Speaking Notes for a Speech to the Victorian Branch of the Australian Institute of International Affairs

Thank you MC

It is a pleasure to be here today and to contribute to the long tradition of the Australian Institute of International Affairs of promoting discussion and debate on international affairs.

- More than seven decades after its formation, the Institute continues to make a significant contribution to the foreign policy debate in Australia.

Today, I would like to talk about a topic that has, without doubt, been subject to regular interest and scrutiny prior to and throughout those seven decades:

- Namely, the relationship between Australia and the United States, and the impact this relationship has for each in its dealings in regional and global affairs.

While the relationship has evolved and grown to meet the circumstances of the day, it is a relationship that has remained strong, based on enduring values and a priority for leaders on both sides of the Pacific.

In recent years, as a consequence of a deliberate policy direction, the Australian Government has successfully intensified Australia's relationship with the United States.

- And we are now much better placed than ever before to influence the policy considerations of the world's most significant power.

Shared perspectives and endeavours

Through to the highest levels of Government in both nations there is a shared perspective on many of the foreign policy challenges confronting us.

- We share many interests and many core values.

We also share a sense of purpose and resolve to contribute actively and constructively to improving the global environment - not just for ourselves but for others as well.

-We are prepared to stand up for what we believe in and take action to defend and promote our interests and those of others - even in the face of criticism and trying circumstances.

For we believe that there are some endeavours - such as promoting freedom and democracy - that are worth the effort.

One of the most positive developments I have witnessed during my time as Foreign Minister has been the growing force of democracy.

- More and more we are seeing the peoples of the world turning to the democratic model:

- From former states of the Soviet Union - such as the Ukraine - now embracing democracy.

- To the Middle East where we have been delighted by the historic democratic elections in Iraq; the peoples of Lebanon seeking out change; and seen steps taken in Saudi Arabia and Egypt.

And in our own region, already home to the world's largest democracy India, we saw a stellar year for the democratic process in 2004, with Indonesia, Malaysia, Thailand, India, the Philippines and Afghanistan among those going to the polls.

Indonesia's embrace of democracy several years ago and its commitment to other reforms has been an enormous achievement - for which it should be heartily congratulated.

- Today, Indonesia is the world's third-largest democracy.

Australia and the United States are both robust democracies - with a conviction that democracies and democratic institututions provide for a more stable international environment.

- US Secretary of State Condoleezza Rice recently called for us all to "look to a future when every government respects the will of its citizens - because the ideal of democracy is universal" [Remarks of Secretary Condoleezza Rice at the American University in Cairo on 20 June 2005]

The Australian Government looks forward to and will work with others, including the United States, towards that future.

- Australia is providing support to Afghanistan in its transition towards stability and democracy - including by working with the United Nations Development Programme to assist in preparations for Parliamentary elections due in September this year.

But while we are seeing progress, sadly it is too soon to be claiming victory for democracy over totalitarian regimes - much remains to be done.

- As can be seen when you look at the complete lack of respect for democratic norms and basic human rights repeatedly demonstrated by Robert Mugabe's regime in Zimbabwe.

Iraq remains an important Middle East frontline in the campaign for democracy - and the war against transnational terrorism.

Iraq has come a long way in just two years, emerging from dictatorial rule to a fledgling democracy.

- Sovereignty was restored a year ago, free elections have been held, and the transitional government is making steady progress in drafting a constitution.

While the vast majority of Iraqis support the democratic movement, it is clear terrorists and insurgents are seeking to exploit Iraq in transition and to deny Iraqis the benefits of freedom and democracy.

- The international community must continue to support the Iraqi people so that democracy can flourish and terrorism be defeated.

Central to this is ensuring Iraqis are able to take responsibility for their own security - and to do this they have to be trained.

- Australia is playing an active role in developing the Iraqi security forces, including building leadership, logistics and policing capabilities.

I welcome the renewed international commitment to Iraq, demonstrated most recently at the EU-US International Conference on Iraq.

- More than 80 countries pledged to "support Iraq's political transition process, to encourage its economic recovery and reconstruction, and to help establish the rule of law and public order in the country." [from the Communique of 22 June 2005].

- Were we to lose resolve, that would embolden extremists everywhere and hinder the global fight against terrorism.

Australia and the United States have a long history of working together to defend freedom.

- From our first major military collaboration on the Western Front of World War One onwards.

In today's world there is a continued need for countries with a similarity of purpose to present a united front to the challenges confronting us - whether it be in our immediate backyard or further afield.

A defining feature of the current international environment is the indivisible nature of security concerns - that is, what happens in one region of the world affects others.

- This was made particularly apparent with the September 11 terrorist attacks on the United States.

- And is also clear when considering the threats from WMD proliferation and the risks posed by weak and failing states.

Transnational terrorism poses a particularly grave threat to regional and global stability.

- Australia and the United States have both experienced first-hand the horror of being direct targets - and seen carnage in the neighbourhood and across the globe.

Since 11 September 2001, Australia has been working with others, including the United States, to confront terrorism - successfully damaging terrorist networks, making arrests and hindering access to resources.

Australia's immediate neighbourhood of South-East Asia is home to some of the most determined and violent terrorists of today, led by the local terrorist group Jemaah Islamiyah.

- Terrorists there threaten the aspirations of millions for a safe and prosperous life.

- And challenge governments as they consolidate transitions to democracy and pursue economic reforms.

The role of the United States in regional counter-terrorism cooperation has been and remains both vital and welcome - bringing a crucial multiplier effect to what we can achieve.

Regional cooperation has seen us successfully confront Jemaah Islamiyah - and build the stronger legal frameworks and law enforcement necessary to fight terrorism.

- But we know that JI is continuing to recruit, build its networks and capabilities, and to train its operatives.

Australia and the United States also stand firmly together in the face of threats from the proliferation of WMD.

- Sharing a deep concern at the possible link between WMD and terrorists.

We want to see better compliance with non-proliferation regimes, strengthened international safeguards, and better controls on the spread of sensitive nuclear technology.

- It was disappointing that the Nuclear Non-Proliferation Review Conference held in May this year was unable to agree on further steps to prevent the spread of nuclear weapons.

This setback however does not affect the continuing value of the NPT to international peace and security - and the overwhelming majority of states - including the United States - remain unwavering in their support for the NPT.

On some wider WMD issues Australia and the United States see things differently - for example, Australia strongly supports the Comprehensive Test Ban Treaty and a verification mechanism in the Fissile Material Cut-Off Treaty.

Australia, the United States and other responsible nations are also committed to pursuing complementary ways to bolster regional and global non-proliferation.

A key development has been the Proliferation Security Initiative.

- An initiative - proposed by President Bush - that has now garnered the support of more than sixty countries and built up its operational strength in just two years.

- Providing a practical and informal arrangement among countries to cooperate with each other in intercepting and disrupting illicit WMD trade, their delivery systems and related materials.

- Efforts to make life harder for proliferators and would-be proliferators are essential.

Australia and the United States both view the actions and attitudes of states such as North Korea and Iran with serious concern.

- Australia continues to make clear its grave concerns about North Korea's nuclear weapons program and we firmly support the six party talks process.

-And - as does the United States - we support the ongoing talks between Iran and the EU, which we hope can lead to a permanent resolution to the Iranian nuclear issue.

The United States and Australia are both committed to APEC and the ASEAN Regional Forum.

While its primary focus continues to be economic, we have supported APEC taking on a greater security role.

- And we have worked with the United States, and others, to maximise the benefit of this broader scope.

As we will during our hosting of APEC in 2007.

The ASEAN Regional Forum (ARF) remains the region's pre-eminent forum for security dialogue and cooperation.

- And like the United States, we believe it should have the capacity to respond in an effective and meaningful way to regional security issues.

- And support its evolution from a confidence building role to a preventive diplomacy one.

The Australia-United States Alliance

As I have indicated, Australia and the United States are working closely with other countries and with each other to address the pressing challenges facing the world today.

- We may not always agree on all issues - and we both naturally act in accordance with our respective national interests.

But we always value the views of the other.

The Australia-United States alliance relationship - underpinned by the ANZUS treaty - exemplifies the deep respect between our nations.

Ours is an alliance relationship which has seen us fight side-by-side in Korea, Vietnam, Afghanistan, the first and second Gulf Wars - and an alliance which remains of great currency and immediacy.

- Importantly, this is an alliance that recognises we have security interests going beyond the simple defence of our territory.

- And acknowledges that the United States should not have to bear alone the burden of international security.

The alliance continues to serve as a vital element in the regional strategic balance.

- By its very existence, it complicates the planning of would-be aggressors - and deters them.

- And it adds to the weight and quality of Australia's own engagement with the region.

Far from complicating our relations with the region - as some commentators would claim - the US alliance is an asset in Australia's dealings with the countries of East Asia.

The training, technology and intelligence that Australia accesses through the alliance are vital to own defence capabilities and to our capacity to influence developments in our region and beyond.

- Ensuring that we can successfully contribute to complex joint operations - as in Afghanistan and Iraq

- And work easily together in times of great humanitarian crisis - as we did in responding to the tsunami disaster.

Consistent with the alliance, we have a longstanding intelligence sharing relationship - a vital element in the fight against terrorism in South-East Asia and elsewhere, and in efforts to stop WMD proliferation.

Today, the level of cooperation between us on intelligence issues is unique - and growing even closer.

- We each play a role and share the burden of work in this crucial area.

We have been successful in building the alliance relationship for more than 50 years - conscientiously and constantly working to revitalise it.

- And we see scope to take the alliance even further.

Last year Australia and the United States signed a joint statement on principles of interoperability which provides a strong practical foundation for further developing Australia-US military cooperation.

Last year we also agreed to develop a Joint Combined Training Centre to enhance the quality of bilateral training program and Australian Defence Force capabilities.

And major Australia-US military exercises have again been taking place in various areas around Australia.

We have signed an MOU which provides a framework for cooperation on missile defence.

- We see that as an important area of future cooperation and are working actively to identify the options for taking that forward.

And we are demonstrating the value of close defence industry cooperation through the involvement of Australian companies in the development phase of the Joint Strike Fighter.

At the policy level, our Australia-United States Ministerial (AUSMIN) consultations, involving the foreign and defence portfolios, are exceptionally frank and useful exchanges.

- And I look forward to hosting the next AUSMIN in Australia later this year.

Of course, the United State's contribution to the world, the region - and Australia - extends well beyond security related matters.

- The United States is, after all, by far the world's largest economy, representing more than one quarter of global GDP and a major driver of the global economy.

The contribution to the economic growth of our region - both as an investor and trading partner - has been enormous.

- The United States is the largest export market for China, accounting for 21 per cent of China's total exports.

- The United States is also the largest export market for Japan, accounting for 22 per cent of Japan's total exports.

- China and Japan respectively rank as the United States' third and fourth most important trading partners - after Canada and Mexico.

And now the economy of the United States is to some extent underpinned by the considerable investment that other economies of our region have made in the US.

- Japan is the second largest foreign investor in the United States.

For Australia, the United States is our largest source of foreign investment.

- Many US firms have discovered the benefits of Australia's stable investment environment and transparent regulatory regime.

We are ourselves a substantial investor in the United States - ranked the 10th largest foreign direct investor in the United States in 2003, with assets totalling US$24.7 billion.

Complementing the strong investment relationship, Australia and the United States are important trading partners.

- With Japan, the United States is our most important trading partner.

§The United States was Australia's largest source of imports of goods and services in 2004.

§It was Australia's second largest market for exports of goods and services in 2004, after Japan.

And the US is our number one export destination for services.

Australia and the United States have a long-established and well-developed trading relationship.

The Australia-United States Free Trade Agreement - which came into force at the beginning of the year - will see this relationship continue to flourish and our economies become further integrated.

- Creating an important platform on which our business people can develop their relations with each other over coming years, decades and lifetimes.

- Increasing business competitiveness and opportunities, and in turn, increased jobs and incomes for Australians and Americans.

Engaging with other regional players

In discussing the contribution of the United States and Australia to world affairs, I would like to touch on two important features of the regional and global environment:

- Namely, the contribution of Japan.

- And the emerging role of China.

Japan remains a strong ally of both the United States and Australia in the region and internationally.

Increasingly, we are seeing Japan prepared to play an active and vital role in maintaining international peace and stability.

-As has been demonstrated so clearly in East Timor, in Iraq, in the six-party talks on North Korea, and in dialogue with Australia and the United States on strategic and security issues.

Australia warmly welcomes and supports this trend.

-And we want to see Japan take a permanent seat at the table of any expanded United Nations Security Council.

And note that the United States has also expressed support for Japan.

We also have a Trilateral Security Dialogue involving Australia, Japan and the United States, reflecting the close nature of those three countries' shared interests.

- Pleased that Japan, Australia, and the United States have decided to elevate the Trilateral Security Dialogue to ministerial level.

- The dialogue provides a valuable forum for discussion of current and emerging concerns with two of our most significant strategic partners.

- I look forward to meeting with my counterparts in the coming months.

China's rise is steadily reshaping our world, providing both opportunities and challenges.

A successful China - one that is politically stable and economically strong - is a good thing for Australia and for the region.

The United States agrees.

-Secretary of State Rice has said that America has reason to welcome the rise of a confident, peaceful and prosperous China.

But no rise of a new power has ever come about without strains and stresses on the international system.

- The interests of China and the interests of the United States and other regional countries, including Australia, will at times rub up against each other.

On some issues, the stakes potentially are high.

- But I do not believe that escalating strategic competition between China and the United States is inevitable.

Such pessimistic views undervalue the significance of the interests both countries share.

As well as the constructive approach they have taken to managing their differences, including in relation to Taiwan.

For our part, as the Asia Pacific region changes dramatically in coming years, some principles will remain constant.

-Australia wants to see open and inclusive regional institutions.

-And we believe a strong US presence in the Asia Pacific will remain vital for stability and security.

America's alliance relationships, including with Australia, will be the anchors for that US presence.

-Australia's strategic interests will continue to be best served by a strong and vital alliance with the United States.

Conclusion

As democracies, Australia and the United States are critically aware that governments serve at the will of the people.

- It is therefore appropriate to underline that the ANZUS alliance enjoys the support of the Australian public - support which has endured even during periods of vigorous public debate in Australia over US foreign policy.

The past few years have been no different, with a national poll held in conjunction with Australia's 2004 federal election showing that over 80 per cent of Australians saw the ANZUS alliance as being important to Australia's security.

Australia sees continued strong political, strategic and economic engagement by the United States as vital to our security and that of our region.

- The expanding contribution of other regional players is not going to change this view.

The United States has been - and will continue to be - a particularly close and valued ally of Australia.

And the most significant contributor to global stability and prosperity.