E&OE...........
Thank you very much Mr Chairman, it is a great honour to have the opportunity of addressing this business gathering on the eve of the APEC meeting, a body which brings together the dynamic economic area of the Asian Pacific region. This year';s meeting sadly meets under the shadow of a terrorist outrage, the one at Bali on the 12th of October which has taken the lives of so many people, including a large number of the lives of my fellow countrymen and women. And just as the APEC meeting in Shanghai last year took place under the shadow of the terrorist attacks on New York and Washington, so again as APEC leaders and as leaders of the APEC business community we must not only address the awful personal horror involved in terrorism, but also its economic impact and in that context what further measures can be taken by the nations not only of APEC but also the nations of the world to respond more effectively to terrorism.
Nations can make declarations together, nations can cooperate together to share intelligence, to enforce multilateral understandings which make travel safer and security stronger. But in the end the sum total of the strengthened determination of the nations of the world to combat terrorism is the determination of individual nations through their sovereign governments to take the steps that are needed inside the borders of their own country to counteract terrorism. No amount of international exhortation can substitute for the determination of individual governments who know they have a terrorist problem within their borders to do something about it. And that is a view which is strongly held by my government, understandably held by my government, and a view that I communicate to all of the people gathered here today and all of the governments of this region.
We meet of course not only under the shadow of those attacks, but also against the background of a year which has had some reversals so far as the goals of APEC are concerned. It';s a year that';s had some indifferent growth in many countries, although there are some, including my own I';m pleased to say, where growth has continued to be strong. It';s a year in which corporate governance has come under the spotlight and I know that representatives of the business community of our various nations are conscious of the importance to the strengthening of competitive capitalism and more open trade to ensure that corporate governance is as strong and as transparent and as open and acceptable as it can possibly be within individual countries. It has also been a year in which levels of protectionism have been on the rise and it';s very important that the business gathering, as well as the leaders, reassert the importance of resisting the re-emergence of protectionist tendencies within our nations.
We must do more to resist those tendencies, we must reassert by our practice as well as our rhetoric that the original goals of APEC remain desirable goals and goals that are not only achievable but goals that must be achieved. Because the key lesson of the last 50 years is that those countries that open their markets develop the most. Those developing countries which over the last 50 years that have practised open trading, have practised open policies towards foreign investment, that have put their faith in a more free market approach, those have done best. Those developing countries that have put their faith against opening markets have done worse. And the lesson of the last 50 years has been very strong. APEC has played a very important role, not only in the region but also as a body reaching out to the rest of the world in not only arguing but demonstrating some of the value of more open markets. Our own experience in Australia as a developed country, but nonetheless a country that in the 70s and 80s saw that it could do better if only it brought about a number of internal reforms, has been very instructive. Between 1985 and 2001 tariffs in Australia have been reduced by over 80 per cent. That';s from a general level of 22 per cent, an average level of 22 per cent, to a level of about four per cent. The result in that, or from that, has been that we have become a more open and competitive economy. We have more competitive and we have more export oriented industries. Our export mix has become far more diversified, we have long been seen as a major exporter of agriculture and mining products. But we';ve also known become, without in any way derogating from the very important contributions that the mining and the farming sectors make to our economy, we';ve also roughly doubled our manufacturing exports over the past two decades as a proportion of total exports. And one of the reasons that we were able to withstand the negative effect of the Asian economic downturn in 1997, one of the reasons, was that our export face has become more diversified. There were other reasons, our flexible exchange rate shouldered a great deal of the adjustment process and we learnt in that experience that no one part of the world economically is the permanent salvation of a trading country such as Australia and our capacity to ship many of our exports lost to markets in the Asian region to Europe and to North America was a very important element in Australia being able to withstand that downward effect.
So the lesson from all of this is that those who try the open markets normally do better, those that remove protective barriers always do better. But there';s another side to it and that is that those countries which are endeavouring to lift themselves from developing to developed status do need access to more open markets. And that of course is where APEC, and most particularly, the World Trade Organisation Doha round comes into the equation. Doha remains central to Australia';s trade agenda, although we stand ready where there is mutual benefit in seeking to negotiate free trade agreements with other countries. Reduction in protectionism and domestic support would have enormous benefits to developing countries. A 50 per cent reduction in protection worldwide would deliver global welfare gains of around $400 billion United States dollars annually.
The export earnings of the world';s poorest countries are depressed by at least 10 per cent because they are shut out of the worlds biggest agricultural markets, the United States, the European Union and Japan. And speaking as the Prime Minister as an agricultural producing country, but not a developing country, can I say that the levels of protection in agricultural maintained by the United States, by Japan and by the European Union have an extremely adverse effect on many developing countries. And it remains a central objective of Australian trade policy to argue and agitate and negotiate against those protective barriers. I declare of course in Australian interest, but more importantly we should declare a world interest in opening markets for the developing countries. The OECD nations spend nearly six times more on agricultural support than on official development assistance to poor countries. When I hear calls for increases in foreign aid by the more developed countries in the world I understand the generosity of spirit which is behind those calls, but those calls would have more resonance, they would deliver more benefits and they would mean a lot more to developing countries if they were matched, or even replaced by the breaking down of trade barriers. Because in the end that will do more to help the poor than to develop an assistance.
Australia has a strong commitment to opening markets to the poorest countries to help them trade their way out of poverty. And I';m pleased to announce today that Australia will grant tariff and quota free access for 49 least developed countries, as well as East Timor, which is so far not been developed, not been listed rather as an LDC by the UN. And this is a gesture by Australia to demonstrate our commitment. And can I say that the benefits of liberalisation are not just confined to developing countries. Wealthy developed countries, the engine rooms of continued world growth, also get a double bonus because reduced costs for taxpayers when expensive subsidies are abolished and cheaper goods for consumers when high tariffs are removed, and those deliver benefits for wealthy developed countries.
I do not need to remind an audience such as this that the starting point for economic growth is of course sound macroeconomic policy at a domestic level. Australia has enjoyed a very strong period of economic growth for the last six or seven years. More than anything it';s a product of some major economic reforms carried out over a period of 15 to 20 years, including the floating of our exchange rate, the removal of exchange control, major reductions in tariffs, the restructuring of our industrial relations system, although we';d like to go a bit further but we';re encountering a bit of domestic political opposition there but we';re continuing to work on that subject, and also major changes in Australia';s taxation system. The lesson for us out of that is that you often have to wait a while before you get the dividends of economic reform, but if you are willing to undertake the major reforms and face down some of the short term political challenges you do in the end get the benefit of those reforms. Our economy would not now be amongst the fastest growing of those in the developed world and have been in that position for such a long time had it not been for the many reforms that we have carried out.
The last few weeks has been a difficult time for my country and many of my fellow Australians have been saddened by the tragic events in Bali. They have had a great impact on our nation, but what they have not done is to diminish in any way the determination and the commitment of Australia and Australians to be active, positive citizens, not only of the Asia-Pacific region but of the world. We are a nation made up of people from many parts of the world, we are a nation that has always had great links with many parts of the world, we have always travelled, we always will travel, we thank our many friends for their messages of condolence and support, they are deeply appreciated. We remain in every way a committed citizen in a national sense of APEC and a determined contributor to the economic and social growth of mankind.
Thank you.
[ends]