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Department of Foreign Affairs and Trade - Annual Report 2000-2001
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OUTPUT 1.1
Protection and advancement of Australia’s international interests through the diplomatic network and Canberra-based activity

OUTPUT 1.2
Provision of policy advice and analysis to Portfolio Ministers

1.1.4 and 1.2.4: South Pacific, Middle East and Africa

Effectiveness indicators

Overview

In a year when the Papua New Guinea (PNG) Click to view related information - opens in new window Government faced growing challenges to its reforms, the department was at the forefront of Australia’s efforts to support Prime Minister Morauta’s crucial adjustment programs. This included a $59 million financial assistance package and support for defence force restructuring.

We were also instrumental in helping the parties reach a historic political agreement in Bougainville Click to view related information - opens in new window in June and in negotiating further reductions in the Peace Monitoring Group (PMG). In conjunction with international financial institutions, we sought to address the challenges facing the PNG economy; this was a strong focus of interest. Our merchandise exports to PNG were worth $1.05 billion, an increase of 13.2 per cent over the previous year. PNG, however, enjoyed a trade surplus with Australia, with exports worth $1.45 billion.

Events in the region ensured our continued very close cooperation with New Zealand Click to view related information - opens in new window in restoring peace and stability in East Timor, Bougainville and Solomon Islands. The department played an important role in continuing to strengthen relations with this important economic partner. Our exports to New Zealand, our fourth largest market, reached $6.9 billion in 2000–01, a 2 per cent increase over the previous year. We also contributed to the successful conclusion of new social security arrangements with New Zealand announced by both prime ministers in February 2001, thereby removing a major irritant in the bilateral relationship.

The department’s main priority in the South Pacific Click to view related information - opens in new window during the year was to respond effectively to instability in Solomon Islands and Fiji. We are pleased with the progress to date—signature of a peace agreement in Solomon Islands and early elections under the 1997 constitution in Fiji. But these and the other Pacific island nations face significant challenges and uncertainty. Management of Australia’s interests in the South Pacific will continue to require the department’s close attention. Our merchandise exports to South Pacific countries increased by 17 per cent this year.

Political developments in the Middle East during the year have required high levels of attention because of the region’s strategic importance, our commercial ties and the strong interest of communities in Australia with close links to the region. The renewal of conflict between the Israelis and Palestinians was a particular cause for concern. On the commercial front, we were pleased with the growth and diversification of our merchandise exports, which increased by 44 per cent in 2000–01 to reach $6.8 billion. We look forward to helping more Australian exporters seize opportunities in these markets, which are often difficult to penetrate, but potentially very rewarding.

Trade with the stronger economies of Africa Click to view related information - opens in new window continued to grow, particularly with South Africa and Mozambique. Our exports to sub-Saharan Africa rose 33 per cent to $2.1 billion in 2000–01. Greater cooperation on fisheries protection helped Australian interests. Encouraging the development of good governance, democratic norms and respect for human rights remain a key focus, particularly in Zimbabwe.

See description below - click image for a larger version

The official opening of the University of Wollongong in Dubai in October 2000. Pictured (l–r) are Jim Langridge (Vice Principal (International), Loftus Harris (Director-General of the NSW Department of State & Regional Development), Gerald Sutton (Vice Chancellor), Michael Egan (NSW Treasurer & Minister for State Development), John Hines (Australian Ambassador to the United Arab Emirates), Julie Bayliss (Australian Consul-General, Dubai) and Professor Rodney Hills (Director of the University of Wollongong).

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Papua New Guinea and Bougainville

The department played a leading role in managing and advancing Australia’s extensive interests in PNG Click to view related information - opens in new window. We worked hard to support Prime Minister Morauta’s ambitious, but essential, reform program. We supported the Commonwealth Eminent Person’s Group commissioned by the PNG Government to develop proposals for defence force reform and encouraged international financial institutions to work constructively with PNG. We worked closely with the PNG leadership to manage extra-constitutional challenges to the Government and its reforms. By year’s end, the PNG Government was still reviewing plans to restructure the defence force and was facing some local opposition to its wider economic reform agenda.

We also played a key role in working closely with the PNG authorities and international financial institutions to address the serious long-term challenges facing the PNG economy. The department was active in helping to consolidate relations with the International Monetary Fund and the World Bank to support the delivery of their structural reform programs.

Visits by Mr Downer, Senator Patterson, Senator Hill (Minister for the Environment) and Mr Ruddock (Minister for Immigration and Multicultural Affairs) helped strengthen bilateral cooperation and complemented the work of the productive Australian/PNG Ministerial Forum organised by the department in February. We remained closely engaged in private sector efforts to strengthen business links between Australia and PNG and played a supportive role in continuing PNG/Queensland gas pipeline negotiations.

The peace process on Bougainville Click to view related information - opens in new window ended the year on a high note with the parties, the PNG Government and the Bougainvilleans, reaching a major agreement in June 2001. Through regular dialogue with the leaders and the United Nations representative, and through our role in the Peace Monitoring Group, we played a key part in helping the parties to resolve outstanding issues. In December 2000, Mr Downer put forward proposals that led to agreement between the parties on Bougainville’s political future, and we hosted a meeting in Townsville that paved the way for the historic decision in May 2001 on weapons disposal. The department continued to support the Australian-led Peace Monitoring Group—consisting also of Fiji, Vanuatu and New Zealand—on Bougainville with 24 departmental officers serving as peace monitors during the year. These included four officers assigned, on a rotational basis, to act as Chief Negotiator with the Group and co-chair peace negotiations. The department played an important role in securing the first substantial reduction in the PMG deployment, from 300 to 195 personnel, achieved due to progress in the peace process.

The department continued to manage the Commonwealth’s obligations under the Torres Strait Treaty. Through our Torres Strait Liaison Office on Thursday Island, we worked closely with community representatives to help strengthen free movement arrangements in the region, and improve awareness of the Treaty and its benefits.

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New Zealand

In a year focused on consolidating relations with the New Zealand Click to view related information - opens in new window Government sworn in on 10 December 1999, we worked hard to strengthen bilateral cooperation through policy advice and practical support. Our support for meetings between Australian Prime Minister John Howard and NZ Prime Minister Helen Clark contributed to the successful conclusion of the new social security arrangements they announced in February 2001. Miss Clark visited Australia in April 2001 for the dedication of the New Zealand Memorial in Canberra. We also supported productive meetings between Mr Downer, Mr Vaile and the ministers for Immigration and Multicultural Affairs; Health; Defence; Agriculture, Fisheries and Forestry; and Communications, Information Technology and the Arts, with their counterparts.

The department helped advance negotiations on mutual recognition issues under the Trans-Tasman Mutual Recognition Arrangement. With our support, good progress was made towards establishing a joint therapeutics agency to facilitate trans-Tasman trade through common regulatory outcomes. We encouraged the Air Services (‘Open Skies’) Agreement signed in November. Aviation ministers agreed to amend the aviation inscription to reflect the Air Services Agreement. Removal of remaining inscriptions under the Closer Economic Relationship (CER) Services Protocol to improve the coverage of the Protocol proved difficult because of domestic policy constraints. Further work will be required.

Bougainville: keeping the peace

A remote village in Bougainville was the setting for sensitive weapons disposal talks on 1 May 2001. Talks had reached an impasse and suspicions remained of both Australia and the regional Peace Monitoring Group (PMG).

When advice was received that a woman in a neighbouring village needed emergency medical treatment, the Chief Negotiator for the PMG and colleagues left the talks and, with some young local men as guides, coordinated an evacuation with a PMG medical team. Within half an hour the woman was en route to hospital. The PMG had demonstrated both its capacity to help and its humanity.

When the talks resumed the same day, the mood had lightened considerably, leading to more constructive dialogue and agreement. Within 24 hours, the historic Rotakas Record was signed between the Bougainville Revolutionary Army and the Bougainville Resistance Force, establishing the terms of a weapons control regime that may well contribute to lasting peace on Bougainville.

The woman gave birth safely to a baby girl.

See description below - click image for a larger version

Members of the regional Peace Monitoring Group (PMG) and local Bougainvilleans at the weapons disposal talks held in the village of Togarau. The department’s Matt Anderson, Chief Negotiator for the PMG, is seated at centre right.

 

The department ensured that Australian interests were better understood and accepted by New Zealand across a range of trade and economic areas, including through its briefing of the New Zealand Parliamentary Select Committee’s Inquiry into the Australia–New Zealand Trade and Economic Relationship. We coordinated closely on World Trade Organization (WTO), APEC, Cairns Group and ASEAN Free Trade Agreement—Australia–New Zealand Closer Economic Relations Trade Agreement (AFTA-CER) issues and supported ministerial consultation and strong policy cooperation in these areas.

With our support, New Zealand’s continued defence deployment helped to consolidate progress in East Timor. We worked closely to ensure our joint efforts were successful in advancing the peace process on Bougainville and easing tensions in Solomon Islands.

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Figure 12. Australia’s merchandise trade with New Zealand

Click for a larger version. This information is available as an image only - a paper copy is available by phoning (02) 6261 3114 or from Ausinfo bookshops or by visiting www.ausaid.gov.au/publications

Source: Compiled by DFAT from ABS data

South Pacific

The department’s efforts in the South Pacific centred on management of Australian responses to instability in Fiji Click to view related information - opens in new window and Solomon Islands. We coordinated a review of Australian Government policy, and as a result, ministers agreed to adopt a stronger and more proactive approach to the significant challenges posed by this region. We supported the development in the Pacific Islands Forum of the Biketawa Declaration on regional security cooperation, which is a major step in the protection of democracy and good governance in the Pacific region.

We supported Mr Downer in placing Australia at the forefront of international efforts to encourage an early return to democracy in Fiji. This was achieved through measures including bilateral sanctions adopted in July and action taken in the Commonwealth. We took steps to encourage Fiji to hold early elections, including by linking Australian support for adjustment processes in the bilateral textile and garment trade with clear Fijian commitments to return to democracy more quickly. We also urged Fijian authorities to respect court rulings confirming the continuing validity of Fiji’s constitution. The elections were brought forward to August–September 2001.

In Solomon Islands Click to view related information - opens in new window, in difficult conditions, we supported peace initiatives and safeguarded Australian citizens. We were instrumental in facilitating and promoting the peace negotiations and Mr Downer’s key involvement in the peace process, which culminated in the signing of the Townsville Peace Agreement by rival militant groups and the Solomon Islands Government in October 2000. The department managed Australia’s participation in the International Peace Monitoring Team established to monitor disarmament under the peace agreement, contributing the leader and other personnel, and coordinated Australian Government efforts to strengthen law and order. We supported domestic efforts in Solomon Islands to advance the peace process. Recognising also that Solomon Islands needs the support of the international community, the department has ensured that Australia is at the forefront of international efforts.

As chair of the region’s Forum Fisheries Committee, we helped steer to a successful conclusion negotiations on a multilateral treaty for fish conservation and management in the western Pacific. The department secured a good result for Australia in the negotiation of a Pacific Islands Forum Click to view related information - opens in new window trade agreement and negotiated a trade and investment arrangement with New Caledonia, a significant and growing Pacific market.

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Middle East

The department made numerous representations on market access issues and engaged in promotional activities and policy dialogue to advance trade and investment relationships in the Middle East. We provided policy advice and support for high-level visits, which elevated our political dialogue while promoting our commercial interests. We assisted the private sector to pursue opportunities in Middle East markets.

Capitalising on Mr Vaile’s February–March 2000 visits to Saudi Arabia, Kuwait and the United Arab Emirates (UAE), we re-established our live sheep trade with Saudi Arabia Click to view related information - opens in new window, which also became our largest export market for passenger motor vehicles. With a positive dynamic in bilateral relations, exports to Saudi Arabia grew by 65 per cent in 2000 to $2.2 billion. In the first-ever visit of an Australian Foreign Minister to Saudi Arabia in April 2001, Mr Downer signalled our interest in broadening and deepening relations and further promoted our economic interests.

We provided in-country support and policy advice for Mr Vaile when he led a business delegation to Egypt. The visit reinforced and expanded a valuable network of contacts for Australian business in Egypt’s telecommunications, agribusiness and foodstuffs sectors. Working closely with industry, we persuaded the Egyptian Government to reverse a decision to impose increased tariffs and arbitrary customs valuations on sugar.

In Tehran in July 2000, Mr Downer engaged the Iranians on human rights. In follow-up to the April 2000 Joint Ministerial Commission, we exchanged draft trade agreements, prepared an agricultural cooperation proposal for Iranian consideration, and developed cooperative research and development projects with CSIRO for the Sarchesmeh copper smelter. Reformist President Khatami’s re-election in June 2001 justified our efforts to develop Australia–Iran Click to view related information - opens in new window relations and should facilitate further development of the relationship.

Mr Downer’s visit to Lebanon Click to view related information - opens in new window in April 2001 reaffirmed the closeness of the bilateral relationship and community ties and their potential to act as a springboard for commercial growth.

In July 2000, Mr Vaile’s visit to Israel Click to view related information - opens in new window promoted valuable commercial connections. In September 2000, we opened a Representative Office in Ramallah to further links with the Palestinian Authority as the peace process advanced and to administer development assistance. The subsequent renewal of the Israeli–Palestinian conflict, setting back hopes of a settlement, has made this task harder. Together with other supporters of the peace process, we deplored renewed violence between Israelis and Palestinians and urged them to return to negotiations. So far, unfortunately, this pressure has been to no avail.

We continued to implement UN Security Council resolutions on Iraq Click to view related information - opens in new window and facilitated deployment of HMAS Anzac to the Multinational Interception Force (MIF). We assisted companies trading with Iraq through the UN oil-for-food program.

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Africa

The department’s policy advice and practical support underpinned Mr Downer’s visits to South Africa Click to view related information - opens in new window and Kenya Click to view related information - opens in new window in April–May 2001, which advanced dialogue on Commonwealth issues in preparation for the 2001 Commonwealth Heads of Government meeting. Mr Vaile co-chaired the September 2000 Third Joint Ministerial Commission meeting in Pretoria, which is our peak trade forum with South Africa. This and the department’s efforts contributed to a 24.8 per cent increase in exports to South Africa to $1.2 billion. Our support also contributed to increased trade and investment in Mozambique Click to view related information - opens in new window (exports up 461 per cent to $164 million) and Tanzania Click to view related information - opens in new window (investment up 14 per cent to $800 million). We protected our Exclusive Economic Zone through negotiating an ad hoc agreement with South Africa to prevent illegal fishing. One vessel, with a cargo worth approximately $1 million dollars, was apprehended in a joint operation between Australian and South African defence forces.

As part of our effort to build consensus for a new WTO round agenda, we trained African trade negotiators and helped African governments develop converging views on trade liberalisation. We supported Mr Downer’s role in the Commonwealth Ministerial Action Group. With the Commonwealth Secretariat, we worked towards a peaceful democratic solution in Zimbabwe Click to view related information - opens in new window. We advocated good governance, respect for the rule of law and human rights through representations and by co-sponsoring UN resolutions on Africa.

Table 5. Australia’s regional trade with the South Pacific, Middle East and Africa

 

 

EXPORTS

IMPORTS

1999–00
($M)

2000–01
($M)

TREND GROWTH 1995–96
TO 2000–01

1999–00
($M)

2000–01
($M)

TREND GROWTH 1995–96
TO 2000–01

New Zealand and Territories

6,744

6,878

3.7

4,375

4,569

5.2

Papua New Guinea

927

1,050

–3.0

1,353

1,457

4.5

Other Pacific Islands

1,351

1,583

6.7

495

413

3.6

Middle East

4,709

6,796

18.7

2,475

3,753

9.3

South Africa

1,039

1,296

7.4

749

877

15.9

Other Africa

665

999

21.8

280

151

2.0

Total

15,436

18,602

8.5

9,726

11,219

6.9

Source: Compiled by DFAT from ABS data

Reporting against quality and quantity indicators and administered items begins on page 103. The financial and staffing resources summary for outcome 1 is at Appendix 2.

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