TEL:
VA 21. Jun. 93 14: 13 No. 011 P. 0' 1/ 10
SPEECH BY THE PRIME MINISTER, THE BON F J KEKATING NP
KOREA riORRICR ThADE ASSOCIATIONI
SEOUL MONDAY# 21 JJIE, 1993
It is a great pleasure for me to address this gathering
of business people here in one of the most dynamic and
influential. capitals of the region.
Korea is important to us, of coursei as one of our
biggest trading partners.
But it is important in other ways as well.
Korea is an example of a country which, in recognising
necessity, recognised great opportunities and found the
Way to grasp them.
A country which was determined to re-create itself, which
imagined success in the world and found success.
K~ orea has been an outstanding example of successful
change. An example and an incentive k7uto of course, we are very
different countries and we will find success in different
Ways. in an entirely different cultural, political and
historicat enviizonment, Australia is also undergoing a
radical transformation.
A deregulated economy, a new psychology and new
disciplines in business and industry, a new labour
relations culture, new manufacturing and export
priorities imperatives most of all, a new orientation
towards the region.
Today Australians do business in ways which had not been
imagined a decade ago. And they do much more business in
East Asia.
It has been an epoch-making decade in Australia our
decade of re-definition. And we defining It further.
in recent times Australians have recognised th~ e necessity
to coinpete in the world, to be less reliant Onl
TEL: 21. Jun. 93 14: 13 No. 011 P. 02/ 10
2
coymodities, to change the idea of Australia from that
of a country which needed to do little more than exploit
its material resources, to one which also exploits its
intellectual resources.
From one which exploits her vast reserves of natural
energy, to one which also calls on the energy of her
people. Change is being vigorously discussed in other realms aS
well: about how to deliver justice to Aboriginal
Australians for instance; about the institutional and
symbolic representations of our nationhood, about
projecting an iuage of Australia which reflects the
modern cultural complexity of Australia, about whether
Australia would be better served by a republican form of
government. In a significant sense all these debates derive from the
same source, namely the recognition of the new realities
facing us and the need to create a new Australia to meet
those realities.
They are all debates about issues which, in the interests
of expediency, or old loyalties and connections, or
because we were for a long time carried along by our
comodities, previous Australian governments and previous
generations were able to ignore or defer.
Today we can't ignore them. We came to understand that
in the 1980c. And the response from Australians has
been, I believe, a reason for pride and confidence.
but in Australia we face new challenges to keep raising
our level of competitiveness, to find the means of
concentrating our national enOrgies: so toO, I know
does Korea have to deal with the challenges of a more
sophisticated economy.
Korea has also been important to us to all of us In the
region fbr the'foresight and skill of its contribution
to the creation of an Asia-Pacific economic community.
It was here in Seoul four years ago that Australia and
Korea launched the initiative that has today become the
Asia-Pacific Economic Cooperation group.
Two years ago it was again Seoul which hosted the third
meeting of APEC ministers.
When the history of APEC is written it will begin with
that Seoul declaration of 1991 the set of principles
upon which APEC is founded.
Principles of open regionalism, of liberal and expanding
trade connecting the two sides of the Pacific, which
underlie the emerging Asia-Pacific economic comunity.
TEL 3
Over the years the Republic of Korea and Australia have
continued to work closely together on this great
objective of linking the Western Pacific and North
America. The objective of spreading a net of government
understandings and cooperation under the booming growth
of Pacific trade and industry.
In APEC we produce half the world's output.
Already the degree of regional integration is very high.
of our total trade, two thirds is between APEC countries.
We can observe within the Asia-Pacific region all the
signs of an increasingly rapid and unique economic
integration.
We can see shifting patterns of production as labourintensive
industry is relocated to China and Indonesia,
for example; while Singapore and Korea develop newer and
more capital-intensive industries based on services or
new technologies.
We can see successive waves of restructuring as Japanese
industry is forced off-shore by the ever rising yen.
We can see the growth of trade within the same industry,
but between different APIC countries.
We can see the growth of trade within the same
corporation, but again between different APEC countries.
We can see the rapid growth of investment across APEC
borders and the growth in services trade.
The notion that trade policy is only about access for
goods, about tariffs and concessions, is dead.
That is whvy the trade-liberalising agenda being pursued
in APEC is one wich accommodates diversity and which
focuses on changes from which all participants gain.
Today, only four years after the process was launched in
seoul, we have begun to give some real substance to APEC.
There is an APmC secretariat in Singapore with an
executive director and staff.
There are working groups developing agendas of tradeliberalising
reform in oustoms procedures, standards,
health controls, telecommunications data bases and so
forth. There is an APEC Eminent Persons Group, including Korea's
* Kim Mahn Je, presently thinking about ways to deepen our
integration In coming years. 21. Jun. 93 14: 13 No. 011 P. 03/ 10
TEL: 4
And there Is the ministerial meeting in Seattle in
November. That is a meeting which will give all of us an
opportunity to consolidate our progress and set new goals
-and give the United States an opportunity to think
through its economic and trading relationship with this
side of the Pacific.
So we have come. a long way. in building APEC, but we are
Still only at the beginning of what might be possible.
The integration of markets and production in the region
is so rapid that governments are going to have to work
very hard just to keep up with it.
As our economies become more dependent upon each other it
becomes ever more necessary to lay underneath them the
political nets or cooperation, conflict resolution and
dispute settling.
As I said earlier this year, we should be seeking as our
goal an integrated market which includes Australia and
Now Zealand, the ASEAN countries, the three Chinese
economies, Korea, Japan and North America -a market of
two billion people producing half the world's output*
bound together with harmonised trade rules, harmnonised
investment rules, harmonised standards and certification,
and an agreed way of settling disputes between members.
it would be a market where trade between its members
already accounts for two thirds of their own trade and
where the total exports of the region already account for
per cent of world exports.
it would be an integrated regional market which works
towards commonality and minimum restriction in all areas
in which these can sensibly be advanced.
That is sovething beao nd the initial APEC information
sharing,~ trade 1 bral Lsing agenda to a true economic
comuniy.
All it takes is mutual agreement that it should be done,
and the time and intelligence of governments to decide on
appropriate standards, the appropriate forms of mutual
recognition, the appropriate harmonisation of conflicting
rules* There are great opportunities, but right now there are
zany challenges to Asia-Pacific economic COOPeration.
There are the bilateral trade negotiations between Japan
and the United States# which require great sensitiVity
and imagination on both sides. TEL: 21. Jun. 93 14: 13 No. 011 P. 04/ 10
i-I
I LL
There is the end game in the Uruguay ikound, which means
so much to the future of the world trading system on
which Pacific prosperity is based.
There is the lateat yen appreciation, which may see
another wave of restructuring of Japan's industry
throughout the region.
Within a few months we will have the rminent Persons
Group report and the November APEC meeting, which will
set out goals for the organisation over the next few
years. We will be looking at the possibility of a framework
agreement which will formalise the objectives and process
of APEC, and strengthen the structure of government
understandings underpinning the has-Pacific economic
community.
We will be looking, too, at a work program designed to
remove obstacles which business people encounter in trade
within the region.
Finally, there is the need for a meeting of Pacific
leaders to give greater weight and authority to the APEC
agenda. It the United States administration moves to host such a
meeting this year, we should all be delighted to attend.
Above all we would like to convey to the United States
the message that the Asia-Pacific region represents much
less a threat than an extraordinary opportunity: Duch
less An area of difficulty than one of almost limitless
potential. it is very much in the interests of all Western Pacific
countries that the United States sees things this way.
There is a great deal to be done, and I know from my
talks with-Presioent Kim that Australia and Korea
continue to find ourselves in close agreement on the main
issues bef ore um.
In a way this alliance between our two countries to
advance the creation of an Asia-Pacific economic
community is less surprising than it seems.
True, we are at opposite ends of the Pacific.
True, we often have so few difficulties In our
relationship that the media have little cause to report
on~ it.
True, the strength of our mutual relationship is
* sonetimes overshadowed by the relationships each-of usr
V& ewith the regional giants of China, Japan and the
United States. I 17-21. jun. 93 14: 13 NO. 011 P. 05/ 10
but the logic of our relationship in fact depends on
these characteri~ stics.
The economic weight you wield in the world is about the
same as ours*
Like us, you are always aware you are a big player in
relation to some countries, and that Japan, China and the
United States are big players in relation to us.
Like us, you are a security ally and trade Fartner of the
United States, but also an important participant in the
Western Pacific economy.
Like us, you depend on trade to expand your economy and
increase your living standards.
Like us, you have an interest in keeping both sides of
the Pacific together.
And of course the truth is that the bilateral
relationship between Korea and Australia is now very well
established, deep and stable and continuing to grow.
it was in response to this growth and the growing depth
and diversity of our dealings that President Kim and I
agreed this morning to establish a new Joint Economic
Coamittee, bringing together all the relevant government
agencies, and meeting annually to oversee the developmsnt
of our economic relationship.
Korea is now our fourth largest export marketq
Commercial links betWeen Australia and Korea underpin a
relationship from which both countries have prospered.
Australia supplies high-quality competitively priced
industrial raw material inputs f or Korean industry
including coal, aluminium, iron ore, non ferrous metals,
uranium, wool and cotton.
Australia is a Significant market for Korea in mtotor
cars, textiles clothing and footwear# chemical$ and
electronics. Today we are striving for a further expansion of two-way
trade. Korean industry is still growing in areas which miatch
Australia's export strengths, Particularly enkergy.
Australia is broadening its trade profile with Korea as
the Korean market expands and diveraifies.
Australia remains well placed to supply coal andl uranium.
Commercial appraisal is underway Of Australia's capacity
TEL:' 21. Jun. 93 14: 13 No. 011 P. 06/ 10'
21. Jun. 93 14: 13 No. 011 P. 07/ 10
7
to suPPlY Korea's long-term delhand for liqUid natural
gas a
Australia is now becomin~ g a supplier of Manufactured
goods such as food, fiiM, building products, automotive
engines and component..
We are selling services such as telecommunications,
banking, computer sortwareo education and tourism.
Korea is also Iiproving its share of the Australian
market. Last year your exports to Australia rose 20 per
cent, with cars leading the surge.
While Australia's reputation as a supplier or mineral,
energy and agricultural commodities is well known within
] Korean industry, we are much lass well known by Korean
business as a source of industrial goods and technology.
Australia has recognised Korea's priority to develop and
access industrial technology as a part of the economic
reform program.
r an pleased to note that, coinciding with my visit,
Australia and Korea will sign tomorrow an industrial
technology cooperation a~ reement which will provide a
framework for collaboration in this field.
The extent of business cooperation between Australian and
Korean companies is also encouraging.
I refer particularly to areas such as the coo0perationt
taking place between
The Australian telecomm unicatians carrierl Tel'stra,
and the Korean companyt posDATA. on Wednesday I
will be witnessing the signing or a letter Of intent
between the two cooPanies for a strategic alliance
witi) a view to becoming one of the leading
telecommuiicatjohs companies in Korea.
In the informatiofl-t~ chn~ l~ gY field; the supply of
industrial software to Hyundai zlectronics by
Adelaide company# The Cadds. Man Australia, and the
success of Moldf low Korea in selling Australianl
comaputer-aided engineering software for the plastics
industry. in the area of environmental technology; the suPPly
of new water-related environmental technologY
equipment by cheutronics to several organisations in
Korea, including the Seoul Metropolitan Government,
and the agreement between the West Australian
ovipany, Environmental Solutionls InternatiOnal, and
R Samsung on the supply of oil-from-sludge technology.
in the automobile industry; the supply Of
sophisticated mbachine tools by Kirby Engineerinlg for
TEL a
the manufacture of automobile steering mechanisms
and the supply of automobile engines by utralia's
Holden Engine Company.
And the supply of engineering services by Kaiser
Engineering for the construction of a new aluminiua
hydroxide plant in Korea General Chemical
Corporation.
In this context, I welcome the joint management
consortium between the Australian company Intag
International, Deutsche Aerospace of Germany and Samsung
of Korea to use Australian technology for electronic
baggage and freight handling. This is an agreement which
will open up new manufacturing opportunities in both
Australia and Korea for markets world-wide.
I am also pleased that Austrade will be expanding its
role in Korea with the-establishment of an office in
Pusan.
The growth of our trade has been more than satisfactory
although Australia still encounters difficulties in the
Korean market over access for agricultural commodities,
particularly for beef and dairy products, and over
Korea's wide-ranging quarantine restrictions on the entry
of Australian horticultural products.
The business environment between our two countries is
being enhanced by the rapid increase in non-stop direct
air services between Australia and Korea. Six flights
per week will be in place this coming July compared with
YAO services at the beginning of 1990.
For those of you who haven't visited us recently, let me
say that everything you hear about our wonderful beaches,
about the forests and wilderness and the outback is true.
But, as I said when I began, it is also true that
Australian% have over the last decade transformed their
economy. It is most visible in our trade performance. over a
decade, exports have more than doubled. A decade ago
barely one dollar in eight in Australia came from
exports. Today it is one dollar in five, and Climbing.
Today manufactures and services each rival rural exports,
and both are growing. The fastes6t growing manufactured
exports are elaborately transformed goods.
Ahs our exports have grown and the nature Of our exports
has changed, their destination has also changed, A
decade ago less than half of our merchandise exports vent
to East Asia. Today nearly two thirds do and our
exports to Asia are far and away the fastest gr6wing part
of our trade., 21. Jun. 93 14: 13 No. 011 P. 08/ 10
TEL:* 21. Jun. 9 14: 13 No. 011 P. 09/ 10
behind these changes in our trading performance are the
ef forts of Australian industry* and deliberate changes to
government policy.
We have opened up the economy by floating the Australian
dollar, abolishing capital controls, and puttinV in place
a sensible, consistent program of tariff reductions.
We have introduced competition into telecommunications
anid deregulated air transport.
We have Introduced a national system of eniterpr ise
bargaining by management and labour, which we Intend to
sustain and encourage through comprehensive legislation
later this year.
We have over a decade maintained an Accord withi the trade
union movement which has been a significant factor in
reducing inflation to 1.6 per cent one of the lowest
rates among industrial countries.
And as a result of tax reforms we now have one of the
lowest ratios of tag to GDP in the OECD.
The change continues today. We are cutting the company
tax rate from 39 per cent to 33 per cent. We have
introduced a conditional 10 per cent investment allowance
for plant and equipment, anid an additional 10 per cent
development allowance for approved projects with a
capital cost over $ 50 million.
We now have consistently higher productivity growth than
we have had for a generation, low inflation, and the
lowest level of industrial disputes for decades. We have
a trade surplus, and manufacturing production is rising.
There is no doubt the structure of the Australian economy
is changing, and that we have the policies in place and
under developm~ nt to maintain the pace.
Certainly our recovery has not been as fast as we would
like. economic growth, though faster than virtually any
other OECD country, is not sufficient to make an impact
on our greatest problem unemployment.
Of course, we are not helped by the slow pace of world
recovery, or the low prices presently being fetched by
some of our commodities.
But we have no doubt about the path we are on. Indeed it
is all the more reason to push on with our programs of
reform, especially our efforts to encourage more world
class small and medium sized businesses to flourish, to
flourish as exporters, and to flourish particularly ini
Asia and the Pacific.
Fifteen years ago, with some of my colleagues, I imagined
an Ausntralia which exported not only commodities but
TEL:
sophisticated manufactures. I sometimes ask those same
colleagues to ileagine for a moment whiere we would now be
bad these ref ormis not been made if We had continued to
drift in the world, instead of qoing out to meet it.
The reforms represent a huge step for any country to take
they involve cultural change as well as structural
change in the economy. It all takes time, anid the world
does not always cooperate with our ambitions. Although
in Australia we are determined to soften the impact,
there bar, been hardship for a lot of people.
But there is no question these reforms were essential anid
that they have given us unprecedented opportunities and
there is hardly a more persuasive testimony to this than
our flourishing trade with Korea.
I said at the beginning Australia has had to re-imagine
itself anid rQ-define itself. And because Korea has done
this, and because Korea continues to meet the new
challenges, I know my audience here today will understand
what I mean.
I have no doubt we will continue to re-define ourselves.
And I am sure that our two countrie& will be able to call
on this excperience in our efforts to re-imagine the Asia-
Pacific region and help re-create it as a genuine
economic community.
If we do that, every country's interests will be served,
and so will future generations of Noreans, anid
Australians. Thanik you. TEL: 21. Jun. 93 14: 13 No. 011 P. 10/ 10