EMBARGO: 5-0O0 pm
PRIME MRAINISTE
FOR MEDIA SUNDAY, 30 MAY 1982
ELECTORATE TALK
International. trade is of great importance to the Australian
economy. Indeed in 1980-81, the value of Australia's.
international trade was equivalent to well over one third of
our gross domestic product. With a population of only
million pe! ople, Australia's domestic market is relhtively
small. W6 nEed large and growing markets overseas to achieve
the expansion of employment opportunities and of real
living standards that trade makes possible. And during
the 1950s and 1960s, when total world volume of exports
grew at an average annual rate of 10%, our living standards*
were greatly increased by the trading opportunities that then
were made available.
But, while the Australian economy has derived enormous benefit
from overseas trade, if overseas economic conditions are poor,
the Australian economy is bound to ' be affected, and the
reality is that economic conditions and prospects in major
economies overseas are not good. In recent months
industrial production has fallen in 6 of the 7 largest
western industrialised economies; total unemployment in
the industrialised countries of Europe and North America is
set to soon exceed 30 million people, and last year, for the
first time in 6ver 20. years, the value of world trade actually
fell. Moreover, under the stress created by prolonged
recession, many governments have relaxed their resistance
to pressures for increased protection for their domestic
industries.
This world wide economic crisis poses a real threat to
Australia's Living standards, and it has already had a significant
impact on a11 sectors of the Australian economy, on the
mining industry, on agriculture and on manufacturing. We have
shaped our domestic policies in response to the challenges
posed by these * circumstances, and in the current world economic
climate, Australia is by no means the worst affected country.
But the longer the world recession continues, the longer
protectionism persists and the further it spreads, the more
Australia will be affected.
Next weekend iii Versailles, the heads of government of seven
major economiLes, the United States, Japan, West Germany, the
United Kingdom, France, Italy and Cdnada, meet in an economic ./ 2
2-
summit t6 discuss the nature of the current economi-c crisis,
and to seek solutions to it. This is the background against which
I undertook my recent visit overseas to the United States,
Canada, Japan and South Korea.
In discussions with the heads of government of these countries,
three of whom will be at Versailles, I put the view that
Australia's living standards, and those of the entire world
are heavily dependent on the Summit producing actions not just
words; what the world is looking for is a lead a demonstration
of political resolve from the seven major economics,
which between them account for well over half the output of the
industrialised western world, and about half the world
merchandise trade. All agreed that concrete action was needed
to break out-af the circle of continuing reces; sion and stagnant
world trade, axnd all agreed that protectionist policies
constitute a central problem in achieving a break-through
which will give a realistic and lasting prospe ct of economic
recovery. I took to those leaders a concrete proposal dE'signed to -tackle
these problems head-on. Specifically, I suggEsted that the
participants at the Versailles Summit give a l. ead to the rest
of the world by agreeing to: a halt on increases in
protection in all forms; a commitment to the a~ bolition of
export incentives and subsidies over a five year period; and
significant and progressively implemeted3 reductions in all
other forms of protection.
This is not a package of measures which any country could implement
alone: indeed it would not solve the problem for Australia
or any other country to implement them in isolation. Nor
may it be the only proposal for action that would get sustainable
reco ery going, though to my knowledge it is the only concrete
proposal thathas so far been put forward, and I have
indicated that if this proposal or something like it were
agreed to by the Summit participants, Australia would join
them in implementing it.
All the world leaders I met agreed with the general principles
underlying the Australian proposal and acknowledged its
particular relevance to the world's problems, and the broad
thrust of the. proposals has received widespread support by leaders
of international economic organisations.
It would not be an overstatement to say that the participants
in Versailles Summit carry an enormous burden of responsibility,
not only to their own peopl. e, but to people throughout the
world including Australians whose living standards depend
vitally on the promotion of world growth and trade. The
objective of getting world trade moving again is surely one
which must be shared by all nations.
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