Charting Australia's Regional Future: The White Paper on Foreign and Trade Policy

Speech by The Hon Alexander Downer, MP, Minister for Foreign Affairs, to the Foreign Correspondents' Association, Sydney, 29 August 1997.



It is a great pleasure to be here, and to have the opportunity to speak to the Foreign Correspondents' Association.

Yesterday, the Government released Australia's first White Paper on Foreign and Trade Policy.

The White Paper's publication fulfills a key election promise made by the Coalition. More than that, it reflects the Government's strong commitment to a clear-headed foreign and trade policy that the Australian community understands and supports. It sets out the principles and priorities of the Government's foreign affairs and trade policy, and it examines the key international challenges facing Australia over the next fifteen years.

The quality of Australia's future over the next fifteen years and beyond will be determined largely by its own efforts. Australia cannot rely on others to promote the interests of Australia. Securing a future requires a willingness and a capacity to engage the world, and thereby to influence the events which shape the future. It also requires Australia to make best use of its many assets.

The White Paper demonstrates conclusively that the next century will offer great opportunities for Australia. But if Australia is to grasp these exciting opportunities it must have a strong economy at home and an active voice abroad. The two must be pursued in tandem because in a global economy there can be no separating foreign and trade policy from domestic policy.

The White Paper puts Australia's national interests squarely at the centre of Australian foreign and trade policy. In all that it does in foreign and trade policy, the Government will apply a basic tenet of national interest: how does it advance the security of Australia and the jobs and standard of living of all Australians.

The starting point of the White Paper is that Australia has global interests. It is part of the global economy. Its prosperity is tied to its performance as a trading nation. Its security is tied closely to the security of its neighbourhood. But our horizons must extend well beyond our immediate region. This is the experience of our past and it is the key to our future. For Australia, the alternative to a foreign and trade policy of broad scope is irrelevance and decline.

I want to focus my remarks today on what the White Paper says about Australia's future in the Asia Pacific, and what the Australian Government is doing to make the White Paper a practical reality in our regional policies. But, first, I want to speak briefly about the overall framework that the White Paper provides for Australia's foreign and trade policy.

PART ONE: Advancing Australia's National Interests

1.1 Getting Our Priorities Right

The White Paper makes some very important judgements about the world in which Australia will be operating. It brings together everything that the Government has been doing in foreign and trade policy since March last year, and charts the way ahead for Australia's place in the region and the world in the 21st Century.

Most importantly, the White Paper identifies globalisation and the rise of East Asia as the two most profound trends in the international environment to which Australia's foreign and trade policies must adapt and respond over the next fifteen years.

Globalisation offers huge opportunities for internationally competitive economies, but also brings in its wake challenges for political and economic management. It has profound implications for trade policy. It blurs the division between foreign and domestic policy. It increases competitive pressures in markets, and makes globally-based trade rules and disciplines even more important.

The White Paper's judgement is that economic growth in industrialising Asia will continue at relatively high levels over the next fifteen years. The World Bank forecasts growth for East Asia (excluding Japan) over the next decade at 6.8 percent, compared with 2.4 percent for Western Europe and North America.

All of this means that the countries of Asia will become even more important to Australia as trade and investment partners, and in security terms. It also has implications for Australia's relative standing in the region, and significant consequences for the broader relativities of power and influence in the Asia Pacific and beyond.

1.2 Defining Practical and Effective Strategies

The White Paper sets out the broad framework for Australia to meet these challenges effectively. It contains elements both of change and of continuity, and represents a significant rearticulation and rebalancing of Australian foreign and trade policy. Its key elements include:

. a reaffirmation that the Asia Pacific is the Government's highest foreign and trade policy priority;

. an emphasis on bilateral relationships as a means of advancing Australian interests. Strong bilateral relationships are not an alternative to regional and global efforts, but they form the basic building block of the Government's foreign and trade policy strategies;

. a more selective approach to Australia's involvement in multilateral issues, concentrating on areas where Australia's national interests are closely engaged;

. a recognition of the contribution that trade liberalisation makes to Australia's standard of living, and the Government's commitment to a `jobs foreign and trade policy';

. strong support for practical measures which advance Australia's trade interests including through the World Trade Organisation and the free trade and investment objectives of APEC;

. the importance of rounded security policies which embrace a strong national defence capability, the alliance with the United States, expanding bilateral and regional security dialogue, stronger regional security institutions and support for global regimes against weapons of mass destruction; and

. the adoption of a `whole-of-nation framework' which recognises that Australia's international competitiveness in a global economy will be closely linked to a more flexible labour market, investment in research and development, strong education and training systems, good infrastructure and effective savings and taxation policies.



PART TWO: Australia's Enduring Commitment to the Asia Pacific

2.1 Marshalling Australia's Assets

A fundamental message of the White Paper is that Australia is committed to the Asia Pacific for the long haul, and that Australia's highest foreign policy priority is to make a lasting contribution to the region.

The White Paper is our declaration of commitment to our neighbourhood as we begin what surely will be the Asia Pacific century. It reflects the weight of Australian interests which are engaged with the Asia Pacific: with the region's three major powers and largest economies - the United States, Japan and China - and with our largest neighbour - Indonesia. It reflects the significant Australian interests which are engaged in Australia's relationships with the other ASEAN states, the Republic of Korea and New Zealand. It reflects the effort and priority we have attached to Australia's relationship with Papua New Guinea and the other island state of the South Pacific. And it reflects the initiatives this Government has taken to deepen Australia's ties with South Asia.

As a member of the Asia Pacific, and with one of the most East Asian-oriented economies in the world, it makes perfect sense for Australia to build on the foundations which complementary economies and geographic proximity provide.

Australia brings substantial economic, strategic and cultural assets to its regional and global engagement. The Australian economy is bigger in absolute size than all in the region to our north except Japan, the ROK and China. Australia has a strong skills base sustained by quality educational and training institutions. Australia has an impressive record of inventiveness and openness to new technology and innovation. In overall terms, Australia is ranked 8th in the world as a network society `plugged in' to the high-tech world. That puts 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.

Australia's many cultural assets include a proven capacity to change and adapt which is a feature of immigrant cultures, particularly those that value ethnic and cultural diversity. In short, Australia is one of the most sophisticated and modern societies in the region. Australia's unique economic and cultural profile makes us particularly attractive as a conduit for business between Asia, Europe and North America.

But none of this is to suggest that Australia can afford to be complacent about its future. Rather, the White Paper emphasises that Australia must marshal its considerable and growing assets and bring them to bear on the prosperity and security of the world in which we live.

2.2 Growing Regional Trading Links : Creating New Jobs for Australians

The Importance of Economic Liberalisation

The White Paper underlines Australia's accelerating involvement in the economic life of the Asia Pacific, and the enormous potential to expand our economic ties across the region. It recognises that the sustaining force behind the Asia Pacific's dynamism is economic liberalisation.

Economic liberalisation is the key to a buoyant trade and investment environment. It 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 country of the region.

The White Paper reinforces the importance of striving for further economic liberalisation at three levels - through bilateral relationships, APEC and the World Trade Organisation. Each level has an indispensable contribution to make to increasing Australia's prosperity, none offers the only way ahead, and all three will be needed if Australia is to continue to improve its trade performance.

At the bilateral level, the Government has already had a great deal of success in building trust between countries in the region and striking mutually beneficial deals. I want to mention just three of the more recent highlights:

. The landmark Australia-Indonesia Development Area - or AIDA - was inaugurated successfully in May this year. AIDA is all about reducing barriers to business investment in Eastern Indonesia so as to bring development for Indonesia and create jobs for Australians.

. Agreement was reached earlier this year that the Australian and Japanese Prime Ministers will hold an annual summit on bilateral and regional issues. This gives us an unprecedented opportunity to work with our largest trading partner at Prime Ministerial level so as to achieve positive economic outcomes for Australian firms and workers.

. In February this year, the Government gained concrete results from the inaugural Australia-Thailand Ministerial Economic Commission meeting held in Canberra. Thai and Australian Ministers set the goal of doubling Australian-Thai trade, and doubling our two-way investment, by the year 2000.

- A key demonstration of Australia's commitment to this goal was the decision to participate in the $1 billion dollar currency swap as part of the IMF's package to help the Thai economy. This was a concrete example of Australia's commitment in action.

At the regional level - as the White Paper indicates - we have already seen tremendous reductions in trade barriers, partly under the auspices of APEC. ASEAN, in particular, has cut applied tariffs on a trade-weighted basis by two-thirds and most recently Indonesia has announced further cuts. In the same period, China has cut its average tariff rate from 35 to 23 per cent, and will reduce the rate to 15 per cent by the year 2000.

Australia wants to go on contributing to the growth of regional economies as it has now for decades. The White Paper argues that - if our region is to continue to grow rapidly, and living standards are to rise substantially - governments must continue to push for trade and investment liberalisation.

APEC, of course, gives us considerable hope that this trend will continue. Last year, APEC economies began implementing their goal of free and open trade and investment by 2010 and 2020 for industrialised and developing economies respectively.

I believe 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.

Beyond APEC, the White Paper identifies as a key priority over the next five years the need for genuinely closer links between CER (Australia's economic relations agreement with New Zealand) and the ASEAN Free Trade Area (AFTA).

Developing closer links 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 dynamic business communities.

2.3 Enhancing Regional Security

The New Regional Security Environment - Key Strategies

The White Paper's analysis of regional trade and investment patterns - and their wide-ranging implications for jobs in Australia - is matched by its hard-headed appraisal of the new regional security environment. This appraisal shows that Australia has an historic opportunity to help lock in the peace which is underwriting the region's extraordinary economic growth.

The White Paper makes it clear that Australia's security means much more than safety from direct attack. It means preserving our nation's capacity for independent decision-making. And it means recognising the growing inter-relationship of Australia's security and economic interests with the security and stability of the Asia Pacific.

While Australia's strategic environment is shaped by developments in the Asia Pacific, global issues can also have significant security implications for Australia. The risk of global conflict has diminished considerably with the end of the Cold War, but other potential threats remain, including the proliferation of weapons of mass destruction.

The White Paper demonstrates that Australia's security interests should not be seen exclusively in terms of potential military threats or regional conflicts. Over the next fifteen years it is likely that even more attention will be paid to so-called non-military threats such as pandemics, illegal migration, refugee flows, environmental degradation, narcotics and transnational crime.

The White Paper's judgement is that the United States will continue to see its best interests being served by maintaining its strategic engagement in East Asia, where it has vital security and economic interests.

The White Paper also notes that China's economic growth, with attendant confidence and enhanced influence, will be the most important strategic development of the next fifteen years. How China manages its economic growth and pursues its international objectives, and how other nations, particularly the United States and Japan, respond to China will be crucial issues over this period.

The growth in economic and political influence of others in East Asia, notably the Republic of Korea and Indonesia, is also likely to affect the dynamics of regional security.

In the face of this evolving regional security environment, the White Paper advocates practical strategies for advancing Australia's security interests. These strategies include:

. maintaining a strong national defence capability;

. the alliance relationship with the United States;

. expanding Australian bilateral, regional and multilateral security links - including through expanded security dialogues;

. strengthening Asia Pacific-wide regional security institutions, of which the ASEAN Regional Forum (ARF) is the most significant ; and

. working to ensure that the international regimes covering weapons of mass destruction are implemented and, where necessary, strengthened.

Australia's Vital Contribution to a More Secure Region

I am pleased to say that the Australian Government is already making substantial progress along the policy lines and framework advocated by the White Paper.

Last year, Australia gave new vigour to its alliance with the United States through the AUSMIN joint declaration - known as the Sydney Declaration - the focus of which was very much on the contribution the alliance makes to regional security.

Australia has also been building a wide-ranging set of bilateral linkages which provide the indispensable foundation for pursuing mutually beneficial objectives.

Australia has in recent years been extending the number of countries with which it has bilateral dialogues on regional security issues. Last year we commenced political-military talks with Japan and the Republic of Korea and instituted semi-official talks with Vietnam.

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. With the addition of these new dialogues, Australia now has bilateral security linkages, in one form or another, with most of the countries of the East Asia/Pacific region.

At the regional level, Australia strongly supports the ASEAN Regional Forum. Importantly, the ARF brings together all the countries which have an impact on, or are involved in, the security of the Asia Pacific region. Although the ARF is still in its youth, it is already starting to achieve some very positive results. The first level of the ARF's activities - confidence-building - is maturing as a useful mechanism for developing a sense of shared strategic interest.

The White Paper emphasises the importance of building regional structures which promote the peaceful resolution of differences and which foster a sense of common interests and shared responsibility for the region's future.

The Australian Government will remain committed to strengthening the web of close relationships which lie at the heart of regional security and stability.

PART THREE: A Tolerant and Diverse Australia - Getting the `Good News' Better Known

3.1 The Importance of Australia's Values

Of course, advancing Australia's national interests is a task for all Australians and not just their governments. It demands communication and consultation among governments at all levels, businesses and the community. If Australia's foreign and trade policies are to succeed they must attract the understanding and support of the Australian community.

The White Paper makes it clear that national interests cannot be pursued without regard to the values of the Australian community, including its support for fundamental human rights. Central to these values is an unqualified commitment to racial equality and to the elimination of racial discrimination.

That is why the White Paper rejects racial discrimination absolutely and reaffirms Australia's commitment to human rights and sustainable development. The rejection of racial discrimination is not only a moral issue. It is fundamental to Australia's acceptance by, and engagement with, the region where its vital security and economic interests lie.

Australia's accelerating engagement with the region is perhaps most clearly reflected in the growing people-to-people links being established by business men and women, academics and students, and the media, including many of you in the audience today.

What's more, Australians in the region are finding that people are receptive to Australia's values, and our way of communicating and problem-solving. This may be partly because there are many people in the Asia Pacific who were themselves educated in Australia at some stage.

These are the people-to-people ties which perhaps have the most enduring effects, flowing as they do across national borders and down through the generations. They are absolutely crucial to our understanding of Asia in a new century likely to be defined by the increased influence of Asian powers.

3.2 Getting the `Good News' Better Known

The White Paper is a repudiation of the views of those who believe that Australia's future lies in an inward-looking and isolationist posture. Australia's historic transition from being a European outpost to becoming one of the most innovative and constructive members of the Asia Pacific region is one which presents great opportunities, and most Australians recognise that.

Australia is home to people of some 130 nationalities. Australia is a remarkably tolerant and diverse country with a growing web of relationships across the Asia Pacific - this is the `good news story' about Australia which deserves to be disseminated more widely across our region and beyond. It is news which should be taken seriously by all those who have the responsibility of reporting on and interpreting Australia's national life and character for a wider audience.

The reality is that the narrow-minded, inward-looking views of Ms Hanson and her supporters represent a small segment of Australian opinion - only about 5 per cent of the population. To put it another way, 95 per cent of Australians reject views which are completely out of step with Australia's contemporary reality.

The media - both in Australia and overseas - has an important role to play in putting Ms Hanson's views and political status in the right perspective, and in conveying balanced and accurate images of Australia's national life to Australians, the region and the world. The image portrayed in recent times of Australia in some overseas publications has been neither accurate nor fair. Ms Hanson does not represent Australia. She is not even representative of Australia. And she should not be portrayed as doing so.

Conclusion: A Confident Australia

In its conclusion, looking ahead to the new millennium, the White Paper highlights the great strengths that all Australians should draw from their history, traditions and values.

It is clear that Australia has many natural endowments, but it is also the case that, throughout its history, Australia has had to make its own luck.

The successful Australian experience of nation-building is one of growth, adaptation and social progress, and it is no less remarkable for being so understated in Australia's national consciousness.

In the challenging period after the Second World War, Australia showed that it could adapt to radical changes by reshaping the priorities of its foreign policy and the focus of its trade.

The White Paper demonstrates convincingly that - in this dynamic period after the Cold War - Australia should retain equal confidence in its capacity to grow and adapt.

I assure you that a clear sense of the national interest, an understanding of what is important for Australians and confidence in the capacity of Australia to shape its future internationally will always define this Government's approach to foreign and trade policy.