Speech

Australian Minister for Foreign Affairs, Alexander Downer

16 December 1999

Fiji and Australia - Doing Business Together in the Region and the World.

Speech by the Hon Alexander Downer, MP, Minister for Foreign Affairs,
to the Fiji-Australia Business Council

Introduction

Thank you Dr Baba, distinguished guests, ladies and gentlemen.

Thank you for your welcome. It is my pleasure again to be in Fiji. This is my fourth visit to Fiji as Minister, and with all the travelling I do, it is nice to come back to a familiar place with a warm and friendly welcome.

I appreciate the opportunity to address you all today, particularly those of you in business, because in many ways you are at the forefront of the ever-expanding, people-to-people links between our two countries. Trade and investment links are only two elements of our strong relationship, but they are among the most important. I was particularly pleased to hear the views of Australian and Fijian business leaders about those links at our earlier meeting.

But before I speak of trade and investment matters, I would like to take advantage of this public forum to thank Fiji very much for its support for InterFET in East Timor. This is further evidence, if it were needed, of our common desire to contribute to a peaceable world and our strong partnership, as we act together to uphold universal values.

 

Links between our countries

Many of you will already know of the Australian Government's strong commitment to the Pacific and Fiji, but it bears restating: the Pacific is integral to Australia's place in the world. As I have said before, we in Australia ignore the Pacific at our peril, and our Government is determined to see the region given the recognition it deserves. That commitment is all the stronger in the case of Fiji, which has a vital leadership role to play within the wider region. We value our heritage of close historical, political, economic, aid, community, religious and sporting ties and the broad networks of interpersonal ties that link even the most remote areas of our two countries. It is up to us all to promote the development of closer relations in the Pacific, and to take advantage of the opportunities that these developments bring.

Australia has abiding interests in the Pacific. These interests include the stability of countries in the region, and involves in large part facilitating growth in trade and investment, as a means of contributing to development and stability. This demands a genuine partnership and a sense of mutual commitment - we must be more than just neighbours, we must be good neighbours. It should not be forgotten, too, that democratic development is as important as economic development; hence, the emphasis on good governance in our aid program. In the long-term, Australia has the objective of assisting the Pacific countries to achieve the maximum possible degree of self-reliance.

Over recent years successive governments in Australia have devoted a good deal of time to working out and building up the relationship with Fiji, which is very important to us. I look forward very much to continuing that effort with my colleague, Dr Baba, who I met for the first time this morning, and all the members of the current government in Fiji. To the representatives of Australian and Fiji business organisations here today, I want to say that I believe your responsibility is a great one - to encourage more and more Australian and Fiji businesses to seek out their regional counterparts, to further build our regional community through genuine, solidly-based and long-term economic and commercial engagement.

 

Globalisation - a time of opportunity

I would like to say a few words about globalisation, as it is a key challenge which faces both our countries. Globalisation is commonly understood as the progressive erosion of barriers erected by nation-states to flows of goods, services and investment. But, significantly, it is about flows of people and ideas too. More than ever, globalisation is a phenomenon that cannot be ignored. Communications and trade have made the world a smaller place and no nation is able to develop and thrive while pretending this is not so. At the end of the 20th Century, isolation is not an option for any nation wishing to prosper. The necessary policy changes to prosper in such an environment may appear daunting, but the challenges must be taken up or else the region may be left behind in an increasingly competitive world.

Australia certainly recognises concerns among the Pacific island countries for their vulnerability in this regard. This is why Australia has worked so hard to provide support for Pacific countries in their reform efforts. The challenge for our two countries, and other Pacific countries, is to maximise the advantages and minimise the disadvantages of globalisation. Governments, and, indeed, societies in general, have a responsibility to work towards maximising the advantages.

I think there is an unfortunate tendency to assign negative connotations to globalisation, as if it were some insidious threat or a grand conspiracy against all the good things in the world we know. It's become something of a popular bogeyman, and all too easy to blame for problems which are not new. In fact, globalisation has made good business common sense for a long time. Austrade, a key agency in my portfolio, sums up the Fijian market for potential exporters like this: `Fiji is a price conscious and competitive market. If your product or service is not price competitive, it is important to explain its other advantages.' For business, globalisation is about creating a level playing field, where the common sense of the Fijian market is applied to the world: where goods and services compete on price and value alone, to the ultimate benefit of us all. In any event, globalisation is not something we can opt out of. We either adjust our bearings and navigate according to the new conditions, or risk the consequences.

 

 

Trade - finding opportunities in the global market

Australia's economy has become increasingly complex and multi-dimensional over the past two decades but, as an island continent with only limited population and resources, trade remains crucial for our economic future. To this extent, we have much in common with Fiji. Without trade we would be very much poorer, unemployment would soar, and the ills that would come with that would undoubtedly damage the social fabric. As relatively small markets, Australia and Fiji will always be particularly dependent on trade to generate new jobs and greater wealth. The global market will inevitably become more competitive. Australia and Fiji can either improve further our international competitiveness and grasp new export opportunities, or we can be left behind. One of the lessons that Australia learnt from the East Asian economic crisis is the importance of diversifying markets; likewise, Fiji also has opportunities in a range of markets. As in Australia, business and government in Fiji need to work together closely to attract greater foreign investment.

 

 

Governance - providing an environment that facilitates business growth

In talking of trade and economic matters, it is difficult to ignore the lessons of the East Asian economic crisis over the last two years. Many of the factors contributing to the crisis in the region were shown to derive from failures in systems of governance. In contrast, those countries that managed to continue to perform in the face of the crisis were seen to have good systems of governance - by that I mean the concepts of good government, capacity building, transparency and accountability, human rights and the equitable rule of law.

Putting in place the right legal infrastructure to provide security of investment, and avoid capital flight, is very important. But providing an environment that facilitates business growth extends beyond the legal framework to general societal factors as well. For example, investors are simply not going to be attracted to countries where there are perceptions of chronic law and order difficulties or an uncertain regulatory environment. Citizens and businesses must be able to exercise their rights, mediate their differences and voice their interests. Governments must be able to be questioned and their decisions contested so that they consider alternatives and defend their decisions. This is why Australia puts such an emphasis on good governance in our aid program, and why we will continue to work in partnership with South Pacific countries on programs that encourage good governance generally, and good corporate governance specifically.

 

 

The importance of liberal, inclusive trading arrangements in the region

In accordance with the decision of regional leaders at their recent Palau meeting, one of the trade issues that will be discussed in detail over the coming year is the proposal for the negotiation of a Pacific Regional Trade Agreement, the PARTA. Various proposals have been talked about for membership, from limiting the agreement to Forum Island countries, to including Australia and New Zealand, to including French and US territories.

In the context of globalisation, let me tell you why I think the inclusion of Australia and New Zealand is important, even vital. The share of intra-island country trade is quite low. An agreement encompassing only these countries is going to provide little benefit, in terms of lowering prices for consumers. It will also have little benefit in making production in these countries globally competitive. It is better to take steps towards becoming globally competitive by firstly competing with Australian and New Zealand goods and services, where island countries will be operating in a sympathetic environment, with countries that understand the island countries' needs and requirements and are strongly committed to their development. The greater weight our inclusion would give the arrangement would be of real benefit in dealing with third parties.

We fully appreciate the revenue implications and other adjustment costs that will be involved, particularly for the smaller island countries. These issues need thorough attention and appropriate allowances, such as providing a longer period for the implementation of the PARTA provisions in relation to Australia and New Zealand. Australia stands ready to consider technical and other assistance necessary to support Forum Island countries through this adjustment process.

The importance of trade facilitation in addition to liberalisation cannot be discounted. A genuinely regional free trade area would promote greater economic cohesion among the Pacific countries, and substantial economic benefits from the implementation of trade and investment facilitation measures. APEC, for example, has put as much institutional effort into trade facilitation as liberalisation. Adopting in the first instance WTO standards, and second, APEC standards would allow the Pacific islands to enter into regional and global trade facilitation efforts.

No doubt some in the audience are thinking I am speaking out of self-interest. And it is true that Australians would be disappointed with an agreement that relegated Australia to a secondary position compared to other Forum members, given our longstanding partnership under SPARTECA and more generally. But let me say this: if we consider the world of 2020, under the APEC Bogor Declaration, free trade will have been achieved in the Asia Pacific, for both developed and developing countries. The Bogor Declaration may be superseded by other WTO or APEC agreements before 2020 anyway. Whatever the difficulties of recent weeks, this is part of the worldwide downward trend in tariff rates.

What this means is that in twenty years and two weeks South Pacific countries must be competitive in this new global environment - or risk being able to export very little. All the South Pacific countries are reliant on exports to a greater or lesser extent - none of us can guarantee our futures through high tariffs and regulation to protect sluggish, uncompetitive industries. Development for all of us is dependent on policies that look outward. There is a need for all Pacific countries to integrate their economies into the increasingly competitive global trading environment. We need to work together to secure the next generation's welfare.

 

Conclusion

I believe that the twenty-first century will be a time of opportunity and growth for the Pacific community of nations. The century that encompassed colonialism, and the simultaneous difficulties and joy of independence, will be behind the Forum island countries. It is time for a new era, which I believe will belong to those countries, which, with self-reliance and skill, adapt to the challenging, but rewarding, circumstances of globalisation.

The new era will be about partnership and mutual commitment, in a continually evolving regional community. I am confident that Fiji and Australia will be at the forefront of further developing the Pacific community of nations together. I believe that in the new century, Australia and Fiji, along with the rest of the South Pacific, can be an example to the rest of the world, with strengths in democracy, diversity and development.

I am very glad to have been in Fiji, and to have had this opportunity to speak with you, as we move into the millenium year, and a new era, in a little over two weeks.

In closing, may I take this opportunity to thank Dr Baba again for his hospitality and to wish you all a very happy holiday season.

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