Speech at the Australia-United Kingdom Chamber of Commerce
JULIE BISHOP: I acknowledge my former colleague and now Australia's High Commissioner to the United Kingdom, Alexander Downer. Paul, thank you to the Commonwealth Bank for hosting this morning and Catherine, thank you to the Australia-UK Chamber of Commerce for hosting this event this morning.
In about three weeks, Qantas will begin a direct flight from Perth, my home town, to London yet we are still geographically far apart, that might mean that our views are far apart yet they are not.
Australia and the United Kingdom are more aligned than ever on many geo-strategic issues and particularly on geo-economic issues. We are at one in recognising, for example, the importance of the private sector in driving economic growth, in supporting open economies, liberalised trade and investment. We support a rules based order that manages competition between all nations large and small, and we are determined to ensure transparency and boosting business confidence to drive economic growth.
In this time of transition for the United Kingdom, I am here to assure, perhaps reassure you that Australia is a willing and trusted partner of the United Kingdom and that we see many opportunities for our already close relationship to deepen and broaden in the post-Brexit world.
Last year Foreign Secretary Boris Johnson was in Australia for the annual AUKMIN meeting – Australia's Foreign and Defence Ministers meeting with Britain's Foreign and Defence Secretaries. Boris addressed a large gathering at Sydney Town Hall. As you would imagine it was a highly entertaining address and he played a parlour game on the audience with a hypothetical – imagine what Australia would look like today had it entered the Common Market at its inception.
As we pondered that thought, it occurred to me that Boris' starting point, the beginning of the Common Market, was an opportunity for us to look at a point in history and see how much had changed in that period and perhaps give us indicators of what life will be like in a post-Brexit world.
For of course in the 1950s and 1960s, the United Kingdom was Australia's largest trading partner. Over 30 per cent of our exports went to the Britain.
In fact, in some vital areas of our economy, like red meat in the agricultural sector, about 93 per cent I believe of our sheep meat, lamb, went to the United Kingdom.
So when Britain entered the European Economic Community, there was a massive impact on the Australian economy.
We were suddenly faced with prohibitively high tariffs and country-specific quota allocations. Let's be blunt – Australia fared very poorly.
So we had little choice but to diversify our export profile and we did. We looked elsewhere and we worked very hard to continue to push for liberalised trade, particularly in the agricultural sector through the Cairns Group and in other forums.
Today, our export profile is radically different from that point when Britain turned towards Europe.
Our largest trading partner, two-way merchandise trading partner is China at about $170 billion a year.
Our top ten trading partners with the exception of the UK and Germany are all in the Indo-Pacific region. In other words, eight of our top trading partners are in our region with the exception of Britain at number five and Germany at number ten.
We have free trade agreements, high quality, comprehensive, and gold standard free trade agreements with our top four trading partners – China, the United States, Japan and South Korea.
So when the United Kingdom turned to Europe, Australia had to turn to the Indo-Pacific – the nations of the Indian Ocean, Asia Pacific – but without doubt it has been to our benefit.
This year, we are entering our 27th consecutive year of uninterrupted economic growth. No other advanced economy has ever achieved that. It is a world record. Undoubtedly much of that success is due to our economic integration with the countries to our north, east and west.
Of course we are continuing with a very ambitious free trade agenda, particularly in the face of growing protectionist sentiment that we are seeing in parts of the world.
Australia is highly ambitious in promoting open and free trade. We are, after all, an open export oriented market economy. We depend on our ability to sell our goods and services around the world for our standard of living and for continued economic growth. As I often say: "You don't get rich selling to yourself".
That brings Britain into focus yet again. Britain is, as I said, our fifth largest trading partner. Last year our two-way trade was valued at about Â£16 billion and almost half of that, almost Â£8 billion was in the services sector. I believe that post-Brexit there will be enormous opportunities for us to engage more closely in trade and investment and when the circumstances are right, when the timing is right, Australia would be keen to pursue a free trade agreement with the United Kingdom – high quality, comprehensive, gold standard. We have, of course, been pursuing a free trade agreement with the European Union for some time, well before the Brexit vote, and that is consistent with our agenda to pursue free trade agreements, enhance existing markets, and find new markets for our exporters.
Recently we concluded the Trans Pacific Partnership, TPP-11 as it is now known since the United States withdrew its intention to join it under the Trump Administration.
TPP-11 is not only a very good free trade agreement, it is also strategically important. It brings together nations such as Chile, Brunei, Japan, Canada, New Zealand, Malaysia, Mexico, Singapore, Peru, Vietnam, and of course Australia.
TPP-11 is an example of how a high quality free trade agreement can work to the benefit of a very diverse group of countries but those who are strategically connected.
What I believe we should be seeking to do is also focus on the many opportunities that already exist between Australia and the United Kingdom. For example, in the field of investment the United Kingdom is our second-largest source of foreign direct investment after the United States.
Last year, Australia was the sixth-largest source of new foreign direct investment into the United Kingdom and there are some rather exciting examples. Our Future Fund has a 17 per cent stake in Gatwick Airport. One of our major superannuation funds, AustralianSuper, has taken a almost 68 per cent stake in a development in Kings Cross.
I know Australian investors are keen to do more.
Likewise, Australia has many investment opportunities for the United Kingdom in energy and resource projects. We are an energy and resource powerhouse. Not only are we the world's largest exporter of coal and iron ore, we are soon to overtake Qatar as the largest exporter of LNG.
The Australian Government also has a policy to develop Northern Australia – the north of Western Australia, Northern Territory and Queensland. We have a Northern Australia Infrastructure Fund where we are encouraging investment from overseas to leverage infrastructure projects in our region.
There are many opportunities for Australia and the UK to work more closely together for our mutual benefit.
Later today I will be addressing King's College – a speech focusing on Australia's commitment to the international rules based order as articulated in the Australian Government's recently released Foreign Policy White Paper. This is the first time since Alexander Downer as Foreign Minister released a White Paper in 2003.
Our 2017 White Paper sets out a framework, a blueprint of our international engagement and our interests, and values, and priorities over the next decade or more.
At the heart of it is a commitment to ensure that our Indo-Pacific region is free and open and prosperous and we can only achieve that by adhering to the international rules based order – that network of alliances, and treaties, and conventions, and norms underpinned by international law that has evolved since the Second World War.
Australia and the United Kingdom are aligned in this common purpose of supporting the international rules based orders that determines how nations behave and towards each other.
The United Kingdom is a very important global player. It is a member of the Permanent Five of the Security Council. It has enormous military capability. It is one of nine nuclear powers in the world. It is the founding nation of the Commonwealth. Its innovation and technology can be found all over the world. So Australia is very keen to continue to deepen and broaden what is historically a most special relationship.
Thank you for giving me the opportunity to talk in such optimistic terms about the post-Brexit world.
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