The Hon. Alexander Downer, MP
FORMER MINISTER FOR FOREIGN AFFAIRS

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Speech

Dallas, 12 July 2002

Australia and the United States: A Dynamic and Diverse Relationship

Introduction

Thank you Tim Baker (President, Oncor Group); ladies and gentlemen

It's my great pleasure to be here in the city of Dallas, and to have the opportunity to address you.

It's wonderful to be in the state of Texas, which is not only the home state of your President, but also of your Ambassador in Australia, Tom Schieffer.

Ambassador Schieffer is a good friend, and a great representative for his country and his state in Australia.

Not surprisingly, the bonds between Australians and Texans are warm and genuine.

This reflects the many common traits, including the important role of agriculture and natural resources in the development of our societies.

There is even some political similarity - in 1986 my home state of South Australia and Texas shared a sesquicentenary.

The 1836 Proclamation of South Australia established the first Council of Government in what was then known as the province of South Australia.

And, of course, 1836 heralded the Declaration of Independence of the Republic of Texas.

The circumstances behind each were somewhat different - we didn't have an Alamo under siege.

The Proclamation established South Australia as the first free settlement in Australia - it was never a British convict colony.

Today, we find substantial commercial links between Australian companies and Texas.

BHP Petroleum, a subsidiary of Australia's biggest company, BHP Billiton, has its US headquarters here in Texas.

Santos - a major Australian oil and gas player headquartered in South Australia - holds oil and gas exploration and production interests in South Texas and the Gulf of Mexico.

I am delighted representatives from both companies are with us today.

Other leading Australian companies like Boral, Brambles, and James Hardie also operate here in Texas.

Australia's international airline, Qantas, is fast rebuilding its service to the United States, following the down turn last year, and is looking at Dallas as a possible new destination.

Just as Texas is important to Australian businesses, so too is Australia an important economy for Texas.

Australia was one of Texas's top twenty export markets in 2001, with exports worth US$739 million.

And several US corporations headquartered in Texas are active in Australia, such as Halliburton (25 offices in Australia), EDS (employs more than 6,800 in Australia) and ExxonMobil.

Today's host, TXU, is a major investor in the State of Victoria power industry.

Just recently, the Government announced our decision to join in the Joint Strike Fighter program with the option to purchase up to 100 of the jets to be developed jointly by Lockheed Martin Aeronautics, at Fort Worth.

Australia and the United States

Looking at the broader bilateral relationship, there is no doubt that Australia has a dynamic and diverse relationship with the United States.

Separated by the vast expanse of the Pacific Ocean we may be.

But we have remarkably similar characteristics and experiences that sustain our relations.

We are both vibrant New World democracies - two of just a few countries in the world which sustained democratic political systems throughout the 20th century.

Our central institutions are drawn from a common heritage, in particular the English language and the system of common law.

We both achieved independent nationhood under federal constitutions - indeed, the Fathers of Federation in Australia looked to the US Constitution for inspiration.

Many features of our national government, even the names of the two Houses in the Australian Federal Parliament - the Senate and the House of Representatives - reflect the American experience.

We are both lands of opportunity.

We have built up strong economies that provide high standards of living to our people.

We have welcomed millions of migrants, and our societies have been enriched by their energy, dedication and diversity.

We are both lands of freedom.

We value freedom of speech, religion and association.

We pursue free trade in the world at large.

We are committed to the rule of law at home and abroad.

Americans, of course, are very familiar with what could be called the Paul Hogan or Steve Irwin outback adventurer stereotype.

This reflects one aspect of modern Australia.

But it is only one, and a fairly minor one at that.

Indeed, Australia is one of the most urbanised societies in the world, with a vibrant, diverse and cosmopolitan culture.

Australians have been making their names internationally in diverse fields since the nineteenth century.

We have our share, for example, of Nobel Prize laureates, such as Peter Doherty, now Professor of Biomedical Research and Chair of Immunology at St Jude's Hospital in Memphis, Tennessee.

As you will know, many Australians working in the film industry - some of them household names in America - have been honoured in the Academy Awards in Hollywood over many years.

Political and strategic links

The United States is Australia's most important bilateral partner.

Both nations share common strategic interests and objectives, because we both want a free and secure world.

The truth of this was demonstrated by Australia's reaction to support the US after the tragic events of September 11 last year.

The ANZUS alliance, borne out of the shared sacrifices of Australian and American forces in two world wars, half a century earlier, was invoked to demonstrate our determination that terrorism can not, and will not, be tolerated by civilised countries.

Our commitment is demonstrated today by the presence of Australian troops, on the ground with their US colleagues, in Afghanistan.

It is a commitment the US administration has acknowledged readily, and highlighted in President Bush's recent moving words of eulogy for a fallen Australian SAS soldier.

And it is a commitment that continues a tradition of standing together in the cause of defending freedom, promoting democracy and protecting human rights.

Australian and US forces have served together in World War I, in World War II, in Korea, in Vietnam, in the Gulf war, and now in Afghanistan.

I particularly want to express gratitude today for the important diplomatic and military assistance that the United States provided during the international operation in East Timor.

The US contribution in East Timor, of course, is but a microcosm of the deep - and in our view, essential - US commitment to the security of the Asia-Pacific region.

Without the security architecture of the region - in particular the US commitments with Japan and on the Korean peninsula - East Asia would be a considerably less stable environment.

Without the role the United States has played since World War II, East Asia would not be as rich or as peaceful as it is today.

That is a fact recognised throughout the region.

I believe the United States values Australian perspectives on geo-political and strategic issues in our region, including the threat of terrorism.

Certainly we welcome the regular and frank dialogue we enjoy - at the highest levels - with the United States.

Last month, Australia's Prime Minister, John Howard, had a most successful visit to the United States.

Mr Howard addressed a joint sitting of the Congress, and held talks with key figures in the US Administration and on Capitol Hill.

Of course, despite the commonality of views on most strategic issues, there are areas where our perspectives do not coincide.

It is a mark of the maturity of our relationship that we can speak our minds, air our differences, and agree to disagree, and still walk away the firmest of friends.

We hope that maturity can continue to play into recent differences we have had with US decision-makers on economic issues - such as tariffs on steel imports and subsidies to American farmers.

Trade and commercial links

One of the Prime Minister's - and my - abiding interests is in Australia's economic partnership with the United States.

The Australian economy has been performing strongly in the face of the East Asian financial crisis, and the more recent international downturn, which included the United States, but not Australia.

Part of our success has been in a long period of economic reform, undertaken by successive Australian governments over 20 years, exposing the Australian economy to international financial markets and international trade in goods and services.

Today we are one of the most open markets in the world, and at 4.2 percent, the fastest growing in the OECD.

Inflation is well under control, at 2.9 percent, unemployment is at low levels, and government debt is at less than 5% of GDP.

We also are a major player in global trade and investment, punching well above our notional economic weight.

We are a major player in international commodities markets.

We lead the Cairns Group of agricultural exporters in global trade negotiations.

And the Australian dollar is one of the most highly traded currencies.

The United States, of course, remains the crucial player in the global economy.

You have undergone a recent recession.

And there are some serious issues to be dealt with from the accounting disasters at Worldcom and Enron.

But still, the United States remains a behemoth, and a model for the world.

In 1980, the US accounted for 25 per cent of world GDP. Today, the figure is 34 per cent.

US military expenditure is nearly US$400 billion, over six times that of Russia and nearly ten times that of China, or about the same as Australia's total GDP.

And US expenditure on research and development, at US$265 billion in 2000, is larger than that of Japan, Germany, the UK and France combined.

The economic global pre-eminence of the United States is reflected in the importance of your country to Australia.

The United States is our second largest trading partner, our principal source of imports and the second largest destination for our exports.

Merchandise trade between us has become increasingly diversified.

Our exports no longer consist of just meat, milk and metals.

Now we sell medical products, industrial machinery, computers, telecommunications equipment and automobile parts.

Our biggest success has been the explosion in wine sales, which increased 40 percent last year, to over US$325 million (A$583 mn), continuing a decade long march of this market.

Indeed, we expect to take over shortly from Chile as the second largest source of overseas wine - after the EU - for the US market.

The United States is also our largest source of investment and the leading national destination for our outward investment.

Few people know that Australia is the 8th largest foreign owner of US assets.

Our successes, however, belie some of the problems we have in access to the US market - including, of course, a highly protected sugar industry, and quota restrictions on dairy and meat products.

Some of you will be aware of a high profile dispute we had with the United States over safeguards on lamb imports.

You should understand our dismay with the vote in the Congress for the renewed Farm Bill, which in our view will simply distort further global trade in agriculture, and disadvantage Australian farmers.

Moreover, from the US perspective, the scale and impact of the subsidies are unsustainable, and will end up hurting the family farm in America more than it can help it.

And the Administration's decision to impose punitive tariffs on imports of steel, despite the exemptions we were able to win, has sent a bad signal about US resolve and leadership in global trade.

Sometimes it is difficult not to get the impression that the maturity of our security relationship is not matched by equally mature economic and commercial relations.

I believe that we should match our strong security relations with the US with a more sound economic relationship - and on a better strategic footing.

That is why we are seeking a Free Trade Agreement between our two countries.

Such an agreement would generate substantial export and investment opportunities for business in both countries, with forecast boosts to both our economies of US$4 billion.

And it would enable us to manage better the difficult trade issues that can arise between us from time to time.

President Bush's positive comments about the proposal during the Prime Minister's recent visit were most welcome.

The President indicated that the Administration was ready to discuss a FTA with Australia, once Congress passes Trade Promotion Authority.

And I was particularly impressed by the forceful, six-pronged, argument for a FTA put forward on Wednesday night in Washington by US Trade Representative Zoellick.

His comments highlighted the mutual benefits - from the economic to bolstering our strategic alliance - that would flow from a FTA.

I should emphasise that Australia's ambition is a comprehensive FTA that includes agriculture.

Both sides have agreed that agriculture should not be excluded.

No-one pretends, of course, to underestimate the difficulties of doing this.

I know that, for example, there have been some issues for the United States involving Australia's strict quarantine rules.

It is important to stress that both Australia and the United States are committed to the WTO requirement that quarantine measures be applied on a scientific and non-discriminatory basis.

The scientific basis of Australia's quarantine principles has never been in question.

I believe that there is sufficient will on both sides - including our farming communities - to negotiate and conclude an FTA, and put our economic relations on a sound strategic footing.

The Doha Round

As great trading nations, the best strategy for securing the jobs of working Australians and Americans is to break down the barriers to trade and investment in international markets.

Australia and the United States have prospered, in part, because we have exploited our comparative advantage, opened our markets to others, and led the world in creating global trade rules.

Australia and the United States share the wider strategic objective of further global trade liberalisation.

Australia will be working hard to ensure a successful outcome to the Doha Round of trade negotiations, particularly through its leadership role in the Cairns Group.

The United States has shown tremendous leadership in the past, and I want to encourage the US to do so again in the Doha Round.

There is, unfortunately, a perception that the United States is in a protectionist mood following the restrictions on steel imports and the passage of the 2002 Farm Bill.

The United States will need to work hard to restore its credibility so that it can take on the kind of role, in keeping with its past efforts, that will ensure a successful outcome to the Doha Round.

Anything that you can do, as influential Americans, to encourage Washington to follow its instincts for leadership, can only be to the benefit of Americans and Australians both.

Conclusion

Australia and the United States are successful countries because we have forged open and liberal economies, and developed sound institutions.

As a result, we are well placed to take full advantage of the opportunities that are opening up in an era of globalisation.

We will continue to work together, including in international forums, to take advantage of the benefits of globalisation and to meet the challenges before us.

I want to reaffirm Australia's commitment to a dynamic and diverse relationship with the United States.

I want to declare to you the sense of horror Australians felt at the events of September 11, and how committed we are to joining Americans in defending our common values.

And I want to assure you all here, in Dallas, of the special affinity Australians feel for Texans, in particular your openness, your generosity, and the traditions of mateship - of buddies - that help define your relationships, as it does ours.

Thank you for your hospitality today, and thank you for listening.

I look forward very much to the opportunity of returning to Dallas again soon.


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