PRIME MINISTER
CHECK AGAINST DELIVERY EMBARGOED UNTIL DELIVERY
SPEECH BY THE PRIME MINISTER
WELCOME DINNER FR DELEGATES
TO THE MINISTERIAL MEETING ON
ASIA PACIFIC ECONOMIC COOPERATION
CANBERRA 5 NOVEMBER 1989
Distinguished guests,
Ladies and Gentlemen,
Just nine months ago, I had the pleasure of making an
official visit to the Republic of Korea a visit that took
me from near the southernmost point of the Asia Pacific
region to near its northernmost point.
The Australia-Korea relationship is just one of the economic
success stories of the region.
over the nearly three decades from 1960, trade between
Australia and Korea has grown one thousand fold, at a
compound annual rate of 28 percent from $ 3.5 million to
billion and shows no signs of slowing.
Similar stories can be told by any of the economies
throughout the region of their growing trade with each
other, and with the rest of the world.
Larger regional GNPs, stronger regional investment figures,
higher standards, of living all bear witness to the
dynamism, the energy, the exuberant growth, that are the
striking characteristics of the economies of the
Asia-Pacific region.
The 9 per cent of world output contributed by the Western
Pacific in 1967 has doubled to 18 per cent; including North
America, our region produces some 44 per cent of global
output. Since 1980, more goods have been traded across the Pacific
than across the Atlantic. 298-5
AV AWoh"
It was with all this in mind all these pointers to the
Pacific Century that I undertook my visit to Seoul, and I
took with me a proposal designed to build on these
achievements; a proposal that I believed was useful, timely
and directly relevant to the mutual interest of all the
economies of the region: a proposal for closer regional
economic cooperation.
At the conclusion of my visit there I * made a speech in which
I articulated my belief that the time had come for us as a
region substantially to increase our efforts towards
building regional cooperation, and seriously to investigate
what areas it might focus on and what forms it might take.
The months that followed that speech made it clear that I
was far from alone in my belief as to the value and
timeliness of a new look at regional cooperation.
In my own talks with President Roh Tae Woo and later on that
same tour with Prime Minister Chatichai of Thailand; in my
subsequent talks and correspondence with other Heads of
Government in the region; and in the rounds of consultations
between Australian officials and their counterparts
throughout the region, it became clear that a substantial
body of-support existed for a ministerial-level meeting at
which the whole region could explore ways of improving our
economic cooperation.
So when I express my heartiest welcome to our guests todayto
Ministers and senior officials from Brunei, Canada,
Indonesia, Japan, Korea, Malaysia, New Zealand, the
Philippines, Singapore, Thailand and the United States of
America I do so, first, with a deep sense of personal
satisfaction. But much more importantly, I do so with a sense that we are
participants in an unprecedented, vital experiment in
international consultation we have made an historic
breakthrough where previous efforts,' for different-reasons,
had failed.
This is the first time the region has met, as a region, to
discuss the economic future of the region.
By coming together at this time we are expressing both the,'-
dynamism of our-. region, and tangibly demonstrating our
commitment to see what more we can do to enhance our
prosperity, to the benefit of those * hundreds of millions of
people whom we represent and whose interests we seek to
advance. We are, if you like, expressing our regional
self-confidence; making a statement that for all our
diversity we share a capacity and a determination to create
a region of economic excellence.
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Ladies and gentlemen,
Asia Pacific economic cooperation is, of course, * an idea
with a history.
Proposals for some sort of regional economic forum have been
emerging since the 1960s, and were achieved in part but
without the involvement of governments in any leading role
with the constructive formation in 1980 of the Pacific
Economic Cooperation Conference.
With the benefit of hindsight, we can clearly understand why
the early attempts failed to mature fully.
The relatively benign global economy of the 1960b and early
1970s diminished the apparent need for regional cooperation.
The long period of post-war growth in the major economies
had still not come to an end and the GATT framework was,
with global tariff cuts, successfully delivering real
benefits to the region.
At the same time, regional economic linkages, though
strengthening, were still relatively weak. The western
Pacific economy was based heavily on a simple vertical
division of labour fuelled by Japan's demand for
agricultural products and raw materials and its capacity,
along with the US, to supply manufacturing products to the
region.
Overhanging all this, of course, were global political
tensions and damaging regional conflict that pushed issues
of economic management out of the limelight.
So it is not surprising that the idea of strengthened
cooperation remained an obscure vision. It was simply too
early. But today, we are no longer the simple, vertically
integrated, region of the 1960s, but one of spreading
prosperity and of more sophisticated interdependence.
Intra-regional trade has continued to grow; a more complex
division of labour is emerging, with increasing
manufacturing, investment, tourism and technology; economic
management has been sound and flexible; and, not least, the
hard working human resources of the region our people
have continued to acquire new skills, and new purchasing
powers. Some regional economies of course still face daunting tasks
of development Indo China comes immediately to mind. But
no observer could conclude other than that there have been
in this region, overall, some of the most rapid improvements
in living standards in the history of mankind.
That is why there has been a resurgence of the regional
cooperation idea a renewed determination to see what can
be done to sustain and enhance that amazing transformation
and a growing feeling that our level of economic dynamism
and interdependence will make such an effort worthwhile.
It was against this background that I made my proposal
with a conviction that the idea of closer, more effective,
regional cooperation is an idea whose time has come.
Let me add this. Some of the earlier thinking about Asia
Pacific cooperation was confused by a mistaken belief that
we should or could move towards some kind of Pacific trading
bloc. Then, as now, such an idea was an impractical one that
failed to take into account the diversity of the region's
economic development.
More seriously still, such an outcome would be a foolish
one, in that it would run counter to the reg~ ion's absolutely
compelling interest in the maintenance of a strong and open
multilateral trading system. It is on such a system that the
region's economic prosperity has been built, and continues
to rely.
indeed, one of the reasons why the time for regional
economic cooperation has at last arrived is because of the
important new challenges that have emerged to threaten the
multilateral trading system.
We all know of the critical issues at stake in the current
Uruguay Round of trade talks.
One of the primary benefits that I originally envisaged
springing from more effective cooperation was the
opportunity to protect that system and to enhance the
practices of fair trade.
So let it be clearly understood that we do not meet here
today with any hidden agenda to create some form of Pacific
trading bloc.
Our commitment is to open, multilateral trade. our united
resolve is that thee world eco ' nomy should not fragment into
defensive trading blocs. Our very prosperity depends on it.
Ladies and gentlemen,
I referred earlier to the view that we are entering or have
already entered, the so-called Pacific Century. It's a fine
notion but I have always thought it wrong to assume we
could sit down complacently and expect the fruits of Pacific
prosperity to fall into our laps.
2% 988
The Asia Pacific region can sustain its economic dynamism
during the coming decades. But whether it will depends on
whether we anticipate the opportunities and the problems of
what will, without doubt, be a challenging, even a
difficult, global and regional environment.
Let me briefly and broadly enumerate these forthcoming
challenges. First, there is the challenge of ensuring that the
growing economic significance of the Asia Pacific region
will be adequately reflected i. n international economic
forums including, as I have said, in efforts to
protect the multilateral trading system.
Second, there is the challenge of reducing impediments
to trade within the region and of identifying hitherto
untapped opportunites.
this highlights the need for flexibility and
structural adjustment. As industrialisation
continues to spread, the need for adjustment will
be felt not only in the older industrial centres,
but increasingly in the dynamic economies of our
own region. Yet barriers and inflexibilities
persist within our region and we all know the
strength of sectional interests that resist change
for essentially short-sighted reasons.
Third, there is the challenge of accelerating
technological change. The declining importance of
unskilled labour; further positive emphasis on education
and training; the rise of automation; the demands for
custom-made goods and services; the growth of leisure
and tourism; the undeniable necessity to achieve growth
that is environmentally sustainable all these forces
will change the pattern of comparative advantage in the
region. Fourth, ther e is the challenge of ensuring continued
rapid growth is facilitated, and not obstructed, by
available infrastructure.
Fifth, there is the challenge of change in the
international economic environment in which we will
operate. substantial current account imbalances between
major economies, the indebtedness of developing
countries, and the particular problems of primary
commodity exporters are likely to remain with us
for some time.
Sixth, and related to all the foregoing, there is the
further challenge over the next decade of integrating
the socialist countries into the international economic
order. 2981)
we are witnessing massive and welcome changes
within the Soviet Union and Eastern Europe. Within
our own region, it is in the interests of us all to
maintain a trading environment in which the
People's Republic of China can participate
increasingly productively to our mutual benefit.
In posing these challenges, I don't seek to determine a
precise work program for regional cooperation. That will, I
hope, emerge from your discussions over the next couple of
days. But I do want to point to the breadth of potential issues
that need to be discussed and the substantial and relevant
benefits that can flow from such discussion.
Because in confronting all these challenges in the eventful
decades ahead, we would do well to strengthen our individual
and collective capacity for analysis and policy formulation;
to share essential information; to compare experiences; to
weigh short-term costs and long-term benefits; to reinforce
each other's political will where necessary all this so as
to achieve sensible economic policy decisions that reflect
and advance our common interests.
Ladies and gentlemen,
Let me state once more, here, what Australia has made clear
from the start: this meeting has on its agenda only issues
of economic cooperation not politics.
In particular, we don't seek with this meeting to impinge on
the enormous contribution that has been made over the years
to regional political cooperation and consultation by ASEAN.
But having made that quite clear, I want to draw attention
to a broader reality the fundamental relationship between
sound economic and political management.
In a very real fashion, economic cooperation and good sense
are the handmaidens of peace and security.
whatever progress we can achieve here in the field of
economic cooperation can only serve to support the work, and
help to achieve-the goals, in the political field, of groups
such as ASEAN.
By the same token, economic irrationality and the practices
and attitudes of economic autarky inevitably put peace and
security at risk. We need look no further than the 1920s and
the 1930s to be taught that lesson of history.
So it is, I believe, with a sombre responsibility that we
embark today on a process of profound importance to our
region and to the world.
2990~ f
Let me briefly refer to two more specific questions that
will need to be resolved as we begin to build regional
consultation. One issue for further reflection is whether, when and how to
broaden participation so that-the process can draw in all
those economies within, or with close links with, the
region. In the short term we will need to think through the issues
related to the potential participation of the People's
Republic of China, and the economies of Hong Kong and
Taiwan. In the longer term, we will also need to remain open in
principle to helping others forge stronger economic linkages
with the dynamic economies represented at this meeting.
A second issue is to do with our recognition that improved
economic cooperation in our region is a long-term investment
in our shared future prosperity.
We won't be able, at this initial exploratory meeting at
Canberra, to discuss and solve all the challenges that this
long-term investment'will require.
we will need to come together again, and I am pleased that
ASEAN the outstandingly successful institution of regional
cooperation and the Republic of Korea one of the most
dynamic economies in the region have offered to host a
second and third meeting of this group.
But if these consultations are to be truly effective, we
will need to back them up with effective sharing of
information, and sharp strategic thinking to identify and
study relevant policy questions.
Now that we've embarked on this endeavour, I don't want to
see the spirit that has brought us together simply wither
away for lack of a mead~ s of keeping the momentum going.
By the same token, none of us, least of all me, wants to see
this meeting result in the creation of a vast, expensive or
cumbersome bureaucracy, or the duplication of existing
organisations that are already performing an effective role.
Neither outcome could be seen as a productive step towards
the goal we have come together to explore.
My own preference would be to harness as soon as practicable
a small, high-calibre group of officials, seconded from our
governments, that could prepare the groundwork for
forthcoming meetings and follow up on issues that have been
identified at previous meetings, drawing also on available
analytical resources in the region. 29.1
I recognise of course that others may have different
proposals and I certainly don't make my suggestion in any
way to impose it as the only suitable outcome.
But I do believe that, in the short term, some effective
mechanism is needed to carry forward our efforts and
intentions for the future; and I look forward to hearing the
views of the meeting on this.
Ladies and gentlemen,
Australia is proud to host this historic meeting, which I do
not doubt will carry the message of the cooperative
commitment of our countries throughout the region and indeed
the world.
The meeting will also carry a message a vital message to
my fellow Australians a message I have repeatedly
emphasised for nearly seven years as Prime Minister. The
message is that the transformation underway in the Asia
Pacific region is of critical importance to the way we go
about life in this country and to the expecta'tions
Australians can entertain for the future.
With our historical roots in Europe, and our reputation
let me concede it was sometimes in decades past a
well-earned reputation for economic and cultural
insularity, Australia has not been seen by some in the
region as an integral part of the region. Indeed sometimes
Australians haven't seen themselves in that light either.
But those days are gone gone forever. Increasingly our
domestic attitudes and certainly, at the level of my
Government, our domestic and foreign policy making
recognise the truth that our future is thoroughly interwoven
with that of the Asia Pacific region.
This is not the place to discuss the sweeping economic
reforms underway in this country and I do not propose to
do so. But I say this: none of us is immune from the need
for economic flexibility and structural adjustment, and
Australia's own commitment to reform our determination to
achieve greater enmeshment with our region shows we
recognise that as a fundamental fact of life.
Certainly, with 8 of our top 10 export markets last year
being in the Asia Pacific, we are as good an example of
regional interdependence as any economy in this region.
So this is certainly one of the most important international
meetings Australia has ever hosted important in the range
and seniority of our guests and important, indeed vital, in
the issues to be discussed over the next two days.
If Asia Pacific economic cooperation is to bear fruit, we
will need to be flexible, imaginative, and outwatd-looking.
9.
if we succeed in this respect, I believe we will have
succeeded in making an historic contribution to sustaining
our remarkable record of Asia Pacific growth well into the
next century.
I thank you for your attendance and I wish you well in your
work, which I believe can be of enduring benefit to each of
our economies and for all the peoples of our region.