TEL -I
PRIME MINISTER
RMOMRGOED: Against Delivery
SPEECH BY THE PRIME MINISTER, THE NON P. J. XEATING, MP
ASIA SOCIETY, ME YORK, 15 SEPMhNER 1L993
" AUSTRALIA, THE UNITED STATES AND) THE NEW ASIA"
It is five years since I addressed members of this
distinguished institution. They have been five years of
extraordinary, momentous change. The end of the Cold War
has greatly increased the level of uncertainty in the
world, but as events in Washington on Monday this week
dramatically showed, it has also greatly increased the
level of possibility. The new world order now emerging
is rich with possibilities which could scarcely be
imagined'a decade ago.
within the brief span of the last five years some of the
deepest and most intractable issues of the post-war world
have been put on a path to resolution.
The Soviet Union has ceased to exist, Germany has been
reunited, and we saw on Monday the beginnings of what may
be a permanent peace settlement in the Middle East.
For the first time since 1945, the United States is now
free to concentrate on new challenges in new regions.
my address today concerns one such possibility. I mean
the opportunity presented by the economic advancement of
East Asia the " new Asia" of my title today. For the
centre of gravity in world affairs is moving inexorably
from the Atlantic to the Pacific: and it is in the
interests of both our countries to recognise the promise
the region holds.
in recent years and particularly in the twenty months I
have been Prime Minister a substantial even a
preponderant amount of the Australian Government's
energies have been directed in varying degrees towards
equipping Australia for the Asia-Pacific era which lies
ahead. Equipping it economically, of course, but also as
a society and as a nation. T1EL6:. Sep. 93 10: 21 No. 013 P. 01/ 09
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In the five years since I last addressed tis institution
we have taken the reform of the Australian economy Rauch
further# to a point now where it is as competitive as any
in the OECD, and in certain essential respects, such as
the rate of company taxation and incentives for research
and development, comparable to the Asian economies.
There have been profound changes in the shape and
orientation of the Australian economy; namely, towards
sophisticated manufacturing, towards exports, towards
Asia. Equally priofound have been the-~ hdnges to the
business and industrial culture necessary to initiate and
sustain the pace of reform.
But in making these essential changes, the Australian
Government has been determined to ensure that social
policy keeps up with economic change.
We take the view that change comes more effectively and
more rapidly when it comes cooperatively and with a
substantial degree of social consensus. For example, we
won industrial peace, a much more creative industrial
culture, lower inflation and much else through an Accord
between trade unions and the Government.
we have always taken the view that a more competitive
economy should not and does not mean the sacrifice of the
social fabric. on the contrary, we have stuck fast to
basic social democratic principles because we believe it
is in them that the faith of the Australian people lies,
and on that faith our progress depends.
we recognise that the re-orientation of Australia towards
Asia gives rise to a certain amount of apprehension among
Australians accustomed to old European ties and
attitudes. But we go to Asia without compromising our
heritage or our beliefs or our democracy. In fact, we
need to make them stronger.
As a result of policies which might be generically
described by the word " inclusive", we emerged from the
1980s with an economy much more competitive and much
better placed to take advantage of our opportunities: And
with a first class national health system, And a social
safety net the equal of any in the world, An the most
advanced legislation effecting rights and opportunities
for women, An-d a richly pluralist and remarkably peaceful
society. it is in this-broad context that some other recent
initiatives might be seen. We have opened up debate on
the prospect of an Australian Federal Republic because it
would seem to be singularly more appropriate to the
reality of our position in the world, and our national
identity and aspirations. T1E6L:. Seo. 93 10: 21 No. 013 P. 02/ 09
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We are in the process of legislating a new deal for
indigenous Australians because justice is long overdue to
them and because, by delivering justice, we will raise
the level of national unity and notional self -esteem.
we are continuing to actively encourage the development
or a multicultural Australia because, as the United
states well knows, there is enormous strength in
diversity. We are conscious of the fact that the reality of
Australia does not accord with the image of Australia
projected abroad. Pond as we are of our national legend
and our native fauna, we are fonder still of our social
and democratic institutions and values.
You will understand how irritating it can be if you
imagine the United States defined exclusively by coyotes.
By way of a corrective I might quote an article in the
Sydney Morning HaralA earlier this year written by one of
your own -Susan Gaetner, a resident of Manhattan. She
had gone to Sydney in 1991 believing, she said, that it
was a place populated by " rubes and yahoos". She found,
I am pleased to say that the standards of urban chic were
at least as high as her home tows, the health care and
social programs " light years ahead" and the quality of
life " stunningly, resoundingly, overwhelmingly better."
I imagine New Yorkers would find this hard to believe.
More is the pity, so would many Australians. But I should
hope it makes the point Australia is an advanced social
democracy and a complex and modern even post modern
society.
The recession hit us hard in Australia and we have a
major unemployment problem which, in the face of world
recession or feeble recovery, all our efforts so far have
failed to solve. But the reinforcements to the social
fabric we have made have served us very well in binding
Australian society together and making it possible to
maintain the momentum of change and seize the
opportunities which the world, and particularly the
region, offers.
Ladies and gentlemen
in Australia, we understood very well when President
Clinton emphasised in last year's campaign that foreign
and domestic policy are now two sides of the same coin.
These days, trade policy most decidedly is high policy.
And there is no more iiiportant focus for trade poli~ cy
than East Asia.
Right round the Western Pacific we watched with great
interest as, step by step, Hr Clinton began to swing
America's interests towards the Pacific. TEL: 1~ 01: 62.1S eNpo.. 9031 6 ru~ u
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We saw early on that he recognised the link between the
US budget deficit and its poor trade performance through
the eighties. For the nations of-the Western Pacific,
Mr Clinton's deficit reduction package meant he was
acknowledging that America's trade problems cannot be
solved without change at home.
Then we saw that despite the clamour against it, he
reaffirmed American commitment to the Blair House accord
on world agricultural trade. A little while later, hie
committed his administration to a speedy conclusion of
the Uruguay Round and sought a renewed fast track
authority from Congress to complete the round.
For the nations of the Western Pacific, which have
depended for their growth on an open world trading
system, Mr Clinton's commitment to the Uruguay Round was
good news indeed.
Month by month Mr Clinton continued to confound the
sceptics on our side of the Pacific, and confirmed that
the US was on the right track.
His American University speech at the end of February
recognised the centrality Or Asia and of APEC to a
strategy based on economic growth, increasin
international competitiveness, and stronger trade.
For the Western Pacific, Mr Clinton passed a crucial test
when he successfully sought an extension at China's HFN
status, conditional on human rights tests.
in June, he began to reveal a long awaited package of
proposals for enhancing US excports to Japan and we were
relieved to find that the US would not seek preferential
access, or trade quotas.
Finally in July, in his Waseda University speech in
Japan, Mr Clinton proposed to convene the first meeting
of the leaders of the economies of the Asia-Pacific
region. in mny discussions with the President yesterday we shared
our visions of the future course of the Asia-Pacific
economic community.
The discussions confirmed my belief that the Clinton
Administration has found a path out of the puzzling
uncertainties of the late eighties.
The path out is trade, and it goes west across the
Pacific. Now in all this I believe Mr Clinton was recognising an
unmistakable economic imperative. T1EL6:. Sep. 93 10: 21 No. 013 P. 04/ 09
EL: 16. Sep. 93 10: 21 No. 013 P. Ut / U'j
South-East Asia is now in the throes of an~ industrial
revolution which is transforming the ASEAN economies from
primary producers to major manufacturing centres.
Manufacturing now accounts for over one-third of their
GDP and around 60 per cent of their exports.
Importantly for Australia, our . near neighbour, Indonesia,
has achieved 25 years of sustained economic development
and transition from one of the world's poorest countries
to one standing on the threshold of the middle-income
group. With the fourth largest population in the world, it is
now launched on a strong growth path.
For the first time in its history, Indonesia has become a
significant industrial exporter.
At the same time, radical reform of the Chinese economy
has unleashed powerful forces of growth and
industrialisation. I visited China in June this year and, particularly in
Shanghai, was impressed by the resurgence of
entrepreneurial drive and skill.
The IMF and others have recently recalculated China's GNP
on a purchasing-power basis.
These calculations suggest that it might be more
realistic to regard China's GNP as three or four times
the official figure, making China already the world's
third biggest economy after the United States and Japan.
Each of the East Asian economies has started from a
different base, with different resources and different
economic circumstances.
But there are common threads running through each story
of success: the determined pursuit of economic growth qnd
social progress, and a willingness to embrace domestic
economic reform and outward-looking trade and investment
policies. in the wake of sustained economic growth, East Asian
societies are being transformed.
Across diverse cultures, there is a common commitment to
modern isation.
There is a high premium on education and technical
training which relate to modern economic sectors, as well
as an international orientation in government and
business. Demand for quality consumer goods, fashion,
entertainment, leisure and travel is steadily growing.
TEL
In developing East Asian economies including those of
South-East Asia a substantial middle class is rapidly
emerging.
This has political as well ' as economic consequences.
East Asian middle classes valui-political stability, but
they also seek greater participation in the political
process. Circumstances vary from country to country, but there is
a welcome overall trend towards political pluralism and
libera lisation.
Indeed, judging by the examples of Korea and Taiwan, one
could argue persuasively that, beyond a certain point,
dynamic and internationally-oriented economic growth
almost certainly requires progressive steps towards
political liberalisation and democracy.
in the cases of China and Vietnam, the question of how
long economic liberalisation can be insulated from
political reform is a fundamental question for the future
of both countries.
I think it should be emphasised to an Asia Society
audience that the United States is benefiting enormously
from the economic dynamic in East Asia and stands to
benefit more as time goes on.
The two sides of the Pacific now form an integrated
market of two billion people, accounting for half the
world's production and halt the worlds trade.
it is a rn~ rket, a production zone, an economic community
which for a decade has grown more rapidly than any other
region of the world, and which is likely to continue to
grow at twice the rate of Europe.
we often think of the European Community as a model of
economic integration. Or we think of the economic
relationship between the United States, Canada and Mlexico
as an example of a naturally integrated group.
certainly these groups are closely integrated, but it is
a surprising fact that the economies of North America and
the Western Pacific are actually more closely integrated,
without a regional trade agreement, than are the
economies of Europe or of North America, with a regional
trade agreement.
man Americans think of East Asia primarily as a source
of Tmports competing with US industry here or in thirdcountry
markets.
Anid certainly, it is true that the us market remains
vitally important for most East Asian economies.
TEL: 16 Sep .93 1 U: 21 NO. VU,) LQ v
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But over the last decade East Asia, Australia and Niew
Zealand have become an increasingly important market for
US exports. A
Less than a decade ago, more than one third of Western
Pacif ic exports came to the UniLted States.
Today the proportion is less than one quarter.
And over the same time-frame, the proportion of US
exports which go to the Western Pacific has risen to well.
over one quarter, on a par with those to the NAFTA
partners and well ahead of exports to the EC.
Since the mid-eighties the trend rate of growth of US
exports to the Western Pacific has been three times the
rate of growth of Western Pacific exports to the United
States. in other words, East Asia is no longer just a production
2one for exports to the United States it is also a
thriving and rapidly growing importer of US imports.
I believe that the Western Pacific today is your key
market and it is not too much to say that the success
of the United States In the international economy, Its
success as an exporter, its success in regaining its
confidence and belief in itself, depends on its
continuing success in Western Pacific markets.
Australia's trade orientation towards East Asia is even
more pronounced.
Around 60 per cent of our exports now go to East Asia.
Indeed, without any formal arrangements, there is already
closer integration between the economies of North
America, East Asia and Oceania than between either the
members of the EC or the members of NAFTA.
Given the enormous stakes involved on both Bides of the
Pacific, it seems to me important that we think
creatively about what sort of policy and institutional
framework will best maintain and strengthen the highly
valuable economic linkages which now operate between East
Asia, Oceania and North America.
in my discussions with President Clinton in Washington
yesterday, we were in ready agreement that the Asia-
Pacific Economic cooperation or APEC process has the
potential to play a decisive role in this regard.
APEC is already showing great promise as a forum for
promoting economic cooperation on a basis of open
regionalism among the main economies of the Asia-Pacific
region.
TEL: ib. Sep. 93 10: 21 rio.-
APEC'a members are the United Statesi Canada, Japan,
Korea, China, Taiwan, Hong Kong, the six ASEAN countries,
Australia and New Zealand.
But to succeed, this process will " also require close
attention to other aspects of trans-Pacific relations
outside the economic realm.
We need to recognise, for exampfe, that the favourable
strategic circumstances and promising economic outlook
that now obtain in East Asia are partly the result of
enlightened US strategic policy towards the region since
the Second World War.
Judging by the quality of the discussion I was privileged
to have yesterday with the President of the United
States? I am sure your country is sufficiently
imaginative and big-hearted to meet this challenge.
I left my meetings in Washington with a deeper conviction
that Mr Clinton is putting the United States on the right
path.
A path west to the pacif ic.
But at the same time as he resolved to rebuild America's
competitiveness, he has signalled his determination to
rebuild hmerican society as well.
I was encouraged by his commitment to the Asia-Paciric
economic community. And I was struck with the unanimity
with which the President, his Cabinet and the
Congressional leadership in both Houses and both Parties
expressed their conviction that the US should assign a
higher priority to its trading relations with the western
Pacific and the Asia-Pacific economic community.
May I also say that I appreciated the Administration's
high regard for its relationship with my own country.
We also discussed the importance of the Uruguay Round and
the need to have a result by the middle of December a
schedule which in the view of both my Government and the
Clinton Administration leaves no room at all for
reopening the Blair House accord on agriculture.
Ladies and gentlemen
Tomorrow I go from New York to London: from a, country
which scarcely notices the presence of an Australian
Prime Minister to one whose popular press is driven to an
orgy of insults by his impending arrival. There it was
recently written that I was among other things a
" barbarian" -which in the London tabloids is pretty well
a synony m for Australian that I was bent on taking
Australij towards " some hellish Japanese future": that
the only solution to we hustralians was, to " shoot them
all". rr. 1 Voi n
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I expect it will get qult-abusive when I
arrive. I must say my sympathies are fundamentally with
the British people who have to endure a press
like this every day.
Of course Britain remains an important trading
partner, a firm friend, and, as with the United
States, a source of much In the way of culture
and institutions that we value.
The British Foreign Secretary, Douqlas iurd,
has made this very point to the Australian
media in the past day or so.
Certainly, the historical ties between Britain
and Australin are unhrnnknbln. nut tlin ( AImn
changnd a long timo ago, In pursuing tho
possibilities which the Asia-Pacific holds
Australia has simply recognised necessity,
which Is to say the future.
Thank you.