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SPEECH BY THE PRIME MINISTER, THE HON PJ. KEATING, MP
" INTO ASIA" TRADE AND INVESTNIENT CONVENTION
PERTH 17 NOVEMBER 1992
Ladies and gentlemen
I am delighted to have this opportunity to address the " Into Asia" Trade and Investment
Convention, and I congratulate the Western Australian Government and other supporters
of the conference on the imaginative program you havc devised.
Its appropriate indeed that you are rnccting in this State, because Western Australia in
some respects has been leading us into Asia.
With less than a tcnth of Australia's people, this state now accounts for nearly a third of
Australia's total cxports.
And today, 70 pcr cent of Western Australia's exports go to Asqia.
We are familiar of course with the great wealth that continues to be generated by exports
from Western Australia's mining and energy industries.
[ ron orc from the Pilbara and natural gas from the North West Shelf will remain sinews of
interdependence bctween Western Australia and North Asia.
The State govcrnxncent recognises, however, in its " Into Asia" strategy that Western
Australia's future prosperity depends not only on maintaining these traditional links of
trade with Asia, but also on learning to exploit rclatively new arcas of compctitive
advantage in the dynamic Asian market.
This means expanding services and manufactures exports while continuing with
commodity exports.
As Western Australia has found new markcts in Asia, so too has Australia as a whole.
Nearly two thirds of Australian exports now go to Asia, and Asian mnarkets; continue to
lead all others in export growth.
I would like to take a little time today' to discuss what this powerful and consistent trend
means for our international trade policy and for the way we think of ourselves as
Australians.
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During the 1980s, the dozen or so countries and territories of North-East Asia and South-
' East Asia grew twice as fast as the rest of the world.
During the 1990s, they seem likely to repeat that performance.
At a time when the OECD has had to revise downward its growth forecasts for Europe, the
United States and Japan, Australia's strengthening links with the more rapidly growing
economies of Asia are of critical importance to our economic expansion in the 1990s.
The North-East Asian economies are more complementary to Australia in resource
endowment and trade composition than any other economies in the world.
North-East Asia accounts for nearly half of Australia's exports.
North-East Asia is a major source of tourists, investment and business migrants, and is the
single most important market for Australia's cducation exports.
While North Asia rcmains by far the single most important market for Australia,
Australia's exports to the six countries comprising the Association of South-East Asian
Nations ( ASEAkN) are now growing more quickly than our exports to any other part of
world. The ASEAN countrie-s now account for more Australian exports than cither the United
States or the European community.
Even more striking. is thc fact that Austral ia's manufactures and service exports to South-
East Asia are growing morc quickly than exports of primary commodities.
As South-East Asian economics have modernised we and they have discovered greater
and greater opportunities in trade.
Indonesia probably best exemplifies the need for Austra lians to revise their image of
South-East Asia.
Despite the fact that it has already become our ninth largest export market and second
largest in ASEAN, too many Australians still have an image of Indonesia as a poor and
backward country which is somehow threatening to Australia's interests.
My visit to Indonesia in April this year served various foreign policy objectives.
But, just as importantly, wanted to underline new realities for the Australian public.
I made a point of highlighting the cnormous strategic benefit Australia has obtained
during the past 25 years through the success of the Soeharto Government in consolidating
political stability and economic devclopment in the Indonesian Archipelago.
Between 1966 and 1991, Indonesian's real GDP rose 450 per cent.
In the late 1970s, Indonesia was the world's largest importer of rice. In 1984, Indonesia
became self sufficient.
The people of Indonesia are now better fed, housed, and educated than evcr bcfore. Infant
mortality rates are approximately half of what they were.
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In recognition of the dynamic economic relationship Australian and Indonesia now enjoy,
President Soeharto and I agreed to establish a regular Ministerial Forum to discuss at a
high level trade and economic matters of shared interest.
Establishing this body reflects a ncw maturity and mutual confidence in the relationship.
I am pleased to note that yesterday and today the first meeting of the Ministerial Forum is
taking place in Jakarta with five Australian Cabinet Ministers participating.
I am also pleased to note that one of your distinguished speakers yesterday was His
Excellency Governor Soelarso of Indoncsia's East Java Province, whom I met during my
visit to Surabaya last April.
No visitor could help but be impressed by the vitality of economic dcvelopment in
Surabaya and its environs.
I congratulate the State of Western Australia for its foresight in establishing a sister
relationship with East Java.
A new study by the East-Asia Analytical Unit of the Department of Foreign Affairs and
Trade demonstrates that Australia has hcld its market share in South-East Asia during the
past five years.
if we continue to hold it for the rest of this decade and I am confident we can we will
put an additional $ 12 billion onto our annual exports.
So you can see that because of their rapid growth, South-East Asian markets will become
increasingly important to Australia's prosperity.
Now, of course, we won't get the growth and we won't get the exports unless we can
continue to transform our culture, but if you want proof of our ability to transform
ourselves in a decade ahead, you need only look at the way in which we have transformed
ourselves in the decade behind.
We have transformed ourselves from a high inflation nation to a very low inflation nation.
We have increased our competitiveness by well over one tenth.
We have replaced industrial disputation with a cooperative system which has delivered the
lowest strike rate for 30 years a system of consensus which I think the Australian people
are very reluctant to abandon.
We have opened the economy to the world with a floating exchange rate, financial
deregulation, and Cuts in protection.
We havc succeeded in putting governmcnt behind trade with the unification of trade and
foreign affairs policies and departments, the creation of Austrade, the succssful
leadership of the Cairns group in the Uruguay Round, and the initiative which lead to the
creation of the APEC group of Pacific trading nations.
A decade ago, we exported one seventh of what we produced.
Today we export nearly one quarter of what we produce.
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And as the quantity of exports changed, so too has the composition and direction of
exports. Today our manufactured exports are equal in value to our rural exports and our mining
exports. And more and more of our exports arc going to Asia.
As trade becomes more important to our national prosperity, international trade policy
becomes more critical in national governmecnt. I
As I have already made clear, our core interest is in protecting and cnhancing our trade
with Asia.
We Australians should see it as our historic good fortune to be located close to the world's
fastest growing economies and one of its Vrcat economic powerhouses, and to have
already established closc economic ties with it.
We have the further advantage that the regional emphasis of Australia's foreign policy and
our shared strategic intcrcsts with nicighbours to our north correlatc vcry wcll with the
rcgional focus of our trade and commercial interests.
As I said, it is our good luck. It is not the first timle we have been lucky, of course. For
years we were able to rely on special relationships and our rural and mineral products to
see us through.
But our good luck this time is an opportunity to be seized, both by governments and by
business. It won't come to us as a branch office, or as a quarry and a farm.
As never before in our history we have to seize the time ourselves.
Of course, our trading interests are not confincd to the Asian region.
We strongly believe in maintaining and strengthening the open, non-discriminatory
multilatcral trading system based on the General Agreement on Tariffs and Trade or
GATIT. This interest is shared by Japan and other East Asian trading partners because each of
them pursues outward-looking economic policies and depends, on access to a wide spread
of international markets.
The beniefits of a new multilateral agreement would be considerable.
It would extend international trade rules to cover agriculture and services, and also
strengthen the disciplines and dispute-settling procedures of GATT.
We have been deeply disappointed at the apparenit lack of political will in Europe, and in
France in particular, to agree on reasonable understandings on agriculture.
Sobered by the prospects of trade conflicts in a climate of slower OECD growth,
negotiations betwccn the United States and the EC have now resumed.
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An agreement is, I believe, the most important thing that Europe and the United States can
do to stimulate world growth and confidence.
But whatever the outcome of the Uruguay Round, we are now in a period of fluidity in the
world trade system.
There is an increasing tendency towards regional, subregional and bilateral trade
arrangements. We may or may not like this trend, but it is indisputably there and we must
seek to use it to our advantage.
At the same time, there are powerful forces enhancing globalism, including the extinction
of communism and the new universality of market economics, and the more powerful role
the United Nations is now able to play in world affairs.
In this new era in international affairs, our ovcrriding objective is to do all we can to
preserve and enhance a trading environment in which our major markets remain as open to
us as possible, and these markets remain open to each other.
We must never lose sight of the fact that most of our trade, and the fastest growing part of
our trade, is now with other countries in the Western Pacific.
We must also not lose sight of the fact that many of these countries are highly dcpendent
on the US market.
At the regional level, an important clement of Australian policy is the promotion of a
trade-liberalising agenda in the APEC group.
The grouping includes the United States, Canada, Japan, Korea and the other main
cconomies of the Western Pacific.
Its member-, account for 50 per cent of world output and over 40 pcr cent of world trade.
The importance of APF. C underlines the pivotal role that the United States will have in
determining the trade environment in the Asia-Pacific region.
The United States is the world largest economy and trading nation.
As shown in the Uruguay Round, it retains a vital leadership role in helping maintain a
sound multilateral trading system.
Despite the growing economic importance of Japan, the United States remains the leading
export market for most EAst Asian economies.
And much more of the United States' Own trade now takes place across the Pacific than
across the Atlantic.
Against this background, the policies of the Clinton Administration will have a decisive
bearing on trade alignments in the Pacific.
I have been much impressed by President-elect Clinton's conviction that foreign and
domestic policy are two sides of the one coin.
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By his recognition that the United States must he able to compete successfully in the
global economy if it is also tio suciicat home.
We also noted that he affirmed strong support for the multilateral trading system and
avoided the temptation to engage in the Japan-bashing that some in his party have
indulged in.
In Australia's dealings with President Clinton and his Administration, we shall make every
effort to encourage Washington to think more deeply about the future institutional
structure of economic relations in the Pacific.
We think it is very important not only for ourselves but also for Japan, the United States
and other trading nations in the region, that the United States and Japan increase their
economic interdependence rather than diminish it.
We will resist any process which has the effect of dividing the Pacific into trade allies of
the United States and trade allies of Japan.
As I explained during my visits to Japan and Singapore last Scptember, Australia's core
interests lie in maintaining the most favourable possible environment for our bilateral
trade rclationships with Japan and the other economics of East Asia.
This reflects a situation where East Asia now accounts for nearly six times as much of our
total exports as does the United States.
But the regional trading environment for Australia will he so much better if the Western
Pacific and North America remain part of the same thriving trading community.
As important as they are, the initiatives of the biggcr players cannot of themselves
guarantee Australia's success in international trade and commerce.
We have a big responsibility at home for maintaining the drive towards making our
economy intcrnationally competitive, and developing a creative culture of
entrepreneurship. While thcre is much that the Australian Government can do to hclp create the right policy.
environment, we have to recognise that the ultimate challenge Of SLuccccding in the region
rests with Australian business.
Many of our private companies havc acceptcd their responsibilities and arc aircady
demonstrating how well they can succccd.
But there is a broader challenge for the whole Australian comnmunity.
it is a question of attitudes, to do with how we see ourselves as a nation and how we
perceive our relations with the region.
Australia can no longer afford to be a society located with its geographical feet in Asia,
but with its intellectual head and emotional heart in Europe or North Amecrica.
Part of this is being confident in ourselves and knowing that our political and social values
do not have to be compromised in a closer association with Asia.
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Indeed, I would argue that Australia's reputation for openness and multiculturalismi are
definite assets in a region which is already very diversified politically and is showing
increasing pluralism as it advances economically.
We should recognise the increasing contribution that our Asian migrant community is
making to commercial links with Asia.
It also serves our economic purposes that an increasing number of Australian students are
studying Asian languages at secondary and tertiary level.
During my recent visit to Japan, government and business leaders were very imnpressed to
hear that we now have around 100,000 students studying thc Japanese language.
Thiis number is gcater than the number of Japancsc-language students in any country in
the world outside North Asia.
There are now 41 centres or institutes of Asian studies at Australian universities and there
is a growing number of educational exchange programs between Australia and Asian
universities. Increasingly, we are recognising that just as the changes we have made in the way we do
business at home and in the way we conduct our industrial relations involve cultural
questions, so too will our continuing success in integrating ourselves with the economies
of Asia depend upon cultural changes that allow us to adapt our basically European
society to Asian cultures.
It is here, I think, that thc Australian people and government will find its grcatest, most
absorbing and most rewarding challenge in the coming decade.
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