Thank you Michael. It is my great pleasure, with my colleague the Minister for Trade and Investment, Andrew Robb to this morning launch Australia’s economic diplomacy agenda– and share our vision for what it will mean for Australia in the years ahead.

And I want to thank Michael Fullilove and the Lowy Institute for hosting this event, and I also thank the Lowy family for their contribution to Australia’s understanding of international affairs and the complex, ever-changing, globalised world in which we live.  

Australia as a nation has built its wealth and prosperity on the back of international trade and investment.

Given the record levels of debt and deficit that we inherited from the previous government, it’s never been more important for our political leaders, and diplomats, and trade and investment officials, our tourism and overseas development specialists to ensure that economic outcomes are a top priority of our international efforts and statecraft. 

Australia’s future prosperity depends on it: we all depend on building the prosperity of the Australian economy through international engagement.

Australians have shown that they excel when competing in an open and vibrant trading environment. It has often been said that foreign policy is economic policy, economic policy is foreign policy. And the Coalition Government has enhanced that truism by promoting what we call 'economic diplomacy" as a core concept of our international engagement.

If the goal of traditional diplomacy is peace, then the goal of economic diplomacy is peace and prosperity. Australia’s prosperity is dependent on regional and global prosperity.

So what do we mean by economic diplomacy?

Economic diplomacy is an overarching principle that puts strong economic outcomes at the centre of our foreign, trade, investment, tourism and development assistance policies.

I also see economic diplomacy as changing the approach of government, to more closely engage with the private sector, the business community and non-government organisations in all our work - both in our country and in our partner countries, particularly in our region.  

To achieve this, we will be harnessing broader aspects of our international diplomatic work to promote trade, encourage economic growth, attract investment and support business. 

Australia has a global network of 95 Ambassadors, High Commissioners and Consul Generals and 72 Trade Commissioners. 

Economic diplomacy will be a guiding principle of their work, including promoting our national reputation as an open export-oriented free market economy. Our country is a great place to invest and with which to do business. 

And as our Prime Minister, Tony Abbott, said on election night – Australia is open for business.

Australia’s economic diplomacy assets are not exclusive to government.

Economic diplomacy naturally includes our business and private sector community, particularly SMEs, but also think tanks, NGOs, and individuals - artists, actors, athletes and more. 

Today I will go beyond some of the more obvious – but important – manifestations of economic diplomacy that will be covered by Andrew, as our Trade and Investment Minister: that is, promoting free trade and fostering new inward investment, enabling us to compete internationally and become a destination of choice for international business and investment.

As Andrew will show, our free trade agreements are where our economic diplomacy policy finds its most public expression.

Economic diplomacy means tackling barriers to growth and expanding economic opportunities for people, businesses and communities particularly in our region.

It means providing support to Australian investors abroad as they seek new opportunities in the global economy.

And, if we want to promote regional and global prosperity, we need to promote sustainable economic growth. 

This is why I have announced a new approach to our overseas development assistance program, what we call the new aid paradigm.

Our foreign aid will continue to play a vital role in response to humanitarian crises and natural disasters, and to support education and health outcomes.  

But foreign aid alone is not the panacea to poverty or even lifting large numbers of people out of poverty.

The real driver of poverty elimination is and will always be economic growth. 

For instance, in just a few decades, economic growth in China has lifted hundreds of millions out of poverty. China is no longer an aid recipient, it is now itself a donor with a significant foreign aid budget about the size of our own.

Similarly, it has been economic growth that has seen South Korea transform from one of the world’s poorest nations mere decades ago to a top 20 global economy and a significant aid donor.

Importantly, the total value of foreign aid funding from all nations is dwarfed, utterly dwarfed, by international investment flows, remittances, and other sources of capital to developing countries.

So this is part of the logic behind our agenda for the G20, which Australia will be chairing this year in Brisbane, to embrace a target for all member economies to lift economic growth by a further 2 per cent – a measure that, if achieved, will benefit many, many more people globally.

I want our economic diplomacy agenda to substantially realign the work government does overseas, and to give the private sector, give our small and medium enterprises, and small businesses, and our NGOs, new and innovative ideas about the opportunities that we see lie ahead.  

To do this, I have requested every one of our 95 Heads of Mission to construct an economic diplomacy strategy – a strategy for how they and their diplomatic teams will enhance that post's trade, growth, investment and business work on behalf of Australia in their host country.

I can report today that our diplomatic teams have responded to my request with enormous enthusiasm and energy, and they have delivered in a most impressive way. This is it (produces volume).

Every post - from Ankara to Amman, Shanghai to Suva, New York to New Delhi – has submitted a strategy with highly specific local goals. 

They have produced over 2,000 – we have put it all together – they have produced over 2,000 specific, practical ideas to implement across our global diplomatic footprint.

These strategies bring together our work across government in the truest sense. 

Our diplomats do us proud and I acknowledge the presence here today of the Secretary of our Department, Peter Varghese. The work of our diplomats is evidenced by our Department’s extraordinary response to the MH17 tragedy. Ours are among the very best diplomats in the world.

In this instance in relation to economic diplomacy, they are complemented by Tourism Australia’s promotional activities. We have 18 priority markets, and Andrew will no doubt talk more about that. 

But this also includes the work of EFIC, the Export Finance and Insurance Corporation in supporting Australian business overseas.

And the efforts of ACIAR, the Australian Centre for International Agricultural Research – this is a real gem within the Department of Foreign Affairs and Trade – and ACIAR supports sustainable and more productive agricultural practices among the farmers of our region. It’s one of our strengths. It is what we do so very well.

In implementing all these strategies we’re working more closely than ever with Australian business and the not for profit sector and State and Territory Governments. 

And that’s why we’re launching today two portfolio charters, which explain to Australian business, to NGOs, to State and Territory Governments, what we offer through our economic diplomacy agenda.

Like most things in life and in government, our economic diplomacy agenda builds on past foundations of success.

For example, consider Australia’s relationship with Japan – now one of our closest economic partners.

 In 1934 – a time of great strategic and economic uncertainty for Australia – Australia’s External Affairs Minister John Latham led a diplomatic mission to Japan.  The mission was to explore the potential for a closer trading relationship.

Now, of course, this was disrupted by the events of World War II, but economic engagement was the bridge for bringing our nations together after the war.  

Even today it astounds me that in 1957 Robert Menzies as Prime Minister was able to conclude a Commerce Agreement with our former wartime enemy, barely a decade after hostilities had ended. Robert Menzies – supported by Foreign Minister Richard Casey and Trade Minister John McEwen – and Japan’s Prime Minister Kishi - had the vision to see that, despite the war’s terrible toll on both nations, our futures would best be served by forging closer economic links.

Australia’s iron ore and energy resources helped create and sustain Japan’s extraordinary post-war transformation. But it also benefited Australians. 

Resources exports to Japan helped to create and consolidate one of the defining industries of modern Australian – our mining sector. And those exports, along with Japanese investment in Australia, created Australia’s strong, secure, growing post-war economy.

Today, in an increasingly globalised, competitive and unpredictable world, we must have the capacity to prosecute our economic ambitions more vigorously than ever before.

That legacy is nowhere clearer than in the Japan-Australia Economic Partnership Agreement, signed by Prime Ministers Abbott and Abe in Canberra last month.

Now, of course, there were echoes of the 1957 agreement abounding as Prime Minister Abe is the grandson of Japanese Prime Minister Kishi.

This is clear evidence of economic outcomes also paying strategic dividends.

Not only have our economic ties with Japan created unprecedented economic prosperity – they have also enabled us to forge trust and friendship across the broad sweep of our relationship.

Educational exchanges promoted now by our New Colombo Plan for Australian undergraduates to study live and work in countries in our region, and the Rio Tinto Chair of Australia-Japan Studies - will bolster the next generation of leaders in many spheres of both our nations, including science and technology.

These will be leaders who benefit not only from deeper people-to-people ties, but who will also drive the innovation that is key to future economic prosperity.

Economic ties have been the bedrock for a much closer political and strategic relationship – which has been absolutely central to both our nations’ interests in the 21st Century.

It is now enabling Australia and Japan to deepen our defence co-operation, and elevate our relationship to a strategic partnership based on our common values.

There is greatly enhanced defence training and joint exercises, consolidating our shared ability to respond to humanitarian disasters and protect peaceful development.

Our experience with Japan teaches us that we shouldn’t confine our desire for economic outcomes to ticking a box only with a dollar sign.

Likewise with China, now our largest two-way trading partner. We have elevated the relationship to a strategic partnership with annual leaders' and high-level ministerial meetings. Our defence co-operation now extends to trilateral military exercises with the United States. China has signed up for our New Colombo Plan to enable Australian undergraduates to live, study and work in China to become more China-literate.

Economic and financial relationships are an important way for nations to build trust and understanding – both between governments, through the private sector, and among individuals.

So when I say I want our diplomats to put economic diplomacy at the centre of their statecraft, I don’t for a moment mean that their pursuit of traditional diplomatic outcomes will be diluted. They work hand in hand.

It’s important to remember that just like all our diplomatic efforts, it’s not a one size fits all: economic diplomacy must be nimble, and flexible and adaptable, to reflect the differing approaches to our relations with various countries.

Take the United States, a nation with which we have a strong and enduring economic and security relationship.

In this context, economic diplomacy will build on our past successes – like the annual “G’day USA" events, promoting Australia as an attractive investment and tourism destination.  The United States is Australia’s number one source of investment, and that will continue for the foreseeable future.

So our diplomats and other staff will work hard to ensure the United States’ financial and investment sectors are well-informed about the advantages of investing in Australia. And that’s why I’m so pleased that tourism is now a part of our broader portfolio of foreign affairs and trade – in what should always have been its natural home.

Inbound tourism is, like education, an export industry, contributing almost $30billion to our economy. And judging by the reaction of Secretary of State John Kerry to his first visit to Sydney and his first boat trip on Sydney Harbour, there is enormous potential to attract many more Americans to our shores!

Turning to the north for another example - in the emerging market of Mongolia, we are working with Australia’s mining sector to increase their investment access.  At Mongolia’s request, our aid is developing capacity, improving governance in the regulatory framework, making investment in Mongolia a more stable and attractive proposition.

Our approach in Indonesia is aligned to different development interests, where for example, Australia’s expertise in science and agriculture comes to the fore. 

There’s enormous capacity for Australia to boost our agricultural exports to Indonesia and at the same time work with Indonesia to meet its food security goals. And I think there’s obviously enormous potential for our two-way trade with New Zealand, a country of about 5 million people, is greater than our two-way trade with Indonesia, a country of 245 million people.

Australia is in a strong position to be the food supplier of choice to our largest neighbour, while we are also engaged in development programs and working in partnership with agri-business to stimulate Indonesia’s food production capacity.

The Australian Centre for International Agricultural Research, ACIAR, already has a strong track record in Indonesia – increasing both the country's food production and quality.

Collaborative Australian-Indonesian research is developing a lobster industry in Lombok, Aceh and South Sulawesi which can produce potentially more than 2,000 tonnes of marketable lobsters a year. This scheme is employing over 1,000 families.

Indonesia is also the world’s third largest producer of cocoa, with something like a million smallholder farmers.

The industry has had a difficult time of late with pest and disease challenges, yet research funded through our ACIAR has identified pest and disease-resistant varieties with the potential to double Indonesia’s productivity.

ACIAR has teamed up with a major international confectionary company, Mars, to scale up new varieties. Within seven years, Mars has supported over 600 smallholder businesses across Indonesia – producing 6 million cocoa seedlings for sale that is helping revitalise the industry.

So Indonesia – the largest recipient of Australian aid – is working in partnership with Australia for sustainable economic growth. It’s in our interests, it’s in their interests.

In the Pacific, our economic diplomacy looks different again.

Accepting that foreign aid alone cannot overcome poverty, we are helping facilitate partnerships and private sector engagement to improve development outcomes in the Pacific.

The private sector plays a vital role in growing and establishing businesses, creating jobs and stimulating new economic opportunities. In short, allowing the private sector to do what the private sector does best.

Under the new Aid Framework I have requested a specific performance target for engaging the private sector, alongside a target for increasing our expenditure on Aid for Trade initiatives - to 20 per cent of our entire program by 2020. 

And we’re establishing an innovation hub within the Department of Foreign Affairs and Trade to bring together people from across the Federal Government, across our public sector, from the private sector, from home and abroad – the brightest, most creative and innovative thinkers that we can find to work at finding new, better, more creative, more innovative ways of delivering our aid program.

Tourism can play an important role in helping transform Pacific economies – and I’ve used this example many times - cruise tourism alone contributed $55 million to the Vanuatu economy in 2013. 

And our Department has established a fantastic partnership with Carnival Cruises in Vanuatu. Carnival and other cruise companies, including Royal Caribbean, are enabling tourists to access some of the most beautiful, but least visited, islands on earth.

Cruise companies are partnering with local businesses in Vanuatu, training local staff, using local labour and suppliers for essentials like bottled water and coffee. And this engagement with local suppliers creates jobs and opportunities for people who otherwise aren’t directly engaged with the tourists.

And I’ve been having this discussion with our friends in Timor Leste, as an opportunity to open up that most extraordinary island to tourism.

Similarly, our modest investments in agricultural research can open the way for trade and enterprise development in the Pacific, directly benefiting communities.

ACIAR-supported Australian researchers have given coastal communities the knowledge and skills to supply baby oysters as a raw material for Fiji’s pearling industry. And under Australia’s new approach, fresh approach, on engagement with Fiji, I know that this work will be well received, removing a constraint to industry expansion and providing a new source of income to communities with limited options for diversification. So not only are we working with Fiji to promote a return to democracy – we want to ensure that Fiji has a sustainable economy.

This is economic diplomacy in action: working together with the private sector to create far better and more sustainable development outcomes than aid money alone could ever achieve.

We are working with some of our major banks, including Westpac and ANZ, to explore improving access to equity, financial inclusion and literacy in the region.

Access to equity is a crucial impediment to business expansion in the Pacific, Our aid program is funding Australian Volunteers to work with ANZ, supporting business in the Pacific to understand and improve their access to financial products and services. 

We are funding microfinance schemes to support local businesses and a specific goal of ours, the economic empowerment of women.

This work is also supporting the provision of commercial capital to infrastructure projects to public-private partnerships.

I am excited by the energy and the unique expertise that banks are bringing to these challenges.

The private sector is also playing a role in helping to deliver some of the region’s most fundamental needs.

 In Papua New Guinea – one of our foreign policy priorities - we’ve partnered with oil and gas exploration company, Oil Search, through its not-for-profit health foundation.

The Australian Government’s $10 million commitment to this foundation has helped establish a reproductive health training unit in PNG’s highlands, improving training in essential and emergency obstetric care.

Together, these initiatives will not only alleviate poverty; they will improve economic outcomes, promote human development, and build stability and prosperity in the Pacific.

So that’s what economic diplomacy is all about – creating opportunities for the people in the region so they can take control of their destinies and offer a brighter future for their children. And it’s not about pursuing Australian naked self-interest to the potential detriment of other nations – for our prosperity and security depends on a prosperous and secure neighbourhood.

I am passionate about the Pacific - and Australia’s role and responsibility as a major power in the region.

It is in our immediate neighbourhood, and that’s where Australia’s economic diplomacy has the power to really transform lives. And that’s one of the reasons that I merged Australia’s aid agency with the Department of Foreign Affairs and Trade, so that all arms of our diplomatic effort are pulling in the same direction and that all our efforts are aligned.

So, ladies and gentlemen, a large part of ensuring our continued prosperity – as a nation and as individuals – is reliant on building stronger ties with the regional and international economy.

We may be an island geographically, but we can’t afford an island mentality.

Since the beginning of the 20th century, trade has never been less than a quarter of Australia’s national GDP – even as our export focus has shifted from gold and wool to iron ore, LNG and international education.

By being open to the world, by engaging our region, by leading the charge for free trade, Australians have created a growing, stable, diverse economy and an enviable lifestyle.

Australia is a top 20 country in so many respects - the fifth highest per capita GDP; the twelfth largest economy.

Our policies recognise that trade and investment increases income, boosts GDP, creates jobs and reduces prices for consumers. That’s true for Australia and for the countries of our region.

Prosperity and peace go hand in hand.

A more prosperous world where the benefits of global wealth are spread far and wide will help create a stable and secure environment for Australia and for the wider Indian Ocean Asia Pacific region. It is undoubtedly in Australia’s national interest to support global prosperity and create a more resilient and vibrant economy in our region.

That’s what economic diplomacy is all about.

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