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«AUSTRALIA AND NORTHEAST ASIA AUSTRALIA AND NORTHEAST ASIA Address by the Minister for Foreign Affairs and Trade, Senator Gareth Evans, to the ...»

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Address by the Minister for Foreign Affairs and Trade, Senator Gareth Evans, to the

Committee for the Economic Development of Australia (CEDA), Melbourne, 22 March


In a period of rapid and immense international change, such as that through which we are

now passing, diplomacy needs to keep a sharp eye out for opportunity. Opportunities occasionally beckon but more often than not they must be identified before they can be seized. In the Northeast Asian context, this means understanding the economic dynamics of the region and how Australia can further plug into the pattern of growth and development there. It also means understanding the strategic environment of Northeast Asia because, as the post-war history of the region demonstrates, strategic stability has been an important ingredient of economic success.

The 1980s will probably be recorded as something of a turning point in the way Australia perceived Northeast Asia, by which I mean the region encompassing Japan, the two Koreas, China, and the economies of Taiwan and Hong Kong. More so than any previous decade, the '80s were characterised by a sense of enthusiasm and opportunity about the future of Australia's relations with Northeast Asia, in trading terms as well as in terms of building up relations of greater depth and texture. The most eloquent expression of this view has been, and remains, the recently completed Garnaut Report on Australia and the Northeast Asian Ascendancy with its wide-ranging checklist of the opportunities which Northeast Asia holds for Australia.

The development of a broadly based relationship with Northeast Asia is, of course, very much an on-going process. In economic terms, and to a lesser degree in political and cultural terms, we have already made a great deal of progress which we hope will be further consolidated in the 1990s. The existing linkages between Australia and Northeast Asia are extensive. Japan is by far our largest market anywhere. The ROK is set to become our third largest export destination. We export more to Hong Kong than we do to the United Kingdom. Taiwan and China rank fifth and ninth respectively in terms of their importance as export markets. In all, Northeast Asia takes fully 43 per cent of our exports, provides a little under a third of our imports, is a major source of foreign investment and tourism, and contains five of our top ten export markets.


The concept of a distinct Northeast Asian region may be gaining increasing currency, but file://///Icgnt2000/data/Programs%20and%20Publications/Re.../Foreign%20Minister/1990/220390_fm_australiaandneasia.htm (1 of 9)23/04/2004 13:06:01


for the foreseeable future the main avenue for advancing Australia's interests in this heterogeneous area will continue to be our bilateral connections in the region. Asia Pacific Economic Cooperation (which I will come back to later) and the increasing economic interdependence of the Northeast Asian economies will broaden the scope for regional approaches, but not to the extent of displacing the primary role of bilateral diplomacy.

In economic terms, and increasingly in other areas as well, the most important bilateral relationship for Australia in Northeast Asia is with Japan. Japan is the most significant regional economic power. It is Australia's most important trading partner by virtue of the volume of two-way trade, investment and tourism, and there is every reason to believe that this economic importance will continue well into the next century.

In the post-war period the Australia-Japan relationship has grown from an essentially commercial one into a "constructive partnership", to use the description proposed by the Japanese side at the last Australia-Japan Ministerial Committee meeting. Commerce is still the core of the relationship, and bilateral trade issues - most notably the opening up of the Japanese economy in the agricultural and other sectors - are a prominent item on the bilateral agenda. But today that agenda also covers an enormous range of subjects beyond the bilateral trading relationship. We talk about international issues as diverse as global warming, international macro-economic coordination, the Uruguay Round of multilateral trade negotiations, development assistance cooperation in the South Pacific, North Pacific security strategy, the economic and political reconstruction of Indo-China, and the biggest issue on the regional economic agenda - Asia Pacific Economic Cooperation. And on top of all these government to government contacts, there are the innumerable human contacts generated by the several hundred thousand Japanese tourists who have visited Australia.

In talking about Australia's relations with Japan it is impossible to pass over, as much as I would like to be able to, the unhappy events of the last week in relation to the Multifunction Polis proposal. The peremptory abandonment by Mr Peacock of a concept which, only a week before, his Party had described as one that was "unique for Australia and deserves extensive consideration", and which his Industry spokesman, Mr Howard, had said should not be "buried in a sea of hostility" before it is fully studied, is extremely unfortunate for this country for three main reasons.

First, it sends all the wrong signals about Australia's willingness to embrace a high technology, innovative, adventurous economic future: to become, as the Prime Minister has put it, the "clever country" rather than just the "lucky country".

Secondly, it sends a message - about the irrelevance and unacceptability of a highly creative Japanese idea - to our major trading partner that can only be described as gratuitously offensive, and certainly quite counter-productive to the development of positive government and commercial perceptions of us.

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Thirdly, it sends a very poor message about the willingness of our alternative political leadership to pander to crude populist sentiment in the community, rather than accepting the responsibility of leading it in more rational directions.

The MFP may well yet prove to be, at the end of the day, an idea that may not fly - that may not be able to be pinned down with sufficient precision to make it attractive to Australian and international investors. But as the financial commitment of 156 leading companies in Australia and Japan amply testifies, it is nonetheless an idea which is certainly worth pursuing a lot further yet, certainly to the completion of the feasibility study now under way. Good government and good political leadership - the kind that improves rather than diminishes Australia's standing in the region and the world - is not about ill-informed and ill-considered dismissal of ideas before they are ripe, but the rational assessment of the balance of Australian interests when all the evidence, and all the arguments, are in.

The position of China is, of course, central to any discussion of Australia's relations with Northeast Asia. The events of June 1989 have had a significant impact on the bilateral relationship. As a government, we simply could not pretend that nothing had happened and, after a decent interval, go back to business as usual.

Last July, following the Beijing massacre, the Government announced a series of measures which substantially downgraded Australia's relations with China. These measures included the suspension of ministerial visits, restrictions on the consideration of new project aid and concessional finance proposals, and the indefinite suspension of high level defence visits and future defence sales. In January of this year, the Government reviewed these measures and decided to keep them in place, with the exception that instead of a total suspension of ministerial visits, these visits would be considered on a case by case basis. Our decision to continue with the various restrictions reflected several factors, not least being our global human rights concerns and interests. Any further adjustments to Australian policy over time will be made, as appropriate, by the Foreign Minister in consultation with the Prime Minister, taking into account further developments in China, evident threats to Australian interests, and changes in the attitude of like-minded countries.

At the same time, the Government remains committed to a long-term cooperative relationship with China where Australia has enduring strategic and economic interests. It is manifestly not in the interest of Australia, or indeed of the region or the broader international community, to have an isolated and inward-looking China. Regional stability will be influenced by China's key role in issues such as Cambodia, and by the results of its economic modernisation program. The extent of China's openness to outside economic forces will have crucial influence on the future of Asia Pacific regional economic growth and integration, with obvious implications for Australia. China is also an important player file://///Icgnt2000/data/Programs%20and%20Publications/Re.../Foreign%20Minister/1990/220390_fm_australiaandneasia.htm (3 of 9)23/04/2004 13:06:01


on issues of global importance such as disarmament and the environment. The Government continues to hope that China's leaders will return to the path of reform and modernisation, and permit the full resumption of the strong bilateral relationship between our two countries that existed prior to the tragedy of June 1989.

Australia's relations with Hong Kong and Taiwan are necessarily more restricted and of a different character, given the absence of a government-to-government framework.

Nevertheless both economies are major trading partners of ours and our commercial relationship with each is diverse, and at least in the case of Taiwan becoming more so. As Taiwan's economic strength continues to grow, it is likely to become increasingly assertive, and perhaps less accommodating in the pursuit of its interests. But for the moment our economic relationship continues to develop. Taiwan investors are beginning to show interest in investing in Australia. The number of business visitors is growing steadily. Negotiations on a direct air service are continuing through commercial channels.

An Australian Education Centre will shortly be established in Taiwan, and Taiwan is already a major source of business migrants.

The future of Hong Kong is more uncertain following the developments in China last June. Business confidence has suffered, growth in the last half of 1989 slowed, and emigration figures are rising. Some of the uncertainty over the legal and constitutional arrangements which will apply after 1997 when Britain leaves has been resolved with the publication by the Chinese legislature of the final draft of the Basic Law. But confidence remains a problem.

Australia is committed to the long-term prosperity and stability of Hong Kong. We have an important economic stake there, through trade, investment and also through Hong Kong's unique position as a stepping stone to the China market. In the period ahead, we will be looking carefully at what more we can do to help ensure a successful transition.

Our relations with the ROK, like those with Japan, are also reaching out well beyond the trade area. Bilateral trade - including access issues - remains a very important part of the bilateral dialogue, but that dialogue is also gaining more depth and breadth. At the Australia-Korea Forum held in Canberra last November, for instance, the agenda ranged across political and strategic issues, industrial relations, education, science and technology, the environment and culture. And even the trade dialogue is itself becoming more sophisticated and wide ranging, focussing strongly on international and regional issues - with all the complex politics and diplomacy that goes with them. This year will also see the establishment of direct air links which will further broaden the ties between Australia and the ROK.

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