Australia and the Asia-Pacific Century
Paper presented to the South Australian Branch of the Australian Institute of International Affairs
12 April 2010
Thank you for your introduction.
It is my great pleasure to be with you today in Adelaide.
I thank Professor Felix Patrikeeff, President of the South Australian Branch of the Australian Institute of International Affairs, and members of the Executive for the invitation to speak today.
The Australian Institute of International Affairs has a long and distinguished record of encouraging informed debate about foreign policy.
The Asia Pacific Century
Ladies and gentlemen. This is the century of the Asia-Pacific.
Economic, political, military and strategic influence is moving to the Asia-Pacific, to our part of the world.
In this century, the Asia-Pacific will become the world's centre of gravity.
The rise of China is a defining element of Asia's growing influence, but it is not the only or whole story.
Everyone sees the rise of China but the rise of India is still underappreciated, as is the rise 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, our region's economic growth has been outpacing other regions for many years. APEC's 21 member economies represent approximately half the world's GDP and trade.
The ongoing shift in influence is, however, not just about economics or demographics.
Economic power underpins military modernisation. It contributes to political and strategic weight.
The Asia-Pacific is home to the world's five largest militaries - the United States, Russia, China, India, and North Korea.
The implications of this historic shift continue to unfold. No one can say with certainty what the new international or regional order will look like or when it might crystallise.
Some people seem implicitly to assume that the economic and strategic influence of the United States, the world's largest economy and superpower, will somehow be eclipsed overnight.
The United States, which has underwritten stability in the Asia- Pacific for the past half-century, will continue to be the single most powerful and important strategic actor in the region for the foreseeable future, both in its own right and through its network of alliances and security relationships.
The Asia-Pacific region has prospered because of the foundations laid down by this stability.
Australia believes the ongoing engagement of the United States in the Asia Pacific is absolutely essential to our region's interests.
The relative resilience of the region amid the global economic crisis has also brought home to others that our region is and will be crucial to global economic stability and growth.
This was one of the factors behind the emergence this year of the G20 as the premier forum for global economic cooperation.
Prior to the financial crisis, only the United States, Canada and Japan, of the Asia-Pacific countries, were members of the principal global economic institution, the G7 industrialised economies.
Ten countries of the Asia-Pacific region are in the G20: Australia, Canada, China, India, Indonesia, Japan, Mexico, Russia, South Korea, and the United States of America.
Australia has high ambitions for the G20 and the Asia-Pacific region's influence in it.
It can become a political driver of stronger global cooperation and governance, responding to the range of global challenges that will confront us in this the Asia-Pacific century.
Bilateral relationships
Vital, enduring and long term Australian economic, security and strategic interests are concentrated in North Asia.
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. For more than 40 years, Japan has been Australia's largest export market.
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-chaired the International Commission on Nuclear Non-proliferation and Disarmament, which reported recently.
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. The Government remains committed to a comprehensive and mutually beneficial Free Trade Agreement with China.
Our bilateral relationship is more than just economic. It is comprehensive, covering all aspects of a bilateral relationship. During my visit to Beijing last year, Foreign Minister Yang and I conducted the second Australia-China Strategic Dialogue.
Given our different socio-political systems, differences will inevitably arise from time to time.
The Stern Hu case is one of these.
The Australian Government said from the outset that we respect China's legal and judicial sovereignty.
We do, however, regret the decision by the court to try the commercial secrets charge behind closed doors. We consider this a missed opportunity on the part of China to demonstrate a commitment to transparency.
However, we know that both countries have an interest in successfully managing these issues and inevitable differences, and focusing on the much broader 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. 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 2009, 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.
India has become an important player on the major global issues of our time, not least climate change and the response to the global financial crisis.
The Government has seized upon this 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.
Recognising the implications of India's rise for Australia's national interests, the Government has taken the overdue step of making India a policy priority in Australia's foreign relations.
We are doing this by encouraging high-level dialogue and engagement. There have been twelve Indian ministerial visits to Australia since 2008. On Tuesday last week I met Indian Minister for Human Resources Sibal in Perth.
Eleven Australian ministerial visits to India took place over the same period, as well as Prime Minister Rudd's visit.
In November 2009, Prime Ministers Rudd and Singh agreed to elevate the relationship to a "strategic partnership" and concluded a Joint Declaration on Security Cooperation. Prime Minister Rudd also announced a substantial increase in Australian diplomatic resources devoted to India, including new positions in New Delhi, Mumbai and Chennai.
I have made three visits to India, most recently in March.
Fast-growing trade and investment links are key drivers of the Australia-India relationship.
Within a few years, India is likely to become Australia's third largest export market behind China and Japan.
In 2008-09, India was Australia's fourth-largest merchandise export market and seventh largest merchandise trading partner.
Two-way trade - including goods and services - was nearly $A22 billion. That was a 55 per cent jump on the previous year, making India our fastest growing major trading partner.
Australia is a key supplier of the resources India needs to fuel its economic growth and we are well positioned to meet India's energy demand into the future. This was demonstrated by the conclusion of the $US20 billion deal between Exxonmobil and India's Petronet to supply Australian LNG to India from the Gorgon Project in Western Australia.
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.
Our relationship with India has faced a recent challenge of great concern to Australians and Indians alike - the contemptible attacks on Indian students and others of Indian origin in Australia.
Australia is a major destination for Indian students studying abroad. There were over 120,000 Indian student enrolments in Australia in 2009.
These attacks are inexcusable. And Australia is taking this matter very seriously.
We accept and understand that it has considerably damaged Australia's reputation in India and among the Indian people.
When we face these challenges, we address them in a frank and honest way, but in a way which does not disturb the ongoing nature of the relationship with India and our strategic partnership.
We do so because Australia and India's broad-based relationship is grounded in common interests, shared values and democratic traditions.
We are also working closely with Sri Lanka as it strives to meet its political and humanitarian challenges and to ‘win the peace' after decades of military conflict.
We have responded generously to the humanitarian challenges facing Sri Lanka.
We are committed to working with Sri Lanka to build a peaceful and prosperous future for all Sri Lankans.
Closest to home, Australia's relationship with Indonesia forms a vital part of Australia's international engagement. Indonesia is a key bilateral partner, an important player in our region and a driving force behind ASEAN and the East Asia Summit.
For Australia, Indonesia is a major partner for our future in the region and in global terms.
Leveraging our strong bilateral ties, Indonesia and Australia are working together to address regional and global challenges including to address climate change. Our partnership is a strategic asset and we are committed to increasing our cooperation in regional and global forums such as the G20 to advance our common interests.
During last month's visit to Australia by President Yudhoyono we upgraded our comprehensive partnership to allow us to better tackle the challenges and opportunities of the 21st century. Our political leaders will now meet annually in Australia or Indonesia and we will institute an annual meeting of Foreign and Defence Ministers as well as a high-level dialogue of business, political and community figures.
Regional Groupings
The importance of fostering regional cooperation both in the economic and security spheres is a key priority for Australia.
The Asia-Pacific region, by harnessing its collective strategic and economic weight through enhanced cooperation, can exert considerable influence internationally.
Australia 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 Australia's Asia Pacific community concept, 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 of course 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.
While ASEAN continues to evolve and has set itself ambitious new goals under the recently adopted ASEAN Charter, it is important to recognise just how successful ASEAN has been in advancing the goals set out at its establishment.
ASEAN is an outstanding example of the notion of interdependence, that the destiny of a nation is shaped by the nations around it.
ASEAN shows us that by building a strong community of nations, all of its members reap greater rewards than they could by working alone.
Annually I take part in the ASEAN-Australia Post Ministerial Conference and ASEAN Regional Forum.
The ASEAN Regional Forum, the ARF, is the region's principal multilateral security discussion and action forum.
At last year'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 (EAS). The fourth East Asia Summit was held in Thailand in October last year.
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.
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. In April this year Australia will participate for the first time as an observer at the SAARC Summit in Bhutan.
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.
We also need to think about regional architecture in relation to the Indian Ocean.
We need to ensure that we look west, as well as east.
The Indian Ocean region is of critical strategic importance to Australia and this is substantially underappreciated. The security of its waters goes to the heart of Australia's national interests.
The Gulf Cooperation Council is an important regional body and we want to strengthen further our relations with the GCC.
The Indian Ocean Rim Association for Regional Cooperation, or IOR-ARC, is the region's largest grouping. Its interests are as diverse as its membership, and there are many issues IOR-ARC can work collaboratively on, including fisheries management, disaster management, education, tourism and agriculture.
We have made a good start but there is a lot more we can do to step up our engagement with our neighbours to the west on critical strategic issues.
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.
The Australian Government does not believe the region needs an additional institution or a further leaders' meeting.
Instead, as the Prime Minister and I said at a conference on the Asia Pacific community concept in December 2009, regional countries need to discuss how to develop and evolve new architecture from our existing regional institutions.
Such renewed regional architecture would have ASEAN at its centre and would bring together all major regional countries in a single forum at leaders' level to discuss the full array of political, security and economic issues confronting the region.
It would emerge from the existing architecture, just as the ARF and EAS have emerged from ASEAN itself.
This is even more critical as our region becomes the centre of global and economic strategic weight.
Such a leaders' level dialogue could encourage further economic and financial integration, foster a culture of deeper collaboration and transparency in security matters, and drive cooperation on the range of transnational challenges.
It would enhance the Asia-Pacific's ability to shape our future, rather than be captive to the vicissitudes of change.
A stronger sense of community in the Asia-Pacific would be fully consistent with Australia's commitment of comprehensive engagement with the Asia-Pacific region.
Conclusion
Australia brings great assets and strengths to the challenges and opportunities of the Asia-Pacific century, along with real commitment and energy to multilateral and regional cooperation
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 will continue to strengthen cooperation with our partners, not only bilaterally, but importantly by playing an active role in existing regional groupings and in the context of the G20 and other global fora.
We will also continue working to shape our regional architecture to ensure it meets the needs of our region into the future.
Thank you.