Australia’s place in the international system –and our relations with New Zealand

Address by the Secretary Dr Ashton Calvert to the New Zealand Institute of International Affairs

Wellington, Thursday 8 May 2003

Introduction

Ladies and Gentlemen

It is a great pleasure to have the opportunity to speak to you this evening.

This gathering offers me the opportunity to discuss with you Australia’s place in the international system –and where we see our valuable partnership with New Zealand fitting in.

The broader issue has been very much on our minds in recent months in Canberra as we worked on the White Paper on Australia’s Foreign and Trade Policy that was released in February this year.

I would like to share with you some of the main themes of the analysis we undertook.

Throughout its history as an independent country, Australia has been actively involved in international affairs both within and beyond the Asia-Pacific region to which we belong.

This is a natural consequence of the outward-looking nature of Australian society.

We have strong links and close affinities with Europe and North America, a long history of active political, military and economic involvement in Asian affairs, and a vibrant economy which is deeply enmeshed in the international flow of trade and finance.

Every year Australians make more than three million visits overseas and we welcome to our country annually around five million foreign visitors.

A brief summary of Australia’s key interests and relationships will, I suggest, demonstrate amply the diversified and global nature of Australia’s international involvement.

In Australia’s external policy, close engagement with the countries of Asia is an abiding priority.

Asian countries account for seven of our ten largest export markets and are simultaneously important sources of investment, major security partners and a growing source of skilled migrants.

Three of Australia’s biggest embassies are located in Tokyo, Beijing and Jakarta.

Japan has been Australia’s largest export market for many years and is a valued diplomatic partner.

It is our second biggest two-way trading partner overall.

China is Australia’s third largest two-way trading partner and an increasingly important interlocutor on a range of regional and international issues.

Indonesia and the countries of South-East Asia have a natural focus in Australia’s foreign policy.

At the same time, Australia’s most important defence and intelligence ties are with the United States, with which we share cultural similarities and values.

If goods and services are counted together, the United States is now our largest two-way trading partner.

Given US pre-eminence in world strategic and economic affairs, the importance to Australia of these already very strong ties with the United States is likely to grow.

And that prospect explains the priority that the Australian Government has given to concluding a free trade agreement with the United States.

Australia’s contemporary relationship with the United Kingdom is also strong and vibrant.

Apart from close historical and people-to-people ties, Britain is our fourth biggest two-way trading partner and a key defence and intelligence ally.

More broadly, Australia has close economic and people-to-people links with most countries of Europe.

Considered as a single entity, the European Union is Australia’s largest two-way trading partner and our second largest investment partner.

We have shared formative parts of our history with the peoples of Europe, the United States, Canada, and of course New Zealand.

These experiences remain assets in our international relations.

Maintaining a productive interplay between these two things –close engagement with Asia on the one hand, and the basic Western make-up of Australian society and its institutions and our wider international associations on the other –lies at the heart of our foreign policy.

Managed well, this interplay is a strength, not a zero-sum game.

Our links with Asia and the other parts of the world are mutually reinforcing.

It is also worth noting that the diversity and spread of Australia’s international interests are further underlined by the important relationships we are developing in the Middle East, which over the past five years has been our fastest-growing regional market; our longstanding ties with the South Pacific; and the considerable interests we share with Latin American countries particularly with regard to trade liberalisation and the activities of the Cairns Group.

One of the main sources of increasing confidence about Australia’s place in the international system is our country’s relatively strong performance in an era of globalisation of the world economy.

Australia has been one of the best-performing developed economies in the world.

Over the past decade our average annual GDP growth was 4 per cent, one of the highest among developed economies.

Productivity growth in Australia during the 1990s was second highest among developed economies after Finland.

As we have all seen, globalisation brings both opportunities and challenges.

Its disciplines test the quality of a country’s governance.

The soundness of Australia’s policies, institutions and governance has seen us prosper in what has otherwise been a difficult international economic climate, including the East Asian financial crisis and global uncertainty following 11 September 2001.

Australia’s international standing has risen as a result.

Taken together, these observations demonstrate, I believe, that Australia’s security and prosperity depend vitally on the quality and strength of the political, defence and intelligence partnerships and the economic links that we are able to maintain around the world.

On this basis, the recent White Paper stated that the overall framework for Australian foreign and trade policy is global, reflecting the wide spread of our interests and relationships.

Some of Australia’s interests are defined by geography, others are not.

As globalisation of the world economy continues and as the most serious international security challenges manifest themselves in ways that transcend regional boundaries, Australia expects to find itself increasingly in situations where we consider foreign and trade policy less in geographic terms and more in terms of developing functional affinities with countries and groups of countries with which we share specific interests and values.

This is equally true of the Cairns Group coalition in the World Trade Organisation as of the longstanding intelligence partnerships that Australia enjoys with the United States, the United Kingdom, Canada and New Zealand.

Both are examples of functional affinities that transcend geography.

On the basis of this account of Australia’s place in the international system, it might be useful if I highlight briefly some of the current priorities in Australian foreign and trade policy.

Before doing so, let me emphasise that the subjects I will mention here are no more than a small selection of the numerous issues we are currently working on.

Foreign policy priorities

Ladies and Gentlemen

As you are no doubt aware, a major recent preoccupation in Australian policy has been the challenge that Iraq posed to international security and Australia’s decision to join the US and Britain in military action against Saddam Hussein’s regime.

Now that the military conflict has concluded, we are moving to define those areas where Australia can make a contribution to the rehabilitation of Iraq.

In military terms, Australia’s role will be confined to a number of niche contributions.

In the civilian area, we hope to make a significant contribution towards the rehabilitation of Iraqi agriculture as well as help more broadly with humanitarian assistance.

Australia is currently moving to re-establish a diplomatic presence in Baghdad.

For some months, North Korea’s brinkmanship and its interest in acquiring nuclear weapons have been a second major focus of Australian policy attention.

We are committed to supporting the United States, China, Japan and the Republic of Korea in finding a diplomatic solution to the crisis generated by the DPRK’s policies and actions.

In these manoeuvres the stakes are particularly high, and the room for error narrow.

In parallel with these two major preoccupations, the Australian Government continues to give high priority to international cooperation in combating terrorism.

The attacks on the United States on 11 September 2001 and the Bali bombings last October have underlined the grave challenge that international terrorism poses to the way of life that Australians and New Zealanders hold dear.

Following our military contribution to the war on terrorism in Afghanistan, Australia is currently investing effort into two areas.

One is strengthening Australia’s domestic defence against terrorism.

The other is close cooperation with regional neighbours in combating terrorism in South-East Asia and the South Pacific.

We have recently appointed an Ambassador for Counter-Terrorism who will help coordinate these activities.

Trade policy priorities

The Australian Government is currently prosecuting the most ambitious trade policy agenda in Australia’s history.

It is built around a strategy of ‘competitive liberalisation’–pursuing complementary opportunities to open markets for our goods and services abroad.

Following New Zealand’s lead, Australia recently signed a Free Trade Agreement with Singapore which sets some important benchmarks for a contemporary FTA.

We are currently negotiating Free Trade Agreements with Thailand and the United States.

We are also discussing new Trade and Economic Agreements to update and modernise the structure of our economic relations with Japan and China.

In the region, Australia and New Zealand recently signed a Closer Economic Partnership between ourselves and the ten member states of ASEAN –to facilitate trade flows between Australasia and South-East Asia.

Australia continues to accord primacy to the multilateral trade liberalisation process.

We are a leading participant in the Doha Round of multilateral trade negotiations at the WTO, including as Chair of the Cairns Group of agricultural exporting nations.

Our activity is intended to be complementary: we see bilateral trade initiatives as helping to set benchmarks for the multilateral negotiations, while delivering quicker and deeper results in key markets for our goods and services.

Likewise, we see the multilateral trading system as the best way to ensure a level playing field for global trade, through rules that allow us to trade on equal terms.

The Doha Round is also the best means of delivering liberalisation in those sectors that would otherwise be largely immune to reform –especially agriculture.

NEW ZEALAND

Ladies and gentlemen

In Australia’s international relations, the partnership with New Zealand is of first-order importance.

The historical, economic, social, cultural and political foundations of Australia-New Zealand relations run deep, and will always inform what we do together.

The common background of our two countries, the long history of cooperation both bilaterally and on the wider international plane, and the values we share are all part of the strong base on which the contemporary relationship is built.

Our political institutions are democratic, securely anchored and open, and our economies are liberal and market oriented.

We both enjoy the benefits of a highly skilled workforce, advanced infrastructure, and well-established public health and education systems.

Starting from Gallipoli, Australians and New Zealanders have a strong tradition of working together as allies and partners in various international endeavours.

In the recent period, we have worked closely together in East Timor, Bougainville and the Solomon Islands and in dealing with people smuggling.

We live and work freely in each other’s countries:  some 450,000 New Zealanders reside in Australia, and some 50,000 Australians in New Zealand.

During the 20 years that the Closer Economic Relations (CER) agreement has been operating, our two economies and business environments have become closely integrated, and the process of integration still continues.

The operation of CER is a model for other free trade agreements.

At the policy level, our two countries share unique inter-governmental structures of consultation and cooperation.

Geographic proximity and intensity of economic interaction between Australia and New Zealand mean that each country ranks highly for the other as a trade and investment partner.

Australia is New Zealand’s biggest trade partner, and your country is our fifth largest two-way trading partner.

Beyond the bilateral relationship, there are big areas of close alignment in Australian and New Zealand external policy including especially our respective policies towards the South Pacific and Asia, in the World Trade Organisation and in much of the work of the United Nations and its agencies.

But despite all this common ground, I believe it is important for us to recognise and respect each other as sovereign nations acting entirely reasonably and properly in accordance with how we each interpret our own national interests.

The Australian White Paper that I referred to earlier notes that “for both countries it will be important to deal with each other realistically and pragmatically, deciding on a case-by-case basis whether our individual interests require us to work together or separately.”

And the White Paper suggests that “the trans-Tasman relationship will necessarily evolve as differences in economic strength, political systems, ethnic composition and strategic outlook become more apparent.”

One very topical area of policy difference between Australia and New Zealand is the recent war against Iraq.

In the broad, Australia and New Zealand share a lot of common ground in our views of the threats posed by international terrorism and the spread of weapons of mass destruction.

Our governments differed, however, in the circumstances prevailing last March on whether it was appropriate to use military action against Saddam Hussein’s regime after its long and persistent defiance of the United Nations Security Council over its weapons of mass destruction.

Bilaterally, this difference has, I believe, been handled maturely and realistically by our two Governments.

Now that the military phase has been completed in Iraq, Australia encourages New Zealand to make an appropriate contribution to the rehabilitation of that important country.

We welcome your Government’s recent announcement of the deployment of 14 personnel to assist the UN Mine Service Action in Iraq.

Another area of divergence between Australia and New Zealand is the status of our respective defence and intelligence relationships with the United States.

Again, I believe that in the bilateral sphere between Australia and New Zealand this important area of difference has been handled sensitively by our two Governments.

Ladies and Gentlemen

In conclusion, let me say that we on the Australian side are confident that the Australia-New Zealand partnership will continue to grow from strength to strength and continue to bring great benefits to both our peoples and economies.

Equally, we can expect that areas of divergence will emerge from time to time in our respective external policies.

As in the past, the challenge for both Governments will be to maximise the mutual benefits of the wide areas of common ground that we share, and to handle intelligently and realistically particular areas of divergence.

Such an approach befits two close allies and partners who know each other well, respect each other’s sovereignty, and acknowledge freely each other’s achievements.

Thank you.