E&OE
18 December 2008
Q & A with the media, Japan Institute of International Affairs, Tokyo
SUBJECTS: Asian regional frameworks; USA engagement; China engagement; Free trade agreements; North Korea; Nuclear non-proliferation
QUESTION: Thank you very much for your informative speech on Australia's external policy, particularly on this region. I've been very much enlightened. I would a like to ask a question about Australia's attitude on regional cooperation in East Asia. Your Excellency already mentioned that Australia is a member of the East Asia Summit and also an active member of APEC. There's been some discussions among ASEAN+3 countries as to which regional framework should be the main vehicle for other efforts for community building in East Asia. I understand, Prime Minister Rudd also announced his idea on possible community building in the Asian Pacific region. May I ask, does Australia have any particular preferences for the types of regional framework for future community building in this region, and what active role Australia intends to play, for instance, in the East Asia Summit framework, and is Prime Minister Rudd's idea on the community building in the Asia Pacific region any different any different from the ongoing APEC cooperation? Thank you.
STEPHEN SMITH: Thank you very much for that question. Can I start by saying that Australia believes that the current regional architecture works very well, not just for Australia, but also for Japan and for the region. That includes the ASEAN-related regional architecture; ASEAN itself, the ASEAN Regional Forum and the East Asia Summit.
In Singapore this year, we had very effective foreign ministerial meetings of each of the ASEAN related dialogues, the East Asia Summit and the ASEAN Regional Forum. Last month, or the month before, in Lima in Peru again we had a very successful APEC meeting, and APEC remains, in our view, the premier regional economic, trade and investment forum.
But the point the Prime Minister made when early this year in April he launched the Asia Pacific Community initiative was this: despite the effectiveness of those regional pieces of architecture, there's not one piece of regional architecture where all of the players are in the same room, at the same time, having a conversation about both economic and trade and investment matters, and also security and strategic matters.
For example, India is not in APEC and so central to this year's APEC conversation amongst trade and foreign ministers was, of course, trying to bring some urgency to the Doha round. The Trade Minister would have a conversation and someone would be required to get on the phone to Minister Nath in New Delhi because India wasn't there. When you look at the East Asia Summit, the United States, for example, is not a member.
So the challenge that the Prime Minister faced was in this century, which we describe as the Asia Pacific Century, where we see an inexorable shift to our region of economic and strategic influence - the rise of China, the rise of India, the rise of the ASEAN economies combined - an inexorable shift to our region, do we have - and he chose the year 2020 - do we have for 2020 the correct regional architecture for that shift? That's the conversation or a discussion we've been having with our neighbours and partners. We have established a prime ministerial envoy, Australia's former head of our Department of Foreign Affairs and Trade and also Ambassador to Indonesia, Dick Wolcott, to engage consultations throughout the region, and those consultations are ongoing.
Both at the APEC Leaders' meeting and at the delayed East Asia Summit, the Prime Minister will raise this matter with his colleagues. We've been very pleased with the response that we've had to the initiative, which is essentially "yes, this is a conversation worth having".
So the challenge is do we have, in the first decade of this century, the necessary preparation for the architecture that we'll need for the first quarter of this century when we see an inexorable shifting of economic, strategic, political influence to our region. In terms of APEC, of course, there's no capacity for a strategic or security or defence conversation because there are some non-nation states in the room, some economies rather than nation states. So how do we find one piece of regional architecture for the Asia Pacific where all the key players are in the same room at the same time, having a conversation that is geared, not just to our prosperity through investment and trade, but also our security through strategic and defence conversations? Thank you.
QUESTION: You mentioned the importance for Australia, and for Japan and the United States, to be partners. How can Australia and Japan best engage the United States in Asia, given the kind of active involvement upon the United States (inaudible) especially in the second Bush Administration, and I think even people like Richard Armitage have expressed concerns about this? And secondly, you also talked about the importance of China. How do Australia and the United States best engage with China without alienating Japan? There seems to be a common problem of perception in Japan towards both the Australian Labor Party and the US Democratic Party.
STEPHEN SMITH: Well, firstly, Australia's view is that the active engagement of the United States in the Asia Pacific is essential in Australia's national interests. We also take the view that this is in Japan's interest, and it's in our region's interest. And so we very much believe in the active engagement of the United States in our region.
The current Administration serves until the 20th of January, so I'm not proposing to say anything which would reflect on the current Administration's term in office. I'm happy to leave that to the historians.
But we do think there is an opportunity, both in Australia and in Japan's case, and this was the subject of part of the conversation that Defence Minister Mr Fitzgibbon and I have just had with Prime Minister Aso, for Australia and Japan to make the point to the United States that engagement, indeed an enhanced engagement in the Asia Pacific, is in our interests.
The election of Senator Obama, the election of any new Government or Administration, brings with it the chance for a fresh approach to long-standing issues or challenges. President-elect Obama's election was historical, the first African-American elected to the office of President. For a country where race has been such a central issue, this does present opportunities which come with the historically significant achievement.
We know that President-elect Obama himself has historical, personal attachments in our region. He's made the point that he's visited Tokyo on innumerable occasions. He spent part of his childhood in Indonesia. And so we may well discover that the personal attributes of the President bring to bear in the United States engagement in our region.
You raised the issue of the rise of China. In my formal remarks I make the point that it's not just the rise of China - it's the rise of China, the rise of India, and also, under-appreciated in my view, is the rise of the ASEAN economies or the ASEAN nation states combined. Just by way of an aside, in the decade from 1996 to 2006, Australia's trade, on average, with ASEAN countries increased by a hundred and thirty percent. This gives you some understanding of the size of the growth of the ASEAN economies combined.
Australia believes it's very important that, as China emerges, China has a very good, positive, constructive relationship with the United States. We also think it's important that China has a good, positive, constructive relationship with India. We also think that it's important that China has a good, positive, constructive relationship with Japan, which is why when I was last here I welcomed very much the fact that we saw in the course of the last twelve months positive and constructive visits by the Chinese leadership to Japan, and by the Japanese leadership to China. This is an unambiguously good thing, and in recent days we've seen a very successful trilateral dialogue between the Republic of Korea, Japan and China. This is a very good thing.
It is entirely possible for a nation state to have a good relationship with more than one country and that not impact adversely on another country. In Australia's case, we have an alliance with the United States. We have a comprehensive partnership, a comprehensive economic, security and strategic partnership with Japan. We have a growing economic relationship with China. We want to take our relationship with India to the front line of our international relationships.
All of these things can occur in a way in which it adds collectively to the benefit for Australia without detracting from the relationship that Australia has with any one of those nations. It's not a - the phrase which you often see - it's not a "zero-sum game". Indeed my Republic of Korea counterpart said it's a "plus-sum game". If China has a good relationship with the United States, and has a good relationship with Japan, and has a good relationship with India, that is unambiguously in Australia's interests. It's also unambiguously in Japan's interest. It's also unambiguously in our region's interest and in the international community's interest.
So, one of the challenges of this century will be ensuring that, as China emerges, as India emerges, that the emergence of these two great nations of over one billion people is effectively managed by the international community. And that requires not just good bilateral relationships between China and India and other nations, but also good regional relationships and good multilateral relationships. All of that can be done without anything occurring at the expense of another nation state.
QUESTION: You touched upon the Free Trade Agreement with Japan. My question is: how many Free Trade Agreements you have concluded with other countries? And, secondly, what are the prospects for the Free Trade Agreement with Japan?
STEPHEN SMITH: Well I'm happy to take the fact of your question on notice but we've got plenty. We have, for example, a Free Trade Agreement with the United States. We have a Free Trade Agreement with Thailand. We've just concluded a Free Trade Agreement between Australia, New Zealand and the ASEAN economies. That's a very significant agreement.
We are working very hard to conclude a Free Trade Agreement with Japan and we regard that being a good thing for the Australian economy and its future, and a good thing for the Japanese economy and its future. In any trade relationship between two countries there will always be potential hurdles or difficulties. Often agriculture is one issue, and that's certainly an issue in the negotiations between Australia and Japan. But we don't regard that, or any other issue, as being insurmountable. And, as I said in my prepared remarks, our negotiators have met on four occasions this year, and they're scheduled again in early next year, January or February.
We are confident that a Free Trade Agreement, a comprehensive Free Trade Agreement between Australia and Japan, will emerge, and we think that will be a good thing. None of these things occur necessarily easily or quickly. But it is, we think, in Japan's interest, in Australia's interest, and in the region's interest for an EPA or a Free Trade Agreement to be concluded.
QUESTION: (through translation) I'm from Nikkei Shimbun. My name is Nozawa. I'd like to ask about the FTA issue that you've just raised. The Asia-Pacific FTA is one in which New Zealand, Singapore, Brunei, Chile will negotiate. Within this framework, they have said the US has started to engage in consultations - so we have focused on this. But Australia and Vietnam are expressing their intention to start consultation in this respect, so I'd like to ask you about this. Right now Australia, with these four or five countries, what sort of stage are you in? What sort of consultation stage are you in right now? And also this framework, for Australia ultimately, is it the case where you want to have an APEC FTA and is this a framework to ultimately establish an APEC FTA? And lastly, are you going to try to persuade, or are you talking to, Japan and trying to invite Japan into this framework?
STEPHEN SMITH: Well, substantively, two questions there.
Firstly, Australia's attitude to possibly adding to the so-called P4. Yes, we are disposed to joining an expanded P4. The approach was made to us in the course of this year but was formalised in the margins of the APEC meeting in Lima. And Australia's trade minister and I have both made it clear that we are very positive about engaging in consultations with the P4 to see whether it's possible to enter into an enhanced or expanded trade group or trade arrangement. We're not the only one who's made such a response, you mentioned Vietnam. The consultations are at a very early stage, and we're not putting a timetable on them, but we are positive about entering into those conversations.
The second substantive question was whether we envisage, or whether we're working towards, or are actively engaged in the possibility of an APEC-wide Free Trade Agreement. In your question, you referred to the ASEAN-Australia-New Zealand Free Trade Agreement. If I can just make a remark about the ASEAN-Australia Free Trade Agreement and then make some remark about APEC.
I think a number of things have occurred in the course of this year which have been under-appreciated. I think the significance of the Australia-New Zealand-ASEAN Free Trade Agreement has been under-appreciated, both in terms of its economic potential, but also in terms, in very many respects, of its strategic implications. It correctly, in my view, enmeshes Australia even more into engagement in our own region, and that's a very good thing. I think any notion of an APEC-wide Free Trade Agreement is fraught in some people's minds, but it's something I think is very preliminary.
I think we'll see nation states who are members of APEC focusing on bilateral or regional Free Trade Agreement efforts. I don't discount the possibility that it might not occur or emerge at some stage into the future, but I think, at the moment, there's a focus on three things: bilateral Free Trade Agreements between nation states; regional agreements, and, importantly, in our view, on the multilateral system through the WTO.
Australia was very disappointed when the Doha round got very close but negotiations effectively collapsed. That was before the global financial crisis. We think the arguments in favour of a successfully completed Doha round are even more pressing now in the face of the global financial crisis. One of the worst things that the world could do now in the face of the global financial crisis would be to see a retreat to protectionism. On the contrary, it's not just sufficient to stand still. It's very important, in our view, to continue the international structural reform which sees openness and access to trading arrangements much more effective in the future than they are today.
QUESTION: My question is how do you view the recent Japanese political turmoil and frequent change of Prime Ministers, and can I get some advisory comment for Japan to establish a sustainable two-party system?
STEPHEN SMITH: I can deal with that one very quickly. As Foreign Minister I've discovered that I have less of a focus on Australian domestic politics than I have in the past, and as Australian Foreign Minister I'm certainly not proposing to make any comments about Japanese domestic politics other than that, like Australia, Japan is a robust, striving democracy, and all of these things will be settled consistent with that tradition, consistent with Japan's robust, striving democracy.
I think you've got an election next year, and in accordance with our enduring partnership with Japan, Australia will, of course, work with any government which the Japanese people elect and ask to represent it. Such are the bonds between Australia and Japan that governments in Australia and Japan come and go, but the enduring partnership continues, and that's in both our nations' interests.
QUESTION: You mentioned your support for Japan's stance on North Korea. I wonder if you are planning to discuss anything about providing fuel oil to North Korea in Japan's place, and what your current stance is on that?
STEPHEN SMITH: In the course of this year, the second half of this year, Australia was approached by the United States, in the context of the Six Party Talks, enquiring as to whether Australia would be favourably disposed at some stage to a contribution of heavy oil to North Korea. And our response was, in principle, we were disposed to make such a contribution but on the basis of a number of pre-conditions. One was, of course, ongoing success so far as the Six Party Talks were concerned, and success in terms of North Korea's acceptance of verification mechanisms so far as its nuclear program is concerned. And were happy to make that in-principle contribution on the basis that we were persuaded that there needs to be an element of carrot and stick here, that there needs to be stern measures so far as the international community is concerned to bring about those verification measures.
But there are also things that the international community can do to encourage North Korea to accede to those verification procedures. As well, we made it clear to the United States, but also to other members engaged in the Six Party Talks, that Japan's attitude would be very important to us, both in terms of progress on verification, but also in terms of Japan's view of its progress on the abductions.
Australia has been very sympathetic and very supportive to Japan on the abductions issue for a considerable period of time. I think, regrettably, the most recent set of talks have shown a refusal on the part of North Korea to engage in serious or meaningful talks on verification processes or procedures. That's very disappointing. The long suffering Deputy Secretary of State, Chris Hill, has been working very assiduously with others to try and bring about a successful conclusion, but his remarks in the face of the most recent talks were both depressing and negative in terms of the outcome. So I don't see, given that outcome, that there is any realistic prospect that Australia will make a contribution in the short-term.
We hope, and I expect that the relevant timetable now will be the new Obama Administration, that after the 20th of January there is a renewed effort so far as the Six Party Talks are concerned, and, again, our ongoing disposition will be, in principle, we're prepared to make a contribution but we need to see progress made so far as verification is concerned. North Korea's nuclear program and Iran's nuclear program are two of the most difficult and worrying issues for the international community, and both of those issues may well end up being two of the most contentious or difficult or challenging issues for the international community in the course of next year.
QUESTION: Could you just, following on from that last question, could you just mention a little bit more about the collaboration with Japan regarding the Commission on nuclear issues in the lead up next year and to the conference in 2010?
STEPHEN SMITH: The Australian Government came to office over a year ago with a commitment to enhance our engagement both in and with the multilateral system, and particularly the United Nations, but also with a commitment to take an enhanced activity and engagement in non-proliferation and nuclear disarmament issues. In the course of this year, we announced the establishment of the International Commission for Non-proliferation and Disarmament, co-chaired by former Foreign Ministers Kawaguchi and Evans. The first meeting was held in Sydney in October. From recollection, the next meeting will be held in Washington February/March, and other meetings are scheduled in the course of next year.
There are two ambitions that we have with the establishment of the Commission. One is to try to encourage a conversation or a discussion about the Nuclear Non-Proliferation review conference for 2010 to see whether it's possible to bring some focus to that review conference. The truth is the last review conference for the NPT was, if I'm polite, disappointing - if I'm not polite, a debacle. And we need to make a much greater effort on the NPT on this occasion.
Secondly, Australia's long-term aspiration and ambition remains the abolition of nuclear weapons. The political party that I represent has had that as a long-standing objective. We are not starry-eyed about the prospect of achieving that overnight but we do believe that there may well be the prospect in the international environment and in the international community to make progress on that front, and the so-called "four horseman of the apocalypse" render some optimism there. Former Defence Secretary Perry, who was one of the authors of that famous article is also a member of the Commission.
So, in the short-term, we think we can play a role on the Non-proliferation review conference front, but in the longer term, we do think that it might just be right time right place for a renewed conversation about the abolition of nuclear weapons.
On other fronts, at UNGA in September, I chaired the ministerial meeting of the Comprehensive Test Ban Treaty. And, as you would know, we're now down to a small number of countries that have not signed up to the Comprehensive Test Ban Treaty. Whilst it's a small number, it's a group of very important countries, including the United States. In the course of the election campaign, both Senators McCain and Obama made favourable remarks about giving the Comprehensive Test Ban Treaty serious and favourable consideration.
So it may well be that there is hope for positive developments on that front as well. But it's an area that as a country of a small population who is non-nuclear weapons state nation, it's an area where Australia believes very strongly that we can make a contribution as we have in the past with, for example, the Canberra Commission and other initiatives that we've made historically.
[Ends]
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