Introduction

Thank you President Ko, ladies and gentlemen.

It is a pleasure to be on my third visit to Seoul. Australia's relationship with the Republic of Korea is one of our most important bilateral relationships. South Korea is an important economic and political partner for Australia. We work closely together on regional issues, as reflected in South Korea's valuable support for the INTERFET mission in East Timor. But it is a relationship that I believe clearly demonstrates Australia's approach to building relationships with countries in our region. We are not just fairweather friends, we are all-weather friends. Australia was pleased to help kick-start South Korea's recovery in the wake of the 1997 financial crisis through its contribution to the IMF support package - we were one of only two countries to contribute to all 3 IMF packages in the region - and through export credit assistance. More recently, we have demonstrated our continuing interest in the prosperity and stability of the region through our resumption of diplomatic ties with North Korea.

Our bilateral relationship

The importance of our bilateral relationship has been impressed upon me yet again during this visit. I have had discussions with a number of distinguished Korean leaders, including President Kim Dae-jung. We have shared views on a range of issues of common interest and concern. This has revealed once again the breadth and depth of our relationship - and its potential for further development. But we are not solely focussed on further strengthening and deepening our bilateral relations - though that is important; we are seeking also to work together to advance security and prosperity in our region.

Our relationship is an enduring one. The first people-to-people links between us occurred in the 1880s, with the first arrival in Korea of Australian missionaries. Official links were forged in 1947, when Australia became a member of the UN Temporary Commission on Korea - going on to become the only country to serve on all three UN Commissions dealing with Korean issues - and were strengthened during the Korean War, when Australia committed 17 000 troops to the defence of South Korea.

In the post-war period, Australia played an important role in South Korea's economic development. For example, POSCO - that giant of Korean industry - was largely shaped by Australian expertise and raw materials. And the Australia-South Korea relationship has developed strongly since we co-partnered the APEC initiative in the late 1980s. Indeed, Australia plays a full and active role bilaterally with Korea and other countries in the region, and also in a range of regional forums such as APEC and the ARF.

Our economic relationship

Our bilateral economic relationship is highly important to both of us. We have a very strong trading relationship that has developed over the years.

While Australia's exports to South Korea will remain dominated by commodities for the foreseeable future, trade relations are expanding through growing two-way investment and the export of Australian manufactured products - such as automotive parts and financial services, including banking and management advice. Australian investment in Korea remains low but, with improvements in the regulatory environment here, increasing interest from Australian companies is evident. Korean investors in Australia, led by Korea Zinc's US$580 million investment in Queensland, are increasingly looking to secure access to Australian raw materials and expertise.

We believe that trade and investment ties can be made even more vibrant. Last year, both Governments launched analytical studies, in Australia and in Korea, aimed at strengthening the economic partnership. They will be completed before the next meeting of the bilateral Ministerial Joint Trade and Economic Commission later this year. We are focussed in particular on future business opportunities in areas such as services and information communications and technology. ICT is reshaping the Australian economy, with Australia's spending on IT - around 3 per cent of gross domestic product - the second highest in the world, setting Australia among world leaders in computer, internet and mobile phone usage.

Regional stability and the Korean Peninsula

So the links between Australia and Korea are close and significant. Importantly, we are both close partners committed to the stability of the Asia Pacific region. Not surprisingly, one of the issues which concerns us both is North Korea.

In May last year, Australia resumed diplomatic relations with North Korea, after an interruption to relations of some 25 years. We were one of the first nations to give tangible support to President Kim's 'sunshine policy'.

Our reason for resuming formal ties was motivated by my strong belief that dialogue and engagement is the most productive way to achieve progress in securing peace and prosperity on the Korean Peninsula and for our region as a whole.

Our resumption of formal ties with the DPRK does not mean that we accept or condone the policies or practices of the North. Indeed, the ideology of the North and the behaviour of its government, at home and abroad, are abhorrent to many of the values cherished by Australians and the people of South Korea. Nonetheless, we must deal with the reality of the situation on the Korean Peninsula and I believe our decision was a vivid expression of Australia's willingness to play a thoughtful and constructive role in the affairs of our region.

I have used the meetings with the members of the new administration in Washington to brief them on Australia's approach to the Korean Peninsula, and to urge the United States to continue its policy of engagement towards the DPRK. The US is yet to finalise its policy review in this area, but I am hopeful the Bush Administration will continue to build on the momentum that started under the previous administration.

In our dialogue with North Korea, we strongly support President Kim's efforts to achieve a more secure dynamic on the Korean Peninsula, and register with the North the need to address issues of international concern. We are planning to host a visit to Australia by the North Korean Foreign Minister Paek Nam-sun, following my first visit to Pyongyang last November.

Australia looks forward as well to a second historic inter-Korean summit, which would play an important role in enhancing peace and prosperity on the Korean Peninsula. We believe that by returning President Kim's visit to Pyongyang, Chairman Kim Jong Il would confirm the North's commitment to confidence-building measures and peaceful coexistence, and thus to working with South Korea towards security and prosperity for the Korean people and their global partners.

North Korean nuclear and missile programs threaten regional security and are therefore of great concern. As an active contributor to global efforts to prevent the proliferation of weapons of mass destruction, we support efforts to achieve comprehensive and verifiable cuts in the DPRK missile program.

Australia's role in supporting regional peace and prosperity is reflected in our strong and steadfast support for the Korean Peninsula Energy Development Organisation - KEDO - to which we have contributed $18 million to KEDO to date, making us the largest contributor after the four KEDO Executive Board members. Australia will make further contributions to KEDO because of its vital role in reducing the risk of nuclear proliferation on the Peninsula. In due course, we hope that Australian companies will have the opportunity to contribute their expertise at the Sinpo site.

Australia is hosting a nuclear safeguards training course later this year, inviting North Korea officials to join regional counterparts in developing their expertise in the management and accounting of nuclear materials, to assist North Korea to meet its NPT and IAEA obligations.

Our actions towards the North are not just focused on strategic relations between countries of the region. We are also deeply concerned by the humanitarian situation and the terrible suffering that has been experienced by people in the North as a result of natural disaster and famine. Our food aid and humanitarian contributions, designed to alleviate the difficulties faced by the North Korean people, have been regular and targeted to those most in need. I saw for myself the impact our assistance is having when I visited Pyongyang last year. Australia has contributed $24 million in humanitarian aid to North Korea since 1996/97. I am committed to making further substantial contributions to the international humanitarian effort.

We are providing training in market economics for North Koreans at the Australian National University. And the Australian Centre for International Agricultural Research is training 20 North Korean senior administrators and research scientists in soil and pest management, crop production and biotechnology related to rice production. I am keen to see this training continue and, perhaps, expand, helping North Korea to deepen its local skills base and further enhance its ability to engage with other nations.

We are of course under no illusions about the difficulties and challenges which lie ahead in engaging the DPRK. Australia's resumption of ties with North Korea won't in itself lead to a resolution of the problem. Indeed, our relationship is still at a very early stage of development. But it does indicate our strong desire to work with our friends and neighbours in striving for lasting solutions to regional concerns.

We will continue to work closely with South Korea in seeking to realise the aspirations of the Korean people through constructive engagement with North Korea. This includes helping to facilitate their active participation in security dialogue, such as in the ARF, and in economic forums, including the ADB and APEC.

Conclusion

I hail from a great sporting nation, so it is appropriate for me to conclude with a couple of sporting references. I want to tell you that Australians remember the wonderful 1988 Seoul Olympics, which were a remarkable milestone in South Korea's development as a vibrant and democratic nation.

Similarly, we are very proud of the 2000 Sydney Olympics, which showcased our talent and achievements. I'm sure all Koreans were touched by the tremendous acclamation Australians gave the joint entry into the Olympic Stadium, under one flag, of the North and South Korean teams at the Opening Ceremony - watched by some 4 billion people around the world. That was a special moment in our relationship, and will be long remembered.

This year, Australia celebrates 100 years of Federation. We are a nation born through the peaceful joining of six states, not through war or bloodshed. We hope that the two Koreas will achieve an early start to a process of cooperation and coexistence that will gradually transform the Korean Peninsula into one economically strong and politically democratic nation. My message to you today is that we in Australia will continue to work with you towards that goal, as a strong, reliable and allweather partner of South Korea.