The Hon. Alexander Downer, MP



at the opening of The Australia-Japan Conference for a Creative Partnership
Tokyo, Japan, 7 November 2002

Australia and Japan: Challenges and Opportunities


Mr Yano, Senior Vice Minister for Foreign Affairs for Japan;

Leaders of the Japanese and Australian delegations, Mr Murofushi and Mr Ellis;

Ambassador McCarthy, Ambassador Hatake-naka, Distinguished guests and Conference participants;

Ladies and Gentlemen.

I am very pleased to be here today for what I believe is an important event in the Australia - Japan relationship.

When the 'Australia - Japan Conference for the 21st Century' concluded in Sydney in April 2001, not even the most prescient amongst us could have envisaged the changes and challenges that would emerge.

We have had the momentous and tragic events of September 11, a global economic slowdown and, most recently, the appalling mass murder committed by terrorists in Indonesia - which we have remembered here today.

In the meantime, we have continued a busy bilateral agenda, particularly the search for a new framework in which to conduct our trade and economic relationship.

Rarely, therefore, has such a high-level Conference been more timely for considering long-term challenges, and ways in which, together, we can meet them and build for the future.

Today I would like explore future directions in Australia-Japan relations. I would like to first outline the implications of regional and global events for cooperation between our two countries, as strong regional partners.

The Regional Security and Economic Outlook

Of course, Australia's strategic outlook and perspective has been sharpened by the bombing in Bali on the 12th of October.

There were at least 180 victims and we believe almost half of them were Australians.

We also know there were at least 2 Japanese citizens, together with citizens of many other countries, who were casualties of the attack.

And, of course, we know of scores of Indonesian casualties, not to mention the enormous damage done to Bali and Indonesia more widely.

The bombings underscore that terrorism threatens our region.

They remind us that no one is immune, and everybody is threatened.

If left unchecked, terrorism has the potential to obstruct the welcome trend towards a mature democracy in Indonesia, and to destabilise other countries in our region - which of course is one of the main aims of the perpetrators.

We must emphasise that this is not a clash between Islamic and Western norms, cultures and civilisations.

It is a clash, instead, between tolerance and moderation, on the one hand, and, on the other, zealotry and extremism.

Australia's effort in the war against terrorism will remain global, regional and domestic in nature.

Australia has troops on the ground in Afghanistan; we have been working to strengthen intelligence, law enforcement, and counter-terrorism capabilities in South East Asia.

We have signed Memoranda of Understanding on counter-terrorism with Indonesia, Malaysia and Thailand and we are working on a similar arrangement with the Philippines. It was under the MOU that we were able to establish a joint investigation team on the Bali bombing with Indonesia.

We have also strengthened anti-terrorism legislation at home and continue to work for tighter measures globally and in our region to prevent the financing of terrorism.

Iraq, North Korea & Weapons of mass destruction

Ladies and gentlemen

Terrorism is an immediate threat to our security.

So too, however, is the spread of nuclear, chemical, biological and radiological weapons - as well as missile proliferation.

The prospect of links between terrorists, weapons of mass destruction, and certain states we know are responsible for their proliferation, also has to be confronted.

Iraq, and North Korea, in particular, threaten regional and global security.

Iraq has avoided its obligations to disclose and eradicate weapons of mass destruction programs since the Gulf War.

Iraq's defiance of the United Nations challenges the authority of the international community and international law.

Australia supports, therefore, a tough new Security Council regime for immediate, unimpeded, unconditional and unrestricted access to suspected weapons of mass destruction sites.

In our own region, we are now faced with the threat of nuclear weapons from another undemocratic state - North Korea.

Pyongyang's admission that it is enriching uranium is renewed cause for grave concern about North Korea's intentions.

As a region, and with our allies, we have to ensure that North Korea stops developing nuclear weapons, and the means of delivering them beyond its borders.

The international community needs to present a strong, coordinated and unified response to the DPRK to convince it of the need to address international concerns about its nuclear program, and for it to come into early and full compliance with its international obligations and meet international expectations.

Australia welcomes Japan's initiative to engage North Korea and congratulates it for its steadfastness in challenging North Korea on its production of enrichened uranium.

I again call on North Korea to verifiably and immediately dismantle all nuclear weapons programs.

Australia wants to work with Japan and other countries in the region to reach a peaceful diplomatic solution on these issues.

We will keep open our channels of dialogue with the DPRK but will not reward it for such provocative behaviour.

Australia wants to send a clear message to the DPRK about the consequences of its activities.

Failure to comply with international obligations risks undermining the DPRK's own economic aspirations and interests in developing relations with neighbours and other countries.

Power relativities in East Asia

Ladies and gentlemen

North Korea's admission that it is developing nuclear weapons raises longer term, strategic considerations for the region.

The Asia-Pacific is home to the world's six largest armies - those of China, the United States, Russia, India, North Korea and South Korea.

It is also home to three of the world's most volatile flashpoints - the Taiwan Strait, the Korean Peninsula and Kashmir.

China's rising economic, political and strategic weight is the most important long-term trend in the region.

It is - truly - an awakening giant, which faces enormous internal hurdles as it modernises, not least the economic and political impacts of transition from socialist enterprise to market capitalism.

Japan, despite its current difficulties, is still the world's second largest economy, and will remain a critical player regionally and globally.

That said, Japan does have serious issues of demographic change - and Japan will need to address long term questions of how it contributes to regional security.

For our part, Australia supports Japan playing a more active role in regional security issues, at a pace with which it is comfortable.

The United States' strategic presence in East Asia - to which our bilateral security alliance contributes much - underpins the long term security and stability of the region.

It is crucial - both to the United States and to the region - that the United States remains engaged in the region, economically, politically and strategically.

South East Asia continues to undergo a quite fundamental transition after the financial crisis of 1997 and the subsequent economic and political impacts.

Those impacts have varied across the region, with some countries adjusting more quickly than others to the flight of capital and the resulting collapse of currencies, incomes, demand, and employment.

Now we have the added impacts of terrorism and the Bali bombings, which took place in the country which has undergone most change, and where the impacts have been greatest - Indonesia.

It remains to be seen where this transition will take South East Asia - but in the short term, at least, the region will suffer from a lack of confidence and direction.

We need to think long and hard about where uncertainty - and possible instability - will take our region.

Implications for Australian and Japan cooperation in the region

Ladies and gentlemen

I wish I could say with complete confidence that I feel that the region will negotiate the challenges before it easily - but it is going to be an enormous task.

It is absolutely clear that the challenge presented by terrorism is not going to be met successfully by individual effort.

In his speech in Singapore in January this year, Prime Minister Koizumi called for the establishment of a regional community that encourages functional cooperation.

Prime Minister Koizumi also said that Australia would be a core member of such a community.

Prime Minister Koizumi's vision is one that is shared by Australia: Asia has been an abiding priority in our foreign policy and we are committed to playing a constructive and active part in cooperative efforts in the region.

Australia also believes that Japan has an important role to play in promoting the benefits of open regionalism, and promoting the contribution inclusive arrangements can continue to make to regional stability and prosperity.

Together, Australia and Japan are well placed to build on a proud record of cooperation, and provide leadership in this area.

We have vital strategic and economic interests in the stability of the region, and through it the consolidation of free markets and democratic government.

We also have considerable diplomatic, financial, technical, defence and other resources to bring to bear.

Our task, then, is to look at how we can further enhance these links in view of the nature of the challenges we face.

One possible area, for instance, is continuous and rapid information exchange.

The regional strategic environment - be it terrorism or the recent admission by the DPRK - demonstrates that developments unfold quickly, as does the requirement for effective responses.

This maxim applies whether we are talking about specific threats and challenges, initiatives to deal with them, or broader strategic policy dialogue.

Australia and Japan have already developed a very effective strategic dialogue which operates at several levels: -- a new "one and a half track" dialogue, annual political-military talks, and counter terrorism consultations.

We have cooperated on peacekeeping and intelligence exchange, are increasing our defence contacts - such as in East Timor - and are working closely in areas such as disarmament, including in the South Pacific.

We will explore possibilities for further cooperation.

One area is in our response to the terrorist threat in South East Asia - through capacity building, and supporting regional states in their efforts to crack down on terrorists.

Another area is strengthening regional arrangements that can facilitate the swift and effective handling of the security challenges we face.

The APEC Leaders' Summit in Mexico last month focussed on security as well as economic issues -- in particular terrorism -- in a highly productive manner.

Our cooperation in the Bali Conference on People Smuggling last January, as well as after the September 11 attacks, is a good example of the flexibility and creativity that is required.

One general observation I would make is that there is now considerable overlap in our increased cooperation on security matters, and on economic issues.

The nexus between economic prosperity and political stability is now more clear than ever - and I believe there is much Australia and Japan can do to inject some much needed certainty and confidence in the region.


The Bilateral relationship

Ladies and gentlemen

When Prime Minister Koizumi visited Australia earlier this year, he agreed with Prime Minister Howard that our two countries should explore all options for deeper economic linkages.

Australian and Japanese business representatives have strongly supported this initiative - including by recommending that we begin negotiating a free trade agreement (FTA).

There is no secret about the short term impediments to concluding an FTA, but we should not lose sight of the longer term opportunities and strategic benefits of an FTA.

In recent years, Australia's and Japan's trade policy focus has expanded to include preferential trade agreements.

While neither of us has lessened our commitment to the WTO, we both see FTAs as building economic and political links at a depth that is not possible by relying exclusively on the WTO.

We need to make sure our bilateral economic relations reflect these changes -- by keeping alive the option of a bilateral FTA, and by making sure our interests are not affected adversely by FTAs we conclude with other countries.

Australia and Japan have always provided each other "most favoured nation" (MFN) status, by granting market access at least as good as that granted to any other country.

The MFN principle should continue as a central feature in our relations - but it should also be updated to maintain a clear focus on promoting future growth.

Australia and Japan share strategic and economic interests in having regional economies continue to liberalise their economies.

In establishing rules which allow the market to operate freely, and which foster enterprise and innovation, a new Australia-Japan agreement could be a model for other regional agreements.

Indeed, a new agreement could enhance Japan's credentials with other regional countries, some of which seem sceptical about Japan's commitment to comprehensive trade liberalisation.

A new agreement could also deliver economic gains by promoting further trade and investment liberalisation, including in new areas such as biotechnology and ICT, and by encouraging greater integration between our business communities.

In short, a new agreement could ensure the trade and investment environment maximises the potential for growth in the relationship.

I encourage you all to consider a bold, creative approach to enhancing trade and economic links and to support an ambitious new agreement.


Ladies and gentlemen

I think it worthwhile to address also our social, cultural and scientific relations - for if we want true quality and depth in our relations, it is essential that solid links between everyday people, and between our public and private institutions, are nurtured.

In a sense, our social, cultural and scientific relations are a study in inter-generational change.

It took nearly thirty years - from immediately after World War II, through the embryonic commercial links developed in the 1950's and 1960's - to develop a platform for broad exchange.

This involved Japanese tourism, study and investment in Australia - and for Australia's part, investments in Japanese culture and language.

The intensity of activity was formally signified by a range of cultural and scientific agreements, as well passing the Australia-Japan Foundation Act in the Australian Parliament in 1976.

Today we stand on the cusp of further generational change, brought about in many respects by external forces in the way of globalisation and technological change.

Both of our economies and societies are in a state of change, as we - and others - grapple with new technologies and new forms of exchange - in short, the new economy.

There is fertile ground for new forms of cooperation in new economy areas such as e-learning, nanotechnology and biotechnology, as well as in more established areas such as health and the arts.

The task is to create, develop and nurture such links, and I am much encouraged by the progress that has been made since the first Australia Japan Conference.


Ladies and gentlemen

We have played an integral role in each other's contemporary development, spawning diverse links that have enriched us both.

From an Australian perspective - and I'm sure Japan's as well - these benefits have been openly acknowledged and appreciated for many years.

They are founded not just on a keen awareness of our shared interests, but also strong pride about what we have achieved.

In the past two years, directed by our Prime Ministers and with your help, we have embarked on a project to prepare our relationship for the challenges of the future.

I think that as a result of the Australia Japan Conference process, we are off to a very good start.

We have here today some of the foremost experts on the bilateral relationship and its various aspects in both countries to continue the process commenced at the Australia - Japan Conference for the 21st Century.

On this note, I should express my appreciation to those who have already dedicated so much time to this process, particularly the two co-Chairs, Mr Murofushi and Mr Ellis. My thanks also to our Japanese hosts, who have worked assiduously in organising today's conference.

Finally, I would like to thank participants from both countries for your efforts, and wish you and your delegations all the best as you go about ensuring that Australia and Japan continue to nurture the vibrant and mutually rewarding friendship which has been built up over many years.

I certainly look forward to hearing your views. Thank you.

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