Annual Report 2006-2007
 

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1. Overviews2. Performance3. Corporate4. Appendixes5. Financials6. Glossaries and Compliance Index

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

1.1.1 North Asia

On this page: Overview :: Japan :: China :: Republic of Korea (ROK) :: Democratic People's Republic of Korea (DPRK) :: Mongolia :: Outlook

Overview

The department strengthened cooperation and dialogue with North Asian countries and promoted Australia’s economic, political and strategic objectives in the region. As North Asia is the destination for approximately half of Australia’s exports, developments there have a direct impact on our national interest.

The department strengthened economic ties with Australia’s three largest merchandise export markets—Japan, China and the Republic of Korea (ROK). Following intensive high-level advocacy and successful completion of a joint free trade agreement (FTA) feasibility study, we secured Japan’s agreement to commence formal negotiations on a comprehensive bilateral FTA, with the first round of negotiations held in April 2007. The department used high-level dialogues with China’s two key economic agencies to strengthen further Australia’s economic engagement with China. We held four rounds of negotiations on the proposed bilateral FTA in an effort to improve market access for Australian goods, services and investment in China. Our outreach activities to the ROK business community saw our FTA aspirations endorsed by the peak ROK industry association, while work commenced on a non-government FTA study.

Australia’s strong economic interests in North Asia and close ties with countries in the region give us a direct interest in strengthening security and stability in the region. The department strengthened Australia’s political and strategic relationships with Japan, China and the ROK, which contributed to regional stability. We played a key role in securing Japan’s agreement to the Australia–Japan Joint Declaration on Security Cooperation signed by Prime Minister Howard and Japanese Prime Minister Shinzo Abe in March 2007. The Joint Declaration represents an unprecedented deepening of our strategic partnership with Japan, and sets the ground for even closer relations.

The department also facilitated a successful first meeting of the Japan–Australia ‘2+2’ Joint Foreign and Defence Ministerial Consultations (JAUSMIN) in June 2007. JAUSMIN is the ministerial-level forum that will direct and review the further growth of Australia’s bilateral defence and security cooperation with Japan.

The DPRK’s nuclear weapons and ballistic missile programs remained a source of considerable tension in North Asia. We liaised closely with key allies and partners on Australia’s robust response to the DPRK nuclear test of 9 October 2006, including full implementation of United Nations Security Council Resolution 1718.

We coordinated implementation of bilateral sanctions against the DPRK with Japan and the United States. We welcomed the Six-Party statement of 13 February 2007 on denuclearisation of the DPRK, and we continued to urge the DPRK, through its ambassador in Canberra and senior DPRK representatives in Pyongyang, to implement its commitments to abandon its nuclear program.

Japan

The strengthening of the Australia–Japan relationship over the past year has been unparalleled. The department made a significant contribution to a number of landmark commitments with Japan that reflect our shared values, complementary economic ties and increasing convergence of strategic interests.

Photo - See caption below for description
The establishment of the Australia–Japan Joint Foreign and Defence Ministerial Consultations (JAUSMIN) in 2007 reflects the growing strength of our relationship with Japan. (From left to right) Then Japanese Foreign Minister, Mr Taro Aso, Minister for Foreign Affairs, Mr Alexander Downer, Minister for Defence, Dr Brendan Nelson and then Japanese Defense Minister, Mr Fumio Kyuma, celebrate the successful conclusion of the inaugural JAUSMIN meeting in Tokyo on 6 June 2007.
Enlarge image :: Photo gallery

Prime Minister Howard and Japanese Prime Minister Shinzo Abe jointly signed the Australia–Japan Joint Declaration on Security Cooperation in Tokyo in March 2007 (see box below). The Joint Declaration is the most significant security arrangement undertaken by Japan apart from the Japan–United States alliance. As part of the Joint Declaration, the department secured Japan’s agreement to develop an action plan to take forward specific areas of security cooperation, and to establish annual joint foreign and defence ministers’ talks to enable better coordination in these areas.

The establishment of the Australia–Japan Joint Foreign and Defence Ministerial Consultations (JAUSMIN) in 2007 reflects the growing strength of our relationship with Japan. (From left to right) Then Japanese Foreign Minister, Mr Taro Aso, Minister for Foreign Affairs, Mr Alexander Downer, Minister for Defence, Dr Brendan Nelson and then Japanese Defense Minister, Mr Fumio Kyuma, celebrate the successful conclusion of the inaugural JAUSMIN meeting in Tokyo on 6 June 2007.

The department helped ensure the success of the inaugural Australia–Japan ‘2+2’ Joint Foreign and Defence Ministerial Consultations (JAUSMIN) held in Tokyo in June 2007. Mr Downer and the Minister for Defence, Dr Nelson, held frank, constructive discussions with their Japanese counterparts—Mr Aso, Minister for Foreign Affairs, and Mr Kyuma, Minister for Defense—on issues of common strategic interest. These included cooperation on disaster relief, peacekeeping and peace-building activities, counter-terrorism and counter-proliferation and greater coordination to enhance the effectiveness of our respective approaches to the Pacific region. Australia and Japan agreed to collaborate more in these areas, including through joint exercises and training, and to step up cooperation and information sharing. The meeting was a historic event that reflects the growing strength of Australia’s relationship with Japan. Australia has such meetings only with the United States and the United Kingdom, and Japan only with the United States. We will host the next JAUSMIN meeting in Australia in 2008.

The department, with Japan’s Ministry of Foreign Affairs, chaired and concluded a joint Australian–Japanese study into the feasibility of an FTA between the two countries. The study found that a comprehensive WTO-consistent agreement would bring considerable benefits for both countries and provided the basis for the agreement by Prime Minister John Howard and Japanese Prime Minister Shinzo Abe in December 2006 to begin FTA negotiations. To build support in Japan for the commencement of negotiations on an FTA, the department hosted visits to Australia by a key Japanese industry body, a Japanese academic and Japanese journalists and, through the Tokyo embassy, organised seminars on meat and dairy trade involving Australian and Japanese industry representatives. The decision to commence negotiations coincided with the 50th anniversary of the Agreement on Commerce between Australia and Japan. The 1957 Commerce Agreement laid the foundation for our most successful trading partnership over the past 40 years.

FIGURE 5. Australia's trade in goodsand services with Japan(a)

Figure 5: Australia's Trade in Goods and Services with Japan

(a) Goods data on a recorded trade basis, services data on a balance of payments basis.
Source: DFAT STARS database and ABS Catalogue 5368.0.

In 2006, Japan remained Australia’s largest export market. Australia’s total exports (goods and services) to Japan reached $35.6 billion, an increase of 12 per cent on 2005. Japan was Australia’s top market for exports of primary products (as a whole), agricultural products (as a whole) and, by item, for coal, liquefied natural gas (LNG), beef, aluminium, copper ores, woodchips, dairy products and horticulture.

The department played a significant role in promoting Australia as an ongoing, stable source of LNG for Japan, with Australia increasing its market share to become Japan’s second largest LNG supplier in 2006. We also played a key role in ensuring Australia maintained its dominance of Japan’s beef import market, supplying almost 90 per cent of Japan’s beef imports in 2006. We worked closely with the Department of Agriculture, Fisheries and Forestry to secure further flexibility in Japan’s implementation of its beef ‘snapback’ tariff measure.

The department conducted the first annual high-level bilateral dialogue at secretary/administrative vice-minister level with Japan in October 2006 and the first bilateral senior officials’ talks on East Asia in August 2006. We also supported the extensive new trilateral dialogue (the United States, Australia and Japan), which arose out of the first ministerial level Trilateral Strategic Dialogue meeting in March 2006 (see sub-output 1.1.10 for more information).

Photo - See caption below for description
The Australia–Japan security relationship has advanced markedly in recent years underpinned by our shared values, common strategic outlook and our respective alliances with the United States. A key achievement was the conclusion of the Joint Declaration on Security Cooperation in March 2007. Prime Minister John Howard (left) and Japanese Prime Minister Shinzo Abe exchange copies of the Declaration during the official signing ceremony in Tokyo on 13 March 2007. Photo: David Foote, Auspic
Enlarge image :: Photo gallery

At the 59th meeting of the International Whaling Commission, held in Anchorage in May 2007, we worked successfully, in cooperation with the Department of Environment and Water Resources, to restore a majority for countries opposed to Japan’s ‘scientific’ whaling program (see sub-output 1.1.9 for more information).

The department, together with the Department of Families, Community Services and Indigenous Affairs, helped conclude negotiations on the Australia–Japan Social Security Agreement. The agreement was signed on 27 February 2007 and is expected to come into effect on 1 January 2009. It will help provide better access to age pension benefits for Australians who have worked in Japan.

Following the implementation of the Government’s response to the Review of the Corporate Governance of Statutory Authorities and Office Holders conducted by Mr John Uhrig, the Australia–Japan Foundation was re-formed as a bilateral foundation within the department. The Foundation now operates on the same footing as the department’s other foundations, councils and institutes in supporting Australian foreign and trade policy interests and developing the Australia–Japan relationship.

The 2006 Australia–Japan Year of Exchange—a joint prime ministerial initiative to mark the 30th anniversary of the signing of the Basic Treaty of Friendship and Cooperation between the two countries—succeeded in raising awareness in Australia and Japan about the strength and diversity of the bilateral relationship, and enhanced the community and institutional linkages. As part of the official close of the Australian program, the department coordinated an Australian Festival in Tokyo from 27 September to 9 October 2006. We also worked closely with the Department of the Prime Minister and Cabinet and Tourism Australia on arrangements for a rugby match between the Prime Minister’s Invitational XV and the Japanese national team in Tokyo in November 2006. The Year of Exchange was a valuable means of reaffirming the goodwill and friendship between our two countries.

High-level visits

In addition to the visits by the Prime Minister in March 2007, and the Minister for Foreign Affairs and the Minister for Defence in June 2007, the department supported a number of high-level visits to strengthen bilateral engagement with Japan. Mr Downer visited Tokyo in August 2006 to advance the Government’s key objectives for the bilateral relationship, including strengthening cooperation on defence and strategic issues, expediting the finalisation of the Joint FTA Feasibility Study, and developing common approaches to the evolution of regional architecture in East Asia. Mr Truss visited Tokyo in November 2006 to intensify Australia’s FTA advocacy efforts in Japan.

Other high-level visits included visits to Australia by a delegation from Japan’s House of Councillors (Upper House) in August 2006, by the Japan Economic Federation, Japan’s peak industry body in January 2007 and by Japan’s peak agricultural industry body, JA Zenchu, in February 2007. These visits allowed the department to press our case for an FTA, and to outline our views on the future development of APEC and the East Asia Summit.

Australia–Japan Joint Declaration on Security Cooperation

Prime Minister Howard and Japanese Prime Minister Shinzo Abe signed the Australia–Japan Joint Declaration on Security Cooperation in Tokyo on 13 March 2007.

The Joint Declaration is a positive and forward-looking document that paves the way for even closer security cooperation between Australia and Japan. It reflects our shared values and builds on our substantial history of working together to promote peace and prosperity in the Asia-Pacific region and beyond.

The Joint Declaration commits both countries to strengthen practical cooperation between their respective defence forces and other security-related agencies, including through exchange of personnel and joint exercises and training.

The scope of security cooperation will include, but is not limited to, the following:

The Joint Declaration also established joint foreign and defence ministers’ talks to enable better coordination in the above areas. The inaugural Australia–Japan Joint Foreign and Defence Ministerial Consultations—JAUSMIN—was held in Tokyo on 6 June 2007, less than three months after signature of the Declaration.

China

The department played a key role in strengthening Australia’s relations with China. Two-way trade in goods and services reached $50 billion in 2006, with China cementing its place as our second-largest trading partner and second-fastest growing export market. On current rates of growth, China is expected to become Australia’s largest trading partner by the end of 2007.

In early 2007 Australia implemented agreements on legal mutual assistance, the supply of Australian uranium to China’s nuclear power program, and nuclear cooperation that were signed during Premier Wen Jiabao’s visit in April 2006. The steering committee established under the Coal Mine Safety MOU is considering mine site project proposals. As well, reciprocal visits by young Chinese and Australian scientists occurred under the bilateral arrangement for exchange of young scientists, and three projects were awarded funding under the Agricultural Technical Cooperation Program.

High-level visits

The department supported a number of high-level visits in both directions that strengthened our bilateral engagement. We supported separate visits to China by Mr Downer and Mr Truss in April 2007, and by the Deputy Prime Minister and Minister for Transport and Regional Services, Mark Vaile, in December 2006.

In April 2007, Mr Downer visited Beijing and Shanghai and met senior Chinese Government representatives, including the Secretary General of the State Council, Hua Jianmin, and Foreign Minister Li Zhaoxing, to discuss a range of political and regional strategic issues. These discussions covered China’s role in resolving the North Korean nuclear issue, advancing the agenda of Asia-Pacific Economic Cooperation (APEC), and Australian cooperation with China to address its significant environmental challenges.

Photo - See caption below for description
The Prime Minister, Mr John Howard, and the Premier of the State Council, China, Mr Wen Jiabao, holding bilateral talks. Photo: David Foote, Auspic
Enlarge image :: Photo gallery

Mr Truss met the Minister for Commerce, Bo Xilai, in April 2007 to further Australia’s trade and economic interests with China, including discussions on advancing the negotiations on the proposed FTA. Mr Truss co-chaired the second ministerial meeting of the High-level Economic Cooperation Dialogue in Beijing with Chairman Ma Kai of the National Development and Reform Commission, China’s key economic planning agency. The meeting promoted a greater understanding of the investment regimes of each country and identified potential areas for increased trade in energy and resources. China reaffirmed its commitment to work with Australia on environmental issues in the Asia-Pacific Partnership on Clean Development and Climate and through the Joint Coordination Group on Clean Coal Technology and the Australia–China Climate Change Partnership.

The department supported a visit to Australia by Commerce Minister Bo Xilai in October 2006 to co-chair the eleventh meeting of the Australia–China Joint Ministerial Economic Commission (JMEC) which aims to advance the bilateral economic and trade relationship. The JMEC meeting provided a forum to review developments in the economic and trade relationship with the Chinese Ministry of Commerce, which has responsibility for key aspects of bilateral trade and investment, to address specific trade concerns and promote new areas of cooperation. The department also supported a visit to Australia by Vice Premier Zeng Peiyan in March 2007 to promote bilateral cooperation on resources and environmental issues, including water security and clean coal technology. During the visit Vice Premier Zeng signed a declaration of intent to cooperate with Australia on water scarcity, building upon the MOU between Australia and China on water management. He also witnessed the signing of MOUs between Australia and China on aviation security and product standards, as well as four commercial deals involving renewable energy and clean coal technology.

Commercial interests

The department supported a wide range of Australian commercial interests in China. Following the meeting of the Joint Ministerial Economic Commission in October 2006, the department facilitated a business forum for 13 Australian representatives of business and industry groups with interests in China to discuss economic and trade issues with the Chinese Minister for Commerce.

The department facilitated a visit to China in October 2006 by the then Parliamentary Secretary to the Minister for Foreign Affairs, Teresa Gambaro, to promote industry-to-industry links between the two countries. The Parliamentary Secretary led a 50-strong Australian industry delegation to Beijing, Shanghai, Hong Kong and Macau to attend the second biennial Australia–China Business Forum. The forum, organised in cooperation with the Australia–China Business Council and the Australian Chambers of Commerce in Beijing, Shanghai and Hong Kong, brought together experts from the public and private sectors to discuss developments in the Chinese economy and opportunities for future growth.

In November 2006, the department facilitated the Australia–China Business Council Networking Day in Canberra. The event provided 67 industry representatives from the Australian finance, services, manufacturing, mining and education sectors with an opportunity to engage with four Australian ministers, a shadow minister and senior government officials on China trade and business issues.

FIGURE 6. Australia's trade in goods and services with China(a)

Figure 6: Australia's Trade in Goods and Services with China

(a) Goods data on a recorded trade basis, services data on a balance of payments basis.
Source: DFAT STARS database and ABS Catalogue 5368.0.

The department supported the efforts of Australian energy companies to market LNG in China. We assisted with the implementation of the Guangdong Phase I LNG supply contract, which was signed in 2002 and is still Australia’s largest single export contract. We facilitated the participation of nine Chinese academic and industry representatives in the second annual LNG training program under the Australia–China Natural Gas Technology Partnership Fund. The sixth-month course, jointly conducted in Perth by the University of Western Australia and Curtin University of Technology, provided specialist training on the gas industry and has assisted the operation of the Guangdong Phase One LNG terminal and associated facilities.

The department worked closely with Invest Australia, Geoscience Australia and state governments to host the first Australia–China Mining Seminar in Beijing in November 2006 to promote Australia’s mining sector to 170 key Chinese Government officials and business representatives. The seminar helped identify Chinese interest in specific mineral sectors in Australia, and provided information to the Chinese Government about the approvals process for mineral exploration and development in Australia.

Institutional links

The department supported a number of bilateral talks and other high-level meetings to engage China on matters affecting the regional and international community. We supported secretary-level senior officials’ talks in October 2006 and June 2007 that strengthened Australia’s engagement with China on key strategic issues, including climate change, regional links and the Korean Peninsula.

The bilateral Australia–China agreements on nuclear cooperation and the sale of uranium entered into force on 3 February 2007, following intensive departmental negotiations with Chinese authorities.

The department assisted the Department of the Prime Minister and Cabinet and the Department of Industry, Tourism and Resources to establish the Australia–China Joint Coordination Group on Clean Coal Technology, a joint proposal of Prime Minister Howard and Chinese Premier Wen Jiabao. The Joint Coordination Group brings together leaders from industry, the coal research community and the Australian and Chinese governments to identify and implement joint clean coal technology projects. We assisted the Department of Industry, Tourism and Resources to hold the first meeting of the Joint Coordination Group in Brisbane in March 2007, which agreed on the terms of reference and work program. The co-chairs also agreed to undertake a stocktake of clean coal activities in their respective countries.

Taiwan

The department helped Australian business increase trade and investment with Taiwan. Australian merchandise exports grew 14 per cent in 2006 to $6.3 billion.

We facilitated Taiwanese investment in Australia in the resources and other sectors and helped Australian investors with regulatory issues in Taiwan. We achieved some progress on agricultural market access and promoted trade opportunities in the energy, electronics, education, biotech and food and beverage sectors through officials’ talks and other advocacy for Australian businesses. The department supported a visit to Taiwan in August 2006 by the Parliamentary Secretary for Agriculture, Fisheries and Forestry, Sussan Ley, which made progress towards resolution of a number of difficult agriculture-related quarantine issues.

FIGURE 7. Australia's trade in goodsand services with Taiwan(a)

Figure 7: Australia's Trade in Goods and Services with Taiwan

(a) Goods data on a recorded trade basis, services data on a balance of payments basis.
Source: DFAT STARS database and ABS Catalogue 5368.0.

Hong Kong

The department helped Australian companies identify and win business opportunities that have opened as a result of Hong Kong’s strong economic growth and increasing integration with mainland China. Australian merchandise exports to Hong Kong rose 18 per cent to $3.1 billion in 2006. Our advocacy contributed to a Hong Kong Government decision to reduce the excise on imported wine and beer, creating a valuable market opportunity for Australian exporters.

The department supported a visit to Hong Kong by Mr Downer in August 2006 which reinforced close government-level links, advanced economic objectives and underlined Australia’s support for universal suffrage as soon as practicable under the Basic Law. We also facilitated a visit to Hong Kong in October 2006 by the then Parliamentary Secretary for Foreign Affairs, Ms Gambaro, which reinforced our bilateral and regional economic interests.

Macau

We helped Australian companies win lucrative business arising from Macau’s economic boom in a diverse range of sectors, including civil engineering, design and construction, aviation, food and beverages, legal and financial services, gaming and education. Through our advocacy to Macau authorities we also assisted Australian businesses resolve a number of regulatory issues. In October 2006, we facilitated a visit by the then Parliamentary Secretary for Foreign Affairs, Ms Gambaro, which reinforced positive perceptions of Australia by the Macau Government and senior Macau business people. We increased our consular services to the rapidly growing resident Australian population in Macau through community briefings and more frequent consular visits.

Republic of Korea (ROK)

The department continued its active support for Australian business in the ROK market to expand bilateral trade and investment. The ROK is Australia’s third-largest merchandise export market, with Australian exports increasing by more than 12 per cent in 2006 to reach $12.3 billion. The increase was underpinned by continuing strong performance by resources and energy exports and increased beef exports. Our role in successful efforts to extend a major LNG supply contract was acknowledged by industry. In September 2006, we facilitated a visit to the ROK by the Minister for Agriculture, Fisheries and Forestry, Peter McGauran, which included an effective and widely publicised promotion of Australian beef.

We worked closely with other Australian agencies and state and territory governments to defend and promote Australia’s commercial interests in the ROK. In close cooperation with the Department of Agriculture, Fisheries and Forestry, we secured the early release of a shipment of live cattle from post-arrival quarantine in the ROK.

The department continued to advocate to ROK ministers and senior officials the mutual benefits of a comprehensive bilateral free trade agreement (FTA). We agreed with the ROK to sponsor a joint non-government FTA study, which commenced in April 2007 and the outcomes of which will be reported to the Government in December 2007. The results of the joint study will inform discussions by senior officials, who will then make recommendations on next steps to both governments. Given both countries’ active FTA agendas, we highlighted the growing importance of a comprehensive bilateral FTA to defend and promote our respective interests in each other’s market. We continued our FTA outreach activity with the business communities, and gained strong endorsement for an FTA from the peak industry body in the ROK, the Federation of Korean Industry.

FIGURE 8. Australia's trade in goodsand services with the Republic of Korea(a)

Figure 8: Australia's Trade in Goods and Services with the Republic of Korea

(a) Goods data on a recorded trade basis, services data on a balance of payments basis.
Source: DFAT STARS database and ABS Catalogue 5368.0.

High-level visits

The department facilitated a visit to Australia in December 2006 by ROK President Roh Moo-hyun, the first visit by a ROK head of state since 1999. We used the President’s visit to lift the profile and expand the substance of the bilateral relationship. Visit outcomes included agreement to conduct the FTA study, and the signing of bilateral social security and migratory birds agreements. The President met Prime Minister Howard and Cabinet ministers during his visit. Mr Downer hosted a visit by the then ROK Foreign Minister Ban Ki-moon in August 2006 for the annual Foreign Ministers’ Meeting, and met with Mr Ban’s successor, Song Min-soon, during President Roh’s visit.

Democratic People's Republic of Korea (DPRK)

The department continued to work closely with like-minded countries to urge the DRPK to abandon its nuclear and other weapons of mass destruction (WMD) programs. Following its ballistic missile tests in July 2006, the DPRK conducted a nuclear test on 9 October 2006. Australia, in close cooperation and consultation with like-minded allies, played an active role in urging a strong international response to these provocative acts. The department worked closely with other agencies to implement fully the measures contained in the United Nations Security Council (UNSC) Resolution 1718 adopted in response to the nuclear test.

In addition to the measures under UNSC Resolution1718, Australia also implemented a number of bilateral actions. Mr Downer announced a further tightening of visa issue for DPRK citizens and, jointly with Mr Vaile, Minister for Transport and Regional Services, a port ban on DPRK-flagged ships. In September 2006, in cooperation with Japan and the United States, Mr Downer announced the implementation of financial sanctions against a number of companies and one individual connected with financing the DPRK’s continuing efforts to develop its nuclear and other WMD programs.

Australia welcomed the agreement reached by the members of the Six-Party Talks on 13 February 2007 on steps towards the resolution of the nuclear issue. In March 2007, Mr Downer dispatched a delegation, led by a senior departmental officer, to urge the DPRK to implement its Six-Party commitments without delay. During the visit, the Australian delegation emphasised to senior DPRK representatives that development of the bilateral relationship would remain suspended pending progress by the DPRK towards the abandonment of its nuclear program, and raised Australia’s serious concerns over human rights issues. The delegation also emphasised Australia’s willingness to provide assistance to the DPRK should it implement its commitments under the Six-Party Talks and take concrete steps towards abandoning its nuclear programs. Other Six-Party members welcomed our delegation’s visit, which emphasised to the DPRK the wider international community’s interest in resolving the nuclear issue. These messages have been regularly reinforced in meetings with the DPRK Ambassador in Canberra.

Despite the suspension of bilateral relations with the DPRK and independent of nuclear and WMD issues, Australia continued to provide humanitarian assistance to relieve the suffering of the DPRK people. Mr Downer announced in April that Australia would provide nearly $4 million to support multilateral programs run by the United Nations and other agencies to improve health, hygiene and nutrition in the DPRK.

Mongolia

The department provided support for the first visit to Mongolia by Mr Downer in April 2007. During the visit Mr Downer signed a joint statement with his Mongolian counterpart, Mr Nyamaa Enkhbold, in which the two agreed to establish a joint working group on mining and energy cooperation and to undertake regular senior officials’ talks on bilateral and other issues of mutual interest. Both sides acknowledged that Australia was one of Mongolia’s ‘Third Neighbours’ (an honour bestowed by the Mongolian Government to emphasise a close cooperative relationship with another country), and Mr Downer announced that Australia would open an honorary consulate in Mongolia.

Australia’s ambassador to China led a delegation, including 30 Australian business representatives, to Mongolia in June 2007, to develop further bilateral economic relations.

TABLE 5. Australia's trade in goods and services with North Asian economies
 
Exports
Exports
 
Imports
Imports
 
Goods and services (a)
2005
2006
Trend
growth
2001–2006
2005
2006
Trend
growth
2001–2006
 
$m
$m
%
$m
$m
%
Japan
31,825
35,570
6.0
19,192
19,388
2.5
China
19,156
23,705
22.6
22,570
26,598
19.0
Republic of Korea
12,378
13,963
5.4
5,514
7,324
6.4
Taiwan
5,995
6,743
3.7
3,860
4,381
5.9
Hong Kong, China
4,228
4,749
—4.5
2,941
3,320
0.4
Other (b)
51
68
7.3
28
26
15.4
Total North Asia
73,633
84,798
8.1
54,106
61,038
8.7

(a) Goods data on a recorded trade basis, services data on a balance of payments basis.
(b) Goods data only. Services data is not published by the ABS for these countries.
Source: DFAT STARS database and ABS Catalogue 5368.0.

Outlook

The department will continue to work with North Asian partners to promote regional stability and Australia’s economic interests. The high-level visits by North Asian leaders from APEC economies during Australia’s year as APEC host in 2007 will provide a unique opportunity to further our engagement on economic, political and strategic issues.

The department will continue to strengthen Australia’s economic relationship with Japan, including by seeking to achieve a successful conclusion to FTA negotiations. We will pursue implementation of the activities agreed under the Action Plan provided for in the Joint Declaration on Security Cooperation and other mechanisms to reflect our shared strategic interests with Japan, including cooperation on peacekeeping and peace-building, counter-terrorism and counter-proliferation. We will strengthen cooperation with Japan on regional and international issues including through the annual meeting of foreign ministers, the annual joint foreign and defence ministers’ meeting and a range of dialogues at senior officials’ level.

The Australia–China relationship rests on a firm basis of economic complementarity, growing people-to-people links and a history of high-level political engagement. A high point of this 35th anniversary year of the establishment of diplomatic relations will be President Hu Jintao’s bilateral visit associated with APEC. The visit provides an opportunity to register clearly with the Chinese leadership key Australian goals and objectives across a range of bilateral and international issues, including the finalisation of an FTA, climate change cooperation and the denuclearisation of the DPRK. The visit will also see key law enforcement treaties and other agreements signed. The department will work with other Australian agencies to implement these and existing agreements. We will promote Australian interests in consular matters, human rights, non-proliferation and disarmament, through established institutional mechanisms. The bilateral trade relationship continues to surge and, based on current rates of growth, China is expected to become Australia’s largest trading partner by the end of 2007 (although Japan will remain our largest export market). We will seek to improve market access opportunities for Australian goods and services through the FTA negotiations and by addressing specific impediments.

We will continue to lift the tempo of our existing strong and friendly relations with the ROK to realise more fully the potential of our shared democratic values, strategic perceptions and economic complementarity. A key priority will be the successful conclusion of the non-government FTA study, and the department is consulting closely with industry to ensure business views are taken into account. The department will continue to work closely and actively with allies, particularly the United States and Japan, and the broader international community to urge the DPRK to honour its commitments to dismantle its nuclear programs. We will remain ready to support the Six-Party Talks providing the DPRK demonstrates its willingness to abandon its nuclear weapons programs.

 

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