Introduction

I am delighted to have the opportunity to address the twentieth Australia Japan Relations Symposium.

Over the years these symposia have provided a valuable opportunity to reflect on the extraordinary strength and durability of relations between Australia and Japan, and to consider ways of making our bilateral ties even more productive.

Today the Australia-Japan relationship stands, in many ways, as an exemplar of the kind of partnership we would like to foster in all our important country-to-country links across the region and beyond. It is a relationship characterised by long standing trade and investment ties, a remarkable range of government-to-government contacts, very close cooperation on many regional and global issues, and extensive people-to-people links and cultural exchanges.

1997 is a particularly significant year in the history of the bilateral relationship because it marks the 40th anniversary of the signing of the landmark Australia-Japan Agreement on Commerce on 6 July 1957. The Commerce Treaty was a truly ground-breaking achievement for Australia and Japan. It heralded not just a new era in Australia-Japan relations, but a new phase in the development of our respective economies, and a growing realisation that our future prosperity was tied inextricably to the future of the Asia Pacific region.

In that context, I would like to focus my remarks this evening on three major themes:

. the role played by the Commerce Treaty as a catalyst in the evolution of the relationship;

. the remarkable diversity and breadth of the modern Australia-Japan partnership; and

. the excellent outlook for even closer and more productive ties in the future.

Before discussing the significance of the Commerce Agreement, I would like to make some important points about the controversy which accompanied its signature.

The challenge for Australia since 1945 has been to open itself to the world and to embrace its neighbours and immediate region. There has been no more important step in that process than the signing by the Menzies Government of the Australia-Japan Commerce Agreement in 1957. This was a far-sighted decision taken despite the opposition of some, including, amazingly, the Labor Party. It was a decision which recognised that Australia's future lay with Asia and which rejected the backward-looking narrow views of some. The same is true today.

Sadly, however, there remain some dissonant voices in our society, which do not see Australia's future with Asia. These views promote an insular Australia separate from the region. These views create divisiveness within Australia and portray a false view of this country and of the true values which constitute and sustain our society. They are views which, if adopted widely within this country, would harm our national prosperity and diminish the role Australia can and must play in Asia.

As I have said many times before, the simple fact is that Asia is Australia's first foreign policy priority. In this we do not have a choice and, frankly, we do not want a choice. Australia is already thoroughly engaged with its region. If Australia were to step back from this and seek to become a protectionist, isolationist nation then we may as well move to the dark side of the moon. Conversely, by seeking ever closer engagement with Asia we can continue to derive the profound benefits which flows from our friendship with the countries of the region - such as Japan - and from the realisation of our mutual interests.

Part One : The 1957 Commerce Treaty - The Basis for a New Era of Cooperation

The historic significance of the Commerce Treaty in the development of Australia's relationship with Japan deserves to be better understood in Australia and Japan.

The Treaty was concluded in the same year that Australia and Japan first hosted reciprocal Prime Ministerial visits. Australia's then Prime Minister, Robert Menzies, visited Japan in April 1957, and was followed three months later by John McEwen, then Minister for Trade, who signed the Treaty on Australia's behalf. The Japanese Prime Minister at the time, Nobusuke Kishi, visited Australia for the first time in December 1957.

The Treaty heralded an era of unprecedented high level dialogue and underwrote the subsequent dramatic growth in trade relations between Australia and Japan. For Australia, the Treaty was a clear vote of confidence in Japan's ability to sustain its impressive post-war economic growth. The Treaty was also a constructive way of encouraging Japan's inclusion in regional and global deliberations - of facilitating, where possible, an international role for Japan more commensurate with its growing economic prowess.

More broadly, the Treaty reflected the far-sighted recognition on both sides that the long term national interests of Australia and Japan were moving closer and closer together. As Prime Minister Kishi said during his visit to Australia in December 1957, the Commerce Treaty and the Colombo Plan were evidence not only of Australia's desire to assist the development of the region, but of Australia's "awakened Asia-mindedness".

The Treaty's flow-on benefits to all other aspects of Australia-Japan relations were evident almost immediately. Australia's then Minister for External Affairs, Richard Casey - who did so much to nurture and nourish Australia's links with its Asia Pacific neighbours - wrote to John McEwen in 1959 that "the goodwill shown on both sides and the business-like administration of the Trade Treaty have contributed much to the steady improvement in general relations".

In 1963 the Treaty was re-negotiated, and the original provisions consolidated. Commercial ties and wider political and cultural links continued to expand throughout the 1960s and 1970s, symbolised by the 1976 Basic Treaty of Friendship and Cooperation. The Joint Declaration on the Australia-Japan Partnership followed in 1995. This year, I anticipate that Australian and Japanese Ministers will mark another milestone by finalising a Partnership Agenda to advance the relationship further on a range of fronts.

The Commerce Treaty thus stands as one of the most important achievements in the long history of Australia's engagement with the Asia Pacific region. It laid the indispensable basis for a better and more durable Australia-Japan relationship.

To mark the 40th anniversary of the Commerce Treaty, I have asked my Department to compile a collection of documents on the Treaty, covering the years 1951 to 1959. This compilation - which will appear as the first in a new series of Documents on Australian Foreign Policy - is due to be launched later this year.

Part Two : The Modern Australia-Japan Relationship - Natural Partners in the Asia Pacific

I want to turn now to the dynamic Australia-Japan relationship of the 1990s - a relationship which has advanced to a level barely imaginable in the 1950s.

Australia and Japan are two long-established industrial democracies in the Asia Pacific region. We each have important alliance relationships with the United States. And we both rely heavily for our continued prosperity on stability in the Asia Pacific region.

The successful visit to Australia last month by Japanese Prime Minister Hashimoto gave new impetus to the relationship, about which I will speak later.

2.1 Bilateral Links

The modern Australia-Japan partnership has been forged on strong commercial ties which have provided immense benefits to both countries.

For over two decades Japan has been Australia's most important trading partner. In turn, Australia has fuelled Japan's post-war economic growth. Australia has long been a reliable supplier of agricultural commodities and mineral and energy resources, and now supplies over half of Japan's coal needs as well as a large percentage of its liquid and natural gas requirements. The steady two-way flow of investment and expertise has made an exceptional contribution to the economic development of both countries.

The commercial relationship has, however, been overlaid by a complex and diverse partnership in many fields of endeavour. The positive momentum of the relationship is sustained and regenerated as much by people-to-people and cultural links as it is by commercial ties and official exchanges. Last year, for example, some 800,000 Japanese people visited Australia. There is an impressive array of friendship societies, sister-state and sister-city relationships, and Japanese is now the most popularly studied foreign language in Australia, with by far the largest number of students studying Japanese in the world, with one exception - Japan itself!

I believe firmly that Australia and Japan have reached the point where there is a genuine mutual appreciation of each other's culture and society, and an equally genuine desire to learn even more about each other. This remarkable mutual understanding enriches every aspect of the relationship and underpins the frank exchanges and substantial information sharing we enjoy in our extensive official dealings.

I should also emphasise that Australia and Japan share a humane and principled approach to regional and global issues, and a deep and practical devotion to the building of democratic institutions and values. It should not be forgotten that Australia and Japan are the Asia Pacific region's two major sources of development assistance. We are already expanding our efforts to address in a more coordinated and effective fashion the pressing new problems that explosive economic growth and widespread social change can bring.

And we are expanding our cooperation on security matters. Our first bilateral Political-Military and Military-Military talks were held last year. These talks were the natural next step in our official-level exchanges given the alliance relationships we have with United States and our shared interest in promoting regional stability and security. The second round of these talks was held successfully earlier this month.

2.2 Enhanced Regional and Global Cooperation

The Asia Pacific region is in the midst of an historic transformation, including profound economic, social and cultural changes that are likely to shape the character of the region well into the 21st century. Long-established patterns of production, employment,and social organisation are being turned upside down by these developments.

Rapid economic growth is bringing new and complex challenges such as environmental degradation, population growth and sprawling urbanisation. Economic growth is likely to be greatest in the region's cities and this will place huge strains on basic services and infrastructure. The unprecedented scale of this growth will continue to challenge world markets to deliver the resources and capital needed to sustain it.

Australia and Japan are doing a great deal together to help meet these challenges in the task of creating and maintaining a more stable, secure and prosperous region.

Trade Liberalisation

I firmly believe that the key to successful management of the dynamic regional trade and investment environment is trade liberalisation.

Trade liberalisation encourages a more efficient allocation of resources and gives recognition to the merits of comparative advantage. But, above all else, it is the best means of sustaining the sort of economic growth that produces new jobs and improved standards of living for citizens in all countries of this diverse and dynamic region. Australia and Japan can help the region prosper and grow through our shared commitment to the liberalisation and deregulation of our own economies. Significantly, tariffs and other trade barriers across the region have already been reduced substantially, bringing immense benefits to Australia, Japan and all our regional friends and neighbours.

I am pleased to say that Australia and Japan were among the first countries to promote the concept of closer regional economic cooperation and trade liberalisation through APEC. Today, both countries see APEC as the key framework for regional cooperation on economic matters. Last month, Prime Minister John Howard and Prime Minister Hashimoto reaffirmed that APEC should remain the dominant expression of our shared destiny as partners in the Asia Pacific.

I am convinced that if APEC can push ahead successfully with its far-reaching and comprehensive agenda, it will make a very practical contribution to sustainable growth in the region and, in the process, nurture a greater sense of regional community, shared values and common interests. The positive outcomes achieved by the APEC Trade Ministers meeting in Montreal, which I attended earlier this month, were therefore very pleasing.

At the global level, Australia and Japan continue to work together closely to make the multilateral trading system more effective. For example, Japan and Australia, together with the United States and several other APEC economies, worked very hard in the lead up to the landmark Singapore Ministerial Meeting of the World Trade Organisation last December to ensure one of the meeting's most important outcomes was secured - the announcement by twenty-eight WTO members that they would conclude a path-breaking Information Technology Agreement.

Improved Regional and Global Security

The regional economic transformation and social dislocation to which I have referred has been matched by the emergence of new patterns in the power relationships and security interests of countries in the region.

In this context, the long standing alliances which Japan and Australia have with the United States make a fundamentally important and indispensable contribution to regional security and stability. Australia welcomed the Joint Declaration signed by President Clinton and Prime Minister Hashimoto in April last year. And Australia and the United States gave new vigour to the ANZUS alliance through the Joint Declaration on Security which was announced during the Australia-US Ministerial Talks - AUSMIN - in July last year.

Australia and Japan both recognise that regional security and stability depends increasingly on a complex web of linkages at the bilateral, sub-regional and regional level. The Australia-Japan Political-Military and Military-Military talks I spoke about earlier are an integral part of this closely interlinked pattern of dialogue. Both countries also recognise that the ASEAN Regional Forum, or the ARF, is the premier forum for multilateral regional security dialogue and cooperation. That is why Australia and Japan work together to promote the important ARF agenda, particularly confidence-building measures and transparency.

More broadly, as was the case in 1957, Australia remains committed to Japan's inclusion in international fora so that Japan can play a constructive role commensurate with its regional and global influence. We support strongly a permanent seat for Japan on the United Nations Security Council - a view reiterated by Prime Minister Howard during Prime Minister Hashimoto's visit last month.

Beyond that, our record of productive cooperation in international disarmament and non-proliferation matters becomes more impressive and extensive every year. For example, Australia and Japan were close allies in the successful Australian initiative last September to salvage the Comprehensive Nuclear Test Ban Treaty in the United Nations General Assembly.

Part Three : The Promising Future

Looking to the future, the outlook for even closer and more constructive ties between Australia and Japan is excellent. I am certain that Australia will remain a natural partner for Japan in the Asia Pacific region; we are relaxed and confident in our dealings and discussions with each other because we share such a broad range of interests, objectives and values. The broadening of links between Australia and Japan, so evident in recent years, will doubtless continue undiminished, particularly as Japan comes to play a more and more substantial role in regional and international affairs.

The agreement to hold annual Prime Ministerial meetings - announced during Prime Minister Hashimoto's recent visit to Australia - will result in a significant upgrading of bilateral relations. This will be the first such summit arrangement for Australia - apart from our regular Leader's dialogue with New Zealand - and will help shape Australia's relations with Japan into the next century.

Prime Minister Hashimoto's visit also resulted in Prime Ministerial endorsement of the work towards a Partnership Agenda to which I referred earlier. A major initiative under the Partnership Agenda is the possibility of developing mutual recognition arrangements between the two countries. Although the negotiation of such arrangements will take time, they have the potential to deliver significant benefits for exporters in the future, particularly in terms of reduced costs and improved market access.

This initiative has special importance because of the significant restructuring taking place in the Japanese economy. Australian exporters need to position themselves better to take full advantage of the new opportunities in Japan as they arise.

I expect the current level of senior government-to-government contacts and high level visits to continue unabated. With several of my colleagues, I plan later this year to visit Tokyo for the meeting of the Australia-Japan Ministerial Committee - the peak Ministerial Forum between the two countries.

The forthcoming visit by Japan's Minister for International Trade and Industry, Mr Sato, to commemorate the Commerce Treaty's anniversary, promises to be another highlight in the bilateral relationship this year. It is particularly appropriate that Mr Sato will be reciprocating the ground-breaking visit that John McEwen made to Japan some forty years ago to sign the Commerce Treaty.

The Australia-Japan relationship is thus set to blossom even further as both countries look to the many new challenges and opportunities of the next millennium.

Conclusion

The enduring strength of our bilateral relations and the natural partnership we have established might lead some to suggest that the development of close and mutually beneficial links between Australia and Japan in the latter half of the 20th century was inevitable. But nothing could be further from the truth, as the negotiations leading up to the 1957 Commerce Treaty make abundantly clear.

The Commerce Treaty was only possible because Australian and Japanese leaders in the 1950s exercised patient, determined and courageous leadership and had the foresight to recognise how the national interests of Australia and Japan would be served by better commercial ties. The central insight of those responsible for the conclusion of the Commerce Treaty - that a prosperous future for all Australians and Japanese lay in greater engagement with each other and the Asia Pacific - has been proven correct again and again in the years since 1957.

It is true that much of the great promise the Australia-Japan relationship held in 1957 has been realised in succeeding years, and finds contemporary expression in the extraordinary depth and reach of our modern partnership. As I have made clear this evening, it is equally true that the outlook for even better and broader relations is excellent, and there is more than ample scope for wider cooperation on a bilateral, regional and global basis.

I would like to close with the prescient words of Sir Robert Menzies, speaking at a luncheon for Prime Minister Kishi in Canberra in 1957:

"...Japan is to be a great power in a community of great powers. Australia is taking its part in easing the entry of Japan once more in to the community of Nations. We believe Japan has an important part to play, first in the Pacific and in the world, and we believe most sincerely that that part will be played in friendliness and in harmony with Australia..."

Sir Robert's words reflected the spirit of genuine mutual understanding and cooperation that has been the hallmark of the Australia-Japan partnership for over 40 years.

I want to assure you that the Australian Government remains strongly committed to this vital partnership, and to the exciting future we share in the Asia Pacific region and beyond.