Introduction

Thank you Zeke Solomon; Carrillo Gantner [Chairman of Asialink]; Ambassador Shin [ROK Ambassador to Australia]; former Australian Ambassador to Korea Mack Williams; ladies and gentlemen. I'm pleased to be here and to have this opportunity to participate in this important Asialink seminar.

I admire very much the work that the Asialink Centre does - in its own words, "to enable Australians to contribute to and benefit from the rich cultural, social and economic dynamism of Asia". And I'm pleased that my Department is able to give significant financial support to Asialink's activities. It is, of course, essential that bodies like Asialink exist and, indeed, flourish as they help to give real depth and substance to our bilateral and regional relationships in Asia.

Given the remarkable events which have taken place on the Peninsula over recent months, it is timely for Australians to focus on the future of our relations with the two Koreas. I wish to talk to you this evening about the significance of these relations to Australia and about the dialogue that is taking place between the two Koreas. Much of my focus will be on our bilateral relationship with the Republic of Korea (ROK). But I shall have something to say about our relations with the Democratic People's Republic of Korea (DPRK) as well.

The Australia-Korea relationship

It was a little over 50 years ago that the Korean War began, with forces representing North and South Korea fighting up and down the Peninsula for three years. Australia sent 17,000 troops to fight in the Korean War, and 339 gave their lives in the conflict. The war on the Korean Peninsula had a profound effect on the geopolitics of the East Asian region, the impact of which continues to be felt today.

On a strategic level, recent developments on the Peninsula, especially the North-South leaders' summit, have enormous significance for the security of the Asia-Pacific region. One could say that after half a century's worth of hostility between North and South, "sunshine" is starting to clear the darkness away.

This "sunshine" is not just bringing greater warmth to the Peninsula its impact is being felt across the region. In Australia we have taken genuine delight in seeing the first meeting of two Koreas' leaders and the first reunions of separated families. This delight in the progress in Peninsula relations was demonstrated vividly through the standing ovation Australians gave the two Korean teams marching as one at the Sydney Olympics Opening Ceremony.

Australia and South Korea

Though we stand at opposite ends of the region, Australia and South Korea share important interests that make our partnership both dynamic and vibrant. South Korea was Australia's 4^th largest trading partner in 1999-2000, with the value of trade having grown by some 17 per cent last year to $11.9 billion. South Korea has been in Australia's top five export destinations since 1983, and is currently our third largest export destination.

As both our economies have matured, the trading relationship has begun to expand from traditional sectors into more advanced areas. South Korea's dramatic recovery from the effects of the Asian financial crisis, and the broad-ranging economic reform program associated with it, are providing the opportunity to broaden our trade relationship.

On top of this strong economic relationship, South Korea and Australia share common views on many key regional issues. We share similar views on regional security and a commitment to regional dialogue through a range of forums designed to enhance regional cooperation. We are committed to a fair and open multilateral trading system, although we have very different views on agriculture. We share a common belief that democracy, effective protection of human rights and a market economy are the best way to ensure the prosperity and happiness of a nation's citizens.

This coalescence of views and interests means that our two countries have a strong partnership that spans the region - Australia and South Korea know that we can call on each other for support, confident that it will be forthcoming. This partnership has enabled us to work together closely in some significant events shaping the region in recent years: close to us, involvement in East Timor; and close to South Korea, engagement and rapprochement with North Korea.

South Korea participated alongside Australia in the International Force in East Timor (INTERFET), and in the follow-on Peace Keeping Operation of the United Nations Transitional Administration in East Timor (UNTAET PKO). These operations represented a new dimension in regional security cooperation. They also marked a new phase in Australia's relationship with South Korea, as we worked together with others in seeking regional solutions to regional problems.

North-South dialogue

The Korean Peninsula has long lay at the intersection of competing great power interests and rivalry. The Peninsula today remains one of the most heavily militarised areas in the world, and tensions continue to run high. Given this history, the beginning of the North-South dialogue process and rapprochement is profoundly important to the stability and security of the region. Though there is still considerable progress to be made, the transformation has been a remarkable one.

The summit between South Korean President Kim Dae-jung and North Korean leader Kim Jong-il, held in Pyongyang in June, marked the first meeting of leaders since the division of the Korean Peninsula 55 years ago. Following this historic event, there are encouraging signs that North-South dialogue will continue and deepen. Kim Jong-il has accepted Kim Dae-jung's invitation to make a reciprocal visit to Seoul, with the visit likely to take place in the first half of next year.

Meanwhile, the North and South have held three rounds of ministerial meetings, conducted two rounds of family reunions, and agreed to reconnect the North-South railway. Very significantly, security is becoming a plank of inter-Korean engagement, with Defence Ministers from both Koreas meeting for the first time in September. Continued dialogue offers the promise of a long-term reduction in the threat of conflict on the Korean Peninsula. Personally, I've been impressed by the commitment of people I've encountered in both North and South Korea to eventual peaceful reunification on the basis of mutual respect. Such a development would obviously be of immense value to the region as a whole.

The role of South Korean President Kim Dae-jung in recent developments has been crucial. His visionary approach towards reconciliation with the North and his constructive pursuit of the "Sunshine Policy" make him a richly deserving recipient of the Nobel Peace Prize recently awarded to him.

Australia's view on the North-South dialogue

Australia has warmly welcomed these developments. Indeed, we have done a lot to support the process, acting in close consultation with key regional partners. Over the last year-and-a-half, we have actively engaged North Korea to help demonstrate to Pyongyang the wisdom of ending confrontation and of taking the steps necessary to end the isolation and poverty of its people.

The dialogue I encouraged last year between Australia and the DPRK resulted in the restoration of diplomatic relations with the North in May this year, after a freeze of some 25 years. My visit to North Korea last month marked the next stage in the process, and was intended to encourage the spirit of engagement and change.

Australia has given generously to alleviate hunger in the North - about $24 million since 1996 - and has been a large contributor to KEDO, the Korean Peninsula Energy Development Organisation - in the order of $18 million. Australia has been able to play a timely, supportive role in "bringing North Korea in from the cold", and thereby has helped to contribute to a more stable regional security environment.

While security and stability on the Korean Peninsula may loom largest in the interests of nearby nations, they are not merely academic or philosophic concerns for Australia. They go to the heart of our strategic interests. Roughly 40% of our exports go to North-East Asia, and all the countries in the region, with the exception of the DPRK, fall within our top ten export markets. A breakdown in security in North-East Asia, on the Korean Peninsula, would have massive humanitarian and economic consequences for countries in the region and Australia.

Fifty years ago, stability on the Korean Peninsula was important enough for Australia to commit thousands of troops to the conflict there. Stability on the Peninsula today remains essential to Australia's interests. It is for these reasons, and for humanitarian reasons, that we have been supporting the process of North-South engagement, because we believe it will enhance the prospects for stability in the whole Asia-Pacific region.

Looking to the future

Where do we go from here? I don't for a moment believe that the process of closer North-South dialogue, still in its first stages, will be easy. However, Australia will do its utmost to support the process by building on our efforts to engage the DPRK and start drawing it into the international community.

Government-level contact between our two countries will continue, with the North Korean Foreign Minister proposing to visit Australia in due course, and a possible visit by a trade delegation. We will continue to develop an effective security dialogue with the North, both bilaterally and through the ASEAN Regional Forum. North Korean nuclear and missile programs are, of course, of great concern to Australia and our regional partners, being a large contributor to regional tensions. We will maintain our commitment to KEDO, which we regard as having a vital role to play in reducing the risk of nuclear proliferation on the Peninsula. We will continue to provide training in key areas, such as nuclear safeguards and development economics. We will cooperate in agricultural research. We will continue to raise human rights concerns with the DPRK. And we will continue to provide food aid to alleviate hunger in the North.

All this will be done in close consultation with our key partners in the region - Japan, the US, and of course the ROK itself. The recent developments on the Korean Peninsula have clearly demonstrated that, in spite of a troubled history, results can be achieved when a coordinated strategy is pursued. United States diplomacy, and the continuing US contribution and presence in North-East Asia, have been crucial to the stability of the region over many years. Japan's role in the region, and its extensive support of KEDO and other initiatives designed to reduce tension on the Korean Peninsula, is well recognised.

Given the growing pattern of cooperation between Australia and South Korea, and our support for each other in various initiatives, I believe there is tremendous potential to expand our already strong relationship. We will be examining closely options to do just that. Our political exchange will remain close, building on the strength of the warm relations that our two political leaders share, highlighted by the successful visit of Prime Minister Howard to Korea this year and President Kim's visit to Australia last year.

We are establishing a regular and routine pattern of Ministerial contact. With so many shared interests, it is natural that we meet often - in Korea and Australia, as well as at regional gatherings such as APEC and the ARF. Trade Ministers now meet annually through the forum of the Australia-Korea Ministerial Joint Trade and Economic Commission (MJTEC), the first of these being held in October in Canberra. And I am committed to establishing annual Foreign Minister meetings also, kicking these off next year with a visit to Seoul.

In the area of economic cooperation, Australia and South Korea are launching joint studies that will examine how to capture new and emerging bilateral trade and investment opportunities in our two economies, with a particular focus on "high tech" and "new economy" sectors. These efforts will build on our work on a Mutual Recognition Agreement, an Investment Promotion and Protection Agreement, and a cooperation and coordination agreement in the area of competition policy. There is also the prospect of Australia becoming a long-term supplier of LNG to Korea, fitting well with our deserved reputation as a reliable and competitive provider of the energy needs for Korea's economic growth.

Students and tourism provide opportunities to develop people-to-people links, and we must look at expanding exchanges in this area. But there is an imbalance here. We have hosted some 150,000 Korean tourists this year and over 10,000 students. The numbers in the other direction - Australia to Korea - are too low. With Korea, we have commissioned joint research on visitor flows that should help identify what needs be done to improve these numbers. I should also mention the work of the Australia-Korea Foundation in building cultural, personal and institutional links with the ROK, which is important in this regard.

Conclusion

In the past, I believe, given the interests and views that we share, Australia's relationship with South Korea was somewhat underdeveloped and lacking in profile. Much has been done in the past few years to reinvigorate the relationship, and, as I've outlined, much is planned in the future to ensure that the links between our two countries continue to broaden and strengthen.

I conclude by stressing that our relationship with South Korea now is full of energy. Recent events have led both Australia and South Korea to recognise the important support that each can offer the other as regional partners. We are seeing the relationship mature beyond one of economic partnership - our cooperation now extends in many directions and at many levels.

At the same time, we will continue with gradual engagement of the North, building on the unique and timely contribution that our efforts in this area have made to North-East Asian security to date. Regional stability is well served by a North Korea that is less isolationist and more confident of the benefits of cooperation with the outside world. This will remain a key foreign policy objective for us and for our regional partners.