Australia's Engagement with Asia

Introduction

It's a great pleasure to be here in Sydney and to be speaking at this marvellous Gallery.

I would like to speak today about Australia's engagement with Asia and to start with a historical perspective. I think that is appropriate, given the venue. This gallery has a magnificent collection of Asian art, both contemporary and traditional, which has expanded greatly over the years under Edmund Capon's guidance.

And just as Edmund and his staff have shown a great enthusiasm for Asia, for its art and its culture, over nearly three decades, the importance of Asia has been an enduring feature of Australian foreign policy. It is a feature that dates back to the Menzies Government. It has survived, with largely bipartisan support, through the changes of government since those times and it remains the case today.

Our relations with Asia have been building over many years, since the earliest recognition that our strategic and economic future was inexorably linked with developments in the region. Today, I think they are in better shape than they have ever been. No one should take exclusive credit for the shape of relations today; there have been many architects of the structures that are in place and many more builders - both inside Government and within the private sector, the academic community and in the arts, media and sciences.

Australia and Asia - History

It is always hard to put a date on a shift in history, but somewhere in the 1920s it became apparent to Australian policymakers that Asia would be important to Australia and we had better come to understand it. In 1928, Richard Casey, then Liaison Officer in London and later Foreign Minister, commented to Prime Minister Bruce that Australia's information regarding its Asian neighbours was - and I quote -'vague, muddled and defective'. Casey said 'we are in a deplorable state of ignorance about our back door'.

As Australia began to develop an independent foreign policy in the late 1930s and 1940s, Asia figured prominently. Three of the first five overseas trade commissioners were sent to Asia in the mid 1930s - to Japan, China and pre-independence Indonesia. And Australia's first four diplomatic missions in the early 1940s were Washington, Ottawa, Tokyo and Chungking. After World War II, Australia supported democratic development in Japan and independence for Southeast Asian nations.

It was in the 1950s that the Australian policy towards Asia gained greater clarity. This was reflected in the major developments of those times such as our contribution to the Colombo Plan and the signing of the 1957 Australia-Japan Trade Agreement. Up to the 1950s, our exports to Asia were less than 20 per cent of the total, with 60 per cent going to Britain and Europe. By the late 1970s, around half our exports went to Asia. And Japan had become our largest export destination.

Since then, we've had - some would say suffered - many a debate about Australia's place in Asia. People asked whether we should consider ourselves to be part of Asia and whether Asian countries would accept Australia as one of their number. I have always regarded this as an empty argument and whatever the geographic definitions, engagement with Asia has been an enduring priority of Australian Governments for generations.

This debate misses the point and is just a little too self-doubting and introspective to bother with. The simple fact is that Australia is Australia. We are a continent, an island nation, a distinct geographic, cultural and political entity and our neighbourhood is South East Asia and the Pacific.

In the 1990s we played a constructive part in Asia's development. We played an important role in the settlement of the Cambodian conflict. Along with Japan, we were a key country in helping Asia respond to the financial crisis through three IMF packages. We entered this century well placed in our relations with Asia, with a strong economy of our own, and an increasingly Asia-literate population.

This Government did not, as Paul Keating argued in 2000 - and I quote - 'interrupt the drumbeat of our engagement with Asia'. In fact, the past ten years have been enormously productive. If anything, I think we've quickened the pace of our engagement, particularly in the past five years after the effects of the Asian Financial Crisis passed. We are now more enmeshed with the region than ever. This is because foreign relations are always based on mutual interest, not on intent or rhetoric. And our case to be an active player in the region is very strong.

So, let me take you through how I see our relations with Asia today.

Trade and Economic Relations

Our trade and economic relations with Asia are built on the success of our own domestic economy. To export, you have to have something to sell. To be attractive as a trading partner you have to have competitive products and services. You also need a healthy domestic demand to be an attractive market for Asian exports. And to integrate with Asian economies you have to have world class businesses which are able to invest and grow. The success of our trade relations was reflected in the growth in exports of 17 per cent last financial year. And I would note here that it is not just resources exports that are growing. They grew at 23 per cent, but our manufactured exports also increased by 8 per cent last year. The strategy underpinning this growth has been threefold

- first, removing impediments to business in the domestic economy

- second, investing heavily to expand export infrastructure

- third, pursuing bilateral, regional and multilateral trade initiatives to expand market opportunities for exporters.

On this third point, we have an ambitious agenda. We already have FTAs in place with Thailand and Singapore. We're now negotiating agreements with China, ASEAN (along with New Zealand), and Malaysia. We're hoping to enter negotiations with Japan next year. And we are advocating with Korea for a negotiation. If all of these are achieved, we would have agreements in place with seven of our top ten export destinations.

And while we all know that FTAs are an imperfect substitute for multilateral liberalisation, it is a positive trend in the region that the main economies are negotiating agreements to liberalise trade and pursue economic integration. What we see unfolding is a web of agreements that could extend from India to New Zealand and as far north as China.

Regional Architecture

What is striking in the emerging economic and strategic architecture of the region is that Australia is at the table. Far from being left out, we are included in the most significant regional bodies. We retain an influential presence in APEC, which we host next year. Very significantly we were there at the birth of the East Asian Summit. This is a meeting which brings together ASEAN, China, Japan, South Korea, India and Australia and New Zealand. It's too early to tell what the EAS will become, but our presence gives us the chance to argue our longstanding preference for open and inclusive forms of regionalism. One point we make from time-to-time is that, when you look at trade in Asia, you find that trade across the Pacific is greater that intra-regional trade - Asia sells more to Europe and the United States than it sells internally. So it is not in Asia's interests to have an economic architecture that is inward looking. That is also why APEC is such a useful vehicle for facilitating trade and investment, because it includes the United States.

Security Relations

I've covered people-to-people links and economic links. Let me now turn briefly to security links with Asia before I conclude my remarks.

Let me touch on two security topics here: the US alliance and terrorism. One relates to our strategic standing in the world and in the region. The other relates to the day-to-day security of our interests and our people.

On the US alliance, I make the point that our standing in the region is enhanced by our alliance with the United States. It gives Australia greater strategic weight. And it's true that the United States more and more seeks Australia's view on regional affairs. They recognise that we know the region well and can help to interpret events here. It is very much in our interests to continually encourage continued American engagement in the region. The US presence and involvement underpins strategic stability and is enormously beneficial in the fight against terrorism.

On counter-terrorism, we have made very good progress in recent years. We have Memoranda of Understanding on Counter Terrorism with 12 countries from India, across South East Asia to Fiji. This is not the stuff of headlines, but rather a function of quiet, behind the scenes cooperation between police, intelligence and border protection agencies. It is built on mutual interest and the sharing of expertise and information. And it is built around strong relationships between professionals. It is my role to establish the political context for this cooperation - to give agencies the government-to-government framework to work together.

People-to-people links

Of course, foreign relations are not driven solely by Government. In many areas, the role of Government is to play a catalytic or facilitating role.

Where Government can play a constructive role is in stimulating people-to-people links and mutual understanding. One way we do this is through our bilateral foundations. Reflecting the earlier trends in our relations with Asia, the first two of these to be established were the Australia Japan Foundation in 1976 and the Australia-China Council in 1978. The Hawke and Keating Governments added the Australia-Indonesia Institute (1989), the Australia-India Council (1992) and the Australia-Korea Foundation (1992). During my time, we have established the Australia-Thailand Institute and the Australia-Malaysia Institute last year.

These bodies play an important catalytic role in stimulating exchange in a range of fields. The non-government sector plays a similar role through organisations such as Asialink and the Asia Society in Melbourne. Therefore, between government, the non-government sector and the corporate sector, I think you'll agree we have an impressive web of funding arrangements in place to generate contact between Australia and Asia in the arts, in education, in media and among young people.

This web is given further strength by the approximately 130,000 Australians living in Asia, the 1.8 million Australians who travel through Asia each year for work and holidays and the 2.2 million Asian visitors to Australia each year. We have around 270,000 student enrolments from the region each year and these students return home with a lasting connection to this country.

Australia's entry into the Asian confederation for soccer is another step in our relations with the region. It means that our national teams - men's, women's and juniors - will get regular high-level competition in the region, starting with the Asian Cup next year. It means our top clubs will play their counterparts in Asia. And the television audiences in the region will get an exposure to Australian athletes in a way that simply isn't possible from our traditional football codes. And it's my hope that Australia could one day host the Football World Cup on behalf of Asia.

If there was any doubt about Australia's and Australians' affection and respect for Asia, it was dispelled by the tremendous response to the Indian Ocean Tsunami. In addition to the large Government contributions to the relief effort, including through the defence forces and AusAID, individual Australians gave donations worth more than $300 million through NGOs

Conclusion

I would like to end now with an observation about the present and the future priorities. One crucial area that I think we could develop further is our understanding of Islam in Asia. This is region with 200 million Muslims, including majorities in Indonesia, Malaysia, Pakistan and Bangladesh and significant sized minorities in Thailand, the Philippines and Burma.

Clearly, if we are to create understandings between cultures and societies, we need to have a clear understanding of Islam in Asia. For us, Southeast Asia is particularly important. And we want to be able to support and work with the majority of Muslims in the region who believe in the same things that we do - justice, peace and development.

For these reasons, I'm pleased with the work we have done recently on understanding Islam and contributing to regional interfaith dialogue.

- We have co-hosted two interfaith dialogues in the region

- Through the cultural foundations we have sponsored exchanges of Indonesian, Malaysian and Thai Muslims for visits to Australia to look at how Australian Muslims reconcile their faith with their place in a secular society

- We've sponsored an important publication called Voices of Islam in Southeast Asia - A Contemporary Sourcebook which I commend to you. It puts side by side the views of the widest possible spectrum of Asia's Muslims.

- Through the Australia-Malaysia Institute we have sponsored a fascinating exhibition of Islamic Art called Crescent Moon: Islamic Art and Civilisation in Southeast Asia.

So, we've made a start on this important project. As I mentioned earlier, this is not just a project for Government, but one that the business and artistic communities can make a strong contribution.

We must remind ourselves that understanding and tolerance are the enemies of the terrorists. The extremists want to subvert our dialogue with moderates - they aim to destroy the moderate, democratic and pluralistic administrations in the region. To that end they would seek to undermine our engagement in the region - witness the Bali bombings and the attack on our embassy in Jakarta.

In that way our continued engagement in Asia is also fundamentally important in the battle against terrorism. It supports the economies of moderate administrations, it builds up links and understanding between cultures and it spreads the quality that the terrorists fear most - tolerance.

Thank you.

ENDS