Jump to site navigation...Jump to page breadcrumb navigation...Jump to page content...Jump to page footer...Australian Government - Department of Foreign Affairs and Trade Annual Report 2002-2003
Annual Report home :: Table of Contents :: Userguide :: Download versions
1. Overviews2. Performance3. Corporate4. Financials5. Appendixes6. Glossaries

Your location: Performance > Outcome 1 > Output 1.1 > 1.1.2 South and South-East Asia

OUTPUT 1.1: Protection and advocacy of Australia’s international interests through the provision of policy advice to ministers and overseas diplomatic activity

1.1.2 South and South-East Asia

On this page: Overview :: Indonesia :: Partnerships with South-East Asia :: ASEAN and regional issues :: South Asia


The department continued to foster practical cooperation and outcomes in support of Australia's political, commercial and security interests in South and South-East Asia.

The bombings in Bali on 12 October 2002 underlined the reality of the terrorist threat in the region and led to greatly increased cooperation at both the bilateral and regional level on counter-terrorism. The department played a leading role in facilitating the highly productive cooperation between Australian and Indonesian authorities in the wake of the bombings. We successfully negotiated new bilateral memorandums of understanding (MOUs) on counter-terrorism with Malaysia, Thailand, the Philippines and Cambodia, agreed an MOU text with India, and began negotiations with East Timor.

Against the background of the terrorist threat and concerns from some governments in the region, the department successfully engaged in persistent advocacy to promote greater understanding among regional governments of the purpose and rationale of the Government's advisories for Australian travellers.

The department supported a wide range of Australian companies active in South-East Asia with advice on market conditions, facilitated access to local decision-makers and targeted lobbying. The conclusion of the Singapore–Australia Free Trade Agreement was a major achievement and provides for enhanced trade and investment opportunities in both countries. We also made significant progress in negotiations towards a comprehensive bilateral free trade agreement (FTA) with Thailand.

The department supported Australia's participation in international efforts to manage tensions between India and Pakistan, and to facilitate peace negotiations in Sri Lanka. We vigorously supported the interests of a wide range of Australian companies active in South Asian markets.


Photo - See caption below for description
Mr Hasyim Muzadi (left), the Chairman of Indonesia’s largest Islamic organisation, Nahdlatul Ulama, met the Minister for Foreign Affairs, Mr Alexander Downer (right), in February 2003. Mr Muzadi led an inter-faith delegation to Australia, which was funded by the Australia-Indonesia Institute’s Muslim exchange program and the department’s Special Visits Program. (Photo: AUSPIC)
Enlarge image :: Photo gallery

The department contributed to strengthening links with Indonesia through vigorous advocacy of Australian interests and the facilitation of productive ministerial and officials-level visits. We managed a large number of high-level visits to Indonesia, including two by the Prime Minister, four by Mr Downer and one by Mr Vaile.

The Bali bombing tragedy underlined the importance of a constructive and mutually beneficial relationship between Australia and Indonesia, and cooperation with Indonesia on combating terrorism was a high priority for the department over the year. We facilitated and contributed to extensive bilateral engagement by key agencies on counter-terrorism, notably in joint police and intelligence efforts to find and prosecute those responsible for the Bali bombings. We also negotiated the renewal for a further year of our existing MOU on Combating International Terrorism.

Our close cooperation with Indonesia—including through our successful co-hosting of the Bali Conference on Combating Money Laundering and Terrorist Financing in December 2002 and of the second Bali Regional Ministerial Conference on People Smuggling, Trafficking in Persons and Related Transnational Crime in April 2003 (see sub-output 1.1.7 for further information)—resulted in improved regional responses to these issues of common concern.

A highlight over the past year was the sixth Australia–Indonesia Ministerial Forum (AIMF) held in Jakarta in March 2003. The department facilitated the participation of seven Australian ministers and worked closely with Indonesian counterparts on developing constructive outcomes. We negotiated a joint statement reaffirming our countries' commitment to defeating terrorism in our region and improving prosperity through further economic reform and trade liberalisation. We advanced our commercial interests in both the AIMF and the Australia–Indonesia Business Forum, in which we worked to resolve investment and bilateral trade issues. The department worked to defend market access for our existing exports and promote new opportunities for sectors such as the live cattle trade.

Partnerships with South-East Asia

The department again contributed to enhancing Australia's relationship with Malaysia, including through the finalisation of an MOU on Cooperation to Combat International Terrorism, signed by Mr Downer in August 2002, and the convening of a productive meeting of the Joint Trade Committee in Malaysia in July 2002.

The MOU builds on the existing strong cooperation between Australian agencies and their Malaysian counterparts. The Joint Trade Committee was significant because of its strong focus on a forward-looking and cooperative agenda. Both countries agreed to take forward an initiative for cooperation on halal food products in third markets; to conclude an MOU on telecommunications and e-commerce cooperation; and to support greater cooperation in the legal services sector. The department was able to build on the good links with other Malaysian agencies to advance our bilateral cooperation in a range of other areas, including people smuggling issues, family services and aviation.

Australia–Singapore relations continued to be driven by good cooperation and shared views on many regional and international issues. The department was able to draw on these links to help advance Australian cooperation with Singapore on terrorism. A major achievement was the signature of the Singapore–Australia Free Trade Agreement in February 2003. The agreement provides a major boost to Australian commercial interests in Singapore and underlines the strength of the relationship at both economic and political levels. See sub-output 1.1.5 for further information.

Deepening and strengthening commercial links and opportunities were a focus for the department in carrying forward the relationship with Thailand. To this end, we undertook negotiations and advocacy in support of a comprehensive bilateral FTA, thereby providing a solid basis on which a final agreement might be reached. See sub-output 1.1.5 for further information. Our advocacy efforts culminated in a bilateral visit by Mr Vaile in June 2003, leading to improved understanding and support for the FTA in Thailand.

Other achievements were the signing in Bangkok in October 2002 of a bilateral MOU on Cooperation to Combat International Terrorism, providing for increased cooperation on a range of security issues; the first extradition to Australia of an alleged people smuggler, in February 2003; and the first repatriation of an Australian prisoner from Thailand under the bilateral Prisoner Transfer Treaty, in April 2003.

The department played an important role in the conclusion of a bilateral MOU on Cooperation to Combat International Terrorism with the Philippines, signed by Mr Downer and the Philippines Foreign Secretary, Blas Ople, during Mr Ople's visit to Australia in March 2003. We swiftly responded to specific and credible information of a threat to the Australian embassy in Manila by closing the embassy in November–December 2002. We worked to ensure that normal embassy services and operations were maintained during the closure and hastened the embassy's move to new premises. We organised the opening of the embassy in new premises in May 2003.

The department worked to ensure minimal disruption to Australian exports of live cattle following an isolated case of anthrax in Victoria and to the export of vegetables following the imposition first of import bans and then of increased tariffs. Quarantine issues remained prominent; we played a major role in managing these issues following the release in July 2002 of the Australian Quarantine and Inspection Service's final import risk assessment for pineapples and draft assessment for bananas and a subsequent Philippines challenge to Australia's quarantine procedures under the dispute settlement provisions of the World Trade Organization (WTO).

Table 6. Australia’s trade in goods and services with South and South-East Asia
  Exports Imports
Trend growth
1997 to 2002
Trend growth
1997 to 2002
Indonesia 4 162 3 998 2.1 4 479 4 835 7.5
Malaysia 3 395 3 137 3.1 4 687 4 665 11.3
Philippines 1 460 1 282 –0.7 675 956 9.8
Singapore 7 480 7 092 10.6 6 183 6 937 13.5
Thailand 2 953 2 986 12.1 3 465 3 969 17.5
Vietnam 621 677 22.1 2 330 2 615 38.1
Other ASEAN 151 123 –12.8 470 647 41.7
Total ASEAN 20 221 19 296 6.5 22 289 24 624 14.1
India 2 788 2 820 7.8 985 1 117 10.7
Other South Asia 1 304 1 234 7.0 526 555 13.3
Total South Asia 4 092 4 053 7.4 1 511 1 672 11.6
Total 24 313 23 349 6.6 23 800 26 296 13.9
Source: DFAT Stars database and ABS International trade in services by partner country 2002.

The department played a key role in coordinating Australian support for East Timor's crucial first year of independence. Following a number of security-related incidents in late 2002 and early 2003, we took the lead internationally in securing agreement for a slowing of the planned reduction in 2003 of peacekeeping force numbers in East Timor. We worked closely with AusAID and the Australian Federal Police on a major bilateral project to help develop an effective and accountable police force in East Timor. We successfully supported the nomination of a senior Australian police officer appointed in June 2003 as commander of the United Nations (UN) civilian police force in East Timor.

The department was active at the UN to secure adequate resources for the work being done through East Timor's serious crimes process to bring to justice perpetrators of serious human rights abuse in 1999 during the transition to independence. Our network of overseas posts was critical in encouraging continued international attention to East Timor, in securing donor assistance in key areas and in supporting East Timor's regional integration.

Responding to credible reports of possible terrorist threats, the department successfully managed the temporary closure of our embassy in Dili in September 2002 while maintaining consular services to Australians, including close attention to and advice on their security. We began negotiations with East Timor on an MOU on cooperation on counter-terrorism. The MOU was signed by Mr Downer and his counterpart, Dr Ramos-Horta, in August 2003.

We were instrumental in negotiations leading to the signing on 6 March 2003 of an international unitisation agreement for the Greater Sunrise oil and gas fields. With the entry into force of the Timor Sea Treaty on 2 April 2003, the agreement will benefit Australia and underpin East Timor's future economic viability. See sub-output 1.1.7 for further information.

The department used the thirtieth anniversary of the establishment of diplomatic relations between Australia and Vietnam to promote Australia's interests. The interests of Australians visiting Vietnam were enhanced through the negotiation of a bilateral Consular Agreement. We improved cooperation to combat transnational crime across a range of issues, most notably illegal migration and narcotics trafficking. A second dialogue on human rights was held in Canberra in June 2003. We provided strong support for Mr Vaile's visit to Hanoi and Ho Chi Minh City in March 2003, which advanced a number of outstanding issues in Australia's economic relations with Vietnam, especially the investment licence applications of key Australian companies.

Australia's relations with Cambodia grew stronger through the department's efforts to consolidate bilateral cooperation in combating terrorism, people smuggling and transnational crime. We successfully negotiated a bilateral MOU to Combat International Terrorism, signed by Mr Downer and his Cambodian counterpart, Mr Hor Nam Hong, in Phnom Penh in June 2003. Our persistent advocacy contributed to the conviction of two of those responsible for the murder of an Australian citizen, David Wilson in 1994. Sentences were handed down in September and December 2002. We were also influential in encouraging Cambodia and the UN to resume negotiations on the establishment of a Khmer Rouge Tribunal.

We regularly raised Australia's concerns about the lack of progress in political reconciliation in Burma. The department arranged and supported Mr Downer's visit to Rangoon in October 2002 to register these concerns with Burma's leaders, and to hold discussions with the leader of the National League for Democracy, Aung San Suu Kyi. The continued detention of political prisoners was a focus of our representations throughout the year and we continued to assist the efforts of the UN Secretary-General's Special Envoy to Burma. While a number of political prisoners were released, the year ended with Aung San Suu Kyi being returned to detention, and no sign of movement towards democratic reform.

We provided support to two Australian mining companies developing projects in Laos, and encouraged further reform to the overall foreign investment environment during a visit by a senior Lao investment official, hosted by the department. We helped organise and fund the first human rights training workshop to take place in Laos in June 2003, fostering greater awareness of human rights issues among relevant Lao officials. The department facilitated finalisation of an MOU with Laos concerning cooperation in combating unlawful migration, trafficking in humans and smuggling of people, which was signed in April 2003.

The department supported the visit to Australia by the Crown Prince of Brunei Darussalam, his first visit to Australia. We assisted BHP Billiton with information and advice on issues affecting its interests in relation to overlapping maritime claims by Brunei and Malaysia.

ASEAN and regional issues

The department continued to reinforce Australia's links with ASEAN. In partnership with ASEAN, the department organised the 19th ASEAN–Australia Forum, a senior officials-level dialogue held in Brunei in May 2003. The dialogue reinforced understanding among senior officials from all ten ASEAN countries of Australia's approach to regional and international issues of current concern.

The signing in September 2002 of a Ministerial Declaration on the ASEAN Free Trade Area—Australia New Zealand Closer Economic Relations (AFTA–CER) Closer Economic Partnership, and the establishment of an AFTA–CER Business Council, added momentum to growing economic links between Australia and the region. See sub-output 1.1.6 for further information.

The department supported Mr Downer's participation in successive ASEAN Regional Forums and Post Ministerial Conferences in Brunei in July and August 2002, and in Phnom Penh in June 2003. These meetings focused strongly on transnational issues and raised awareness among ASEAN countries and their dialogue partners of the depth of Australia's practical engagement with the region.

Figure 9. Australia's trade in goods and services with ASEAN

Figure 9. Australia's trade in goods and services with ASEAN

View text description of above chart

South Asia

The department maintained the positive momentum of relations with India, hosting a successful second round of Australia's formal strategic dialogue with India in March 2003 involving senior officials and military personnel of both sides. For the first time, the dialogue included separate talks on defence, terrorism and irregular migration issues. During the dialogue, officials initialled the text of a bilateral MOU on cooperation to combat international terrorism.

The department supported Mr Vaile's visit to New Delhi in February 2003 to co-chair the eighth Australia–India Joint Ministerial Commission meeting and pursue Australia's trade and investment interests with key Indian ministers. Our lobbying contributed strongly to the Indian Government's decision, in March 2003, to announce tariff cuts benefiting Australian wool exporters.

Through targeted representations in capitals, the department supported international efforts to ease resurgent tensions between India and Pakistan over Kashmir.

We also supported efforts by the international community to facilitate a durable political settlement between the government of Sri Lanka and the Liberation Tigers of Tamil Eelam. In a boost for Australia's commercial interests in Sri Lanka, the department negotiated a bilateral Investment Promotion and Protection Agreement, which Mr Vaile and Sri Lanka's Minister for Enterprise Development, Industrial Policy and Investment Promotion, Professor Peiris, signed in November 2002.

The department supported Australia's trade and investment interests in Bangladesh and Nepal and monitored closely the uncertain security situation in Nepal to protect Australians and our aid projects.

We supported a successful visit to Australia in November 2002 by the Foreign Minister of Afghanistan, Dr Abdullah Abdullah. His visit, the first to Australia by a member of the Afghan Transitional Administration, gave us an opportunity to reaffirm Australia's support for Afghanistan's government and its reconstruction efforts. We negotiated the establishment of formal diplomatic ties between Australia and Bhutan, and facilitated the inaugural visit to Australia in June 2003 by Bhutan's Foreign Minister, Lyonpo Jigmi Y Thinley.


Return to top of page

Next page: Americas and Europe
Previous page: North Asia

Department of Foreign Affairs and Trade Annual Report 2002–2003
Home | Table of Contents | Userguide | Download versions
Overviews | Performance | Corporate | Financials | Appendixes | Glossaries

Australian Government
Department of Foreign Affairs and Trade
Home | Copyright | Disclaimer | Privacy


Valid XHTML 1.0 Valid CSS