Annual Report 1994-95

PROGRAM 1: INTERNATIONAL RELATIONS, TRADE AND BUSINESS LIAISON
PROGRAM 2: CONSULAR AND PASSPORT SERVICES
- 2.1 PASSPORT SERVICES
- 2.2 CONSULAR SERVICES
PROGRAM 3: SERVICES FOR OTHER AGENCIES
PROGRAM 4: SECURE GOVERNMENT COMMUNICATIONS AND SECURITY SERVICES
- 4.1 THE AUSTRALIAN DIPLOMATIC COMMUNICATIONS NETWORK
- 4.2 SECURITY SERVICES
PROGRAM 5: EXECUTIVE AND DFAT CORPORATE SERVICES
- 5.1 EXECUTIVE DIRECTION
- 5.2 DFAT CORPORATE SERVICES
PROGRAM 6: DEVELOPMENT COOPERATION

PROGRAMS

PROGRAM 1: INTERNATIONAL RELATIONS, TRADE AND BUSINESS LIAISON

Objectives:

To increase Australia's economic prosperity through trade and investment flows.

To ensure a favourable security environment for Australia.

To advance Australia's standing as a good international citizen.

To promote global cooperation based on fair rules.

Resources Summary by Sub-programs

1.1 INTERESTS IN NORTH ASIA


1993-94		1994-95	1994-95
Actual		Budget	Actual
& AEs
$'000		$'000	$'000
Appropriations
Running costs	37,398	44,834	37,871
Other program costs	615	615	757
Total appropriations	38,012	45,449	38,628
Less adjustments	1,517	n.a.	2,868
Total outlays	36,495	n.a.	35,760
Staff years	262	275	267

1.2 INTERESTS IN SOUTH AND SOUTH EAST ASIA


1993-94		1994-95	1994-95
Actual		Budget	Actual
& AEs
$'000		$'000	$'000
Appropriations
Running costs	43,439	49,140	42,042
Other program costs	346	346	373
Total appropriations	43,785	49,486	42,415
Less adjustments	628	n.a.	3,886
Total outlays	43,157	n.a.	38,529
Staff years	640	585	573

1.3 INTERESTS IN AMERICAS AND EUROPE


1993-94		1994-95	1994-95
Actual		Budget	Actual
& AEs
$'000		$'000	$'000
Appropriations
Running costs	85,304	90,527	75,382
Other program costs	3,670	2,406	3,336
Total appropriations	88,974	92,933	78,718
Less adjustments	284	n.a.	6,371
Total outlays	88,690	n.a.	72,347
Staff years	663	722	627

1.4 INTERESTS IN SOUTH PACIFIC, AFRICA AND MIDDLE EAST


1993-94		1994-95	1994-95
Actual		Budget	Actual
& AEs
$'000		$'000	$'000
Appropriations
Running costs	35,241	35,797	34,946
Other program costs	40,000	17,000	17,000
Total appropriations	75,241	52,797	51,946
Less adjustments	24,392	n.a.	3,281
Total outlays	50,849	n.a.	48,665
Staff years	415	383	360

1.5 MULTILATERAL TRADE POLICY AND NEGOTIATIONS


1993-94		1994-95	1994-95
Actual		Budget	Actual
& AEs
$'000		$'000	$'000
Appropriations
Running costs	7,792	8,570	7,102
Other program costs	1,201	1,353	1,353
Total appropriations	8,994	9,923	8,455
Less adjustments	358	n.a.	174
Total outlays	8,636	n.a.	8,281
Staff years	94	71	103

1.6 TRADE STRATEGY DEVELOPMENT AND BUSINESS LIAISON


1993-94		1994-95	1994-95
Actual		Budget	Actual
& AEs
$'000		$'000	$'000
Appropriations
Running costs	19,774	21,629	17,953
Other program costs	5,954	7,495	5,994
Total appropriations	25,729	29,124	23,947
Less adjustments	1,520	n.a.	933
Total outlays	24,209	n.a.	23,014
Staff years	202	185	187

1.7 GLOBAL ISSUES


1993-94		1994-95	1994-95
Actual		Budget	Actual
& AEs
$'000		$'000	$'000
Appropriations
Running costs	17,324	18,852	24,622
Other program costs	112,932	128,013	102,893
Total appropriations	130,255	146,865	127,515
Less adjustments	1,372	n.a.	1,130
Total outlays	128,883	n.a.	126,386
Staff years	173	179	194

1.8 INTERNATIONAL LEGAL INTERESTS


1993-94		1994-95	1994-95
Actual		Budget	Actual
& AEs
$'000		$'000	$'000
Appropriations
Running costs	4,101	4,381	4,187
Other program costs	54	55	65
Total appropriations	4,155	4,436	4,252
Less adjustments	269	n.a.	39
Total outlays	3,886	n.a.	4,213
Staff years	49	49	49

1.9 INFORMATION AND CULTURAL RELATIONS


1993-94		1994-95	1994-95
Actual		Budget	Actual
& AEs
$'000		$'000	$'000
Appropriations
Running costs	17,911	29,204	24,871
Other program costs	4,446	4,546	4,558
Total appropriations	22,356	33,750	29,430
Less adjustments	692	n.a.	2,734
Total outlays	21,664	n.a.	26,695
Staff years	107	109	137

1.1 INTERESTS IN NORTH ASIA

Objectives

Inform and advise the Government on the advancement of Australia's political, economic and security interests in North Asia.
Enhance trade and investment opportunities in countries in the region through commercial diplomacy, bilateral government-industry forums, and the provision of information and in-country assistance to Australian companies.
Maintain and expand high-level consultations, exchanges and mechanisms for dialogue to promote Australia's interests in the security and economic development of the region.
Encourage wider adherence by countries in the region to international human rights standards and democratic principles.
Project an accurate, contemporary image of Australia in the region and inform debate within Australia in support of Australia's interests there, particularly closer economic integration.

Description

The five principal economies of North Asia - Japan, China, the Republic of Korea (ROK), Taiwan and Hong Kong - play a vital role in securing Australia's economic future, both in Asia and the wider world. In 1994-95, they accounted for 45% of Australian merchandise exports and 37% of total trade.

The process of Australian engagement with the region further intensified in 1994-95, with merchandise exports to the region as a whole increasing by 5.0%. The overall performance, however, masked significant differences between countries. Exports to Japan increased by only 2.2%, in part reflecting the subdued nature of the Japanese economy. Exports to China, on the other hand, increased by 14.2%. The increase in exports to the ROK of 11.7% caused it to displace the US as Australia's second-largest export market. The region now contains Australia's two largest export markets and five of the top 10 export markets.

The diversification of trade with the region away from its more traditional commodity base continued in line with the Government's overall priorities, but at a more subdued pace. Such diversification is all the more important in the case of Japan, as it enters the post-industrial age. The other key markets of North Asia will offer opportunities for trade in many areas for which Japan was formerly the key target market. Unprocessed primary products to the region have fallen from 69% of merchandise exports to 42% over the past 10 years (see chart). Correspondingly, manufactures exports have grown strongly, increasing their share of total exports to the region from a little over 10% to more than 20%. Elaborately transformed manufactures have contributed overwhelmingly to this growth, increasing their share from 2.8% to 10.6% over the same period.

North Asia figures less prominently in services exports and two-way investment compared with merchandise trade, but the countries of the region are growing in importance in these areas. It now accounts for approximately 30 per cent of global services exports, and Japan is Australia's largest services export market. Tourism from the region has grown substantially in recent years and now accounts for around 25% of short-term visitors. Hong Kong is the largest source of full-fee paying students, and Japan, the ROK, Taiwan and China are also among the top 10 sources of students.

North Asian investment in Australia amounted to $65.9 billion at June 1994, representing 17.8% of total foreign investment in Australia. The level of investment from the region as a whole fell slightly from the previous year on account of the worldwide fall-off in Japanese investment abroad. Australian investment in North Asia stood at $15.3 billion (11.7% of total investment abroad), a 30% increase on the previous year.

The countries of the region are also playing a growing role in regional and global affairs. The already extensive array of strategic and policy consultations on wide-ranging regional and global issues was further extended through the year. Japan will host the APEC heads of government meeting later in 1995. Japan is also seeking, with Australia's support, to become a permanent member of the UN Security Council. North Asian countries took part in the first meeting of the ASEAN Regional Forum (ARF), which had important outcomes for the longer term goal of comprehensive regional security arrangements.

Changing structure of exports to North Asia

Chinese engagement in the global economy is already linked with double-digit economic growth rates over the past 15 years, making it a country whose markets and opinions on international issues cannot be ignored. Both China and Taiwan are seeking to accede to the World Trade Organisation (WTO) and its rules. Accession will result in opportunities for both economies as well as obligations to their trading partners. Australia is playing an active part in the negotiations that are an essential part of the accession process. The ROK is also seeking to become more engaged in international issues, as illustrated by its efforts this year to secure the position of WTO Director-General, fully supported by Australia.

Several important events promoted the achievement of objectives, most notably the November visit to Australia by ROK President Kim Young-Sam and the May visit to Japan by Prime Minister Keating.

The resources dedicated to sub-program 1.1 were the North Asia Division (North East Asia Branch, East Asia Branch, North Asia Projects Section and the East Asia Analytic Unit - the Unit having a broader mandate than just North Asian matters) and a significant proportion of the work of Australia's overseas missions in North Asia.

Performance summary

Performance against the objectives has been assessed according to such measures as:

satisfaction among ministerial, parliamentary and other client sectors, including the business community, with timely, appropriate responses to developments and opportunities in North Asia;
indications, through high-level, official and institutional contacts, and through media coverage, of enhanced understanding and acceptance of Australian policies.

The outcomes achieved country by country are detailed below.

1.1.1 Interests in North-East Asia

Japan

The growth and diversification of the Australia-Japan relationship and its importance to both sides was illustrated by increasingly close consultation and cooperation on the APEC trade liberalisation agenda , with Japan having taken over the APEC chairing role in November 1995, and reinforced through numerous bilateral visits and consultations.

In 1994-95, merchandise exports to Japan amounted to $16.3 billion representing a 2.2% increase over 1993-94 and 24.3% of total exports. Japan remained Australia's second-largest source of imports ($12.8 billion or 17.1% of total imports) after the US. Australia maintained a trade surplus with Japan, albeit a reduced one. Australian exports of foodstuffs, elaborately transformed manufactures (ETMs) and simply transformed manufactures (STMs) to Japan grew strongly - by 7.6% (food), 12.4% (ETMs) and 14% (STMs). In the growing services trade area, tourism from Japan is estimated to have generated about $2 billion of receipts in 1994 (690 000 visitors).

At June 1994, Japan ranked third after the US and the UK as a source of foreign investment, with an investment stock of $48.9 billion. Japanese investment in Australia has in the past heavily favoured the mining, real estate and tourism sectors. There is now a trend towards the manufacturing sector, which accounted for 61.5% of Japan's $US990 million of new investment in Australia in the first half of the 1994-95 Japanese fiscal year, much of it in the food processing sector. At 30 June 1994, the total stock of Australian investment in Japan was $10.7 billion, an increase of more than 40% on June 1993 and representing 8.2% of total Australian investment in foreign enterprises.

Strengthened Australia-Japan cooperation was evidenced by the steadily increasing congruence of policies on such regional issues as APEC, the mooted East Asia Economic Caucus (EAEC) and the ASEAN Regional Forum on security. In a landmark Joint Declaration issued during Prime Minister Keating's official visit to Japan in May, the Japanese Government welcomed 'Australia's decision to create its future in the region' and reaffirmed that 'Australia was an indispensable partner in regional affairs'.

Visits by Prime Minister Keating in September and May and the Ministers for Foreign Affairs and Trade, Senator Evans and Senator McMullan, served to increase mutual awareness and confidence and to promote Australia's economic and foreign policy interests. In addition, the development of specific interests were successfully targeted through six other ministerial visits. Australia was thus able to maintain dialogue with Japan at the highest levels of government on such issues as Japanese economic reform and deregulation and market access, and on pressing regional and international issues.

Representations were also made through annual and biannual bilateral consultations on several issues, including dairy, beef, energy, science and technology, space cooperation, fisheries, aviation, and housing standards. In consultation with the private sector, major submissions on deregulation and on dairy issues were presented to the Japanese Government. As a result, small gains were made in particular problem areas. The deregulation program released by the Japanese Government in March addressed about one-third of Australia's concerns, and there were signs of progress on housing and construction materials, commitments to greater harmonisation of standards, acceptance of foreign testing, and facilitation of cargo flows through airports. The Japanese Government and bureaucracy also responded to repeated representations on specific issues and eliminated, reduced or modified particular non-tariff barriers affecting dairy products, cut flowers, certain fruits, beef, rice and processed foods.

The Department maintained and developed its contacts with the Australian motor vehicle and motor vehicle parts industry to ensure that its interests were fully taken into account in the representations made to the Japanese and US governments during the US-Japan auto sector negotiations. The agreement reached between the US and Japan at the end of June will provide improved access to the Japanese market, particularly in motor vehicle imports. Both Japan and the US have given the assurances which Australia sought that the agreement reached will be implemented on a MFN basis, but it will be necessary to continue to liaise closely with the industry to monitor the results and ensure that Australian companies are not disadvantaged, either in terms of the markets which they have developed or the new opportunities which will become available.

In April, Japan formally responded positively to Australia's proposal to institute annual politico-military talks between the two countries, the first to be held in Tokyo in January 1996. This development extends the already extensive array of annual strategic and policy discussions between the two countries. In 1994-95, these included exchanges between senior civilian and military defence officials, Foreign Ministry Officials' Talks, Nuclear Policy and Disarmament Talks, Policy Planning Talks, pre-UNGA consultations together with discussions on global environmental issues and a series of talks on aid at ministerial and officials level at which several joint projects (in the Pacific, the Philippines and Indonesia) were agreed.

The appointment of a DFAT Deputy Consul General to the Austrade office in Osaka office in January, after the opening of direct air links in September, helped serve the needs of the increasing number of Australian business and other visitors to Kansai and recognised the potential for future trade and investment with the Kansai region. The officer and staff seconded from the Tokyo Embassy were also able to provide immediate, on-the-spot assistance to Australian nationals caught up in the Kobe earthquake.

The Embassy in Tokyo made renewed representations through the year on the coverage of Japan's role in the Second World War in Japanese school textbooks. There have been some significant improvements in the coverage in recent years, but there still appear to be inadequacies, such as the coverage of the impact of Japan's actions on Australia and Australians. The expectation is that, in the 50th anniversary of the end of the war, new editions will more adequately reflect what happened. The process may, however, take time as changes first need to be drawn up by individual textbook publishers.

Republic of Korea

Relations between Australia and the ROK reached new levels, as the ROK became Australia's second largest export market and both countries continued efforts to diversify the strong complementary trade relationship and broaden relations in other non-trade areas. The gradual opening of the ROK economy will assist in diversifying Australia's trade with that country. President Kim Young-Sam's visit in November highlighted the constructive dialogue on a wide range of issues at the highest levels, confirming the expectation on both sides of increasing interdependence between Australia and Korea at bilateral, regional and global levels. This was complemented by the development of wider people-to-people linkages throughout the community.

There was considerable Australian and wider international interest in the implementation of GATT Uruguay Round commitments by the ROK in the agriculture sector and considerable pressure for removal of related technical barriers to trade. The ROK Government announced significant proposed amendments to food regulations and some quarantine/inspection procedures. It continued, however, to face domestic political difficulties in implementing reform relating to the agriculture sector.

The ROK economy sustained its strong growth, recording an 8.4% increase in GDP in 1994. Two-way trade reached $7.3 billion in 1994-95 compared with $6.6 billion in 1993-94, making the ROK Australia's second-largest export market and Australia's fourth-largest trading partner overall. Imports from Korea increased slightly to $2 billion, and Korea maintained its rank as Australia's eighth-largest source of imports. Australia's trade surplus of almost $3.2 billion in 1994-95 was of continuing concern to Korea, as were Australian anti-dumping actions, government procurement practice and tariffs on automobiles and textiles, clothing and footwear. Australia continued to press for greater access for agricultural product exports to the Korean market.

Australia's largest exports to the ROK continued to be primary products, including non-monetary gold, coal, iron ore and aluminium, but the growing competitiveness of Australian products in non-traditional export areas was confirmed in 1994-95 by a growth of 13.2% in exports of manufactures, which now comprise 25% of total exports to the ROK.

Korea's increasing awareness of Australia as a sophisticated industrial country was evident in expanded business and trade links which flowed from a range of initiatives the Department arranged or supported. These included participation by Korean industry delegations in NTIOC, enhanced high-technology links as a result of an Australia-Korea Information Superhighway workshop held in Sydney and Australian participation in the APEC Technomart in Taejon. Expanded food sector links were supported through Australian participation at the Seoulfood '95 exhibition. These efforts were complemented by the launch in May of a comprehensive campaign in Korea titled 'Inventive Australia', an initiative designed to promote Australia's more sophisticated, high-value-added capabilities in 10 priority sectors.

Efforts to diversify further the economic relationship were reflected in outcomes from a busy agenda of Ministerial visits and officials' meetings. The visit to Australia by President Kim Young-Sam significantly increased mutual awareness, with discussion centring on ways to broaden trade and investment links and to boost the range of political, security and people-to-people exchanges. Outcomes from this visit included agreement to establish a $1 million fund for research and exchange of industrial technology, to hold an energy symposium in late 1995, to strengthen bilateral cooperation on environmental management issues, and to establish a comprehensive education exchange program and an Australia-Korea Economic Research Centre.

People-to-people linkages were enhanced with agreement to establish a bilateral vocational education and training scholarship and the signature of a bilateral Working Holiday Visa arrangement. Korean tourism to Australia continued its impressive growth, with a 78% increase in 1994. Immigration procedures will be streamlined from August 1995 to facilitate their continuing growth. Education links also expanded with more than 4500 full-fee Korean students in Australia in 1994, a 25% increase over 1993.

Australia continued to encourage greater Korean investment in Australia. Two-way foreign direct investment remains relatively minor. Together with the ROK's announced relaxation of foreign exchange controls, this should see higher levels of foreign investment. As an example of Australian efforts, it was agreed at the November Ministerial Trade Talks that Senator McMullan would lead a business mission to Korea in late 1995.

Close cooperation on regional economic and security issues continued. The rapport established between President Kim Young-Sam and Prime Minister Keating in 1993 was reaffirmed at the Bogor APEC Leaders' Meeting in November 1994 and during President Kim's subsequent visit to Australia. Ministerial meetings, together with Senior Officials' Talks, the Joint Economic Committee meeting and other officials' meetings, enabled both countries to exchange views on trade liberalisation and trade facilitation in APEC and the World Trade Organisation, and the North Korean nuclear issue, and served to reinforce the commonality of interest between the two countries.

Democratic People's Republic of Korea (DPRK)

Developments on the Korean Peninsula pertaining to the Democratic People's Republic of Korea (DPRK) remained a significant security concern for Australia during the report period. Tension continued in the second half of 1994, coinciding with the unexpected death of DPRK President Kim Il Sung in July, but eased with the conclusion of the US-DPRK Agreed Framework in October followed by the launch of the Korean Peninsula Energy Development Organisation (KEDO) in March. In June, the DPRK publicly acknowledged it had a severe food crisis and accepted humanitarian assistance from the ROK. In conjunction with these developments, the DPRK undertook a concerted effort to induce Australia, and several other countries, to restore relations, and the DPRK's Korean People's Army (KPA) continued its efforts to immobilise and replace the operation of the Korea Armistice Agreement.

Senator Evans welcomed the conclusion of the Agreed Framework as a major breakthrough in resolving Australian and international concerns about the DPRK's nuclear program. The Government's decision in early 1995 to join the US-led KEDO consortium which is to arrange the financing and supply of the light water nuclear reactor (LWR) package to the DPRK reflects the importance it attaches to a negotiated settlement with the DPRK as a step towards a nuclear weapons-free Korean Peninsula. The DPRK's continued freeze of its nuclear program is tangible evidence of the value of the Agreed Framework in contributing to peace and security on the Korean Peninsula. Close consultation between Department officials and their US, Japanese and ROK counterparts during the US-DPRK Agreed Framework negotiations ensured the Department was able to keep the Government well informed of developments. Australia made a one-off contribution to KEDO of $US5 million in June.

Australia-DPRK relations remain suspended despite persistent DPRK overtures during the year for resumed relations. The Department has outlined to the DPRK Australian requirements for resumed relations, which include improved inter-Korean dialogue, a resolution of the nuclear situation, and more responsible international behaviour by the DPRK. The Department also relayed Australian concerns over DPRK actions against the Korean Armistice.

1.1.2 Interests in East Asia

China

China's strategic and economic importance in the region continues to grow. The Australian Government continued to place strong emphasis on development of the bilateral relationship across the full range of its interests. The visits to Australia by the Chairman of China's National People's Congress, Qiao Shi, in November and by Vice Premier Zou Jiahua in June enabled senior Chinese leaders to focus on the prospects for furthering trade and investment links with Australia. In addition, the visit by State Councillors responsible for Agriculture (Chen Junsheng), and for Science and Technology (Song Jian), brought key leaders in both sectors to Australia.

These visits as well as complementary visits to China by the Minister for Trade, Senator McMullan, leading a delegation of senior business executives; six other ministers; and the Speaker of the House of Representatives acquainted China with Australia's excellence in a wide range of sectors, including high technology and advanced services industries. A wide range of other visits has also occurred, including that by the Chairman of the China Disabled Persons' Federation, Deng Pufang (a son of Deng Xiaoping), and several state and provincial leaders.

Senior official contacts also played an important role in advancing Australia's dialogue on strategic issues with Beijing, including through the annual Policy Planning and Disarmament Talks, held in Beijing in February. These frank and productive talks focused on APEC, regional security, weapons of mass destruction, disarmament and non-proliferation issues, and China's participation in the ASEAN Regional Forum (ARF). China's activities in the Spratly Islands and underground nuclear testing raised particular concerns.

The Department made intensive efforts, in conjunction with its posts in the PRC, to consolidate Australia's economic integration with the region's fastest-growing region. Export growth remained strong, with a significant increase in the number of Australian firms launching ventures with Chinese partners. China is now Australia's sixth-largest trading partner. Bilateral merchandise trade totalled $6.6 billion in 1994-95, 15.7% higher than 1993-94. However, trade is in deficit to China by $693 million. Exports increased by 14.2% to $3.0 billion and imports by 17% to $3.7 billion. Major exports included wool, iron ore, barley, alumina, cotton, transport equipment, such as high-speed catamarans, and telecommunications.

Australian firms are now involved in mineral exploration, power, roads, beer, food processing, packaging, telecommunications, education, legal services, banking, insurance and architectural design. Australia is one of the top 10 investors in China, and the second most important destination for outwards investment from China after Hong Kong.

Improved market access continued to form a central element in exchanges with senior Chinese ministers and officials. Senator McMullan pressed access concerns with Chinese Trade Minister, Wu Yi, and other Chinese ministers, especially over wool and services. In meetings with officials of the People's Bank of China in May, he also pressed Australian bids for insurance licences in China. As part of its market-access strategy, Australia also took an active part in negotiations for China's accession to the GATT/WTO. Australia maintains strong support China's entry, but accession requires a high preparedness on China's part to conform to WTO principles, and to make the firm contractual commitments necessary to conclude negotiations. Progress has been slower than Australia would have liked. Success in this arena would result in a more transparent, non-discriminatory trade regime in China, with fewer barriers to trade and investment. Australia has also sought to strengthen China's engagement in regional and global activities, in particular in APEC.

Support for strengthened business links between Australia and China remained a high priority for Australian Government activity. NTIOC brought important Chinese business leaders to Australia and introduced them to key areas of niche high technology relevant to China's modernisation. Australia also pressed particular business interests, as well as access issues, at the officials-level intersessional meeting of the Joint Ministerial Economic Commission in Beijing in late 1994. Australia's posts in China as well as department officers in Canberra also played a key role in assisting business activities through regular briefings in Canberra and State capitals.

To further human-rights objectives, the Australian Government continued to make high-level representations about abuses in China, including Tibet, and about individual human-rights cases. Australia was again a co-sponsor of the draft resolution on the human-rights situation in China at this year's UN Commission on Human Rights. In discussions with PRC Foreign Minister Qian Qichen, Senator Evans renewed Australia's invitation for a Chinese human-rights delegation to visit Australia. Australian Government intervention also continued on behalf of Australian citizens detained in China, particularly in the case of Mr James Peng.

Mongolia

Australia advanced its objective of supporting the independence, and democratic and market-economic development, of Mongolia with the visit of Senator Evans in October 1994. He confirmed Australia's commitment to an increase in Australia's aid program to Mongolia from $750 000 to $1 million a year. With the Przewalski horse nearing extinction, Senator Evans announced funding for the transport to Mongolia of Australia's gift of seven horses from Western Plains Zoo. Senator Evans also exchanged views on regional security and opportunities for economic co-operation.

Hong Kong

The portfolio Ministers endorsed a review of the extensive range of Australian interests in Hong Kong and the strategy for upholding and advancing them. From its long-term perspective of the relationship and its concern to protect its trading interests, Australia continues to supports the implementation of the Sino-British Joint Declaration on the Question of Hong Kong (1984), which provides for a 'high degree of autonomy' for Hong Kong after 30 June 1997, and the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China (1990).

Australia believes the maintenance of the rule of law, a predictable system of legal redress, an efficient civil service, freedom of speech, freedom of abode and travel, and free and transparent financial and economic systems will be essential in maintaining international and Australian business confidence in Hong Kong.

Through numerous high-level ministerial and other parliamentary visits and contacts with senior officials, Australia has registered with Britain, China and the Hong Kong Government its conviction that the maintenance of these guarantees will be essential to Hong Kong's continued stability and prosperity. Australia welcomes agreement on major issues such as a Court of Final Appeal and the recent resolution of the impasse over the airport project, in part because of international concern.

Australia has a major interest in the continued stability and prosperity of Hong Kong. It is Australia's 10th-largest trading partner, with two-way trade totalling $3.6 billion in 1994-95. Australia's exports to Hong Kong - predominantly gold, seafood, pearls and precious stones, coal and aluminium - amounted to $2.6 billion, slightly down on the previous year due to significantly lower gold exports. About 35% of those exports are estimated to be re-exported into China. Imports from Hong Kong in 1994-95 were valued at $0.8 billion, a slight increase over the previous year.

More than 350 Australian companies are based in Hong Kong and more than 1000 have representative offices there. About 30 000 Australian citizens are estimated to be living in Hong Kong. Australian companies have achieved a good market share across all service sectors, especially education, accounting, consulting, insurance, legal and finance and banking. Hong Kong is Australia's largest source of fee-paying overseas students (more than 11 000 in 1994). The Department provided a substantial written and oral briefing on Hong Kong and Australia's participation in its service sector to the Australian Joint Parliamentary Committee Inquiry into Australia's Services Exports, and was closely involved in negotiations to resolve the air services dispute with Hong Kong.

On 30 June 1994, Australian investment in Hong Kong stood at $3.5 billion, about 2.7% of Australia's investment overseas, while Hong Kong investment in Australia has more than doubled over the past five years to $14.4 billion.

To ensure that the legal basis of the bilateral relationship is in place for the post-1997 period, the Government instituted a review of all bilateral and other treaties with application in Hong Kong. Groundwork was laid for the opening of the Hong Kong Trade and Economic office in Sydney in the second half of 1995, and a program of exchanges of trade officials and police was begun.

Australia has continued to work closely with Hong Kong in regional and multilateral forums, particularly in the WTO and APEC, where Hong Kong has indicated a particular interest in closer consultation.

Macau

As with Hong Kong, Australia supports the maintenance of a high degree of autonomy for Macau, as agreed by Portugal and by China, after China assumes sovereignty in 1999.

Australian commercial involvement in Macau continues to be confined to a small number of niche areas, especially in the tourist, education and horse- and dog-racing industries. Australia is a major supplier of wool to China's largest enterprise in Macau. Good commercial prospects exist in Macau's new airport and infrastructure projects and the transport services sector. Relations with Macau at the political level were affected by Australia's concern at the involvement of Macau authorities in the removal from Macau of Australian businessman James Peng and his detention in China.

Taiwan

The Australian Government continued to facilitate trade and economic links with Taiwan, multilaterally and bilaterally, within the parameters of its one-China policy. Two-way merchandise trade between Australia and Taiwan, our ninth-largest trading partner, totalled $5.7 billion in 1994-95, growing by 10.7% and accounting for 4.0% of Australia's total trade. Exports to Taiwan, our sixth-largest export market, were worth $3.1 billion, with higher exports of crustaceans and copper offsetting lower aluminium, gold, coal and cotton exports. Imports were $2.6 billion, mainly computer and office machines and sporting goods. Taiwan continues to be a rapidly growing source of tourism to Australia, with a growth of 54.7% over the past year to 131 500 visitors. The number of fee-paying students from Taiwan rose 20% in 1994 to 3300.

Multilaterally, the Government made major progress towards securing concessions in areas of interest to Australia, including horticultural and other agricultural goods, which will result in expanded export opportunities when Taiwan joins the GATT/WTO. A small list of market access and services trade issues remains unresolved pending further negotiations. In line with Taiwan's status as a member economy of APEC, Australia has maintained close consultations with it on a range of APEC issues. In the context of GATT/WTO trade discussions, the Government intensively pursued specific market access objectives bilaterally, including non-discriminatory access for beef.

The Government has continued to place maximum focus on the economic and trade relationship within the context of Australia's one-China policy. The Department worked closely with Austrade to refine its trade strategy approaches, for example by assisting a Metal Trades Industry Association mission to Taipei in July. The Australian Commerce and Industry Office in Taipei opened branch offices in Taichung and Kaohsiung. Direct weekly flights started between Cairns and Taipei in September.

Unofficial visits to Taiwan were made by the Minister for Tourism, Mr Lee; a bipartisan parliamentary group in July; and the Parliamentary Secretary for Transport, Mr O'Keefe, in May to explore opportunities arising from Taiwan's infrastructure development programs.

The Government aggressively countered the negative publicity surrounding the discovery of chlorfluazuron residues in Australian beef. An increased public affairs effort has been directed at building Australia's image as a multicultural society and source of highly skilled labour and sophisticated technology.

Progress was made in working towards the conclusion of several bilateral arrangements which will benefit Australian commercial interests. An MOU on quarantine matters, which provides for regular consultations and covers fruit and vegetables, was signed in March. Negotiations are continuing on a double-tax arrangement, copyright and ATA Carnet (providing for temporary entry of goods for sample purposes). An MOU on industrial property came into effect in late 1994.

Taiwan made a concerted push during 1994-95 to achieve an enhanced international profile commensurate with political and economic achievements. The Department monitored these developments closely, giving particular attention to Taiwan's dealings with China and the US, for any possible impact they might have on Australian interests.

1.1.3 East Asia Analytical Unit

The East Asia Analytical Unit continued to fulfil the need of business and government for high-quality analytical reports on East Asia. The Unit launched one major report during the year and published two titles in the working paper series. Five reports were near completion by year's end, and work began on the design of three new reports. In a cooperative effort with the Bureau of Industry Economics, the Unit also produced a briefing paper on Australia's links with Asia for participants at the second National Trade and Investment Outlook Conference (NTIOC) in Melbourne in December.

Senator McMullan launched the Unit's latest report, Subsistence to Supermarket: Food and Agricultural Transformation in South-East Asia, in Canberra on 12 August. The report extended the research on changes in food and agriculture markets in South-East Asia. Its detailed examination of the changing demand for food and agricultural products in South-East Asia and their supply was aimed at helping Australian exporters and investors as well as governments, and was well received.

The report series Sub-Regional Growth Areas in South-East Asia focused on three sub-regional growth 'triangles' likely to attract Australian investment - Indonesia-Malaysia-Singapore, Indonesia-Malaysia-Thailand, and Brunei-Indonesia-Malaysia-Philippines. Other reports nearing completion include a comprehensive study, Overseas Chinese Business Networks in Asia, which will highlight the role of Australian Chinese business entrepreneurs in enhancing our economic integration with Asia.

New reports in preparation include an examination of the growing economic links between Japan and China, a report on Russia's Pacific region focusing on the outlook for its increased integration with the North-East Asian region, and opportunities for Australian business, and a report on the iron and steel industry in China examining long-term prospects for new and expanded links with industries in Australia.

Work also began on three reports covering economic developments in Japan, China and East Asia's transitional economies, mainly Indochina and Myanmar.

Two new titles were added to the Unit's working papers series during the year. Tapping into China's Transport Infrastructure, which focused particular attention on prospects for Australian Build, Operate and Transfer (BOT) projects, was given wide local and international media coverage and was well received by Australian business. The Challenge of Logistics: Shipping Services between Australia and Indonesia, detailing shipping links between the two countries, was commended by the Australian shipping industry.

Wide distribution of the Unit's reports enhances Australia's reputation and credentials as a serious economic player with a long-term commitment to East Asia. Sales have averaged more than 100 copies a month. Five reports have each sold more than 1000 copies since publication; and two have sold more than 3000 copies. Copies of the briefing paper The Asia-Australia Nexus: Issues for Business, were distributed to Australian and international participants at NTIOC94.

Findings and recommendations in two reports, India's Economy at the Midnight Hour: Australia's India Strategy, and ASEAN Free Trade Area: Trading Bloc or Building Block, were publicised in a series of business seminars conducted by the Unit in state capitals. In addition, officers of the Unit represented the Department, and on occasion the Government, as speakers at conferences and seminars in Australia and overseas.

Australia's regional trade - North Asia


	EXPORTS			IMPORTS
	$m	Trend Growth		$m	Trend Growth
	1993-94	1994-95	90-91 to	1993-94	1994-95	90-91 to
			94-95			94-95
Japan	15,930.0	16,286.5	3.4	11,700.1	12,779.1	10.1
Korea, Rep.	4,718.0	5,270.5	14.0	1,882.5	2,028.5	15.0
Taiwan	2,756.8	3,098.4	10.5	2,362.2	2,570.1	9.9
Hong Kong	2,797.8	2,626.1	14.2	801.0	923.6	4.6
China	2,590.4	2,957.5	24.0	3,119.7	3,650.8	25.0
Other	7.1	5.2	-41.2	13.1	12.1	-21.7
TOTAL	28,800.1	30,244.2	8.0	19,878.5	21,964.2	12.1

Source: Compiled by the DFAT Statistical Services Section from data supplied by the ABS.

1.2 INTERESTS IN SOUTH AND SOUTH EAST ASIA

Objectives

Inform and advise the Government on the advancement of Australia's political, economic and security interests in South-East Asia and South Asia.
Enhance trade and investment opportunities in countries in these regions through commercial diplomacy, bilateral and regional government-industry forums, and the provision of information and in-country assistance to Australian companies.
Maintain and expand high-level consultations, exchanges and mechanisms for dialogue to promote Australia's interests in the security and economic development of these regions.
Encourage wider adherence by countries in these regions to international human rights standards and democratic principles.
Project an accurate, contemporary image of Australia in these regions and inform debate within Australia in support of Australia's interests there, particularly closer economic integration.

Description

This sub-program is administered by the South and South-East Asia Division. As a result of a major restructure in mid 1994, it comprises three branches - ASEAN Bilateral Branch (ABB), South Asia and Indochina Branch (SIB) and Regional Policies and Projects Branch (RPB). Seventeen DFAT-administered overseas posts are in the Division's area of responsibility.

Performance summary

Australia's links with the region, which is an area of high priority and activity for the Department, continued to diversify and acquire greater substance during the year. The policy of 'comprehensive engagement' pursued since 1989 has had considerable success, and Australia is now in a position to move into a new phase of partnership and integration with the region. This is particularly so as South-East Asia increasingly 'looks south' for goods and services needed at its current stage of economic and social development. Strong interaction with the region warrants consideration of Australia as an integral part of an 'East Asian hemisphere'.

High-profile and contentious issues, notably kidnappings in Cambodia and human rights issues in East Timor, have generated a high level of public interest and required a major commitment of resources.

Priority market access concerns and the implementation of Uruguay Round commitments in the region were pursued, with particular success in Indonesia and Thailand. Market access issues were raised on behalf of Australian companies in meetings between Australian ministers and their counterparts. Positive feedback has been received from the companies concerned, and indications are that successful outcomes are likely in several of the cases raised.

Enhancing trade and investment opportunities was another high-priority area. Ministerial business missions, follow-up to the National Trade and Investment Outlook Conference (NTIOC), joint trade commissions and extensive bilateral dialogue were among the techniques used to achieve this objective. There were some disappointments, including the cancellation of the visit by Thai Prime Minister Chuan, and Senator McMullan had to postpone his planned Business Mission to Pakistan. Progress has, however, been made with many countries in the region as indicated by the overall increase in trade, particularly with ASEAN countries.

The sub-program played a significant role in the success of NTIOC in 1994. Follow-up action ensured that full advantage was taken of the opportunities which arose from the five market focus groups and the Singapore mission. Results from the Thai and Philippine missions were particularly pleasing and the presence of India and Vietnam as market focus countries for the first time was an important achievement.

In a significant step, Indonesia invited Australia to participate in the Biological Diversity Technical Working Group under the auspices of its South China Sea Workshop process.

Human rights issues in the region generated a high level of effort, and produced successes and disappointments. The visit to Vietnam by the Australian Consultative Parliamentary Delegation established a comprehensive dialogue on human rights issues inside its wider focus. On Cambodia, Australia worked in the United Nations Commission of Human Rights (CHR) to achieve a strong resolution through consensus. There was also a growing effort, in response to community interests and concerns, to pursue human rights issues in India, Pakistan and Sri Lanka. Australia made repeated representations for change in Myanmar, but the military regime (SLORC) appeared unwilling to implement reforms and seemed largely impervious to international pressure. A forthcoming policy review will examine options for relations with that country. Human rights problems in Indonesia continued to cause concern for the Australian Government and generated a high level of public interest. The Australian Embassy in Jakarta took up significant human rights issues with the Indonesian Government, including disturbances and detentions in East Timor, media freedom, labour rights and alleged human rights abuses in Irian Jaya.

Important high-level visits made a significant contribution to the projection of a positive image of Australia in the countries of the region. The Indonesian Minister for Research and Technology, Dr B. J. Habibie, developed positive impressions of Australia and its capabilities through his visit, as demonstrated by his comments to the Australian and Indonesian media. He returned to Indonesia with a range of proposals for possible future cooperation. Mr Banharn Silpa-archa, then Thai Leader of the Opposition and a strong contender for Prime Minister, has publicly referred favourably to his visit several times. Visits by key advisers, ministers and business groups from India, Vietnam, Pakistan and Laos have reinforced understanding of Australia's industrial, services and technological capacities in those countries.

Support was given to Market Australia's campaign to present Australia to the region as a sophisticated, internationally competitive economy capable of supplying advanced manufactures, technology and services.

The restructure of the Division, which resulted in the establishment of the new Regional Policies and Projects Branch, enabled the Division to concentrate more resources on the core bilateral relationships and to deal more effectively with a range of additional complex issues of major significance to Australia's long-term interests and standing in the region, notably the proposed Asia-Europe Meeting and Australia's Indian Ocean Initiative.

The Department advised Senator Evans and Senator McMullan in their discussions with Japan, Korea, China and the ASEAN countries aimed at securing a place for Australia at the Asia-Europe meeting scheduled for 1996. Australia's Indian Ocean initiative involved organising a major international forum in Perth, which included sensitive discussions with regional countries on the economic advancement of the region and on the handling of difficult security issues. The Forum advanced the process of developing networks in the Indian Ocean, brought together for the first time participants from a large group of Indian Ocean states and produced significant support for increasing regional cooperation.

1.2.1 Interests in ASEAN

Indonesia

The relationship with Indonesia, which remains central to Australia's foreign policy, became increasingly diverse during the year. It was not without its tensions arising, for example, from Australia's concerns over human rights abuses, particularly in East Timor and Irian Jaya and, in the period after this review, over the issue of General Mantiri's nomination as Ambassador to Australia. Bilateral activity spanned an enormous range of areas, and necessitated effective liaison with federal and state departments and the private sector to project coherent and coordinated foreign and trade policies towards Indonesia. The range of activity taking place and the number of agencies involved makes effective coordination a challenge. Timely and relevant advice and information was provided to the Government on key economic and political developments, and the range of academic contact in these areas was extended.

The Ministerial Forum process continued to provide the two governments with a means to work together to support and promote expanded commercial links. The second Ministerial Forum meeting was held in Canberra in August and brought together 11 Australian and four key Indonesian ministers. It reviewed progress in the economic relationship, set directions for future bilateral activity, led to substantial outcomes on a range of trade and investment issues including improved market access, and gave participants a broader perspective on the diversity of the relationship. Three working groups and a high-level group on minerals and energy resources remain responsible for implementing many of the forum decisions, and they have met independently during the year. In April, DFAT hosted an interdepartmental meeting which endorsed the establishment of a core group of federal departments, state and territory government representatives and the business sector to improve Australian coordination of forum-related activities. The first meeting of the group was held in August.

Bilateral commercial links were pursued through follow-up to the successful Australia Today Indonesia '94 (ATI) promotion and the National Trade and Investment Outlook Conference (NTIOC94) and the launch of the 'Inventive Australia' campaign in Indonesia to improve perceptions of Australia's capabilities in high value-added goods and services. These vehicles have raised awareness in Indonesia of Australia's commercial and technological strengths and in Australia about business opportunities in Indonesia. They have also encouraged Australian businesses to diversify their activities in Indonesia, including exports of higher-value-added products and manufactures.

Specific issues of concern, including market access issues, were raised several times. Bilateral representations were made to the Indonesian Government in support of multilateral objectives relating to APEC, AFTA/CER and the World Trade Organisation (WTO)/Uruguay Round. Insti-tutional and industry body links between Australia and Indonesia were strengthened, including the development of Memoranda of Understanding (MOUs). Overall, bilateral trade diver-sified and expanded steadily throughout the year, with exports up 10% to $2.1 billion and imports by 8.3% to $1.2 billion. However there is scope for the Department to do more, including involving the private sector more closely in the Ministerial Forum process.

The bilateral relationship was again characterised by frequent high-level visits in both directions, including the Prime Minister paying his fourth visit to Indonesia in November 1994 to attend the APEC Leaders' Meeting in Bogor, the Governor-General's State Visit to Indonesia in May 1995, three visits by Senator Evans and three by Senator McMullan. Visits to Australia by Indonesian Ministers included Vice President Try Sutrisno; the Minister for Education and Culture, Wardiman Djojonegoro; Minister for Tourism, Posts and Telecommunications, Joop Ave; and the Minister for Research and Technology, Dr B. J. Habibie.

The Australian Government raised its concerns with the Indonesian Government over human rights abuses on numerous occasions, particularly in relation to East Timor (about disturbances at the end of 1994 and early 1995 and the Liquica killings) and Irian Jaya. The Australian Government also raised labour issues, including the arrest of independent trade unionist Muchtar Pakpahan and the possibility of regulating Indonesian NGOs. Despite improvements, including the performance of the new Human Rights Commission, Indonesia's record in the human rights area remains below international standards and the Department will continue to express its concern about human rights abuses in Indonesia and the importance of human rights issues to the bilateral relationship. The Department responded to 1700 items of correspondence expressing concerns within the Australian community about the human rights situation in Indonesia.

The Department worked closely with the Department of Defence to ensure that the defence relationship developed within the parameters of broader foreign policy objectives. The defence relationship was increasingly confident and included joint exercises, increased officer exchanges between Australian and Indonesian armed forces and the training of 138 ABRI personnel in Australia. The Defence and Security Minister, General Sudradjat, visited Australia in September 1994 as a member of Vice President Sutrisno's delegation and Senator Ray visited Indonesia in July-August.

Brunei Darussalam

Brunei's importance to Australia increased significantly over the past 12 months as it became the chair of ASEAN and Australia's consultative partner in the organisation, and was reflected in the visit to Australia by the Permanent Secretary of the Brunei Ministry of Foreign Affairs, Dato' Lim Jock Seng, and the Sultan's sister, Her Royal Highness Princess Hajjah Masna, for discussions on security and other regional issues. DFAT Secretary Costello visited Brunei in January, and Senator Evans visited in February.

The Department sought to engage Brunei on a wide range of regional and international issues. Brunei provided useful insights into ASEAN processes and provided concrete support on issues such as Asia Pacific Economic Cooperation, ASEAN Free Trade Area/Closer Economic Relations and Brunei, Indonesia, Malaysia and the Philippines-East ASEAN Growth Area. During Senator Evans's visit in February, Brunei agreed to support Australia's candidacy for election to the United Nations Security Council for 1997-98.

The promotion of trade and investment with Brunei had a positive impact. The number of Bruneian students undertaking tertiary courses in Australia grew by 106 to reach 460. In January 1995, a contract was concluded between the Bruneian Government and an Australian partnership for the supply of Australian halal meat. An increase in car import duties in Brunei of up to 200% had, however, adverse implications for a small but growing market for Australian manufacturers. The Department made representations opposing these increases.

Defence relations continued to be strengthened, with an increased level of military exercises and exchanges taking place. These complemented sustained efforts by the Department and the post to ensure that Australian tenderers remain well placed to win valuable contracts for three Bruneian offshore patrol vessels and an upgrade of the naval base.

Singapore

Over 1994-95 the bilateral relationship between Australia and Singapore developed into a broader partnership, flowing from similar approaches to regional and multilateral issues, underpinned by strong defence and economic links. The bilateral agenda was driven particularly by initiatives promulgated jointly by Prime Ministers Keating and Goh Chok Tong.

The two Prime Ministers met twice during this period, first in Australia in September and then in Singapore in March. At the first meeting, they agreed to establish a special Singapore-Australia Business Alliance Forum (SABAF) and a dedicated $2 million Joint Feasibility Fund, to be launched in August 1995, to enable Australian and Singaporean businesses to forge strategic alliances in third country markets. At the March meeting, Prime Minister Goh suggested a comprehensive look at the bilateral relationship. A high-level inter-departmental committee of senior Australian and Singaporean officials will meet during the second half of 1995 to produce a blueprint to be proposed to the Prime Ministers as guidance for the future direction of the bilateral relationship.

Visits by the Governor-General, Mr Bill Hayden, the Minister for Trade, Senator McMullan, Singapore's Minister for Defence, Dr Lee Boon Yang, and the Permanent Secretary, Singapore Ministry of Foreign Affairs, Mr Kishore Mahbubani, strengthened an already close pattern of consultations with Singapore and led to agreement to work more closely in advancing joint interests in key areas such as Asia Pacific Economic Cooperation, closer links between the ASEAN Free Trade Area and the Australia-New Zealand Closer Economic Relations agreement and the ASEAN Regional Forum.

Two-way trade between Australia and Singapore in 1994-95 amounted to $5.9 billion, an increase of 17.9% over 1993-94.

Defence cooperation continued to expand. The Department supported arrangements for the opening of the Republic of Singapore Air Force (RSAF) Flying Training School at Pearce, Western Australia, and longer-term RSAF access to Australian Defence Force training areas.

Malaysia

After the bilateral controversy of November-December 1993, there were several indications that the relationship was firmly back on track. Dr Mahathir opened a Sydney University-linked tertiary college in July and launched the Malaysia Australia Foundation (MAF) to foster people-to-people links in September. Dr Mahathir and Prime Minister Keating had a productive meeting in Jakarta in November at the time of the APEC Summit.

Australian ministerial and official visits to Malaysia included Senator Evans, Senator Ray, Secretary Costello, and Mr Dawkins as Special Investment Representative. From Malaysia, there were visits by the Human Resources Minister, Datuk Lim Ahlek, the then Defence Minister,Dato Seri Mohd Najib, and the Government Economic Adviser, Tun Daim Zainuddin, at the invitation of Prime Minister Keating.

The Department played a key role in facilitating these visits, and the post provided strong support for the launch of the MAF. Another important initiative in promoting people-to-people contact was the post's establishment of an alumni data base, which is the first step in formalising a network of more than 120 000 Malaysians who have been educated in Australia.

The Department made a concerted effort to improve and reinforce commercial cooperation during the year. There was a range of important commercial opportunities which the Department has been closely involved in pursuing, ranging from defence-related contracts in Malaysia to projects in third-country markets. The visit by the Government Economic Adviser, Tun Daim, and a high-level business-military delegation provided a focus for consideration of such issues. The Joint Trade Committee meeting in April provided an opportunity for officials and private sector representatives to address regional and multilateral trade policy issues, market access issues and mutual promotion of investment opportunities, and to begin negotiations on revising the bilateral trade agreement. At NTIOC94, Malaysia was a market focus country for the second consecutive year.

The Department engaged the Malaysian Government in dialogue on a wide range of regional and international economic and political issues, with mixed results. Malaysia now favours the development of links between the ASEAN Free Trade Area and the Australia-New Zealand Closer Economic Relationship and having the Northern Territory linked with the Brunei-Indonesia-Malaysia-Philippines-East ASEAN Growth Area (BIMP-EAGA).Australia has secured considerable cooperation on regional security issues, notably in the context of the ASEAN Regional Forum, though Malaysia remains wary about Australia moving too quickly. Malaysia has played a more constructive role in APEC but remains one of its most cautious members.

The continued diversification of the relationship was reflected in the Department's decision to establish new honorary consuls in Penang and Kota Kinabalu. Defence cooperation was maintained at a high level under the Malaysia-Australia Joint Defence Program, the largest of its kind with an ASEAN country, and through the Five Power Defence Arrangements.

Philippines

The bilateral relationship with the Philippines continued to expand and develop, reflecting the new era of political stability and economic growth under the Ramos Administration. Expanding trade and investment was a priority, but the changed relationship between the Philippines and the US and its increasing focus on the Asia Pacific region also placed emphasis on enhancing cooperation on a range of regional economic and security issues. The visit to Australia of President Fidel Ramos in August 1995, the first state visit by a Philippine President, is a clear sign of the maturing bilateral relationship.

A particular highlight was the participation of the Philippines as a market focus country at NTIOC94. The Philippine delegation was led by the Secretary for Trade and Industry, Rizalino Navarro, and comprised a former Secretary for Energy, an Under-Secretary and eight leading Philippine business people. Washington Sycip, a prominent Philippine businessman, was a keynote speaker. Delegations of Australian business people travelled to the Philippines after NTIOC to examine opportunities in the infrastructure and energy sectors.

Another important step towards expanding bilateral trade and investment was the Investment Promotion and Protection Agreement (IPPA) signed in Manila in January, providing investors with a range of guarantees relating to non-commercial risks.

Two-way trade during 1994-95 increased by 23.7% to $1.1 billion. Australian exports to the Philippines totalled $838 million, an increase of 20%, and consisted predominantly of dairy produce, metals, live cattle and cereals. While the balance of trade continued to be in Australia's favour, imports from the Philippines showed an increase of 37.6% to reach $259 million, consisting mainly of electrical equipment, copper, furniture and textiles. Australian investment in the Philippines was steady at $135 million at 30 June.

Trading achievements during the year included the granting of a foreign banking licence to the ANZ and the granting of the first two Financial and Technical Assistance Agreements in the mining sector to two Australian companies, Arimco and Western Mining. Agreement was also reached on the establishment of a joint Philippine-Australian Working Group on Meat, Dairy and Livestock in addition to the established Working Group on Energy. Trade inquiries from Australian companies increased by 30%. On the negative side, Australian agricultural trade continued to be complicated by several quarantine issues, while the Philippine plan for a shift in customs valuations from Home Consumption Value (HCV) to our preferred Transactions Value (TV) system is yet to be implemented.

In May, Australia hosted the fifth round of Australia-Philippines Senior Officials' Talks, which provided an opportunity to discuss shared regional interests, including ASEAN issues and APEC, as well as the bilateral relationship. The talks were also timed to allow discussion of the full range of issues which might arise during the visit of President Ramos.

Of the new regional growth areas, the one of greatest interest to Australia is the Brunei-Indonesia-Malaysia-Philippines-East ASEAN Growth Area (BIMP-EAGA). Among the high-level visitors from Australia to the Philippines was the then Northern Territory Minister for Asian Relations and Trade and now Chief Minister, Shane Stone, who attended the East ASEAN Business Convention held in Davao in November at which BIMP-EAGA member countries welcomed future Australian, specifically Northern Territorian, participation. Though the Northern Territory will not be a member of BIMP-EAGA, it will have a special relationship with it. As a result, an MOU setting out principles of trade enhancement between the Philippines and the Northern Territory is likely to be finalised by the end of the 1995 calendar year. Other significant Australian visitors to the Philippines included the Deputy Prime Minister, Brian Howe; the Minister for Defence, Robert Ray; Senator McMullan; and an Australian Parliamentary delegation led by Martyn Evans MP.

Defence relations focused on training, attachments and visits, with particular emphasis on enhancing the Philippines' capability for external defence. Australia was the largest single provider of training to the Armed Forces of the Philippines (AFP); 114 Filipino military trainees studied in Australia during 1994-95. Training was also conducted in the Philippines and among the successful courses was counter-hijack training which took place in November. In May, the AFP's Deputy-Chief for Education and Training visited Australia to discuss training opportunities. Expenditure on defence cooperation was slightly more than $3 million.

Myanmar

Australia maintained correct but limited diplomatic relations with Yangon and continued to play a prominent role in international and regional efforts to press the Myanmar State Law and Order Restoration Council (SLORC), the country's ruling body, to implement political reforms and adhere to universally accepted standards of human rights.

The fundamentals of Australia's approach to Myanmar remained unchanged. Australia co-sponsored United Nations consensus resolutions calling for political and human rights reform, and continued to use its best endeavours to restrict the assistance programs of UN organisations in Myanmar to grass roots activities. Bilateral development assistance remained suspended in the absence of substantial progress in political and human rights, and a ban on defence exports to Myanmar and the suspension of defence visits from Australia remained in place. There were intermittent signs that this approach had some effect, with indications that the SLORC was making some concessions and seeking to explain its position to the international community. Australia maintained a vigorous dialogue with the Myanmar authorities through our Embassy in Yangon. In addition, Senator Evans was able to convey Australia's policy directly to his counterpart, the Myanmar Foreign Minister, U Ohn Gyaw.

Australia continued to encourage ASEAN countries to apply greater direct influence to encourage positive movement in Myanmar. At the ASEAN PMC in Bangkok in July, there was widespread support for the view that dialogue had an important role to play in encouraging positive change. Several benchmarks were identified as providing a useful means of measuring progress, and there was support for the proposition that concessions to the Government of Myanmar should be matched to progress against the following benchmarks: the unconditional release of Aung San Suu Kyi, who was released in the period after this review; the start of a serious dialogue between the SLORC and Aung San Suu Kyi about the political and constitutional evolution of the country; access to political prisoners by the International Committee of the Red Cross, UN Special Rapporteur and other outsiders; a review and reduction of sentences imposed for political activity; significant progress in the proposed dialogue between the SLORC and the UN; a clear timetable for the constitutional process with delegates able to participate more freely; agreement by the SLORC to the inclusion of transitional provisions in the new constitution permitting further constitutional development; the provision of legal guarantees for the rights of the ethnic minorities; the cessation of forced labour and porterage beyond what are traditional practices; and the repeal of censorship and state protection legislation.

There were positive developments in the latter part of 1994, but the military activity in December and January which led to the fall of Manerplaw, the headquarters of the Karen National Union, caused a considerable setback. On the fall of Manerplaw, Senator Evans issued a statement in which he expressed the Australian Government's deep concern and urged all parties to engage in a process of national reconciliation through dialogue rather than through military activity.

Other developments included an increase in the amount of humanitarian assistance delivered through NGOs to a total of $3.4 million in 1994-95 (including assistance to Karen who sought refuge in Thailand from the fighting in December and January), and limited cooperation on narcotics issues (including the provision of training in anti-narcotics measures to Myanmar officials).

Thailand

The past year was an eventful one in Thai politics, with three major cabinet reshuffles and a series of ministerial resignations. The year culminated in the calling of a general election after the withdrawal of one party from the governing coalition. Despite the many political changes, Australia's relations with Thailand continued to develop robustly. Trade, the cornerstone of the relationship, boomed. Allegations in Australia of continued links between individual Thais and the Khmer Rouge caused strains, but the sound foundations of the Australia-Thailand relationship enabled both parties to put this matter behind them.

Ministerial exchanges accelerated, and included visits to Thailand by Senator Evans, Senator McMullan, Mr Bilney and Mr Crean and visits to Australia by Deputy Prime Minister Supachai, Foreign Minister Prasong, Commerce Minister Uthai and the then-Leader of the Opposition, Mr Banharn Silpa-archa.

With total trade valued at $2.5 billion, Thailand ranked 15th among Australia's trading partners in 1994-95, up from 17th in 1993-94. This ranking reflected rapid growth in Australia's exports to Thailand (up 21.8% on the previous year to $1.6 billion in 1994-95) and imports (up 22.1% to $1.0 billion).

The share of manufactures in Australia's export mix to Thailand has increased in recent years, with elaborately transformed manufactures constituting about $503 million in 1994-95, followed by primary products ($367 million) and simply transformed manufactures ($390 million).

Investment flows remain disappointing, with Thailand ranked 18th as a destination ($418 million, or 0.3%, of Australia's overseas investment) at 30 June. A recent survey, however, conducted by the Australian Embassy and the Australian Thai Chamber of Commerce reveals a positive attitude to investment in Thailand by Australian companies. In light of its rapid economic growth and attractive business environment, Thailand was again a focus country at NTIOC94 and is one of four focus markets in the Market Australia campaign.

Meetings of the Joint Technical Working Group on Quarantine and Food Inspection and the Joint Trade Committee in August produced advances towards solving several economic issues. Issues relating to tapioca and sweetened condensed milk have subsequently been resolved, and settlement of a Specific Commodity Understanding for the import of Australian citrus into Thailand should be achieved during 1995. Agreement has been reached with Thailand to establish a structured program of cooperation on intellectual property. An Industrial Property Agreement and a Memorandum of Understanding on Cooperation in Intellectual Property are expected to be signed soon. Thailand has also indicated that regulations are being prepared which would give Qantas a zero rating under its VAT regime. Unfortunately, Australia's long-standing major market access concern about the prohibitive tariff imposed on ready-to-eat breakfast cereals remains unresolved. There is also difficulty in encouraging Thailand to participate in a new round of discussions on civil aviation issues.

On APEC, Australia has sought to reassure Thailand - which has taken a cautious approach to suggestions for implementing outcomes of the Bogor meeting - that the liberalisation process Australia is suggesting will not confront its most sensitive sectors from the outset. Australia has emphasised the importance of concrete progress being made in APEC and the overall benefit trade and investment liberalisation will have on the Thai economy. Australia has also gained the support of Thailand to move forward the concept of AFTA-CER links.

1.2.2 Interests in South Asia and Indochina

Vietnam

Despite the increased profile of Vietnam's other regional relationships, in particular with the ASEAN nations and major investors such as Taiwan and South Korea, Australia maintained its position as an established and long-term political and economic partner and consolidated and expanded relations across a range of issues. Dialogues on strategic, security and human rights matters were added to a bilateral relationship hitherto dominated by aid and trade.

Australia took every opportunity during the year to encourage Vietnam's accession to ASEAN and the normalisation of diplomatic relations with the United States. The achievement of these goals in 1995 will foreshadow a major change to Vietnam's regional strategic status and will allow Vietnam to pursue more comprehensive engagement in regional affairs.

Vietnam continued to achieve significant progress in its political and economic engagement with the region, including participation in the ASEAN Regional Forum in Bangkok in July, its first official presence at a regional security meeting. This was followed by attendance at a Trust Building Measures Seminar held in Canberra in November.

There were significant visits in both directions. Mr Bill Hayden made the first visit to Vietnam by an Australian Governor-General and the Minister for Small Business, Customs and Construction, Senator Schacht, led a construction mission. From Vietnam, Foreign Minister Nguyen Manh Cam; Labour, Invalids and Social Affairs Minister Tran Dinh Hoan; and Education and Training Minister Tran Hong Quan visited Australia during the year.

In November, Australia opened a Consulate General in Ho Chi Minh City, reflecting the rapid expansion of the Australian business presence in Vietnam. The Consulate now has fully operational consular, immigration, trade and bilateral assistance programs in the south of Vietnam. The Australian Embassy in Hanoi gained an Education Counsellor, a second Trade Commissioner and additional development assistance staff during the year, in response to the increasing breadth and depth of its relations.

Australia continued to develop its human rights dialogue with Vietnam, notably through the visit by the Australian Parliamentary Consultative Delegation (APCD) in April. The inclusion of members of the Vietnamese Australian community enabled them to raise many of their concerns directly with Vietnamese authorities and to gain an objective view of the current situation. The delegation report recommended several measures to improve Australia's capacity to encourage and promote improvements in the structures and systems which affect human rights standards in Vietnam. Australia will increase its already active contribution to the reform of the legal and judicial systems in Vietnam through a 'Cooperating for Justice' package. Australia continued to raise its human rights concerns with the Vietnamese Government through the Australian Embassy in Hanoi. Several prisoners on whose behalf Australia had made representations were released.

The first Senior Officials Talks were held in Hanoi in June, expanding dialogue on regional and multilateral issues, the trade and commercial relationship, consular access and prospects for cooperation on foreign service management issues. Based on the successful inaugural session, it is envisaged that the talks will become an annual event.

Australia's investment in Vietnam continued to grow in an increasingly competitive environment, with projects totalling more than $945 million in a range of industry sectors. However, Australia's ranking as a foreign investor in Vietnam slipped from fourth to sixth, reflecting Vietnam's increasing importance as a regional investment destination for major investors such as Taiwan, Singapore and South Korea. The Department, with Austrade, devoted considerable resources to supporting Australian commercial interests in Vietnam. Vietnam was designated as a Market Focus Group under the Government's National Trade Promotion Scheme and participated in NTIOC94.

Two-way trade continued to grow, reaching $445 million in 1994-95. The major Australian exports were telecommunications equipment, electrical machinery and appliances, wool, cereals and preparations and medicaments. Imports consisted largely of crude petroleum and oil, coffee and substitutes, and seafood.

Australia concluded an Air Services Agreement with Vietnam, opening the way for regular scheduled air services to be introduced in the latter part of 1995.

Laos

Australia has a strongly positive profile in Laos, built up over more than 40 years of diplomatic relations and supplemented by a highly appreciated program of development assistance, best known for the Friendship Bridge over the Mekong. The excellent state of bilateral relations was highlighted by the April visit of the Governor-General.

Australian commercial involvement has grown over recent years in market sectors where Lao development priorities and Australian commercial and technical expertise complement each other. Several of Australia's biggest companies are active in Laos, including Transfield, John Holland, Thiess, Maunsell, Snowy Mountains Engineering Corporation, the Hydroelectric Corporation of Tasmania, Normandy Poseidon, CRA, Western Mining Corporation and Telstra.

Australia maintains excellent access to Lao decision-makers. The visit to Australia by the Lao Vice Minister for Industry under the Department's Special Visitors Program provided a useful opportunity for business to display Australian expertise in the most promising economic sectors of Laos.

An agreement on the promotion and protection of investments between Australia and Laos, signed during the April 1994 visit to Laos by Prime Minister Keating, came into force in April 1995.

The arrangement established in 1993 under which Austrade and DFAT share the cost of the trade and industry representative in Vientiane was bolstered in May 1995 with the upgrading of the position to First Secretary level. Post assistance to Australian business contributed to several significant commercial successes over 1994-1995, including the conclusion of the heads of agreement for a billion-dollar hydropower joint venture led by Transfield.

Through a series of high-level representations and carefully targeted assistance, such as to the Lao legal sector, Australia continued to pursue an active dialogue on human rights, environmental and social issues.

Cambodia

Australia's principal policy objective in Cambodia is to support the democratically elected Government and its efforts to raise overall living standards, to rebuild the structures of a civil society and to contain the destabilising activities of the Khmer Rouge. As a signatory to the Paris Accords, Australia took an active interest in developments in Cambodia, particularly in military reform, good governance and responsible economic management. Senator Evans conveyed Australian views on these issues to the Co-Prime Ministers and other Cambodian Ministers and Mr Bilney articulated donor concerns at the meeting of the International Committee for the Reconstruction of Cambodia (ICORC) in Paris in April.

The Department supported the small but growing Australian commercial presence in Cambodia. Contracts have been awarded to Australian companies in the telecommunications sector and for infrastructure construction. The companies concerned have told the Department that the Australian Government's support contributed to the success of their commercial efforts.

Australia-Cambodia relations were dominated by the abduction and killing by the Khmer Rouge of David Wilson and the confirmation that Kellie Wilkinson, who had been abducted by the Khmer Rouge in April 1994, had been murdered soon after her capture. After persistent urging from Australia, the Cambodian legal authorities issued warrants for the arrest of Ms Wilkinson's and Mr Wilson's murderers. The Government made it clear to the Cambodian authorities that it expected that all necessary action would be taken to bring the perpetrators before a court of law. One of those named in the Wilkinson warrant was arrested and stood trial in July. The Cambodian Government has given assurances that the murderers of Ms Wilkinson and Mr Wilson will not be eligible for an amnesty under its program to encourage rank and file members of the Khmer Rouge to defect. The safety of the Australian community in Cambodia remained a priority for the Department, which revised its travel advice and recommended against non-essential travel outside Phnom Penh.

The Royal Cambodian Armed Forces (RCAF) made progress in reform and retraining in its efforts to contain the Khmer Rouge insurgency. The Khmer Rouge was weakened further by defections and shortages, but it is still a destabilising influence and interferes with government and international efforts to spread economic and social development through the countryside. However, it does not have the capacity to seriously threaten the integrity of the Cambodian State.

Australia took the lead at the ASEAN meetings in July to urge regional and international support of the legitimate defence needs of the Cambodian Government. The Ministers for Foreign Affairs and Defence jointly announced a further $5 million package of assistance to Cambodia, of which $3 million was allocated for defence assistance with a focus on helping the RCAF to upgrade its training program and facilities. No Australian personnel were to be involved in support of RCAF combat operations and the package did not include lethal material. Training activities were well under way by mid 1995. AusAID earmarked up to $2 million for the reintegration into society of demobilised RCAF soldiers, a reduction in the size of the army being essential to achieve improved efficiency.

Human rights issues remained a serious concern. There has been substantial progress, but the functioning of the judiciary remains rudimentary, the security forces continue to operate largely outside the law and there were regrettable indications of the development of a heavy-handed approach towards the media and individual free expression. Australia took the lead in developing a strong consensus resolution at CHR 51 and supported successful UN efforts for the continued operation of the Office of the UN Centre for Human Rights in Phnom Penh and the work of Justice Michael Kirby, Special Representative of the UN Secretary-General for Human Rights in Cambodia. Individual cases of human rights abuse, particularly those involving freedom of the press, received close attention.

The Cambodian economy stabilised over the year with continuing large-scale assistance from the international community. These positive trends were weakened by the difficulties of creating a climate of good governance and a transparent investment and commercial environment. Australia took the lead in addressing these issues with the Cambodian Government and the international community at ICORC because of their potential to seriously damage Cambodia's ability to attract long-term investment and undermine donor confidence.

Australia continues to have excellent high-level access in Cambodia and the momentum of the relationship has been sustained by frequent personal contact between Senator Evans and Cambodian leaders. The Governor-General made a State visit to Cambodia in April, and the Cambodian Minister of Finance and Economy, Keat Chhon, visited Australia in March for the inaugural High Level Consultations.

India

The development and strengthening of Australia's economic relations with India was a priority objective for the Department in 1994-95. Business opportunities for Australian companies have increased markedly as a result of the program of economic reforms set in train by the government of Prime Minister Narasimha Rao. The reforms have opened important sectors of India's economy by reducing tariffs and other import controls and encouraging foreign investment and partnership arrangements. The Department worked to enhance trade and investment opportunities, providing targeted information and advice on economic developments to Australian companies.

Senator McMullan headed the largest Australian business mission ever to visit India. The mission included a Western Australian delegation led by the Deputy Premier. A highlight was attendance by more than 100 Australian business representatives at a combined meeting of the Australia-India Joint Ministerial Commission (JMC) and the Joint Business Council (JBC) in New Delhi in February. The visit and the combined meetings heightened Australia's commercial profile in India and created substantial interest in the skills and technologies that Australian companies can offer, particularly in telecommunications, mining, power and transport infrastructure, agribusiness, education and financial services.

Senator Evans visited New Delhi in May to discuss Indian Ocean regional cooperation leading to the Australian-hosted International Forum on the Indian Ocean Region (IFIOR) in Perth. Senator Evans also held talks on disarmament and nuclear non-proliferation, arms control, environment and human rights issues, but Australia's ability to influence India on international security issues, especially nuclear non-proliferation, remains modest. Progress was made on influencing India's approach to Indian Ocean regional cooperation, the environment and human rights. Bilateral dialogue on human rights was advanced through a meeting in New Delhi in October of the Indian National Human Rights Commission and the Australian Human Rights and Equal Opportunity Commission, where opportunities were identified for further cooperation between the two national institutions.

Other Australian visits included a construction industry mission led by the Minister for Small Business, Customs and Construction, Senator Schacht, a coal industry mission led by the Minister for Resources, Mr Beddall, and a telecommunications industry delegation led by the Special Trade Representative, Mr Button.

The visit to Australia in June of the Indian Minister of State for External Affairs, Mr Salman Khurshid, highlighted the growing economic links between Australia and India, and investment opportunities in India, to the Australian business community.

Through the JMC process and ministerial representations, the Department vigorously pursued increased market access in India and continuation of the economic reform program, especially further tariff reductions in economic sectors of significance to Australia, including thermal coal, wool, agricultural products and telecommunications equipment. The Department pressed for the opening up of Indian insurance and financial services sectors, which are promising areas for Australian participation.

India was again featured as a market focus country at NTIOC94. Several top-level Indian business representatives participated at the invitation of the Minister for Trade and substantial business was generated between Australia and India as a direct result of the conference.

Despite a rise in business interest between India and Australia far beyond expectations, there was only a modest increase in bilateral trade and Australia's share of India's imports declined. Australia's exports to India diversified, however, with elaborately transformed manufactures (ETMs), education and other services improving significantly. Approvals for Australian investments in India also increased markedly, and substantial progress was made towards concluding a bilateral Investment Promotion and Protection Agreement.

The announcement in February that the next major Australian Integrated Country Promotion would be in India in late 1996 highlighted the priority being accorded to India by Australia, as did the continuing public diplomacy programs of the Australia-India Council. The Department was successful in encouraging the Indian Government to establish a counterpart body, the India-Australia Council, in February.

Pakistan

Australia's relations with Pakistan were given added substance by Senator Evans's visit to the country in May. The visit underlined the significance of Pakistan in Australia's 'Look West' strategy as a moderate and democratic Islamic state close to some of the more volatile regions of the world and as a prospective long-term economic partner in the Indian Ocean region.

The Department and the Australian High Commission in Islamabad provided information and advice to assist Australian companies to pursue commercial opportunities presented by Pakistan's continuing program of economic liberalisation. High-level representations by the High Commission helped secure a large contract for an Australian company to construct a container port at Port Qasim. Representations also succeeded in reducing a range of tariffs that were impeding Australian exports of frozen and chilled meat. A successful Australian education exhibition was held in late 1994, attracting thousands of visitors and follow-up inquiries and highlighting the potential for Australian educational services in Pakistan. The success of the promotion was reflected in increased student travel to Australia. Throughout the year, the Department also sought to take advantage of Pakistan's long-standing links with Central Asia and the Persian Gulf to tap into emerging commercial opportunities in these resource-rich areas. Several Australian companies were assisted by the High Commission to enter the Pakistan market.

Some negative domestic developments during the year, in particular, the deterioration in security conditions in Karachi, the country's largest city and commercial hub, contributed to a down-turn in Australian trading and investment. This was reflected in a 14.3% decrease to $190 million in Australian exports.

The Department increased high-level contacts on Indian Ocean regional cooperation, disarmament, non-proliferation, human rights, narcotics, the environment and other bilateral, regional and global issues of priority to Australia. The Department helped influence Pakistan's decision to introduce a new drug control ordinance to curb trafficking. Successful negotiations have Australia poised to sign an extradition treaty with Pakistan. During the year, representations were also made by the High Commission about human rights concerns (particularly over blasphemy laws) and though progress was slow, positive steps were taken by the Pakistan Government, including the establishment of a human rights body and proposed procedural amendments to the blasphemy legislation.

Australia's profile was raised through an active public relations program ranging from sports tours, public speaking and journalist exchanges to cultural events, including a exhibition of Aboriginal art, which attracted strong local interest.

Sri Lanka

Australia welcomed the smooth transition of power after parliamentary elections in Sri Lanka in August and the initiative taken by the new People's Alliance Government of Mrs Chandrika Kumaratunga to negotiate a peaceful settlement of the long-standing ethnic conflict with the Liberation Tigers of Tamil Eelam (LTTE). The Australian Government condemned attacks by the LTTE in April that ended the cessation of hostilities and renewed the armed conflict. During a visit to Colombo in May, Senator Evans expressed Australia's support for a peaceful and durable solution to the conflict, which is central to the country's long-term development prospects, and stated the preparedness of Australia to consider assisting a genuine peace process in any way that would be useful and acceptable to both sides.

Trade and investment between Australia and Sri Lanka are now significant. Bilateral trade reached $191 million in 1994-95, a 24.3% increase over the previous year. Australia has become one of the largest investors in Sri Lanka, with a 63% increase in the past 12 months in existing investments and contracts to a total of about $300 million. Investments still in the pipeline amount to a further $776 million and new opportunities are expected to emerge as a consequence of the Sri Lankan Government's privatisation plans.

Bangladesh

The political environment in Bangladesh in 1994-95 was dominated by a long-running dispute between the Government of Prime Minister Khaleda Zia and opposition political parties over their demand for the next national elections to be held under a neutral caretaker government. With the agreement of the Bangladesh Government and the Opposition, the Commonwealth Secretary-General asked Sir Ninian Stephen to visit Dhaka as his personal emissary to mediate between the two sides. However, despite extensive negotiations in October chaired by Sir Ninian, the political deadlock remained unresolved at the end of 1994-95.

Bangladesh will continue to need significant financial assistance from international donors, despite a GDP growth of around 5% in 1994. Australia's relationship will remain largely centred on development cooperation, with a focus on health and population sectors, training and food aid, but with a high priority also given to strengthening the bilateral commercial relationship.

Bilateral trade dropped from $125 million in 1993-94 to $112 million in 1994-95. The Department and the High Commission provided advice and assistance to Australian firms, including a major prospective investment in coal mining. Further opportunities for expansion of trade with Bangladesh will increasingly depend on Australian companies winning a greater share of internationally financed infrastructure contracts.

Nepal

Aid and consular-related activities were dominant in the Australia-Nepal relationship. The Department and the Australian Embassy in Kathmandu pursued commercial opportunities for Australia and facilitated the activities of Australian companies in Nepal, including assisting the conclusion of an MOU with the Government for a hydropower development worth more than $US700 million. Feedback from companies indicates a high degree of satisfaction with services provided. The number of Australian tourists visiting Nepal dropped slightly during the year but consular assistance to Australians remained a significant task for the Embassy in Kathmandu.

Afghanistan

Fighting between rival factions continued in Afghanistan throughout the year, negating the efforts of the United Nations Special Representative to promote a sustainable peace settlement. Opportunities for Australian engagement with Afghanistan were limited. The Department approved the appointment of an Honorary Consul for Afghanistan in Canberra, and in March Senator Evans met a delegation of representatives from the Afghan community in Australia and discussed a range of issues. The Department, through the Australian High Commission in Islamabad, which is also accredited to Afghanistan, emphasised the Australian Government's support for a peaceful resolution to the conflict in Afghanistan and the need for all political factions to conclude a durable ceasefire that respects the interests of all Afghans.

Australia continued to provide humanitarian aid, and an assistance package of $3.5 million for relief and rehabilitation was announced in March. Australia also maintained its offer of resettlement for eligible Afghans on a humanitarian basis, the only country to do so in recent years.

1.2.3 Interests in regional policies and projects

ASEAN

The Association of South-East Asian Nations, which groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand, is South-East Asia's primary regional grouping and hence of major importance to Australia. The importance of ASEAN has been further increased with the entry of Vietnam into the grouping in July 1995. Throughout 1994-95, the Department provided advice to the Government on all aspects of Australia's relationship with ASEAN, and achieved significant outcomes outlined below.

At the annual Post Ministerial Conference (PMC) hosted by ASEAN in Bangkok in July, which brought together 22 Foreign Ministers from around the Asia Pacific region and the EU, Australia signed an MOU with ASEAN to establish Phase III of the ASEAN-Australia Economic Cooperation Program, and reached agreement to look at establishing links between the ASEAN Free Trade Area (AFTA) and the Australia-New Zealand Closer Economic Relations (CER) area. Senator Evans used the PMC to further Australia's economic and strategic interests with its regional neighbours, through bilateral meetings with 18 of his counterparts, held in the margins of the PMC.

Brunei took over from Thailand as Australia's ASEAN coordinating dialogue partner in August. Senator Evans visited Brunei in February to meet his counterpart, His Royal Highness Prince Mohamed Bolkiah, and to discuss coordinating partner arrangements.

The Department maintained the momentum towards closer economic cooperation between ASEAN and Australia in 1994-95. ASEAN and Australian and New Zealand officials met to discuss AFTA-CER links in March, and at the end of April, ASEAN Economic Ministers invited CER Trade Ministers to participate in ministerial consultations the following September. Senator McMullan and NZ Trade Minister Burdon both welcomed the invitation, and officials were given the task of preparing discussion papers on priority areas for cooperation. Eight possible areas are under consideration, including harmonisation of standards and customs procedures.

The Department was also active in efforts to secure Australia a place at the first Asia-Europe Meeting as a member of the Asian side. This meeting, originally proposed by Singapore and taken up as an ASEAN initiative, is likely to be held in Thailand in March 1996 at Head of Government level. Australia succeeded in gaining agreement for its attendance at the second meeting of the ASEM, and in doing so raised awareness and increased acceptance of Australia's credentials as a member of the East Asian economic and security community.

DFAT achieved a first for cultural cooperation between Australia and ASEAN in 1995 with the holding of a workshop on film and video archive management in conjunction with the ASEAN Committee on Culture and Information at the National Film and Sound Archive in Canberra. This will expand with further workshops, including other areas of cultural and heritage preservation.

Work on further ASEAN-Australia functional cooperation continued throughout 1994-95, with agreement being reached to hold the 17th ASEAN-Australia Forum (an officials-level dialogue covering all aspects of the bilateral relationship) in Brunei on 12-13 March 1996.

Asian projects

The Australia in Asia Official Exchange Program (AAEOP), established under the Australia in Asia Package of Initiatives: Economies Growing Together, generated several successful exchanges with Japan. Exchanges with Brunei and Hong Kong have also been put in place, with Departmental officers taking up placements in the Foreign Ministry (Brunei Darussalam) and Trade Ministry (Hong Kong). The program was established to foster personnel exchanges with counterpart government departments in the region. An evaluation showed it had encountered unforeseen difficulties in its initial phase, mainly due to sensitivities about security from counterpart Asian ministries. As a result of recommendations from the evaluation, the program has been expanded to include other Australian Government agencies which are in a position to take advantage of the interest in the region for collaborative government-to-government projects.

Production continued of the monthly newsletter Asialine, which aims to help advance Australia's economic interests in Asia by informing Australian business of possible opportunities for participation in trade and investment in the region.

A readership survey showed 85% of respondents rated the publication as good to excellent. In response to suggestions resulting from the survey, Asialine is to be made available on the Internet and forthcoming issues will include articles on specific industry sectors. A small charge for an annual subscription will be introduced from July 1995.

Indian Ocean Regional Initiative

The Indian Ocean region, although not characterised by the interdependence, economic advancement or extraordinary growth evident in the Asia Pacific region, has always been significant for Australian security and commerce because of its resources and the shipping lanes that cross it.

Recent events in this region have opened the way for Australia to take a forward-looking approach. South Africa's return to the international community, and India's shaping of an outward-looking economic policy have seen the beginning of a new sense of regional identity and community of interests. The end of the Cold War and the worldwide trend towards regionalism have given rise to new regional approaches to dealing with economic and security issues. The Indian Ocean is emerging as a region with promising trade and economic opportunities.

In August, the Government set out its 'Look West' strategy and announced it would sponsor with the Western Australian Government an International Forum on the Indian Ocean Region (IFIOR) in Perth from 11-13 June. Cooperation with the Government of Western Australia is an essential element of the 'Look West' strategy, and throughout the year the Department has worked closely with its counterparts in Western Australia to ensure the success of the Indian Ocean initiative.

The Department sent senior-level representation to a meeting hosted by Mauritius in March to discuss economic cooperation in an inter-governmental process of seven 'core' countries in the region. Australia's delegation took a lead role in achieving agreement on principles and objectives.

The Minister for Foreign Affairs, Senator Evans, visited countries in the region in May and gained considerable support for regional cooperation, and high-level representation at the IFIOR. In the lead-up to IFIOR, the Minister for Trade, Senator McMullan, led a series of business delegations to major Indian Ocean markets which attracted a high level of business participation. IFIOR brought together 122 participants from 23 countries in the region, representing academia, business and officials (in their personal capacities) and several regional organisations, to discuss prospects for dialogue and cooperation in the region.

In a parallel development two region-wide networks were established - the Indian Ocean Consultative Business Network (IOCBN) and the Indian Ocean Research Network (IORN). The Business Network will examine information technology, including telecommunications, customs and trade documentation, non-tariff barriers, impediments to investment and maritime affairs. The Research Network will promote the exchange of information and data, will encourage joint research projects and will carry forward discussion on security issues. Both networks are to meet in New Delhi in December 1995 to develop work programs.

The Government has contributed to the establishment of an Indian Ocean Centre at Curtin University. This will administer a Commonwealth research funding grant and provide a focal point for carrying forward research in Indian Ocean matters.

Australia's Trade with South and South East Asia


Exports	1990-91	1991-92	1992-93	1993-94	1994-95	Trendgrowth
$A		$A	$A	$Am	$Am	90-91to94-95
ASEAN
Brunei	15.3	18.6	52.6	60.7	54.7	45.3
Indonesia	1,462.1	1,634.6	1,715.3	1,905.6	2,098.6	9.2
Malaysia	984.9	1,105.5	1,310.8	1,759.0	2,039.6	21.2
Philippines	436.7	514.0	597.6	698.5	838.3	17.5
Singapore	2,768.4	3,189.4	3,787.3	3,207.4	3,649.1	5.7
Thailand	664.9	825.4	1,205.4	1,277.3	1,556.1	23.8
Vietnam	24.8	50.1	75.9	111.2	149.8	55.2
Total ASEAN	6,357.0	7,337.7	8,744.9	9,019.7	10,386.0	12.6
Other South-East Asia	31.1	66.1	80.7	38.1	64.4	9.5
SOUTH ASIA
India	667.4	753.4	888.5	864.7	974.5	9.4
Other South Asia	273.7	346.4	418.0	444.4	428.7	12.2
Total South and
South-East Asia	7,329.2	8,503.5	10,132.1	10,367.0	11,853.7	12.3

Imports	1990-91	1991-92	1992-93	1993-94	1994-95	Trendgrowth
$A		$A	$A	$Am	$Am	90-91to94-95
ASEAN
Brunei	40.6	82.2	49.5	17.2	21.9	-24.4
Indonesia	783.7	994.7	1,305.1	1,105.5	1,197.2	10.0
Malaysia	731.5	867.4	973.7	1,103.2	1,421.0	17.0
Philippines	129.0	142.8	177.1	188.2	258.9	18.2
Singapore	1,271.0	1,300.5	1,508.7	1,792.4	2,247.1	15.7
Thailand	505.0	647.4	755.6	794.4	970.3	16.3
Vietnam	17.8	79.4	236.9	290.9	295.2	99.7
Total ASEAN	3,478.7	4,114.4	5,006.5	5,291.8	6,411.7	15.9
Other South-East Asia	5.4	4.0	11.5	11.3	8.7	22.0
SOUTH ASIA
India	259.8	287.9	361.9	427.4	532.3	20.1
Other South Asia	134.6	159.4	190.1	212.9	213.2	12.9
Total South and
South-East Asia	3,878.6	4,565.7	5,570.0	5,943.4	7,165.9	16.1

1.3 INTERESTS IN AMERICAS AND EUROPE

Objectives

Protect and advance Australia's political, strategic and economic interests with the United States and the Americas, Western and Central Europe, and the newly independent states of the former Soviet Union.
Facilitate the development of Australian trade and commerce with the countries covered.
Ensure an appropriate pattern of treaties and commitments for the conduct of relations, and encouragement of involvement of these countries in Australia's economic development.
Ensure a continued constructive involvement of the United States in promoting the security of the Asia Pacific region.

Description

The resources dedicated to sub-program 1.3 are the Americas Branch, West Europe Branch, Central and East Europe Branch and the Project and Coordination Section of the Americas and Europe Division. The sub-program has responsibility for 99 countries. Twenty-nine overseas missions and the Department's regional offices played an important role in meeting these objectives.

Performance summary

Launch of a major study on Australia's trade and investment links with the US, which charted the way for a more strategic pursuit of Australia's commercial interests.
A public affairs campaign to ensure understanding of Australian trade and foreign policy interests in the US Congress and Administration, especially after the Republican victory at the November 1994 Congressional elections.
Constructive dialogue with the US on its strategic and economic engagement in the Asia Pacific region.
Successful resolution of Australia's long-standing beef access dispute with Canada.
Positive reception of public affairs promotions to Australian business about NAFTA, the Free Trade in the Americas and Latin American market prospects.
Expansion of economic links with European Union (EU) countries, including progress on finalising a framework agreement, conclusion of several market access agreements and increased interest by the EU in regular exchanges on economic policy issues.
Expansion of Australia's economic and political links with Germany.
Effective management of Australia's initial response to France's decision to resume nuclear testing, including through regional and multilateral institutions.
Success in advancing commercial links in Russia, the Commonwealth of Independent States and Central Europe, including a significant public affairs and advisory role for business about Pacific Russia and the CIS states, especially Kazakhstan. An embassy was opened in Kazakhstan in May 1995 mainly to promote Australian commercial objectives.

1.3.1 Americas

United States

At the November 1994 Congressional elections, the Republican Party swept to power, taking control of both houses of the US Congress for the first time in more than 40 years. Many members of the new Congress were unaware of Australia's foreign and trade policy objectives, so it was necessary to intensify efforts to raise their awareness. The Department used a range of lobbying and public affairs activities to influence policy makers and members of Congress.

The campaign reflected the high value which Australia places on continued US leadership in global affairs and multilateral organisations and in the Asia Pacific region. As part of this effort, the Department urged restraint in making cuts proposed by Congress to the US foreign relations and development assistance budgets.

Continuing US support for APEC was encouraging, given that a key portfolio objective has been to encourage the US to continue its positive strategic and economic role in the Asia Pacific region. Australia cooperated closely with US officials in the lead-up to the APEC meeting of heads of government in Indonesia in November. The Department also worked effectively with US officials in pursuing trade liberalisation and facilitation commitments from the APEC meeting.

A sign of the collaborative US approach was its decision to consult Australia and other partners while preparing its Regional Security Strategy for East Asia and the Pacific in February. The strategy confirmed a US commitment to its bilateral security alliances. It will keep 100 000 troops in the region, and is supporting the ASEAN Regional Forum.

At the annual Australia-United States Ministerial (AUSMIN) Talks in April, the US offered a strong reaffirmation of its commitment to the ANZUS alliance and continued strategic and economic engagement in the Asia Pacific region.

In response to Australia's substantial and increasing trade deficit with the US, the Department completed a major study of the bilateral trade and investment relationship. The review concluded that the process of structural change in the Australian economy had substantially stimulated imports from the US. About 80% of those imports are capital goods or intermediate manufactures, which are important inputs to internationally competitive sectors of the economy. It found the low level of complementarity between Australia's export mix and US import requirements also contributed to the large trade deficit, but some US trade barriers also continued to limit access for Australian exporters. It also found that Australia was capitalising on niche markets in the US for innovative products and services. The review set the foundation for an expanded Trade and Investment Framework Arrangement (TIFA), which will enable trade barriers to be the subject of negotiations through continuing consultations in key areas, such as standards conformance, professional services and access to the US for Australian fast ferries.

Persistent lobbying in close cooperation with industry bodies reduced the impact on Australian primary producers in key Asian markets of subsidies paid under the Export Enhancement Program and the Dairy Export Incentive Program. The US reconfirmed at AUSMIN an earlier assurance by President Clinton to Prime Minister Keating that it would seek to avoid using its agricultural export subsidy programs in ways which undermine Australian interests.

The Department worked with relevant government departments and industry groups to secure longer-term reductions in US subsidy programs through the 1995 Farm Bill which raised important trade issues. (See also sub-program 1.5). It used the bilateral Agricultural Consultations to press Australian trade interests. Departmental lobbying overturned a US import ban on kangaroo meat, which benefited Australian game meat producers.

Australia was removed from the US Special 301 list during the year because of measures it took against copyright piracy and a relaxation of content requirements for new broadcasting services. The US continued to express concern over Australian local content rules in broadcasting, despite the dominance of US products in Australia's audio-visual market. It also continued to seek change in the screening regime used by the Foreign Investment Review Board and in government procurement regulations.

Canada

Australia's relations with Canada strengthened during the year with several high-level political exchanges. These were partly related to the celebration of 100 years of Australia-Canada trade relations. The Department worked closely with Canada on a range of multilateral issues such as UN reform, APEC's trade liberalisation agenda and the Cairns Group work program.

Significant progress was made in the resolution of outstanding trade irritants, particularly access to the Canadian beef market. Canadian Trade Minister McLaren announced during a visit in March a 42 000-tonne country share for Australia under Canada's beef tariff rate quota regime. The visit also resulted in agreement to negotiate a trade and investment framework agreement.

Latin America

With 450 million people and a combined GNP of $1500 billion, Latin America has an economy four times the size of Australia's. Several of its markets are of growing importance to Australia. The Department broadened and deepened political and commercial relations with the region during the year. These links have expanded rapidly since the early 1990s, driven largely by Australia's greater commercial engagement.

Although some Latin American regional trade arrangements are restrictive, a move has been made towards progressive trade liberalisation, privatisation and budget consolidation in most countries. This has attracted a substantial increase in foreign commercial interest, including Australia. A trend towards democracy in many of the countries has also contributed to a more positive business environment for foreign firms.

There was a significant increase in political and official contacts during the year, including visits to Australia from Chile's President Frei, Colombia's Trade Minister Mazuera and Brazil's Foreign Minister Amorim. Each of these visits contributed to greater commercial and political links. Contact at parliamentary and officials' level reinforced this trend, including meetings of APEC, the Cairns Group, the OECD, the Non-Aligned Movement (NAM) and the World Trade Organisation (WTO).

Australia initiated exchanges with Latin American countries on trade liberalisation, including the first round of talks between Australia and New Zealand as members of the CER and the four members of the trade grouping Mercosur - Brazil, Argentina, Paraguay and Uruguay. They are aimed at deepening and broadening the trade policy and commercial links between the two groups. The next round of talks is planned to take place in the first part of 1996. The Department also made significant progress towards the conclusion of legal frameworks (double taxation, investment protection and promotion agreements) to support Australian firms operating in the region.

Senator Evans' visit to Cuba in January paved the way for a normalisation of commercial links. It established the terms for resolving Cuba's long-standing debt to Australia's Export Finance Insurance Corporation.

Caribbean

In contrast with other regions, the focus of Australia's links with the Caribbean is in sport and culture. Visits by prominent cricket and netball teams were highlights of the year and fostered closer ties. Because Caribbean countries play a significant role in the UN and the Commonwealth, the Department sought their support for several of its multilateral objectives. Australia's base for pursuing Caribbean interests is a post in Bridgetown, Barbados, which is collocated with the Canadian post. This was the first time Australia and Canada had formally established such arrangements and they developed effectively.

1.3.3 Interests in East Europe, Russia and Central Asia

Russia and Eurasia

The promotion of trade and investment links with Russia and the countries of the former Soviet Union have been the key objective in the region. Bilateral trade slumped badly after the collapse of the Soviet Union, but has now recovered to reach $253 million in 1994-95.

This objective was effectively pursued during Senator Evans' visit to Russia and the three Baltic states in July. The result was a Joint Working Group to oversee the development of Pacific Russian infrastructure, and particularly to increase Australian alumina exports to Siberian smelters.

Another channel which the Department used to expand trade ties in Russia was the senior officials' talks of November. The state remains a significant actor in trade and investment , and the Department was therefore active in registering Australian commercial interests, including in Pacific Russia. A dialogue was initiated on impediments to bilateral trade and the opportunity was taken to present Australia as a reliable source of high-quality goods.

Australian business interest in Russia has increased steadily in investment opportunities, particularly in Pacific Russia. However, there is a need for greater security for investors. Two bilateral agreements were identified as vital to the continued growth of the economic relationship - on double taxation and investment promotion and protection. As a result of the Department's negotiations, a double taxation agreement is expected to be finalised in late 1995, but negotiations on investment promotion continue to face technical obstacles and will require sustained effort and patience.

The Department cooperated with the Department of Defence to promote closer ties in Pacific Russia. HMAS Sydney paid a historic visit to Vladivostok in May. This goodwill mission also included a small trade display of Australian food products.

A high point of bilateral exchanges was the visit in June of Russian Deputy Prime Minister Alexandr Zaveryukha, accompanied by other Ministers and senior business and government figures. Negotiations during the visit led to the creation of the Australia-Russia Joint Commission on Trade and Economic Cooperation. The Department used this forum to obtain Russian help in overcoming difficulties faced by Australian business in Russia, especially the wheat, wool, meat, processed foods, energy and alumina industries. Soon after Mr Zaveryukha's return to Russia, he suggested a reduction in imported wool tariffs in exchange for Australian assistance to the Russian woollen textile industry.

Increased trade and investment opportunities in some parts of the CIS led to the opening in May of an Australian Embassy in Almaty, Kazakhstan. Kazakhstan is the largest of the newly independent states of Central Asia, with a population of similar size to Australia. It is attracting strong international investor interest because of its large recoverable deposits of oil, gas, coal, gold and other minerals. Australia's expertise in mineral extraction, telecommunications and agriculture in harsh and isolated conditions is particularly suited to Kazakhstan's development needs. The Department will use its new Embassy mainly to help firms pursuing business there.

Australia used the visit of the Deputy Ukrainian Foreign Minister in August to advance a bilateral trade and economic cooperation agreement. A Ukrainian business mission accompanied the officials and discussed trade and investment opportunities with Australian business.

Central and Eastern Europe

Many countries in Central and Eastern Europe and in the former Soviet Union experienced continuing political and economic volatility in 1994-95. The Department concentrated its efforts on strengthening Australia's commercial ties and pursuing the Government's objectives in the former Yugoslavia.

The disintegration of the former Yugoslavia was a primary concern. The Department sought a balanced and constructive approach to the disturbing developments. It administered Australia's implementation of the UN sanctions imposed against the Federal Republic of Yugoslavia (Serbia and Montenegro) and the parts of the Republic of Croatia and the Republic of Bosnia and Herzegovina controlled by local Serb groups.

During the state visit to Australia in June by the Croatian President, Dr Franjo Tudjman, Australia made clear its support for efforts to reach a negotiated settlement to the conflict in the former Yugoslavia and its commitment to the promotion and protection of human rights. The Department also faced criticism by some groups and individuals within Australia over the Government's recognition of the Former Yugoslav Republic of Macedonia (FYROM). Its temporary use of the description ÒSlav-MacedonianÓ when referring to people who live in or originate from the FYROM also generated considerable concern.

On the economic side, the Department was active in facilitating trade and investment opportunities and worked closely with Austrade. Different approaches were needed because of the different transitional stages of these former communist states towards a market economy. The Czech Republic, Slovenia, Poland and Hungary are among those making the most significant advances. An increasing number of Australian companies showed interest in the region. The Department helped by creating three additional Honorary Consul positions in Riga, Vilnius and Ljubljana. This brings the number of honorary consuls in the region to eight.

High-level visits during 1994-95 also contributed to the development of closer economic links. The visit to Poland in July by Senator Evans served to reinforce the bilateral commercial relationship and provided an opportunity to support the first Australian wine industry promotion there.

The visit of the Czech President, Vaclav Havel, in March acted as a catalyst for closer economic and political ties. The Czech Republic is the region's most promising market for Australia and the Department used the visit to facilitate contact between the large business delegation accompanying President Havel and Australian firms. In addition, a Double Taxation Agreement was signed, business forums were held in Sydney, Melbourne and Brisbane and two joint business ventures were announced.

Australia's commercial interests in Romania were given a boost during the Australian-Romanian Joint Governmental Commission meeting in June. Fifteen Australian companies took part. They were from mining, agriculture, telecommunications, transport and manufacturing. The Joint Commission contributed to detailed discussion of trade and investment opportunities, especially in minerals, meat, live sheep and wool.

The Australian Program of Training for Eurasia (APTEA)

The Department manages the Australian Program of Training for Eurasia (APTEA), which delivers technical assistance to the countries of Central and Eastern Europe and the former Soviet Union, especially in their economic reforms. It has also become an effective vehicle for trade facilitation, particularly in industries which offer from 1994-95 the greatest commercial interest for Australia. Funding for the triennium to 1997-98 will be $10.46 million. Total funding for the program from its inception in 1990 until 1997-98 will be $20.22 million.

APTEA brings graduate managers to Australia to undertake a Graduate Certificate course in Business Management, followed by a placement in an Australian business. By the end of 1994, about 250 students had taken part in the program, with 85 expected during 1995. The program also carries out small projects through Australian missions. These have included small-business training courses for women; farm management courses; seminars on the GATT; management of an employment service; mining industry economics; stock market management; and land titles systems.

1.3.2 Interests in Western Europe

European Union (EU)

Australia and the EU developed a new, broader relationship during the year. This followed discussions between Prime Minister Keating and the former President of the European Commission, Jacques Delors, in June and the conclusion of the Uruguay Round negotiations.

The bilateral agenda with the European Commission was extended to include constructive exchanges on a wide range of issues on which the two sides share concerns and interests. These include economic and social policy, education and training, competition policy and the environment. The Prime Minister also initiated negotiations with the European Commission on a new framework agreement to underpin the emerging relationship.

Negotiations have been concluded on several trade issues over the past year, including agreement by the EU to maintain Australia's access to its market under its high-quality beef quota (about $66.4 million a year) and the export restraint arrangement on sheepmeat ($57.6 million a year) up to the implementation of Uruguay Round arrangements from 1 July 1996.

Agreement was also reached to increase access to the enlarged EU for the first half of 1995 to take into account Australia's exports of sheepmeat to the new EU member countries - Austria, Finland and Sweden. Negotiations have started to maintain Australia's access to these markets in the longer term and to ensure that the parties' Uruguay Round commitments are implemented to the maximum benefit of Australian exporters.

Negotiations continued on a Mutual Recognition Agreement (MRA) on product conformity assessment , which was close to conclusion. It will facilitate bilateral trade in specified sectors and enable both sides to certify that products exported from one country to the other meet the importing country's standards requirements. Attempts are being made to include the motor vehicle sector.

A bilateral veterinary agreement was also under negotiation during the year with the European Commission. When concluded, it will facilitate two-way trade in live animals and animal products by providing for reduced levels of physical veterinary checks at EU borders in recognition of Australia's high status of animal and plant health.

After an offer by Commission Vice-President Sir Leon Brittan to help in promoting Australia as a base for regional commercial activity in the Asia Pacific, work has started on a joint publication on this issue for dissemination in Europe. It is expected to be published in late 1995.

West Europe

The Department was active in advancing Australia's interests in the countries of West Europe. One indication of the breadth and depth of Australia's links with region is the fact that 34 ministers and 95 Federal and State parliamentarians visited the region during the year. This was in addition to several high-level visits to Australia from West Europe.

The Department expanded its efforts in Germany during the year. During a visit by the Prime Minister, three major events were launched: Australia's stand at the CeBIT information technology fair in Hannover, which is estimated to have generated more than $300 million of sales in information technology; ÒExperience AustraliaÓ, a campaign designed to raise awareness of Australian services; and the inauguration of the Australia Research Centre at the University of Potsdam.

Chancellor Kohl's decision to send a senior minister and high-level business delegation to Australia to take part in the Australian-German Association's Partnership 2000 trade and investment conference was an indication of Germany's interest in closer links with Australia. The conference will be hosted by Senator McMullan in October. Chancellor Kohl and the Prime Minister also commissioned a study of bilateral trade and investment ties, to be completed in advance of the AGA conference.

France was the subject of intense political and economic activity during the year. In the lead-up to the French presidential elections, the Department made representations against any resumption of nuclear testing in the South Pacific to the main presidential candidates and to other senior politicians and officials. President Chirac's announcement on 13 June 1995 that France would conduct eight tests in Mururoa Atoll between September 1995 and May 1996 provoked a strong response from the Government, which included a freeze on defence contacts.

On 18 June, Senator Evans led a delegation of South Pacific Forum representatives to Paris in an effort to persuade France not to proceed with the tests. The French Government did not change its position, so Australia escalated its response. As chair of the South Pacific Forum, Australia initiated the establishment of a Regional Action Committee to coordinate responses to the French decision.

At NTIOC94, France was featured as the European market for discussion. France sent a high-level business delegation to Australia for this event. An upsurge of French investment in Australia followed the NTIOC engagement. The Australia-France Mixed Commission also met in early 1995 and agreed on several initiatives, including the development of a multimedia product. A long-running dispute over the marketing of Australian wild boar meat was also resolved.

In Turkey, the Department promoted Australian commercial interests through the Australia-Turkey Joint Economic Committee meeting in April. The meeting included Australia's largest business delegation ever to visit Turkey. Eighteen firms from the education, mining and energy, agriculture, finance, health and marine sectors took part. Outcomes included the initialling of a Memorandum of Understanding on education and an agreement on the promotion of closer cooperation between the Chambers of Commerce and Industry in both countries. The two sides also agreed to hold talks on social security and double taxation agreements. An extradition treaty was concluded in early 1995.

The 80th anniversary of the Gallipoli landings in April was a major event in the year, requiring a substantial Departmental commitment. Australia was represented at the ceremony by the Governor-General, the Ministers for Trade and Veterans' Affairs, several Parliamentarians and 10 descendants of Gallipoli veterans. Administrative and coordination problems in the conduct of the ceremonies led to criticism of the Department's role. As a result, the Government tabled a full Departmental report in Parliament.

In the United Kingdom, the business-oriented Partnership 2000 conference led to increased Australian efforts in that markets, and resulted in the UK being chosen as the main European market for discussion at NTIOC95. The Department began preparations to ensure maximum trade and investment spin-offs from the presence of a senior UK business delegation to NTIOC.

The UK Government also decided to hold a year-long series of activities in 1997 under the title ÒNew Images: Britain and Australia into the 21st CenturyÓ. Then UK Foreign Secretary Hurd described this as the largest event of its kind ever to be staged by Britain overseas, which indicated its strong interest in expanding ties with Australia. Another positive development was the visit to the UK of a delegation of Òup-and-comingÓ politicians from the major political parties. This is expected to become a regular exchange.

A point of difference between Australia and the UK was the non-indexation of UK social security payments to British pensioners in Australia. The UK argues that the cost of indexation is too high to change its policy. The Department continued to press the issue and will do so in 1995-96.

Australia demonstrated its commitment to help the peace process in Northern Ireland by announcing a $7 million contribution over five years to the International Fund for Ireland. The Department manages this program. The Fund is run by the UK and Irish governments with the aim of promoting socioeconomic advancement and reconciliation among the communities most affected by the violence of the past 20 years.

Energy Charter Treaty

After more than two years of difficult negotiations, the Energy Charter Treaty was opened for signature in December. Australia and 48 other countries signed the Treaty and a related Protocol on Energy Efficiency and Related Environmental Aspects. This followed detailed consultations by the Department with Australian companies, industry associations and State and Territory Governments.

The Treaty aims to foster the development of the energy sectors of the former Soviet bloc countries by providing rules which promote and protect foreign investment, international trade, market principles and sound environmental guidelines. The Treaty will also help to promote better market access to Australian energy products and provide more secure investment opportunities. Importantly, this includes the right to take disputes on certain issues to international arbitration.

Although the Treaty has not yet entered into force, its standards of conduct provide a benchmark for Central and East European countries as they develop their domestic legislation in areas such as international trade, investment, competition policy and the environment.

Australia's regional trade - Americas and Europe


	EXPORTS			IMPORTS
	$m	Trend Growth		$m	Trend Growth
	1993-94	1994-95	90-91 to	1993-94	1994-95	90-91 to
			94-95			94-95
NAFTA	6,421.1	5,903.6	-2.0	15,407.8	17,669.3	8.8
Latin America	853.3	789.3	16.3	641.0	767.9	7.5
Western Europe	8,200.7	8,076.0	0.3	15,571.7	19,450.4	11.2
Eastern Europe	377.4	402.2	-7.2	188.0	219.4	3.0
TOTAL	15,852.5	15,171.1	-0.3	31,808.6	38,107.0	9.9

Source: Compiled by the DFAT Statistical Services Section from data supplied by the ABS.

1.4 INTERESTS IN SOUTH PACIFIC, AFRICA AND THE MIDDLE EAST

Objectives

Protect and advance Australia's specific political, commercial, investment and strategic interests in the South Pacific, Africa and the Middle East, with a particular focus on economic opportunities.
Provide policy advice to Ministers and the Government on matters affecting Australian interests in, and relations with, countries and organisations in the region.
Promote links between Australia and the countries and organisations of the South Pacific, Africa and the Middle East (including the Gulf), so Australia continues to be seen as a reliable partner with shared interests.
Contribute to peaceful political and economic development, particularly in Papua New Guinea and the South Pacific, enhancing regional stability and Australia's security.
Encourage the peaceful settlement of disputes within and among countries in the South Pacific, Africa and the Middle East in ways which respect basic human rights and freedoms including the consolidation of democracy in South Africa.
Contribute to an informed public debate in Australia of regional issues affecting Australia.

Description

This sub-program is administered by the South Pacific, Africa and Middle East Division, comprising three Branches: New Zealand and Papua New Guinea Branch, the Office of Pacific Island Affairs, and the Middle East and Africa Branch. Twenty-eight overseas missions are located within the division's areas of responsibility.

Strategies

To achieve the objectives, efforts through the year were channelled principally through:

seeking to maximise commercial opportunities for Australia, identifying and overcoming obstacles to trade and ensuring that Australian commercial interests are alert to the potential of regional markets;
providing foreign and trade policy advice to Ministers and the Government and conducting public affairs and information activities;
managing and coordinating Australia's relations with countries in the sub-program's area of responsibility, including activities of Australian diplomatic missions; and
evaluating political, strategic, economic and other developments in the area that have implications for the objectives.

1.4.1 South Pacific

To promote Australia's long-term interests, the Department's primary strategy in the South Pacific in 1994-95 was directed towards providing leadership, in close and sensitive cooperation with Governments of the Pacific island countries, to obtain greater mutual economic and social benefits for the countries of the region. In particular, it endeavoured to work with them to help maximise the achievement of sustainable economic development and sound economic management policies. Particular impetus to this was given at the 25th South Pacific Forum in Brisbane in August, which focused on key economic resource management issues.

Specific strategies were adopted to advance the principles of good governance in the region, to try to ensure that national economies received a fair return from the exploitation of their national resources such as fish and forests, and that these resources were used sustainably, and to encourage rationalisation of civil aviation in the region to ensure that it operated on a sound economic basis.

In accordance with broad Australian government policy, strategies were developed to encourage the observance of human rights in countries in the region, including media improvement with the aim of contributing informed opinion to debate in island countries on matters of social, political and economic importance.

Strategies were adopted in dealing with regional organisations to ensure that the emphasis of their activities was on improved program delivery to member states.

Performance outcomes

The Department worked to ensure that Australia, as the most substantial country in the South Pacific region, continued to take a leading role in promoting peace and stability in the region to protect and advance its priority strategic, commercial and political interests. A particular policy objective is helping maximise the long-term self-reliance of Pacific island countries through sustainable resource management and development, and business and export growth. The network of Australian posts helped to protect and advance Australia's political and commercial interests in the region, and assessed and reported on developments relevant to these interests.

To provide a more intensive and specialised focus on advancing Australian interests in the region, an Office of Pacific Island Affairs was set up in the Department at branch level, replacing the former South Pacific Branch. This Office worked closely with Minister Bilney in implementing Australia's policies and managing its relationships in the South Pacific region.

Prime Minister Keating hosted and chaired the Brisbane South Pacific Forum. Subsequently, the Department, strengthened by the Prime Minister's role as Forum Chair for 1995, pursued Australia's interests through working closely and cooperatively with Forum governments and regional organisations to implement key Forum decisions to promote the sustainable and equitable management of natural resources, particularly fisheries and forestry, the rationalisation of regional airline operations and the improvement of national economic management.

As Forum Chair, Australia, through the Department, also took the lead, in close consultation with Forum members, in coordinating Forum countries' responses to France's announcement in June of its intention to resume nuclear testing on Mururoa Atoll. Forum governments welcomed Australia's leadership role.

The Department, in consultation with AusAID, worked to ensure that Australia's policy of constructive commitment was implemented in ways that substantially assisted Pacific island countries' development needs, particularly in resource management, environmental protection, health, education and public sector management. Australia was again the largest single aid donor to South Pacific countries, including Papua New Guinea, and conducted aid and defence cooperation programs in the region valued at $414.4 million (aid) and $53.2 million(defence).

The Department promoted Australia's policy of good governance in the region by providing practical assistance to Pacific island countries with the judiciary, law enforcement and industrial relations.

Australia, through the Department, gave special attention to briefing and consulting Pacific island governments on key international issues such as disarmament, trade liberalisation, environmental protection and human rights, encouraging their active involvement in these issues and their support for Australian positions and multilateral candidatures.

As the interest of traditional aid donors in the South Pacific continued to decline, the Department pursued the Australian policy of encouraging island countries to implement economic reforms, directed to seeking quality foreign investment necessary for sustainable long-term economic growth, and to capitalise more strongly on the economic buoyancy of the Asia Pacific region. After a review of the trade development provisions of the South Pacific Regional Trade and Economic Cooperation agreement (SPARTECA), the Department arranged an Australian contribution of $900 000 by AusAID for the establishment of a Foreign Investment Advisory Service office in Sydney to advise on investment promotion in the South Pacific region.

Pacific island countries were also encouraged to participate in the new international trading arrangements resulting from the conclusion of the GATT Uruguay Round. The Department helped Papua New Guinea and Solomon Islands with their accession arrangements when they joined the World Trade Organisation.

The Department ensured that regional governments were kept informed of developments in APEC and encouraged them to ensure that their trade policies were consistent with APEC principles to enable them to more readily access APEC markets, even though APEC is not at present accepting further members.

The Department worked to assist island countries to broaden and diversify their export capacity through a range of trade and investment development under SPARTECA and the Papua New Guinea-Australia Trade and Commercial Relations (PATCRA) agreements, and sought generally to promote economic and trade links with regional countries. South Pacific countries provided a ready market for Australian goods and services and opportunities for investment. Australia's trade with South Pacific countries, including PNG, continued to grow, with exports totalling $1824 million in 1994-95 and imports $1454 million.

In August, the Government initiated a series of projects, managed by the Department, to recognise the history and culture of Australian descendants of Pacific islander labourers brought to Australia last century to work in the sugar and pastoral industries. Two of these projects, an exhibition of South Sea Islander history and a cultural award scheme for Islanders to research family links and traditional culture in Pacific island countries, are being funded under the Australia South Pacific 2000 Program. This initiative was welcomed by Islander communities in Australia and by the governments of relevant island countries.

In November, Australia hosted resumed Ministerial talks with Fiji, the first since the military coups in 1987. The talks largely focused on bilateral trade. A key outcome was agreement that imports from Fiji could best be facilitated through encouraging maximum value-adding in Fiji. In support of the Government's policy of good governance, the Department, with the assistance of AusAID, arranged the allocation of $100 000 from the bilateral aid program to Fiji to support the constitutional review process.

The Department promoted Australia's interest as the Solomon Islands' largest aid donor in frank dialogue on the need for policies to ensure sustainable economic development, particularly in the forests sector. Some success was achieved, but further work will be necessary to achieve these objectives.

The Department cooperated closely with the Vanuatu government to encourage policies on taxation reform and sustainable forest management. The Vanuatu Prime Minister led a successful trade mission to Australia in March.

In response to opportunities created by a reduction of trade barriers in the French Pacific territories, the Department worked successfully with Austrade to assist Australian business to increase its market share for Australian goods in New Caledonia.

Regional organisations

Australia supported a range of South Pacific regional bodies, including the South Pacific Forum (the region's pre-eminent decision-making body), the South Pacific Commission, the Forum Fisheries Agency, the South Pacific Regional Environment Program (SPREP), and the South Pacific Applied Geoscience Commission (SOPAC).

The Australian delegation to the 34th South Pacific Conference held in October in Port Vila, Vanuatu, led by Mr Bilney, raised concerns about the management of the organisation, among other issues. Australia also nominated Dr Bob Dun, a former Director-General of the Australian International Development Assistance Bureau (AIDAB), for the position of Secretary-General of the South Pacific Commission, which becomes vacant in early 1996.

1.4.2 New Zealand and Papua New Guinea

New Zealand

Australia's relationship with New Zealand is its closest and most comprehensive, based on strong historical, security and economic links and shared perspectives and prospects in the wider Asian-Pacific community. Close cooperation and dialogue remains of the first order of importance to Australia, and the Department plays an important part in promoting it. New Zealand is Australia's third-largest trading partner and third-largest export market. The bilateral relationship encompasses a broad range of contact, including a number of Commonwealth and State Ministerial Councils.

Performance outcomes

A highlight of 1994-95 was the signing in January of a revised Double Taxation Agreement. The Agreement includes new provisions to take into account changes to both countries' tax legislation and reflects the growing integration of the two economies since the Australia New Zealand Closer Economic Relations Agreement (CER) came into force in 1983. The CER work agenda now focuses largely on 'third generation' trade issues such as harmonisation of food standards and mutual recognition of standards for goods and occupations. Good progress was made towards negotiating these agreements, which involve Commonwealth, State and Territory governments.

The Department was also involved in consultations with New Zealand officials aimed at developing cooperative trade and economic links between AFTA and CER. These consultations have been useful in identifying steps required to progress dialogue with ASEAN on this issue. The success of CER continues to attract interest from regional trade groupings around the globe.

Australia's Trade with New Zealand

The importance and management of Australia's relationship with New Zealand was demonstrated by the frequency of ministerial contact, formal and informal, during the year. Senator Evans had three rounds of talks on bilateral, regional and multilateral issues with his New Zealand counterpart in Canberra in August, Melbourne in February and Wellington in June. Senator McMullan met his New Zealand counterpart in Canberra in August and Christchurch in April to discuss bilateral and multilateral trade. Mr Bilney joined Senator Evans at the February meeting for a broad-ranging discussion of South Pacific issues.

In 1994-95, bilateral trade with New Zealand grew by 15.4% to $8.3 billion This rapid growth has consolidated New Zealand's position as one of the most important trading partners and export markets for Australia.

Papua New Guinea

The Department pursued strategies to promote a mature relationship which respects the sovereignty and national interests of each partner. Australia has an extensive commercial relationship with Papua New Guinea, including exports of almost $1 billion a year and foreign direct investment of $2.1 billion. Promoting economic and commercial links with PNG retained a high priority.

Performance outcomes

The government led by Sir Julius Chan which took office in September was confronted by a deepening economic crisis, and in late 1994 approached the IMF and the World Bank seeking macroeconomic stabilisation and structural adjustment packages. Australia strongly supported agreement on these programs as the only effective way to address major structural problems in PNG's economy, and provided bridging support totalling more than $100 million to that end. It is clearly in our mutual interests to support these efforts for significant economic policy reform in PNG.

Senator Evans, accompanied by Mr Bilney, led the Australian Ministerial Delegation to the seventh annual Australia-PNG Ministerial Forum in Melbourne in December. PNG's economic situation, Australia's program of development assistance, defence cooperation and a range of other matters of mutual interest were discussed. Agreement was reached on continuing action to fulfil commitments made at the 1994 South Pacific Forum; and on the establishment of guidelines and a framework of principles for the 1995 review of the Aid Treaty.

Annual economic and trade talks were held between officials of both governments in March to discuss issues of multilateral interest, such as APEC and GATT/WTO, and key bilateral trade issues. PNG affirmed its commitment to trade liberalisation as announced in the 1995 PNG national budget. Australia encouraged PNG to continue its efforts to improve trade competitiveness through the implementation of further structural and economic reforms and other fiscal initiatives. Australia pressed for prompt repayment of long-term outstanding debts owed by PNG government agencies to a number of Australian companies. Significant technical assistance and cooperation was given to help PNG, consistent with its government's commitment to build a more competitive economy, to join the World Trade Organisation.

Agreement between Australia and PNG to extend the 10-year moratorium on mining of the seabed in the Torres Strait Protected Zone, as established by the Torres Strait Treaty, was secured in early 1995. Bilateral discussions continue to determine the duration of the extension. An extension to the moratorium has been strongly supported by the traditional inhabitants of the Torres Strait.

Australia's long-standing efforts to assist where possible in the peaceful resolution of the conflict on Bougainville were most prominently reflected in Australia's training, support and overall command of the South Pacific Peace Keeping Force, deployed to Bougainville in October to facilitate the Arawa Peace Conference. Despite the failure of senior leaders of the Bougainville Revolutionary Army to attend, the conference gave a broad cross-section of Bougainvillean groups a chance to interact and to voice their desire for peace for the first time in years. Since the conference, the peace process has continued with the establishment of the Bougainville Transitional Government, and there has been a corresponding reduction in overall conflict. The delivery of development assistance to Bougainville is now a high priority, with Minister Bilney announcing in June a further $10 million in aid. Allocated aid to Bougainville under AusAID's Bougainville Restoration Program since 1991 totals $23 million.

1.4.3 Middle East and Africa

The Department continued to monitor closely developments in the Middle East, the Gulf region and Africa relating to its portfolio priorities, in particular, bilateral political, economic, trade and human rights issues.

The Middle East and Gulf Region

The Department's strategies were aimed at maintaining Australia's profile in the Middle East and the Gulf region through the continued efforts of its embassies in the region, through the exchange of high-level visits, and through involvement in relevant multilateral forums. These strategies included having Australia take an active role in the Middle East peace process through involvement in the Water Resources and Arms Control and Regional Security Working Groups, establishing a reputation for having a balanced and principled approach to the process. On the economic front, strategies were put in place to advance Australia's interests through joint ministerial commissions and ministerial visits to the Gulf states.

Performance outcomes

Middle East

The Government welcomed the peace treaty between Israel and Jordan, signed on 26 October, and condemned terrorist attacks against Israelis by extremist groups opposed to the peace process. Australia reaffirmed its views on the status of Jerusalem during a debate on the issue in the United Nations Security Council on 15 May. In the light of changes arising from the peace process, the Department conducted a thorough review of Australia's relations with Israel and adjoining Arab states.

Australia continued to urge the dismantling of the Arab economic boycott of Israel, both in bilateral representations throughout the region, and at the United Nations General Assembly. In December, the Government agreed to extend the term of the 26-member Australian Defence Force contingent to the Multinational Force and Observers for a further two years from January 1995.

The Government maintained a program of regular high-level political and diplomatic contact with the Middle East parties to develop bilateral links and convey support for a negotiated peace settlement. The Government announced that the Australian Embassy in Beirut would reopen on 18 July 1995. The Embassy had been closed since February 1984.

The Department continued to manage Australia's practical contribution to the peace process through participation in the multilateral working groups on Arms Control and Regional Security, and Water Resources. In the Arms Control-Regional Security working group, Australia was a leading contributor to discussions on the establishment of Regional Security Centres. In the Water Resources working group, Australia hosted a workshop on rainfall enhancement in April.

Australian exports to the Middle East (excluding Egypt) fell from $1.84 billion in 1993-94 to $1.31 billion in 1994-95. A rise in imports of 16.7% to $2.0 billion saw the balance of trade with the region change from a surplus of $147 million in 1993-94 to a deficit of $669 million in 1994-95.

Gulf region

The promotion of Australia's trade and commercial ties with the countries of the Gulf Cooperation Council remains a high priority for the Department. Senator McMullan led a business delegation to Saudi Arabia in April after first visiting in 1994 and advanced the claims of several Australian companies bidding for contracts. With some members of the business delegation, he also visited Bahrain, where he established contact with key Ministers and decision-makers and promoted Indian Ocean Rim initiatives.

The Department, in association with the Department of Primary Industry and Energy and industry groups, continued to work towards a resolution of the live sheep trade with Saudi Arabia, including the measures and procedures which might be put in place to meet Saudi requirements.

The sixth Joint Ministerial Commission meeting with Iran, organised by the Department, took place in Canberra in August . The meeting advanced commercial bids of Australian companies for major contracts in Iran. Protocols on sheepmeat and beef exports were finalised. An agreement on Agricultural Education Cooperation was signed between Iran and the University of Adelaide. Ministers took the opportunity to raise Australia's concerns about human rights practices in Iran and the continued perception in the West that Iran sponsors terrorism.

The Department and the Australian Embassy in Riyadh coordinated the successful participation by Saudi Arabia and the United Arab Emirates in NTIOC94. The International Forum on the Indian Ocean Region held in Perth in June also provided a significant opportunity for delegates from the GCC states, Yemen and Iran to examine the potential for expanded regional activities.

Africa

The Department's key strategies in 1994-95 were directed towards the promotion of economic reform to improve the material conditions of Africans and to encourage the development of export and investment markets for Australia. The Department encouraged the development of closer regional links through the 'Look West' policy and through its hosting of the International Forum on the Indian Ocean Region.

Australia also encouraged efforts to foster regional security in Africa by contributing to the processes of preventive diplomacy and peace building, and offered support to processes of democratic reform and good governance. The Department developed strategies to secure African support for Australian objectives in multilateral and international organisations.

Performance outcomes

After the inauguration of the Government of National Unity in South Africa in May, the Department made strong progress in broadening the scope of the bilateral relationship. A notable feature was the number of high-level visitors to Australia, including both Executive Deputy Presidents of South Africa, Mr F. W. de Klerk and Mr Thabo Mbeki; the Minister for Public Enterprises, Ms Stella Sigcau; and the Minister for Provincial Affairs and Constitutional Development, Mr Roelf Meyer. Ms Baleka Kgositsile, a prominent ANC member of Parliament, visited Australia in November under the Department's Special Visits Program.

The visits established valuable personal links between Australian political leaders and their new South African counterparts, and allowed public and private sector representatives in Australia to outline their capacity to help with South Africa's Reconstruction and Development Program. Bilateral institutional links were further strengthened when a South African parliamentary delegation visited Australia in June, and a Department officer began a one-year exchange in the South African Department of Foreign Affairs.

Senator McMullan became the first Australian Minister to visit post-apartheid South Africa when he led a trade delegation to South Africa, Mauritius and Zimbabwe in April. Discussions in each country provided him with an opportunity to give an up-to-date picture of Australian export capacities and to underline Australia's interest in increased cooperation between countries of the Indian Ocean region. In May, Senator Evans made official visits to South Africa, Madagascar, Mauritius and Seychelles. The outcome of his discussions with regional ministers provided valuable input to the Department's planning of its approach to the International Forum on the Indian Ocean, which was held in Perth in June.

The Department contributed to the successful holding of the first democratic elections in Mozambique in October. Acting under the auspices of the United Nations Operation in Mozambique (ONUMOZ) 18 Australians, drawn largely from the Department, monitored the polling. The Department made a major submission to the inquiry by the Joint Standing Committee on Foreign Affairs, Defence and Trade into Australia's relations with southern Africa and was represented on an Australian Parliamentary Delegation to Botswana, Namibia, South Africa and Zimbabwe. The tragic events in Burundi and Rwanda continued to occupy the Department's attention, especially given the presence of a 300-member Australian Defence Force medical team operating under the auspices of the United Nations International Mission in Rwanda. The Department also monitored the deteriorating political and human rights situation in Nigeria.

Australia's regional trade - South Pacific, Africa and Middle East


	EXPORTS			IMPORTS
	$m	Trend Growth		$m	Trend Growth
	1993-94	1994-95	90-91 to	1993-94	1994-95	90-91 to
			94-95			94-95
New Zealand
and Territories	4,013.0	4,772.3	17.4	3,202.0	3,554.2	13.8
Papua New
Guinea	954.4	929.3	4.5	1,295.8	1,124.1	17.5
Other Pacific
Islands	853.7	894.8	10.7	291.4	329.6	25.5
Middle East
(less Egypt)	1,840.8	1,308.3	0.6	1,693.7	1,977.2	6.5
Africa	600.0	800.4	19.3	339.0	406.2	30.1
TOTAL	8,262.0	8,705.2	11.7	6,821.9	7,391.2	13.1

Source: Compiled by the DFAT Statistical Services Section from data supplied by the ABS.

1.5 MULTILATERAL TRADE POLICY AND NEGOTIATIONS

Objective

Strengthen the multilateral trading framework and further liberalise global trade, including through the pursuit of a post-Uruguay Round agenda.

Description

Sub-program 1.5 is managed by the Department's Multilateral Trade Policy and Negotiations Division, which has four branches - Multilateral Trade Organisations, Services and Intellectual Property, Manufactures and Minerals, and Agriculture.

Performance summary

As part of the process of negotiated compromises arising from the Uruguay Round, Australia achieved key outcomes which were the focus of the Department's negotiating efforts in 1994-95. These included:

reinforcement for the outcomes of the Agreement on Trade-Related Aspects of Intellectual Property (TRIPs);
strengthening of the framework agreement for Trade-Related Investment Measures (TRIMs);
maintenance of an influential role for the Cairns Group in multilateral trade negotiations; and
work towards the completion of sectoral services agreements under the framework General Agreement on Trade in Services; and
the development of a strategic trade policy framework within which the Government's post-Uruguay Round trade policy initiatives would be developed. This is outlined in Winning Markets: Australia's Future in the Global Economy (see box).

Multilateral trading system

For a middle-sized trading nation like Australia, the multilateral system is crucial in providing protection against the harmful excesses of unilateral, bilateral and regional protectionist pressures. This involves a high level of consistent participation in the multilateral trading system and particularly in the establishment and monitoring of multilateral rules. By this means the extent of Australia's influence in the system is significantly increased at the multilateral level. This does not always guarantee the outcomes Australia is seeking, but it provides valuable trade-offs and generally better results than could be expected within the actual level of Australia's trade. Bilateral and regional approaches are used to mutually reinforce these multilateral approaches.

The Department is responsible for implementing Australia's commitment to continued strengthening of the multilateral trading system. Underpinning this commitment is the development of policy initiatives aimed at securing improved market access in international, regional, and bilateral forums to open up opportunities for Australian business. The Department also promotes the development of a broadly based export culture.

A major focus is the continued strengthening of the business liaison mechanism to keep industry well informed of commercial opportunities arising from the Government's negotiating efforts. To maintain understanding of industry's concerns on trade and investment issues, the Department has been looking to expand ways of liaising closely with key industry bodies and representatives throughout the Uruguay Round as well as during trade policy development at the multilateral, regional, bilateral, sectoral and industry levels.

The Department is responsible for advising other areas of the bureaucracy to ensure that domestic policy developments are consistent with Australia's international obligations. The Department collaborated closely with the Attorney-General's Department in the drafting, amendment and passage through parliament of legislation necessary for Australia to accept the World Trade Organisation in December 1994. This involved substantial work with a wide range of relevant departments and agencies on the implications for domestic policies and legislation arising from the outcomes of the Uruguay Round negotiations. Legislation covered patents, copyright, trade marks, customs tariffs, anti-dumping and countervailing duties, sales tax on citrus juices and dairy industry assistance arrangements.

Other recent examples of issues requiring policy advice include environment policy developments (such as domestic legislation on waste products in relation to the Basel Convention Commitments; national genetic resources policy; trade-related aspects of Biodiversity Convention), export market development arrangements, wholesale sales and excise taxes on raw materials and processed agricultural products and ensuring that revisions to the Australian Customs Tariff are consistent with Australia's WTO obligations.

A substantial contribution by Australia during the Uruguay Round of multilateral negotiations (September 1986-April 1994) resulted in outcomes which established a new framework of market access and rules. These provide Australian business with significantly improved market access opportunities by providing a fairer and more predictable environment for Australian exporters and investors. Publications by the Department have been designed to encourage Australian business to capitalise on improved trading conditions.

Australia needs to continue to be proactive in the setting of the agenda of the World Trade Organisation (WTO). At this stage in its development, the WTO offers excellent opportunities for Australia to contribute to the further development of the multilateral trade system, and maximise its influence there.

The Uruguay Round's 'in-built' agenda provides for follow-up negotiations in certain areas to pursue further market access opportunities, including agriculture and services. The Department is participating in the WTO work program on trade and the environment and in the debate on new multilateral trade issues such as regionalism; trade and labour; trade and culture; trade and competition policy; and trade and investment.

Trade policy agenda

The post-Uruguay Round multilateral trading system is much more complex than the range of activities conducted previously under the GATT. The Department has been closely involved in the arrangements for a smooth transition from the GATT to the WTO and to make it quickly operational.

The Department is closely involved in a work program which has undergone rapid expansion since the end of the Uruguay Round negotiations. This includes:

ensuring that Australia's interests are identified and effectively pursued in the residual activities of the GATT;
furthering specific Australian GATT/WTO interests such as the effectiveness of the dispute settlement system, compliance with the provisions of the WTO Agreements and implementation of Uruguay Round commitments, extensive participation in accession negotiations, continuing work on negotiations on services and on agriculture and phytosanitary measures;
participating in the WTO work program on trade and the environment and in the debate on new multilateral trade issues such as regionalism, trade and labour, trade and culture, trade and competition policy, and trade and investment; and
ensuring that initiatives developed in other multilateral/regional forums such as APEC, AFTA and CER are consistent with GATT/WTO outcomes.

Particular emphasis was given to maintaining and strengthening the commitment of the Cairns Group of agricultural traders to continuing agriculture reform through maintaining effective consultation and coordination on agricultural issues in Geneva. Developments in the United Nations Conference on Trade and Development (UNCTAD), the OECD and the United Nations Economic and Social Council (ECOSOC), including building up their analytical capacities, were also encouraged.

Multilateral trading system

Australia strengthened its influence on arrangements for the establishment and operation of the WTO and its subsidiary bodies. For example, during the selection of the Director General of the WTO, Australia was able to have agriculture specifically mentioned as a high priority for the Director General and as a high priority in any new multilateral round.

By consensus of the WTO members, Australia's Ambassador to the WTO was appointed as the first Chair of the Dispute Settlement Body. The strengthened dispute settlement system of the WTO will be important to its effective functioning and credibility. The Department has therefore sought to ensure that the working procedures of the Dispute Settlement Body are appropriate to the demands that will be placed on it in the resolution of disputes and that the integrity of its operations is enhanced through an ethical code of conduct for dispute settlement panelists.

Close consultation was maintained with Australian industry in the WTO dispute settlement consultations on the US-Japan auto dispute. Industry commended the Department's role in ensuring that Australian industry would not be disadvantaged. The US and Japan agreed to Australia's participation as an interested third party in the WTO consultations sought by Japan in relation to the US Section 301 announcement of punitive tariffs on Japanese luxury cars. The settlement of that dispute, on a non-discriminatory basis within the WTO framework, has reinforced the credibility of the WTO and can be compared with earlier bilateral arrangements on autos which had potential for trade diversion rather than trade expansion.

In conjunction with the Department of Administrative Services, the Department has started a major consultative work program with other Commonwealth and State and Territory agencies on the implications for Australia of the WTO Agreement on Government Procurement, of which Australia is not a member. The work program is aimed at examining the potential costs and benefits for Australian exporters, domestic suppliers and purchasing entities of possible membership (or continuing non-membership) of the Agreement. This exercise is without commitment to any decision the Government might subsequently take on Australia's attitude to the Agreement. A discussion paper has been prepared to facilitate the consultative processes, which are expected to continue throughout the remainder of 1995. No time limits have been set.

Australia's interests were advanced in the implementation of the institutional arrangements of the WTO. These included the General Council, the Goods Council, budget, financial and administration bodies, its relationship with international financial institutions, the satisfactory start to the implementation of the Agreements in Annex 1A (goods), and particularly the development of procedures under the Subsidies Agreement. Australia influenced the establishment of the Committee on Agriculture, and Sanitary and Phytosanitary Committees of the WTO and used them as vehicles for the effective implementation of Uruguay Round commitments in agriculture.

Agriculture

As the focus of multilateral agricultural trade policy has shifted from negotiations to implementation, strategies have been formulated to secure Australian interests. Australian approaches to the work program of the Cairns Group, to Australia's goals and objectives in the new WTO forums and to recent developments such as the enlargement of the European Union have been developed and refined.

Meetings of the WTO Committee on Agriculture (COA) and the Sanitary and Phytosanitary Committee (SPS) have been important opportunities for bedding down the new arrangements. The introduction of effective working procedures, including notification and monitoring for the committees, are fundamental to the successful implementation of the Uruguay Round outcomes. Australia has therefore given particular attention to ensuring that these issues are properly handled from the outset. It was especially important in the SPS to finalise a number of technical and definitional issues unresolved in the Uruguay Round agreement.

Australia will need to be especially vigilant to ensure that there is no circumvention of the Uruguay Round obligations on agriculture. Already the US and the European Union have implemented the first year of their export subsidy reduction programs in a way inconsistent with the spirit of the Uruguay Round Agreement on Agriculture. Australia and other members of the Cairns Group have taken up this issue in the COA. Australia also has serious concerns about the way in which the EU is operating its import regime for cereals, rice and dairy products in contradiction to its Round commitments. In each case, the conditions of access have been eroded and fall short of Australia's reasonable expectations. These issues are being taken up with the EU in the WTO.

As a result of Australia's initiative at the Cairns Group Ministerial meeting in Montevideo in 1994 to maintain the sense of common purpose among the members of the Group and the momentum of activities, Cairns Group members, particularly in Geneva, have played a major role in the development of effective rules in the COA and the SPS. There has also been close cooperation between members in the development of common approaches towards accession negotiations with China and Taiwan and on the implications for third countries of EU enlargement. Also at Australia's suggestion, the Cairns Group became closely involved in monitoring the implementation procedures being employed by the US, the European Union and Japan and the development of farm policies in the majors.

At the Cairns Group Ministerial meeting in Manila in May, Australia convinced the Group of the need to build on the momentum for further reform in agriculture and to ensure that agriculture will be a central element at the first World Trade Organisation Ministerial Review Conference in Singapore next year. The Singapore meeting represents an important opportunity for the Cairns Group to push for the earliest possible commencement of new negotiations on agriculture. The Cairns Group will develop negotiating goals before the next Cairns Group Ministerial Meeting in Colombia early next year.

The 1995 US Farm Bill, which is set in the context of Australia-US relations under sub-program 1.3, presents a landmark opportunity to influence US farm programs and to seek reductions in support and greater market orientation. Despite the Farm Bill being primarily a US domestic policy issue, Australia has identified a range of areas where it might be possible to influence the debate in the US on the bill. Australia hosted a Cairns Group seminar in Washington which highlighted the costs of current support programs to US taxpayers and consumers and the alternatives through which the US Administration could work towards reducing production in less trade-distorting ways. A separate seminar conducted by Australia aimed at Congressional staffers and featuring speakers from Australian industry and government proved useful in setting out Australia's experience with low levels of rural support. These efforts have made some ground in encouraging US policy makers to consider a much more radical rethink of farm support programs.

The most significant element of Australia's position in the negotiations on EU enlargement has been the discussions of proposals to incorporate the Uruguay Round commitments on agriculture by the three acceding countries of Finland, Austria and Sweden with the existing EU-12 commitments.

Australia's negotiation efforts are directed towards ensuring that compensation is made for the loss in Australia's existing trade in agricultural products resulting from the enlargement; to preserve the Round commitments made by the EU and the acceding countries on market access, domestic support and export subsidies; and to set down principles for issues not previously encountered which will apply in future enlargements.

Services

Particular effort was focused on negotiations aimed at completing sectoral service agreements under the General Agreement on Trade in Services (GATS). Australia's interests in the final stages of financial services and movement of natural persons negotiations, and in the early stages of telecommunications and maritime negotiations, were advanced through the successful pursuit of industry input which ensured industry concerns were reflected in Australian negotiating positions. Vigorous pursuit of Australia's interests ensured that regional participants were fully engaged and regional cooperation was maximised.

A continuing rise in the level of export awareness among Australian services producers was achieved through the Department's sponsorship and input to a major study, Intelligent Exports and the Silent Revolution in Services, which was released by the Prime Minister in September. The study identified the profile of successful service exporters, key markets and impediments to exporting. Many of its recommendations, including access to finance, telecommunications, education and training, were addressed in the Working Nation statement and in other Government policies. Results from the study have been successfully presented in bilateral Ministerial and trade discussions.

A framework for improved market access for services in major Asia Pacific markets was developed. A major submission was prepared for the Inquiry into Trade in Services by the Joint Standing Committee on Foreign Affairs, Defence and Trade (JSCFADT) which, inter alia, examined impediments to Australian services exports to Indonesia and Hong Kong.

Encouraging greater industry input in global services issues has been a key factor in the success of much of the work being undertaken. This has involved an effort by the Department to ensure that two-way consultative mechanisms are available. The Accountancy Market Access Committee (AMAC), a joint industry-government body initiated by DFAT, assists in developing Australia's position in the WTO and in addressing bilateral market access issues particularly in Asia. The Department produced a substantial submission to the AMAC which commissioned a study on impediments to access to the accountancy services market in Vietnam. In consultation with the International Legal Services Advisory Committee (ILSAC), Australia has made representations to the PRC Government about granting operating licences to Australian law firms.

The Department's input to the review of telecommunications policy post-1997 was aimed at ensuring consistency with WTO obligations, as was its contribution to the development of the National Information Services Council.

From January to July 1995, Australia was an active participant in the GATS negotiations on financial services. These concluded with an interim agreement, valid to December 1997, under which all WTO members except the US, accorded each other MFN treatment in the commitments they had made on their financial services sector.

Negotiations in the GATS on the Movement of Natural Persons involved DFAT in close consultation with the Department of Immigration and Ethnic Affairs, and to a lesser extent, the Department of Employment, Education and Training. These negotiations led to improved commitments by Australia on the temporary entry of certain categories of business people. The Department also lodged a submission with the Roach Committee of Inquiry into the temporary Entry of Business People and Highly Skilled Specialists, established by the Minister for Immigration and Ethnic Affairs. The Committee's recom-mendations were in keeping with a number of points raised by DFAT in its submission.

Intellectual property

Providing reinforcement for the outcomes of TRIPs has been a major preoccupation for Australia. This has been directed towards bringing intellectual property rules and disciplines into the multilateral trade framework with the aim of improving standards in the protection of intellectual property rights.

Australia hosted an APEC TRIPs seminar in Sydney in May. It was the first forum for APEC members to address intellectual property rights and cooperate on strengthening the regional IP infrastructure.

The seminar complemented Australia's involvement in the development of bilateral cooperation programs focused specifically on improving the intellectual property regimes of Indonesia, Thailand, Vietnam, China and the Philippines through training and exchanges of intellectual property specialists. Australia has also worked with the World Intellectual Property Organisation (WIPO) in its efforts to bolster regional IPR protection.

The Department has also been involved in domestic intellectual property considerations concerning parallel importation of sound recordings, performers rights, rental rights, intellectual property issues associated with computer software, and recommendations of the Copyright Convergence Group.

Investment

The Agreement for Trade-Related Investment Measures (TRIMs) is limited to an illustrative list of measures that are inconsistent with obligations of national treatment and the elimination of quantitative restrictions, but it does provide for a review of its operations to consider whether it should be complemented with provisions on investment policy and competition policy.

A strengthened multilateral framework agreement for TRIMs will help alleviate the level of uncertainty for Australian investment abroad by limiting the scope for foreign governments to attach trade-related onerous conditions to investment approvals or to link them to the receipt of other advantages.

Towards this objective, the Department has been involved in refocusing the discussion in the OECD on the development of a Multilateral Agreement on Investment (MAI) to reflect better the trade and economic benefits of securing improved access to the markets of Australia's trading partners. The importance of extending the Agreement to OECD non-member economies, particularly those in the dynamic Asia Pacific region, has been emphasised and reflects Australian business intentions.

Industrial goods and minerals

Starting on 1 January 1995, Uruguay Round participants began to implement reductions in tariff bindings, which are commitments not to increase import tariffs without negotiating compensation for other countries. There will be five equal reductions over a four-year period for most products; some sectors, such as textiles, have a 10-year implementation period. At the completion of the reductions, the trade-weighted average tariff faced by Australian exports to major trading partners will have been halved; and almost 50% of all Australian exports will have bound duty-free access to significant markets. With minor exceptions, Australia will meet virtually all of its commitments within the framework of the current program of phased tariff cuts initiated in 1991.

Australia welcomed the increased commitments to binding tariffs from developing countries but was disappointed at the level of ceiling bindings - setting tariffs at levels well above the applied tariffs. This was a particular concern for countries within the Asia Pacific region, where there were numerous ceiling bindings and sensitive sectors remained unbound. In future negotiations, Australia will try to ensure that in sensitive sectors such as motor vehicles and petrochemicals, tariffs are bound. This will provide a higher degree of security and predictability in market access.

The Department has been giving added emphasis to bilateral market access strategies. As Chair of the Processed Foods Market Access Committee and the Chemicals Market Access Committee, the Department pursued a broad range of market access barriers which impeded Australian exports in these sectors.

Responding to consultations with business on export support, the Department instituted an Export Barriers Reporting Scheme. This will make it easier for exporters who encounter export impediments to obtain help from the Department.

New trade issues

The Department has initiated programs to identify and pursue Australia's interests in the 'new' trade issues raised at the Marrakesh Ministerial Meeting of the WTO in April 1994 and since then. An important objective has been to ensure that debate on the issues, domestically and in international forums such as the OECD and WTO, is well informed and based on sound analysis.

For issues not established on the WTO agenda, the Department's efforts have concentrated largely on developing and promoting understanding of the issues and their trade implications for Australia, including debate in the OECD. As noted earlier, OECD members have agreed to negotiate a Multilateral Agreement on Investment and the organisation has a continuing analytical work program on the trade-related aspects of competition law and policy. These issues, which are also being discussed in APEC, could have significant market access implications and the Department will seek to maximise such opportunities for Australian exporters.

In December, Senator McMullan established a working party to examine ways Australia could promote and protect core labour standards in the Asia Pacific region. The Department, which provides the Secretariat to the Working Party, has coordinated the preparation of a combined DFAT-AusAID submission.

The work done by the Department in the OECD Trade and Environment Committee, UNCTAD and the WTO Committee on Trade and Environment is discussed in sub-program 1.7.2

At the third meeting of the Commission on Sustainable Development in New York in April, Cairns Group countries presented a paper on agricultural trade reform and sustainable agriculture. The paper, an Australian initiative, highlighted the contribution which agricultural trade liberalisation could make to facilitating sustainable development. The Cairns Group gained recognition of this contribution through the CSD decision on promoting sustainable agriculture.

Regional-multilateral trade linkages

Australia continues to be actively involved in the WTO process of examining the effects on the multilateral trading system of regional trading arrangements. The Department is seeking to ensure that regional arrangements are compatible with the multilateral system while seeking to advance trade liberalisation and rule-making, bilaterally and regionally, when it is efficient to do so. This has included continued scrutiny of regional agreements in the WTO and monitoring of developments which may affect Australia's interests either positively or adversely.

The Department has sought to ensure that policy towards regional initiatives of which Australia is part and which may affect it as a non-member, or proposals for new regional groups, contributes to the strengthening of the multilateral trading system. Areas where Australia's interests are being pursued include negotiations with the European Union on the effects on Australia of EU enlargement to include Finland, Austria and Sweden; the North American Free Trade Agreement; the early stages of the Free Trade Area of the Americas; developments in Latin America such as the Common Market of the Southern Cone (MERCOSUR), with which a CER link has also been proposed; and development of cooperative trade and economic links between AFTA and CER. Reflecting the successful initial efforts, AFTA-CER discussions have been elevated to ministerial level.

Accessions and market access

In 1994-95, Australia engaged in market access negotiations with a number of new members and countries seeking to join the WTO. These countries together account for around 10% of Australia's total exports of goods and services.

Advantages secured for Australia through this process included improvements in market access for exporters of goods and services, including specific products of current or potential commercial interest; commitments that market access will not deteriorate in the future; commitments on behalf of new members to adjust their economic and trade policies in a way which results in increased transparency and liberalisation; and an increase in the number of countries adhering to the international trading rules embodied in the WTO, and brought within the WTO's surveillance.

Negotiations were undertaken with PNG, Solomon Islands, Qatar, the United Arab Emirates, Bulgaria, Ecuador, China, Estonia, Mongolia, Panama and Taiwan. A further 20 countries are in the process of seeking membership of the WTO. Australia's Ambassador to the WTO was appointed to chair the WTO accession Working Parties for Armenia and Estonia.

To complement the program of bilateral reductions and arrangements associated with Uruguay Round outcomes, Australia took part in further negotiations with a number of trading partners. These negotiations reached improved access agreements with Canada on a country-specific quota of 42 000 tonnes for beef, and with Korea on access of 4000 tonnes of grain-fed beef to the wholesale market and an agreed negotiating strategy with industry on post-1995 access arrangements

Throughout the Uruguay Round, many of Australia's negotiating positions and assessment of the offers from other trading partners were based on evaluations carried out through the Trade Negotiations and Analysis System (TNAS) tariff data base. After the Round and taking account of new demands, for example from APEC, improvements were carried out on TNAS to provide timely, up-to-date information on tariff barriers.

Other institutional developments

A broad-ranging review of Australia's OECD involvement was conducted in 1994-95 to assess the benefits and costs of membership in the light of APEC and the WTO. This was the first such review since Australia joined the OECD in 1971. It concluded that the OECD remained a key international organisation of great value for Australia, despite concerns with aspects of its operations, the advent of APEC and the WTO, and the costs associated with membership.

Australia achieved some of its objectives at the 1995 Meeting of the OECD Council at Ministerial Level. These were to ensure strong communique references to trade liberalisation and their repetition in the G7 Communique; to put the conduct of the OECD's relations with non-members on a more careful and constructive footing; and to consolidate the central place of the OECD's core work.

Australia has been active in the OECD Chemical Group and Management Committee's work on the proposed Council Act on Lead (see international chemical safety issues in sub-program 1.7.2 for details).

Australia now participates in UNCTAD's Trade Point Program. This is a computer-based information system designed to provide exporters with easy access to key service providers relevant to developing exports. It is a gateway to global networking through an electronic link with other trade points around the world.

WINNING MARKETS: THE TRADE POLICY FRAMEWORK

The launch on 21 June by the Prime Minister of the Government's trade policy framework document, Winning Markets, addressed one of the four main pillars of its strategy to deal with Australia's current account deficit. Others are macro-economic policy settings, micro-economic reforms and industry policy.

It reviews trade policy against the major changes taking place within the global economy and Australia and recognises that it will need to be conducted within a consciously flexible and pragmatic framework. In doing so, the framework addresses three main areas:

securing market access;
providing value-added services to assist the efforts of exporters and potential exporters; and
building an export culture, and particularly tapping latest export potential.

Winning Markets introduces a more complex approach to the issues of MFN and preferential trade arrangements within APEC. While Australia's strong preference continues to be unconditional MFN, it may sometimes be able to secure better and faster access from preferential regional arrangements, as was the case with the CER.

It set out areas where government can most add value in improving Australia's trade performance. High priority is assigned to continued development of Australia's new exports strengths in manufactures and services, while ensuring the continuing contribution of its natural resource-based exports. The removal of border and other barriers to our exports of goods and services into the Asia Pacific remains an overwhelming priority. The Waning international support for multilateral trade liberalisation is also identified as a concern. An important policy priority will be to work vigorously to build support for an ambitious agenda for the WTO Singapore Ministerial Meeting in December 1996.

The announcement listed 10 support initiatives as part of the Winning Markets strategy. They include:

a new Austrade client services policy;
a parliamentary inquiry into airfreight services;
an export barrier reporting scheme;
establishment of a centre for the practice of international trade, with substantial private-sector backing, at Melbourne University's School of Business;
a trade policy training centre targeting ASEAN trade officials; and
an international conference on future directions for the multilateral system involving key international opinion leaders.

MAJOR COMMODITIES - EXPORTS &IMPORTS


EXPORTS $m (a)	Trend growth
1993-94		1994-95	Rank	1990-91 to
1994-95
Major markets
Japan	15 930	16 286	1	3.4
Korea, Rep	4 718	5 270	2	14.0
New Zealand	4 009	4 768	3	17.4
United States	5 075	4 633	4	-4.6
Singapore	3 207	3 649	5	5.7
Taiwan	2 757	3 098	6	10.5
China	2 590	2 958	7	24.0
Hong Kong	2 798	2 626	8	14.2
United Kingdom	2 902	2 267	9	9.3
Indonesia	1 906	2 099	10	9.2
Malaysia	1 759	2 040	11	21.2
Thailand	1 277	1 556	12	23.8
Italy	1 052	1 249	13	7.0
Canada	1 149	1 132	14	10.5
Germany	1 006	1 080	15	-0.4
India	865	974	16	9.4
Papua New Guinea	954	929	17	4.5
Philippines	699	838	18	17.5
France	792	793	19	-1.2
Netherlands	703	706	20	-8.8
Other	8 430	8 083	2.9
OECD	34 551	35 019	3.0
APEC	49 197	52 217	8.0

1993-94		1994-95	% share	Trend growth
1990-91 to
1994-95
Major commodities
Coal	7 180	6 886	10.3	2.1
Gold	5 295	4 820	7.2	8.5
Wool	3 210	3 871	5.8	4.0
Bovine meat	3 228	2 842	4.2	3.4
Iron ore	2 779	2 772	4.1	1.3
Major categories
Primary products	37 452	38 321	57.2	3.5
Unprocessed food	4 947	4 378	6.5	7.4
Processed food	8 723	8 958	13.4	11.0
Other rural	4 984	5 766	8.6	3.2
Minerals	7 673	7 971	11.9	-1.8
Fuels	11 126	11 248	16.8	1.2
Manufactures	20 124	22 314	33.3	13.1
Simply transformed	6 295	7 267	10.8	9.2
Elaborately transformed	13 829	15 047	22.4	15.2
TOTAL	64 578	67 036	100.0	6.7

(a) Merchandise exports fob, recorded trade basis.
Source: Compiled by the DFAT Statistical Services Section from data supplied by the ABS.

MAJOR MARKETS - EXPORTS &IMPORTS


IMPORTS $m (a)	Trend growth
1993-94		1994-95	Rank	1990-91 to
1994-95
Major Sources
United States	14 017	16 048	1	8.8
Japan	11 700	12 779	2	10.1
Germany	3 759	4 865	3	11.8
United Kingdom	3 698	4 439	4	8.0
China	3 120	3 651	5	25.0
New Zealand	3 201	3 554	6	13.8
Taiwan	2 362	2 570	7	9.9
Singapore	1 792	2 247	8	15.7
Korea, Rep	1 882	2 028	9	15.0
Italy	1 617	2 027	10	10.8
France	1 542	1 754	11	8.8
Sweden	1 072	1 426	12	16.7
Malaysia	1 103	1 421	13	17.0
Canada	1 055	1 277	14	9.5
Indonesia	1 105	1 197	15	10.0
Papua New Guinea	1 296	1 124	16	17.5
Switzerland	818	991	17	12.1
Thailand	794	970	18	16.3
Hong Kong	801	924	19	4.6
Saudi Arabia	593	750	20	-3.1
Other	7 140	8 594	14.4
OECD	45 648	53 240	10.3
APEC	44 819	50 464	11.4

Trend growth
1993-94		1994-95	% share	1990-91 to
1994-95
Major commodities
Passenger motor cars	3 455	4 357	5.8	18.0
Computers	2 631	3 235	4.3	15.1
Crude petroleum & oils	2 275	2 467	3.3	14.6
Telecommunications equipment	1 587	2 184	2.9	21.1
Computer parts &accessories	1 858	2 071	2.8	14.1
Major categories
Primary products	8 160	8 993	12.0	8.1
Unprocessed food	754	903	1.2	10.6
Processed food	2 394	2 658	3.6	9.9
Other rural	1 246	1 369	1.8	10.8
Minerals	282	351	0.5	7.6
Fuels	3 484	3 711	5.0	5.7
Manufactures	55 121	64 578	86.5	12.2
Simply transformed	6 966	8 115	10.9	9.7
Elaborately transformed	48 155	56 463	75.6	12.5
TOTAL	64 470	74 638	100.0	11.4

(a) Merchandise imports fob, recorded trade basis.
Source: Compiled by the DFAT Statistical Services Section from data supplied by the ABS.

1.6 TRADE STRATEGY DEVELOPMENT AND BUSINESS LIAISON

Objectives

Strengthen APEC as the pre-eminent forum for economic cooperation and trade liberalisation in the Asia Pacific region, including through the development of cooperative working relationships with other key APEC members.
Broaden and deepen APEC's economic cooperation agenda, par-ticularly in the area of trade and investment, enhance the operational efficiency of the organisation and foster an environment conducive to regional business activity.
Promote government economic policy settings and reforms aimed at improving Australia's international competitiveness.
Provide analysis and advice to the Government on domestic im-pediments to growth in trade.
Provide advice to ministers and the Department on developments in the global, regional and domestic economies.
Advance the Team Australia concept through development of the National Trade Strategy Consultative Process.
Build more effective policy links with business.
Maintain access of the business community to commercially useful information and statistics through country economic briefs, statistical services and other publications.

Description

Sub-program 1.6 is managed by the Economic and Trade Development Division, which has four branches - Asia Pacific Cooperation (APEC); International Competitiveness; Trade Analysis; and National Trade Strategy and Business Affairs. Overseas posts contributed significantly to the sub-program, particularly through economic reporting and in the work of the APEC Branch. The Department's regional offices played an important role in relations with Australian business and the wider community.

Performance summary

Major expansion and deepening of APEC through the Bogor leaders' meeting, including commitment of APEC members to free and open trade and investment in the region.
Strong input into strategies to implement effectively the Bogor Declaration in the lead-up to the Osaka leaders' meeting.
An independent evaluation of the National Trade and Investment Outlook Conference (NTIOC94) found overwhelming business support for the conference and estimated it generated $135 million in new business over the following 12 months.
Advancement of the Team Australia concept, in particular through the agreement of State and Territory ministers to structure their individual market development activities under a framework of agreed national trade and investment priorities covering trade competitiveness, market access and market development.
Increased interchange of views between business and the Department on policy issues and service delivery, and a strengthened business-support culture within the Department.
Expanded commercial and foreign relations links through targeted initiatives with regional developing countries and Australian business.
The publishing of more-detailed analyses of trade and investment developments, including bilateral trade flows and market penetration.
Expanded business access to bilateral trade and economic statistics through, for example, the release of the new Economies at a Glance publications.
Key research and analysis into the implications of globalisation and other international developments on the structure and performance of the Australian economy.
Development of a sophisticated research-based capacity to provide extensive policy advice on economic and environment issues affecting Australia's international competitiveness, particularly in relation to continuing negotiations under the Framework Convention on Climate Change.

Asia Pacific Economic Cooperation (APEC)

The Department continued to place high priority on the successful development of APEC, given its potential to advance Australia's regional and global national interests. Policy aims at developing a deeper sense of regional community and at improving economic relationships between East Asia and North America.

Australia has also pressed strongly for further trade and investment liberalisation and facilitation within the region, aimed at sustaining rapid regional growth and further developing commercial links.

The year was historic for APEC. The Bogor Meeting of Economic Leaders in November set in train a further deepening and expansion of APEC as a regional forum, in which the Department played a key role. Since then, it has worked closely with economies in the region to prepare an Action Agenda to implement the Bogor Declaration.

At Bogor, APEC leaders committed themselves to achieving free and open trade and investment in the region, with industrialised economies achieving this goal by 2010 and developing economies by 2020. The Declaration has made trade and investment liberalisation the centre of APEC's future work. APEC leaders also agreed to cooperate in implementing and accelerating Uruguay Round outcomes; try to refrain from increasing levels of protection in the region; expand and accelerate APEC's efforts to facilitate trade and investment; and intensify APEC's economic cooperation in such areas as human resources development, infrastructure and small and medium enterprises.

In the period leading to Bogor, the Department worked to create the environment for a strong outcome including representing Australia at APEC officials' meetings, networking closely with key APEC economies such as Indonesia, and providing advice and assistance to the Prime Minister, ministers and other departments. However, the Bogor Declaration was also, in many ways, an outgrowth of earlier strategies developed by Australia. Direct involvement by APEC leaders, initially proposed by Prime Minister Keating and advanced with the support of the Department in 1992 and 1993, was critical. The Eminent Persons Group, established in 1992 as a result of an Australian initiative, made an important contribution by setting out a long-term vision for APEC's development which included free and open trade. The Pacific Business Forum, created by APEC leaders in Seattle, also played a valuable role.

The Sixth APEC Ministerial Meeting, which took place in Jakarta immediately before the leaders' meeting, was an important step forward. Among other outcomes, APEC ministers:

approved a strong work program on trade and investment for APEC in the following year (including the addition of competition policy to APEC's agenda);
adopted a set of APEC non-binding investment principles (initially proposed by Prime Minister Keating);
adopted a framework for further work on human resources development and endorsed a program for work on infrastructure;
strengthened APEC's institutional capacity to address customs and standards harmonisation by creating new sub-committees of the Committee on Trade and Investment to deal with these issues; and
considered reports by the Eminent Persons Group and the Pacific Business Forum.

Australia's representatives were Senator Evans and Senator McMullan. Australia also played an important part in an earlier meeting of APEC Trade Ministers held in Jakarta in October and attended by Senator McMullan.

After the APEC leaders' meeting, the Department played a leading role in generating regional support for the approach favoured by Australia under which economies would implement Bogor on the basis of a mixture of individual action (subject to common guidelines to ensure fair and balanced liberalisation) and collective action (where a greater degree of common action is appropriate, including areas such as standards and customs). APEC economies appeared to have moved a long way towards achieving consensus on this approach by mid-1995 after APEC officials' meetings in Fukuoka in February, Singapore in April and Sapporo in June and July.

Significant progress was made in developing stronger cooperation within APEC in a number of other areas which have the potential to strengthen further its role as a forum. This has been reflected in meetings involving other portfolios. For example, APEC finance ministers met in April for the second time; telecommunications and information industry ministers met in May; and transport ministers met in June. Australia was host for a second meeting of ministers with responsibility for small and medium enterprises in September 1995. Australia has also played an active role in areas such as energy and human resources development, which have been a focus of APEC's work for several years.

The Department has continued to place high priority on attaining early results for the business community. It worked to ensure that trade liberalisation under Bogor would begin at an early date, with substantial contributions from all economies. Australia also placed emphasis on achieving benefits from accelerating Uruguay Round outcomes and sought effective measures on standards and customs harmonisation, where different procedures in the APEC community add significantly to costs. By mid-1995, progress had been made in all these areas. The Department established a dedicated committee of the Trade Policy Advisory Council to provide a mechanism for regular exchanges of views with business and the union movement on APEC and to obtain business and union input into policy development. Other consultations with the business community were undertaken throughout the year.

Trade and investment development

The National Trade and Investment Outlook Conference - first convened by the Department in November 1993 in response to the McKinsey Study on Emerging Exporters identifying the need to promote a stronger export culture in Australian business - was held again in Melbourne from 6-8 December under the banner 'Creating Networks for Global Business'.

NTIOC94 was attended by 1300 Australian and international government and business representatives. NTIOC sponsored the visits of 150 international business representatives from China, France, Hong Kong, India, Indonesia, Kansai (Japan), Korea, Malaysia, Mexico, the Philippines, Saudi Arabia and the UAE, US, Singapore, Switzerland, Thailand and Vietnam. The visitors undertook individually tailored national business programs to showcase Australian competitiveness and industry capabilities and to provide opportunities for new business. An independent survey of Australian business people who attended NTIOC94 conducted by Roy Morgan and Associates found that 94% considered it successful, 77% wanted the event held annually and 50% expected new export business as a direct result of their networking there. There was a five-fold increase in sponsorship in 1994, and a further 50% increase for NTIOC95. Business sponsorship now represents almost a quarter of the conference budget. Attendance registrations are also rising.

NTIOC has become a major trade and investment event in the Asia Pacific region and will be held annually in Melbourne until 1997. NTIOC95 will be held from 4-6 December 1995. The steering committee for NTIOC is chaired by the Special Trade Representative, Mr Button, and includes senior Australian business representatives and delegates from Australian Government agencies. The NTIOC secretariat is in the Department of Foreign Affairs and Trade, Canberra.

The Trade and Investment Promotion Service (TIPS) continued to help developing countries facilitate trade and investment promotion. It provided $2.83 million for activities through the trade development component of AusAID's development cooperation program. TIPS is focusing increasingly on expanding Australia's direct investment in developing countries, particularly in the Asia Pacific, to help promote Australia's economic integration into the region.

Ministers approved a three-year strategic program during the year involving investment missions to and from Australia, buyers' missions, market entry strategy programs and formal training for developing countries. TIPS worked closely with Austrade, AusAID and Australian business in the implementation of the program.

This year's program has yielded significant commercial results, including joint ventures in industry sectors such as food processing, computers, infrastructure, environmental waste, port expansion and aquaculture.

In the area of trade finance, the Department contributed to the work of the Export Finance and Insurance Corporation, EFIC (the Secretary is on the EFIC board), which provides finance and insurance services to support the export of goods and services from Australia and the insurance of certain risks of direct investment overseas. As well as bringing foreign and trade policy perspectives to bear in decision making by the EFIC board, the Department drew on its expertise to assist in assessment of country risk. The Department has been an active participant in the National Interest interdepartmental committee which considered applications for support referred to the Government by EFIC. In doing so, the Department has sought to encourage prudent use of the National Interest Account and the setting of premiums which are appropriate for the level of risk.

The Department participated in successful negotiations with Cuba on the rollover of its outstanding debt to Australia. The Agreement reached between EFIC and the Banco Nacional de Cuba provides for the repayment of the full amount of outstanding principal and interest ($14.545 million) in return for the provision by EFIC of an equivalent amount of new credit.

The Department continued to work with other departments in the scrutiny of proposals seeking tied aid support and in ensuring continued effective operation of OECD rules aimed at limiting the aid and trade-distorting effects of tied aid credits. The rules are limiting the use of tied aid credits to projects that are 'commercially non-viable'. The Department has also participated in internal reviews of the operation of AusAID's Development Import Finance Facility.

Trade development was supported through Australia's membership of the United Nations Industrial Development Organisation (UNIDO). The UNIDO Inter-Agency Consultative Group, chaired by DFAT and comprising representatives of other departments and agencies, as well as the Australian consultant to UNIDO, met several times during the year to assess and promote involvement by Australia in UNIDO activities. Extensive efforts were made to involve Australian industry in UNIDO projects being undertaken under the Montreal Protocol to eliminate ozone-depleting substances.

International competitiveness

The Department, recognising the overriding need for Australia to maintain and enhance its international competitiveness and its capacity to adapt to ensure its economic well-being, has increased its capacity to undertake economic research and analysis into factors affecting the internationalisation and cost structure of the economy.

The Department has played an important role in promoting economic policy settings aimed at strengthening the economy and reducing the impediments to the competitiveness of Australian industry. It provided trade policy advice on all aspects of the Government's microeconomic reform and structural adjustment agenda, including areas such as the finalisation of the National Competition Policy reforms and follow-up to the Karpin Report. It also provided background contributions and analysis of international trade and investment developments to the forthcoming Innovation Statement.

The Department researched the implications of the globalisation of the world economy for Australian small and medium enterprises (SMEs). This research, Winning Enterprises: How Australia's Small and Medium Enterprises Compete in Global Markets, was released by Senator McMullan in June. The study examined the performance of Australian SMEs in international markets and highlighted the opportunities and challenges of the global economy which are making the international option more attractive for them. The study was well received by business and demand for copies has been strong. A series of seminars in state capitals has been arranged to inform interested SMEs on the key findings.

A Department study, Trade and Competition Policy: A Survey of the Issues, examined the potential for competition policy to complement trade liberalisation by creating and maintaining open and accessible markets. The study aims to raise awareness of the issue and to encourage discussion within government, business and the wider community on trade and competition policy and contribute to the evolving international debate.

The Department and the Australian Bureau of Agricultural and Resource Economics (ABARE) started a major study to assess the trade, economic and environmental impacts of possible measures to limit greenhouse gas emissions. The expanding international environment agenda, particularly developments under the Framework Convention on Climate Change (FCCC) and the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (Basel Convention), has potentially significant implications for Australia's competitiveness and the trade performance of Australian industry.

The DFAT-ABARE research project is one of the inputs designed to help Australia prepare for the next phase of negotiations on climate change which will deal with commitments beyond 2000, to take place under the mandate agreed in Berlin. The Berlin mandate recognised that the assessment and analysis of possible policies and measures for achieving global reductions in greenhouse emissions were important if the environmental objectives of the Convention were to be achieved in a cost-effective and equitable way. The DFAT-ABARE study will examine ways in which reductions in emissions may be achieved which minimise the global costs and promote the equitable sharing of these costs. Research of this kind will assist in ensuring that the analytical phase of the mandate negotiations is fully effective.

The Department was involved in the development of the Government's domestic greenhouse response strategy, Greenhouse 21C, to ensure that the trade and competitiveness implications of response measures such as the proposal to introduce an environment levy were fully analysed and assessed. The Department also worked to ensure that the Government's 21C package was consistent with strengthening the competitiveness of Australian industry, for example by emphasising continuing microeconomic reform in the energy sector and encouraging cooperative arrangements between government and industry to limit emissions of greenhouse gases, and that the package recognised the contribution of Australia's technological expertise to environmentally sound development in the Asia Pacific region.

On the Basel Convention, the Department worked closely with other agencies and industry to ensure that the Government's consideration of the amendments required to domestic legislation - the Hazardous Waste (Regulation of Exports and Imports) Act 1989 - included a full appreciation and understanding of Australia's trade and economic interests.

The Department followed up the decision of the second Conference of Parties to the Basel Convention to ban by 31 December 1997 exports of hazardous waste for recycling or recovery from OECD to non-OECD states. Consultations with regional trading partners were held to obtain a clearer understanding of the extent and current trade in recycling. The Department also strongly supported efforts to undertake the technical and other work necessary to define clearly what constitutes hazardous waste and so reduce uncertainties and improve the effectiveness and operation of the Convention.

Global, regional and domestic economic advice

The Department continued to monitor and analyse factors which have an important bearing on Australia's trade, including macroeconomic developments and the underlying structure of economies. It undertook a detailed analysis of the extent of complementarity between the Australian and US economies as a driving force in that bilateral trading relationship. Assessments were made of the balance of payments implications of developments in financial markets and the economies of Australia's major trading partners, and the Department worked with the Australian Bureau of Statistics to assess the changing pattern of Australian investment abroad. The Department's Economic and Trade Review included surveys of the economic developments and outlook of major East Asian countries, the Australian economy, trade and investment and the economic outlook for the OECD. Preparation was also begun for a restyled Economic and Trade Review focusing on analysis of international trading relations and Australia's trade and investment relationships with the world.

With AusAID and Treasury, the Department continued to provide advice on political, economic and trade issues associated with Australia's membership of the World Bank, the International Monetary Fund, the European Bank for Reconstruction and Development and the Asian Development Bank. In particular, the Department has been active in formulating Australia's position over their dealings with Papua New Guinea.

Trade strategy and coordination activity (Team Australia)

Significant progress was made during the year to advance the Team Australia concept of Australians working together to capture global market opportunities and position Australia in the front rank of exporting economies by early next century. The Team Australia consultative process is underpinned by annual meetings of Commonwealth, State and Territory ministers responsible for international trade and business development, and more regular intersessional consultations involving government officials, peak industry associations and the trade union movement.

Intersessional meetings were held in August and March, leading to a Team Australia Ministerial forum which met in Canberra in April under the chairmanship of Senator McMullan. At that meeting, ministers reaffirmed their commitment to a team approach to lifting Australia's trade and investment performance and agreed that sustained economic growth will be achieved only if Australia improves its international competitiveness. They endorsed a set of national trade and investment priorities for 1995-96 covering international competitiveness, market access and market development and agreed to structure their individual market development activities under that framework.

The Ministerial forum also endorsed the Australian Trade and Investment Development Guide (TRAID) - the key working document of the Team Australia process - as a valuable resource for government and business. The 1995 edition of TRAID was launched by the Minister for Trade in December, coinciding with NTIOC94. The Guide draws together information from a broad range of Commonwealth agencies, State government departments, peak industry organisations and the union movement. It features trade and investment promotion strategies for 30 key markets, sectoral strategies for 45 commodity, manufacturing and service industries, and provides details of Government programs to facilitate enterprise development and export.

The portfolio worked closely with the Department of Industry, Science and Technology under the framework of the National Board of Industry, Trade and Investment (NBITI), an initiative of the 1994 Working Nation statement. Underlying the establishment of NBITI is the Government's commitment to strengthening the integration of industry development, trade and investment promotion and export facilitation to enhance export orientation across Australian industry. The board held four meetings during the year. Its priority has been the development, in conjunction with industry, of strategies to advance the export performance of particular sectors. Initial work has been carried out on the multimedia, petrochemicals and plastics, information technology and automotive industries.

The portfolio continued to work closely with other Commonwealth agencies through the Standing Interdepartmental Committee on Trade-Related Activities and Programs. The committee, chaired by DFAT, has 12 Commonwealth agencies with an interest or involvement in trade-related activity. It was established by the Government in 1993 to coordinate forward planning of trade activities and major trade-related programs across Commonwealth portfolios. The IDC held four meetings during the year and proved a valuable mechanism for officials to canvass trade-related activities and programs, minimise duplication and overlap and generally to enhance interagency cooperation.

Policy links with business

The Trade Policy Advisory Council is the Minister for Trade's peak advisory body on trade policy. The council met four times during the year and provided private sector advice on a wide range of policy issues, including NTIOC, the Winning Markets review of trade policy, a review of Australia's trade relations with the US, and Australia's export outlook. The feedback and views provided by Council members formed a valuable component in government consideration of trade policy.

The council had discussions on the Government's objectives for the Bogor APEC leaders' meeting with the Prime Minister; on commercial opportunities arising from Australia's development assistance program with Mr Bilney; and on the lead-up to the Budget with the Minister for Finance, Mr Beazley.

The Department also sought to enhance its links with business through the continuing programs of the Business Affairs Unit (BAU), established in 1993. Its activities in 1994-95 included coordinating a program of policy seminars for business covering trade and environment, APEC, economic integration in the Americas and Law of the Sea issues; organising a regular program of high-level contact with business and peak industry bodies, including East Asian heads of mission and the National Farmers Federation; publishing a Foreign Affairs and Trade Business Directory outlining services provided by the portfolio to business; introducing improved arrangements for minister-led overseas business missions; and strengthening the business support culture in the Department through the establishment of a business awareness training course for staff.

The BAU worked closely with the Department's regional offices, which are usually the first point of contact with the business community. Regional offices have significantly expanded their business networks, organising business participation in overseas minister-led trade missions, and well attended policy seminars during the year.

Business access to economic information

The Department continued to enhance the analytical and statistical content of its publications and through them contributed significantly to research on exports. Publications released included a comprehensive study of the characteristics of manufacturing exporters. The study, which received wide media coverage, disclosed that more than one in eight of Australia's manufacturing units was involved in exporting, and that the exporting units were more productive and invested more than corresponding non-exporting units.

The Department, in conjunction with the ANZ Bank, Austrade, and the Queensland Department of Primary Industry, also developed a new publication series, Economies at a Glance, to provide a brief, easily understood source of information on the economies of important trading partners. The series released in 1994-95 covers 15 key trading partners in the immediate region and it is planned to expand the series during 1995-96.

The Country Economic Brief series of publications, however, remained the Department's main medium for disseminating bilateral economic and trade information. In 1994-95, Country Economic Briefs covered 31 countries, mainly in the Asian region. About 10 000 copies were sold, generating a gross revenue of nearly $250 000, an increase of 6% on 1993-94. The most popular titles continued to be Indonesia, China and Vietnam.

In addition to the Country Economic Briefs, publications included more than 1100 subscriptions for the major statistical publication, Composition of Trade, which has about 300 pages of trade statistical tabulations. When taken in conjunction with work for Austrade, private sector demand accounts for around three-quarters of all inquiries for publications.

At the end of 1994-95, the Department discontinued its Cable Subscription Service because of limited subscriber interest. The goals of this service can be achieved instead through the Department's newsletter Asialine.

1.7 GLOBAL ISSUES

Objectives

Enhance the regional security environment based on acceptance of cooperative security approaches in our region.
Limit the proliferation of nuclear and other weapons of mass destruction and missile delivery systems, particularly in our region.
Strengthen the effectiveness of the United Nations in cooperative security arrangements.
Promote solutions to international environmental issues consistent with Australia's economic and environmental interests.
Advance Australia's interests through strengthening the effectiveness of international organisations in political, social and humanitarian issues.

Description

This sub-program is the responsibility of two branches in the International Organisations and Legal Division - International Organisations and Environment and Antarctica - and three branches of the International Security Division - Nuclear Policy, Peace Arms Control and Disarmament, and Strategic Assessments. The range of responsibilities of the Legal Division is set out in sub-program 1.8.

Performance summary

Australia's contribution as a valuable and seriously committed member of the UN was given international recognition by the visit of the Secretary-General. Particular areas of Australian contribution to the process of UN reform are preventive diplomacy, UN funding and administration and peace keeping reform.
The campaign for Australia's election to the Security Council seat in 1996 was launched.
An activist position was sustained on human rights, with achievements in the Commission on Human Rights on Myanmar and Cambodia, the rights of women in the context of the Beijing conference, and the rights of indigenous peoples.
Australian objectives in the environment area were largely achieved in relation to the Framework Convention of Climate Change, by progress on the Convention of Biological Diversity, by the completion of the Desertification Convention, by useful achievements in the Commission on Sustainable Development, and the successful launching of the International Coral Reef Initiative.
The maintenance of a key role by Australia in the Antarctic Treaty System was secured, and important conservation measures were advanced in relation to Antarctic fisheries and the Southern Ocean Whale Sanctuary.
Key opportunities were seized to advance Australia's goals of nuclear non-proliferation and enhanced regional security arrangements, particularly a major and successful contribution to securing indefinite extension of the Nuclear Non-Proliferation Treaty (NPT), and taking full advantage of negotiations in Geneva to contribute significantly to the earliest possible conclusion of a Comprehensive Test Ban Treaty (CTBT).
A major and central Australian objective on regional security was realised with the inaugural meeting of the ASEAN Regional Forum (ARF), followed by the first ARF intersessional seminar in Canberra.
Good progress was made in the promotion of the Chemical Weapons Convention; in moving towards a strengthened Biological Weapons Convention; in international efforts to limit the use and availability of anti-personnel land mines.

1.7.1 International organisations

United Nations

Senator Evans, in his capacity as Chair of Australia's National Committee for the commemoration of the 50th anniversary of the United Nations, launched the Australian program of activities in October. The program focused attention on the achievements of the UN, how it should respond to the challenges facing it in the 21st century and the relationship between Australia and the UN.

A wide range of activities was organised to commemorate the anniversary. The Department instigated the release of a commemorative stamp and a circulating 20¢ coin. An exhibition titled 'Jessie Street and the Foundation of the United Nations', which highlighted the significant role she played as the only woman member of the Australian delegation at the founding conference in San Francisco in 1945, was held at the National Library in Canberra.

A central element of Australia's program of activities was a series of major conferences designed to stimulate debate and serious thinking on the UN's role and performance and to develop new ideas on its future. The Department made available $80 000 to meet the National Committee's recommendation to provide seed funding for several conferences in capital cities. The United Nations Association of Australia coordinated a speaking program by members of the National Committee and officers of the Department, and the preparation of a booklet containing answers to questions most commonly raised about the United Nations. Funding for these activities has also been provided by the Department.

A highlight of the anniversary was the visit of Secretary-General Boutros Boutros-Ghali to Australia in April. The visit provided an excellent opportunity to raise awareness and understanding of the UN in Australia and to advance the range of Australia's interests in the UN. A number of other senior UN officials and representatives were invited to Australia for events throughout the anniversary year.

Australia's Permanent Representative to the UN chaired the United Nations Preparatory Committee for the Anniversary. The committee organised many commemorative activities and drafted an Anniversary Declaration to be adopted by heads of state and government at their summit meeting in New York on 24 October - United Nations Day.

UN reform

Work on UN reform intensified during the 50th Anniversary year, with a marked increase in reform proposals from within and outside the UN. These focused on international peace and security, the economic and social sectors, and UN funding and administration. The Department's input to this reform agenda was extensive. The key areas to which Australia gave priority were preventive diplomacy, UN funding and administration and peace keeping reform.

Preventive diplomacy

Australia drafted a resolution on peace building and preventive diplomacy which sought to strengthen the UN's capacity to identify and resolve disputes at an early stage of their development. This included proposals for enabling the UN to offer a dispute resolution service to its members, providing skilled third-party assistance through good offices and mediation and implementing a range of non-coercive, non-military responses to security problems. The draft resolution also recognises the importance of regional organisations in preventing disputes.

The UN Secretary General's Supplement to 'An Agenda for Peace', released on 3 January, provided a further opportunity to pursue preventive diplomacy initiatives. The General Assembly established a working group on the supplement in April, and Australia was invited to coordinate the sub-group on Preventive Diplomacy and Peace Making. Initiatives in prevention of conflict were also pursued within the Asia Pacific region when Australia presented a paper advocating the establishment of a regional centre for conflict prevention at the ASEAN Regional Forum inter-sessional seminar on preventive diplomacy held in Seoul in May.

UN funding and administration

At the 49th session of the UN General Assembly, the Fifth Committee on administrative and budgetary issues adopted a core budget outline for 1996-97 which reflected zero real growth, as well as reforms strongly advocated by Australia. These will improve the preparation, review and approval of peace keeping budgets.

The Australian delegation drafted and coordinated one of the key resolutions approving a comprehensive human resources management strategy for the UN Secretariat. This supports the most concerted efforts yet to introduce modern personnel practices into the UN Secretariat. Australia also supported initiatives to find ways of improving the financial situation of the UN, including the establishment of a high-level working group which reported to the Secretary-General by the end of UNGA 49. A new scale of assessments was adopted for the period 1995-1997. As a result, Australia's share of UN core budget and peace keeping payments will go down slightly from 1.51% to 1.46% in 1995 and 1.48% in 1996 and 1997, generating savings of around $7 million for the two-year period.

As part of the reform process, Australia advised several UN agencies on ways to improve the transparency of budgets and programs, the need to establish corporate plans which incorporate program objectives, priorities, resource requirements, performance indicators, management and information reporting systems and program evaluation. Other members of the so-called 'Geneva Group', an informal grouping of governments dedicated to management reform in the UN system, participated in this process. Direct action at meetings of governing bodies in the form of resolutions calling for better management practices for the agencies has also been a significant activity which has helped to achieve positive outcomes. These include the adoption of a strategic plan for the International Telecommunications Union (ITU), a re-examination of the World Health Organisation(WHO) constitution to ensure that the organisation is able to function through to the 21st century and the achievement of significant budgetary reform in the WHO.

The establishment of the United Nations Joint and Co-sponsored Program on HIV/AIDS (UNAIDS), which is to be operational on 1 January 1996, was a major achievement on the reform agenda. The program will coordinate multilateral activity on AIDS issues, achieving a new approach to coordination between and among the United Nations agencies and the member states. The successful establishment of UNAIDS is widely regarded as an important test of the ability of the Economic and Social Council (ECOSOC) to coordinate programs within the United Nations system.

UN peace keeping

The UN continued to face challenges in planning for, and managing, about 17 peace keeping operations and maintaining about 60 000 personnel in the field. The UN Operation in Mozambique (ONUMOZ) was brought to a conclusion in January after assisting the conduct of democratic elections in late October. The UN Observer Mission in El Salvador (ONUSAL), one of the UN's other success stories, was terminated in April. The optimistic note set by these two successful operations was tempered by the decision of the UN Security Council to close the UN operation in Somalia (UNOSOM) and the problems faced in other operations, such as in the former Yugoslavia.

The ADF continued to be represented in the UN Truce Supervision Organisation (UNTSO) in the Middle East and the AFP continued its long-term commitment to the UN Peace keeping Force in Cyprus (UNFICYP). The ADF's major peace keeping contribution during the period was the deployment in August of a medical support group of more than 300 personnel to provide medical services to members of the UN Assistance Mission in Rwanda (UNAMIR) and to use any excess capacity to provide humanitarian care to the local population. The ADF ended its commitment to UNOSOM in November. The Australian contribution to ONUMOZ consisted of four ADF mine-clearing instructors, the AFP deployed 16 civilian police observers, and the Australian Electoral Commission and the Department provided more than 20 electoral observers. The AFP also contributed 30 of its officers to the Multinational Force in Haiti for a six-month period to train and monitor the Haitian police service.

Australia continued to be an active participant in international discussions on ways to improve UN peace keeping, particularly in the debate on developing the UN's rapid reaction capacity. The Department and the Stockholm International Peace Research Institute (SIPRI) co-funded a workshop in Stockholm in April to discuss the use of force in peace operations, which resulted in agreement on general principles on the use of force. Senator Evans gave the keynote address at the workshop.

UN elections

An important strategy in seeking to strengthen the effectiveness of the UN and its specialised agencies has been to secure the election of Australians to key positions in relevant international organisations, with notable successes. Dr Neal Blewett was elected to the WHO executive board, Dr John Zillman became President of the World Meteorological Organisation, and Dr Gavan Griffith was re-elected to the International Telecommunications Satellite Organisation (INTELSAT) Panel of Legal Experts. Australia also did well in elections to the council of the International Telecommunications Union, the Universal Postal Union governing council, the governing body of the International Oceanographic Commission and the program coordinating board of the newly formed United Nations AIDS program. Australia narrowly lost a contest with South Africa for the position of External Auditor with WHO. Election campaigns were started for the governing councils of International Maritime Organisation, International Civil Aviation Organisation and for Chief Executive Officer of the International Mobile Satellite Organisation (INMARSAT). In elections at UNGA 49, Australia was re-elected as the endorsed Western European and Others Group (WEOG) candidate to a second term on ECOSOC and a term on the UN Commission on International Trade Law (UNCITRAL).

Australia's priority for the period 1994-1996 is election to the United Nations Security Council for 1997-98 to fill one of two WEOG seats which become vacant when the terms of Italy and Germany expire on 31 December 1996. The elections will take place at UNGA 51 in October 1996. Other declared WEOG candidates for the two seats are Portugal and Sweden.

Australia and Sweden have agreed to support each other's election to the Security Council and to work together to ensure the electoral success of both countries in 1996. Australia's candidature was also endorsed by members of the South Pacific Forum in the Forum Communique issued in August. Canada and New Zealand, Australia's partners in CANZ, also endorsed the candidature.

The campaign is progressing steadily, but the Department will have to sustain a concerted effort up to the election. Recent experience of Security Council elections, the most politicised and challenging in the UN system, and the level of activity of the other candidates, have demonstrated that a strong campaign is essential.

Human rights

Australia's human rights concerns were pursued through the United Nations, including the UN General Assembly, the Commission on Human Rights (CHR), the Commission on the Status of Women (CSW) as well as in numerous other UN bodies and meetings. Positive results in relation to indigenous rights, resolutions on situations of human rights abuse particularly in Myanmar and Cambodia, strengthening of the UN Human Rights Treaty system and recognition to the right to self-determination were achieved at UNGA 49. At CHR51, Australia took a major role in drafting and leading negotiations on the promotion of indigenous rights, National Human Rights Institutions and Cambodia and contributed to negotiation of other country resolutions, as well as to resolutions on the rights of women. Australia has provided substantive input into negotiations on human rights and the environment.

Further progress was achieved in the development of the Draft Declaration on the Rights of Indigenous Peoples, promoting the International Decade of the World's Indigenous Peoples, the future of the Working Group on Indigenous Peoples and the development of a permanent forum on Indigenous Rights in the UN.

Preparations for the World Conference on Women in Beijing dominated the agenda on women's rights in 1994-95. At the CSW, Australia's proposal that the Conference should be a 'Conference of Commitments', encouraging each country to identify its own specific and measurable commitments at Beijing, was actively promoted. The Department also worked to ensure the right of all women to be represented at the conference. A continuing issue of concern which the Department continues to pursue is the integration of women's issues into mainstream activities of the UN.

During 1994-95 the Department made 631 new representations on human rights matters to 101 foreign governments drawing on information provided mainly through the Amnesty International Parliamentary Group. Issues raised included extra-judicial killings, torture, detention without trial and the use of the death penalty. Results on individual cases were mixed. Improved reporting systems for assessing how effective these representations were in protecting and promoting human rights were instituted in April and should enable a more detailed assessment of results.

The Department has continued to encourage international interest in the development of 'National Action Plans' on human rights first proposed by Australia at the 1993 World Conference on Human Rights to promote domestic adherence to international human rights obligations. Internationally, Australia's proposal is gaining support with a number of countries expressing interest in preparing their own plans. Domestically, the Department compiled a progress report on Australian efforts to implement the undertakings contained in the National Action Plan.

The Department worked closely with the Human Rights and Equal Opportunity Commission (HREOC) in regional and international activities aimed at strengthening national human rights institutions. It has facilitated the continuing cooperation between HREOC and national institutions in countries such as Indonesia, India, Philippines, PNG and Latvia.

The establishment of a position of Special Adviser to the UNHigh Commissioner for Human Rights to assist in promoting preventive approaches to strengthening human rights, including human rights institution building, was the result of an Australian initiative and will be funded by Australia.

The Department's $100 000 Human Rights Fund supported a range of activities aimed at the promotion of human rights in Cambodia, Indonesia, Burundi and South Africa. Feedback from posts indicated that this constructive approach was well received.

The Department consulted community groups and other agencies regularly on human rights matters. A Standing Interdepartmental Committee on International Human Rights Issues was established to ensure a more integrated domestic approach to human rights promotion and protection. The Department continued to meet regularly with leading human rights non-government organisations (NGOs) to consult on a range of human rights matters. In addition to providing concrete policy advice on a number of issues, the consultations contributed to greater understanding in the community about Australia's human rights policy.

UNESCO

The Department continued to provide financial and secretarial assistance to the Australian National Commission for UNESCO to support the Government's objective of maintaining and increasing Australia's involvement in UNESCO's major program areas. A significant number of Australian institutions, individuals and non-government organisations contributed and benefited from involvement in the development and delivery of UNESCO programs in science, education, culture, social science and communication. The depth and breadth of Australia's contribution to UNESCO was confirmed during a visit to Australia in April by the UNESCO Director General, Dr Fedrico Mayor.

United Nations and Multilateral Development Bank procurement.

Improving the performance of Australian companies in winning contracts let by the United Nations and Multilateral Development Banks (MDBs) - in particular the Asian Development Bank and the World Bank - became a high priority during 1994-95.

The overall strategy developed in collaboration with Austrade and AusAID resulted in increased activity domestically to encourage Australian companies to look to multilateral agencies as possible sources of new business. Companies were provided with early intelligence about procurement opportunities, derived largely from Australian diplomatic missions engaged mainly in multilateral issues as well as from missions accredited to countries borrowing from the multilateral development banks.

It is too early to measure the results of the strategy, but more Australian companies are becoming involved in multilateral procurement processes.

The Commonwealth

The Australian Government maintained its strong commitment to the Commonwealth and is supporting its role as an organisation which promotes good government, strong institutions and democratic values among its members. Concrete methods for strengthening its role in the promotion of human rights and development among member states and promoting the interests of small states internationally will be addressed at the next Commonwealth Heads of Government Meeting (CHOGM), to be held in Auckland from 9-13 November 1995.

Senator Evans appointed Mr James Ingram, former Director of the World Food Program and Director-General of AIDAB, as his representative to the Commonwealth Intergovernmental Group on the Emergence of a Global Humanitarian Order. This body was established by the Cyprus CHOGM in 1993 to examine specific ways in which the Commonwealth could make the fullest possible contribution to the work of the international community on this theme. Its report will be considered at the 1995 CHOGM. In October 1994, Sir Ninian Stephen was appointed by the Commonwealth Secretary-General, Chief Anyaoku, as his special envoy to Bangladesh to facilitate dialogue between the Government and Opposition and to seek to avert a damaging confrontation between the parties. Australia was also represented by Mr A. R. Parsons on the eight-member Commonwealth Observer Group to the Presidential and National Assembly Elections in Namibia from 7 to 8 December 1994.

1.7.2 Environment and the Antarctic

Environment

Environmental concerns have become a central issue of international relations with world-wide recognition that they must be addressed and managed on a collaborative, global and regional basis. Commitments negotiated in multilateral forums have important and far-reaching effects on national energy, resource and development policies. The development of Australian positions involves a number of areas of responsibility in the Department. The main actions are summarised below, and cover substantial involvement and input on trade and environment matters in forums such as WTO/GATT and the OECD under sub-programs 1.5 and 1.6. The legal aspects of environmental decision-making are also handled under sub-program 1.8.

Strategies

The signing of Agenda 21 at Rio in 1992 focused international attention though the major environmental conventions addressing the global implications of climate change, biological diversity and desertification. As Australia implements these agreements, the Department is more heavily involved in work associated with addressing their domestic economic and regulatory implications. Internationally, attention is now turning to elaborating protocols to the post-Rio conventions to advance their objectives and to addressing other areas of Agenda 21. The Department's international efforts have concentrated on protecting and advancing Australia's interests through strengthening regional institutions and dialogue, building coalitions to support Australian interests in the multilateral environmental arena and improving community understanding of the issues. Extensive consultations took place with Australian business and NGO interests. The negotiation and implementation of environment agreements continued to generate a major workload.

Outcomes which reflected Australia's objectives included the decisions taken at the First Conference of Parties to the Framework Convention on Climate Change (FCCC), completion of the Desertification Convention, constructive outcomes at the Commission on Sustainable Development, and the Department's key role in the launching of the International Coral Reefs Initiative (ICRI). High priority was given to the Basel Convention on the Transboundary Movement of Hazardous Wastes and the Montreal Protocol on Substances that Deplete the Ozone Layer.

The Department was involved in negotiations for revision of the FAO International Undertaking on Plant Genetic Resources, and led the negotiation of a South Pacific regional convention on hazardous wastes. The final text of the regional convention has been agreed by officials to the South Pacific Forum Heads of Government at their September 1995 meeting.

The Department has given priority to coalition building to increase the level of cooperation with like-minded countries on international environment issues. It initiated action to establish in March the Group of Temperate Southern Hemisphere Countries on Environment, known as the Valdivia Group. This development will increase opportunities for temperate southern hemisphere countries to pursue common objectives in international environment negotiations. The members are Argentina, Australia, Chile, New Zealand, South Africa and Uruguay.

This initiative complements existing departmental efforts to participate in coalitions of countries which share many of Australia's interests on international environment issues. An increase in their influence is viewed as a critical means of achieving outcomes in international environment issues which best suit Australian interests. To this end, the Department has worked to enhance cooperation in international environment forums within the JUSCANZ grouping (Japan, United States, Canada, Australia, New Zealand, Norway, Iceland, Mexico and Turkey). With the enlargement of the EU, this grouping of non-EU OECD countries has been recognised as an even more important player on the international environment scene.

The appointment of an environment scientific adviser increased the Department's ability to provide substantive advice on policy relating to complex scientific and environmental matters.

Climate change

Climate change is the global environmental issue of central importance for Australia. The Framework Convention on Climate Change (FCCC) is among the leading Australian priorities for multilateral environmental negotiations.

The Department was active in preparations for the first session of the Conference of the Parties of the FCCC, held in Berlin from 28 March to 7 April. The key issue was to ensure that in its review of the adequacy of current commitments in the Convention to achieve stabilisation of global greenhouse gas concentrations in the atmosphere at a safe level, Australian objectives were met. Australia sought agreement to a mandate for negotiations to address the next phase of action under the Convention, with the purpose of securing an equitable, effective outcome and providing for global action by all parties to deal with this global issue. Negotiations up to and during the conference were long and difficult. The final outcome was a mandate for negotiation of a protocol or other legal instrument to apply for the period beyond the year 2000.

Negotiations are aimed at elaborating policies and measures and setting objectives for limiting greenhouse gas emissions by OECD countries and the countries of East Europe and the former Soviet Union, for specified time frames up to 2020. They are to take into account the differing starting points of developed countries, their different economic structures, the need for equitable and appropriate contributions and to include an analytical and assessment phase to assess particular policies and measures in environmental and cost-effectiveness terms. In all these respects, the mandate meets Australia's objectives.

Emissions from the rest of the world already exceed those of OECD countries and the contribution from non-OECD countries is expected to increase significantly by 2010. The mandate provides for no new commitment for developing countries but reaffirms their existing commitments under Article 4.1 of the Convention. In this respect, the mandate does not go as far as Australia was seeking in providing for the progressive involvement of developing countries. Such involvement will be necessary to achieve an effective global response to climate change.

Commission on Sustainable Development

The third session of the Commission on Sustainable Development (CSD3) in April reviewed progress in implementing the Agenda 21 chapters dealing with sectoral issues, notably agriculture, forests, land management, biodiversity, desertification and mountains, as well as progress in relation to cross sectoral issues, including financial resources, transfer of technology, trade and the environment and a number of other matters.

The establishment under the CSD of an ad hoc intergovernmental panel on forests with an ambitious work program covering a wide range of forests issues was the key outcome of the session. The panel's first substantive meeting was scheduled for September 1995, with the panel's recommendations and proposals for action to be submitted to the CSD's fifth session in 1997.

Australia submitted its second national report to the CSD on the implementation of Agenda 21 and made a successful presentation on Landcare. The final CSD reports on land management and agriculture largely reflect Australia's objectives, particularly in relation to agricultural trade policy, emphasising the importance of community-driven approaches and approaches to land management which take account of the entire system. The Cairns Group, chaired by Australia, worked with developing countries to obtain agreement on recommendations on trade and agriculture which recognise the importance of the Uruguay Round, the need for a continuing reduction of agricultural support mechanisms, and the urgency of examining the environmental consequences of the use of agricultural subsidies, and of other agricultural policies.

Trade and environment

The Department has committed substantial resources to the work currently under way in various forums on trade and environment issues. Australia was active in the work program which was submitted to the OECD Trade and Environment Committees and endorsed at the May Ministerial Council Meeting. The report takes into account Australia's trade and environment interests.

Australia also supported work on trade and environment by the United Nations Conference on Trade and Development (UNCTAD). In addition to the analytical work by its Secretariat, UNCTAD has provided an important forum for policy dialogue between governments, particularly involving developing countries.

The Department has been active in the WTO Committee on Trade and Environment (CTE), which started its examination of the links between the multilateral trading system and trade measures for environmental purposes. The CTE will report to the first WTO Ministerial Conference in December 1996. It will recommend whether any changes to the provisions of the multilateral trading system are needed to ensure positive interaction between trade and environment policies, while avoiding trade protectionism.

Australia is seeking to ensure that the CTE undertakes a thorough and balanced examination of the issues and that Australia's trading interests are advanced, including recognition of the positive environmental implications arising from trade liberalisation in areas such as agriculture and environmental technologies.

Ensuring that Australia's trade and environmental objectives are coordinated is a key objective of the Department. Thus the Department continued to be active in international forums dealing with trade and environment issues, including the CSD, UNEP, GATT/WTO and OECD. The outcomes of CSD3 highlighted international recognition of the need for the intergovernmental bodies dealing with trade and environment to work cooperatively and to avoid duplication.

The Government's working group on trade and environment, established under the aegis of the NGO Consultative Forum on International Environmental Issues, added to Australia's understanding of the views of industry and environmental groups on international trade and environment matters.

International chemical safety issues

Internationally, attention is turning to areas of Agenda 21 that address environmental risks associated with toxic and dangerous chemicals. The Department has focused its attention on work under way directed to the development of a treaty on prior informed consent (PIC) procedure concerning international trade in certain hazardous chemicals, on international management of persistent organic pollutants (POPs) and chemicals risk reduction in the OECD.

In the OECD, the Chemical Group and Management Committee unanimously accepted Australia's proposal to review its risk reduction program, and to develop a set of priorities and guidelines for future activities. Concern to ensure that the OECD risk reduction activities result in practical environmental outcomes has underpinned Australian efforts to have the OECD adopt a ministerial declaration on lead risk reduction which would allow different countries to take positive action based on their priorities and environmental circumstances. Australia has put forward this approach as a more effective alternative to proposals for a binding OECD Council Act containing inappropriate prescriptive national strategies for lead risk reduction.

Biological diversity

Priority was attached to the pursuit of Australia's interests in international work on biosafety and access to plant genetic resources at the first Conference of the Parties (COP-1) to the Convention on Biological Diversity, held in Nassau from 28 November to 9 December.

COP-1 laid the foundations for the effective operation of the Convention. Its medium-term work program is generally consistent with Australian interests, focusing on the handling of intellectual property rights, conservation, incentive measures, biosafety, indigenous peoples, the revision of the FAO's Undertaking on Plant Genetic Resources, establishment of a clearing house mechanism, and cooperation with other relevant conventions. However, work on forest biodiversity was not included in the COP's work program despite Australia's efforts.

One of the major outcomes of COP-1 was a decision to initiate a process to consider the need for a protocol on the safe transfer, handling and use of the products of modern biotechnology which may affect the environment (a biosafety protocol). Australia has a close interest in biotechnology, and hence in any possible development of international regulatory systems. By keeping open its options on whether a protocol is required, the Department has been able to allow a process of domestic consultation, including a discussion paper, with key domestic stakeholders as part of the process of developing Australia's position on the protocol. This will be taken up at the second Conference of the Parties in November 1995.

The Department participated in work being undertaken by the FAO on plant genetic resources, especially the revision of the International Undertaking on Plant Genetic Resources to bring it into line with the Convention.

Desertification

A key development during the year was the completion of negotiations on the Convention to Combat Desertification. Australia signed the Convention on 14 October. A comprehensive consultation process will be undertaken with States and Territories and interested non-government organisations before a decision is taken on ratification. The Department is preparing an analytical guide to the Convention to facilitate the consultations.

International Coral Reef Initiative (ICRI)

The Department was an active participant in launching the International Coral Reef Initiative (ICRI), a partnership among several nations, including the US, Australia, the UK, Sweden, France, Jamaica and the Philippines, to work for the conservation and sustainable use of coral reefs and related ecosystems. ICRI will promote capacity building, improved coastal management and coordinated research and monitoring on global, regional and national levels to ensure coral reef resources are sustainably managed. An International Coral Reef Workshop was held in the Philippines in May to discuss the future of the world's coral reefs. The workshop adopted a call to action and framework for action which will be used as the basis for proposals on the conservation and sustainable use of coral reefs and related ecosystems.

To implement the initiative in the region, Australia will sponsor a Pacific regional workshop in November 1995 through the South Pacific Regional Environmental Program to establish a program of action for the Pacific. The results of the ICRI workshops will be submitted to the fourth session of the Commission on Sustainable Development (CSD4) for endorsement.

Global Conference on the Sustainable Development of Small Island Developing States

In a positive outcome for Australia, the 25th South Pacific Forum in Brisbane in August agreed to establish a regional consultative mechanism, based on an Australian proposal, to coordinate and facilitate the implementation of the outcomes of the Global Conference on the Sustainable Development of Small Island Developing States (GCSDSIDS). Forum members requested that the South Pacific Regional Environmental Program (SPREP) consider arrangements for implementing the regional mechanism.

That mechanism, based on an Australian proposal, will consist of a support unit using the resources and services of SPREP and ESCAP's Pacific Operations Centre (EPOC) and an advisory committee comprised of senior officials. The success of GCSDSIDS's implementation will depend greatly on the effectiveness of the regional mechanism and Australia is encouraging SPREP to have the Pacific mechanism operational as soon as possible. Australia has funded a position in EPOC to assist in this task.

Regional and bilateral action

As a result of discussions between President Kim Young Sam and Prime Minister Keating, Australia and the Republic of Korea have started negotiations on a MOU relating to cooperation in the field of environmental management and protection. An MOU on Environmental Cooperation between the National Environmental Protection Agency of the People's Republic of China and the Australian Department of the Environment, Sport and Territories, was signed in Canberra in April. Australia and the European Union held talks on the environment in Brussels in May, consolidating dialogue on environmental issues formalised in the exchange of letters between Australia and the EU in 1991.

The Department continued to promote stronger commercial links in environment technology and services through its participation in the Environmental Cooperation with Asia Program (ECAP). The program funds a diverse range of projects all of which seek to promote the capability and cost-competitiveness of Australian environment solutions and the advantages of environmental protection generally.

The APEC environment experts meeting, held in Taiwan in August, recommended that APEC committees and working groups consider ways of integrating environmental considerations into their work programs. At Australia's initiative, the Human Resource Development (HRD) Working Group established an environment project coordination sub-committee to review the outcomes of the APEC Environment Ministers' meeting in Vancouver in March and the Taiwan experts' meeting, to enhance the three environmental projects already under way in the group and to identify future HRD projects for the group's consideration.

International wildlife

Preservation of wildlife is another objective important to Australia. The Department was a member of the Australian delegations to the Ninth Conference of the Parties to the Convention on the International Trade in Endangered Species of Wild Fauna and Flora (CITES), held at Fort Lauderdale, US, in November, and the 47th meeting of the International Whaling Commission (IWC) in Dublin in May-June.

The Australian delegation to the CITES conference chaired a working group which reached agreement on new criteria for the listing of species on the CITES appendices, a key outcome of the conference. The criteria seek to make the process of listing more scientifically rigorous while also preserving the precautionary principle.

At the CITES conference and the IWC meeting, Australia took firm steps to promote the protection of whales. The outcome of the IWC meeting met Australian objectives through the continuation undiminished of the IWC's commitment to the moratorium on commercial whaling and the adoption of a resolution supporting the Southern Ocean Whale Sanctuary and opposing lethal scientific whaling in it.

Protection of the marine environment

The London Convention is a multilateral treaty controlling dumping of wastes at sea. The Department, in conjunction with the Environment Protection Agency, participated in negotiations to amend the Convention with the objective of strengthening its environmental standards and language. Australian interests in strengthening the Convention, consistent with the 1979 Offshore Constitutional Settlement between the States and the Federal Government, and other Australian interests relating to dumping at sea, are expected to be achieved.

The Antarctic

Among the Government's objectives for its Antarctic Territory is the strengthening of the Antarctic Treaty system and the maintenance of an important role for Australia in it. The year saw useful advances in these matters.

The Department led Australia's delegation to the 19th Antarctic Treaty Consultative Meeting from 8 to 19 May. Australia contributed to development of a liability annex which, when concluded, will provide for liability for damage to the Antarctic environment. Australia led technical discussions on the structure and nature of an Antarctic Treaty secretariat, considerably advancing work in this area and maintaining momentum for the establishment of such a secretariat.

The Department continued to promote ratification of the Madrid Protocol on Environmental Protection. Further ratifications during 1994-95 improve the prospect of the Protocol entering into force during 1996. Australia declared an exclusive economic zone around Australian territory, including adjacent to the Antarctic Territory. This decision is consistent with Australia's rights under the Law of the Sea Convention and protects Australia's longer-term interests in the Antarctic.

Australia's Delegation to the 13th Meeting of the Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR) in October-November played a leading role in improving the design of CCAMLR's conservation measures including those aiming to reduce incidental mortality of seabirds in long-line fishing. The Commission accepted Australia's proposals for improving procedures for intersessional reporting of vessel inspections in the Convention area and the introduction of more transparent procedures for inviting observers to CCAMLR meetings.

1.7.3 Nuclear policy

Nuclear Non-Proliferation Treaty

The objectives of enhancing Australia's regional and global security environment, and limiting the proliferation of nuclear weapons, were greatly advanced by the historic decision of parties to the Nuclear Non-Proliferation Treaty (NPT) to make the treaty permanent. Indefinite extension of the NPT has been an objective of Australian international security policy for many years, and was achieved in May at the NPT Review and Extension Conference (NPTREC) in New York. Significantly, the extension decision was adopted without a vote at a conference attended by 175 NPT parties - an outcome made possible by an accompanying package of decisions covering a strengthened NPT review process and a declaration of principles and objectives for nuclear non-proliferation and disarmament.

The Australian delegation took a central role in negotiating this package with a view to enhancing the NPT's capacity to assist the achievement of key non-proliferation and disarmament objectives on the international agenda. These include the strengthening of the international norm against nuclear proliferation and progress towards universal application of the NPT, the earliest possible conclusion of a Comprehensive Test Ban Treaty, the negotiation of a 'cut-off' convention banning the production of fissile material for weapons purposes and progress towards the ultimate elimination of nuclear weapons.

A key Australian objective for many years was achieved when the NPTREC declared it essential for non-nuclear weapon states to have adopted full-scope safeguards to be eligible for nuclear supply. In working to achieve a strong decision in favour of indefinite extension of the NPT, the delegation drew on the Department's global network and built on a successful long-term strategy of close consultations with a large number of countries involving ministers, senior Canberra-based officials and Australian diplomatic missions.

North Korea's Nuclear Program

Concern about the regional security implications of North Korea's nuclear program remained a key preoccupation for the Department. As a member of the Board of Governors of the International Atomic Energy Agency (IAEA), Australia supported the IAEA's safeguarding of nuclear activity at North Korea's Yongbyon site. IAEA inspections constitute the principal verification mechanism of North Korea's compliance with its non-proliferation obligations. The Government took the view that Australia's regional security and non-proliferation objectives would be best served by encouraging parties principally involved to deal with the concerns raised by North Korea's nuclear program as far as possible through negotiations. Australian welcomed the conclusion in October of the US-DPRK Agreed Framework as a way of resolving concerns about the DPRK's nuclear program. A contribution of $US5 million was made to the Korean Peninsula Energy Development Organisation (KEDO), the internal energy consortium which will provide alternative energy to the DPRK (see also sub-program 1.1).

International Atomic Energy Agency

The strengthening of international safeguards remained a priority activity in pursuing non-proliferation and security objectives under this sub-program. The Department continued to work closely with the IAEA to enhance its safeguards capacities, especially its ability to detect any undeclared nuclear facilities. The discovery of Iraq's clandestine nuclear program after the Gulf War, and the experience of dealing with the DPRK's nuclear activities, have led the international community to emphasise the importance of improving the IAEA's capacities in these areas. The strengthening of the IAEA safeguards system was strongly endorsed by the NPT Review and Extension Conference.

The Department remained closely involved in the IAEA's program to demonstrate and evaluate new safeguards measures (named 93+2). Under that program, which started in December 1993, Australia participated in trials of environmental sampling measures, and in no-notice broad access safeguards inspections, under which IAEA inspectors had access to locations beyond those agreed under traditional safeguards arrangements. These trials, which involved the Australian Safeguards Office (ASO), and the laboratory of the Australian Nuclear Science and Technology Organisation (ANSTO) at Lucas Heights, near Sydney, helped the IAEA to confirm that such new techniques were feasible in enhancing international safeguards. At its Board of Governors meeting in June, the IAEA approved implementation of a series of new safeguards measures developed under the 93+2 program. Implementation of these and further safeguards strengthening measures will be a continuing Australian objective in 1995-96.

The Department continued to press for enhanced budget effectiveness and accountability within the IAEA. It also sought better arrangements in the IAEA in areas such as technical cooperation, nuclear safety and the management of radioactive waste. An Australian proposal to develop a strategy to improve the delivery effectiveness of the Agency's technical cooperation program was accepted. Also under IAEA auspices, the Convention on Nuclear Safety was opened for signature in Vienna in September, at which time Australia signed. Negotiations started in February on a convention covering radioactive waste management safety, fulfilling a commitment sought by Australia during negotiations of the Safety Convention.

Nuclear Export Controls

Effective controls on nuclear exports have long been recognised by Australia as vital to the objectives of this sub-program. The Department therefore remained active in the two nuclear and dual-use supplier regimes - the Zangger Committee and the Nuclear Suppliers Group, which provide an additional level of assurance to the global non-proliferation regime. Within these forums, Australia successfully sought to tighten export licensing guidelines. A key Australian initiative was a program of information outreach activities in response to a perceived need for greater transparency in the operation of export control regimes.

Bilaterally, the Department in close cooperation with the Australian Safeguards Office (ASO) continued to ensure the effectiveness of Australia's safeguards agreements, under which uranium exports take place. (see sub-program 1.7.6). Nuclear policy consultations provided for under terms of those agreements were held with Japan, the Republic of Korea, Sweden and Finland. The consultations enabled the Department to review and monitor the operation of bilateral safeguards agreements, and to discuss cooperation in support of international non-proliferation efforts. The consultations also provided an opportunity to promote Australia as a reliable supplier of uranium for nuclear power generation.

The Department took a close interest in the shipment in early 1995 of vitrified high-level radioactive waste from Europe to Japan, the first in a series of radioactive waste shipments to be made by Japan over the next 10 years. There was wide concern, especially in the South Pacific, about the risk the shipment involved. The Department was satisfied that the radiological protection and safety arrangements complied with the latest internationally accepted IMO and IAEA standards for such shipments. The shipment did not contain waste resulting from the reprocessing of Australian Obligated Nuclear Material.

There were discussions with Indonesia on the signature of the Nuclear Science and Technology Cooperation Agreement. It is envisaged that regional and broader international objectives under this sub-program will be served by facilitating a cooperative relationship with Indonesia in areas where Australia has nuclear expertise, such as safety, safeguards, radioactive waste management, the operation of research reactors, and the application of radiation technology in industry, agriculture and medicine.

1.7.4 Strategic assessments

Regional Security

The Department achieved a key Australian regional security objective through its contributions to the inaugural ASEAN Regional Forum (ARF) meeting in Thailand in July. The Department worked closely with the host government and other participants to secure substantive outcomes from the first ARF meeting, and has been active in putting forward to Brunei, the current Chair of the ARF, proposals to ensure momentum in the development of this new regional security body. The Department made a major contribution to launching ARF intersessional activity by organising and funding, with the Department of Defence, the first ARF intersessional seminar. This seminar on 'The Building of Confidence and Trust in the Asia-Pacific' was held in Canberra in November. It was chaired by Professor Paul Dibb of the ANU's Strategic and Defence Studies Centre (SDSC) and focused on practical defence-related trust-building measures which gained support from a number of defence practitioners.

The Department also made substantive inputs into ARF intersessional seminars on peace keeping in Brunei and on preventive diplomacy in the Republic of Korea, where it presented a paper titled Approaches to Peace Building and Preventive Diplomacy in the Asia-Pacific Region, which was tabled at the 1995 ARF Senior Officials Meeting and proposed a regional Conflict Prevention Centre. In collaboration with the ANU's SDSC, the Department produced and distributed two editions of its biannual regional security calendar. The Department contributed, through the provision of funding and participation in meetings, to the establishment of the Australian chapter of the Committee for Security and Cooperation in the Asia-Pacific (AUS-CSCAP), the major second track security process in the region. The Department, in cooperation with the Department of Defence, also conducted a training workshop in Kuala Lumpur on regional security for departmental and defence officers from regional posts designed to strengthen Australia's input into regional security discussions.

Defence Issues

The Department participated in the drafting of the 1994 Defence White Paper Defending Australia. It continued to contribute foreign policy advice and perspectives into other aspects of defence policy and defence activity, including defence export policy and the processing of export applications; participation in defence exercises; addresses to defence seminars and staff colleges; and arranging and coordinating politico-military talks with the US and the UK.

The Department also participated in international consultations designed to establish a global regime covering transfers of conventional arms and dual-use technologies to succeed the former COCOM arrangements of the Cold War era. It supported an initiative of the Department of Defence to bring together for the first time, at a meeting in Canberra in February, two of the working groups seeking agreement on these new multilateral export control arrangements. Progress has been slow, but there is prospect of faster movement now that agreement has been reached to include new members, particularly Russia, in the consultations.

The Department maintained its contribution to intelligence policy issues, ensuring that foreign policy objectives were incorporated into the coordination and tasking of the Australian intelligence community. It continued to make a significant contribution to the work of the Judicial Inquiry into ASIS, which concluded its work in March. It also played a major role in coordinating the implementation of inquiry outcomes, including mediation and arbitration issues and inputs into the Government's response to the inquiry, delivered in Parliament on 1 June.

Counter Terrorism

International terrorism remains a matter for concern, and the Department continued to coordinate Australia's readiness to deal with terrorism incidents involving foreign interests within Australia as well as incidents directed against Australian interests overseas. It achieved this through participation in the 1995 national counter-terrorism exercise at ministerial level, and through the exchange of counter-terrorist expertise through dialogue with the United States and New Zealand. The Department coordinated a review after the chemical terrorism in Tokyo in May.

1.7.5 Peace, arms control and disarmament

The Department continued to place high priority on advancing the negotiations in the Conference on Disarmament in Geneva for a Comprehensive Test Ban Treaty (CTBT). Other priorities included preparations for the entry into force of the Chemical Weapons Convention (CWC) - which may occur by the middle of 1996 - and further work designed to control the use and availability of anti-personnel landmines, particularly through preparations for the Review Conference of the Inhumane Weapons Convention (IWC) in Vienna in September 1995.

Nuclear Testing

Australian representatives and experts made a major input into the negotiations for a CTBT. A significant contribution to the development of the treaty's verification system was made through the provision of technical experts in the seismic, hydro-acoustic, infra-sound and radio-nuclide fields. The Australian delegation in Geneva continued its active role in the negotiations towards a treaty text. The delegation tabled working papers designed to clarify outstanding issues and promote Australian priorities. The Department sent high-level missions to a number of capitals, including Washington, Paris, New Delhi and Islamabad, for consultations on the CTBT negotiations. For the second year running, Australia, New Zealand and Mexico worked together to achieve a consensus resolution on the CTBT at the UN General Assembly. All five nuclear weapon states co-sponsored the resolution, which called for the conclusion of negotiations 'without delay'. The Department gave a number of press briefings on the CTBT and related issues. The delegation to the NPTREC worked to secure the commitment from the nuclear weapon states to conclude a CTBT no later than 1996.

In the lead-up to the French presidential elections, the Department acted to ensure that all principal presidential candidates were made aware of the Government's assessment that there would be an inevitable, strong adverse reaction in Australia and among the countries of the South Pacific to any decision by France to resume nuclear testing. The Department formulated recommendations to the Government on its response to France's decision to resume nuclear testing in the South Pacific. Australia also condemned the continuation of China's nuclear testing program.

Chemical and Biological Weapons

The Chemical Weapons Convention (CWC), opened for signature in 1993, remained part of the Department's disarmament work. Efforts were shifted to the promotion of early and effective entry into force of the Convention. This will occur 180 days after 65 state parties have ratified and deposited their instruments advising of this step.

Twenty state parties ratified in the financial year, including the Cook Islands within the Asia-Pacific, bringing ratifications to 29.

Australia continued to encourage regional parties to ratify the CWC. It made significant contributions to two Asia Pacific seminars, the first conducted in Jakarta in November and the second in Seoul in June, which were held to assist CWC implementation. In March, bilateral disarmament consultations, with a strong focus on CWC, were held with an experts delegation from Indonesia. As US ratification will probably encourage other states to follow suit, the Department has been active in urging early US ratification. The issue was raised in April in the annual Australian-US Ministerial Consultations, and Senator Evans subsequently wrote to Secretary of State Christopher, and to the Assistant to the President for National Security Affairs, Anthony Lake, stressing the importance of US ratification.

The Preparatory Commission of the Organisation for the Prohibition of Chemical Weapons (OPCW Prepcom) in The Hague is developing plans for international implementation of the Convention. At the OPCW Prepcom, Australia has worked to ensure that the Convention's effectiveness will be maximised. An Australian representative chaired a key expert group on confidentiality issues. A senior officer, Dr John Gee, is on leave from the Department while occupying a position in the provisional secretariat. Australia's interest in early implementation of the CWC was underlined by Senator Evans's visit to the preparatory commission in April.

Strengthening the Biological Weapons Convention (BWC) was another significant objective on Australia's disarmament agenda. In September, at a special conference of BWC state parties, the Australian Ambassador to the Conference on Disarmament served as Vice-Chair of the Drafting Committee, and in this capacity the Australian delegation helped secure the establishment of an Ad Hoc Group whose aim is to negotiate a legally binding verification instrument. Australia was elected to one of the two vice-chair positions of the Ad Hoc Group. From June 1995, Australia assumed the role of coordinator for the Western Group of countries, a position which will reinforce Australia's capacity to contribute to the negotiations.

The Australia Group (AG) continues to be a central element in Australia's contribution to efforts to prevent the proliferation of chemical and biological weapons through stringent export licensing. In 1995, the AG moved from a cycle of two meetings a year to an annual meeting. The group's deliberations are increasingly oriented towards the early and effective entry into force of the CWC. Membership has expanded to 29 with the admission of Poland, the Slovak Republic and Romania. The Department briefed non-members on the group's activities and contribution to chemical and biological non-proliferation.

Other Arms Control Issues

The Department developed the Weapons of Mass Destruction (Prevention of Proliferation) Bill. This legislation was enacted in May and significantly strengthens legal barriers to any possible Australian assistance to proliferators, including the export of goods or the provision of services. The Act is planned to come into force before the end of 1995.

The Department was deeply involved in preparations for the Review Conference of the Inhumane Weapons Convention (IWC), to be held in September 1995. It launched, in consultation with the Department of Defence, an Australian proposal to ban manually placed, long-lived anti-personnel landmines. A joint US-UK proposal for a Landmines Control Regime to complement the IWC was supported by Australia.

The Department continued to place a high priority on preventing the proliferation of missiles and related technology capable of delivering weapons of mass destruction. Efforts were focused on participation in the Missile Technology Control Regime (MTCR). Australia briefed countries in South-East Asia on the regime and sought to encourage regional states to adhere to the regime's guidelines.

Further representations were made to the US urging a more positive approach to the South Pacific Nuclear Free Zone. The Department also pursued activity designed to encourage full regional adherence to the treaty. An officer from the Geneva Disarmament Mission participated in meetings in Africa to conclude an African Nuclear Weapon Free Zone. Australia has been the only non-regional non-nuclear weapon state which has consistently participated in these meetings.

The Department made representations in regional countries in support of the UN conventional arms transfer register. Participation in the register by countries in the Asia Pacific region continues to increase.

Australia continued its participation in the Middle East Arms Control and Regional Security working group (ACRS) which forms part of the multilateral arm of the Middle East peace process. Departmental officers participated in ACRS meetings and expert groups, making a significant contribution in particular to efforts to establish regional security centres in a number of locations in the Middle East.

The Department remained in contact with members of the National Consultative Committee for Peace and Disarmament which helps the Government to maintain a dialogue with community representatives on all aspects of arms control and disarmament policy. Two meetings of the committee were held in the Department in 1994-95.

Forward Planning

In its forward planning under this sub-program, the Department will give top priority to the CTBT negotiations which over the next year will enter a final, crucial stage as well as to efforts to bring about an immediate end to nuclear testing. In particular, the Department will be seeking to ensure that the CTBT negotiations produce an effective and verifiable treaty which bans all nuclear test explosions in all environments. Priority will also continue to be given to CWC matters, particularly the early entry into force of the Convention, and its effective operation and to the strengthening of IAEA safeguards, the Biological Weapons Convention and the land mines protocol of the IWC. The Department will continue to support the immediate start of negotiations on a convention banning the production of fissionable material for nuclear weapons. At the regional level, high priority will be given to the consolidation of cooperative security activities under the ASEAN Regional Forum and to deepening Australia's bilateral dialogue on regional security with key regional countries.

1.7.6 Nuclear safeguards

Objectives

Contribute to the strengthening of the nuclear non-proliferation regime.
Implement domestic safeguard measures and administer Australia's bilateral safeguards so that nuclear material is used only for peaceful purposes.

Description

This sub-program is managed by the Australian Safeguards Office (ASO), headed by the Director of Safeguards, a statutory officer responsible directly to the Minister for Foreign Affairs. Staffing and administrative support for ASO is provided by DFAT.

To implement Australia's obligations over the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), ASO operates a system to account for and control nuclear material, through administration of the Nuclear Non-Proliferation (Safeguards) Act 1987. To help ensure the continuing effectiveness and efficiency of International Atomic Energy Agency (IAEA) safeguards, ASO contributes to their development through activities such as participation in international expert meetings, and a program of research and development projects. ASO also administers the system of bilateral nuclear safeguards agreements, under which conditions are applied to the export and use of Australian uranium and nuclear material derived from it. The Director of Safeguards prepares a separate annual report which is available through government bookshops or by writing to the Australian Safeguards Office, PO Box E131, Queen Victoria Terrace, ACT 2600.

Performance summary

The IAEA continues to confirm that NPT safeguards requirements are being met within Australia.
Physical protection arrangements applying to nuclear material in Australia meet international standards.
ASO's counterpart organisations in bilateral partner countries provide reports and other documentation confirming that Australian Obligated Nuclear Material (AONM) has been received and accounted for in a timely and accurate manner.
Continued representation and involvement of ASO officers at international nuclear consultations, and involvement of ASO officers in expert international groups/bodies, with outcomes reflecting Australian objectives and interests.
Projects completed under Australia's safeguards research and development support program.

Monthly audits of the inventory of nuclear material at the Australian Nuclear Science and Technology Organisation (ANSTO) enabled reporting as required under Australia's NPT safeguards agreement with the IAEA. ASO officers accompanied IAEA inspectors and assisted in facilitating activities at each of the four routine IAEA inspections of ANSTO. The IAEA statement that it has reached satisfactory conclusions about inventories of nuclear material and Australia's accounting for that material is available in the annual report of the Director of Safeguards.

ASO carried out inspections of the physical protection measures applied by holders of significant quantities of nuclear material in Australia. Measures were considered satisfactory. ASO has overseen upgrading of physical protection measures at the Lucas Heights Research Laboratories to bring them into line with new international standards. Upgrading of the revised protected area around the HIFAR reactor was completed during the year.

In addition to IAEA safeguards, Australia applies its own conditions to the export and use of Australian uranium and nuclear material derived from it, known collectively as Australian Obligated Nuclear Material (AONM). ASO administers the system of bilateral nuclear safeguards agreements under which these conditions are applied. ASO's counterparts in bilateral partner countries possessing AONM provided reports and other documentation confirming that the material has been received and accounted for in a timely and accurate manner. During 1994-95, reports were supplied by Canada, Euratom, Finland, France, Japan, the Republic of Korea, Sweden, Switzerland, the UK and the US. By analysing this information, ASO continued to track AONM through the nuclear fuel cycle. ASO representatives visited counterpart organisations in bilateral partner countries possessing AONM to clarify operating procedures and discuss their reports. As a result of these visits, there are no unreconciled differences in the reports.

Close collaboration and assistance to the IAEA in such matters as testing new safeguards concepts in Australia is a feature of the program. These concepts aim to strengthen the capability of the NPT IAEA safeguards regime to detect undeclared nuclear activities, and to open up the possibility of reducing routine inspection intensity, thus allowing IAEA resources to be directed towards higher priority areas. As part of the trial, a 'no-notice' inspection was carried out at ANSTO in March, with inspections of the two uranium mine sites.

ASO directed and funded the Australian Safeguards Assistance Program (ASAP) of research and development in support of IAEA safeguards. An important area covered by ASAP is the development of environmental monitoring techniques as part of a strengthened IAEA safeguards system. One aspect of this involves accelerator mass spectrometry analysis of samples collected by the IAEA in participating countries, using the facilities and expertise available at ANSTO. It is hoped that ANSTO will become an accredited laboratory for regular services to the IAEA.

1.7.7 Chemical Weapons Convention

Objectives

Undertake preparatory activities to implement the Chemical Weapons (Prohibition) Act 1994 and other instruments to meet Australia's obligations under the Chemical Weapons Convention (CWC) when it enters into force.
Contribute to the resolution of outstanding issues related to the CWC's implementation in Australia.
Contribute to Australia's assistance to regional countries on CWC implementation.

Description

Australia has ratified the Chemical Weapons Convention (CWC) and is undertaking the preparatory work required to meet its obligations when the CWC enters into force. Thorough preparation is required in relation to many of the CWC's obligations. As a CWC party, Australia must identify and gather information on chemical activities which are required to be declared to the Organisation for the Prohibition of Chemical Weapons (OPCW) within 30 days after the CWC enters into force and to prepare for inspection of relevant chemical facilities by the OPCW.

The Chemical Weapons Convention Office (CWCO) was created in February as Australia's national authority for CWC implementation. It is a non-statutory unit of the Department, collocated with the Australian Safeguards Office (ASO). The Director of Safeguards, a statutory office holder under the Nuclear Non-Proliferation (Safeguards) Act 1987 was subsequently appointed Director of the CWCO.

Performance summary

Timely identification of facilities and activities relevant to CWC requirements.
Development of effective regulatory and administrative measures complementing the Chemical Weapons (Prohibition) Act, to deal with the full range of Australia's CWC obligations.
Dissemination of useful information about CWC implications to stakeholders.
Useful contributions made to negotiations on outstanding issues connected with CWC implementation.
Information given to regional countries assists them in moves toward CWC ratification and implementation.

The CWCO is undertaking an extensive survey of the chemical and related industries in Australia, covering more than 2600 companies. About 50 industrial chemical facilities have been identified which should be 'declarable' under the CWC. With about a year before the expected entry-into-force of the Convention, adequate time should be available to fully prepare companies for obligations they may have to meet.

The CWCO has initiated action to address most of the CWC obligations requiring regulatory or administrative procedures that are not already dealt with through the Chemical Weapons (Prohibition) Act. This includes development of licensing and administrative procedures for exports and imports of certain chemicals, and of measures to help prevent production or use of chemical weapons by sub-state groups.

Information articles have been disseminated to the chemical industry through industry bodies and publications, and as a part of the above-mentioned survey, to increase awareness of the CWC. The complexity of the topic has at times made this task difficult, and a more targeted approach is being developed based on information from the survey.

Using standing treaty consultation mechanisms, the CWCO has initiated discussions with State and Territory authorities responsible for chemicals control, to inform them on the CWC's implications, and to collect information on other legislation potentially relevant to CWC obligations. The consultation process has been well received.

The CWCO has contributed to resolution of outstanding CWC implementation issues by identifying practical examples of where interpretation of the Convention's provisions may need refinement to avoid unnecessary burdens on industry. Input into this process will becomes more intense as entry-into-force of the CWC approaches.

With other DFAT officers and other departments, the CWCO has relayed Australia's experiences in implementing the Convention to representatives from regional countries. This has been well received, and appears to have measurably assisted preparations for the CWC.

1.8 INTERNATIONAL LEGAL INTERESTS

Objectives

Advise the Government on public international law, keeping the Government fully informed of Australia's international legal rights and obligations.
Promote and develop global and regional respect for international legal regimes, including the law of the sea.
Secure Australia's interests in international courts and tribunals.
Expand and secure the benefits of an effective treaty network.

Description

The Legal Office has two branches within the International Organisations and Legal Division. It is structured flexibly to allow concentrated attention to priority issues associated with the negotiation and implementation of treaties and other international instruments. The main issues of current concern are in international litigation, international organisations law, international trade and economic law, environmental law, sea law and ocean policy, defence, outer space and nuclear law, human rights and social law, international humanitarian law, international criminal law, administrative law, treaties support and the law of treaties. The office is also responsible for the Department's interests in the fields of refugees, immigration and asylum, and narcotics liaison.

These responsibilities are effectively exercised through the maintenance of the capacity to advise on international legal issues, the negotiation and adoption of multilateral conventions, bilateral treaties and other instruments of less than treaty status. Promotion of the wide adherence to treaties of special concern to Australia, such as the United Nations Convention on the Law of the Sea, as well as on the promotion of effective agreements on investment protection, fisheries, maritime boundary delimitation, extradition and mutual assistance in criminal matters are important activities.

Performance summary

Substantial achievements in the promotion of Australian interests in the Law of the Sea Convention which entered into force in November.
Solid progress in negotiations in a range of maritime legal areas, including illegal Indonesian fishing, maritime boundary delimitation and the UN Conference on Straddling Fish Stocks and Highly Migratory Fish Stocks.
Substantial and effective involvement in continuing trade and environment law-making.
Securing Australian oil exploration and production interests through the rejection by the International Court of Justice of the case brought by Portugal against Australia over the Timor Gap Treaty.
Substantial involvement in UN law-making initiatives, including those associated with the establishment of an International Criminal Court.
Campaigns to make treaty processes and implementation better understood in Australia and more transparent for the Federal and State governments and Parliament and the public.
The opportunity to monitor and influence international narcotics issues through the assumption by Australia of the regional chairmanship of the Dublin Group.

1.8.1 International agreements, resource law and law advising

Sea law and ocean policy

Australia ratified the 1982 United Nations Convention on the Law of the Sea on 5 October, becoming an original party to the Convention when it entered into force on 16 November. This was the culmination of a long-standing Australian objective, since the first negotiations of the Convention began in 1973, to establish a global legal regime governing all uses of the world's oceans.

Australia is a significant beneficiary of resource entitlements under the Convention, which grants coastal states preferential rights to exploit marine resources in the 200 nautical mile exclusive economic zone and continental shelf. The Convention also provides guarantees of freedom of navigation essential to Australia's sea-borne trade and strategic interests, and enhances the ability of Australia to protect its marine environment.

Australia has also participated in international negotiations to establish the institutions created by the Convention, especially the International Sea-Bed Authority. The objective is to ensure that the Authority is an efficient and low-cost organisation which will protect Australia's interests as a land-based producer of minerals found on the deep sea-bed. Multilateral negotiations are continuing.

Protection of the marine environment

Fisheries

The Department coordinated Government activity designed to deter illegal Indonesian fishing in the Australian Fishing Zone (AFZ) and to protect important Australian maritime resources in the waters off northern and western Australia. In cooperation with the Indonesian Government, an information and education campaign was conducted in Indonesia to explain the conditions under which traditional fishing may take place in the AFZ, to increase awareness of the consequences of illegal fishing, and to urge local authorities to strengthen their efforts to prevent further incursions. Australian and Indonesian officials have visited eastern Indonesian fishing communities, the origin of the fishing expeditions into the AFZ, and maps showing Australia-Indonesia maritime arrangements in the Timor and Arafura Seas have been distributed among them. The Department is coordinating further action aimed at alleviating the problem of illegal Indonesian fishing.

The Department, with the Department of Primary Industries and Energy and the Australian Fisheries Management Authority, participated in two further negotiating sessions of the United Nations Inter-Governmental Conference on Straddling Fish Stocks and Highly Migratory Fish Stocks. Australia has significant domestic fisheries based on highly migratory species, which include tuna, and a growing interest in straddling stocks. The conference arose from concerns about unregulated high-seas fishing and severe stock depletion in international fisheries. It aims to develop a regime to regulate fishing of straddling fish stocks and highly migratory species on the high seas and to strengthen conservation and management efforts. Australia has been working in the conference to seek improved controls over high-seas fishing to ensure the long-term sustainability of fisheries for straddling stocks and highly migratory species.

Australia-Indonesia maritime boundary delimitation

Further negotiations, the fourth in the current round, were held on outstanding maritime delimitation issues. They enabled both sides to discuss in considerable detail the geographic, geomorphological and international legal issues involved. As Australia and Indonesia are now both parties to the 1982 Law of the Sea Convention, both sides are looking for solutions in accordance with the Convention. A further round of negotiations is scheduled.

Trade and economic law and aid issues

Further negotiations were held on investment protection and promotion agreements (IPPAs) with bilateral trading partners identified by the Government and by Australian business as countries with which IPPAs were a priority within the Government's objective of enhancing legal protection for Australian overseas investment. Negotiations were held with India, Russia, Argentina and Chile. IPPAs were concluded with Peru, the Philippines and Lithuania.

Advice provided to Australian Government negotiators on the Energy Charter Treaty ensured that the Australian investments it covered were protected by a multilateral legal commitment to investment protection and fair access. Legal advice was also provided to other Commonwealth agencies engaged in international treaty negotiations on civil aviation, double taxation, science and technology and aid agreements and memoranda of understanding.

Human rights and social law

The Human Rights and Social Law Unit worked on the UN draft Declaration on the Rights of Indigenous Peoples and was involved in drafting two new optional protocols to the UN Convention on the Rights of the Child. One is aimed at the elimination of child sex tourism worldwide, the other at preventing the recruitment of children into armed forces. The unit also coordinated representations to regional states encouraging their accession to The Hague Convention on International Child Abduction.

The input of the Environmental Law Unit into environmental conventions is covered in sub-program 1.7.2.

Defence, outer space and nuclear law

The Defence, Outer Space and Nuclear Law Unit supported Australian interests in disarmament, nuclear non-proliferation and nuclear safety by representing Australia in international negotiations covering compensation in the event of civil nuclear damage, and developing policy on the subject. The unit was closely involved in advising on the Korean Peninsula nuclear threat and developing policy positions. This action was supported by the development of legal instruments covering Australian membership of the Korean Energy Development Organisation (KEDO), which is designed to remove the threat of nuclear proliferation from the Korean Peninsula.

Advice was provided on the draft Comprehensive Test Ban Treaty, various bilateral nuclear safeguards agreements, the Verification Annex to the Biological Weapons Convention, the Missile Technology Control Regime and the prospective Convention for the Safety of Radioactive Waste Management and on space agreements with Germany and Japan. The unit also contributed to the development of Australian policy on the United Nations Committee on the Peaceful Uses of Outer Space.

1.8.2 International and domestic litigation

International organisations and international litigation

The International Court of Justice heard oral argument in the case brought by Portugal against Australia over the Timor Gap Treaty in February and the judgment was delivered on 30 June. The outcome was a decision in Australia's favour by 14 to 2. Exploration and production activities in the Timor Gap were accordingly secured. The Legal Office provided legal and policy advice to Australia's legal counsel, and provided briefings and information to interested Australian non-government groups, including industry, on the proceedings and the outcome.

At the 49th Session of the UN General Assembly in 1994, the office played an important role in advocating early progress on the adoption of a statute for an International Criminal Court and, in conjunction with the Attorney-General's Department, represented the Government in the ad hoc committee established to consider the draft statute for the court which had been finalised by the International Law Commission in 1994.

The office contributed to the convening of the Second Regional Conference on International Humanitarian Law, which was hosted by the Australian Red Cross in Canberra in December. The conference attracted more than 160 representatives from regional Red Cross and Red Crescent Societies, governments, military, academia, and non-governmental organisations, and facilitated the exchange of ideas and views on regional perspectives of international humanitarian law. It enabled regional countries to play a significant part in the development of recommendations aimed at strengthening the compliance of states with international humanitarian law, and improving the mechanisms through which assistance is provided to the most vulnerable, particularly civilians, in times of armed conflict.

The office also helped develop Australia's position for the revision of the Certain Conventional Weapons Convention and in particular Protocol II of the convention which deals with land mines. The achievement of a strengthened international regime restricting the use of land mines and other weapons with indiscriminate effect, particularly on civilian populations, is a major objective for the Department.

Treaty issues as they affect Australia are of vital concern to the office, which is responsible for providing information and advice about the Government's approach to international treaty regimes. The office worked to ensure wide access to information about treaties. The Department's magazine Insight now publishes twice yearly a list of multilateral treaties under negotiation and treaties on which the Government is considering taking action, with contact details for Commonwealth officials involved with each treaty. The inquiry into treaties and the external affairs power being conducted by the Senate Committee on Legislative and Constitutional Affairs received material from the Legal Office.

Considerable resources were devoted to explaining the processes of treaty making and implementation in Australia to a wide cross section of the community. In October, an information kit, 'Australia and International Treaties', was produced. Several thousand copies have been distributed to members of Parliament, State and Territory governments, industry representatives and representatives of other non-government organisations, as well as members of the public.

Work on a variety of UN legal issues has been a major priority. The effectiveness of UN sanctions has been a particular focus of attention for Australia which prepared a paper, in conjunction with the Netherlands, on problems in the administration of mandatory sanctions regimes by United Nations member states. The United Nations Congress on Public International Law in March considered the document, which will form the basis for further work to enhance the effectiveness of sanctions regimes. Legal and policy advice was provided to government agencies, industry and members of the public on all United Nations mandatory sanctions regimes, including those relating to the former Yugoslavia, Iraq, Libya and Angola (all of which were subject to specific Australian legislation at 30 June 1995).

International criminal law

Advice on extradition, mutual assistance in criminal matters, and international conventions on narcotics trafficking and terrorism was provided by the International Criminal Law Unit. Extradition treaties were signed with Brazil and Israel, and the treaty with Indonesia entered into force.

Administrative and domestic law

The Administrative and Domestic Law Group provided advice to the Department on machinery of government, staffing, litigation, freedom of information and privacy, passport issue, standard form contracts for the engagement of consultants, and diplomatic and consular privileges and immunities issues. It coordinated departmental responses to subpoenas and discovery orders relating to departmental documents, and managed the Department's legislative program. Training courses, presentations on diplomatic and consular law, freedom of information and privacy and the authentication of documents were important activities during the year.

1.8.3 Refugees, asylum and immigration issues

The Refuges Immigration and Asylum Section (RIA) provides timely information and advice on international legal, political, human rights and refugee developments to the Department of Immigration and Ethnic Affairs (DIEA) and the Refugee Review Tribunal (RRT), assisting the handling of refugee, immigration and asylum-seeker issues. An objective in the provision of high quality country profiles containing refugee-related information on countries from which refugee applicants come, and specific information when it is required for particular cases. It maintains consultations with public interest groups and NGOs on matters of concern to them relating to unauthorised arrivals in Australia.

It provides advice and assistance to DIEA on controversial visitors, deportations and citizenship issues, with a view to ensuring the smooth management of such cases. It managed DFAT's submissions and evidence to inquiries held by the Joint Standing Committee on Migration into Citizenship and Visa Questions in 1994-95, and has the objective of ensuring that the Committee's recommendations are thoroughly considered by departments before advice is provided to ministers on responses.

Specific issues addressed included:

contributing to improved international understanding of refugee, humanitarian and displaced person issues by pursuing diplomatic and policy aspects of these issues with international bodies, including the United Nations High Commissioner for Refugees (UNHCR) and participation in the annual UNHCR Executive Committee meeting;
managing the Department's submissions and evidence to inquires held by the Joint Standing Committee on Migration into citizenship and visa questions;
providing legal advice on nationality questions arising from applications for refugee status from former residents of East Timor;
investigating the association of people smuggling and organised crime with illegal movements of people in the region;
consulting with DIEA and the UNHCR on the proposed December l995 completion of the comprehensive plan of action for Indochinese refugees, with special reference to arrangements for the repatriation to Vietnam of Òscreened-outÓ asylum seekers from refugee camps in Hong Kong and other South East Asian countries;

Narcotics

Australia remained a major donor to the United Nations International Drug Control Program (UNDCP) and continued to work to support the consolidation and strengthening of its programs, activities and staffing resources.

At the 38th session of the Commission on Narcotic Drugs (CND) in Vienna, Australia was active in the preparation and passage of resolutions and recommendations to enhance the policy making role of CND. As a result of extensive preparatory work undertaken by posts in consultation with the Department and the Standing Interdepartmental Committee on International Narcotics Issues (SIDCINI), Australia co-sponsored a resolution on 'demand reduction' which strengthened its international reputation as a leader in the field of demand reduction.

In 1995, Australia resumed the chair of the South-East Asia and Pacific Region of the Dublin Group, which provides an opportunity for the exchange of information on narcotic matters among EU countries, Japan, Australia, Canada and the US, and convened regular meetings in Bangkok, Rangoon and Vientiane. Australia supported the establishment of a chapter in Hanoi to consider regional narcotics issues. Australia also participated in other regional meetings of the Dublin Group in South America, South West Asia and Africa.

1.9 INFORMATION AND CULTURAL RELATIONS

Objective

•Project abroad an image of modern Australia in support of our key foreign and trade policy objectives.

Description

The International Public Affairs Branch (formerly the Overseas Information Branch), the International Cultural Relations Branch, the Market Australia Unit and the Historical Documents Branch of the Public Affairs Division are responsible for this sub-program. All Australian diplomatic missions and departmental regional offices are also involved to varying degrees. Bilateral councils and foundations funded under the Foreign Affairs and Trade portfolio and serviced by the International Cultural Relations Branch also make a substantial contribution to advancing Australia's public diplomacy. The councils and foundations, which produce their own annual reports, are listed in the appendixes to this report. The Public Affairs Division is also responsible for administering the Commonwealth Government's Access and Equity program on behalf of the Department.

Performance summary

Improved understanding of and support for Australia and Australian policies through targeted and evaluated country and regional cultural relations and public affairs strategies.
Increased international identification of Australia as an attractive and reliable trade and investment partner, a source of high-quality manufactured goods and services, and a nation of cultural diversity and sophistication.
Public affairs support for high-level visits, internationally distributed print and electronic media products, a range of visit programs and satellite television conferencing created favourable publicity and addressed target audiences.
Launch of the Market Australia campaign aimed at improving perceptions in target East Asian markets of Australia's capabilities in sophisticated goods and services.

1.9.1 International cultural relations

Performance summary

Implementation of initiatives announced in the Prime Minister's Creative Nation statement, including the Elite Touring Program and Visual Arts Touring Program and preparation for an integrated promotion of Australia in India in late 1996.
Australia Today Indonesia '94, a major integrated promotion held in June-July, which brought together business, science and technology, education, culture and sports events in a way which improved Indonesia's perceptions of Australia.
The high-profile Experience Australia '95 promotion in Germany launched by the Prime Minister in March, which reinforced the impact of CeBIT '95.
Establishment of a dedicated sports unit in the International Cultural Relations Branch, after work on the implications of the 2000 Olympics for the portfolio and the more general role of sport in foreign affairs and trade.
Assistance for the Australian-initiated Clean Up the World environmental campaign to extend to other countries.
Development of Australian links with cultural entrepreneurs from Asian countries through visits to Australia.

Creative Nation initiatives

Several prime ministerial initiatives gave a significant boost to the Department's international cultural relations program in the period. In his Creative Nation statement in October, the Prime Minister announced that the Department would develop and fund elite performing and visual arts tours in the Asian region with a budget of $3.85 million over four years. An inter-agency working group chaired by DFAT assisted the Department in making recommendations to ministers on the content of the touring program for 1994-95 and beyond. In March, the Prime Minister launched the first international cultural relations program, the mini-festival of Australian performing arts in Singapore, Australia Alive!. It attracted extensive media coverage, and audience polls registered improved perceptions of Australia

These tours will build on a range of other activities aimed at enhancing Australia' s international image, including the major integrated promotions of Australia held in Korea, Japan and Indonesia over recent years. They also aim to establish self-sustaining circuits for Australian artistic organisations and individuals in Asia, thus boosting Australian exports of cultural product.

Major integrated country promotions

Another decision announced in 'Creative Nation' was to provide $3 million in seed money to stage a further major integrated promotion of Australia, to be held in India in 1996. The India promotion will showcase Australian achievements to improve opportunities for both countries in commercial, cultural and other fields. It will also project Australia as a committed and influential member of the Asia Pacific and Indian Ocean communities.

Planning for India drew on the experience of the Australia Today Indonesia '94 promotion held in June and July 1994. This program, developed, managed and evaluated by a private consortium led by Price Waterhouse Urwick with a contribution of $5 million from the Department, brought together business, science and technology, education, culture and sport. The major business conference and program was attended by about 800 Australian companies. The major science and technology exhibition Visions for the Future attracted more than 300 000 Indonesian visitors, including President Soeharto and Dr Habibie, who subsequently led a major science and technology mission to Australia. Among the trade and investment outcomes the promotion generated was a $12 million joint venture between Earth Observation Resources Australia and its Indonesian partner Indica Dharma. It also resulted in an estimated $80 million in contracts for Queensland.

A more modest but high-profile promotion - Experience Australia '95 - was officially launched by the Prime Minister in March in Hannover, where he opened a major exhibition of Australian Aboriginal art from the Holmes a Court collection. The promotion, which will run until October 1995 as a series of 'Australia weeks' in 10 major German cities, reinforced the impact achieved by Australia's participation as partner country at CeBIT '95, the world's leading information technology fair in Hannover. It has also been the catalyst for a number of leading Australian performing and visual artists to visit Germany and then to proceed to other parts of Europe.

At their meeting, the Prime Minister and Chancellor Kohl agreed that a bilateral cultural agreement should be concluded and a draft developed in close consultation with interested Australian agencies has been passed to the German Government. The Prime Minister also launched the innovative Australian studies centre at the University of Potsdam, which received seed funding from DFAT's cultural relations program.

Other cultural relations developments

The general meeting of the Australia Abroad Council (AAC) chaired by Senator Evans in November reaffirmed the importance of the cultural relations program in projecting Australia's image abroad, particularly in Asia, and encouraged greater coherence and integration between trade and commercial promotions, cultural activities and international educational programs, and between the many agencies involved in promoting Australia's image overseas. The AAC's executive committee met in April to follow up, exchanging views on several major strands of Australia's image projection in areas such as science and technology, education and the opportunities offered by the Sydney 2000 Olympics. Departmental examination of their implications for the portfolio and the role of sport in the foreign affairs and trade field has led to the establishment of a dedicated sports unit within the International Cultural Relations Branch.

The cultural activities funded by the Department included not only those relating to fine music and visual arts organised by Musica Viva and Asialink, but also the Australia-initiated Clean up the World environmental campaign. Support for Clean up the World in other countries was effective in reinforcing Australia's image as a concerned international citizen with a commitment to tackle serious environmental problems. More than 30 million people in more than 80 countries took part in the campaign in September.

The period saw a particular focus on developing Australian links with cultural entrepreneurs from Asian countries. Two groups were brought to Australia in October and May. The first visit was timed to coincide with showcases of Australian performing arts at the Sydney Opera House, the Canberra Arts Market and the Melbourne Festival. The second group visited around the time of the Brisbane Biennial. A number of Australian companies have been approached for bookings as a result of these visits, which also generated wider interest among cultural organisations, including federal and state government agencies.

The Aboriginal and Torres Strait Islander cultural program managed by the Department increased the awareness and understanding of Australian indigenous culture in the Asian region and in other parts of the world. Indigenous visual arts exhibitions owned or supported by the Department were well received overseas, attracting large public attendances and wide media coverage. These activities served to demonstrate Australia's commitment to indigenous culture as a dynamic and distinctive part of contemporary Australian life. A highlight was the public launch, in conjunction with Asialink, of the Seasons of the Kunwinjku West Arnhem Land exhibition bought by the Department at an Asia Pacific business colloquium in Melbourne, before touring the exhibition around Asia.

After major restructuring and streamlining in 1993, the Department undertook further reforms during the period, including devolving substantial funding to overseas posts, and implementing other financial and administrative changes aimed at improving the cost effectiveness and transparency of its programs. Continuing challenges for the Department include expanding the funding base for international cultural relations activities by securing more private sector, State government and other sponsorship, and integrating cultural relations activities better with major trade missions and other significant portfolio projects.

North-East Asia

In addition to the work of the Australia-Japan Foundation, the Department managed a cultural program designed to deepen Japanese understanding of contemporary Australia. The program was based on exchanges at the institutional, professional and people-to-people levels. A particular priority during the period was to promote awareness in Japan of the international calibre of Australian arts professionals, thereby gaining a place for the Australian arts industry in the commercially attractive but highly competitive Japanese market.

The main 1994-95 project was the visit to Japan by a delegation of Australian performing arts administrators and entrepreneurs. Meetings in key regional centres as well as Tokyo broadened participants' understanding of professional practices in Japan and established links at both personal and institutional level. The Department also financed a program of visits to Australia for Japanese cultural professionals, resulting in several joint projects and a longer-term strategy for introducing Australian performing arts groups to Japan.

Other activities included support for Australian studies at Tokyo University, an exhibition in Kyushu of the work of Aboriginal artists which attracted more than 50 000 people, and the regular publication of an Australian arts newsletter, Echo, in Japan.

The Department supported a performing and visual arts program targeting China, Hong Kong and Taiwan and managed the activities of the Australia-China Council through its secretariat. Visits to Australia by arts administrators and a tour of the region by actors John Bell and Anna Volska highlighted Australian performing arts excellence. Australian indigenous culture also featured prominently with an exhibition of Aboriginal prints touring China, Hong Kong and Taiwan.

The Department provided $100 000 to the Australian Chamber of Commerce in Hong Kong for a trade and cultural promotion in 1996. This promotion will project a contemporary image of Australia through a multifaceted program of events throughout that year. Cultural relations activities in the Republic of Korea were funded through the Australia Korea Foundation.

South-East Asia and South Asia

The Elite Touring program festival in Singapore and other music and visual arts programs conducted by Musica Viva and Asialink in the region were supported by Australian diplomatic missions in South-East Asia, which developed and funded a range of innovative cultural activities.

An encouraging development was increased interest in Australia as a partner country on joint projects with the ASEAN Committee on Culture and Information (ASEAN COCI). The Department provided substantial funding for a landmark seminar attended by South-East Asian experts on conservation of audio-visual materials at the National Film and Sound Archive in Canberra.

The continued operation of the Australia Centre in Manila, co-funded with the Australia Council, enabled the embassy to promote a wider range of activities and a greater interaction with local arts committees. Visual arts activities with a high profile over the year in review included an exhibition by artist Keith Looby and a major performance and exhibition by Mike Parr, both of which attracted wide-scale media attention.

In view of the substantial programs operated by the Australia-Indonesia Institute, and major events such as ATI '94, the Department does not provide separate funding for cultural relations activities in Indonesia.

In Vietnam, activities focused on developing links with Australia in theatre and music. A number of musical instruments were donated to the Conservatoire of Music, including Vietnam's first harpsichord. Assistance was also provided to the National Library of Vietnam, the Lao Cai Museum, and for heritage conservation in old Hanoi.

In Cambodia, the most visible of the Department's projects was the restoration of the National Museum in Phnom Penh, which was opened by the Governor-General in April. The Department also funded projects in swimming and tennis in Cambodia.

Continuing Australian support for the conservation and restoration of the Tam Ting caves Buddhist shrine in Laos drew the acclaim of the Buddhist hierarchy and senior Lao Government officials. Funding was also provided to assist an Australian sporting administrator to work with Lao officials over a 12-month period, with the eventual aim of having a Lao team participate in the Sydney 2000 Olympics.

South Pacific

At the South Pacific Forum meeting in Brisbane in August, the Prime Minister announced a major new program - 'Australia South Pacific 2000'. This initiative, which was allocated funding of $1 million a year until 2000, seeks to extend the benefits of the Sydney 2000 Olympics to Australia's South Pacific neighbours and to build on Australia's cultural links with the region.

The Department established this program successfully during the period, working closely with the Australian Sports Commission, which is managing the sport component. Highlights included the holding of the first meeting of South Pacific Forum country sports ministers, the award of 36 scholarships to Pacific islanders to study at the Oceania Olympic Training Centre at the Australian Institute of Sport in Canberra, and the establishment of sports participation programs for young people in South Pacific countries. Under the cultural and visits components, 'ASP 2000' provided funds to bring South Pacific delegates to the Global Cultural Diversity Conference in Sydney, and the Eco-tourism World Congress in Hobart, assisted with funding the launch of the Rock Challenge program in Fiji secondary schools and supported tours of Australian music groups to countries in the region.

Europe

The modest size of the budget for Europe, most of which was devolved to posts, required careful and effective targeting of the cultural relations program in this large and competitive environment. The flagship promotion during the period was the Experience Australia '95 promotion in Germany, which generated a range of valuable spin-offs in other parts of Europe.

Delegations from Italy, France and Germany visited Australia during the period to hold consultations on educational, scientific and cultural cooperation. Common themes which emerged from the discussions were the encouraging prospects for partnership with Australia in the Asian region, and for closer collaboration in the educational, sporting and multimedia areas.

Several Australian artists were financed for performances in a range of countries including Turkey, Austria, Poland and Russia. The Sydney Opera House model exhibition funded under the cultural relations program toured Europe and was particularly well received in Cologne.

Americas

A highlight of the North America program was the 'Australia Festival', a major performing and visual arts program developed by the Australian Embassy in Washington and staged at the prestigious Kennedy Centre in October. This event, which attracted more than 60 000 people, drew favourable media reports highlighting the vibrancy, freshness and technical expertise of Australian cultural achievement, thus reinforcing perceptions of Australian excellence to an influential American audience.

Australian culture was also projected into the United States through a range of other activities, notably Australian studies programs. Under these programs, study kits were distributed to schools and financial assistance provided to conferences with Australian themes. The annual 'Australia Week' promotion in St Louis was again a successful event.

A useful modest cultural program was conducted in Canada, the major event during the year being attendance by the Songlines Music Aboriginal Corporation at the Music West convention in Vancouver in May.

In Latin America and the Caribbean, several small-scale projects were undertaken in netball, academic exchange and craft.

Africa

Australia's firm stand against apartheid, coupled with sporting and immigration links, provided a useful basis upon which to raise Australia's profile in the southern African countries through cultural relations events. However, funding constraints and competing priorities, especially in the Asia Pacific region, dictated that the Department's African activities were modest.

Middle East

The main focus of limited cultural relations activities in the Middle East continued to be assistance to the University of Sydney in relation to the excavation site at Pella, Jordan, and associated conservation and research activities. This project raised Australia's profile in Jordan and the region, while providing valuable experience for Australian archaeologists.

Non-statutory and statutory bodies

Funding of bilateral cultural relations activities with some countries is largely carried out by non-statutory and statutory bodies. The following non-statutory and statutory bodies operated in association with the International Cultural Relations Branch of the Department:

Non-statutory bodies

Australia Abroad Council
Australia–China Council
Australia–France Foundation
Australia–India Council
Australia-Indonesia Institute
Australia–Korea Foundation
Australia–New Zealand Foundation

Membership and other background information appears in the appendix on non-statutory and statutory bodies. With the exception of the Australia Abroad Council, refer to annual reports prepared by each body for details of its activities.

Statutory body

The Australia–Japan Foundation is a statutory body which produces its own annual report. Details of its structure and activities appear in the appendixes to this report.

1.9.2 International Public Affairs

Performance Summary

The Department implemented new procedures to ensure that its public affairs output was directed to the needs and expectations of clients. Twenty key overseas posts developed country public affairs plans which described their public affairs objectives and the support and product needed from the International Public Affairs Branch (IPB) to meet the task. These plans informed branch operations.
IPB held a workshop and invited all branch clients, including the Executive, divisions in Canberra, and other agencies and departments to provide details of their needs and expectations for 1995-96. From the results, a public affairs plan has been developed taking account of the needs of clients within Australia and overseas.
Performance changed and improved significantly as a result of the direction and feedback from overseas posts. Most notable among the changes were the use of new technologies such as satellite television, CD ROM, Internet and digital publishing. Some products were modified to support post objectives more closely. The benefits flowed on from the 20 key posts to others in the network.
The Department handled a considerably increased work load associated with a 50% increase in overseas media visitors compared with 1993-94 and a doubling of the number of official visits to Australia for which it provided media support.
Two outstanding proposals for international public affairs activities were advanced- the development and rationalisation of all overseas visitor programs administered by the Department, and the establishment of an International Media Centre in Sydney to capitalise on the thousands of overseas media visiting Australia each year.
The Secretary announced at the end of the financial year that he believed there should be further integration of public affairs with policy development and implementation. He announced a task force to look at future directions of public affairs in DFAT.

Major activities

Twenty-two specialist public affairs officers were working at the key posts in 19 countries. These specialist staff initiated and coordinated relations with the media and other influential target groups, coordinated media arrangements for ministerial and other high-level visits, responded to information requests and were usually responsible for managing cultural relations programs. As part of overseas missions, public affairs officers developed and implemented public affairs strategies directed at fulfilling departmental goals and priority objectives.

The demands from clients outside DFAT were considerable, with the Department of the Prime Minister and Cabinet (PM&C) making extensive calls on the services and expertise of officers for media liaison work. An officer was seconded to PM&C for four months to oversee the public affairs aspects of the 1994 South Pacific Forum. Activities included the preparation of a wide range of media and general information material on the forum, program planning and arranging accreditation and accommodation for 200 international and domestic media. IPB provided five other public affairs officers to assist with the forum media centre. It seconded a public affairs officer to the Office of Multicultural Affairs for a month to organise the media centre for the Global Cultural Diversity Conference and arrange SBS-TV's television coverage of the event. Five public affairs officers assisted with the media centre, and produced radio, print and photographic material.

IPB provided the Department with a team of public affairs officers for NTIOC94. Support included international and national media liaison and arranging interviews and media conferences for leading speakers. IPB produced radio, print and photographic material on the conference which was sent directly to public affairs officers at posts for distribution in the mainstream media. An edited video of the keynote speeches was transmitted twice on Australia Television and was made available in VHS form for conference participants.

Multimedia production

The Department joined the information super-highway in 1995. On 24 April, the Digital and On-Line Unit of IPB began a Departmental six-month trial on-line to the Internet World Wide Web service. The Department's home page includes a comprehensive range of the latest Australian foreign affairs and trade portfolio information available to domestic and world audiences including daily press releases, consular information and ministers' speeches. At the end of the financial year, access rates were approaching 1000 a day. If the trial is successful, this public information tool will alleviate the demand caused by simple information requests which burden many posts. Washington has also established its own Internet home page which has a link function to that of the Department in Canberra.

The Department built on the success of its 'Australia Link' satellite television series of conferences introduced in 1993-94 linking ministers in Australia with media in other countries. The programs continue to be a valuable, cost-effective means of delivering specific public affairs messages overseas.

The first 'Australia Link' program of the year was an edited broadcast of the Prime Minister's opening speech to the South Pacific Forum in Brisbane on 31 July, transmitted via Australian Television to South-East Asia and the Pacific island countries. Senator McMullan briefed foreign journalists on APEC at a Foreign Correspondents' Association of Australia luncheon in October, three weeks before the Bogor Leaders' meeting. An edited version of this speech was broadcast on Australian Television, which also broadcast the Prime Minister's address to the Foreign Correspondents' Association soon before his departure for the Bogor meeting.

In April, Senator McMullan held an interactive satellite conference with South African media to brief them on the 'Look West' strategy before his visit to Africa.

The 'Australia Link' programs generated coverage in overseas print and electronic media on issues important to Australia and coming from Australia. Positive feedback from overseas posts and the media indicated the benefits of developing and diversifying the use of satellite technology as a vehicle for Australia's international public diplomacy. Portfolio ministers have endorsed further use of the technology.

The Digital and On-line Publishing Unit produced and distributed domestically and overseas an interactive multimedia CD ROM, 'Australia - Good For Business', to promote Australia's international competitiveness and investment policies. The production was bilingual in English and Japanese. Demand has been so high that an updated version is being planned.

Other production

The Department also created and disseminated a range of print, radio, television, video and pictorial material to posts to assist their public affairs programs. Periodicals included the fortnightly foreign and trade policy magazine Insight, Australian Science and Technology Newsletter, Peace and Disarmament News and Environment and Australia's International Agenda. Other publications included a trade and investment kit, Winning Markets, launched by the Prime Minister, and a special booklet, Australia and the United Nations, to mark the UN's 50th anniversary.

The Department produced more than 320 public affairs items and 40 feature articles and many captioned photographs on issues ranging from trade, investment and business to the development of new products and scientific endeavours.

It has obtained positive exposure in overseas media for the Government's trade policy. It created five packages to support the 'Austrade Industry Group' promotion through the production of targeted television, print and radio material.

Television and video production for release overseas included 33 video news releases, about 120 minutes of stock footage covering Australia's capital cities, industrial sectors and political leaders, and joint production of a 24-part, 90-minute series titled 'Inventive Australia'. Reports from missions abroad indicate regular usage, particularly in the Asian region.

Video and technical support were provided to six head of state and ministerial visits, NTIOC94, the South Pacific Forum, the Global Cultural Diversity Conference, 'Experience Australia' (Germany) and the Market Australia launch in Australia.

Media liaison

A major initiative for the Department is the establishment of an International Media Centre (IMC) in the central business district of Sydney which will be a 'one stop' shop for visiting overseas media and Australia-based foreign correspondents. The IMC will open in November 1995 and will work closely with Australian business and industry, state, federal and government departments and agencies, academics and the media to project a positive image of Australia and its interests in the international arena.

The centre will identify and contact media visitors before they leave for Australia and assist them with their programming to ensure they achieve foreign affairs, trade and other Government objectives. It will also provide an operational base for resident foreign correspondents, most of whom are located in Sydney. The centre will work in tandem with the Sydney Organising Committee for the Olympic Games to extend coverage of other public affairs issues by assisting visiting media.

Visiting media will be able to use the centre's modern communication facilities to file stories to their home countries as well as have a central place to meet, discuss story ideas and access information. The IMC will be used to launch major Government policy initiatives as well as to brief journalists on specific issues.

The Department coordinated media arrangements on behalf of the Department of Prime Minister and Cabinet for 15 Guest of Government visits, twice as many as in the previous year.

Media liaison and photographic support was arranged for visits by the Prime Minister to Germany, the Netherlands, Singapore and Japan. IPB arranged for Australian and international media coverage of the Prime Minister and portfolio ministers' attendance at the APEC leaders' meeting in Indonesia. A media adviser was seconded from the branch to accompany Senator McMullan to South Africa and Mauritius.

Visits programs

The International Public Affairs Branch administered three major visits programs during 1994-95, and registered significant increases in activity in each one.

Overseas Media Visits Program

The Overseas Media Visits program encourages senior media representatives to visit Australia to produce material covering Australia's foreign policy, trade, economic and cultural aspects of life in Australia. It arranges extensive itineraries for these visitors. Usually they are nominated by Australia's overseas missions, and financial assistance is sometimes provided to help with travel and living expenses in Australia.

During 1994-95, the Department assisted 134 media visitors under the Overseas Media Visitors program, a 50% increase on those handled in 1993-94. The visitors, from 32 countries compared with 23 in 1993-94, covered subjects as diverse as the Australian prawn industry, Australian arts and culture and defence cooperation. Other common topics included bilateral trade relations, Australian innovations in science and technology and primary industry, multiculturalism and the Sydney 2000 Olympics. Divided by region, 42 came from North and North-East Asia, 31 from South and South-East Asia, 30 from the Americas, 17 from Europe, seven from Africa and the Middle East and seven from the South Pacific.

Individual visitors from print and electronic media, including influential publications such as The New Yorker, National Geographic, The Straits Times, The Bangkok Post and The Los Angeles Times enhanced international understanding of Australia's foreign policy, trade and economic interests.

Special Visits Program

Visitors to Australia under the Special Visits Program include influential or eminent people who can contribute to a greater overseas understanding of Australia's policies and institutions and heightened awareness of Australia in key foreign policy, trade, economic and social issues.

Additional funding was provided to restore the Special Visits Program to 1990-91 levels. Forty people visited Australia under the program which represented a 33% increase from last year. Assistance was provided to two officials who accompanied visitors to Australia.

The number of visitors by region was: South and South-East Asia seven; North and East Asia 11; South Pacific seven; Europe three; Americas five; Africa and the Middle East five. Thirteen per cent were women.

Regional visits

Four Australian journalists were sponsored by the Department under the journalist visits scheme to the South-East Asian region. The program is funded by the Department and administered by the Media, Entertainment and Arts Alliance (Australian Journalists' Association). Its aim is to encourage Australian journalists to gain a better appreciation and understanding of politics and culture in our region.

1.9.3 Historical documents

Description

The Historical Documents sub-program embraces research and editorial functions required to produce volumes in the series Documents on Australian Foreign Policy 1937-49. This period is covered first because this was the period during which Australia established diplomatic relations with other countries and began to develop an independent role in world affairs. Successive governments have indicated the importance of documenting the evolution of Australia's external relations.

The content of volumes in the series is scrutinised by a Committee of Final Review comprising the Prime Minister, the Minister for Foreign Affairs and the Leader of the Opposition and advised by the Editor of Historical Documents. An Editorial Advisory Board (comprising eminent scholars and with representatives of the Prime Minister and the Leader of the Opposition in attendance) advises the Minister for Foreign Affairs.

The sub-program also provides policy advice on the Archives Act and the Department's responsibilities under it. It attends to official and public inquiries about the archives of the Department and its predecessors, and to requests for access to those records. It assists a varied clientele, from researchers, journalists and academic historians to departments.

Research expertise is applied also in responding to official and public historical inquiries and publication of scholarly monographs and papers.

Performance Summary

A formal understanding was signed in February between the Department and the British Foreign and Commonwealth Office agreeing to mutual clearance of 30-year-old shared records, which will reduce the need for referral.
Original consular records seized by Australian authorities in 1914 and 1939 were formally restored to the German Government by the Minister in March.
A forward program of assessing records of evident research interest and likely international sensitivity was initiated, with the aim of improving future response times to access requests.
Guidelines for the assessment of foreign-sourced information in records were circulated in January to Australian Archives and several other agencies, in the hope of reducing the number of records referred to the Department for clearance.
Representations were made to the Commonwealth Secretariat in London about procedures for release and consultation with member countries under its proposed 30-year archival policy, with the aim of ensuring that the provisions meet Australia's legal requirements.
The Department's arrangements with Australian Archives under Section 35(1) of the Archives Act covering consultation on access clearance have been revised.
Reference assistance was given to several projects involving special access to Departmental records, including research by a former South African Ambassador for a history of Australia's relations with South Africa and work on Australia's involvement in peace keeping activities.
Volume X1 of Documents on Australia 1937-49 (Australia and Indonesian Independence 1947 was published in August.

Historical Documents Project

Senator Evans launched Volume XI of the documents series in August, in the presence of the Indonesian Foreign Minister, during the Australia-Indonesia Ministerial Forum. Volume XI is the first volume to be published in a soft-cover version as well as the traditional hard cover. Volume XII (all other aspects of Australia's external relations in 1947) was in production for publication late in 1995; a draft of Volume XIII (Indonesia 1948) was approved by the Committee of Final Review; and research for Volume XIV (1948-general) was completed. A sub-committee of the Editorial Advisory Board began work on recommendations about the nature of volumes dealing with events after 1949. The committee's brief includes content and arrangement of future series and developments in publishing technology.

Historical records information and access

The Historical Records Information and Access Section handles requests for access to 30 -year-old records and their clearance, often in consultation with other departments and agencies, with which it maintains close liaison. It also advises the Department on its records responsibilities under the Archives Act 1983 and maintains a data base of administrative and historical information about overseas posts, former diplomatic personnel and overseas representatives in Australia.

Increasing workloads caused by growing public demand for highly classified foreign policy files of the 1950s and 1960s led to provision in late 1994 of additional resources for examination and referral of records, including specialist staff on contract. This has improved response times to public requests and considerably reduced the backlog of cases outstanding after the statutory 90 days for decision.

1.9.4 Market Australia

Description

Market Australia was established in 1994 to project an image abroad of modern Australia in support of Australia's commercial objectives. Its strategies are to:

establish a research basis for a communications strategy to improve Australia's export performance in East Asia, which is being hindered by an incomplete and outdated image of Australia's capacities; and
develop and implement a communications campaign to improve perceptions in target markets of Australia's capacities in sophisticated goods and services.

Performance summary

Market Australia commissioned market research in seven East Asian countries in late 1994 to assess attitudes towards Australia and Australia's capacities in high-value-added manufactures and services. The research, conducted by Diagnostic and Creative Workshop, confirmed anecdotal evidence that outdated international perceptions of Australia's capabilities in high-value-added goods and services were hindering its trade performance. The research revealed a prevailing perception among East Asian decision makers that Australia's capability to supply was largely confined to primary industries and tourism.
Market Australia contracted communications consultants Batey Kazoo to help develop a strategy for a promotional campaign in Thailand, Indonesia, Korea and China to update and broaden the image of Australian capabilities among key business and government decision makers. The campaign, 'Inventive Australia', was launched by Senator McMullan in April. Market Australia placed 'Inventive Australia' advertisements in regional publications and in newspapers in target markets in April-May-June. Consistent with the research findings, the campaign used specific examples of successful Australian innovations in industry sectors of strategic importance to Australia. The case study approach should assist in obtaining financial support for the campaign from innovative Australian companies during the next year.
The Department's Evaluation and Audit Section undertook an evaluation of Market Australia under the portfolio evaluation plan in March-April, and confirmed the need for a Market Australia image-shifting campaign. The evaluation concluded that Market Australia was implementing strategies appropriate for the achievement of its objectives. The impact of the campaign will be assessed against a number of indicators including a quantitative tracking study, direct responses to the advertisements and a survey of reader reactions to the advertisements.
Market Australia plans further advertising in East Asia, including trade publications, to be underpinned by an active public relations program. Market Australia will also undertake research in India to provide a basis for a decision about whether to extend the 'Inventive Australia' campaign there.
Market Australia receives overall strategic direction from its Management Advisory Group chaired by Senator McMullan, and including Senator Cook, State and Territory ministers, the managing directors of Austrade and the Australian Tourist Commission and private sector representatives. Consistent with its 'Team Australia' approach, Market Australia has also coordinated its activities with State governments and other agencies through a series of regular working group meetings.

Market Australia sectoral activities

In support of the promotional campaign, Market Australia developed sector-specific activities in collaboration with the private sector and other agencies such as Austrade. Market Australia coordinated and funded the ASEAN VIP Aerospace Mission in March, timed to coincide with the Avalon air show. Market Australia also hosted a high-level Indonesian telecommunications mission as part of its rural telecommunications program. It contributed to the development of an Australia cuisine project with Austrade in Japan and an Australian 'concept car', a marketing project being developed by Australia's automotive component industry to promote Australia's automotive capabilities to the international market. It also developed plans to place rural telecommunications and environment technology marketing experts in some of its target markets. These activities are designed to reinforce the positive image of Australia's high technology capabilities.

Advertising and market research

Market Australia received assistance from the Office of Government Information and Advertising in selecting its research and communications consultants. Market Australia has not used the Government's central advertising system because most of its advertising has been done overseas. Market Australia spent $4.425 million on the development, production and placement of advertisements overseas and $512,000 on market research and the first wave of a tracking study in seven East Asian markets. It spent $249 000 on advertising in Australia designed to attract private sector interest in and support for the program.

Access and equity

Improved language skills, greater sensitivity and awareness of cultural diversity by DFAT staff have increased the efficiency and effectiveness of the Department's program and services to its clients within Australia and overseas. DFAT staff are a highly valued cross-cultural resource that contribute significantly to Department programs and policies.

The Department has established a cross-cultural program which has produced a Language and Culture Newsletter, and introduced cultural awareness into several departmental training courses highlighting the continuing importance the Department attributes to teaching foreign language and cross-cultural awareness skills for all its officers. An audio-cassette package, Connections, with an accompanying booklet, has been launched to record the knowledge of people, who have recently returned from a posting, or who have a deep personal understanding of the country, as a useful training aid for officers posted overseas.

Language training accounted for $2.16 million of the overall training budget and 426 DFAT officers qualified for language proficiency allowance in 1994-95. The Language Training Unit conducted courses in various languages from basic to intensive for officers and spouses proceeding overseas and held informal lunchtime discussion sessions to improve officers' language proficiency. Although not a prerequisite for selection, 35 of the 38 graduates inducted into the Department's 1995 intake had at least one other language.

The Department continued to improve physical access for visitors to its buildings and premises within Australia and at overseas locations by integrating improved building designs to assist people who are disabled, or sight or hearing impaired. Improved signage in regional and overseas offices focusing on specific language requirements assist clients. The York Park office complex in Canberra, due for completion in 1996, is designed to cater for special needs, providing maximum access to the public.

The DFAT Agency Agreement incorporates 'family friendly' practices such as permanent part-time work, paternity leave and parity in employment conditions for all staff regardless of gender. These practices assist officers to operate without discrimination and to avoid conflict in their employment.

It was a year of consolidation for DFAT social justice policies. The EEO program has assisted target groups over recent years, for example indigenous peoples, women, people from non-English-speaking backgrounds and people with disabilities to build career paths within the Department.

The Department is making progress, through its EEO program, to increase the numbers and position levels of employees in EEO target groups – Aboriginal and Torres Strait Islanders, women, people with disabilities and people of non-English-Speaking background. These goals are expected to be attained by the year 2001. The Aboriginal and Torres Straits Islander Recruitment and Career Development Strategy was initiated to recruit and retain officers from this group to become long-term serving officers with the Department. One per cent of the Department's officers are from Aboriginal and Torres Strait Islander background and the 2% target figure will be reached by 2001. The Aboriginal and Torres Strait Islander officers' mentor network and reference group are contributing to this outcome.

Statistics for other EEO target groups are encouraging, with concerted efforts planned to ensure that more target-group officers reach positions at senior officer levels.

The Business Affairs Unit has provided its publications in multiple languages. NTIOC94 used multiple-language publications to promote its program in participating countries and to community groups in Australia. The ethnic and regional press and radio services are widely used as vehicles for delivery of information and to advertise job vacancies.

Passports Policy contributed $80 000 for the production of an educational program with SBS Television for the series 'English at Work' on passport application procedures. This program assists people from non-English-speaking backgrounds to understand the practical requirements for issue of Australian passports and the provision of overseas consular assistance to Australian citizens. The program will be aired 21 times over a three-year period in English and at least five other community languages. The program targets 2.3 million people and it is expected at least one million people will view the program over a 13-week period. Air time is provided free by SBS Television.

All regional staff are trained in cultural awareness, Aboriginal and Torres Strait Islander cultures and issues, and access and equity. Every State office has an access and equity contact officer who attends the access and equity network meetings, liaising closely with the Office of Multicultural Affairs (OMA). One State office organised, in conjunction with OMA and the local Citizens Advice Bureau, a meeting with representatives from a local ethnic community to identify perceived areas of concern and ways to resolve concerns. It is proposed to hold similar meetings with other ethnic groups.

The access and equity strategy of AusAID is designed to ensure that access and equity target groups are aware of opportunities for participation in the aid program through the provision of goods and services. It also means that public information about development issues and the aid program is accessible to them.

In 1994 AusAID announced a revised Access and Equity strategy which emphasised community outreach, business liaison and public information functions, including those undertaken by AusAID's regional offices. Under this strategy:

• The National Federation of Ethnic Communities Councils and the State Ethnic Communities Councils have been included in its public information and business mailing lists.

• Advertising in the ethnic press on an annual basis begins in July 1995. These advertisements will outline opportunities in the aid program and, it is hoped, identify members of the ethnic community who could be enrolled on AusAID's consultants register.

PROGRAM 2: CONSULAR AND PASSPORT SERVICES

Objective:

To provide Australian citizens
with secure travel identification and to assist and
protect the interests of Australians overseas.

Resources Summary by Sub-programs

2.1 PASSPORT SERVICES


1993-94		1994-95	1994-95
Actual		Budget	Actual
& AEs
$'000		$'000	$'000
Appropriations
Running costs	25,899	30,136	37,897
Other program costs	0	0	0
Total appropriations	25,899	30,136	37,897
Less adjustments	1,120	n.a.	405
Total outlays	24,780	n.a.	37,492
Staff years	273	264	312
Revenue - passport fees	56,957	n.a.	59,643

2.2 CONSULAR SERVICES


1993-94		1994-95	1994-95
Actual		Budget	Actual
& AEs
$'000		$'000	$'000
Appropriations
Running costs	12,556	14,797	10,293
Other program costs	175	225	163
Total appropriations	12,731	15,022	10,456
Less adjustments	187	n.a.	1,164
Total outlays	12,544	n.a.	9,292
Staff years	154	159	116

2.1 PASSPORT SERVICES

Objectives

Increase efficiency and improve quality in passport services through the introduction of new technology and better processing practices.
Strengthen the security of passport issuing procedures by the introduction of more comprehensive application examination, increasing fraud awareness and maximising new technology.

Description

Under the authority of the Passports Act 1938, the Department provides secure, high-quality travel documents to eligible Australian citizens. The Passports Service is administered by the Consular, Programs and Security Division. Passport services are provided by an office in each capital city and Newcastle, and through all Australian overseas missions. There is also a passport processing office in Parramatta.

Performance summary

Achievement of the sub-program's objectives was assessed on:

public satisfaction with the service; and
achievement of targets set in the Passports Service annual business plan.

The number of travel documents issued during 1994-95 was 678 043, a marginal decrease on the previous year. This decline is consistent with the pattern over recent years and largely reflects the introduction in 1986 of 10-year-validity passports. The rate of issue is expected to increase next year when renewals of the 10-year passport start. The accompanying graph shows expected issue rates to the end of the century. Passport revenue for the year was $57 655 972 compared with $59 182 748 in 1993-94.

The provision of a high-quality, efficient and courteous service to the public is an important objective of the Passport Service. Significant elements of that aspect of its operations in 1994-95 included a seven-day-a-week, toll-free passport information service which handled 527 632 calls, an increase of 31 042 over the previous year; the negotiation of a new contract with Australia Post allowing the public to continue to lodge passport applications at post offices throughout Australia, the method used by 75% of all applications; work with SBS on developing an educational program within its English at Work series to help people from non-English-speaking backgrounds to better understand how the Passport Service can help them; and the reduction of average issuing time for passports from six working days to five, meeting the national target set for passport processing. Passports required urgently were issued in three days or less, and an after-hours passport service is available for Australian citizens who require a passport for unexpected business or compassionate travel.

A new document processing system, DAWN, began operation after an extensive period of development. The new system allows the printing in colour of digitised images of passport photographs and signatures on to the passport laminate. These images can be electronically stored in the existing passports database and used for identification at Australian passport offices and at points of arrival for returning Australian travellers. Development continued on the computer software allowing such storage and retrieval.

Passport offices began on-line access to the Department of Immigration and Ethnic Affairs citizenship database. This will enable citizenship details of Australians with citizenship certificates to be checked more readily and will contribute to the accuracy, security and efficiency of the passport system.

In the absence of a central data-base of Australian birth certificates, passport applications for people born in Australia must still be checked manually with the Registrars of Births, Deaths and Marriages when other checks suggest this is necessary. These checks in part resulted in the referral to the Australian Federal Police of more than 100 fraudulent passport applications in 1994-95.

A benchmarking and productivity measuring system was established for core passport processing functions in regional passports offices, resulting in resource savings. For the longer term, there now exists a basis for predictable, systematic future resource adjustments according to workloads.

Passport issue

2.2 CONSULAR SERVICES

Objective

Assist and protect, where necessary, the interests of Australians overseas in accordance with international law.

Description

The Department, acting within the international legal framework of the Vienna Convention on Consular Relations and other international practices and conventions, seeks to fulfil the Government's intention to provide services for the protection of Australians and their interests overseas. The Government aims to provide a level of assistance comparable with that offered by other governments with similar social systems.

A formal definition of a consular service would limit assistance to Australian citizens who encounter difficulties overseas. The underlying philosophy in providing consular services is advising and assisting people with a problem to help themselves. However, this is not always reasonable or practicable and consular officers can be called upon to take over the role that a next of kin might perform if the difficulty arose in Australia. Providing this service often entails contact with relatives or friends in Australia or overseas and the consular task can then extend to providing the contact between the family and friends and the overseas events.

Consular assistance and protection are typically provided where Australians overseas:

encounter an unexpected difficulty, usually financial, and need advice and guidance on overcoming their problem;
fall ill or are injured and need help in dealing with the local medical authorities and in keeping family members in Australia informed of developments; or
are detained by the local authorities for alleged breaches of local law.

For people in financial difficulty, the Department operates a program offering small loans to travellers who are in urgent need of funds. Those who fall ill can be transferred, in principle at their own cost, to another location where, for a variety of reasons including emotional support, it is thought by the family that a better standard of care is available.

For people detained for alleged breaches of local law, the consular official will, to the extent possible, see that:

they are advised how to have access to an appropriate legal defence and that they receive a fair trial under local law;
if imprisoned, they are treated no less favourably than local citizens confined for similar offences; and
basic needs are met and humanitarian standards of prisoner welfare are applied as far as practicable in the circumstances prevailing in the country concerned.

Consular services

About the Department of Foreign Affairs and Trade

Travel

Annual Report 1994-95

PROGRAMS

PROGRAM 1: INTERNATIONAL RELATIONS, TRADE AND BUSINESS LIAISON

1.1 INTERESTS IN NORTH ASIA

1.2 INTERESTS IN SOUTH AND SOUTH EAST ASIA

1.3 INTERESTS IN AMERICAS AND EUROPE

1.4 INTERESTS IN SOUTH PACIFIC, AFRICA AND THE MIDDLE EAST

1.5 MULTILATERAL TRADE POLICY AND NEGOTIATIONS

1.6 TRADE STRATEGY DEVELOPMENT AND BUSINESS LIAISON

1.7 GLOBAL ISSUES

1.8 INTERNATIONAL LEGAL INTERESTS

1.9 INFORMATION AND CULTURAL RELATIONS

PROGRAM 2: CONSULAR AND PASSPORT SERVICES

2.1 PASSPORT SERVICES

2.2 CONSULAR SERVICES