On the economic front, rapid growth in the economies of Southeast Asia and Indo-China in recent years has led to substantially new patterns of trade and investment across the region. For many of the mature economies in the region, such as our own, these changes have meant re-evaluating our approach to trade and investment. With some important ramifications for all concerned in our approaches to domestic economic management.

And all countries in the region have had to address emerging regional concerns such as refugee flows, the need for environmental management and narcotics control.

Australia and the Region
I have made clear, as has the Prime Minister, that engagement with Asia is the Government's highest foreign policy priority. Australia's future security and prosperity will be found in the region. For us, the issue of engagement in Asia and our relationship with the US are part of the same dynamic and mutually complementary.

Furthermore, Australia recognises that the conditions that have allowed for the region's stability and development over the past few decades have not been solely the result of the industriousness of countries of the region. They have taken place in the context of a far reaching commitment by the major regional and global power, the United States, along with its allies, to the long term security and development of the region.

The United States and the Region
The United States' fundamental commitment to the Asia Pacific's stability - demonstrated by its network of alliances in the region and its continuing military presence - has provided the framework for the region's spectacular economic development.

Access to the United States market in the past thirty years has been an essential part of the Asian economic miracle. It needs to be remembered that the United States was the first and most crucial export market for Japan, then Korea, Hong Kong, Taiwan and Singapore, and now Thailand, Malaysia and China. All of these countries are major markets for Australia.

The United States is - and will continue to be - an Asia Pacific power, an integral part of the region. I want to re-emphasise that the Australian Government will strongly encourage the United States to continue to be prepared to cooperate in shaping the regional agenda - through maintaining a military presence and by an active role in developing regional forums.

Australia and the United States: Regional Cooperation: Meeting the Challenges Together
Influencing the future of the region is not something that Australia and the US can do alone. Our close partnership, however, is of clear benefit to the region.

A key way in which Australia and the US contribute to the region is by seeking to make the most of our alliance and its contribution to stability in the region at the same time as seeking to forge greater cooperation in the region.

It is in the interests of Australia and others in the region to support an active US engagement in the region's affairs.

That is why the Australian Government publicly welcomed the firm US response to recent tensions between China and Taiwan, as well as President Clinton's recent reaffirmation with Prime Minister Hashimoto of the US-Japan security treaty.

Australia's consistent approach will be to reinforce US engagement, underscoring the importance of established US security ties such as the US treaty arrangements with Japan, Korea and Thailand. And, in Australia's case, developing our own relationship with the United States to the benefit of the region.

Australia must ensure that our own close alliance relationship with the United States through ANZUS continues to help the United States maintain its forward military deployments, thereby providing for the broader security of the region.

There is a clear link between Australia's longstanding alliance relationship with the United States under ANZUS and our commitment to engagement with Asia. They are mutually reinforcing. As part of strengthening ANZUS's capacity to contribute to regional stability, the Government will, as I indicated earlier, be examining practical ways in which Australia can encourage and facilitate the US military role in the Asia Pacific. Any such measures, of course, would be the subject of discussion with other regional partners.

Australia and the US will also continue to work for regional stability through the ASEAN Regional Forum. The ARF has a useful role to play in developing greater understanding and confidence among the countries of the Asia Pacific and, importantly, contribute to the avoidance and resolution of tensions.

Regional Economic Prosperity
Another important area where Australia and the US can continue to work closely together in building regional infrastructure is in the area of trade and investment, through regional groupings such as APEC.

Our joint commitment to APEC is based on its potential to contribute to an improved environment for doing business in the region, through trade liberalisation and facilitation and through APEC's economic and technical cooperation agenda.

The potential direct benefits, both to Australia and to the United States through the development of new market opportunities is obviously a high priority for Australia. The Government also believes that APEC provides an important means of informal high-level political contact which helps the development of a sense of regional identity and shared objectives.

Importantly, APEC also complements and supports our efforts for further global trade liberalisation - the Asia Pacific region leading the way.

APEC also makes a real contribution to regional security through its built-in high level consultation and dialogue. To make these groups effective will require us to strengthen our bilateral relations in the region, on both economic and security issues.

The region has made great progress towards developing the mechanisms for cooperative dialogue and avoiding tensions. It is clear that the region still faces significant challenges to sustain growth and stability over the long term.

Global Cooperation
Another area in which the Australian Government will be continuing to work closely with the United States is the global agenda.

The United States as a major power has the ability to influence events in a way that is simply not possible for Australia. Nonetheless, there are times when a proposal coming from Australia can be more widely acceptable and less threatening to others.

Australia looks to the United States, as the world's largest economy and the most influential force for liberal trade, to continue its efforts on global trade and investment liberalisation. There is a pressing need to capitalise on the gains of the Uruguay Round of multilateral trade negotiations and build momentum for further trade liberalisation.

Australia has worked closely with the United States in the past through regular rounds of comprehensive trade negotiations. Now, in the lead up to the Singapore Ministerial meeting in December this year, we need to maintain and intensify that close cooperation.

With US leadership, there is great scope for using the Singapore Ministerial Meeting as a springboard for further liberalisation efforts and new multilateral negotiations in 1999-2000.

I would stress that the Government will embark on such cooperation against the background of a clear understanding of Australia's long term national interests in this area. That is, Australia will not agree with the United States on every aspect of the global trade agenda and where we do not agree we will vigorously pursue our own interests in the multilateral system.

Australia will, for instance, not be backward in seeking meaningful US reform of its own trade-distorting and protectionist measures, notably its agricultural export subsidies and its anachronistic Jones Act restrictions in the maritime sector.

In other areas, too, there is now substantially more scope for Australia and the United States to cooperate in shaping global developments.

For example, like the US, we share a strong interest in modernising and streamlining the operations of the United Nations. The Australian Government looks forward to discussing ideas with the US on how this might be done.

There is now a considerable arms control agenda dealing with weapons of mass destruction, the means of their delivery and inhumane conventional weapons.

Entry into force of the Chemical Weapons Convention banning chemical weapons is within sight, and Australia will be working hard to encourage the US Congress to commit the US to ratification.

The Australian Government has moved quickly to change Australia's position to one of complete opposition to anti-personnel landmines and I am pleased that the United States has announced that it will cease the use of non-self-destructing anti-personnel landmines except in certain limited circumstances. Our two countries will now work together to ensure that international pressure is maintained in this important area.

A treaty permanently banning nuclear tests is now within our reach. Australia and the United States will continue to work together to bring about this long desired objective. It has become increasingly apparent in recent years that national approaches are inadequate to deal with a number of important global issues.

One such issue with potential for close cooperation is in the area of narcotics control. According to United Nations statistics, the global trade in illicit narcotics is worth about US$500 billion annually, more than the global oil trade. Australia will be revising its International Narcotics Strategy which will include close coordination of objectives with the United States and others in the region.

Conclusion
From what I have said tonight, it is clear there is no shortage of issues where we have a rich and productive dialogue with the US.

The quality of the Australia-United States relationship has never relied on formal government or defence contacts, important as these have been to both countries.

In Washington next month, along with Mr Fischer I will be attending the Australian American Leadership Dialogue. The Leadership Dialogue brings together policy makers and opinion leaders from both countries with the aim of sharing perspectives on Australia-United States relations. Its work is thus similar to that of ACAS and I look forward to participating in what I am sure will be stimulating exchanges which will be invaluable in improving the relationship.

Our cultural, educational, sporting and other contacts - our people-to-people links - are what underpin the relationship. I will set out just a few here - they are so wide-ranging and numerous that they may surprise even those who maintain a professional interest in the relationship.

The many layers of friendly contact include the well-known Fulbright exchange program which has seen over 4000 Australians and Americans benefit from scholarships for postgraduate study. There are centres devoted to study of the relationship in both countries, And a range of professional exchange programs, in teaching and nursing for instance.

There is also extensive collaboration in the field of scientific research. The CSIRO works closely with US agencies in research fields as diverse as entomology, food science and oceanography. And Australia's international reputation in the field of astronomy has been put to use in scores of collaborations with US projects like the Hubble telescope. We have an Australian astronaut in space with NASA.

There is extraordinary cross-fertilisation between our business and tourist sectors.Over 600,000 business people and tourists travel between Australia and the United States each year, more than a few of whom are no doubt present tonight. It is a tribute, I think, to the warm regard held for Australia in the United States, that, despite the boom in Australian tourism from other places, particularly in Asia, the US remains one of Australia's top five sources of tourists.

Many of these contacts take place well out of the view of governments. They are the product of a history of cooperation, a mutual respect for professional competence and plain friendship.

Conclusion
Australia and the United States are and will continue to be long time friends and allies. Our two countries do share an abiding friendship based on a strong commitment to shared values, substantial cultural and personal ties. It has been a hard-headed assessment of common interests which has seen us cooperate closely in the past and which will underpin closer cooperation in the future.

As I noted at the beginning of my remarks tonight, Australia and the United States are uniquely well-placed to work together to meet global and regional challenges. This Government is committed to developing the partnership at all levels, cooperating where it makes sense, managing our differences, but always aware that we have fundamental broader interests and goals in common.

Even more importantly, our partnership has the virtue of being one which is capable of delivering strategies and solutions to problems - solutions which will be more widely acceptable and successful than either of us could achieve alone. That is the strength in the relationship - we should recognise that and maximise its impact.

I would like to thank Dr Edwards and the Centre for the opportunity to speak here tonight.

Thank you.


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