Department Foreign Affairs & Trade  
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DFAT Annual Report 1998-99

Secretary’s Overview: The International Year in Review

Dr Ashton Calvert, Secretary

Dr Ashton Calvert, Secretary

The work of the Department of Foreign Affairs and Trade during 1998–99 was undertaken against a backdrop of continuing uncertainty in the international environment, particularly in Australia’s region. The second half of the year saw renewed optimism about the international economy in the wake of the East Asian economic crisis, but it was also clear that full recovery, including the alleviation of the social consequences of the downturn, would be a long-term undertaking. Central to the overall strategic outlook was the role of Indonesia, which—in a turbulent year—confronted the consequences of the economic crisis, political transition and a major shift in policy on East Timor.

Of particular significance to Australia was the Indonesian Government’s decision in January 1999 to allow the people of East Timor to choose for themselves whether they wished to remain part of Indonesia, in a referendum scheduled for the end of August 1999. This decision was influenced in part by an initiative from the Prime Minister, Mr John Howard, who wrote to the Indonesian President, Dr BJ Habibie, in December 1998 suggesting self-determination for East Timor after a lengthy transition period. The department supported the Government, particularly the Minister for Foreign Affairs, in developing the new Australian policy and responding to major changes in Indonesia’s stance. The department also worked closely with the United Nations to help shape the international response to East Timor. We monitored closely the uncertain security situation there, supporting the Prime Minister and ministers in emphasising at very senior levels in Jakarta the importance of Indonesia’s honouring its commitment to provide a secure environment for the referendum. An Australian consulate was opened in Dili, and an Australian Policy Liaison Officer was posted to Lisbon to support dialogue with Portugal on the issue.

Notwithstanding the very great attention given to East Timor, international efforts to support Indonesia’s recovery and democratic transition remained a considerable focus for the Government, and thus for the department. Amid continued hardship and social instability, there were some tentative signs of economic recovery in Indonesia in early 1999, but the situation remained fragile. Historic general elections were held on 7 June 1999, with the results revealing a fragmented electorate. The department supported ministerial engagement with international financial institutions and other donors aimed at securing financial backing for Indonesia, and coordinated a major contribution to the organisation of the June elections as well as to an electoral observer mission. A successful Australia–Indonesia Ministerial Forum in February 1999, supported by the department, reinforced the importance Australia attaches to this bilateral relationship.

The global economy continued to grow at significantly lower rates in 1998–99 than had been the case prior to the East Asian economic crisis. The department responded to the evolving economic environment by providing the Government with strategic analysis and advice on the implications for Australia of emerging international economic trends and developments. We worked closely with other Commonwealth agencies, including through participation in the Prime Minister’s Special Task Force on International Financial Reform and the International Economic Policy Group.

Helping to build international agreement to a new round of multilateral trade negotiations, to begin in 2000 under the auspices of the World Trade Organization, was a key objective for Australia. To this end, the department coordinated the Government’s active role in the ‘Friends of the Round’ initiative, including through support for participation by the Minister for Trade. By the end of the year, international support for a new round had grown substantially. The department also initiated public consultation on Australia’s approach to a new round, working closely with ministers to broaden public diplomacy activities highlighting for Australians the benefits of trade liberalisation. The department also continued to coordinate Australia’s active role in Asia-Pacific Economic Cooperation. This regional grouping, while tested by the East Asian economic crisis, demonstrated that it could play a valuable role in supporting global trade liberalisation initiatives, contributing to debate on international financial reform, promoting domestic economic reform, and improving the environment for regional business.

While a rise in protectionist sentiment made the work of pursuing Australia’s trade and investment interests more challenging, there were opportunities for the department to promote the strength of the Australian economy internationally. In cooperation with Australian business, the department played a leading role in advancing the Government’s priorities set down in the Trade Outcomes and Objectives Statement, securing gains including through the Market Development Task Force. Working closely with our ministers, we helped negotiate better market access with key trade and investment partners such as Japan and the European Union. The increasingly competitive trading environment also underlined the need to do more in diversifying markets, and we devoted resources to the promotion of Australia’s trade and investment interests in Latin America and India.

We also focused on the increasingly prosperous Gulf region in the Middle East, and in January 1999 established an Australian embassy in Abu Dhabi.

In keeping with the Government’s priorities, the department focused bilateral attention on Australia’s major strategic partnerships. We strove to enhance cooperation with the United States in response to international economic and security developments, especially in the Asia-Pacific region. Our engagement on bilateral and multilateral trade issues was extensive and sometimes difficult on matters where the US Administration was responding to protectionist pressure, for example on lamb meat. High-level visits between Australia and Japan, with close support from the department, helped promote a closer alignment of views on regional and global issues, from North Asian security to a new multilateral trade round. The department also worked with ministers to engage China in a joint commitment to broaden the bilateral relationship. The resolution of some key market access issues helped lay a solid foundation for growth in Australia’s trade with China and led to in-principle bilateral agreement on the terms of China’s accession to the World Trade Organization.

The department continued to coordinate Australia’s policy and physical contribution towards the peace process in Bougainville which, while subject to some stresses, made further substantial progress. Papua New Guinea’s economic problems and difficult domestic situation were of considerable concern to Australia given the span and depth of bilateral relations, with the PNG Government not able to advance economic reform or stronger civil governance. Our efforts to promote a more positive relationship between the PNG Government and international financial institutions were only partly successful. The department’s work included support for ministers’ consideration of strategy and policy toward Papua New Guinea, visits there by both portfolio ministers, and the Australia–PNG Ministerial Forum in December 1998.

The department supported the Government in monitoring and responding to change within the Association of South-East Asian Nations. ASEAN expanded further, reaffirming its importance in the region by becoming the ‘ASEAN 10’ with Cambodia’s admission in April 1999. The year also saw ASEAN continue to grapple with challenges arising from the economic crisis, and was marked by calls from some ASEAN elements for more ‘flexible engagement’ between member countries. The department focused resources on developing strategic relationships with key ASEAN players including the Philippines, Thailand and Vietnam, supporting high-level visits in both directions and conducting cooperative activities in the regional security, economic and public diplomacy fields.

Shared experience and interests across a wide front continued to underpin Australia’s unique partnership with New Zealand. The department made a significant contribution to the work of the joint task force established by the Australian and New Zealand prime ministers in February 1999 to resolve outstanding bilateral issues, including social security and investment, and supported visits to New Zealand by the Prime Minister and portfolio ministers. The promotion of economic reform continued to be a primary focus in our approach to the South Pacific. The emerging ethnic tension in Solomon Islands stood out in an otherwise positive security picture.

The department pursued a tightly focused global cooperation agenda in pursuit of our national interests. We coordinated Australian negotiating positions on the international environment, working to ensure a sound framework for the implementation of commitments made at the December 1997 Kyoto Conference. The department also played a critical role in developing and promoting Australia’s case to the World Heritage Committee on the proposed ‘in danger’ listing of Kakadu. Through the department, Australia was a major participant in negotiations leading to the adoption of the International Criminal Court statute. As well, the department maintained Australia’s constructive engagement on human rights at the multilateral, regional and bilateral levels, in particular through enhanced dialogue with regional states such as China.

In addition, considerable effort was directed to implementing and strengthening international regimes covering disarmament and arms control. A ministerial meeting convened by the Australian Government in September 1998, with close support from the department, helped galvanise international political will in favour of an early conclusion of the Biological Weapons Convention verification protocol. The department worked actively to promote a more positive security environment in Australia’s region, contributing to dialogue on regional problems such as the tensions in South Asia and the Korean peninsula, and to the development of the ASEAN Regional Forum as an instrument for regional security.

Officers at the department in Canberra, in State and Territory offices, and at overseas posts continued to help the increasing number of Australians travelling overseas through the provision of consular and passport services. The department issued more than a million passports in 1998–99, representing an increase of 7.7 per cent over the previous year. A number of consular cases handled by the department, including our efforts to help mobilise international support for the release of CARE Australia workers Mr Steven Pratt and Mr Peter Wallace in Yugoslavia, received considerable media attention. However, these high-profile cases represented only a small proportion of the department’s overall consular work: we handled more than 20 000 cases during the year involving assistance to Australians overseas and their families.

Ashton Calvert


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