La Trobe University lecture and conversation

JULIEBISHOP: Goodmorning and thank you for the introduction. Chancellor, Excellencies, membersof the diplomatic corps, panellists, friends of La Trobe University.

It is always inspiring tobe at one of Australia's leading centres for higher education, and I'mdelighted to be at this La Trobe University event today and I thank Aunty Joyfor her welcome to country.

One thing that has oftencrossed my mind is how future generations will look back and judge ourgeneration and our time, in the same way that we study past events and judgewhat will be the historical events of our time.

Since World War II, wehave been fortunate to live through a time of relative peace, one that has notbeen disrupted by the global conflict.

This prolonged period ofrelative peace has supported the greatest expansion in prosperity in humanhistory, lifting hundreds of millions out of poverty.

It's also been a time ofrapid change, more recently driven by the unprecedented scale and pace of thetechnology revolution, which has disrupted the way we live and work andconnect.

As every generation faceschallenges and opportunities, future generations will strive to find insightsinto the decision-making processes of the time.

For example, theIndustrial Revolution ushered in an era of enormous change, as largely agrariansocieties and economies were challenged by mechanisation and mass production.

It also led to greaterurbanisation as employment grew in cities where many of the factories werelocated, while demand also grew for energy, mostly provided by coal and oil.

These shifts createdwell-documented tensions between capital and labour, and gave rise to unions,for example.

Policy makers respondedto concerns about labour exploitation resulting in governments legislatingemployment standards including for remuneration and safety, among many others.

There has also been muchwritten over the years about the events, suspicion and misjudgements that ledto the outbreak of conflict that spiralled out of control into WWI.

History is not kind tothose who started that war and less kind to the conduct of it.

Policy makers have alsobeen judged harshly for the decisions that gave rise to the Great Depression,including responses that worsened its effects.

Similarly, politicalleaders who embraced the so-called appeasement policy towards the NaziGovernment of Adolf Hitler have been criticised for failing to identify thethreat he posed to the world.

After World War II, theUnited States political leadership was praised for its visionary decision toimplement the Marshall Plan for the reconstruction of Europe and reinvigorationof the economy, including former combatants Germany and Italy.

Such were the horrors ofthe Second World War, in its aftermath there was a collective will to put inplace structures that would prevent a recurrence of global conflict.

The United Nations cameinto existence, with a powerful Security Council as the custodian ofinternational peace and stability.

There are validcriticisms about the veto power held by the permanent five members, however theSecurity Council has played an important role, not least through thecoordination of sanctions against nations failing to uphold norms and standardsof behaviour.

The United Nations is akey part of the international rules-based order that has evolved in the decadessince 1945.

Other key institutionsand organisations include the World Trade Organisation, International CriminalCourt, the European Union, APEC, East Asia Summit, ASEAN, the InternationalAtomic Energy Agency, the Organisation for the Prohibition of Chemical Weaponsand many, many more.

The rules-based order isthat network of alliances, treaties, conventions and institutions underpinnedby international law, that has been developed to protect the interests of allnations and to create a level playing field so that all boats have the sameopportunity to be lifted on the rising economic tide.

The rules based order wasdesigned primarily to prevent larger nations using economic or military powerto impose unfair or coercive agreements on less powerful nations.

An environment where"might is right" and where the rules are set by powerful nations to their advantageis obviously more susceptible to conflict. I believe the test for ourgeneration will be whether given the opportunity we defended and strengthenedthat rules-based order that has brought unparalleled prosperity and opportunityto humanity.

Australia has been aclear beneficiary of the rules based order.

Economically, Australiais entering our 27th consecutive year of uninterrupted growth – thatis a world record for any economy in modern history.

Australia is exquisitelypositioned in the Indian Ocean, Asia Pacific region – for the Indo-Pacific isthe most economically dynamic in the world.

The most rapid expansionof the middle class in economic history is occurring at our doorstep.

In the mid-1980s, 150years after the Industrial Revolution, the world reached a middle class of someone billion people.

Current estimates arethat the global middle class has reached about three-billion people, with halfin our region.

By 2030, when the globalmiddle class is estimated to reach five-billion people, it is forecast thattwo-thirds will be living in Asia.

The opportunitiesavailable to Australia will be immense, as this growing consumer class demandshigh-quality and clean food for example, and high standards of services forthemselves and their families, including healthcare, aged care and education.

The AustralianGovernment's 2017 Foreign Policy White Paper I launched last November withPrime Minister Malcolm Turnbull and our Trade Minister Steven Ciobo, is afundamentally optimistic document.

It commits Australia tochampioning the benefits of economic openness and further trade liberalisationand warns against the pitfalls of protectionism.

In this context, we areconcerned about recent moves in the United States to unilaterally raise tariffsand quotas against some of its trading partners.

This is not consistentwith the United States as a champion for the past 70 years of more openmarkets.

The more open tradingenvironment has, along with prolonged peace, underwritten prosperity in the UnitedStates and around the world.

It is not in Australia'sinterests, nor that of the world economy, for any escalation of currenttensions into a full scale trade war.

Our concerns have beenraised with the Trump administration at the highest levels, where we have urgedthe United States to remain within the framework of the World TradeOrganisation and to use its dispute settlement processes.

It's also in that contextthat I welcome reports overnight President Xi Jinping's commitment to trade andinvestment openness, with greater access to significant sectors to the Chineseeconomy and the lowering of tariffs on vehicle imports.

Our White Paper is also aclear-eyed and frank assessment of the regional challenges we face over thenext decade and beyond.

To a large degree,the prospects for continued peace and stability in the Indo-Pacific depend onour capacity to manage the consequences of rising prosperity and wealth – whichis overwhelmingly a blessing.

Rising national wealth enablesnations to invest more in their military. Defence outlays in the regionexpanded over 5.5% in the last financial year, which easily outpaced the 1%overall increase in global military spending.

According to the Stockholm International Peace ResearchInstitute, over half of the top 10 countries with the largest military budgetsare in the Indo-Pacific: the United States, China, Russia, India, Japan andSouth Korea.

All, with the exception of Russia, are among the top 10trading partners for Australia.

Six of the world's ninenuclear weapons states are in our region.

Even though the UnitedStates is likely to remain the world's only superpower inthe decade ahead, we have never been in an era where China, Japan and Indiahave also been powerful at the same time.

By 2020, the combinedmilitary budgets of regional countries will likely match or exceed militaryspending by the United States for the first time in at least a century.

Many of the major orrising powers in the Indo-Pacific have maritime or land-based disputes with oneanother – some go back decades, even centuries.

These disputes reinforcethe need for the rules-based order to facilitate negotiated and peacefulresolutions.

A case in point isAustralia and Timor-Leste's successful reconciliation pursuant to the UnitedNation Convention on the Law of the Sea, UNCLOS, to settle our maritimeboundary claims in the Timor Sea and I was pleased to be able to sign thetreaty with Timor Leste in the United Nations in the presence of the UN SecretaryGeneral last month.

More generally, there isgreater uncertainty than was the case when optimism was at a peak in the 1990safter the collapse of the Soviet Union and the end of the Cold War.

Ideologically,illiberalism is on the rise – both in our immediate region and throughout theworld.

At this point I must makemention, for those who read The Australian and saw it this morning, I point outthat my reference is to our "immediate region", which refers to theIndo-Pacific, not any one country. I'm sure TheAustralian will correct their error. They haven't yet. It's ratherdisturbing when journalists make assumptions that are wrong without checkingtheir source, wouldn't you say Mr Walker?

According to FreedomHouse, democracy has suffered global decline since 2006 with the lowering ofdemocratic standards occurring in 113 countries compared to an improvement ofsuch standards in only 62 countries.

This year marks the 12thconsecutive year of decline in measures of global freedom such as free and fairelections, freedom of the press and political and civil liberties.

The attack against, orwinding back of liberal institutions is resulting from the rise ofauthoritarian governments in some instances and from the spread of extremereligious ideologies in other instances.

In some other cases, itis a product of state and institutional fragility.

It is in Australia'sinterest to peacefully promote the spread of liberal principles and institutionssuch as the rule of law, transparency, and appropriate degrees of separationbetween the strategic and political objectives of states on the one hand withcommercial activity of businesses on the other.

So our White Paper, as itis underpinning, has a defence and strengthening of the international rulesbased order.

These are issues I havediscussed with world leaders and counterparts, for example, Iraq's PrimeMinister Abadi, that in the aftermath of the ISIS defeat, to ensure allcitizens, including minorities, are equal before the law.

All citizens of any Statemust feel confident their interests are protected, otherwise there is a riskthey will turn to militias and insurgents as an alternative.

Dr Henry Kissinger wrotein his 2014 book World Order that we are at a moment in history when: "Chaosthreatens side by side with unprecedented interdependence".

Interdependenceand economic integration would normally be expected to reduce the risk of chaosand conflict, however it also does not of itself guarantee stability.

Our White Paper commitsAustralia to an ambitious and proactive strategic and diplomatic agenda. Itcontains a specific policy focus on the Pacific, our neighbourhood, where wehave committed to a significant step up in our engagement in the Pacific.

Overall, it articulatesour values as a liberal democracy, our interests which serve as the frameworkfor proactively acting to promote our interests, and responding to unforeseenevents.

I believe it is a timelyand well researched policy platform - our White Paper team participated in 24roundtable discussions across Australia, met with more than 60 prominentAustralians and subject-matter experts, and received over 9,200 writtensubmissions, including, and I thank you, from La Trobe University – so we consultedwidely.

To be clear, the rules-based order is not facing the samedirect assault as during periods of the Cold War – even if the policies ofpariah countries such as North Korea are in direct defiance of it.

However, we must ensurethat nations do not fall for the temptation of ignoring international law andrules for narrow advantage and short-term gain.

The rules-based orderwill quickly fray if it is perceived that advantage can be gained by floutingit or working around it.

We are also particularlyfocused on the Indo-Pacific as we seek to defend and strengthen the existingorder to enable the continued economic rise of individual countries and theregion.

The economic gains inour region and its emergence as a vast and integrated economic zone, producingthe lion-share of goods and services to the world and each other would havebeen impossible without the rules we have in place.

There are otherimportant aspects to note about the international rules-based order.

It is an open and dynamic system which does notentrench past gains, protect existing privileges, or constrain any country'srise within the order.

Since the end of theCold War, China has become the greatest beneficiary of the existing order whenit opened itself up to the world, and especially after it joined the WTO inDecember 2001.

According to the IMF, Myanmar, India and Bangladeshare expected to emerge as the fastest growing economies in the region.

All countries have as great an incentive and dutyto play their part in supporting the rules-based order.

We are today in a far morecomplex and diverse geo-strategic and geo-economic region.

For example, Japan andSouth Korea are significant economic and strategic powers, India is already a greatregional power with a young population, Indonesia and Vietnam are SoutheastAsian rising powers.

To be sure, China hasemerged as a critical economic partner to every economy in the Indo-Pacific andbeyond, and is the largest trading partner for many countries includingAustralia.

TheAssociation of South East Asian Nations, ASEAN was formed 51 years ago and the fivenations of Indonesia, Malaysia, the Philippines, Singapore and Thailandrecognised the need to promote collective economic growth, social progress,cultural development, and peace and stability.

Atthat time, the then-Foreign Minister of Australia, the Minister for ExternalAffairs, Paul Hasluck, who in fact is a predecessorin my seat of Curtin in Western Australia, was the first world leader towelcome the establishment of ASEAN.

Sevenyears later, in 1974, Australia became the first Dialogue Partner of ASEAN.

Werecognised that the sea lanes of Southeast Asia were vital for us, that thesecurity challenges facing the region demanded a collective regional responseand we knew that the economic prosperity of these five important economies wasof vital importance to Australia, the region and, as it turns out, globally.

Thesereasons remain at least as pertinent today as they did then.

This was why PrimeMinister Turnbull hosted the ten ASEAN nations here in Australia last month atthe first ASEAN-Australia Special Summit.

This Special Summit has markeda new era in our relationship and partnership.

Australia and ASEAN committed to cooperate further withrespect to our response to regional and global challenges and build on our deeplegacy of economic cooperation.

ASEAN is thegeographical and diplomatic heart of the Indo-Pacific.

Our White Paper stands as a clear articulation ofour enduring values and interests and will guide our external engagement anddeployment of national resources over the next decade and beyond.

And of course our greatest national resource is ourpeople, and one of the most important aspects of our international engagementto date, is our New Colombo Plan.

My inspiration for thispolicy was the original Colombo Plan of the 1950's and 60's that brought manythousands of young people from our region to study in Australia, and gainqualifications in Australia, with significant numbers of those scholars now insenior roles in government and business throughout our region.

In 2014 we commenced apilot to send our students overseas for a New Colombo Plan and 40 New ColomboPlan undergraduates were supported to study for 12 months overseas and live andwork. The four pilot locations were Indonesia, Japan, Hong Kong and Singapore.Another 1000 students took up the short-term mobility projects in our pilot.

It was such a success,the feedback from the four locations, was such that we rolled it out across theIndo-Pacific and today there are 40 locations that host our New Colombo Planundergraduates from our universities.

For example, this yearthe New Colombo Plan will support 120 of the scholars in 20 locations and forthe first time, our scholars, will undertake programs in Tonga, Micronesia andNew Caledonia, now among the 40 host locations that welcome Australianundergraduates under the New Colombo Plan.

There will be 13,000students undertaking the 2018 New Colombo Plan mobility projects.

By the way, La Trobe hasbeen particularly successful, with seven of its students receiving prestigiousscholarships and about 609 students receiving funding for the shorter coursesin our region.

By the end of this year,from a standing start in 2014, our New Colombo Plan program will have supported30,000 young Australian undergraduates living, studying and working in ourregion, thus deepening Australia's relationship and engagement.

At the recent ASEANSummit, each leader specifically mentioned the New Colombo Plan as an exampleof Australia's genuine commitment to our region, and I believe that this is oneof the proven investments that the Australian Government can make in our longterm national interests.

It will help build ournational prosperity and our place in the region for decades to come, with ouryoung Australians as an army of unofficial diplomats, making connections,building networks and friendships that will last a lifetime, I feel confidentthat the very best days for Australia within the Indo-Pacific region lie aheadof us.

Overall I believe this isone of the most prudent investments that the Australian Government can make inour long-term national interest and will help build our national prosperity andour place in the region, for decades to come.

With our young Australians as an army of unofficialdiplomats I feel confident that the best days for Australia and theIndo-Pacific region are ahead of us.

Overall, I believeAustralians should be optimistic about our future as an open liberal democracyand an open export-oriented market economy, but we must be vigilant andcontinue to promote and advocate for these values and interests.

And if we remaincommitted to our values and are clear-eyed about our priorities, I believe ourfuture will be bright.