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Speech

Australian Minister for Foreign Affairs, Alexander Downer

Paris, 31 January 2000

Australia's Global Agenda

Speech by the Hon Alexander Downer MP, Minister for Foreign Affairs to the French Institute of International Relations (IFRI)

(Check Against Delivery)

Thank you very much for your introduction and excuse me if I speak to you tonight in English to this audience. I have to confess that I spent at least 6 years at school learning French and lived in Brussels for 3 years where I had to speak French but as the Foreign Minister I feel a little timid about making a speech in French. Nevertheless, it's always a great pleasure for me to be in Paris, one of the truly great capitals of the world and to have the opportunity while I'm here to meet with the leaders of the French Government and business and financial community. But also to come along to your Institute of International Relations and find out a little about the Institute and also to be given the opportunity to talk to you on this occasion.

I think all of us would agree in the international community that France is one of the countries which carries real weight internationally; one of the truly important actors on the international stage. For every country in the world, the relationship with France is an important relationship. And we have done a good deal over the years to ensure that this is a relationship we keep in reasonably good shape. Now that's not to say it's always been in very good shape. We went through a very difficult period in our bilateral relationship when France was conducting nuclear tests in the Pacific and there were some disagreements between the then Australian Government and the then French Government over France's management over the issue of New Caledonia. In 1995 there was once more a significant dispute between Australia and France over the issue of French nuclear testing. But I must say, over the subsequent few years, certainly in the period when I've been the Foreign Minister, we have built up a quite excellent political relationship with France.

We've been very impressed with the way France has managed the issue of New Caledonia since the signing of the Matignon Accord some years ago, decommissioned its nuclear test sites in the Pacific, and signed and ratified the Comprehensive Test Ban Treaty. This has been very much appreciated in Australia. The relationship is really one that has gone from strength to strength.

A very important symbol of the strength of the relationship was France's contribution to the international force in East Timor late last year. It's easy to think that the establishment of an international force in East Timor and the deployment of troops led by Australia was an easy matter but it was a very complex matter. First of all to get the Indonesian Government's agreement to send in an international force. Secondly, to get appropriate Security Council resolutions which required the support obviously of all 5 Permanent Members of the Security Council, importantly including France. Thirdly, to put together an international coalition with real credibility and efficacy in East Timor led by Australia. And the support France gave both through the Security Council negotiations in the passage of the resolution and through the provision of troops very early on and of a strategic kind was a matter of very real importance in making the international force in East Timor a successful operation.

Let me also say that France has provided financial support for this UN program in East Timor and that too is something that is appreciated by countries in our part of the world.

I wanted to begin my remarks by saying how we in Australia now feel about France, about the positive nature of the bilateral relationship at the political level. I'll come back to this a little later. But also the growing economic relationship, with something like $8 billion worth of French investment now in Australia; a large number of French multinationals establishing their Asia-Pacific regional headquarters in Australia; and the trading relationship building as well. So all of those things are positive.

It would really be nice not to focus just on the bilateral relationship but to say something about Australian foreign policy in general.

Let me start by saying that the facts of geography tend to determine naturally enough where any country concentrates its foreign policy efforts. In Australia's case the primary focus is the Asia-Pacific Region. But that's not to say we don't have broader interests. We do. I think I've reasonably articulated our interests in France. We have broad interests in the European Union.

We have interests in Africa. We have interests in Latin America. So we do have a broad range of interests. Nevertheless, like any country, the primary focus of our foreign policy is by necessity on our own region, in our case, the Asia-Pacific region.

Australia is not an Asian country but we are deeply and permanently engaged with Asia. Despite its recent economic and indeed political difficulties, let me say that I remain very strongly of the view that in the medium to long term, the weight of global political and economic activity is increasingly going to be directed towards the Asia-Pacific region. It's a region which is clearly populous but also has the potential to achieve very substantial rates of economic growth particularly if the governments of the region continue to learn from the lessons of the economic crisis and proceed with the process of democratisation and economic restructuring. And my judgement is that both of those trends are broadly speaking, not in every case, but broadly speaking, likely to continue in the Asian region.

I think it would be a mistake for Europe to exaggerate the importance of the Asian economic crisis and to conclude from that crisis that Asia is no longer going to be important to Europe. I think quite the contrary. As time goes on, the growing weight of Asia will mean that Europe will have to focus increasingly on that part of the world. The last 2 years though have seen very great upheaval in Asia triggered by the region's economic crisis. That economic crisis has had a significant impact on the political structures of many of the countries in the region and that, as you would appreciate, is not surprising. Because at least one of the causes, not the only one, but one of the causes of the economic crisis was a lack of accountability and transparency and appropriate prudential supervision within economic institutions. To impose those disciplines on economic institutions has required significant political change. The political changes in Indonesia have been tumultuous but there's also been significant political evolution in countries such as Thailand and Korea. Without any doubt, the last two years have brought a growing trend towards greater democracy and the evolution of a more sophisticated civil society in many of the countries of East Asia. Inevitably these changes have had some implications for the security environment.

At the very heart of Asia-Pacific security lies the relationship between the region's major powers. Between the United States, China and Japan. That relationship, let me say, through the economic crisis has not essentially changed. Indeed the response of the major powers to the various regional developments in recent times has been generally speaking very beneficial. Japan for example has provided very substantial financial support to the region. So too, to a lesser extent and in different ways have the United States and China. What's more, the character of the relationship between China, Japan and the United States has really not undergone any significant transformation. And I tell you that because if the character of the relationship between the major powers in the region had changed, then I think the security environment itself would have changed very substantially.

Yet, today, the United States still plays the major role as the so-called 'balancing wheel' in the security architecture of the Asia-Pacific region. That's something that is supported by most if not all countries of the region. Certainly from our perspective in Australia we would like to see the continuation of the United States' engagement in the region.

But while the role of the major powers in the region has remained stable, there have been a number of security issues of real concern. I just want to mention briefly four of those because each of them has a significant bearing on Australian foreign policy. The first I would mention is the tensions between China and Taiwan. Those tensions do have the potential to escalate and could conceivably, if all were to go badly, cause a major deterioration in the regional security environment. Now, let me make this clear. I'm not predicting for a minute that that is going to happen. Indeed, my expectation is that common sense will prevail and both Beijing and Taipei will understand that it's in their interests to ensure that they have not only a stable relationship but that they do work towards long term reconciliation. Nevertheless, messages sent out from both sides have from time to time caused concern. And the rest of the international community, including the European Union, must do all it can to encourage restraint on both sides of the Taiwan Straits.

The second issue I would mention is the outlook on the Korean peninsula which does remain uncertain. Now that having been said, we've been encouraged in recent times by the modest success of what is called the perry Review of United States policy towards North Korea, the DPRK. This, I think, could lead to a longer term and desirable cycle of diminished tensions and increase North Korean engagement with the outside world. But engagement isn't the only issue. We'd also like to see North Korea abandon completely any plans that it may have, either overt or covert of development of any types of weapons of mass destruction.

The third issue of concern remains the relationship between India and Pakistan because after all don't forget that Australia shares the Indian Ocean with India and Pakistan. The 1998 nuclear tests by both countries did for all of us, reaffirm the importance of non-proliferation at the multilateral level and reminded us that we can't take for granted the very great success of the non- proliferation regime. Since the 1960s it has been a great success but those nuclear tests reminded us that the success is far from complete. We would, as I'm sure would France, like to see both India and Pakistan sign up to the Comprehensive Test Ban Treaty. It would of course be particularly desirable if India and Pakistan were able to reach some accommodation over kashmir. I can only say to you that after over 50 years of conflict the signs of an early resolution of that problem are not propitious. I don't think though that the international community should underestimate the importance of those tensions between India and Pakistan and should not be blind to the fact that conflict is never very far away in that part of the world.

The fourth issue related to Australia's neighbour, Indonesia. We have in our county, as you can well imagine, a very great interest in seeing stability return to Indonesia. But it's not just, let me tell you, Indonesia's neighbours that have an interest in seeing stability return. It has to be remembered that Indonesia is the world's 4th most populous country and that it constitutes around half of the population of ASEAN, the Association of South East Asian Nations. It is the largest Moslem country in the world. And for all of those reasons it exercises a particularly significant role in the strategic environment of South East Asia.

Now, as you all know, over the last two years, Indonesia has undergone a very great upheaval. But that upheaval has now culminated in the election of a democratic government and the evolution of civil society and democratic and accountable institutions. But these institutions, this civil society, this democratically elected government, are all very new. Very new, but what has happened is very desirable. We can't underestimate the challenges that face the administration of President Wahid who is due in Paris in two days' time. But we shouldn't underestimate the challenges he faces in bringing stability to some of the troubled provinces of Indonesia and also importantly in restoring health to the Indonesian economy.

Australia has, historically, going right back to the 1940s, been a firm and consistent supporter of Indonesia's and we've certainly helped Indonesia both to restructure its economy and helped it with the evolution of its democratic institutions. Let me say to this audience here in Paris that we very much hope that France and other members of the European Union will continue to provide strong support to the Indonesian government and the people of Indonesia during this difficult period. And I'm sure during the President's visit to Paris this week there will be a strong message of support from France to the President and naturally enough that would be very well received.

Now, these four issues constitute nothing more than a selection of a very large number of significant challenges that the Asia-Pacific region faces. I could mention internal problems in other countries, I could mention the problems in the South China Sea. Quite a long list of issues. These days, we all have to play a role in trying to assist the region in trying to overcome these problems.

Our countries are becoming increasingly interdependent as a result of what we call globalisation. Over the last four days I have been in Davos in Switzerland attending a World Economic Forum which you will have all heard about, and I must say I have been very struck there by the debate that is taking place over the meaning and the consequences of globalisation. This isn't a new thing for Davos.

I've been there four times and on the previous three occasions I was there, I have to say that whilst the discussion was about globalisation, it was in a very optimistic and upbeat way - I think one would almost say in a triumphalist way - that globalisation was an unchallenged and unchallengeable proposition.

I make no apologies for the fact that I'm a supporter of this broad but sometimes rather ill defined concept. But just to say that this year, Davos Man, as has been described, that predominant ethos of Davos, was confronted by what some people now call Seattle Man, that is opposition to globalisation, opposition that manifested itself in the demonstrations in Seattle at the end of last year. You may have seen on your television screens there was some demonstration in Davos as well, where the McDonald's restaurant was simply trashed.

There is no doubt that globalisation, with all the obvious benefits that it has is making life difficult for governments. It does cast a question about the traditional notions of statehood - that's obviously something new in France you've faced up too, as you've integrated into the European Union. And this can lead to the diminution of national identity and allegiance.

I think the spread of the English language - and this is a good place to say something about that - which I suspect has a great deal to do with the fact that so much of the information technology which is taking control of the global economy has been developed in the United States, presents something of a diminution, definition, of other national languages. And many see that as a challenge to their cultures. This is a matter of some concern.

We've also seen the spread of the transnational corporation in a very major way, so that products aren't necessarily easy to identify by national labels. For example, in Australia, the largest selling wine label is called Jacob's Creek, which is a wine made by a company called Orlando. But just to make the point to you that the company Orlando which makes Jacob's Creek is owned by a French company, Pernod Ricard. And so it may be said that in some respect this wine is French wine. At least it is a product of French capital. And maybe that's a reason why you should go up and buy a lot more of it than you are!

There is an insurance company in Australia called National Mutual: it's a very large insurance company that was taken over a few years ago by Axa, the French insurance company. National Mutual has been for some years trying to get a licence to operate in China.

When Axa took over, the Chinese came to us and said: ''isn't this insurance company, National Mutual, now a French company, and we're planning to give a licence to Axa to operate in China. There is no reason for us to give National Mutual one because they are owned by Axa.'' We naturally enough protested this, saying that National Mutual is majority owned by Axa and its headquarters are in Australia, its employees are Australian and we would still like the Australian operation to get a licence.

These are just some Franco-Australian examples of how globalisation can make things in any case a little more complex. Nevertheless, it is our view that globalisation is something which is very desirable. And we, in Australia, whether it's desirable or not, recognise that it's an irreversible trend. We simply have no choice about whether to accept global economic change. It's an inevitable consequence of technological advances and the business opportunities they give rise to.

Like all powerful forces our real challenge is to learn how to harness it to our advantage and to help others to do so. The East Asian financial crisis and the fall-out from the Seattle WTO meeting highlighted the need for governments to communicate the messages much more effectively, to liaise more closely with their constituents on the effects of globalisation, and so broaden communities' understanding of the benefits of globalisation and liberalisation.

One of the more frequently heard arguments about globalisation - I'm not sure if it's profound - is that it creates a greater mal-distribution of wealth: there are great winners out of globalisation who are doing extremely well, there are losers and the gulf between the rich and the poor is getting greater as a consequence of that. I would make a rather different point about globalisation and say that what globalisation has the potential to do is harness economic opportunities for the poor in both developed countries and developing countries. In developing countries it gives them the opportunity to build on the comparative advantages they have and to export much more successfully and thereby make money, and build employment opportunities and wealth for the poor in their own countries. Imports in developing countries simply mean that people are able to buy products they might need such as clothing, a great deal more cheaply that it would otherwise be the case, and what in turn that means is that they would have more money left over to spend on other things, and that's one way - that's the only way - that people are able to raise their standards of living.

So I don't think that people should be frightened of globalisation and see it as a challenge to the poor or a threat to the poor. On the contrary I think it offers greater opportunities for low-income people and low-income countries. And a solution to dealing with globalisation is absolutely not to cut yourself from it. It is absolutely not. For a developing country, the more it opens up, the more it embraces the globalised economy, the more it integrates with that economy, the more successful it is likely to be. The more developing countries close themselves off, the more they become introverted, the more they think that they can somehow escape from the global economy, the poorer they will be.

That really is one of the lessons we've learnt over the last forty or fifty years. And it is very encouraging to see in the East Asian region, through particularly the difficult period the region has had with economic crisis, nevertheless their commitment to liberalisation of markets and further integration in the global community. That has certainly been the lesson of countries like Korea, Thailand, China, and list really goes on. In fact, when the East Asian economic crisis first struck in the middle of 1997 - two and a half years ago - I thought that many of the governments in East Asia would respond by pulling down the economic shutters, by increasing tax, by discouraging foreign investment because they would blame their exposure to the international market place for the economic problems that beset them. And all I can say is that, if they had done so, that would have been a tragic mistake, that would have exacerbated the problems, not alleviated them. And it was with really great pleasure, although with a good deal of political strain, that so many of the countries responded to the economic crisis by further opening their markets.

A very good illustration of that is China. China has continued with the process of economic modernisation and liberalisation right through the Asian economic crisis. In our particular case, through the latter status of the Asian economic crisis we've negotiated an agreement on WTO accession for China. Other countries have as well, I think the European Union must be fairly close to reaching an agreement with China - I hope I am right in saying that. These agreements with China constitute a further liberalisation of the Chinese market. It's a very good example of how the region is responding in, if you like, a liberal-market way, to the problems that have beset it.

So I hope I am able to transmit to you a message of some optimism about our part of the world. A message that reform is taking place, that engagement with the globalised economy remains just as it was. Let me leave you with a thought., there are many people in our part of the world who think that Europe 'punches below its weight' - to use an expression that is popular in Australia - in East Asia, where other countries, in particular the United States, show a great deal of focus on East Asia. And that many, particularly in Europe in recent times, have taken the view that the Asian economic boom, through quite some years, was really just a 'bubble economy'. And it has burst now and Asia sort of slumped back to where you would expect it. And I think this analysis is a misanalysis. I think it is a major mistake to draw that type of conclusion and Europe needs to understand that the opportunities in Asia are there, and the opportunities in Asia are going to continue to grow. And it's important that there is continuing engagement in that part of the world by the European Union.

Let me again thank you very much for having me here today, I really appreciate the opportunity to speak to you. I've talked quite a lot about the few issues there which are of particular concern to Australia, but I want to finish where I began and say that in my time as a Foreign Minister, many regard this as a matter that doesn't need to be written about a great deal in the media. But one of my achievements, I feel, has been to build up a relationship with France from what was frankly a very low level at the end of 1995 and in early 1996.

Now we have a solid and harmonious relationship with France. We have our differences of course, particularly over agricultural trade, the Common Agricultural Policy - and I'm happy to have an argument with anybody about that - we are of course on the liberal side of the argument and France, if you like, on the conservative side of the argument, but two countries such as Australia and France aren't going to agree on everything. But all I can say, is that we are two countries on different sides of the world, who speak different languages, who nevertheless have shown a very great capacity to work together, and I look to see that relationship strengthen in the years ahead.

ENDS