PRIME MINISTER
* EMBARGOED UNTIL 3: 00PM
STATEMENT TO PARLIAMENT BY THE PRIME MINISTER,
THE HON P J KEATING, NP
VISIT TO JAPAN, SINGAPORE AND CAMBODIA
Mr Speaker
I take this opportunity to inform the House of the
outcome of the visit I made to Japan, Singapore and
Cambodia between 20 and 26 September.
This overseas visit was my third since becoming Prime
Minister.-All three visits have been to Asia-Pacific countries.
All three visits have helped put a sharper focus on
Australia's relations with the region.
A primary objective of each visit has been to talk with
other regional leaders about how we can work together to
respond to the fluid outlook in the region.
But just as importantly, I have also wanted to underline
to both Australian and foreign audiences how much the
Australian economy has shifted towards an international
orientation, especially an Asia-Pacific orientation; how
much Australia has already achieved in the region; and
how much our future depends on successfully carrying
forward this engagement.
More than is sometimes appreciated, the Asia-Pacific
region is in the midst of a period of profound
transition. The strategic consequences of the end of the Cold War are
still working themselves out.
The regional security outlook is generally favourable,
but less prodictabla than before.
The peace process in Cambodia, which involves an
ambitious role for the United Nations, confronts a
serious test of Its sustainability.
Fluidity in the international trading environment is
increased by uncertainty about the outcome of the Uruguay
Round. Whatever the outcome of the Round, we shall probably see
an increasing trend towards regional, subregional, and
bilateral trade arrangements.
Regional governments are now required to develop policy
responses to what could well be a rapidly evolving
pattern of trade alignments.
Asia-Pacific countries also need to consider how
international and regional institutions can better
reflect the growing weight of the region in world
affairs, and the increasing importance of intra-regional
linkages.
Mr Speaker
My visit to Japan was very worthwhile in consolidating
with the Japanese Government the strong community of
interest we have with them in responding to these
important questions.
The Australian public understands very well Japan's
significance in our external relations.
Japan is the world's second largest national economy,
accounting for about 14 per cent of global output.
It has been our largest trading partner since 1970.
Perhaps more than is generally appreciated in this
country, Australia is also an important regional partner
of Japan.
We are Japan's third largest source of imports and sixth
largest trading partner.
The bilateral trade relationship, now worth around 24
billion Australian dollars, is one of the principal
sinews of economic interdependence in the Western
Pacific. The close dialogue between the two governments on
regional and international issues reflects the habit of
friendship and cooperation that has grown up between the
two countries in recent years.
Certainly, the warmth of my reception by the Japanese
Government and the quality of my discussions withPrime
Minister Miyazawa and his Ministers attest to the
maturity of the relationship that we now enjoy with
Japan. The comments of Mr Miyazawa and his ministers reflected,
I think, a realistic view of the international scene.
There was cautious optimism that the Japanese economy
would return to a stronger growth path from the end of
this year.
There was a determination, which I supported, that Japan
should play a more active role in international affairs.
I affirmed Australian support for Japan's permanent
membership of the United Nations Security Council so that
the world body can better reflect changed world
circumstances. I welcomed Japan's decision to participate in United
Nations peacekeeping operations, and the opportunity this
provides for our military and civilian personnel to work
together in support of the Cambodia peace process.
Mr Speaker
I discussed international and bilateral trade issues with
both Prime Minister Miyazawa and International Trade and
industry Minister Watanabe.
They acknowledged an uneasiness in Japanese political and
business circles about the increasing trend to
preferential trade arrangements.
Prime Minister Miyazawa expressed the personal view that
an open and non-discriminatory multilateral trading
system could be maintained despite these developments.
He made clear his government's deep commitment to a
cooperative relationship with the United States, and its
support for an early and successful outcome of the
Uruguay Round.
In underlining the importance of the bilateral trade
relationship with MITI Minister Watanabe, I said that
Australia would not be party to any trade arrangement
which was directed against Japan.
This commitment was reciprocated by his assurance that
Japan would conduct its trade on a commercial basis
without discrimination against Australia's interests in
any arrangements with third countries.
He reiterated this undertaking in the particular case of
Australia's exports of automobile-parts to Japan.
in discussing the outlook for the Uruguay Round, I urged
Japan not to hold back on the rice tariffication issue,
because otherwise it ran the risk of being portrayed by
others as a final obstacle to a settlement on
agriculture. The Japanese Government acknowledged the responsibility
it faced.
My discussions with Japanese Ministers also covered the
need for expanded bilateral air services to cater for the
expected increasei in-tourist traffic, MITI's support for
Australia's trade promotion in Japanese regional centres,
and Japanese involvement in the MFP project in Adelaide.
In a general discussion of defence relations, I confirmed
the Government's satisfaction with the cuirent moderate
level of activity which includes high-level visits and
dialogue on strategic issues.
Mr Speaker
The Government attaches considerable importance to the
Asia-Pacific Economic Cooperation or APEC process as an
essential mechanism for promotiing open regionalism.
I explained to Prime Minister Miyazawa the thinking
behind my proposal for establishing over the medium term
a process for periodic heads-of-government meetings based
on APEC membership.
Such meetings would add political weight and status to
the APEC process.
They would fill a significant gap in institutional
arrangements in the region, enabling leaders to consult
together in a way which has become familiar in European
and trans-Atlantic relations.
I was encouraged by a mark~ ed firming of Japanese support
for the proposal.
Prime Minister Miyazawa welcomed the initiative and
agreed that the idea should be pursued further in
consultation with other members of the region.
Former Prime Minister Takeshita also firmly supported the
proposal. A special feature of the visit was my agreement with
Prime Minister Miyazawa to issue a joint statement
setting out for the public record an account of the
regional perspectives which figured prominently in our
discussions. The statement demonstrates convincingly the extent of
parallel interests* ve share with Japan in regional
strategic and economic issues, and the potential we have
for working together productively in the region.
It also makes clear that the cooperative relationship we
aim to pursue with Japan is by no means an exclusive one.
Rather, it is directed towards broad-based cooperation
with other countries in the Asia-Pacific region,
including especially the United States.
I now table the joint statement for reference by
Honourable Members.
Mr Speaker
My program in__ Tokyo included an audience with the Emperor
and Empress of Japan.
On behalf of the Australian Government, I invited Their
Majesties to visit Australia whenever mutually agreeable
to the two governments.
The invitation was warmly received, but because of prior
consideration of other possible overseas visits, it may
be some time before the visit takes place.
I am sure that an of ficial visit to Australia by the
Emperor and Empress will be welcomed by the vast majority
of Australians.
Mr Speaker
My visit to Japan included substantial contact with
senior Japanese business and financial leaders, and with
the Japanese media.
I impressed on these audiences the progress that has been
achieved in making the Australian economy more
competitive and internationally oriented, and the
commitment of the Australian Government, private sector
and wider community to strengthening Australia's
relations with the Asia-Pacific region.
These contacts were very useful in registering with
Japanese opinion-leaders the changing nature and focus of
Australia. Following my program in Tokyo, I made the first visit by
an Australian Prime Minister to Nag~~, Jpnsfut
largest city and the centre of a-large industrial and
trading region.
I took part in public ceremonies to mark the opening of
an Australian Consulate in Nagoya.
This is one of four new consulates we are opening this
year in Japan to strengthen our trade promotion in
regional centres.
I also visited the headquarters of theToyota Corporation
and inspected technologically advanced production
processes at their Notomachi plant, which will serve as
the parent plant for the new Toyota factory at Altona in
Victoria.
In his welcoming address at a lunch given in my honour,
the Troyota President said his corporation's investment at
Altona was predicated on the Australian Government's car
industry policy persisting into the 21st century, and
that consistent government policy and harmonious labour
relations were always important to the car industry.
Mr Speaker
My visit to Singapore on 24 and 25 September reinforced
the longstanding partnership between our two countries.
Singapore is Australia's fourth largest export market,
and our largest trading partner among the ASEAN
countries. Australia and Singapore maintain close defence relations
both bilaterally and under the Five Power Defence
Arrangements, which also involve Malaysia, Britain and
New Zealand.
my reception in Singapore was very warm.
I had extensive discussions with Prime Minister Goh Chok
Tlong, Senior Minister Lee Kuan Yew, Deputy Prime Minister
and Trade and Industry Minister Brigadier-General Lee
Hsien Loong, and Defence Minister Yeo Ning Hong.
Prime Minister Goh said our bilateral relationship was
in excellent shape and that Australia and Singapore were
following similar strategies in the region.
He welcomed Australia's efforts to engage more closely
with Asia.
My discussions with Singapore leaders confirmed a broad
range of agreement on regional issues including the need
to maintain an open trading system and support for
promoting the APEC process.
I congratulated the Singapore Government on their
successful bid to host the APEC secretariat.
A major feature of my program in Singapore was
participation in a very successful business seminar on
the theme of strategic linkages between Singapore and
Australian companies.
The -seminar was well attended by sernior business
representatives from both sides, including 28 very senior
Australian business leaders who visited Singapore
especially for the occasion.
It provided an excellent opportunity for me and the
Australian business people to explain the important ways
in which the Australian economy is becoming more open and
commercially integrated into the region.
Accompanied by Defence Minister Yeo, I visited HMAS
Brisbane, one of eight Australian ships which had Just
participated in a large-scale maritime and air defence
exercise under the Five Power Defence Arranaeents.
The Singapore Government made clear the value it places
on defence cooperation with Australia including our
active role in the Five-Power Arrangements.
Mr Speaker
My visit to Cambodia on 26 September was the first by an
Australian Prime Minister since 1966, the first by a
Western head of government since 1970, and the first by
any head of government since the signing of the Paris
Peace Accords in October last year.
My brief visit served two important purposes.
I was able to underline Australia's firm support for the
peace process at a time when serious difficulties have
been caused by the refusal of the Khmer Rouge to
participate in the cantonment and demobilisation phase.
I was also able to reaffirm the Government's warm
appreciation of the efforts of the Australian military
and civilian personnel serving with the United Nationa
Transitional Authority in Cambodia, and of the important
contribution by Australian aid workers serving with nongovernment
organisat ions.
Other Members of the House have visited Cambodia since
the signing of the peace settlement.
I know they will support me in saying that all these
dedicated and professional men and women are earning a
high reputation for Australia in Cambodia.
Australia can be truly proud of their contribution
towards peace and a better way of life for the Cambodian
people. I had detailed discussions with Prince Sihanouk, the UN
Secretary-General's Special Representative, Mr Akashi,
and the UN'TAC Military Commander, Lieutenant-Cene-ral
Sanderson. Without underestimating the complexity and difficulty of
problems-which lie ahead, I-was heartened by the
determination of these key individuals to press ahead
with UN-organised elections by around May next year, with
or without participation by the Khmer Rouge.
I assured tinm that Australia remained firm in our
commitment to support a peace process whose outcome is a
democratically elected government which can be recognised
and supported by the international community.
I said Australia wants to persevere so long as there is a
responsible way forward.
Mr Speaker
I am confident that my visit to Japan, Singapore and
Cambodia has put Australia in a better position to deal
with the challenges we face in the region.
I was pleased that my visit to Japan and Singapore
generated considerable public comment about Australia's
trade policy options.
These are crucial issues for our country.
It is important that Parliament and the public have a
clear understanding of where our national interest lies.
In recognition of Australia's position as a medium-sized
trading nation with considerable diversity in the
composition and direction of our trade, the Government
attaches fundamental importance to maintaining and
strengthening the open, non-discriminatory multilateral
trading system based on the GATT.
As part of this, we accord high priority to an early and
successful conclusion of the Uruguay Round of
multilateral trade negotiations.
The benefits of a multilateral agreement, which extends
international trade rules to cover agriculture and
services and which also strengthens the disciplines and
dispute-settling procedures of GATT, are so overwhelming
for a country like Australia that there is no need for me
to describe them to this House.
we are also firmly committed to promote the development
of APEC as an organisation which embraces the main
economic linkages between the Western Pacific and North
America. And we also remain willing to seize trade opportunities
and solve trade problems whenever and wherever they
arise, whether bilaterally or plurilaterally, whether in
a particular class of exports or with a particular
country or group of countries.
This kind of work is so constant and so detailed, so
ordinary And'unspectacular a part of the everyday work of
our trade officials and of the Trade Minister that we
sometimes forget quite how much goes on.
These three tasks the GATT, APVC, and the everyday work
of facilitating trade remain at the core of our trade
policy.
But as we enter this new era of uncertainty in the
direction of the world trading system and in the
strategic decisions of the major trading economies, I
wish to describe the Government's approach in deciding
emerging trade policy issues.
Mr Speaker
For better or worse, the Uruguay Round is coming to an
end. Whatever the outcome, this will free the energies of
trade policy makers and make clear the internationally
agreed benchmarks upon which bilateral. and regional trade
enhancement can be created.
If the Round fails, there will remain a vast agenda of
reform in agriculture and services trade which should be
addressed by some other means.
Even if the Round succeeds in one form or another, there
will remain plenty of room for further agreements which
improve on its outcomes.
As I said at the beginning of this statement, the trend
towards regional, subregional and bilateral trade
arrangements will probably strengthen.
The European Community will certainly spread eastwards,
even if there is now soma doubt about the pace of
deepening integration between the existing members.
NAFTA has now been signed by the governments of Canada,
the United States and Mexico, and we expect that in one
form or another it will be approved by the US Congress
next year.
We expect further links will be established between the
United States and various Latin American countries.
In our own region, APEC has been institutionalised with
the creation of a secretariat in Singapore, while the
ASEAN countries are now moving to establish their own
free trade agreement.
There is plenty of evidence of increased regionalism in
trade institutions.
There is also evidence of increased regionalism in trade
patterns. Between 1970 and 1991 trade between West European
countries grew from 66 to 72 per cent of their total
trade, and that between the APEC countries grew from 54
to 65 per cent of their total.
So the end of the Uruguay Round is coming at the same
time as Australia is changing profoundly, as regionalism
becomes more important and also at a time of new
uncertainty over the trade strategy of the world's
biggest economy, the United States.
Mr Speaker
In his recent Detroit speech, President Bush raised the
possibility of negotiating trade arrangements with
individual countries, incl~ uding some in Eastern Europe
and some in the Pacific.
In the Pacific he instanced Australia, the ASEAN
countries and K~ orea.
No formal proposal has been put to Australia, but the
issue is of such importance to our trading future that we
cannot wait its full development before we make our own
views known.
Our overriding 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 dependent on the US market.
And finally we must not lose sight of the fact that many
of our trade partners are also our trade competitors in
third-country markets.
Those considerations will guide us in what may well be a
fluid and fast-changing external environment over the
next few years.
As to the institutional forms and arrangements into which
we may be prepared to enter, we are open mninded.
We certainly do not rule out bilateral agreements, or
plurilateral agreements.
Indeed, we may well initiate them, and we are of course a
member* of a* strong bilateral arrangiement with New
Zealand. But some bilateral agreements are better than others, and
some may deliver few bilateral trade benefits while
potentially incurring substantial trade costs.
The Government welcomed President Bush's Detroit speech
in the sense that it demonstrated an interest in further
promoting trade liberalisation in the Pacific area.
The Opposition made an enthusiastic embrace of a
preferential bilateral agreement with the United States
despite having a week earlier labelled the United States
as Australia's number one trade enemy.
The Government's approach is more calibrated.
We have reservations about the specific mechanism of a
network of bil~ ateral preferential trade agreements
centred on the United States.
Mr Speaker
The difficulty for Australia works at several levels.
First, the Government would want to consider seriously
any offer of a bilateral agreement with the United States
which would reduce import constraints on those items of
most concern to us particularly beef, dairy products,
sugar and steel.
But past experience suggests that such concessions would
be unlikely because of Congressional attitudes and other
domestic pressures in the United Statas.
Secondly, the perception in East Asia of any move by
Australia and the United States to conclude a bilateral
trade agreement would vary greatly depending on whether
it was seen as part of a broader, even-handed approach
throughout the region, or whether it was seen as part of
a strategy to put pressure on the North Asian economies,
particularly Japan.
In the latter case, Australia would be seen as turning
our back on East Asia despite the fact that it accounts
for almost six times more of our exports than the United
States. Thirdly, while we can understand why some Americans
advocate bilateral trade arrangements on a hub-and-spokes
model as a way of improving US trade access, the
countries at the ends of the spokes may find that this
approach does not help trade between them.
A report on regional trade agreements prepared for the
Government earlier this year by Professor Richard Snape
and others argues convincingly that a hub-and-spokes
system is a-relatively unattractive option for trade
liberalisation. Those considerations were reflected in my statements in
Tokyo about trade policy.
As mentioned already, I told the Japanese Government that
Australia would not be party to a trade arrangement which
was directed against Japan.
12
This commitment reflects a clear-sighted view of
Australia's national interest.
Mr Speaker
It goes without saying that the Government attaches great
weight to our relationship with the United States.
Australia and all other trading nations have benefited
enormously over the years from the enlightened leadership
the United States has demonstrated in helping to maintain
an open and non-discriminatory multilateral trading
ByB tern.
The Australia-US defence alliance remains of fundamental
importance in the post-Cold War period.
Our bilateral economic relations are of grAat value to
both sides.
As made clear in the joint statement issued with Japan,
the Government believes that US strategic and economic
engagement is of fundamental importance to the peace and
prosperity of the Western Pacific.
For this very reason we have promoted the APEC concept
which embraces both the Western Pacific and the United
States, and have queried other regional concepts which
omit the United States.
An important objective of Australian policy is to avoid
so far as we can situations where we have to choose
between relations with the United States and relations
with East Asia. I
We also want to do whatever we can to encourage
cooperative relations between the two.
Mr Speaker
The Government certainly does not rule out Australian
membership of regional trading arrangements.
APEC is already evolving into a regional trade
arrangement with a useful agenda of trade-liberalising
measures. If thinking and practice in the region evolves towards
the idea -of a -trade pact, -we would very much prefer that
it be APEC wide, and of course that it did not raise
barrierg or hinder trade between members and nonmembers.
we appreciate that such an outcome will not be achieved
easily and that, in the meantime, there may be proposals
for plurilateral arrangements between subsets of the APEC
membership.
133
Australia stands ready to consider on its merits possible
membership of any such arrangements that may evolve.
As I said in Tokyo, we do not think a Western Pacific
trade area is a preferred arrangement, but we would
certainly seek to join one if the trade policy decisions
of the major players left us no better choice.
So we remain open to forms and arrangements, but we do
think there are substantial disadvantages for ourselves
and for the entire region if the United States is
encouraged to go down the path of seeking bilateral
preferential arrangements.
Finally, an important principle which will guide
Australian policy is that we very much want to avoid
being party to a process which has the effect of dividing
the Pacific into trade allies of the United States and
trade allies of Japan.
Mr Speaker
Working forward from the understandings reached during my
recent Asian visit, these are the sorts of considerations
that need to be weighed carefully in defining new
Australian positions in this important policy area.
CANBERRA 13 October 1992