It is a great pleasure to be in Korea and to be here among friends.
Our two countries might be separated by separated by geography, but we have a lot in common.
We are both outward looking countries.
We rely for our prosperity on a stable and fair global trading order.
We are both allies of the United States.
And we are both countries committed to middle power diplomacy.
That means we work closely with our partners around the world to shape the international environment.
We have a strong history of working together in particular on regional initiatives.
And we are close economic partners - a relationship that brings enormous benefits to both sides.
Tonight I would like to talk about how I view our relationship and how much scope I see there is scope to develop it.
Because - as many people recognise - the development of the strength and diversity of our political ties has too often failed to keep pace with the development of our economic ties.
I am determined that the Australian Government that I lead will change that trend.
We want to build on the strong economic base of our relationship.
We want to expand our security and political connections.
And we want to work together more closely on the big challenges we all face.
We are committed to building a stronger, broader relationship with Korea - a relationship that reflects the extent of our shared interests, our shared values and our shared goals.
Korea
Part of the reason I want to do this is because I think that a closer relationship is in the interest of both countries.
For Australia, becoming more engaged with Korea's remarkable economy can only be a positive move.
The Republic of Korea turns 60 this week.
I know that “Korea” as a distinct nation on this peninsula has been around for thousands of years.
But it was only 60 years ago that the Republic of Korea was born out of the end of the Second World War.
It was not an easy birth.
In less than two years time, the Republic of Korea was fighting for its very survival in the face of an attack from its northern neighbour.
The war was brutal and tragic.
It pitted brother against brother.
When the war ended with the armistice three years later, Korea was in a terrible state.
Years of conflict had destroyed infrastructure and left people in poverty.
It is that starting point that makes Korea's economic transformation over the next decades so remarkable.
From the 1960s, Korea transformed itself into a global economic force.
Korean brands have come to dominate markets around the world.
Korean ingenuity and innovation is widely recognised.
And this was all achieved by the hard work of the Korean people and the economic policy choices of the Korean Government.
There have been setbacks on the way - including the Asian financial crisis in 1997.
But Korea has always proved itself to be resilient.
So I would like to pay tribute to the people of Korea, and Korea's business sector, for all that has been achieved in the space of 40 or so years.
The New Australian Government
Like Korea, the new Australian Government is committed to economic growth.
We understand that countries need the right domestic economic policies if they want to remain competitive.
We also understand that the best future for our people lies in engagement with the world.
The new Australian Government's domestic economic reform agenda is broad.
We are investing in education and infrastructure so that we have the best workforce we can and that businesses have the physical infrastructure they need to innovate.
We are also working to deregulate and build a seamless national economy.
Australia is a federation that spans a continent.
It is crucial that businesses in Sydney and Perth do not face different rules as they cross state borders.
The other side of our economic development policies is global engagement.
We welcome foreign investment in Australia.
Our process for considering foreign investment is straightforward and provides certainty to investors.
We work with our economic partners around the globe to keep pushing open the door to economic exchanges.
I was very disappointed two weeks ago when the Doha Round of trade liberalisation talks broke down in Geneva.
Pushing forward on global free trade is a key aim for this government.
And, at a time when the global economy is facing pressures from rising oil prices, rising food prices and a global credit crisis, a good outcome from the trade talks would have been a real boost.
It would have sent a strong signal to the business community that governments are still committed to the idea of freer global trade.
And the talks in Geneva made huge progress - we should not lose sight of this fact.
Nor should we give up hope, because the outstanding issues remain capable of resolution.
We have to think about how we now move forward.
There are three steps we should take.
First, lock in what we've achieved by recording the progress we've made.
Secondly, resolving the remaining areas of difference.
And thirdly, looking to seize next available window of political opportunity.
We have to keep pushing to get an outcome from all the work that has been done, because trade has played such an important part in global economic growth in recent decades,
It is simply too important for us to give up.
Australia-Korea economic relations
Despite the set back in Geneva, I am still confident that the economic relationship between Australia and Korea can continue to grow.
Our economic relationship is very important for Australia.
It is also, I believe, very important for Korea.
Our economic ties have been the bedrock of our relationship for decades now - since the first shipment of iron ore arrived here in the late 1960s.
Resources continue to form the foundation of our trade.
Korea is a major export destination for Australian uranium.
The coal and iron ore that Australia exports to Korea is of benefit to both countries - it is an export for us and a critical input in the manufacturing chain for Korea.
My Government is keen for that relationship to continue.
We would also like to see it expand.
Australia has a long and proud history as a stable and reliable supplier of LNG.
A relationship between Australian suppliers and Korean consumers of LNG would be another mutually beneficial strand in our relationship.
What is noticeable about recent years, is the expansion of the economic relationship.
We now have a very strong service component to the relationship.
Education is an important part of that.
Around 35,000 Korean students were enrolled in Australian educational institutions last year.
In addition to these students, we have close to 30,000 young Koreans visiting Australia on “Working Holiday” visas.
More young Koreans come to Australia under this program than from any other country.
And today I witnessed an e-lecture between Yonsei University and the Australian National University (my own university) - it is an example of the expanding education links we have.
Our financial sector cooperation is also growing.
Now, the Macquarie Group of companies, Korea, is a major presence in Korea.
The Group has invested around $20 billion in Korean assets as of March 2008.
In doing so, it delivers good returns for Korean, Australian and international investors.
Australian performing arts is a growing new service export sector for Australia in Korea.
Partnering with Korea's dynamic and influential entertainment sector offers real opportunities for Australia.
Korean audiences welcome foreign performers here in Korea.
Australian groups and individuals are performing almost every week in Korea.
Groups and individuals such as “End of Fashion”, “Tony Emanuel”, “Saritah” are making a big impact on the performing arts scene in Korea.
We have also seen increasing ties between our high-technology sectors.
I visited a clinic today to see the work of Koreans surgeon providing children with cochlear implants - better known as the bionic ear, a technology that was first developed in Australia 30 years ago.
The Cochlear success in Korea is not an isolated example of our high technology trade in the health sector with Korea.
Hospira Corporation's Australian operation supplies $1 million of injectable pharmaceuticals to the same hospital I visited this morning.
In manufacturing too there are more and more ties between Australia and Korea.
Just look at the automotive sector.
The global supply chains of General Motors means that GM Holden of Australia is supplying 100,000 automotive engines to power passenger vehicles manufactured in their Korean factory.
Also, the Holden “Caprice” vehicle fully made in Australia will soon be on the road in Korea as a luxury car in the GM Daewoo range.
The economic and trade relationship is strong and it is growing.
But I think we should be looking for ways to push it to an even higher level.
The recent non-government study into the feasibility of a free trade agreement between our two countries showed remarkable potential.
It showed that a free trade agreement could boost Korea's and Australia's GDPs by more than 20 billion US dollars each over the next 12 years.
I am very keen for our governments to look very closely at the question of an FTA.
I think we would have a lot to gain from one.
And today I was pleased that President Lee and I agreed that our two governments would begin pre-negotiation consultations on a free trade agreement.
Regional Cooperation
One important element of our economic ties is that we share many common ideas about how to ensure that our region is one that supports economic development.
For nearly 20 years now, since APEC was launched, our two countries have been strong supporters of developing our regional organisations.
APEC is still the main economic body for the region.
It has done good work in encouraging more open trade and investment between member economies.
It has helped to ensure that our region remains open and inclusive.
As beneficiaries of globalisation, I think that both Australia and Korea are of the same view that cutting ourselves off from the world of seeking to develop exclusive economic blocs is not in anyone's interest.
We agree that lowering barriers to economic activity is the right thing to do.
We agree that we should be trying to increase the links between countries, not erect barriers between them.
Today I was pleased to have the chance to talk with President Lee about the future shape of our region.
The region we live in now is very different to the one at the time when APEC came into being.
Cast your minds back to 1989.
Only one year earlier, Seoul had hosted the Olympic Games.
China's economy was growing, but was still relatively small.
Japan seemed likely to overtake the United States as the world's biggest economy.
The Soviet Union was collapsing.
Korea's evolution to a full democracy was close, but still incomplete.
India was inward looking and not engaged with the global economy.
We now face a very different region - the economic landscape has shifted dramatically.
In the past 20 years, the challenges we face as a region have also changed.
At the top of the agenda now are climate change, terrorism and financial instability.
Our existing regional institutions are playing an important and constructive role in promoting stability, cooperation and prosperity in our region.
But I believe that we should start thinking about what we want our region to look like in 2020 and what regional organisations we might need.
I want to start a dialogue around the region about this question.
It is time we began to think about where we want to get to as a region.
If we do not, we leave ourselves that the mercy of events.
For Australia, having other countries like Korea support this dialogue is of crucial importance.
Over the coming months I hope that Korean leaders, officials, academics and business people can join in this discussion about where we want our region to be.
More than economics
An important part of this discussion will need to be about matters other than economics.
In 2020, we will need a regional mechanism that can bring nations together to tackle the challenges we will face.
That means we will need a body that can discuss more than economics.
We will need a body that can also discuss security problems.
Australia and Korea both want a stable region - a view that is, of course, shared by many around the region.
The question is, how do we achieve that?
The answer is that we need a body that brings together all of the major powers in a forum that can discuss any challenges that might arise.
In a region with changing power relativities, it is crucial that we have such a mechanism.
So, part of the discussion I want to have around the region is about how we bring security matters into the scope of our regional bodies.
Taking our relationship forward
Regional cooperation is just one area where I believe Australia and Korea can work more closely together.
In fact, I think we can work more closely together on a whole range of areas bilaterally, regionally and globally.
As two middle powers, as two democracies and as two Asia Pacific nations, we should be looking more at what we can do to work together on the big challenges we face.
For instance on climate change I think we can look to do more together.
Korea is a major consumer of Australian resources - a trade that brings benefits to both sides.
But questions of energy and climate change are intimately linked.
As major energy partners, we should look to how we can work more closely together on climate change.
On the big security questions, too, we can do more together.
I announced earlier this year that Australia was going to establish an International Commission on Nuclear Non-proliferation and Disarmament.
I look forward to Korea playing a role in the work of the Commission.
Because I believe that the threat of nuclear weapons is still real, but that the political momentum to solve that problem has faded in recent years.
It is precisely the sort of work that middle powers can do - bringing together countries with a shared goal and building a global consensus on how to tackle a major challenge.
But just as importantly, I think we can do more in our bilateral relationship.
Strengthening our bilateral cooperation would better reflect the shared interests we have.
For instance, Australia and Korea share a keen interest in the resolution of the North Korean nuclear question.
We do not face the threat of the North Korean army the way South Korea does.
But we have important interests in this region.
Three of Australia's top five export markets are in North Asia (Japan, China and Korea).
Anything that could lead to instability on the Korean Peninsula and in the surrounding region is of great concern to Australia.
It is for this reason that Australia has long supported resolution of the North Korean nuclear problem and we continue to do so.
We also continue to provide humanitarian assistance to North Korea.
The shared interests we have in questions of security are often under appreciated.
The historical military links between us are strong - over 17,000 Australian soldiers, sailors and airmen served in the Korean War.
And 339 lost their lives.
We have worked together in peacekeeping operations - including in East Timor.
And as allies of the United States, we have much in common.
I was pleased that today President Lee and I agreed that we should look at how to bring the different strands of our security cooperation together under a new mechanism.
I am keen to see our security relationship strengthened and a formal security cooperation arrangement would help to do that.
There is enormous potential for closer cooperation in the education area.
I was very pleased to be able to witness today the signing of a new agreement between Australia and Korea to encourage greater education and research links at all levels in Australia.
I want to encourage more Australian institutions to build links with their Korean counterparts.
Strong education links can help to build the people-to-people ties and boost understanding of each other's countries.
But other sectors also have an important role to play here.
The Australia Korea Foundation was established in Australia to promote the broadening of the relationship.
The Foundation was established in 1992.
Its goal is to promote links between different sectors in Australia and Korea.
It runs a business internship program and a young leaders exchange program.
And it funds research linkages projects.
It works hard to add depth and breadth to the ties between us.
It is my great pleasure to announce tonight that the Australian Government has appointed a new Board for the Foundation, including a new Chairman.
David Palmer is a former Managing Director of the Australian Meat and Livestock Association.
He has had a long involvement with Korea and brings great business experience to the role.
He is joined on the board by other business, academic and artistic figures who are all committed to expanding and deepening Australia's relationship with Korea.
They share the commitment of the Australian Government to doing more with Korea.
My thinking on building education and other people-to-people links is simple - I believe that Australia needs to be the most Asia-literate country in the collective West.
It is in our interest to do so.
We share a region and a time zone with a diverse region.
To make the most of the opportunities that come our way - particularly in the services sector - we need people that can span the gap between us.
We need people that can understand and be comfortable with the languages and cultures of the countries of our region.
To do that, we need to give young people the chance to experience life in other countries in our region, and we need more education links to achieve that.
Conclusion
Today President Lee and I talked about the relationship between our countries.
We talked about the history and about the relationship we have today.
But most importantly, we talked about the potential we see in the relationship.
As two new governments, we have committed ourselves to take some real, concrete steps to realising the potential of the relationship.
I would like to thank the Korean and Australian businesses that have done so much to build our relationship in recent decades.
And I would like to ask for your assistance as we seek to take this relationship to a higher level.
A level that more properly reflect the interests we share and the ties we have between us.
Thank you.