The Department

1.1 Interests in North Asia

Table 6: Resources Summary for Sub-program 1.1

Figure 4: Interests in North Asia Program and Organisational Structure as at 30 June 1998

Sub-program Objectives

In 1997-98, the objectives of sub-program 1.1 were to:

  • 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 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
  • advance Australia’s security interests in North Asia by encouraging constructive involvement on the part of China, Japan, Korea and the United States in regional affairs
  • 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 North Asia Division administers the sub-program. NAD comprises two branches: the North East Asia Branch and the East Asia Branch, and the East Asia Analytical Unit. NAD’s area of responsibility includes six overseas posts; it coordinates and supports these posts, ensuring their work is targeted effectively. In July, NAD assumed responsibility for the Australia-China Council, the Australia-Japan Foundation and Australia-Korea Foundation, formerly administered under sub-program 1.9, Information and Cultural Relations.

The sub-program pursues strategies designed to help achieve four of the Department’s corporate goals: to enhance Australia’s security; to promote Australia’s economic growth, jobs and standard of living; to strengthen global cooperation in ways which advance Australia’s interests; and to promote public understanding of Australia’s foreign and trade policy. These strategies include advising the Government on policies that advance Australian interests in political, economic and security issues relating to North Asia, managing a number of bodies and processes implementing those policies, improving commercial access to markets in North Asia by participating in bilateral and multilateral negotiations, providing advice to Australian companies and liaising closely with business, the media, academia and NGOs.

Performance Information

In 1997-98, the Department indicated that it would evaluate its performance using:

  • improved Australian market access in North Asian markets, including progress in WTO negotiations with China, implementing Taiwan’s interim trade access package and improved access for beef in the Republic of Korea
  • success of high-level visits to and from countries, with particular emphasis on China
  • success of the Joint Ministerial Economic Commission Intersessional Meeting with China in July and reinvigoration of the JMEC Ministerial Meeting
  • positive outcomes from the Australia-Japan Ministerial Committee events such as the AustraliaJapan Business Symposium, and high-level visits by the Japan Federation of Economic Organizations
  • initiation of new bilateral dialogues with China on disarmament and regional security, and human rights
  • establishment of a satisfactory program of consular discussions with China, including progress towards a consular agreement and resolution of outstanding consular cases
  • extent to which Australian interests in the Hong Kong Special Administrative Region are protected, including through continued high-level contact and dialogue
  • progress on the commitment by the Taiwan authorities to include Australia in the ‘Go South’ investment program
  • further development of Australian political, economic and commercial interests in the Republic of Korea through high-level visits, continuation of close and mutually productive dialogue on economic, political and security issues, and expansion of government and non-government contacts, including holding a third Australia-Korea Forum in Seoul
  • effective demonstration of Australia’s commitment to enhanced security on the Korean Peninsula through actively supporting the Korean Peninsula Energy Development Organization, inter-Korean dialogue and multilateral humanitarian assistance to the Democratic People’s Republic of Korea (DPRK).

The following performance measure was included under sub-program 1.9, Information and Cultural Relations:

  • contribution of programs of bilateral councils and foundations to expanding and deepening Australia’s bilateral relations with priority countries covered by these bodies, as reflected by the impact on target countries and level of satisfaction of Australian stakeholders.

Performance Outcomes

1.1.1 Interests in North Asia

The North Asia region contains five of Australia’s largest export markets; consequently, the impact of the regional economic crisis on the Australian economy was the major focus during the review period. Where markets were assessed to be contracting, strategies were developed emphasising protection of market share. In addition, bilateral efforts to resolve market access questions, involving close liaison with domestic producers, continued to receive high priority.

Table 7: Australia's Merchandise Trade with North Asia

Figure 5: Commodity Composition of Merchandise Exports to North Asia

Japan

Work by the Department to develop the Australia-Japan Partnership Agenda, covering cooperation in 18 areas, came to fruition with the Australia-Japan Ministerial Committee adopting the Agenda in August in Tokyo. Relations with Japan were further developed in high-level visits to Japan by the Deputy Prime Minister and Minister for Trade, the Minister for Foreign Affairs, and five other ministers, and by visits to Australia by Japan’s Minister for Trade and Industry, the Minister for Health and Welfare and the Director-General of the Japan Defense Agency. The Department played a central role in facilitating these visits. It particularly contributed to the growing bilateral relationship in security and defence areas by participating in political-military talks and supporting reciprocal visits by the respective Ministers for Defence.

Photo: Minister for Foreign Affairs, Alexander Downer, and Deputy Prime Minister and Minister for Trade, Tim Fischer, meet Japanese Prime Minister, Ryutaro Hashimoto, on the eve of the fourteenth Australia-Japan Ministerial Committee in August in Tokyo.

The Department provided ministers with detailed analysis of developments in the Japanese economy and Japanese government policy responses, and the implications for Australia and the region. In addition, it provided the Japanese Government with information on Australian policy developments, including on financial and labour market deregulation and continued negotiations on developing a mutual recognition agreement.

The Department played a major part in efforts which significantly progressed market access issues. This progress was reflected in Australia’s overall market share in Japan increasing to over 4 per cent in 1997. Market access achievements included sanitary/ phytosanitary measure harmonisation with the WTO and the lifting of temporary bans on some dairy products and poultry. Import inspection and certification processes were simplified and Australian access for oysters, honey bees and sugar was improved, as was access to the housing and construction and telecommunications markets.

Figure 6: Australia's Merchandise Trade with Japan

The Department raised the profile and public awareness of the bilateral relationship through successful events commemorating important anniversaries, including the Australia-Japan Business Symposium in September in Melbourne held in conjunction with the visit by a senior delegation from the Japan Federation of Economic Organizations. The symposium, hosted by the Minister for Foreign Affairs, Alexander Downer, included participation by senior members of the Business Council of Australia.

The Australian-Japan Foundation worked to update Japanese perceptions of Australia through targeted projects, including a specially developed kit for Japanese primary school teachers, a Japanese-language website on Australia (http://www.australia.or.jp), a public access resource centre in Tokyo, promotion of Australian English-language teaching skills and development of an Australia-Japan arts network. These interlinked projects involved cooperation with the Japanese Ministry of Education, the Australia Council and Australian government agencies. The website and Australian resource centre will provide a basis for future program initiatives.

Republic of Korea

The Department effectively managed the bilateral relationship with the Republic of Korea, advising ministers on the implications for Australia of the unfolding economic crisis and presidential elections in late 1997. The Department advanced Australia’s broader strategic interests with the new Administration of President Kim Dae-Jung by providing advice and supporting the visits by the Minister for Foreign Affairs and the Minister for Primary Industries and Energy, John Anderson, in March.

Figure 7: Australia's Merchandise Trade with the Republic of Korea

In response to the economic crisis, the Department promoted a range of measures, especially in export financing, to assist Australian exporters facing difficulties because of the liquidity crisis affecting Korean importers and banks. In this way, approximately $1 billion in vital Australian exports were facilitated. By closely consulting industry, the Department facilitated trade in beef and horticulture products during the crisis, through successfully negotiating a waiver of the ROK restriction preventing credit for imports with a tariff of more than 10 per cent. This allowed Australian exporters to compete on a more equal basis with those from the United States and Canada.

The Department also encouraged an Australian contribution of US$ 1 billion to the US$ 58 billion International Monetary Fund assistance package for the ROK. On other market access issues, the Department secured improved access in the government-controlled sector of the ROK beef market and assisted in securing ROK agreement to manufacturer-determined shelf life for UHT milk— a major objective of the Australian dairy industry. Other bilateral commercial and market access interests were pursued through the annual Joint Economic Committee meeting in July and the Ministerial Trade Talks in August. Government and other clients, particularly in industry, expressed appreciation for these efforts.

Photo: Acting Deputy Secretary of DFAT, Penny Wensley, and Deputy Secretary for Economic Affairs in the Korean Ministry of Foreign Affairs, Hong Jung-Pyo, sign agreed minutes of the meeting of the Australia-Korea Joint Economic Committee in July in Canberra.

The Department secured the agreement of the new ROK Administration to host a further meeting in late 1998 in Seoul of the Australia-Korea Forum; the meeting will examine areas for closer bilateral cooperation, promote increased non-governmental and people-to-people links, and ensure the relationship’s longer-term development remains high on the bilateral agenda.

Through the Australia-Korea Foundation, the Department supported bilateral cooperation projects in education, industry and commerce, science and technology, media, sports and the arts. It also sought to expand knowledge of Australia in the ROK. The foundation initiated a major education project by developing an Australian Studies Information Kit for Korean secondary schools which should increase understanding of Australia among Korean students. The foundation promoted youth activities in science, education and commerce by providing training and study opportunities in the ROK for young Australians, and in cooperation with the Australian Embassy, it raised Australia’s profile through Australia Week activities in May in Seoul. Enhancing the foundation’s website provided increased access to information on the ROK and foundation program activities. These activities aim to project an accurate image of Australia and inform debate within Australia to support Australian interests in the ROK.

Democratic People's Republic of Korea and Korean Peninsula Issues

Australia has a vital interest in maintaining the stability of the Korean Peninsula and favourable power balances, as well as ensuring non-proliferation of weapons of mass destruction and the retention of the US strategic presence in the region. The Department demonstrated Australia’s commitment to the security of the Korean Peninsula through its support for the Korean Peninsula Energy Development Organization; the Four Party dialogue process involving the United States, China and the two Koreas; and contributions totalling $5.5 million in 1997-98 to UN humanitarian appeals for the DPRK. Australia’s relations with the DPRK have been frozen since 1975, although in unofficial contacts, the Department has encouraged the DPRK to engage in international behaviour conducive to peace and stability. Policies towards the DPRK will continue to be calibrated against benchmarks demonstrating its progress towards dialogue and cooperation with the ROK and the international community, as well as implementation of the nuclear freeze.

1.1.2 Interests in East Asia

China

During the review period, the Department facilitated a strong program of high-level visits to China, including by the Deputy Prime Minister and Minister for Trade, the Foreign Minister and the President of the Senate, and visits to Australia by the Chairman of the Chinese People’s Political Consultative Conference and the Minister for Defence (the first ever visit by a Chinese Defence Minister). These visits contributed directly to improved bilateral relations with China.

The Department achieved progress in a number of important bilateral consultative mechanisms, including commitments by China to reinvigorate the Joint Ministerial Economic Commission process and continue the human rights dialogue. Progress on human rights also resulted in several projects under the Human Rights Technical Assistance Program being initiated and implemented. The Department also significantly improved consular relations, including through negotiations for a bilateral consular agreement. Representations on outstanding consular cases continued to receive high priority. Other important outcomes were expanding the bilateral disarmament talks to include regional security issues and building regional security by encouraging China to expand its role in the ASEAN Regional Forum and Asia Pacific Economic Cooperation.

Figure 8: Australia's Merchandise Trade with China

The Department played an important role in securing gains on market access issues in China, including granting an additional legal licence and Australia’s first insurance licence, reducing some wool tariffs, agreeing on quarantine requirements for the export of live slaughter cattle and granting Australia ‘Approved Tourist Destination’ status. It also contributed to progress in negotiations towards China’s accession to the WTO through bilateral and multilateral discussions.

The Australia-China Council initiated a large range of programs in education, culture, publishing, media, business, legal exchanges and science and technology; these aimed to project a contemporary image of Australia in the region and inform debate. In June, the ACC supported a visit by a delegation from the Chinese Ministry of Culture to attend the ninth meeting of the Joint Cultural Commission between Australia and China. This visit resulted in the signature of implementation arrangements for cultural exchange over the next two years in sport, the arts, education, the media and publishing. The ACC promoted greater knowledge and understanding of Australia in China through upgrading facilities at Australian Studies Centres in China, Hong Kong and Taiwan, funding publication and translation of research and education materials on Australia, and upgrading Internet links in China. It also promoted a greater awareness of China in Australia, particularly links to Australia’s economic and commercial interests, by funding study and work experience opportunities for Australians in China.

Photo: DFAT officer, Jenny Hanna, welcomes a visiting delegation from the Chinese Ministry of Culture outside the National Gallery of Australia. The delegation attended the ninth meeting of the Joint Cultural Commission between Australia and China held in June in Canberra. (photo: PRC Embassy)

Mongolia

The Department facilitated ministerial-level visits to Australia, in particular by the Mongolian Ministers of Finance and Education. These visits strengthened bilateral relations.

Hong Kong

The Department effectively managed the relationship with Hong Kong during the demanding period encompassing the transfer of sovereignty to China; key clients offered extensive positive feedback on the high quality of service and advice provided. The Department played a central role in ensuring China and Hong Kong accepted Australia as a reliable partner with a balanced approach towards Hong Kong, and coordinating a whole-of-government approach on the implications of the 1 July 1997 handover.

The Department supported a strong program of high-level visits to Hong Kong, including by the Minister for Foreign Affairs and several key federal and state parliamentarians. It also supported the visit to Australia by the Hong Kong Chief Executive, Tung Chee Hwa, that resulted in the conclusion of a Memorandum of Understanding on Cooperation in Information Technology.

On the commercial front, the Department worked to protect Australia’s export interests during Hong Kong’s economic downturn. The Department contributed to the growth in trade by developing and pursuing market development priorities in food and beverages, infrastructure and information technology. It also enhanced cooperation on trade liberalisation issues through bilateral dialogue and its work with Hong Kong in APEC and the WTO.

Figure 9: Australia's Merchandise Trade with Hong Kong

Taiwan

The Department promoted Australia’s economic interests in Taiwan, within the framework of the one-China policy, through high-level contact with Taiwan during the year, particularly the unofficial visit to Taipei by the Minister for Minerals and Energy, Warwick Parer, to support the joint Business Council meeting in September. Commercial relations also were advanced through implementing the bilateral market access package the Department negotiated. The package included a reduced beef tariff and increased access for car exports, some fruit products and game meat.

Figure 10: Australia's Merchandise Trade with Taiwan

The Department advised the Government and Australian business on the implications of the regional economic crisis for Australia’s exports to Taiwan, which has weathered the regional crisis better than other economies. The advice to business reassured Australian exporters, leading to continued strong commercial activity in the Taiwanese market. The Department also supported commercial activity by developing market strategies, particularly for minerals and energy products, and food and beverages. These strategies contributed to increased coal exports and a reduced tariff on lobsters.

The Department also facilitated increased Taiwanese interest in investment projects in Australia stemming from Australia’s inclusion in the Taiwanese ‘Go South’ policy, including the holding of Minerals and Energy talks in May.

During the review period, the Department sought to encourage improved relations between China and Taiwan; these have been a major source of regional tension in recent years. Some incremental improvement was apparent.

1.1.3 East Asia Analytical Unit

In line with its objective to inform debate within Australia on regional economic developments, the Department, through the East Asia Analytical Unit, released one major report, The Philippines: Beyond the Crisis and several working papers on China and Japan, China’s Transitional Economy: Between Plan and Market, China’s State-owned Enterprises: Nine Case Studies and Japan’s Housing Market: Opportunities in Australia. (A full list of publications is in Appendix 7.)

When The Philippines: Beyond the Crisis was released in Melbourne, Sydney, Adelaide, Perth and Manila, unit officers conducted seminar presentations for the Australian business community trading with the Philippines. These presentations stimulated discussion on trade opportunities for both countries, while the book provides excellent data for business and government agencies.

The unit began work on three major reports due to be released during the next review period: Private-Public Partnership— Infrastructure Provision in Asia; Asian Financial Market Reforms Pre and Post the Crisis; and The Republic of Korea: Crisis and Reform. Through these reports, the Department seeks to provide business and government agencies with in-depth analysis of key issues.

The unit also organised a roundtable of senior government officials, business leaders and senior academics on the East Asian economic crisis in April in Canberra. Mr Downer and Mr Fischer addressed the roundtable which was chaired by a senior departmental official. Discussion focused on the likely future path of the crisis in regional economies; bilateral and regional relations; business perspectives on trade and investment impacts; strategic responses for Australian companies; and policy implications for the Australian Government. Participants indicated they found the informed debate and insightful conclusions drawn by the roundtable useful in deepening their understanding of the crisis and its likely impact on Australia.

Photo: Head of the East Asia Analytical Unit, Frances Perkins, with Foreign Affairs Secretary for the Philippines, Domingo Siazon Jr, and Australian Ambassador to the Philippines, Miles Kupa, at the launch of the report, Philippines: Beyond the Crisis at the Australian embassy in May in Manila.

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