E&OE……………………………………………………………………………………
Well thank you very much Ambassador for your kind words of welcome, Minister, Governors, ladies and gentlemen. It is a great pleasure for me to be here in Mexico City on my first visit to your country and I first want to acknowledge, I know on behalf of all of the other leaders, what a magnificent job your President did in chairing the APEC meeting at Los Cabos and the outstanding generosity and hospitality that has been extended by the people of Mexico to other leaders and delegations who’ve come to this APEC meeting.
The just completed APEC Meeting made some important declarations. Much in our mind as Australians of course, and I know many others, were the recent terrorist attack in Bali which has claimed the lives of likely of between 80 to 100 of our fellow countrymen and women. And the focus on terrorism and the determined declaration of the leaders of APEC to work together closely to combat the surge of terrorism was the first and I believe the most important item on our agenda. But there were other important declarations from the meeting, and amongst the others the most important clearly was the determination of all of the member countries of APEC as declared in the Leaders’ Declaration to work to bring about a successful outcome of the Doha World Trade Organisation round. It is imperative, if the rhetoric of freer and more open trade is to be turned into greater reality, it is imperative that the Doha trade negotiations be successful. And crucial to the success of those negotiations is of course a breakthrough on the agricultural front and the refusal of countries and groupings, and I have particularly but not only in mind the European Union, the refusal thus far to open their markets is having not only a damaging effect on world trade but a particularly depressing effect on opportunities for the least developed countries in the world. It has been calculated time and time again that the wealthier countries of the world would do more to help to the poorer countries of the world by dismantling trade barriers than they do by giving direct foreign aid. And in fact a dismantling or a significant reduction in trade barriers from groupings such as the European Union would by factors of four or five exceed the value of the official development assistance that is given to those countries.
So out of APEC are two declarations. A determination to do what we can collectively to fight terrorism, which is touching all countries, nobody is immune from the reach of a terrorist attack. In the increasingly globalised mobile world, especially for the young, the young of the world travel now more than ever before. And that applies to my country, I know it applies to yours. And nobody can be immune. And the second important commitment coming out of APEC is a renewed effort by all countries to achieve more in the Doha round in the area of trade liberalisation.
The bilateral relationship between our two countries has improved and strengthened in leaps and bounds over the last few years. I want to publicly thank our Ambassador and all the other representatives of Australia in Mexico for the way in which advantage has been taken of opportunities for cooperation and greater trade. We’ve more than doubled our bilateral trade over the last five years, and I know it is dwarfed naturally by the weight of economic linkage with the countries of North America. But can I say in the whole of Latin America Mexico is far and away Australia’s strongest economic partner. And I believe because of the complementary nature of our two economies we have an opportunity of doing even more. The Australian economic story is a very strong and successful one, we’ve averaged four per cent growth over the last five years, which for a developed country is very good. We have low inflation, low interest rates and a government debt of only 4.6 per cent of GDP. We have an excellent central bank governor who’s making a great contribution to the successful management of the Australian economy. And I know how much your central bank appreciates our polymer currency notes and they were recently launched by my colleague the Treasurer Peter Costello.
What our experience over the last few years has taught us, and I know the same applies to Mexico, is that countries that undertake domestic economic reforms reap the benefits of that change and that reform. Over the last 20 years, under governments of both political persuasions in Australia let me acknowledge, we have undertaken a serious of major reforms. If you go back 20 years Australia had a fixed exchange rate, it had high tariffs, it had an old fashioned taxation system, it had a union dominated industrial relations system and it essentially had a still far too inward looking attitude to world trade. Now it was a prosperous stable high living standard country, let’s keep these things in proportion. But over the last 20 years we reformed our financial system, dismantled exchange controls, floated the dollar, we significantly reduced tariffs and in the last few years under my administration we’ve done three very important things. We have undertaken a major reform of our industrial relations system, and I regard economic reform as being fundamentally dependent upon having a free and open labour market. And unless you have a more open labour market you eventually find it impossible to absorb the impact of international economic changes.
In 1997 and 1998 the Asian economic downturn threatened to engulf Australia, but it didn’t. And one of the reasons it didn’t is that because we had a flexible exchange rate we could take a lot of the economic adjustment on our exchange rate and we were able to shift some of the exports that otherwise would have gone to Asia, to North America and to Europe. And that meant that we, in an economic sense, sailed through that downturn without any real damage. And we were able to see a depreciation of our exchange rate not have an inflationary impact and the reason it didn’t have an inflationary impact was that we had domestically made our economy more flexible. And with greater price competition we were able to absorb the impact of that lower exchange rate without any adverse domestic consequences. Now I am very conscience, having spoken to the two Presidents of your country at length at APEC meetings, I’m very conscience of the economic reforms that have been undertaken in this country. And the way in which, particularly since Mexico acceded to the North American free trade agreement in 1994, the change and reform that has been undertaken in this country is very admirable indeed.
Mexico faces of course, unlike Australia, some very great social challenges as well. A very large population and the need over time to tackle, as all countries must with varying degrees, the gaps between the rich and the poor. But I believe the path being chosen, the path of freeing your domestic economy and the path of a more open trading environment around the world is the right path.
Finally can I say that the bilateral relationship between our two nations can be made stronger and better. There is often in Australia an assumption that parts of the world are not so much no go areas but they’re parts of the world with which we don’t have much contact. And then over time we find to our great surprise and mutual benefit that we can build bilateral relationships with nations with which we’ve previous had very little contact. And that of course is very much the case with Mexico. I think the potential in many areas is very significant. The most important thing we have in common at the present time is a roughly comparable view of the world economically. We both believe in expanding our horizons, we both believe that open and freer and more liberal world trade will be of benefit, not only to the world but be of enormous benefit to our two communities. 20 years is too long a gap for visits by Australian Prime Ministers to this country. I want to thank the people of Mexico for the warmth of the welcome that they have extended to my delegation, both in Los Cabos and also here in Mexico City. We’ve had a lot of ministerial visits by Australians over the last year, I think we’ve had four ministerial visits in the last 12 months and a business delegation is coming from Mexico to Australia later this year. All of these are signs of a growing economic relationship.
And finally can I thank MIM for its generosity in sponsoring this gathering and I hope it makes a contribution, this gathering, to further building the relationship between our two countries, that is important to me, I know it’s very important to President Fox and I’m sure it’s important to everybody gathered here this morning.
Thank you.
[ends]