Promoting a stable and prosperous regional and global environment

The world is experiencing a period of fundamental change and uncertainty. Rapid economic growth in the Indo–Pacific region has brought increased prosperity to Australia and contributed to global growth, but has also changed the balance of power and intensified strategic competition. Rising economic nationalism and protectionism in some countries and communities could challenge Australia’s interests, as do terrorism and humanitarian crises. Geopolitical and other changes are placing greater pressure on the international cooperation and laws, principles and norms that are fundamental to the prosperity of our nation and region.

Australia has completed its 26th year of uninterrupted annual economic growth. The department contributed to this achievement through the promotion and protection of Australia’s interests internationally, particularly through our trade, investment and economic growth agenda.

In 2016–17 we deepened our bilateral, regional and multilateral engagement to advance our interests. We built partnerships to secure outcomes beneficial to Australia and bolstered the rules-based order that supports a stable and prosperous international environment.

The department led Australia’s in-depth engagement with the United States during a year of political transition, helping to ensure our nations remained the closest of allies. We supported visits by consecutive Vice Presidents, a meeting between the Prime Minister and President Trump and Australian ministers’ engagement with new US counterparts. These strong connections at the highest levels drove greater collaboration on counter-terrorism, deepened our sophisticated defence cooperation, and protected our economic interests.

The department achieved some important advances in trade, investment and economic relations with countries elsewhere in the Americas. Australia commenced negotiations for an FTA with Peru, one of the fastest growing economies in Latin America, in May 2017. We also launched FTA negotiations with the Pacific Alliance bloc of Mexico, Peru, Chile and Colombia on 30 June. Australia is the first country to pursue a trade agreement with the Pacific Alliance, which has a combined gross domestic product (GDP) of US$1.8 trillion. Alongside Austrade, we continued our work at the government level to support the growing number of Australian companies active in Latin America and opened a new embassy in Colombia.

A stable and prosperous North Asia matters to Australia because of its economic weight, strategic significance and proximity. Around 50 per cent of Australia’s exports are to North Asia. China, Japan and the Republic of Korea (ROK) are three of Australia’s four biggest trading partners.

We prioritised bilateral engagement with countries in this region, providing policy advice to ministers, supporting high-level dialogue, ensuring the effective implementation of our existing FTAs and negotiating new ones.

We supported a visit to Australia by Japan’s Prime Minister that drove deeper defence and economic cooperation. Our two Leaders emphasised the economic and strategic value of the Trans-Pacific Partnership (TPP) and the importance of realising its benefits. We played an integral role in the seventh ‘2+2’ meeting of foreign and defence ministers, the key bilateral forum for security cooperation with Japan. Working with the Department of Defence, we continued negotiations on an agreement to improve procedures for bilateral defence activities.

We also deepened high-level dialogue with China under the Comprehensive Strategic Partnership, supporting visits by Premier Li Keqiang and Foreign Minister Wang Yi. The Premier’s visit led to the establishment of a new bilateral security mechanism with the Chinese Communist Party’s Commission for Political and Legal Affairs—the first meeting took place in April 2017. Discussions dealt with law enforcement and judicial matters, and we reached an agreement to cooperate on cybersecurity.

We strengthened relations with the Republic of Korea, including by supporting a visit by the Minister for Foreign Affairs in which Ms Bishop engaged on the threat North Korea poses to regional security. The minister also launched a floating platform for LNG extraction, which will operate at the Japanese-invested Ichthys LNG field off northern Australia.

We worked to expand access to the markets of the region and enhance the business environment. We convened FTA Joint Commission meetings with China, Japan and the Republic of Korea to ensure we maximise the benefits of our three North Asian FTAs, including by taking forward the negotiating agendas and work programs of these agreements. The Minister for Trade, Tourism and Investment launched FTA negotiations with Hong Kong in May, noting such an agreement had the potential to expand opportunities for Australian business, particularly in trade in services and investment.

The Pacific is Australia’s immediate neighbourhood, and we have a strong interest in a secure, stable and prosperous region. We worked to strengthen the region’s stability by boosting our regional security efforts, including on fisheries management and information sharing on maritime activity. We supported greater labour mobility to provide job opportunities for our Pacific neighbours while addressing labour shortages in Australia. Our development assistance to the Pacific—totalling just over $1 billion in 2016–17 and representing the region’s largest aid investment—is supporting regional stability and security by addressing shared challenges, including climate change, natural disasters, sustaining economic growth, creating jobs, mitigating the threat of major disease outbreaks and tackling transnational crime. We facilitated regular high-level engagement between Australia and Pacific countries, including visits to the region by the Governor-General,
Prime Minister and portfolio ministers.

We assisted Australian companies facing market access issues and established a new consulate in Lae, Papua New Guinea’s (PNG) commercial capital, to bolster our growing trade and investment relationship. We continued to help PNG prepare to host APEC 2018. Our aid program focused on strengthening the capacity of the local authorities to develop and manage the economy, and to deliver services in health, education, law and justice, and infrastructure.

The department supported the inaugural trans–Tasman Single Economic Market Ministerial Meeting in Sydney in October 2016. The event, preceded by a meeting between Australian and New Zealand trade ministers, launched the Australia & New Zealand Infrastructure Pipeline and laid the groundwork for signing a bilateral science and innovation agreement in the margins of the February 2017 meeting of Australian and New Zealand prime ministers in Queenstown.

We supported the smooth conclusion of the Regional Assistance Mission to Solomon Islands (RAMSI) and laid the foundation for a bilateral security treaty. In Fiji, we facilitated the signing of a Memorandum of Understanding between the Australian Electoral Commission and its Fijian counterpart to assist preparations for upcoming elections, while also helping rebuild critical infrastructure and enable economic growth following Tropical Cyclone Winston. Across the Pacific, we worked with partners to promote governance, economic growth, gender and healthier, better skilled communities.

But we know the Pacific needs more than aid. In recognition of this, the Prime Minister announced at the Pacific Islands Forum Leaders’ Meeting in Pohnpei, Federated States of Micronesia, on 9 September 2016 that Australia would pursue a ‘step-change’ in its engagement with the Pacific. To meet this commitment, Australian ministers and officials started a conversation with their regional counterparts aimed at identifying a range of practical, mutually agreed measures to strengthen economic growth and resilience, enhance regional security cooperation, and deepen people-to-people links across the Pacific. This work will support and complement Australia’s existing engagement in the region.

Southeast Asia’s strategic significance to Australia is growing as the region faces complex security challenges and its economies continue to demonstrate strong growth prospects.

Recognising the region’s importance, we supported high-level engagement with ASEAN. We initiated and secured a Leaders’ Statement on Non-Proliferation in the East Asia Summit and we assisted the Prime Minister in his role as co-chair of the first regular ASEAN–Australia Summit in Vientiane in September 2016. ASEAN leaders agreed to hold an Australian-hosted Special Summit in Sydney in 2018. In close collaboration with the Department of the Prime Minister and Cabinet, we are preparing for the summit, when the Prime Minister will host ASEAN leaders together in Australia for the first time. This summit will support deeper strategic and security partnerships and our efforts to enhance regional economic integration, including through the ASEAN–Australia–New Zealand Free Trade Agreement and in negotiations for a Regional Comprehensive Economic Partnership.

We played a pivotal role in drafting the ASEAN Master Plan on Connectivity, which provides a blueprint for ASEAN’s connectivity needs and capabilities out to 2025. ASEAN officials consider the program to be ‘leading the way donors work with ASEAN’.

We developed the Australia–Indonesia relationship, focusing on trade and economic cooperation, counter-terrorism, countering violent extremism, cybersecurity and maritime cooperation. President Widodo’s first bilateral visit to Australia resulted in a Joint Declaration on Maritime Cooperation, the announcement of a new Australian Consulate-General in Surabaya and new support for preventing terrorism. We advanced Indonesia–Australia Comprehensive Economic Partnership Agreement negotiations and, through our aid partnership, supported inclusive economic growth, infrastructure and skills development to address rising inequality.

The department consolidated the relationship with Singapore through the Australia–Singapore Comprehensive Strategic Partnership. We negotiated a significant review of the Singapore–Australia Free Trade Agreement, which ministers signed on 13 October 2016. The review outcomes will provide greater opportunities for Australian businesses in a number of areas, including in trade in services, the recognition of qualifications and investment. The review outcomes support our goal of realising the benefits of the TPP.

We supported a visit by the Minister for Foreign Affairs to Malaysia in March, and hosted young Muslim leaders in November 2016 and young political leaders in June 2017, showcasing Australian democracy, multiculturalism and the role of Islam in Australian life. We also supported the visit of the Minister for International Development and the Pacific to Myanmar and Cambodia. The first ministerial visit since Myanmar’s historic election of 2015 consolidated bilateral engagement, including new avenues for aid cooperation. In Cambodia, the minister announced a new program to support people with disability and prevent violence against women.

We stepped up cooperation with the Philippines to provide additional support for the peace process and to counter violent extremism, and we supported the Philippines’ education reform agenda. We signed the Australia–Vietnam Plan of Action 2016–19 to increase collaboration in defence and security, trade and investment, and economic cooperation. We dealt sensitively with Thai interests following the death of the much-revered late King Bhumibol and we encouraged the Thai Government to hold elections in 2018 following the mourning period for the late King.

We worked with Timor-Leste on maritime boundaries through a conciliation commission established under the UN Convention on the Law of the Sea. Our new aid investments in Timor-Leste took a more integrated approach to supporting education, health, water and sanitation, social protection, gender and disability, and farmers’ access to markets.

Australia’s increased focus on the Indo–Pacific region was mirrored by the department’s deepened engagement in South and West Asia, with a strong focus on the benefits from India’s rise. We have increasingly focused on shaping the character of the Indian Ocean as a strategic space. We played a critical part in the first Indian Ocean Rim Association Leaders’ Meeting, attended by the Prime Minister. We developed the first Indian Ocean Joint Ministerial Declaration on Preventing and Countering Terrorism and Violent Extremism.

Prime Minister Modi’s political consolidation and bold initial steps on economic reform, combined with India’s youthful demographics and broader geostrategic developments, ensured India remained the major focus of our work. Australia’s economic relationship with India is significant, with two-way trade almost doubling in the last decade to $21 billion. During the Prime Minister’s April visit to India, he announced commissioning of an India Economic Strategy to be led by Mr Peter Varghese AO, Chancellor of the University of Queensland, supported by the department. This major study will provide greater insights into India’s growth trajectory out to 2035 and the opportunities that will exist for Australian businesses. As India pursued its ‘Act East’ policy, we also deepened our collaboration on maritime policy in the East Asia Summit, and through trilateral dialogue with India and Japan.

Together with NATO and the US, we supported Afghanistan’s efforts to address international terrorism and its other security challenges through a military deployment that helps train, advise and assist local security forces. At the 2016 Brussels Conference on Afghanistan we pledged to extend our $80 million annual aid program to 2020 and collaborated with trusted partners to address violence against women and provide essential humanitarian assistance.

We used visits by both the President and Prime Minister of Sri Lanka, and a reciprocal visit by the Minister for International Development and the Pacific, to cement cooperation on people smuggling and enter into a Joint Declaration on Enhanced Cooperation to improve trade, investment and scientific cooperation. We launched a new aid program to assist women entrepreneurs and increase women’s participation in formal employment.

Our aid program in Pakistan promoted inclusive economic growth, leveraging innovative approaches to trade strategy, a forward thinking ‘no-win-no-fee’ performance-based tax revenue project, food security, nutrition-sensitive agriculture and private sector growth. We provided training to boost law enforcement agencies’ counter-terrorism capacity in Bangladesh, including on ways to counter violent extremism. Our aid program to Bangladesh supported children’s education and innovative social protection programs to assist poor and marginalised communities.

We collaborated with partners such as ACIAR and CSIRO to address cross-border challenges in energy, food and water security. This included piloting more resilient farming practices with 29,000 farmers across the region. We continued efforts to address gender inequalities across the region, using a visit by the Ambassador for Women and Girls to Nepal to highlight our work on girls’ education, violence against women and economic empowerment.

We maintained a strong reporting focus on security in Africa and the Middle East. In response to increasing threats, we stepped up cooperation to counter violent extremism and terrorism. The department facilitated Australia’s counter-ISIL military effort, which made steady progress over the year. ISIL lost most of its remaining major territorial holdings in Iraq and efforts commenced to liberate its Syrian ‘capital’, Raqqa. We supported efforts to address the underlying conditions that gave rise to the terrorist group, through consultation with the Iraqi Government and advocacy in the International Syria Support Group.

In April 2017 the Prime Minister and the Minister for Foreign Affairs announced $100 million over three years for Iraq to meet humanitarian needs, support the stabilisation agenda and facilitate reconciliation. We provided $50 million from the Syria Crisis Humanitarian and Resilience Package to UN agencies and international and Australian NGOs to meet humanitarian needs and support education and livelihoods projects.

The department supported the first visit to Australia by Jordan’s King and Queen. Australia and Jordan signed the Joint Declaration on Enhanced Cooperation to expand political and economic ties, and security, intelligence and counter-terrorism cooperation. We also supported the first ever visit to Australia by an Israeli Prime Minister, and signed a Technological Innovation Treaty and an Air Services Agreement. Both sides committed to deepen engagement across cybersecurity, innovation and education. We contributed to the pursuit of legitimate business opportunities in Iran following implementation of the Joint Comprehensive Plan of Action nuclear deal.

We continued to advance trade and investment opportunities in the Gulf with the Minister for Trade, Tourism and Investment visiting the UAE and Saudi Arabia in April 2017, accompanied by an Australian business delegation. While we continued to advocate the recommencement of negotiations on an FTA with the Gulf Cooperation Council, there has been little progress. In the absence of movement on an FTA, we secured the agreement of the UAE to establish the Joint Economic Committee, a mechanism aimed at promoting bilateral trade and investment initiatives. We opened a new embassy in Qatar, Australia’s third-largest trade partner in the Middle East and we prepared for a new embassy in Morocco, an economic gateway to North, West and Francophone Africa, to harness opportunities in a rapidly industrialising economy.

We supported Australia’s increasing investment engagement with Africa, focusing on supporting Australian extractives companies. We worked with industry to expand Australia–Africa Week, highlighting commercial opportunities, and the Assistant Minister for Trade, Tourism and Investment encouraged African countries to strengthen their regulatory environments and improve certainty and transparency to attract high-quality investors. We also provided over $94 million in humanitarian assistance, including for affected communities in Somalia and South Sudan, drought relief to Southern Africa, and those impacted by displacement in Nigeria and the
Lake Chad Basin. The Minister for International Development and the Pacific, while in Addis Ababa for the African Union Summit, launched Australia’s $1 million gender equality partnership with the African Union.

The past year saw some important steps forward in Australia’s engagement in Europe. The department supported 30 high-level visits and 19 senior officials’ talks across 23 countries—a record-breaking effort centred on preserving and advancing Australia’s interests. Australia and France concluded a Joint Statement of Enhanced Strategic Partnership, and we cemented a new era of cooperation through the $50 billion Future Submarine Program—the largest and most complex defence acquisition in Australia’s history.

In April 2017 Australia and the European Union (EU) successfully concluded a joint FTA scoping exercise to determine the scope and level of ambition of a future agreement—a key step toward launching formal negotiations.

During 2016–17 the department arranged 71 visits for our four portfolio ministers to 50 countries for a combined duration of 364 days. We arranged all travel logistics, identified strategic objectives, prepared briefs and speeches, and managed meetings and events. Often our portfolio ministers travelled abroad simultaneously.

We worked with the Department of the Prime Minister and Cabinet to support nine prime ministerial visits to 13 countries. We assisted 44 federal parliamentarians’ travel to 35 countries. This included 24 non-portfolio ministers to 33 countries, parliamentary delegations to 10 countries and presiding officers to five countries. We also supported five former prime ministers with 29 visits to 16 countries. We received excellent feedback on our efforts.

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