Australian Commonwealth Coat of Arms

Speech

14 August 2009

for the Griffith Asia Institute at the Gallery of Modern Art, Brisbane

Australia and the Asia-Pacific Century

Thank you, Professor O'Connor, for that introduction.

Thank you also to the Griffith Asia Institute for the invitation to speak here today at Brisbane's Gallery of Modern Art.

The "Perspectives Asia" series has attracted impressive support, which underscores the importance of our deepening links with Asia.

The Asia Pacific Century

It is now widely accepted that global economic, strategic and political influence is inexorably shifting to the Asia-Pacific, to our part of the world, and that, in this century, the Asia-Pacific region will fast become the world's centre of gravity.

The rise of China is a defining element of Asia's increasing influence, but it is not the only or the whole story.

The rise of India, the weight of the ASEAN economies combined, the great individual potential of Indonesia and the enduring economic strengths of Japan and South Korea, must also be acknowledged.

On average, Asia's economic growth has been outpacing other regions for many years. But the ongoing shift in influence is not just about economics or demographics: economic power underpins military modernisation. It contributes to political and strategic weight.

The implications of this historic shift continue to unfold. No one can say with certainty what the new regional order will look like or when it might crystallise.

The United States, which has underwritten stability in the Asia-Pacific for the last half-century, will continue to be the single most powerful and important strategic actor here for the foreseeable future, both in its own right and through its network of alliances and security relationships.

The ongoing engagement of the United States in the Asia Pacific is absolutely essential to the region's interests.

Indeed, Australia's view is that the United States should enhance its engagement in the region. Australia welcomes the initiative shown by the United States Obama Administration to reflect such a greater engagement.

The Secretary of State's recent travels to Japan, Indonesia and the high-profile Strategic and Economic Dialogue with China, recently hosted in Washington underscore, as does the United States recently entering into the Treaty of Amity and Cooperation.

Asia matters not just to Australia but to the world.

Asia is home to the world's two most populous countries, the world's largest holders of foreign exchange reserves, and two of the world's top three economies. Asia includes the world's largest Muslim population. Three of the world's five largest militaries are in Asia.

Trade and investment ties with Asia have underpinned Australia's prosperity.

In 2008 Australian education institutions recorded over 290,000 enrolments by Asian students, creating new job opportunities and supporting Australian growth.

APEC economies now account for nearly 70 per cent of Australia's total trade in goods and services. Our economic links with APEC economies and India have helped Australia weather the storm of the global recession.

One factor which is likely to accelerate the shift to the Asia-Pacific region is the global economic crisis. While the impact across the region has been mixed, overall the region has proven remarkably resilient.

The lessons of the Asian financial crisis a decade ago have been heeded and the region's economic strength has been enhanced. Asian countries and economies collectively are therefore more likely to emerge from the global economic crisis in a stronger position relative to those of other regions.

Regional financial cooperation and integration is likely to accelerate that trend.

This matters to Australia, not just because of the immediate economic importance of our key markets remaining 'open for business' but because of the increasing weight of the region in global decision making.

Significantly, six of the G20 members are from the Asian region. This gives the region an important say in the ambitious program of reform of international financial regulation and governance that is currently underway. The G20 is not purely an economic creature. It represents industrialised powers meeting with the fresh, emerging powerhouses as equals for the first time.

Australia has high ambitions for the G20 and the region's role in it. It should become the political driver of stronger global cooperation and governance, responding to the full range of global challenges that will confront us in the Asia-Pacific century.

Engagement with the Asia-Pacific

When the Government came to office, we identified Australia's engagement with Asia as one of three fundamental pillars of our foreign policy.

Developments since then have served to reinforce Asia's strategic importance to Australia. They have only encouraged Australia to enhance our engagement with the region even further.

Australia brings valuable attributes to our regional engagement.

We are a significant and considerable nation.

Although a country of a population of only 21 million, Australia is in the top 15 economies in the world. In terms of prosperity, based on income per capita, we are in the top 15. Our pool of funds under management is the world's fourth largest. In defence and peacekeeping expenditure, we are in the top dozen.

We are a robust parliamentary democracy. We respect the rule of law and human rights. We are a successful and prosperous economy with a dynamic, diverse and multicultural society.

Our approach to foreign policy is defined by those qualities and our national interests. While our foreign policy priorities are regional, in the modern world our focus, our interests and the reach of our diplomacy are necessarily global.

Engagement with Asia is not a recent invention of Australian foreign policy.

What the Government is effecting today builds on the finest traditions of Labor Governments and Australian foreign policy, extending back to Curtin and Chifley.

Curtin played the fundamental role of turning Australia's focus towards Asia during World War II, understanding the importance of the Asia Pacific and the United States to Australia's strategic future, not just its immediate defence.

In 1949, Chifley inaugurated planning for a comprehensive international aid program for South and Southeast Asia, which came to fruition in 1950 as the Colombo Plan, one of Australia's most influential public and foreign policy achievements.

In 1973, Whitlam recognised China, with a one China policy, a watershed in Australia's diplomatic history at a time when it was not necessarily fashionable to be so focused on China. That one China policy endures on a bipartisan basis to this day.

In 1989, Bob Hawke set APEC in motion and Prime Minister Keating first proposed an annual APEC Leaders' Summit four years later.

The current Government is building on that legacy of pragmatic, innovative, and effective action, geared for outcomes now but with an eye for the strategic future.

We are accomplishing this through intensified bilateral dialogues, bilateral security arrangements, frequent high-level contacts with and through regional institutions, and targeted development assistance as an intergral part of foreign policy.

In 2008-09, Australia's development assistance for the East Asia region will be nearly $1 billion, making us one of the region's major development partners.

Not only does this help discharge our obligation to be a good international citizen, but it makes foreign policy and strategic sense to help build the economic, social and security capacity of our region.

We are also intensifying the negotiation of bilateral and regional Free Trade Agreements with and in the region.

We attach significant importance to the ASEAN-Australia-New Zealand Free Trade Agreement. This is a high quality free trade agreement, the largest free trade agreement Australia has negotiated to date and the most comprehensive ever negotiated by ASEAN.

Its economic and strategic importance has been considerably underappreciated. In some respects it was the most important new regional agreement entered into last year.

Australia is looking forward to the negotiation of a comprehensive and forward looking Trans-Pacific Strategic Economic Partnership (TPP) agreement with Brunei, Chile, New Zealand, Peru, Singapore, the United States and potentially Vietnam, which will further strengthen economic integration and liberalisation in the Asia Pacific region.

Bilateral Relationships

North Asia is an appropriate place to start a discussion about Australian bilateral relationships. Vital, enduring and long term Australian economic, security and strategic interests are concentrated there.

Japan and China are two of the world's three largest economies. Together with South Korea they represent Australia's top three merchandise export markets.

At the same time, North Asia is home to some of the world's largest armed forces and a number of its potential flashpoints.

Our relations with Japan are strong and continue to grow. Japan has been our closest and most consistent partner in East Asia for many years and central to the Government's foreign policy priorities. I've visited Japan five times as Foreign Minister which reflects the breadth and depth of our shared interests.

For over 40 years, Japan has been Australia's largest export market. It was our largest trading partner in 2008. Japanese investment in Australia has continued to grow, notwithstanding the global economic crisis and Japan's domestic economic difficulties. We look forward to enhancing our economic relationship further through the conclusion of a comprehensive Free Trade Agreement.

Australia is committed to strengthening relations with Japan, not only by intensifying high level relations, but by building on our respective Alliances with the United States through the Trilateral Security Dialogue.

We are working to enhance defence and security cooperation in maritime security and combating organised crime. Former foreign ministers of both Australia and Japan co-chair the International Commission on Nuclear Non-proliferation and Disarmament.

Australia has been successfully building a balanced and productive relationship with China, commencing with our early recognition and an early focus on trade links, particularly minerals and petroleum resources from my own state of Western Australia.

The Government is strongly committed to strengthening it even further.

China was Australia's second largest trading partner in 2008. In recent times, it has become an increasingly important foreign investor in Australia. Since November 2007, Australia has approved Chinese investments worth more than A$34 billion, at a rate of more than one application per week. The Government remains committed to a comprehensive and mutually beneficial FTA with China to facilitate even closer economic integration in the future, although that will require hard work and patience.

Our bilateral relationship is more than just economic. It is comprehensive, covering all aspects of a bilateral relationship. Australia and China conducted its first Strategic Dialogue when Foreign Minister Yang visited Canberra in March 2008.

During my visit to Beijing earlier this year, Foreign Minister Yang and I conducted the second Australia-China Strategic Dialogue.

Australia's long-term commitment to the China relationship is reflected in the Government's investment in a striking exhibition and pavilion for the World Expo Shanghai 2010.

For over six months, Australia's pavilion will provide a unique opportunity for millions of Chinese visitors to experience authentic sights, sounds and flavours of Australia.

Given our different socio-political systems, differences will inevitably arise from time to time. Stern Hu and Rebiya Kadeer's visit to Australia are current cases in point.

Both countries have an interest in successfully managing these issues and differences, and focusing on the much wider range of issues where our interests coincide.

Australia is expanding a long standing close relationship, forged in the aftermath of the Korean War, with South Korea.

Australia and South Korea are firm friends and close regional partners. 2011 will see a Year of Friendship between Australia and South Korea, to mark the 50th anniversary of diplomatic relations.

South Korea is Australia's third-largest export market and our sixth-largest trading partner. We have commenced negotiations for a comprehensive bilateral FTA.

We are working together to advance a broad agenda, including in the World Trade Organisation and the G20.

The relationship, though, still has great untapped potential.

In March, Prime Minister Rudd and South Korean President Lee issued the joint statement for closer cooperation in areas such as border security, disarmament, non-proliferation, disaster response and peacekeeping.

The bilateral relationship is underpinned by growing people-to-people links. South Korea is Australia's second largest source of working holiday makers and our third largest source of overseas students.

A key challenge in the North Asia region is North Korea. Australia is very concerned about North Korea's nuclear weapons and ballistic missile programs, which threaten stability on the Korean Peninsula and in North Asia. It poses a major challenge to global counter-proliferation efforts.

Australia supports international efforts to achieve a peaceful resolution of Korean peninsula security issues, especially through the Six Party Talks. In addition to implementing UN sanctions against North Korea, including through the most recent UNSC Resolution 1874, Australia has also put in place autonomous sanctions. These include a visa ban on all North Korean nationals and a ban on North Korean-flagged ships entering Australian ports.

Although our bilateral aid program has been suspended, Australia continues to provide emergency humanitarian aid to the North through UN agencies and the International Committee of the Red Cross.

South Asia is increasingly important for Australia's strategic and economic interests.

Australia is committed to taking its relationship with India to the front rank of our bilateral partnerships.

Today, the world is beginning to see India, the largest parliamentary democracy, assume the global influence to which its economic size and strength, its strategic weight and its rich history entitle it.

The Government is determined to seize upon an historic opportunity to take our relationship with India to a new economic and strategic level. This momentum has occurred despite, not because of, any concerted Australian governmental effort over the past thirty years or so.

Australia and India are bound ever closer by a truly remarkable growth in trade. Trade with India has grown faster than any of our other top markets over the past five years. In 2007 two-way trade in goods was nearly $11 billion, with India our fifth-biggest export market. Resources, which form the bulk of Australia's merchandise exports, are helping to fuel India's growth.

Australia and India are looking to cement our excellent trade relations through a possible FTA.

But there is certainly much more than an economic complementarity between our two countries. There are ties of language, parliamentary democracy and respect for the rule of law, the law of contract and intellectual property and of, course, sporting traditions.

We have profound values and interests in common and we cooperate both regionally and multilaterally to advance those common interests, whether that is climate change, energy, food security, nuclear disarmament and non-proliferation or counter-terrorism.

The Australia-India Strategic Research Fund is Australia's largest bilateral science fund. It underwrites cooperation in areas such as climate change, water conservation and information technology security, where Australia and India have a great deal to offer each other in terms of expertise and innovation.

In addition our defence cooperation with India is growing rapidly, encompassing regular senior-level talks.

I will again travel to India in October and the Prime Minister is planning to travel there by the end of the year.

Regional Groupings

The importance of fostering regional cooperation both in the economic and security spheres is a key priority for the Government.

The Asia-Pacific region, by harnessing its collective strategic and economic weight through enhanced cooperation, can exert considerable influence in international fora.

This is one important area of different emphasis between the policies of this Government and the past.

When the Government came to office we did inherit some strong relations with the countries of Asia, particularly Indonesia.

The primary focus of the previous Government's engagement with the region was building bilateral links. Bilateral ties are obviously important but increasingly we need to ensure that there is effective regional cooperation, not only to enhance the region's own security and prosperity, but to enable the region to play its rightful role in international groupings to ensure that regional interests and perspectives are taken into account.

The Government is devoting considerable attention to the critical question of ensuring that the region's architecture can effectively enable its leaders to discuss the key strategic and economic challenges.

That is the thinking behind the Asia Pacific community initiative, which simply asks the question: what sort of regional architecture do we need to have by the year 2020?

Our support for ensuring effective regional engagement in key international groupings also lies behind our strong support for Japan and India's bids to become permanent members of the UN Security Council.

While ASEAN, the ASEAN Regional Forum and the East Asia Summit remain of central importance to Australia's involvement in existing regional architecture, there are other key regional groupings: not only APEC, but SAARC, the South Asian Association for Regional Cooperation, and the Asia Europe Meeting process, ASEM.

These groupings individually make a unique contribution to regional cooperation. Together, they work in complementary ways to reinforce regional stability and prosperity.

ASEAN, the region's premier regional institution, has been central to Australia's strategic approach to the region. In 1973 Australia became ASEAN's first dialogue partner. Since then Australia's relationship with ASEAN has gone from strength to strength.

Last month I took part in the ASEAN-Australia Post Ministerial Conference and the 16th ASEAN Regional Forum, in Phuket, Thailand.

The ASEAN Regional Forum, the ARF, is the region's principal multilateral security discussion and action forum.

At last month's ARF meeting, we discussed the key security issues for the region, including Afghanistan, Burma, Iran, and North Korea. We also discussed cooperation on counter-terrorism in the wake of the terrorist attacks in Jakarta.

Australia is a founding member of the East Asia Summit. The fourth East Asia Summit will be held in Thailand in October.

The 16 EAS members represent almost half the world's population and account for 30 per cent of global GDP. Almost 60 per cent of Australia's goods and services trade is with EAS members.

The EAS has a broad mandate for cooperation in such areas as finance, climate change, education, environment, energy security and regional security.

Given the EAS is the most recent addition to regional architecture, Australia is strongly committed to working with EAS partners to develop a substantive and comprehensive agenda. A key focus for Australia in the EAS has been greater regional financial cooperation and integration.

The Government is committed to enhancing Australia's engagement in South Asia through participation in the South Asian Association for Regional Cooperation list members. Australia next year will participate for the first time as an observer at the SAARC Summit in Bhutan.

The Asia-Europe Meeting process, or ASEM, brings together 16 Asian nations and the ASEAN Secretariat, along with 27 European Union nations and the European Commission.

Australia's absence from this forum has been for many years an historical anomaly. In May of this year ASEM's foreign ministers welcomed Australia's application to join ASEM. Australia will participate in ASEM for the first occasion at the ASEM 8 Leaders' Summit in Brussels next year.

That we have been invited to join ASEM reflects both the increasing strength of Australia's engagement with Asian countries and growing momentum in our relationships with Europe.

APEC is the pre-eminent regional forum for Australia's economic engagement with Asia and the Pacific and a driving force for open trade and investment, structural reform and human security in our region.

APEC's overarching agenda of regional economic integration is more important than ever. By connecting our economies more closely, we can help strengthen each other against external economic shocks, and position ourselves for a sustainable recovery once the global economy rebounds.

This year's APEC host, Singapore, is doing a very good job advancing APEC's work on trade and investment liberalisation and facilitation. Australia has been working closely with Singapore to develop new work programs to facilitate trade in services and reduce logistical impediments to trade in goods.

Asia Pacific Community

As valuable as all of the existing organisations and regional groupings I've mentioned continue to be, we need to closely examine the regional architecture and consider how it might best be developed to serve the region's interests into the first quarter of this century and beyond.

None of the groupings in the current architecture is comprehensive in membership, scope or purpose. India is not a part of APEC. The United States is not part of the EAS.

More importantly, there is as yet no leaders-level meeting where all of the key regional leaders can gather to discuss the full array of both trade and investment issues as well as political, security and strategic issues confronting the region.

An Asia-Pacific community would bring together all major regional countries in a single forum at Leaders' level with a view to enhancing cooperation on economic, political, security and strategic issues.

Such a community could encourage further economic and financial integration. It could foster a culture of deeper collaboration and transparency in security matters. It could drive cooperation on the range of transnational challenges.

This Asia-Pacific community would be fully consistent with Australia's commitment of comprehensive engagement with the Asia-Pacific region. It is not about supplanting or diminishing the roles of existing regional groupings, especially the centrality of ASEAN. This community concept might emerge from the existing architecture, just as the ARF and the EAS have emerged from ASEAN itself.

To take the Asia Pacific community discussions forward, Australia will convene a one-and-a-half track conference by the end of the year.

In addition to enhanced United States engagement in our region, the United States and its bilaterial relationships of course are central and crucial to our region's future.

The United States bilateral relationship with China will be perhaps the most important determinative relationship in this first half of the century. That said, we cannot ignore the United States relationship with India or India's relationship with China.

Conclusion

Australia brings great assets and strengths to the challenges and opportunities of the Asia-Pacific century, along with real commitment and energy.

Australian security and prosperity is increasingly defined by what is happening in Asia.

In recognition of that fact, the Australian Government, building on the finest traditions of Australian foreign policy, has been actively enhancing, at every level, our engagement with the region.

We have been doing so by strengthening partnerships with our neighbours, both bilaterally and regionally, by playing an active role in existing regional groupings, and by working to shape a new regional architecture that will meet the needs of our region and the world well into the future.

Many of you, I know, are personally committed to advancing Australia's relations with our region. I encourage Griffith University's Asia Institute and Brisbane's Gallery of Modern Art to continue their important contribution to achieving a successful role for Australia in the Asia-Pacific Century.

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