4' 1', u~ sT PA L A~ AS DEL IVER&,-'
FOR MEDIA WEDNESDAY, 4 NOVEMBER 1981
ADDRESS AT THE 8TH SESSION OF THE COUNCIL OF MINISTERS OF
THE INTERNATIONAL BAUXITE ASSOCIATION
It gives me great pleasure to addxess you today on behalf of thet
Government of Australia. I welcome you to Australia, and
especially to our national capital, Canberra.
Australia has been a member of the International Bauxite
Association since it was formed in 1974. Our membership
ref lectsZ the importance of bauxite and alumina to Australia:
we are the world's largest producer, and third largest exporter
of bauxite, we are both the largest producer and exporter of
alumina, and we are expanding our production of aluminium.
However, our membership also reflects our desire to assist
developing countries to achieve fair and reasonable returns
for their raw materials exports; and our desire to support
international co-oper-ation on commodity trade matters. We
also see the promotion of domestic processing of raw materials
as a significant means of promoting economic development.
As a significant producer and exporter of bauxite and alumina,
Australia is conscious of the effects of the downturn in the
y iorld aluminium market, and the consequent decline in demand
for bauxite and alumina. The effects on producing nations are
being reflected in significant cutbacks in production, and
being accentuated by downward pressure on prices. No doubt,
the state of the world market and of the world economy in
general will be a principal subject of discussion for ministers
at this Conference. Letme offer two observations relevant to
that subject.
First, as much as we may wish otherwise, the prospects for all
of us are significantly affected by general world economic
conditions. There are things countries can do on their
own account to improve their position, but trade dependent
countries are particularly affected by the economic circumstances
and policies of the major industrialised countries, particularly
dependent. on the industrialised countries cettinq their own
policies right, getting their own economies right. The policies
of the United States Government, for example, and the state of: the
United States economy, are of central important to many parts of
the trading world, not only because the United States is the largest
importer of products that members of this association produce, but
also because world economic conditions are greatly affected
by domestic United States economic conditions. / 2
AS DELIVERED -2-
Second, and a source of rather more optimism, there are signs
of an underlying strengthening of the demand for aluminium.
It is becoming an increasingly important material in
packaging, building and construction, electricity transmission.
and especially transportation. That tend offers good prospect~ s
for the future for all of us, but especially for those countries
which take advantage of the higher returns available from their
raw materials by encouraging greater domestic processing.
The problems of depressed, and often volatile, world prices
for resources and primary products, a lack of progress in
reducing barriers to trade in commodities of particular concern
to developing countries, and the general impact of the slow
growth of world trade have also served to highlight the
significance of what are often referred to as north-south
issues, issues that primarily concern the obstacles to progress
in the economic development of the poorer nations of the world~.
? Australia has believed for some time that progress on north-south
issues is important for the well-being of the whole world.
There is-, of course, an overwhelming moral and humanitarian
case for'assistance to those people who are living in
unfulfilling conditions of poverty. But progress in promotinr
the dialogue between the north and the south, and in integrati . ng
the South into the world economy to a greater extent is at least
as much a matter of enlightened self interest for the North.
Without such progress, political and economic unrest may worsen,
so heightening East-West security tensions and opportunities for
expanded trade that are of mutual benefit to the North and the
South will certainly be missed.
The reciprocal nature of the benefits from expanded trade
between developed and developing countries needs, I think, to be
much more widely appreciated than it now is. Some 25% of the
West's entire trade is with developing countries, and the proportion
is even higher for the United States and for Japan
so many millions of employment in the factories of Northern
countries is dependent upon trade with Southern-countries. If that
trade did not exist, the economic problems of North America and
of Europe would be infinitely greater than they now are. Moreover,
between 1973 and 1978 compared with an average annual growth in
exports from developing to developed countries of around
exports from developed to developing countries increased at an
average annual rate of over 26%. Without growing markets in
developing countries, employment prospects and prosperity in
developed countries would be significantly lower today, but un~ less
the developed countries are prepared to provide market access -to
developing countries in return, they will cut off an important
source of support for their growth products. All of this
represents an argument from enlightened self interest from the
countries of the North and I suspect that that is the kind of
argument that is most likely to attract them. But it does not
matter which argument attracts the countries of the North so long
as in the coming months there is action on these fronts.
Australia recently hosted the Commonwealth Heads of Government
Meeting ( C: HOGM) in Melbourne and that was attended by 42 Heads of
Government or their alternates, representing a quarter of the world's
population from both developed and developing countries. An
important outcome of that meeting was the strong positive support
/ 3
AS DELIVERED 3
given to initiatives reflecting both the spirit and the
substance of the North-South issues through the Melbourne
Declaration and through the Communique. The Declaration
signifies the strong commitment of the Commonwealth leaders
to progress in North-South issues, while the Communique
proposes practical action to overcome many problems in
vital areas.
Two weeks ago, 22 Heads of Government representing over
two-thirds of the world's population met in Cancun, Mexico. The
subject of their discussions was also the North-South issue.
The Cancun discussions were conducted, as I am advised, in a
constructive spirit and while the progress that is so essential
has not yet been achieved, while the will to advance our
objective needs to be further strengthened, a basis of understanding
has, I believe, been established and the impetus for continuing
discussions and negotiations which was also developed at the
Ottawa summit and the Melbourne meeting, needs to be maintained.
Australia will continue to emphasise through all channels open
to it the vital importance of getting global negotiations moving.
At the same time, however, we shall continue to promote a number
of special initiatives that would in themselves lead to
improvements in international well-being. Our Foreign Minister,
Mr. Street, will shortly be visiting the United Nations so that
he can advise the Government better on the ways and means in
which Australia, through the agencies of the United Nations, can.
help to promote those global negotiations in general terms and
in the specifics to which we and many other countries are commit: ted.
It is not going to be good . enough for countries to sit back and
let others take the running. I think we all need to do what can
be done in these particular areas.
World food security is a basic and vital goal that is presently
being discussed in many international forums a very important
, part of the North-South dialogue. Australia supports and has
contributed significantly to international efforts to improve
food security. We believe this can be most rapidly achieved
through measures which encourage increased food production,
particularly through the use of appropriate price incentives.
We have taken some initiatives of our own account to assist
developing countries in their food production. We are, in a sense,
throwing open access to the research establishment in Australia
which is a large one Government funded and in universities and
in State Departments to help solve some of the agricultural and
pastoral problems that may be being experienced in developing
countries. We are providing considerable funds for that purpose.
We also consider that food security will be considerably enhanced
by reducted protectionism in agricultural trade of particular
importance to developing countries and by encouraging new donors
to meet international food aid targets. There is, moreover, El
need for guidelines designed to ensure the security of food supplies
to developing countries in global crop shortfall situations.
Official Development Assistance has an important rol-e to play in
development, not only in food but in other areas of great importance
to developing countries. Australia has recently increased its aid
allocation by almost 20%. However, we recognise that official flows
will remain inadequate probably for the task, and in this context,
we believe that private enterprise and private investment have an
important role to play. / 4
* AS DELIVERED -4
The tendency towards increasing protectionism poses a particular
obstacle to world trade development. Protectionism in
agricultural trade, again of particular importance to developing
countries, and the use of non-tariff barriers to trade are
particularly damaging.
It is our view that reduced protectionism will encourage growth
which will benefit countries of the North and' of the South..
The potential gains from liberalisation of trade are especially
significant for agricultural trade. Indeed, an UNCTAD study
conducted in the 1970s estimated that removal of barriers to
agricultural trade in goods relevant to developing countries
would increase export earnings of developing countries by an
amount equivalent to some $ 30 billion a year in 1980 values.
That is a very significant and substantial amount, and quite
obviously if financial flows were increased by that sum to a
number of developing countries they would be able to do so much
more on their own account.
A strengthening of the GATT offers a potential source of
progress in this context and Australia supports strongly the GATT
ministeiial meeting proposed for 1982. We also very much hope
that maybe for the first time the GATT will be able to pay
adequate attention to the problems of trade in agricultural products
because in the past they have concentrated on industrial products,
and barriers there have been reduced in significant ways, but
barriers in agricultural trade have not really been reduced at all,
especially from the European Community.
We in-Australia are conscious of our fortune in being generously
endowed with many sources of energy, and equally conscious of
the important of energy in development, and of the need for
developed countries to assist developing countries to adjust to
the changing energy situation.
' We support increased lending by the World Bank to developing
' countries for development of energy resources and for conversion
to more efficient forms of energy usage, and we support the
establishment of the proposed World Bank energy affiliate todevelop
new sources of oil and promote alternative energy sources.
Finally, I would like to point to one important achievement
already made through the North-South dialogue: the etablishmient
of the Common Fund for commodities. Australia strongly supported
this initiative. In particular at the Commonwealth Heads of
Government Regional Meeting in Sydney a few years ago, we announced
attitudes markedly different to those of other developed count~ ries
in a real effort to break the deadlock between the positions
adopted by major groups of developed and developing countries.
This is one of the things which is of concern to us; that there
are rigidities in the negotiation process that often inhibits
progress and makes progress difficult. Without being critical of
either grouping, the Group of 77 come to a view, if that view
is to be changed much work has to be done within the Group of 77
itself and if a modification is needed to reach agreement to m.-ake
a sensible advance, that modification can be hard to achieve in a
speedy way through those processes. Equally, of course, the B Group
have their own caucused position and if they need to modify a
position to enable progress to be made through negotiation
the modification of their own situation can b~ e difficult and hard
to achieve. That had been the situation during the negotiations
AS DELIVERED
on the Common Fund, and as a result of it Australia in a sense
deserted the B Group and took a separate and independent position.
In a sense, I suppose, we jumped into the middle ground. But I
believe that breaking of the ranks, if it can be called that,
was instrumental in causing people to assess their positions
to enable progress to be made. But these are matters that all
need to be examined very closely in the preparations for the
global negotiations which we hope will take place in the coming
months. Australian Ministers and officials had followed up with intensive
discussions with many countries that had taken opposing positions
on the Common Fund issue and as we now know, eventually the
dialogue was renewed and the necessary compromises were worked out
and agreement was reached.
The Common Fund, by providing a mechanism for stabilising
commidity prices and commodity trade, does offer mutual benefits
Ito commodity producers and to consumers, and has the potential
to contribute to the economic progress of developing countries
through means in addition to aid, or other than aid, by providing
more event returns for the commodities that they have to sell.
The agreement to the Fund's establishment, moreover, provides an
example of what can be achieved through dialogue pursued in a
determined way. We now urge other countries to ratify that
agreement so that it might come into effect at the earliest
possible date.
Ladies and gentlemen, just as there is a need for truly global
negotiations on the broad range of issues that comprise the
North-South dialogue, so too there is a need for international
meetings between countries with specific common interests and
problems.
, The International Bauxite Association provides a forum which
permits member countries to exchange information and views on
matters of common interest and concern. I hope that members
will continue to find the International Bauxite Association
a valuable forum for these discussions.
It gives me very great pleasure indeed to formally declare this
8th Session of the Council of ministers of the International
Bauxite Association open, and to wish you every success in you~ r
deliberations. I hope you not only have a productive time When
you are in formal session, but I hope you also have some time to
see a little of Australia and to enjoy something of AustralianL
hospitality. 000---