AUSTRALIA AND THE ASIA PACIFIC: COMPLEMENTARITY AND COOPERATION

Address by The Hon Alexander Downer, MP, Minister for Foreign Affairs, to the Institute for Policy Studies, Singapore, 4 August 1997.

Dr Lee Tsao Yuan, Director of the Institute for Policy Studies, Excellencies, ladies and gentlemen.

I welcome the chance to address the Institute for Policy Studies today. This is a great opportunity to set out for a group of distinguished thinkers on regional issues how we see Australia's role in the region.

As we move ever closer to what is now frequently dubbed the "Asia Pacific Century" Australia has no higher foreign policy priority than to contribute to the evolution of our region. The Asia Pacific is where our greatest economic opportunities lie. It is also where we must make the greatest efforts to ensure that any tensions which arise are resolved peacefully.

I therefore want particularly today to outline for you three areas in which Australia has established itself as a major contributor to the region:

But let me turn first to the extent of Australia's contribution to the regional economy.

PART ONE: Australia's Integration with the Regional Economy

Australia has a great deal to offer the Asia Pacific and complements well the region's emerging economies with their growing resource and infrastructure requirements.

Australia's resource-rich profile enabled us, almost literally, to fuel Japan's and Korea's industrialisation from the 1960s onwards. We are now set to play a similar role for other rapidly developing economies in the region. The fact that the composition of our exports is now much more sophisticated, with manufactures and services roughly balancing agricultural and mineral exports, means that Australia now contributes to the region's growth on even more fronts.

Australia is certainly fully enmeshed in the region's economic transformation. Over half of Australia's total foreign direct investment and three-quarters of our exports go to Asia Pacific markets. The Asia Pacific has, in fact, been Australia's major trading partner since the mid-1960s.

Our unique economic and cultural profile also makes us particularly attractive as a conduit for business between Asia, Europe and North America. Many businesses have recently realised just what a great opportunity Australia represents as a staging post for conducting business in the region. 200 companies have established regional headquarters or regional management operations in Australia over the last three years.

Our developing role in this area makes us all the keener to participate in the Asia-Europe dialogue process - or ASEM, as it is known - as we have a great deal to offer with the combination of our extensive and expanding links to Asia, the European traditions of many of our people, our international outlook and the culturally diverse makeup of our society.

The sustaining force behind the region's dynamism has been economic liberalisation and Australia has played an important part in helping to maintain the momentum of regional economic liberalisation.

In 1980 Prime Ministers Fraser of Australia and Ohira of Japan put in place the Pacific Economic Cooperation Council or PECC. PECC paved the way for the formation in 1989 of APEC, again proposed by an Australian, then Prime Minister Bob Hawke.

Partly under the auspices of APEC we have seen tremendous tariff reductions in the region this decade. ASEAN, in particular, has cut applied tariffs - on a trade-weighted basis - by two-thirds and most recently Indonesia has announced further cuts. In the same period, China has cut its average tariff rate from 35 to 23 per cent, and will reduce the rate to 15 per cent by the year 2000.

APEC, of course, gives us considerable hope that this trend will continue. Last year APEC economies began implementing their goal of free and open trade and investment by 2010 and 2020 for industrialised and developing economies respectively.

Australia wants to go on contributing to the growth of regional economies as it has now for decades. If, however, our region is to continue to grow rapidly, and living standards are to rise substantially, governments must show the will to push trade and investment liberalisation even faster.

For its part, Australia has already reduced its tariff levels to 5 per cent or less for most sectors. Be in no doubt - Australia will meet its Bogor commitment of free trade and investment by 2010.

We urge other APEC member economies to adhere to the Bogor timetable as well. We therefore particularly welcomed the APEC Trade Ministers' agreement in Montreal last May to accelerate regional liberalisation on a sectoral basis.

PART TWO: Closer Cooperation in a Changing Regional Security Environment

The post-cold war era has brought challenges as well as opportunities. The regional security environment is now more complex and uncertain. Issues such as the Korean Peninsula and the competing claims and interests in the South China Sea, for example, are all manageable, but they nevertheless pose challenges for the region.

The region's fluidity and complexity require the further development of its security architecture. Today we have an historic opportunity to lock in the peace which is underwriting the region's extraordinary economic growth.

Although it might not often be said publicly by countries in the region, there is, I think, widespread support for continuing United States strategic engagement in the Asia Pacific. Its presence strengthens regional countries' confidence in their security - in effect helping to minimise tensions.

The region's emerging security framework, founded on a strong US presence, combines bilateral, sub-regional and region-wide linkages - some formal, some informal - in a growing web of relationships in the region. All contribute to what I see as the core goal of Australia's regional policies - building structures which reinforce the peaceful resolution of differences and which promote a sense of common interests and shared responsibility for the region's future.

What Australia is Doing

At the bilateral level, there is growing acceptance that strong, confident relationships underpin regional stability. These alliances are not directed against any other country or countries. But, by enhancing confidence and transparency, alliances - along with other cooperative links - play a vital role in building a sense of common interests shared by the whole region.

Last year, Australia gave new vigour to its alliance with the United States through the AUSMIN joint declaration - known as the Sydney Declaration - the focus of which was very much on the contribution the alliance makes to regional security.

Australia has also been building a wide-ranging set of bilateral linkages which provide the indispensible foundation for pursuing mutually beneficial objectives. Our longstanding and important defence relationship with Singapore, both in the bilateral and Five Power Defence Arrangements - or FPDA - contexts, is a vital part of those linkages.

Australia has in recent years been extending the number of countries with which it has bilateral dialogues on regional security issues. Last year we commenced political-military talks with Japan and the Republic of Korea and instituted semi-official talks with Vietnam.

Last week I announced in Kuala Lumpur four new important security dialogues which Australia will conduct with China, the Philippines, Thailand and Vietnam.

These represent a real strengthening of regional security cooperation.

The new dialogues will commence over the coming year and will involve high level Australian officials from both our foreign and defence ministries. They will focus on developments in the regional security environment and its longer term prospects, the emerging regional security architecture, including the ASEAN Regional Forum (ARF), and its further development, and on disarmament and non-proliferation issues. We will also look to exchange information on national security policies.

With the addition of the four new dialogues, Australia now has bilateral security linkages, in one form or another, with most of the countries of the East Asia/Pacific region.

I think it is significant that Australia has developed such a dialogue with China. The fact that the security dialogue builds on the human rights dialogue to be held between the two countries next week is evidence of our absolute determination to work with China in its engagement in the life and work of the broader Asia Pacific region. In the end, integration of all regional countries in a shared security framework is the best assurance of regional stability.

Regional Cooperation

Regional cooperation, of course, manifests itself at levels beyond merely the bilateral.

At the regional level, Australia strongly supports the ASEAN Regional Forum or ARF.

Importantly, the ARF brings together all the countries which have an impact on, or are involved in, the security of the Asia Pacific region. Although the ARF is still in its youth, it is already starting to achieve some very positive results. The first level of the ARF's activities - confidence-building - is maturing as a useful mechanism for developing a sense of shared strategic interest.

The value of the ARF as a venue for addressing regional tensions was amply demonstrated at its recent fourth meeting in Kuala Lumpur. There were, of course, a number of key outcomes.

Discussions about Cambodia and Burma showed that the ARF was prepared to deal with sensitive issues in an open and direct way. The ARF's clear support for ASEAN's Cambodia initiative reflected an institution growing in maturity.

ASEAN's handling of the question of Cambodia's membership last month displayed great maturity and skill. Not to admit Cambodia under the circumstances was a difficult decision well taken. I can only applaud the leading role which ASEAN is now playing in encouraging the Cambodian government to keep its commitment to the Paris Peace Accords and to hold free and fair national elections as scheduled.

I am also pleased to say that another outcome of ARF 4 was agreement for Australia and Brunei to co-chair the intersessional group on Confidence Building Measures or CBMs. This core ARF group will meet twice over the next twelve months and Australia will host the second meeting in Sydney in early March next year.

There was also agreement on moving the ARF process towards its agreed second stage - preventive diplomacy - through discussions in the CBMs group. We believe it is important for the ARF, at this stage, to begin to develop some voluntary, non-coercive, generic mechanisms in the area of preventive diplomacy.

Indeed, I put forward at ARF 4 some ideas on an enhanced "good offices" role for the ARF Chairman. These and other ideas about how to keep moving forward could usefully be discussed further at officials' level over the coming year.

Another important decision at ARF 4 was the agreement to have senior defence representatives attend the ARF along with Ministers for Foreign Affairs. Australia has actively supported this move as a sensible and appropriate one.

The very positive developments I have outlined at the bilateral, sub-regional and regional levels reinforce our view that we are close to achieving a strong "web" of linkages in the region. Such a web of linkages can address not only bilateral matters but also deal maturely and sensibly with the issues which are generating the greatest regional tension.

PART THREE: The Importance of Australia's Growing People-to-People Ties

Australia's increasing contribution to our region is perhaps most clearly reflected in the growing people-to-people links being established by business men and women, academics and students, and the media. These are the linkages which perhaps have the most enduring effects.

Australians are everywhere in Asia. There are thousands of expatriate Australians with high quality services skills and expertise to offer. A conservative estimate puts the number of Australians working in Asia at about 100,000, including nearly 6,000 in Singapore. These include highly skilled managers, engineers, investment bankers, doctors and educators forging bonds which integrate us even more firmly in the region's economy and society.

Australian aid, more than 80 per cent of which goes to the region, also helps get that Australian expertise to where it is needed most. Australia has been one of the largest individual country donors in the region for some time. In recent years, for example, Australia has spent 2 billion dollars in the Mekong Basin alone.

What's more, Australians in the region are finding that people are receptive to the Australian way of communicating and problem-solving. This may be partly because there are many people in Asia who were themselves educated in Australia at some stage.

Australia's involvement in education in the region is longstanding. Australia is now the preferred destination for Singaporean students enrolled in Australian higher education institutions. The Colombo Plan, begun in the 1950s, saw thousands of Asians coming to Australia over subsequent decades. Indeed there is an impressive alumnus of senior figures in Asian governments and businesses who received part of their academic training in Australia. For example, Singapore's President Ong Teng Cheong and his wife, and Deputy Prime Minister Tony Tan, are some of these illustrious alumni.

That is a trend which looks set to continue as over the last decade students have been coming to Australia in ever greater numbers. Australian universities have thrived in the international market place following the introduction in 1987 of full-fee paying courses for international students.

This year international students will number around 140,000, making up 8.4 per cent of the total student population. We are now seeing large communities of graduates returning home with a special understanding, high regard and often strong affection for Australia.

Australians are also studying Asian languages in increasingly large numbers. One indicator of the extent to which Australians are now engaged with Asian cultures is the fact that 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!

4.2 million people visited Australia in 1996. Japan was a major source for these visitors but the fastest growth in visitor numbers is from other Asia Pacific countries. Numbers of visitors from Korea grew by over 30 per cent, now making it our fifth largest source country. China, Malaysia, New Zealand and the Philippines all grew at well over 20 per cent. Numbers of Hong Kong and Indonesian visitors grew in the order of 15 per cent. And approximately 250,000 Singaporeans visited Australia last year - close to 7 per cent of Singapore's population.

A Tolerant and Diverse Australia

Some of you will have heard of the ethically reprehensible views of a member of the Australian Parliament, Mrs Hanson.

Australia's historic transition from being a European outpost to becoming one of the most vital and exciting contributors to the Asia Pacific region is one which presents great opportunities, and most Australians recognise that.

I am pleased to be able to say that Mrs Hanson has the support of only about 6 per cent of the population. To put it another way, 94 per cent of Australians reject views which are completely out of step with Australia's contemporary reality.

Mrs Hanson has unfortunately attracted considerable media attention. You must remember, however, that she is only one among many hundreds of politicians - and her views are not shared by the others.

Every country has its mavericks but we should never fall into the trap of judging a country by the eccentric views of such people. In Australia's case, almost everyone knows that the Hanson views, if put into practice, would not only justifiably offend the peoples of the region, they would be a suicide note for Australia.

But they will never be put into practice and therefore they don't deserve the publicity they get.

Australia is home to people of some 130 nationalities. We are proud of the excellent job we have done in getting all our people to live together harmoniously, and we will continue to work hard at it. We utterly reject discrimination, and it is crucial to our well-being as a nation that we keep it that way.

We are proud of our diversity, and believe in it so strongly that we will sustain it by rejecting any sort of religious, racial and cultural intolerance. Mrs Hanson has received considerable publicity in Australia - but only because what she says is so outrageous to almost all Australians.

She has challenged the consensus, but the consensus has held, and I have no doubt that Australia's belief in cultural, racial and religious diversity will emerge stronger for Mrs Hanson's challenge, not weaker.

Her views are wrong, her prescription is dangerous and her future is limited. The fact is, Australians will continue to reject policies which would destroy job after job after job and which would undercut the ethical basis and reputation of modern Australia.

Basic tolerance is, I believe, the hallmark of Australia's extraordinary success as a culturally diverse country. I do not mean to suggest that Australia has got this perfectly right. There is always room for improvement. But we have done as well as any nation in the world in building a strong, diverse and tolerant nation.

PART FOUR: Australia and Singapore - Natural Partners for the Region's Future

I would now like to talk about what we regard as a natural partnership between Australia and Singapore.

Australia and Singapore have a great deal in common. There is an easy affinity between Australians and Singaporeans which perhaps stems in part from our historical associations - we have similar education, legal and commercial systems.

Australians and Singaporeans are forging important business alliances reflecting our complementary strengths. Singapore is already a major hub for Qantas and we welcome the announcement in June by Ansett and Singapore Airlines with AirNewZealand of a new strategic partnership to serve a larger range of markets linking Australasia and Europe. There are already well over 100 flights between Singapore and Australia each week.

Looking to the future, in this era of globalisation Australia and Singapore, two of the most open markets in the region, can look to establishing further partnerships in other areas of complementary strengths ranging from information technology to international financial and equity markets.

We also need to work closely together to advance our shared ambition for further trade and investment liberalisation in the region.

In APEC I know we can count on Singapore's support for further accelerating liberalisation in order to ensure that the Bogor goals are met. Further liberalisation can only assist both our economies, particularly as we both have very few remaining barriers to trade.

The process for identifying sectors for early liberalisation is a crucial one. We welcome Singapore's enthusiastic embrace of this initiative. We want to work closely with you to advance this vital concept. In particular, we want to examine the potential to support each other's nominations for regional liberalisation of particular sectors.

The APEC Business Travel Card, Australia's joint initiative with the Philippines and South Korea, announced in Manila last year, is another area in which we would hope to be able to cooperate with Singapore.

On security issues, Australia has a very long-standing and close defence relationship with Singapore. Again, as we look to the future I know we can cooperate to achieve our very closely aligned goals in regional security. Singapore's Deputy Prime Minister, Dr Tan, addressed the first general meeting of the Council for Security Cooperation in the Asia Pacific in June. His speech reflected very closely Australia's own views on regional security issues.

We look forward to continuing and possibly expanding the extensive range of bilateral defence cooperation which already includes:

For Australia, the form and level of our defence cooperation with Singapore reflect important shared strategic perceptions and objectives as well as recognition of Singapore's special needs for access to overseas training facilities.

Conclusion

To conclude, I want to reiterate that Australia is a nation whose economic and human resource strengths complement the ever-growing needs of a region hungry for growth. We are also a partner in the emerging regional security cooperation networks.

Australia has made a significant contribution over the decades to the development of Asia - from the Colombo Plan begun in the 50s, through security cooperation of the 60s which became FPDA, to the greater economic cooperation in PECC and APEC in the 80s and 90s. Australia's involvement has been substantial and longstanding.

Richard Casey, Australia's Foreign Minister from 1951 to 1960, who perhaps more than anyone pioneered Australia's modern relationship with our Asian neighbours, set Australia on this course when he said in 1954 that "our own special role lies in South East Asia and consequently our foreign policy is largely but not exclusively concerned with that region".

Australia will continue to make an ever greater contribution to Asia into the next century.

What's more, we look forward to doing it in partnership with Singapore - an alliance which presents so many opportunities for both our countries. Australia is a natural partner for Singapore. We work well together because of our mutual respect for each other's institutions and way of life as well as our economic complementarity and, as middle powers in the region, the shared desire to reinforce regional cooperation.

Let me say once again Australia is totally committed to greater involvement in the Asia Pacific region.

To put it simply, Australia is with Asia to stay.