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

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.