Australia and Asia - a New Paradigm for the Relationship
Speech by the Hon Alexander Downer MP, Minister for Foreign Affairs, to the Foreign Correspondents' Association
Sydney, 16 April 1999

(Check Against Delivery)

Thank you Esther, ladies and gentlemen.

Its a great pleasure to be back in Sydney and talking with the members of the Foreign Correspondents' Association. Members of the Association might recall that one of my first speaking engagements as Foreign Minister was here in April 1996.

On that occasion, I chose to speak to you about the Coalition Government's views on Australia's relationship with Asia. The reason then, in part, was to counter some of the disinformation on that subject that had been put about by our opponents during the 1996 election campaign.

Well, three years on and I think our Government's record in our region has been shown to be second to none. I plan to say a bit more on that later in my remarks, but suffice it for me now to remind you that the matter of the Government's record on relations with Asia was conspicuously absent from the Labor Party's election rhetoric last year.

Today I want to address you once again on Australia's relationship with Asia. I do so for two reasons.

First, because our region has been battered by the most severe economic crisis since the end of the Second World War, and it is only right that we ask ourselves what effect it has had on Australia's relations with Asia.

Second, because having spent three years closely examining our ties with the countries of this region, I believe that we are establishing a new paradigm for the relationship. It is the nature of that paradigm, the form of which is still changing, that I wish to discuss with you today.

I want to start today by talking briefly about the history of Australia's ties with Asia, and then examine the nature of our national interests in the region. I then want to touch on my own Government's record on relations with Asia before looking at the impact of the Asian economic crisis on the relationship.

Australia and Asia - a Long History

It is important to remember that Australia has had a long history of engagement with the countries of Asia. For some strange reason, the enthusiasm felt by many in this country to build ties with the region in the late 1980's or early 1990's led to a kind of collective amnesia about the achievements of the decades before. Perhaps those who then had a stake in talking up Asia felt that their success could only be assured by talking down the achievements of their predecessors.
The plain fact is, of course, that the Asia Pacific region has been crucial to Australian foreign policy since the Menzies government opened our first independent diplomatic missions in 1940 and 1941 - indeed, two of those first four missions were in Asia, in Japan and China.

When the Coalition was in government from 1949-1972, Australia was at the forefront of efforts to ensure regional stability and economic development. That effort was completely logical - after all, Australia had only narrowly avoided being invaded in the Second World War, which had riveted national attention on the security of our own region. So it was that Richard Casey, my predecessor as Foreign Minister during the 1950s, would note that "our own special role lies in South East Asia and consequently our foreign policy is largely but not exclusively concerned with that region".

And while many commentators dwell on the White Australia Policy (the death-knell of which, in reality, had been sounded by the end of the War and the tremendous changes to the world order that it presaged), fewer recall the momentous examples of interaction between Australia and Asia of that same time, like the Colombo Plan and the signing of the 1957 Australia-Japan Trade Agreement. Australian insularity - global insularity - was coming to an end.

So strongly do I feel about this matter, and in order to inform Australians about the true nature of their country's ties with Asia and thereby generate a higher standard of debate about the future of our relationship with that region, I and my colleague the Minister for Trade, Tim Fischer, have decided to ask the Department of Foreign Affairs and Trade to produce a narrative history about Australia's engagement with Asia in the twentieth century.

The book will be our portfolio's contribution to the celebration in 2001 of Australia's Centenary of Federation, and will trace the development of Australia's broad political, strategic, economic and people-to-people links with Asia over the century since the federation of the Australian colonies. I hope this history will help bring to an end the erroneous view that Australia's engagement with Asia began in the 1980s.

In fact, a historical review such as the one we propose to publish will, I believe, allow us to draw several conclusions about Australia's ties with Asia. It will show:

• that Australian engagement in Asia is extensive, and has been gathering pace for many decades;
• that successive Australian governments, both Coalition and Labor, have been energetically pursuing our interests in the region throughout the entire period of our diplomatic representation abroad;
• that this bipartisanship typifies a national consensus on the importance of Australia's engagement with Asia; and
• that the record of our engagement has been overwhelmingly positive, both for Australia and for the Asian countries that have been interacting with us.

Identifying our National Interests in the Region

I am sure that I don't need to tell an audience such as this why Australia continues to pay close attention to its relations with Asia, but for those less well informed about Australia's foreign policy let me state the reason clearly: it is because we have substantial and abiding interests at stake in the region, and we would neglect those interests at our very great peril.

Our political and strategic interests are obvious. Take a glance at any map - it doesn't take an expert in strategic policy to understand that what happens in our own neighbourhood will affect us more deeply and more quickly than events that occur in most other areas of the world. That simple reality has been confirmed through most of our nation's history. I invite you to imagine, for example, what kind of situation Australia would be in today if our immediate region had not been largely free from armed conflict for the last quarter of a century.

Australia also has substantial trade and economic interests at stake in the region. Even after the onset of the Asian economic crisis, East Asia takes more than 50 per cent of all our exports, and even more would be transported through the region to markets elsewhere in the world.

If it is true that Australians have, comparatively speaking, enjoyed a high degree of stability and prosperity in recent decades, much credit must go to the fact that the region that surrounds us has also been quite prosperous and stable. Our traders have been able to sell into large and growing markets, and our defence forces have not had to deal with major armed conflicts on our doorstep. It is very much in our own interests, therefore, for us to help keep the region on an even keel.

That is the reason why Australia continues to seek closer engagement with Asia - because of the profound benefit which flows from our friendship with the countries of the region and the realisation of our mutual interests. The region contributes to our own prosperity and security and, just as importantly, we contribute to the prosperity and the security of Asia.

Building Ties with Asia under the Coalition Government

Having always recognised that Australia's future was tied up with Asia, the Coalition Government from the very beginning of its term in office made engagement with Asia its highest foreign policy priority.

We made that point unequivocally in the Government's 1997 White Paper on Foreign and Trade Policy, which committed Australia to a long-term, mutually beneficial relationship with Asia.

We also believed that, while regional engagement through bodies like APEC had its rightful place, there was much more Australia could do to expand ties with our neighbours directly. So it was that the Government set out to systematically revitalise Australia's bilateral relationships with individual countries in our region, recognising their fundamental importance to the more fruitful pursuit of our trade and foreign policy objectives.

Since 1996, therefore, we have concentrated on pursuing activities that will deliver tangible outcomes to advance our security and which promote export jobs for Australians. Some of our foreign and trade policy achievements since that time include:

• the establishment of the Australia - Indonesia Development Area, the first such sub-regional agreement Indonesia has entered into with any country outside of ASEAN;
• the landmark Maritime Boundaries Agreement with Indonesia which completed over a quarter of a century of negotiations;
• the negotiation of a revitalised trade agreement with Malaysia ;
• the establishment of a security dialogue with China and agreement with China to a formal and regular bilateral human rights dialogue;
• the foundation within the ANU of the Centre for Democratic Institutions, which will take the lead in supporting democracy and the rule of law throughout our region;
• the inauguration of political-military talks with South Korea and with Japan; and
• agreement that the Australian and Japanese Prime Ministers will hold an annual summit on bilateral and regional issues.

As I said at the beginning of my remarks, these outcomes show that the Coalition Government has been second to none in establishing fruitful and cooperative relationships between Australia and the countries of Asia. We will never get closer to Asia simply by wishing it so - rather, we will do so by showing how our action and dynamism can accrue practical benefits for Australia and our neighbours.

The Asian Economic Crisis - Australia's Trial by Ordeal

Through these and other efforts the Coalition Government had, at an early point, established its bona fides with the countries of Asia, and had signalled unequivocally Australia's continued commitment to close and mutually-beneficial relationships with them.

The onset of the Asian economic crisis could have challenged all that. It was a crucial time for us, a time for Australia to "put up or shut up" on the question of its commitment to Asia. It became, if you will, a defining moment for Australia's relationship with Asia, and allowed us to prove, as perhaps no other event could have, that the ties we had built were deep and lasting.

We did that by putting Australia at the forefront of international efforts to overcome the economic and social impacts of the crisis. Our response was speedy and substantial. Indeed, given the size of our economy and population, I'd dare to guess that it was second to none.
The steps we took included:

• being one of only two countries to participate in the IMF second tier support arrangements for Indonesia, Thailand and Korea;
• persuading the IMF to ameliorate the conditions of its package for Indonesia;
• extending trade insurance cover on the national interest account to help maintain the capacity of Indonesia and Korea to import essential commodities;
• providing substantial assistance for crisis-hit countries through bilateral aid programs ($127 million for Indonesia and $25 million for Thailand in 1998-99, up 25 and 16 per cent on the previous year, respectively);
• establishing a $50 million, three-year Economic and Financial Management Package for the region, together with our $6 million Asia Crisis Fund;
• setting up major governance and capacity building facilities in our aid programs for China, Philippines and Indonesia; and
• convening in March a major international meeting of ministers and senior officials from 27 countries and 9 major international institutions on development cooperation responses to the Asian crisis.

But just as important for our neighbours as these actions has been the role Australia has played as a model of how strong economic performance can be maintained in a time of crisis. As countries around our region have struggled, we've maintained one of the highest growth rates in the developed world, low inflation and low interest rates, a budget in surplus, unemployment at an eight year low and days lost to industrial disputes at an eight decade low.

What we've done is to show how commitment to economic reform and liberalisation can pay off, and why the temptation to erect barriers to the world, to become inward-looking, must be resolutely opposed

And although our trade with the region has inevitably suffered, we have been maintaining our performance. True, we no longer export almost two-thirds of our goods and services to East Asia, but the figure is still above 50 per cent. And most importantly for our neighbours, we haven't tried to shut out their imports - indeed, our imports from many of the countries worst hit by the crisis have actually grown.

As I've said many times during the this crisis, we've shown ourselves to be all-weather friends in Asia, not just fair-weather friends. We've placed ourselves at the centre of international efforts to assist crisis-hit nations, keeping the trade doors open when times are hard, with faith in the long-term future of our region.

Conclusion - Defining the New Paradigm for the Relationship

There's no doubting that the past 18 months has been a testing time for Australia. But like most such trials, it has proved to be a period of character-building, and has taught us much about our nation's fundamental strengths.

It has amply demonstrated the value of our open and mature political and economic institutions, our diversified and highly productive economy, and our tolerant multicultural society. For example, what other country in the region has managed, in the face of the toughest economic conditions in 50 years, to maintain both strong economic growth and successfully renew democratic institutions through the holding of a free and fair general election?

This time has also been one in which, I would argue, we have begun to define a new relationship between Australia and the countries of Asia. And it is this, more than any other matter, that is likely to stand out in the historical record, 50 or 100 years hence.

We have shown the genuine nature of our relationship with Asia, our true worth to the countries of that region. We have shown leadership through unstinting and unselfish assistance to our friends in trouble, but have been just as willing to show through our own example that we believe in the benefits of open economies and open governments. Instead of being an outsider in our region, we've become a key asset for its long-term recovery and growth.

Australia has long counted itself lucky to be located in this dynamic region, a region that, despite its current setbacks, will one day recover, and go on to even greater things. Today I am proud that, as a result of our unstinting response to Asia's economic crisis, our neighbours also count themselves fortunate to have a friend like Australia.

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