Australia - Meeting Our International Challenges

This is the text of a speech by Alexander Downer, Minister for Foreign Affairs, to the National Press Club.

Introduction

It is now a little over a year since I last addressed the National Press Club. At that time, my remarks centred around our Government’s highly effective response to two of the most important issues that had faced our nation in many years – the East Asian economic crisis, and East Timor.

Today I want to take another look at Australia’s foreign policy agenda. As is my custom on occasions such as this, I don’t propose to give you chapter and verse on every single foreign policy issue. Neither my time – nor, I suspect, your digestion – permits such an approach. Rather, I want to cover some of the more prominent items on our agenda by developing three major themes.

My first theme concerns the rise in Australia’s international standing following five years of achievement, at home and abroad. Those achievements have been widely recognised, and such recognition will continue to serve us well as we pursue our foreign policy objectives.

My second theme is globalisation, and the debate surrounding its impact on Australia. In participating in that debate, all Australians need to be very clear about where our true national interests lie.

And my third theme is the impact of fluidity and instability in Australia’s immediate neighbourhood. Our region is experiencing significant change in places like Indonesia, East Timor and the countries of the South West Pacific – change that demands our continuing attention and response.

After five years as Foreign Minister, I am struck by the increase in Australia’s international standing.

We sometimes need to remind ourselves that Australia is a significant player in the world economy. Australia is not a small country. Although we are only the 50^th country in the world in terms of population, our GDP is the 14^th largest – bigger than every economy in East Asia other than China, Japan and Korea. We have a modern industrial economy, with legendary mining and agricultural sectors, and a sophisticated manufacturing and services base. Australia’s recent strong economic performance has further bolstered our stature. Indeed, the Howard Government has achieved through-the-year growth of 4 per cent or more for 14 consecutive quarters, the longest on record. That included a period when the regional markets on which we depend heavily experienced the most serious economic crisis in half a century. These achievements mean that Australia is listened to with increased interest and respect internationally.

Our Government has worked hard to ensure Australia keeps that winning economic edge. We’ve attacked old rigidities with the introduction of the New Tax System, waterfront reform, and rationalisation of business regulation. And we look to ensure long-term economic viability in our Backing Australia’s Ability program, which will foster an environment in which innovation and entrepreneurial ability will thrive.

Australia enjoys numerous other advantages that, while less tangible, are no less important for our international profile. They include rock solid national institutions; a dynamic and ethnically diverse population; deep historical and cultural ties with the countries of Europe and North America, and growing links with those of our neighbours in Asia and the Pacific; and an innovative and technologically advanced society. We have a highly capable and professional defence force – its abilities proven in East Timor, and its future viability secured in our Government’s White Paper on Defence Policy.

In the past five years, we’ve also seen three pivotal events that have highlighted our achievements and strong performance, providing an enormous boost to Australia’s international standing.

The first was the East Asian economic crisis, during which we amply demonstrated the soundness of our civil institutions, the fundamental strength of our economy, and the value of our assistance to neighbours in need. The second was the crisis in East Timor, which displayed the effectiveness of our peacekeeping and diplomatic efforts, and of our aid program.

The third event was a much happier one – the Sydney Olympics. Rarely has our nation had such an opportunity to showcase its abilities, and we did not disappoint. The staging of what truly were “the best Olympics ever” helped underline Australia’s technological sophistication, and have certainly reinforced the many positive images those overseas have of Australia and its people.

The conjunction of all these factors has added inestimably to our weight in the council of nations. Proof of that can be found in Colin Powell’s remarks praising our regional leadership at his Senate confirmation hearings, sentiments I know are shared by many senior figures in the new Bush administration. Proof, also, in the more than 450 foreign companies – like Siemens, Parmalat, Hewlett-Packard and Cadbury Schweppes - that have located their regional headquarters here, confident in Australia’s future.

We also have a sound record in our own region. As a result of the national achievements I have mentioned, as well as the increased emphasis on bilateralism initiated by our Government, Australia currently enjoys excellent relations with nearly all its partners in Asia. Trade with the region, interrupted by the economic crisis, is growing strongly again. Australia, through its aid program, is making a real difference on important regional development issues, including the building of stronger civil institutions.

It is curious, then, that some commentators should make so much of the fact that Australia is not a member of every single regional institution, as if our regional credentials must live or die by the outcome of that single issue. Let me make three points about new regional groupings, and ASEAN + 3 in particular.

Firstly, all these groups are still in their early stages, and we have yet to see clearly how they will develop. Secondly, their emergence is an advantage to Australia, because they increase cooperation and foster dialogue more broadly in our region.

And thirdly, these groups are evolving in an environment of increased activity by existing regional groupings. Australia plays a very active role in those important forums, including APEC, the ASEAN PMC, the ASEAN Regional Forum, the East Asia - Latin America Forum (EALAF), the Asian Development Bank, the Executives' Meeting of East Asia-Pacific Central Banks (EMEAP), the Manila Framework, and a host of specialist and second-track linkages.

Australia remains a very interested observer of the ASEAN + 3 grouping – and we continue to hope that we might play an active role in the group’s work in the future, should its members so desire and Australia’s own interests so dictate.

It is ironic that, at the very time our nation projects itself as an increasingly confident and accomplished player on the world stage, some Australians are noisily questioning the need for our continued international commitment. The challenge is most often made in relation to globalisation and the push for free markets, which gives rise to another irony. In the year we celebrate the Centenary of our Federation, that hottest of pre-Federation debates – between the Protectionists and the Free Traders – is being contested once more.

In its broadest definition - “increasing interconnectedness between societies such that events in one part of the world more and more have effects on peoples and societies far away” (Smith and Baylis, Globalisation and the Sovereignty of the Nation-State) – globalisation describes a process that has been under way for more than a century. But it is a process that has been thrown into greater prominence, and given added impetus, by the technologically driven revolutions in communications and production of the latter part of the 20th century.

These are fundamental forces at work, affecting our societies in ways we struggle to comprehend completely. As such, they quite understandably give rise to apprehension, particularly on the part of those who feel adversely affected by the changes. Now, some who stridently oppose globalisation – most notably those cynical politicians who seek to manipulate public debate and opinion rather than inform it - appeal to the darker side of human nature by introducing elements of xenophobia and jingoism into the debate. But many that question globalisation are, quite simply, afraid of what their future might bring.

Those fears are genuine, and they are legitimate. No one can deny that change comes at a cost, and that the adjustments it demands may be painful for some. It is incumbent on governments – and, indeed, business – to help individuals and communities deal with change and the adjustment process. But to pretend that we could turn our backs on change would be more than just futile – it would be a cruel deception of all those people who might think their lot, in the long run, would be a better one.

We need to take a close look at what the opponents of globalisation propose – which is, simply, to raise tariffs and other trade barriers against foreign competition. Such policies would certainly have an immediate impact – on the hip pockets of every single Australian, and on input costs for every Australian business. If our own experience demonstrates anything, it is that high levels of protection equate to much higher prices for consumers, but with lower levels of choice and lower product quality.

We need also to consider the direct threat that such policies pose to the employment security of hundreds of thousands of Australians. More than one in five jobs in Australia depend on exports – in regional and rural Australia the figure is more like one in four. Many would be at risk if our trading partners retaliated against the reimposition of Australian trade barriers with barriers of their own, as logic and world trade rules dictate they would.

Opponents of globalisation also target foreign investment. That would jeopardise half a million jobs, or more, in the many Australian businesses with majority foreign ownership. Entire industries – like the automotive industry – would be gutted. Such policies would be doubly tragic, since our society would also lose access to the technical advances and other innovations that often accompany foreign investment. We should never forget that we grow much faster and employ many more Australians when we can take advantage of capital investment from abroad, in addition to our own savings.

Australia’s experience over the past two decades has often defied the doomsayers who predicted that moving towards free markets would decimate Australian industries. Some have felt the pinch, but many others have responded magnificently to the challenge. Our car manufacturers have, from practically nothing, developed an export industry whose value now approaches $4.2 billion. Our TCF industry, which some claimed would be eliminated by cheap foreign competition, has evolved – largely abandoning the mass production end of the market, but moving into high quality production and niche markets – so that the value of our TCF exports has tripled in the past decade.

Indeed, the big story of Australian exports in recent years has been the massive growth in exports of services and manufactures. Those were sectors in which highly protected and expensive Australian products could not have hoped to compete effectively in the past – now they account for almost half the total value of our exports.

Finally, we should also consider the impact of such policies on other countries. Many anti-globalists make much of what they claim to be the adverse effects of free market forces on developing countries, but actually endorse developed country barriers to third-world exports. It has been estimated that the economies of developing countries would gain far more benefit from the elimination of tariffs and other trade barriers than from all developed country aid, by a factor of up to fourteen. Small wonder, then, that so many developing countries are queuing to join the WTO.

When opponents of globalisation attack me, I am often criticised as having some kind of fanatical ideological commitment to globalisation. Nothing could be further from the truth.

There is, and always will be, just one touchstone for foreign and trade policy in the Howard Government, and that is the national interest. We gave it primacy when we released the White Paper on Foreign and Trade Policy in 1997, and we continue to do so. I make no apologies for that.

We continue to judge that a new market-access focused round of trade negotiations in the WTO is the best way to advance Australian interests. Our experience, like that of many countries around the world, shows that open markets and a strong, transparent and rules-based multilateral trading system delivers strong economic growth, more jobs and better living standards for all.

But we are not blind to gains that might be made outside the multilateral system. It was, after all, the Howard Government that gave renewed emphasis to Australia’s bilateral diplomacy, particularly in relation to trade.

We have also been prepared to pursue the negotiation of free trade agreements that can deliver increased market access across all sectors, and in a timeframe that cannot otherwise be achieved. This thinking has informed our discussions with ASEAN members and New Zealand on economic cooperation, which have evolved into the proposed Closer Economic Partnership between the ASEAN and CER trade blocs. It has also spurred our negotiations on an FTA with Singapore, which continue to make good progress. We will explore other possible FTAs where Australia’s interests dictate, including proposed agreements with the United States – either individually, or in concert with New Zealand, Singapore and Chile. And we continue to use APEC dialogue to remove obstacles to trans-border business in the Asia Pacific.

The other main development that has come to greater prominence since I last spoke here has been the fluidity and instability in our immediate neighbourhood.

What was once seen as the linchpin of our region’s security and stability – its great economic stability, founded on seemingly endless economic growth – can no longer be taken for granted. The economic crisis has produced great economic dislocation and social hardship, and has placed civil institutions under enormous pressure.

These past few years have also seen great political change, most recently in Thailand and the Philippines. It is very pleasing to note that the transitions in both those countries have reflected growing respect for democratic standards and the rule of law, a long-term trend in our region that can only be of benefit to us all. A contribution to that trend of which I am very proud is the establishment of the Centre for Democratic Institutions, which has now embarked on a substantial program of work on institution-building and the links between good governance and human rights.

Turning to the regional security agenda, I believe that four items are likely to feature prominently for the foreseeable future.

Firstly, although the language from both sides of the Taiwan Straits has recently been much more constructive, tensions there remain both a focus of regional concern and the most challenging issue in the US-China relationship. Secondly, recent crises in Fiji and the Solomon Islands have highlighted significant problems facing Pacific Island states, of which I will say more shortly.

The third area of concern is the Korean peninsula. The indications that the DPRK is prepared to engage more constructively with the outside world have been welcome, and led naturally to our Government’s decision last May to restore diplomatic relations. Similar actions by other nations will help reinforce these positive trends in the DPRK.

The fourth matter is the situation on the Indian sub-continent, especially over Kashmir and nuclear weapons issues. Australia continues to urge both India and Pakistan to exercise restraint, and to commit themselves to the principles of disarmament and non-proliferation. As part of that process, Australia has been building a broader and more productive relationship with India, which should enhance the effectiveness of our policy messages.

Although all of these matters demand our closest attention, the region’s troubles should not be overstated. The dominant trends for regional security remain very positive. The major powers have remained engaged, with the balance among them continuing to provide a sound strategic foundation for stability. The United States plays a particularly important role in balancing and containing potential rivalries, and the new Bush Administration has firmly reiterated the United States’ strong commitment to long term strategic engagement in the region.

Australia is well placed to deal with this new environment. The good bilateral relations fostered by our Government provides the strong foundation on which we have built close defence and security cooperation with many countries, and a web of bilateral security dialogues with regional powers. Those dialogues dovetail with our efforts at the ASEAN Regional Forum, where we are actively encouraging increased regional cooperation on security issues. At home, we have acted to ensure that an enhanced Australian defence force has the capabilities it needs through our White Paper on Defence Policy

Against that background, I want to mention three areas of particular interest to Australia.

Developments in Indonesia are at the forefront of our policy considerations. Indonesia’s transition from authoritarianism to democracy is of profound importance to Australia and the region, and bodes well for the long-term future of our relationship. At the same time, management of the relationship is now much more complex, as the full impact of democracy on Indonesian government and society comes to be felt.

I believe Australians will find it easier to deal with an Indonesia that has abandoned its authoritarian past, and has enthusiastically embraced the institutions of a modern liberal democracy. This will over time make for a broader-based and richer relationship rather than one that rests on the assumption of some quality of "specialness". It will also be a relationship firmly grounded in the real interests of both countries in developing new and old areas of cooperation. Building such a relationship is well under way. The Australia-Indonesia Ministerial Forum was an important step towards a more mature and forward-looking relationship and was followed last month by a very successful investment mission to Indonesia led by my colleague Mark Vaile.

It would be naive to assume that it will be smooth sailing from here on in. We should expect occasional discordant notes as some in Indonesia continue to come to terms with the new realities in East Timor. But it would be wrong for them to assume that Australia and Indonesia do not share the same long-term interests. We both want to see an Indonesia that is united, well governed, stable and prosperous. We believe that this will be best achieved in the context of Indonesia continuing to pursue its economic and institutional reforms. These reforms, together with respect for human rights and the rule of law, are in the long term always most likely to ensure national unity based on the willing consent of all its people. The pursuit of military solutions, however, will only exacerbate Indonesia's problems. While we will continue to urge Indonesia to take the path of enlightened self-interest, the choice is ultimately theirs to make.

I also want to mention East Timor. Australia has been unstinting in support of the orderly process of transition to independence, both in our participation in UNTAET and in our targeted aid program (now valued at more than $150 million). We are also making good progress on the negotiation of a new Timor Gap Treaty – a treaty that will, contrary to the mischievous suggestions of some in the media, be fair and equitable to both sides.

One matter that demands resolution is the continued presence of refugee camps in west Timor. Last month’s report by the UN Secretary General noted the lack of progress in disbanding militias and in allowing refugees freely to choose whether to return to East Timor. Clearly, while we acknowledge Indonesia’s efforts to improve security in west Timor, more must be done to curb militia intimidation, bring to justice those responsible for crimes, and to ensure that refugees are able to make free and informed decisions about their future. Australia stands ready to provide further support, as part of an internationally coordinated effort, for the repatriation and resettlement of refugees, once security conditions permit.

Finally, I want to touch on the situation in the South West Pacific.

Pacific Island countries face particular challenges, some of which – in combination – even threaten national stability. They include poverty, pressures on land and other natural resources, young and growing populations, unrealised expectations, unemployment and the undermining of traditional structures of authority. These issues have deep historical roots, and are not amenable to simple solutions.

This poses continuing problems for Australia, which has substantial economic and security interests at stake. For this reason, I have directed considerable Departmental resources towards building relations with all the nations of the Pacific, and to the resolution of the region’s conflicts. Recognising the need for increasingly creative Australian responses, policy has been recast and sharpened, giving it a strong, pro-active character. We've also given substantial assistance to help our Pacific neighbours address problems of internal security, law and order, good governance and nation-building.

We’ve been at the forefront of international efforts to resolve conflict in the region. We remain active in the Bougainville peace process – through our substantial aid program, Australian deployment in the Peace Monitoring Group, and most recently by hosting talks on weapons disposal in Townsville last week. Australia leads the International Peace Monitoring Team that underpins the peace process in the Solomons, having facilitated the conclusion of the Townsville Peace Agreement. And we continue to press for a speedy return to democratic and constitutional rule in Fiji.

But we must guard against unrealistic expectations of what Australia can achieve in the Pacific – on the part of Australians as much as Pacific Islanders. Australia is not in the business of becoming a new colonial overlord, bending troublesome nations to its will. The peoples of the Pacific must face up to their own problems, and solve them in their own way. We stand ready to help those who are prepared to address these issues – but we can’t, and won’t, help those who won’t help themselves.

Despite the Pacific’s difficulties, I look to its future with confidence. In all these trouble spots, men and women of integrity are seeking equitable and peaceful solutions to conflict. And the countries of the region have taken responsibility for their future through the adoption at the last Pacific Forum meeting of the Biketawa Declaration. In what truly was a milestone in the Pacific’s development, the Declaration encouraged regional cooperation in upholding democratic principles, allowing action against individual member states that breach those principles.

It is clear, then, that Australia’s foreign policy agenda in the coming year will be a very demanding one, domestically as well as internationally. But our enhanced international standing, combined with the strategic positioning our Government has undertaken over the past five years, will serve us well. We are today in as strong a position as we have ever been to respond to global challenges.

Our Government is determined to pursue Australia’s national interests relentlessly.

The progress of globalisation may not be amenable to national intervention, but our Government can, and will, act to address its inequities. Just as importantly, we will act to ensure that all Australians share the benefits it brings.

Free trade is the cornerstone of our national wellbeing, and the only guarantee of rising living standards for all Australians. We will continue to take the fight to those nations that seek to restrict our access to markets unfairly.

Regional stability has a direct impact on our own national security. Australia will do all it can to assist its neighbours as they strive to resolve conflict in their societies, and to build the strong foundations of civil society.

In short, our Government approaches the world with confidence. The surest way for our nation to court disaster would be to turn its gaze inwards - to try and build a new Maginot Line against change, or a new Great Wall of protectionism. Instead, we take up our international challenges, confident that Australians – as they have done so many times in our history – will rise to the task, and confound those who doubt their ability.

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