QJ9
PRIME MINISTER
TRANSCRIPT OF THE PRIME MINISTER, THE MON P. J. MEATING MP
PRESS * CONFERENCE, GRAND HYATT HOTEL, JAKARTA, TUESDAY,
16 NOVEMBER 1994
E& OE PROOF QOPY
PM: Can I begin by saying that I think fth events In Bogor today, the
decision of the Leaders to carry their support for the communication Is
an absolute triumph for the Asia-Pacdfic. It Is a triumph for the world
trading system and it is a triumph for Australia bemause It will be a very
clear beneflclary from this and It has played a very Important and
significant role in it. But, President Soeharto's statement may well be
seen, I think, as the beginning of te Pacific century and Australia is
set up for it. I want to commend President Soeharto on his leadership
in putting the communique together and drivng It home.
Free trade * int. h e Asia-Pacific by 2020. was the stuff we were only
dreaming about two years ago. A decade ago It was beyond our
dreaming. Today, 18 countries have signed up to It and the sense of
restrained euphoria amongst the members knowing the weight and
moment of what had been undertaken was something for one to
experience. This area, 6f course, encompasses more than two billion people, by
the turn of the century it will be 57 per cent of world trade and by 2020
seven of the top 10 economies In the world will belong' to it In*
Australian terms It means about $ 7 billion In extra Income each year,
extra trade each year, about 70,000 nlew jobs, ft means exponential
growth. 1in opportunities for young Australians. But, I think, much of the
meani~ ng* of it can'tri be* meisured. For Australia's terms, how do you
measure the value of a permanent seat at a table of this size? A seat,
which I might say, we have In this Instance truly earned. A
coonstrctive leading edge role In the region, the knowledge that we are
not only masters of our own destiny, but truly ready tq seize it It
means all the reform and realignmerft that we in Australia have
undertaken In the past decade will now have their rewards, It means
economic growth will be secured by expanding trade, It means cooperation
on other vital issues, It means a collective regional Interest In
peace and security underpinned by a common economic Interest.
I don't think the next generation would have blamed us for not having
done this because this did not have to be done. But what is, I think,
extraordinary about It Is that as the Cold War finished, as that bipolarity
changed, as that bi-polar overlay was taken away, regions had
a chance to do things together or to remain In the same sort of
alignments. And, out of a process of sheer co-operation and
Imagination we have seen developed here a commitment to free trade
in the Pacific rim amongst these vast countries. Something that just
simply didn't have to be done, something which, I think, most people
thought would have been beyond our thought and our imagination.
But, the fact Is It wasn't and it was done. It is a rare achievement, I
think, 18 countries here have seen the future and they have seen the
moment and they have seized it now not in another generations time,
but now and, I think, this is a very extraordinary thing.
So. we have all today lived through a bit of history. And, when we see
the great post war changes such as the Bretton-Woods Agreement or
the establishment of the IMF and the World Bank in the same terms
what has happened today, larger In its Impact than the Uruguay Round
by a factor of two or three, will change the worlds trading system and
mean Instead of having three blocs one In Europe, one In the
Americas and one In Asia we will have an Asia-Pacific dedicated to
growth and co-operation and ultimately a better world where cooperation
and achievement underpins what used to be there with the
frightening polarity of the Cold War.
So, this means much and it is a great achievement by everybody
Involved.
J: Mr Keating, what did you have to offer to Dr Mahathir to get him to sign
up?
PM: I think Dr Mahathir expressed some reservations and Intends to
express them himself, but President Soeharto made this clear that this
was a ' flexible -consensus' as he put it. That was that he wouldn't
accept the view that one dissenter was able to change this and so, I
think, Malaysia commits itself to this, but any reservations it has Is, I
think, for it to explain and for its Prime Minister to explain.
J: Mr Keeting. how Important has Australia's role been In the process?
PM: We started the idea off in 1992. That is, the idea of APEC meeting at
leaders level because we took the view that Ministers, no matter how
committed and no matter how conscientious couldn't draw down the
authority to make these sorts of decisions. This could only be done
to adopt a free trade agenda like this could only be done by leaders,
by heads of government and by leaders and we needed therefore a
leaders forum. It is that process that Australia put In train, but that was
taken up ambitiously by President Clinton and I thank him sincerely for
that for his meeting In Seattle last year and then by President
Soeharto agreeing to host the second meeting end he said he would
only do It on the basis if something positive came from It and then
picking up the free trade agenda and running very hard with it So,
Australia has been Involved I am very happy to say with this for its
inception and we have worked closely now with President Clinton and
President Soeharto and the other 18 leaders who have seen the
opportunity of this and were prepared not to let the moment go.
J: ( French Newspaper) If APEC is not going to be a free trading bloc as
stated In the statement, does it mean that you extend benefits to
Europe without having anything in return, without having to open its
markets?
PM: We think that this Is a proposal to help ourselves and in the doing of it
helping others. Now, the open markets 2000 proposal which President
Clinton proposed during the G7 was rejected by Europe. What has
happened here Is a much more cooperation and conscientious
undertaking and this will change the worlds trading system I'm happy
to say, but the Initiative came from the Asia-Pacf and what is
unusual here, the Initiative has come from the leader of a large
developing country. This has not come from the G7 down or the
OECD or anywhere else. This has come from a group of people
meeting together and the leader of the developing country proposing
to a dutch of developed countries US, Japan, Australia, Canada,
New Zealand et cetera a free trade agenda. So, it is almost a role
reversal for . President Soeharto to have done this, but he has and we
have and the world will be a freer, more supple, more productive
place. Now decisions have to be made in the future about whether
this is MFN or preferential, but any of you who are familiar with the
GATT will know that if this is a QATT consistent policy and it is we
made that very clear, that an adoption of such a policy under the
GATT leaves the option for each individual country of deciding whether
it is MFN or preferential. But again, that Is a broader question that
may be decided In the broad and we decided to have the next Leaders
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Meeting again, in Japan In Osaka In 1995 and that will be, of course,
one of the Issues which we will be discussing.
J: Mr Keating, did you say there was no unanimity or consensus on the
free trade timetable?
PM: No, let me just make these points to you from some of the paragraphs
of the communique. At paragraph six it says ' we further agree to
announce our commitment to complete the achievement of our goal of
free , and open trade no later than 2020.' This is not an aim or a
general direction,. this Is we agree to complete the goal by 2020. And
then it goes on to say that is, that industrialised economies will be
achieving the goal no later than 2010 and developing no later than
2020.' So, in the parlance of intenationalcommuniques there are no
weasel words here. These are firm executive decisions, this Is an
executive decision taken by the Asia-Pacific Leaders. And, at
paragraph seven ' we decide to expand and accelerate APECs trade
and Investment facilitation programs'. Not we might decide or we are
thinking about it, we decide. So, these are a very firm set of decisions
and we will now need to give effect to those and think about the plan
of how we will do that coming up to Osaka, during Osaka and beyond.
J: There has been some sort of talk about this 10 years what happens
in this ten years between 2010 and 2020, do the developing nations
get free access to the developed markets...
PM: We are already seeing a lot of unilateral changes in protection. For
instance, Indonesian tarffs have fallen from 35 per cent In 1982 to
per cent In 1992. In Korea they have fallen from 32 per cent to 10 per
cent. Chile's average tariff Is now 11. Australia In trade weight at
average terms will be at 2.9 per cent by year 2000. So, they are going
down, just that some will have further to fall than others because they
start from a higher level. But, again the modalities of this are to be
decided up to Japan and during the Osaka meeting.
J: ( International Herald Tribune) Mr Keating, when this agreement
speaks of free trade, does that mean zero tartffs and how many of the
countries or economies participating will take advantage of that opt
out clause point nine?
PM: Well, It is not an opt out clause and that was discussed by members
today and there Is, I think, a very clear commitment to the paragraph
six language here the first part of your question was?
J: Can 1 just follow up, If there was a very clear commitment, as you say,
why is this point nine Included?
PM: I think it was included originally for those who found trouble with some
of the feature of itb, u t as It was agreed there would be no annexure to
the statement. In other words, Leaders were not going to be deterred
from publishing the statement as s, that paragraph nine largely
becomes redundant in the decision in terms of any import that you
might attach to it of the kind you are speaking of.
J: Does free trade mean zero tariffs?
PM: The coverage and the determination of free trade will be something
which has to be decided in Osaka in 1995 and maybe beyond, but
under the GATT, of course, the notion of GATT consistent free trade Is
where markets are substantially liberated substantially is the word.
And, that may be a formula that the APEC Leaders take up, it may be
that they say zero to five per cent, t may be something else, it may be
zero, but again these are all Issues which. I think, in the doing of this
it's competent for the Leaders to discuss in Osaka In 1995.
J: Mr Keating, does point nine where It refers to Implementing co.
operative arrangement imply or require another formal agreement by
the Leaders before this whole exercise of free trade might be
embarked upon. And second question, can you tell us whether there
was or was not consensus on the MFN question and is that why that
also has been
PM: The MFN question was not discussed. The only reference to it came
from myself sayrng It is one of the issues which we will need to debate
in Osaka in 1995, no one else discussed MFN. So, that wasn't an
issue there. There was a notion, I think, at some point that In these
negotiations there may be some not yet ready to participate or may
join later. For Instance, countries that are not now In APEC, but who
may join it are not necessarily signed up to these things and therefore
can elect not to do. But. let me make this very clear; this was
discussed, this paragraph nine was discussed at some length in the
meeting today and it is not for the purposes of any of the members
who expressed their support for it an option to move away from the
very clear undertakings of paragraph six.
J: Mr Keating, you say that Soeharto, if I got it right, you . said that
Soeharto wouldn't accept the view that
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PM: That's right, he talked about the notion and I'll give you some of his
words from my notes, he talked about the notion of a flexible
consensus If the majority of the members are ready to c-operate they
can carry it out and not wait for members who may not be ready.
J: So, does this mean that he convinced Mahathir to go along or did
Mahathir
PM: Don't ask me about Prime Minister Mahathir's position, you had better
ask him, I think.
J: Was it in the meeting though, was it discussed?
PM: You had better ask him about his position.
J: What sort of adjustments win this mean for Australian Industry over the
next ten years?
PM: It depends what the climate is. We have always adjusted Australian
Industry In the context of relatively high tariffs in the Asia-Pacific, but if
you have got a commitment like this given the fact that we have
already had the bulk of our adjustment behind us, and as I say we are
going to a trade weighted level of tariffs of 2.9 per cent by the year
2000, Australia's large adjustment task is basically behind it. So, this
opens up an opportunity for Australia obviously, but I think, about any
of these sorts of arrangements they are basically win-win
arrangements. And, that is why I think the developing countries are
bringing their tariffs down unilaterally, removing non-tariff barriers and
being involved In trade liberalisation In general.
J: There has been some expressions back in Australia, they fear that this
may end up with a swamping of footwear, that sort of Industry in
Australia. Are there any guarantees for those workers in those types
of industry?
PM: This is the sort of fears people have expressed down through time and
certainly over the last decade. People said when we removed tariffs,
manufacturing In Australia would close up. What has happened?
Manufacturing production has doubled and manufacturing exports
have tripled. -And, we are now seeing In a lot of competitive areas of
the Asia-Pacific such as motor cars, even with existing levels of
protection we are now producing vehicles for the world market,
competitively of a very high quality, so I am very convinced of the
capacity of Australians to compete in any of these markets and
particularly in the environment of lower tariffs all around us.
J: ( The Daily Telegraph) If given that you are saying that paragraph nine
is overridden by paragraph six in effect, what is the relevance of
paragraph nine?
PM: The thing is, as these meetings go on you could sit down and try to
redraft some of the sections as you get a coalescence of view around
particular points. But, you have got to understand how great this is,
how big this Is. You have got the big Industrial economies of the
United States and Japan, developed economies such as Australia,
Canada, New Zealand, huge developing markets like China and
Indonesia and the ASEAN economies, the industrialised economies
like Singapore and Hong Kong, Korea, et cetera. I mean, this is an
enormous panoply of countries and interests and to secure a thing like
this is done, if someone wants to unpick the threads of a communique
and you find yourself sitting there another day or two haggling over
every point, I think, President Soeharto's instinct was to get the
communique up and he did.
J: Can you just describe from a personal point of view what it was like in
that room with all those leaders, what were the atmospherics there?
PM: The thing I keep trying to remind myself of is that two and a half years
ago there was none of this, none of this existed, but, this has come
together in this very rapid time. You could feel a sense of buoyancy
from the Leaders Knowing tnat iney are in something as large as mis
and it would mean so much for their communities and so much to their
nations. The other thing was I can't think of a more tangible
expression of the north south dialogue In any practical way than this
because APEC is not like the European Community, Which is largely a
community of developed countries. This has got the most developed
and developing countries, it is a huge spread of countries from the
United States to Papua New Guinea through to Indonesia, Korea, the
differences here are so great that how long in all over our lives.
Scertainly in all of my political life, we have heard about the north south
dialogue. Well, this was the facilitation of that dialogue in the most
tangible way that I could ever imagine. I think being part of that cooperation,
I mean, seeing the President of China adopt these
proposals along with the Prime Minister of Japan, the President of the
Unites States along with the President of Indonesia, I mean this is cooperation
and good sense triumphing over the tight polarity we used to
Shave not just a few years ago. So, as I said to you in the opening
remarks, I think, the Leaders have seen the opportunity here and
seized It and this is leadership. This is what politicians can deliver. I
, mean, politicians often are disparaged in this world, but In the end they
are the ones that make the decisions. This is a leaders meeting ati,
this could only have been done by leaders and there was a lot of
leadership on the line today.
J: Did either Japan or China raise any reservations because they
expressed plenty before?
PM: No, there was basically nothing but support from China and Japan.
But, before I leave you again on this paragraph nine, you asked me
about It, If you read back through that you will find it is referring to the
area above which Is largely about trade facilitation and standards
agreements et cetera. That was largely the mood with which it was
discussed in this group about trade facilitation, countries doing that
which they sought to do while others were not yet ready to join. Let
me assure you and you can go over this with a fine tooth comb and
ask the other Leaders, those key words that I referred to you earlier
about ' we agree to complete the achievement of our goal of free trade
by 2020, industrialised economies achieving It by 2010. developing
economies no later', you can't get it any harder than that. That is why
it Is a great achievement.
Could I just complete by thanking a number of people on the
Australian side who have been associated with this for a very long
period. of time, In the Australian bureaucracy, let me Just say about
this, we have had a lot of debate about trade, there are trade
theologians sprinkled all over my country and probably most countries,
certainly in the Australian universities, but with the Uruguay Round and
now with APEC, all the heavier hitters have got into the game. And,
the game has gone way beyond polite papers being delivered at
seminars to massive achievements of this variety by people who could
imagine something bigger and better and had the horse power both
political and bureaucratic to go In after it and get it.
I'd just like to record a special thanks to my foreign policy adviser Allan
Gyngell. To Michael Thawley In the Department of Prime Minister and
Cabinet and his colleague David Ritchie who have worked on this with
might, and tirelessly over a couple of years. Before that their
predecessor Ashton Calvert, who is now our Ambassador to Japan,
who worked on this for the first 18 months with Allan Gyngell. I'd like
to particularly mention also my former private secretary and
Ambassador to the United States Don Russell who has worked with
the United States closely on this issue. My private secretary Geoff
Walsh who has worked closely with Indonesia and I would like also to
thank our Australian Ambassador to Indonesia for the relationship
which he has created with the Indonesian government which has
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helped facilitate this. And. the many other members of the
bureaucracy who have supported this, my colleagues In the ministry
who have played their role right through these ministerial meetings
Gareth Evans and Bob McMullan and officers of their department.
There are many more I could mention and probabty many more I
should and there may be some I have forgotten, but this Is the largest
thing that I have ever been associated with or likely to be and I couldn't
let a moment like this go by without acknowledging all of those who
have put their shoulder to the wheel and kept it there with might and
main. Thank you Indeed.
ends