Australia and New Zealand: An Expanding Partnership

Address by The Hon Alexander Downer, MP, Minister for Foreign Affairs, to the University of Aukland, 22 August 1997.


Professor Carson, distinguished guests:

I am delighted to be in New Zealand, and to have this opportunity to speak to you. I understand that this is the first in a series of Vice-Chancellor's lectures delivered under the auspices of Auckland University.

I am particularly pleased to be in Auckland to deliver this lecture. It is a city that epitomises many of the things I want to say about the dynamic and mature partnership enjoyed by Australia and New Zealand. The air corridor between Sydney and Auckland is Australia's busiest. It carries more passengers than any of Australia's other international air routes to Asia, Europe or the Americas.

Australia and New Zealand are modern and successful democracies living in the most exciting and challenging region of the world. The days when stereotypes and cliches dominated the way we saw and thought about each other are fast disappearing. We have a great deal to offer each other, the region and the world.

Our relationship is so natural and familiar to people on both sides of the Tasman - and encompasses such a wide range of ties - that it can be easy to lose sight of just how unique it is. From our growing links with the powerhouse economies of ASEAN and North Asia, to more traditional security and defence cooperation - the relationship is uncommonly diverse and forward-looking.

The intimacy of the Australia-New Zealand partnership is all the more remarkable because it does not entail any `blurring' of national identities or traditions, as anyone familiar with our intense sporting rivalries will be quick to tell you. But, like all close relationships, it will require the positive direction and attention of government and business if it is to reach a higher level of mutual benefit. A partnership that is not renewed and reinvigorated is bound to fail. I know that the Australian Government's strong commitment to the partnership is matched only by the high priority that the New Zealand Government attaches to building closer relations.

In that spirit, I want to speak more about the key dimensions of this unique partnership, with a particular focus on our economic links and extensive cooperation in the region, and suggest ways we can make relations even more productive in the 21st century.

PART ONE - Australia and New Zealand: An Expanding Partnership

1.1 Equal and Easy-Going Partners

First and foremost, the Australia-New Zealand relationship is a partnership of equals. We do not offer each other unsolicited or patronising advice on how to run domestic or foreign policy. Rather, we work together in a spirit of genuine cooperation based on shared interests, perspectives and values. That is the only secure basis for a mature relationship. It is why the relationship has proved to be so durable.

Australia and New Zealand are no longer European outposts perched on the edge of the Asia Pacific. We are tolerant and sophisticated societies with an expanding web of relationships throughout the region. Both countries are well acquainted with the cutting edge of globalisation. In overall terms, Australia is ranked 8th in the world as a network society `plugged in' to the high-tech world, and New Zealand's overall ranking is 11th. That puts both of us ahead of Germany (13th overall) and Japan (16th overall). Of the 17 Asia Pacific economies, only the US and Canada have a higher overall rating than Australia and New Zealand.

Of course, we do not always see eye-to-eye. For all our shared perspectives, our histories and national interests are not identical. We bring different capabilities and insights to the relationship. But that is a sure sign of the relationship's strength, not its weakness. After all, only distant acquaintances find nothing to argue about and discuss. Together, we complement each other and contribute much more to the prosperity and security of the region and beyond than either of us could hope to do in isolation. That is the essential beauty of the partnership, and is its most irreplaceable quality.

The openness and vigour of the official-level bilateral dialogue is an excellent example of what I am talking about. Australia consults with no other country on so regular or broad-ranging a basis. Don McKinnon and I have just concluded the latest round of our regular six-monthly Foreign Ministers' discussions, and our agenda - as always - ranged productively across regions and topics.

From the Australian viewpoint, we value these regular exchanges highly because of the many insights that New Zealand has to offer on regional and global developments, as well as, of course, the extra dimension that it gives to bilateral relations. And I know that the New Zealand side recognises the importance of these meetings in maintaining the close relationship and providing a high-level forum for open exchanges of views.

1.2 A Burgeoning Economic Partnership

Without doubt, the economic partnership is fundamental to the health and vitality of the relationship. It is a partnership which is central to the way we each achieve our global and regional trade objectives, and ensure the world is open to our exports. It has delivered thousands of jobs for Australians and New Zealanders, and has given industries and enterprises on both sides of the Tasman the opportunity to expand and mature.

The trade and investment figures make this abundantly clear. Today, New Zealand is Australia's fourth largest trading partner and third largest export market. Australia - in turn - is New Zealand's largest trading partner. Over the period from 1983 to 1996, bilateral trade increased at an average of 12 percent per annum. Bilateral trade in goods last year amounted to about $9.4 billion, while the trade in services exceeded $2 billion.

Impressively, over three quarters of Australia's exports to New Zealand - and about 60 percent of New Zealand's exports to Australia - are manufactured goods. New Zealand is Australia's largest market for elaborately-transformed manufactures, twice as important to us as the next market on the list, the United States. Australia foreign direct investment in New Zealand stands at over $ 8 billion (to the end of June 1995), while New Zealand foreign direct investment in Australia is almost $ 5 billion.

The Australia-New Zealand Economic Relations Trade Agreement - more popularly known as the `CER' - is the core of this economic partnership. Concluded in 1983, this landmark agreement laid the foundations for the growth we have seen in economic links over the last decade and a half. It is fashionable in some quarters to assert that the CER agenda has run its course. That is not true. While we have made great strides in the past, challenging issues remain. For example, progress on "third generation" regulatory harmonisation issues is important because it will advance economic integration further, thereby bringing greater benefits to more and more producers and consumers in both countries.

As many of you know, Australia and New Zealand already operate as a single market. Australians and New Zealanders are no longer simply banking at the same banks and driving the same cars. We are buying the same white goods, and the same foods. New Zealanders are beginning to recognise retail names which have been household words in Australia for many years. And Australians are getting to know a host of New Zealand's top quality trademarks. On the Australian side, every Saturday afternoon across the nation, you will see Aussie footballers enter the fray carrying the unmistakable `Canterbury of New Zealand' emblem on their jerseys.

This demonstrates that Australian and New Zealand businesses are increasingly operating in a trans-Tasman rather than national corporate and commercial environment. These emerging trans-Tasman enterprises have substantial manufacturing and business centres in Australia and New Zealand. They have thrived under the liberalised CER trading regime, and are using their CER experience to gain a foothold in much larger markets overseas.

I am convinced that the economic partnership set in place by the CER will continue to underpin the well-being of both countries. The future prosperity of New Zealand and Australia is tied together, and both Governments must continue to work closely with business to build even better economic linkages.

1.3 The People-to-People Partnership

Of course, the bilateral relationship has always meant a great deal more than dollars and cents. The extensive two-way flow of people has contributed much to the nation-building process in Australia and New Zealand. It is fair to say that these people-to-people links remain at the heart of the modern relationship.

At the beginning of this century, Australia and New Zealand were pioneers of universal suffrage, free education and health care services. In the same spirit of policy innovation, as we approach the new millennium, both countries are renovating their respective economies and pursuing public sector reform.

Last year, New Zealand was Australia's largest source of migrants. Trans-Tasman family ties are on the rise. Australians and New Zealanders from all walks of life are making their way across the Tasman - from business people in search of new profits and joint ventures, to academics in search of new insights or tourists in search of the long white cloud or the long cold beer.

These people-to-people links are underpinned on the Australian side by the Trans-Tasman Travel Arrangement. The free movement of New Zealanders under this Arrangement is unique in Australia's immigration law. It demonstrates the wide public acceptance in Australia of the very productive contribution that New Zealanders make to Australia's diverse national life.

Many people forget that Australia and New Zealand have bilateral agreements covering social security arrangements and health care. Work is underway to update these important reciprocal agreements. In particular, we would like to see early progress towards the finalisation of a bilateral Child Support Agreement. This will ensure that adults with continuing financial responsibilities as parents are held to account even if they cross the Tasman. Maintaining and updating all these arrangements to meet contemporary challenges - with equity - is vital to the continued efficiency and public acceptance of the freedoms of bilateral travel.

PART TWO : A Partnership for the Asia Pacific

Looking beyond the diverse bilateral ties I have just outlined, Australia and New Zealand are part of a region that is undergoing an historic transformation. The economic, social and cultural changes sweeping irresistibly across the region are likely to shape the character of the Asia Pacific well into the next century. Long-established patterns of production, employment and social organisation are being turned upside down by these developments.

Australia has no higher foreign policy priority than to contribute to the evolution of the Asia Pacific. I know that New Zealand has a similar commitment to the well-being of the region. Together, we are doing a great deal to help meet these challenges and create a more stable, secure and prosperous Asia Pacific. As I said at the beginning, by bringing different strengths to this joint effort, Australia and New Zealand complement each other and `add value' to our many regional endeavours.

2.1 The South Pacific - Shared Interests and Achievements

In the South Pacific, Australia and New Zealand are working to improve regional cooperation and development. Australia's relations with the countries of the South Pacific are about mutual interests, a shared history and a common future.

Before arriving in Auckland, I had the opportunity to visit Vanuatu and Fiji in preparation for the forthcoming South Pacific Forum meeting in the Cook Islands. These visits gave me the opportunity to reaffirm the importance Australia attaches to long-term and constructive bilateral relations with the Pacific island countries.

Australia appreciates the skills and resources which New Zealand commits to economic development and improved self-sufficiency in the Pacific - at a time when some traditional sources of aid are drying up. Like New Zealand, Australia will continue to support Pacific island governments in their development of improved economic and resource management policies. In 1997/98, Australian assistance the South Pacific will be maintained at $124 million.

I particularly want to applaud New Zealand's very constructive contribution to the peaceful resolution of the Bougainville crisis through its sponsorship of the recent Burnham talks.

While settlement of the conflict may still be some way off, New Zealand's role in promoting a productive meeting between the Bougainville factions was a vital first step. All credit is due to Don McKinnon and his hard working team.

Throughout the process, Don McKinnon and I have consulted regularly and closely, as has Prime Minister Howard with Prime Minister Bolger. We will continue to work together in support of the people of Papua New Guinea. This initial step for peace in Bougainville must be consolidated, and the momentum for peace must not be allowed to falter.

2.2 Enhancing Wider Regional Cooperation

Meeting the Challenge of Trade Liberalisation

Australia and New Zealand want the Pacific island nations to harness and benefit from the economic dynamism that is sweeping across the region. In the wider region - as in the South Pacific - economic liberalisation is the key to a buoyant trade and investment environment.

Economic liberalisation encourages a more efficient allocation of resources and gives recognition to the merits of comparative advantage. But, above all, it is the best means of sustaining the sort of economic growth that produces new jobs and improved standards of living for citizens in every countries of the region.

Australia and New Zealand are helping the region prosper and grow through our shared commitment to the liberalisation and deregulation of our own economies. Significantly, tariffs and other trade barriers across the region have already been reduced substantially, bringing immense benefits to Australia, New Zealand and all our regional friends and neighbours.

Australia and New Zealand see APEC as the key framework for regional cooperation on economic matters. I am convinced that if APEC can push ahead successfully with its far-reaching and comprehensive agenda, it will make a very practical contribution to sustainable growth in the region. In the process, it will nurture a greater sense of regional community, shared values and common interests.

The positive outcomes achieved by the APEC Trade Ministers meeting in Montreal, which I attended earlier this year, were therefore very pleasing.

The Importance of the ASEAN Free Trade Area (AFTA)-CER Linkage

The CER that I mentioned a few minutes ago stands out as a premier example of the benefits of free and open trade. More than that, CER was always envisaged as a collaboration between government and business in both countries. The same spirit of collaboration is assuming even more importance as CER's links with the ASEAN Free Trade Area develop and strengthen, and the exciting potential of more open region-wide trade is realised more fully.

Developing a link between AFTA and CER is about expanding our trade and investment. It is about looking at ways of reducing the costs of doing business, for example by taking steps to simplify our customs regulations and procedures and align our technical standards. It is also about encouraging closer contact between our business communities.

That enormous potential emerges very clearly when you consider that ASEAN is a market of almost 500 million consumers with rapidly increasing incomes. It has a combined GDP 90 percent the size of China's. Trade between the CER area and AFTA doubled between 1990 and 1995 - from US $ 7.9 billion to US $ 15.9 billion.

The AFTA-CER Ministerial consultations provide an annual high-level focus for planning and thinking about closer AFTA-CER links. I was particularly pleased that the 1996 AFTA-CER Ministerial Meeting drew the business sector much more closely into the process. The `business track' of AFTA-CER is a highly significant part of the exercise, and has resulted in the establishment of excellent contacts with ASEAN business organisations. I am proud to say that the Australian business community has played an important part in establishing these links. I am certain that these "business track" activities will continue to build enthusiasm across the board for a more extensive AFTA-CER relationship.

ASEAN Economic Ministers and the Australian and New Zealand Trade Ministers will meet in Kuala Lumpur in October to set priorities for 1998 and discuss the future of the relationship. As the economic integration of ASEAN gains more momentum, I believe that the AFTA-CER relationship can only grow in importance for Australia and New Zealand, particularly as more businesses on both sides of the Tasman and throughout ASEAN realise the new opportunities available for everyone through a closer linkage.

In the same way, I believe that recent progress in CER's links across the southern Pacific - with the Latin American Common Market (Mercosur) - is a constructive development which has the potential to deliver positive export outcomes for both parties.

Regional and Global Security

The regional economic transformation and social change to which I have referred has been matched by the emergence of new patterns in the power relationships and security interests of countries in the region. For Australia and New Zealand - as for all the countries of our region - this means that economic prosperity and regional security are inextricably intertwined.

Australia and New Zealand both understand that regional security and stability depends increasingly on a complex web of linkages at the bilateral, sub-regional and regional level. We both recognise the ASEAN Regional Forum as the premier forum for multilateral regional security dialogue and cooperation.

Last month, I announced in Kuala Lumpur four new important security dialogues which Australia will conduct with China, the Philippines, Thailand and Vietnam. These represent a real strengthening of regional security cooperation. The new dialogues will commence over the coming year and will involve high level Australian officials from both our foreign and defence ministries.

Australia also places great store on the long tradition of partnership with New Zealand on defence issues and international security. As most Australians and New Zealanders are aware, these ties go back a long way - beginning with the ANZAC tradition, the 1944 ANZAC Pact and ANZUS, through to the Closer Defence Relations arrangements. In tandem with New Zealand, Australia is continuing to support the defence and security of the region through defence cooperation worth some A$ 30 million in 1996-97. Security engagement with the region, and the carrying out of our respective international responsibilities, require a serious and continuing investment of energy and resources.

Recently, our cooperation on international security and disarmament issues has gained a new lease of life. Last year, we teamed up successfully - in company with an impressive array of other countries - to secure the elimination of nuclear testing in the Pacific through the landmark Comprehensive Test Ban Treaty. This historic achievement should not be underestimated. It had enormous symbolic and practical significance for the peoples of the Asia Pacific.

Conclusion - A True Partnership for the 21st Century

To be true partners, two countries must possess something jointly. In the case of Australia and New Zealand, we possess a great deal. We possess a shared experience and democratic, liberal values stretching back to our earliest days as sovereign nations. We possess extraordinarily close and growing economic links, deep political ties and people-to-people contacts unequalled anywhere else in the region. We possess a strong attachment to the prosperity and security of the region, and a determination to make the Asia Pacific a better place to live.

And last - but certainly not least - we possess the rare ability to see where our interests come together, and to cooperate in the closest possible way in pursuit of those interests - not just in the region but across the globe. Without doubt, then, Australia and New Zealand can boast a genuinely mature and valuable partnership.

That is why an enormous fund of goodwill exists between Australia and New Zealand - even when we skirmish in the sporting arena. A reservoir of mutual regard enriches almost every aspect of public life in both countries. But I believe that the greatest asset of the relationship is its wonderfully dynamic and forward-looking quality. This abundant energy and momentum shows every sign of increasing, not diminishing.

That is excellent news for all Australians and New Zealanders, and it makes it even more imperative that we re-double our efforts to make this unique partnership even stronger and more mutually profitable in the 21st century.

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