The Department of Foreign Affairs and Trade, Australia

AUSTRALIA AND GERMANY

Address by the Hon Alexander Downer, MP, Minister for Foreign Affairs, at a lunch hosted by the Australia-New Zealand Association and the Asia-Pacific Association of German Industry, Bonn,

18 September 1996

Check against delivery

. I would like to thank Dr. Rohkamm, the Australia-New Zealand Association and the Asia-Pacific Committee of German Industry, for inviting me to speak at this lunch.

. I am well aware of the important ties the Asia Pacific Association of German Industry and the Australia-New Zealand Association are developing between Australia and Germany

- and very much appreciate the leadership role that you have shown in the development of stronger Australian-German relations.

. The new Australian Government will be continuing to take a leadership role in the development of Australia's links with Asia and in the growth of the Asia Pacific as a strong community, particularly through APEC and the ASEAN Regional Forum.

- At the same time, the Australian Government regards its relations with Europe as vital assets and we will be working to re-invigorate those relations.

. I am particularly pleased with the recent trends in investment by German companies in Australia.

- The German Chamber of Commerce and Industry in Australia has recently completed a survey which identifies 44 German companies that have established subsidiaries in Australia since 1994.

- There are now around 260 German subsidiaries in Australia, with some 450 branches around Australia. This translates into around 25,000 jobs and a significant flow on contribution to the Australian economy

. Australian companies are also successfully pursuing investment opportunities in Germany.

- For example, Amcor, the Australian paper industry multinational, is spending around A$38 million to expand its Heidelberg paper mill to produce about 80,000 tonnes of corrugated linerboards from recycled fibre.

- and TNT, the Australian transport and logistics company, has established a very successful presence here, with a turnover of over 1 billion DM.

. Our trade and investment relationship with Germany is already strong, but I think there is a recognition on both sides of untapped potential.

PART ONE: Australia's role as a partner for Germany in the Asia Pacific Region

. A first step in the process of re-invigorating Australia's relations with Europe was the preparation by my Department of the first comprehensive report on Australia-EU commercial relations titled "Australia-EU Trade and Investment: Towards 2000".

- If you haven't seen a copy of this report, I am sure one can be provided by our Embassy.

. One of the key themes in this study - as was the case with David Charles' excellent report for the Australia-Germany "Partnership 2000" Conference held in Melbourne last year - is the current rapid pace of change in the Asia Pacific region and in Europe and the opportunities and challenges this provides to Government and business.

. The Asia Pacific, and East Asia in particular, has emerged as the fastest growing, and most dynamic region in the world.

- APEC's share of the world's Gross Domestic Product has more than doubled in the last twenty years

- It already accounts for 56 per cent of the world's output, and this could rise to two thirds of total world output by 2020.

. By one estimate, in 2020, seven out of the world's top ten economies (on a purchasing power parity basis) will be found in the Asia Pacific.

. The Australian Government welcomes wholeheartedly Germany's stronger focus on the Asia Pacific

- and appreciates the growing recognition that Australia is in a position to be one of the bases for German commercial interests in the region.

: As Dr Werner Hoyer said following his recent visit to Australia, we are an important partner in the world's greatest growth region

. This position gives us unique opportunities to provide a base for European companies wishing to establish operations in the region.

. The German Chamber of Commerce and Industry survey I referred to earlier indicates that over 100 German companies are already using their Australian operations for regional activity.

- These companies are utilising Australia's strong economic and personal ties in the region.

: They have identified Australia's well developed information technology and telecommunications infrastructure

: as well as its strong skills base, and its familiar legal and accounting systems as key factors in deciding to invest in Australia

. Many of you will have seen Australia's strengths in information technology and telecommunications at Germany's CeBIT information technology fair

- where Australia has emerged as one of the top exhibitors.

. This is another reason why Australia provides an excellent base for German companies looking to invest and trade in the region.

. A few examples are worth mentioning:

- Robert Bosch (Australia) is exporting automotive electrical and electronic componentry to the Asia Pacific

: and in 12 months it more than doubled its export revenue from $A17.2 million to $A42.7 million

- The Hoechst Company, through Biotech Australia, is using Australia as an advanced base for biotechnology R&D from which it is exporting innovative diagnostic products to Asia and beyond.

- The major German construction firms, Hochtief, Bilfinger and Berger and Walter Bau are creating positive synergies with Australian partners to tackle Asian markets.

- Hochtief's Australian partner, Leightons, has secured major contracts in the construction of Hong Kong's new airport.

- Another outstanding example of Australian-German collaboration is Concrete Constructions' nearly completed hotel in Bangkok - the world's tallest hotel.

- Finally, Bilfinger & Berger, and its Australian subsidiary Baulderstone Hornibrook, are building the Palau Laut coal handling terminal in Indonesia, to provide fuel for an electricity generator in Java.

. The success of these German companies demonstrates that the strategy of using Australia as a base for operations in Asia is now a reality rather than a concept.

PART TWO: Australia's Relations with Europe and with Germany in particular

. Turning to Australia's relations with Europe, the Australian Government fully recognises the growing importance of the European Union - and we welcome the stabilising role it is playing in Europe. We are looking to develop our relations at both the Union level and with the EU Member States.

. Australia possesses profound and enduring links with Europe

- as is demonstrated by the growing economic relationship

- and by the wealth of historical, cultural and personal ties which

bind Australians and Europeans.

. There are many details in our EU trade and investment study on the size and growth in the bilateral relationship. I think it comes as a surprise to many in Australia that notwithstanding the fact that around two thirds of our exports go to APEC countries, the European Union is Australia's largest source and destination for foreign investment.

- It is also our largest source of merchandise imports

- and, taking the EU as a whole, the second largest market for our exports of goods and services.

. The study also sets out strategies to help ensure that the relationship reaches its full potential and I would commend it to you.

. At the member states level, one of the new Australian Government's most significant bilateral initiatives to this point has been the launching earlier this year, in cooperation with the German Government and industry, of the Australia-Germany Partnership 2000 Action Plan.

. The Action Plan sets out a series of initiatives, developed in concert with many of you here, to promote two-way trade and investment, including:

- an intensified program of Ministerial visits to promote a greater awareness of mutual opportunities

- promotion of German investment in Australia through a series of investment seminars in Germany targeting in particular Mittelstand (medium sized) companies

- increased Australian participation in significant German trade fairs

- promotion of coal sales to Germany in anticipation of reduced German subsidies

- Austrade assistance to Australian exporters in key sectors (automotive components, catamaran ferries, wine, construction technology and urban planning), and

- a range of initiatives in other sectors including education and training, the Arts, tourism, science and technology and the environment.

. The Action Plan demonstrates the breadth of opportunities available to both sides.

- It will be a dynamic document which seizes new ideas and opportunities.

- To facilitate this, joint industry/government advisory committees have been established in Australia and Germany to monitor implementation of the Action Plan and come up with further initiatives.

- I am delighted that Dr Rohkamm is chairing the German Advisory Committee and may I say I look forward to working with you and your Committee to ensure that the Action Plan is implemented and is kept up to date.

Conclusion

. The opportunities for expanded commercial cooperation between our two countries are considerable

- particularly when one considers the potential for Australian and Germany to work together to capture the opportunities open to both of us in the Asia Pacific and in Europe.

. For those of you who have not yet done so, I hope you will be encouraged to explore most vigorously the potential for developing new links with Australia.