PRIME MINISTER
SPEECH BY THE PRIME MINISTER, THE HON P J KEATING MP
ASIA LECTURE TO THE ASIA-AUSTRALIA INSTITUTE
BRISBANE, 26 OCTOBER 1994
I wanted to give this speech in Brisbane, and I wanted to give it to the Asia-
Australia Institute, because in their respective areas of government and
education Wayne Goss and Stephen Fitzgerald are showing the way forward
for Australia and its institutions in dealing with the region around us.
From the start, the Asia-Australia Institute has been working to bring together
the emerging leaders of the region from Government, business and
universities in order to shape the region and help to create an ' Asia
consciousness', not just to stand back and comment on developments.
Similarly, among our state Governments, Wayne Goss and his colleagues
have been pre-eminent among those working to strengthen ties with Asia and
the Pacific. They have had a strong sense of Queensland's place in the
economic life of the Asia-Pacific and have worked with business to build the
State's trade and investment links. Their active support for the teaching of
Asian languages in schools has had a nation-wide impact in time it will
have a profound influence.
So I am very pleased to be delivering the first Asia Lecture to have been held
by the Institute in Brisbane.
I am also very pleased that we have with us tonight Mr Huang Ju, the Mayor
of Shanghai, whom I had the pleasure of meeting when I was in China last
year. As evidence of the dynamism and ferment of economic growth in Asia
we could hardly have a better example than Shanghai.
My speech tonight will be about Australia's foreign policy and it will be about
the Asia Pacific.
Because, in a way which has never been true before in our country's history,
we are talking about the same thing.
I don't mean by this that Australia has no interests outside the region now, or
that we haven't been interested in Asia before.

Our economic and cultural links with Europe and the United States, for
example, are very important to us.
The interests we have in preventing the spread of nuclear or chemical
weapons, or in supporting multilateral approaches to economic co-operation,
or in helping respond to humanitarian crises like Rwanda, are not confined by
regional boundaries.
Above all, the globalisation of the world economy makes it impossible for us
to ignore what is happening outside our region.
Nor am I claiming that Australia has not been involved in Asia before.
For the most part, our record of engagement is long and honourable, from our
support for Indonesian independence, through the establishment of the
Colombo Plan to the development of our great trading sinews with Japan and
later Korea, which helped to fuel literally the astonishing economic growth
in north Asia.
But that said, it is also true in a quite different way from the past a deeper,
more urgent and more intense way that Australia's economic, strategic and
political interests now coalesce in the region around us.
If we do not succeed in the Asia-Pacific, we succeed nowhere.
East Asia's economic explosion ranks with the end of the Cold War as one of
the defining developments of our time.
Beyond all other things, its consequences will shape the 21 st century for
Australia. In the twenty years from 1970, East Asia's share of world GDP rose from 12
per cent to 25 per cent.
At present, three of the world's ten largest economies are from the APEC
region. But by 2020 the World Bank estimates that seven of the top ten will
be APEC members. China, the United States and Japan in the top three
positions will be joined by Indonesia at five and Korea, Thailand and Taiwan.
By the year 2000, the APEC region will generate nearly 55 per cent of world
trade. These developments represent a profound shift in the balance of economic
power in the world from Europe to Asia, from the North to the South.
And it is an economic transformation which over the longer term will have
deep implications for strategic power as well.
Coming to terms with this change and taking full advantage of it represents
the single most important challenge for Australia in the 1990s. We need to
shape ourselves and our region to prepare for it. I

We have no great and powerful patron in this. We have to make our own
way, in our own way.
In the past, it was possible for Australian governments and business people
dealing with Asia to take the policy equivalent of a five-day package tour to
Bali. But dabbling in Asia is no longer an option for Australia. Our engagement
with the region has to be uncompromising, unfailing, tenacious.
The task ahead requires a Government with a creative policy sense a sharp
awareness of the national interest and, indeed the national identity.
As I have often said, there is a cultural element at work in this confidence,
creativity an appropriate sense of national purpose and appropriate symbols
for it these are all part of the effort.
We will need to create abroad the structures and institutions which match the
new times, just as we have done at home.
This Government opened Australia up to the world.
We dismantled the ring fence of tariffs and foreign exchange controls
Australia had slumbered behind. We did it because we knew Australia did
not need to fear the world, and that we could prosper with competition.
The result of that succession of policy reforms has been dramatic. This
country is now far more integrated into the world economy.
Over the decade of reform, the ratio of our exports plus imports to GDP has
risen from 30 per cent to 40 percent. Australian equity abroad has grown
from around 3 percent of GDP in 1983 to almost 20 percent today.
The effective rate of industry protection in Australia is now about one-third of
what it was in the early 1980s and yet our exports now represent 22 per cent
of our GDP compared with less than 14 per cent in 1983.
Our exports to Asia have been booming, growing at a rate of 20 percent per
annum to the ASEAN countries and 12 percent to East Asia as a whole.
Three quarters of our exports now go to other APEC members.
But we also understand that just dismantling the barriers is not enough. All of
us government and business have to go out into the region and help to
shape it in ways which serve our interests.
And that is happening with a gathering momentum.
Our relations with the individual countries around us are in excellent shape.

In Northeast Asia we have relationships of the highest importance. They are
grounded in economic complementarity but are growing well beyond that.
Japan remains overwhelmingly our largest trading partner and a country with
which our longstanding economic links are being matched increasingly by a
broad policy dialogue and partnership.
Japan is now going through fundamental change, both political and
economic. I am convinced from the discussions I had in Tokyo last month that the reform
process which is now reshaping the Japanese political system will have over
time a very positive impact on Japan's role in the region and the world.
Policy debate will become a much more important element of Japanese
politics. This will help nurture stronger political leadership with greater
initiative over the bureaucracy and a clearer sense of Japan's modern
international role.
Simultaneously, the Japanese economy is becoming more open and marketoriented.
Business is demanding economic reform and deregulation.
Consumers are taking advantage of wide-spread price discounting. The
economic integration of Japan with the rest of East Asia is proceeding apace.
Above all, there is a need for Japan to unleash some of its 157 trillion yen in
savings and to invest in itself, in the living standards of its own people.
Australia's relationship with the Republic of Korea is one of great potential.
Korea is now our third largest export market and may soon be our second.
In addition to a thriving bilateral trade relationship, Korea has been one of our
key partners in developing APEC and we have a security relationship dating
back to the Korean War.
I am looking forward to the opportunity to set new directions for future
cooperation when President Kim Young Sam visits Australia immediately after
the APEC leaders' meeting in November.
Our relations with China are deep and growing. China has more foreign
investment in Australia than in any other country a mark of the deep
complementarity in our relationship.
By some measurements, China is already the third largest economy in the
world. The World Bank expects it to be the largest within 25 years. Its
economy has been growing at an average of 9 per cent each year over the
past decade.
As China's economic weight grows, so will its military and political power.
If anything is inevitable about the 21st century, it is the growing weight and
influence of China in the region and the world.

Australia has nothing to fear from this. We have been a firm supporter of
China's full integration into world and regional institutions. We regard it as
essential to engage China productively in the global economy.
But China's growth is nevertheless one of the great shifts to which the region
will have to adjust in the coming decades.
In Southeast Asia, our core relationship is with Indonesia. As I have said
many times, no country is more important to us.
The progress we have made in the past couple of years in broadening the
relationship is a matter of great satisfaction to me.
But we can do more. There is great potential for more Australian businesses
to establish themselves in Indonesia.
Neither Australia nor Indonesia has designs on the other and our strategic
interests in the broader region are similar. Our defence relations are growing
rapidly and I think they can be strengthened further.
We have deep and solid relationships with all the other ASEAN countries
Malaysia, the Philippines, Singapore, Thailand and Brunei. Each of these
relationships has its own distinct strength, history and potential.
With Singapore, for example, we have a very close defence relationship
involving regular exercises and training.
And Prime Minister Goh and I have agreed to press ahead with building
strategic linkages between Australian and Singaporean companies operating
in third markets.
With Malaysia, we have an old and deep relationship, strengthened by the
fact that more than 100,000 Malaysians have studied and trained in Australia.
This is already having its impact in the business area.
Outside ASEAN but not for long Vietnam is a country of growing
importance to Australia. It is a strategically significant country with a resilient
hard-working population of 70 million and a strong national sense of purpose.
It will become a much more important influence as it becomes steadily more
integrated into the region.
For Australia, the island countries of the Pacific are an important part of the
Asia-Pacific too. In August, I chaired the 25th meeting of the South Pacific
Forum here in Brisbane. The emphasis at the meeting was on ways in which
we can address the pressing practical problems of sustainable development
in the area. I

Papua New Guinea and the other countries of the South Pacific will continue
to deserve Australia's careful commitment as they confront the pressures of
development. New Zealand is a firm partner with Australia in the Pacific, as well as in
APEC. But beyond these bilateral links we need to create and sustain a multilateral
framework which can engage all the interests of the region.
Over the next few years the countries around the Pacific face a major
decision about what sort of region this should be whether its institutions and
structures should be focussed on East Asia or on the broader Asia Pacific.
The signs of this debate are evident on both sides of the Pacific and its
outcome will have a profound effect on Australia's future.
The growth of regionalism has been one of the great global trends since the
Cold War ended and ideological competition between East and West ceased
to be a determining influence on regional developments.
We have seen it at work in the expansion of the European Union, in the
speedy development of economic co-operation in Asia and Latin America, in
the creation of the ASEAN Regional Forum.
Regionalism should be a positive force, building on the common interests
between neighbours. But it can also have a darker side if it promotes the
emergence of competing and exclusive blocs.
My own very strong view is that the sort of region Australia wants to see, and
the sort of regional structures we need to encourage, are trans-Pacific.
This doesn't stem from any lack of comfort on my part with Australia's place in
Asia, but from my conviction that Australia and the western rim of the Pacific
all of us are better off in a region which is shaped by, and sustains, our
major economic and security linkages. And these remain heavily trans-
Pacific. Despite rapid growth in trade between Asian countries, trade and economic
links across the Pacific remain important to all of us in this region.
The United States remains Asia's single largest market, its major source of
capital and a vital supplier of technology.
One fifth of all East Asian trade is with the United States. And in 1992 the
United States accounted for more than a quarter of the total stock of foreign
direct investment in East Asia.
Because, despite the astonishing growth of some of the emerging economies,
the United States remains a formidable economic power. An economy of nine
thousand billion dollars growing at three per cent a year generates a lot more

purchasing power than smaller economies growing at six to eight per cent a
year. The United States remains central to the region's security as well. Its
alliances with a number of regional countries, including Australia, are a vital
part of the regional security network and its capabilities provide strong reassurance
to the countries of the region that a balancing military presence is
available in the region in time of crisis.
At present we have a highly unusual situation in which the world's second
largest economy, Japan, is a strategic client of the world's largest economic
power, the United States. This is unprecedented historically. Try to imagine
Britain and Germany being in such a position early this century.
And all our interests those of the United States, Japan, Australia and the
other countries of the region are served by the preservation of this
relationship of strategic co-operation.
It is the core of US strategic engagement in the Western Pacific. It
legitimises Japan's defence role. And it removes the need for Japan to
acquire strategic capabilities.
Without the alliance, the pressure for Japan to throw off the constitutional
restraints on its defence posture would grow. The risk of regional instability
and a spiralling arms build-up would increase.
Australia strongly supports a more active international role for Japan. We
believe it has much to contribute to regional and international affairs.
I have said before that Australia regards it as an anomaly that the world's
second largest economy is not one of the permanent members of the UN
Security Council. But, as I have also said , it does not have to be " in uniform"
to perform this role.
These are some of the important economic and strategic reasons why I hope
we will continue to see the active engagement of the United States in the
region, and I believe we will.
But it is not pre-ordained.
The United States always has choices about its role in the world and where
and how it plays that role for example, the extent to which it focuses its
energies in the western hemisphere. We have seen it exercise such choices
in different ways in the course of this century.
Trade tensions between the United States and the North Asian economies
have the potential to fester and to attenuate the existing bonds across the
Pacific. Inevitably in an economy that size, a tension exists within the United States
between those who think that unilateral pressure is the best and easiest way

to achieve trade results and those who see the broader virtues of a
multilateral approach.
This is where APEC fits in.
In the background to all my thinking about APEC has been a conviction that
the greatest danger to the economic dynamism which has been so important
to Australia's development and the region's, would be a fracturing of the post-
Cold War world into competing blocs.
By bringing both sides of the Pacific into a broader partnership, APEC offers
the best way of avoiding this sort of outcome.
It helps to lock in US economic and commercial interest in the region, which
in turn helps ensure US strategic engagement. It provides a framework to
help contain or manage competition between China, Japan and the United
States. And it gives the smaller countries of the region a greater say in the
nature and shape of the trading arrangements in the region.
It should be clear from what I have said that the last thing Australia wants is
for APEC to develop into a protectionist or inward-looking trade bloc. That is
just the sort of global outcome we think APEC can help to prevent.
But that does not mean, in my view, that APEC does not have an important
role to play in regional trade liberalisation in this part of the world.
So long as APEC's approach is GATT-consistent, and equally importantly
so long as it contributes to global trade liberalisation, it seems to me that, as
the weight of economic development in the world shifts towards Asia and the
Pacific, we have a responsibility to show that countries in this part of the
world can take a decisive step towards a free trade goal.
I am equally convinced that anything that we do inside APEC will have
beneficial consequences in bringing closer a new global trading round.
But it is not only in the area of trade liberalisation bringing down tariffs and
non-tariff barriers for goods and services that APEC is important.
It also has a very important role in trade facilitation that is helping to
eliminate administrative and other impediments to trade and investment in the
region. Indeed, matters like the harmonisation of product standards and certification
arrangements, which make it easier for manufacturers in one part of the
region to sell in the other parts of the region, will have even more importance
as trade barriers come down.
It was in my first speech to the Asia Australia Institute in April 1992 that I first
put forward publicly the suggestion that a process of periodic meetings
between leaders of the APEC economies should be established.

Even at my most optimistic I did not expect that a little over two years later I
would be about to attend the second such meeting.
In two weeks' time the leaders of eighteen economies, representing more
than half the world's production and nearly half of its trade, will meet in
Bogor, as in Seattle, in a room without officials or a detailed agenda, to talk
about the economic challenges in our region.
I don't think there has been a more important meeting held in Southeast Asia
since the Bandung Conference of 1955 established the Non Aligned
Movement. In part, its importance lies in the very significant issues the meeting will
address how we can maintain the velocity of trade in this region by getting
down the formal and informal barriers.
We have been shown a path forward in two important reports from the
Eminent Persons' Group, and the Pacific Business Forum. The Australian
participants Neville Wran on the EPG and Philip Brass of Pacific Dunlop
and Imelda Roche of Nutrimetics in the Business Forum made a very
important contribution to the development of the APEC vision and I am
grateful to each of them.
For our part, what we hope to see come out of Bogor is a commitment to free
trade in the APEC region by a realistic date, in a GATT-consistent manner.
I'm not worried about the end date we set, so long as it is not too distant. As
we have seen in Australia, the main thing is to get the political commitment to
make a start. Then, with business factoring further liberalisation into its
decisions the momentum builds up and becomes unstoppable. That is the
process we want to start at Bogor.
Free trade through the Asia-Pacific is a huge enterprise. There are
commentators who are already talking as though it is an accomplished fact. It
isn't it will require major adjustments from all the APEC economies.
Free trade in the APEC region would bring Australia benefits several times
those of the Uruguay Round. And the benefits in terms of increased
competitiveness and integration with the region would be far greater.
It can underwrite Australia's future. It can give us sustainable growth,
employment, a role in technological innovation, cultural stimulation and
enrichment. It can substantially underwrite the democratic, rich and dynamic
nation we want to be in the 21st century.
But the Bogor meeting is important at another level too.
It represents a new level of leadership from Asia and a new level of
leadership from the developing world.

In the past, the great initiatives in trade liberalisation have come from the
industrialised countries. For the first time in Bogor, one of the leading
developing countries is issuing the challenge. This vision is President
Soeharto's and it is vital that we respond to him.
Ladies and Gentlemen,
It could be argued that the end of the Cold War has changed the world more
profoundly than any other single event since the Napoleonic Wars since
Lachlan Macquarie was Governor of New South Wales.
None of us has any experience of the sort of world we are moving into.
It will be more integrated than ever, a globalised environment in which
commerce is freer than ever in history; in which communications are
instantaneous and open to all; in which more and more aspects of national
government have an international dimension.
This prospect frightens some people, as change always does.
Our opponents, for example, wring their hands because Australia is party to
an increasing number of international agreements. They fret that these
agreements sometimes shape our domestic policies. They complain that our
sovereignty is being infringed and pine for a clearer, simpler world in which
foreigners kept a decent distance.
But it's not like that any more. From saving Antarctica as a wilderness park, to
protecting our security by banning chemical weapons, to expanding
Australia's access to other markets through the Uruguay Round negotiations,
to getting agreements on the harmonisation of product standards, we need at
an ever-increasing rate to talk and deal with the rest of the world.
That is the sort of international system we are now entering; with fewer clear
lines between domestic and external interests, and one in which these
external interests economic, strategic, political are intertwined in a way we
have never seen before.
The best guarantee of our national sovereignty will not be any walls we build
around us, but the resources we can call upon within ourselves. The degree
to which our industrial culture operates to principles of world's best practice
and within a culture of innovation and creativity will be essential to our
national sovereignty: the degree to which we are able to engage and
compete on the international front line will be essential. Our national
sovereignty will depend on our worldliness and integration with the world.
Equally it will depend upon the less tangible resources of tradition and
culture: the values of democracy and tolerance will continue to serve us well,
so will our language, so will all those things which remind us of our common
heritage and interest.
We have no need to be defensive about our place in the Asia-Pacific.

Australian engagement with the region is important to us but, equally, it is
important to the region.
Our relationships with Japan, China and Korea show how important the
economic complementarities between Australia and our neighbours are. And
they will continue to be important as economic growth spreads to the
countries of Southeast Asia.
Our services like education have long made an important contribution to the
development of the region, and we are now seeing other Australian services
like health, housing, engineering, communications and law being exported to
the region and helping to sustain its economic dynamism.
Our skills in basic scientific research, and increasingly in the application of
that research through government initiatives like the Cooperative Research
Centres, are a regional resource.
Information technology will play an increasingly important part in our
relationship with the region and the multi-media initiative among other
elements of the Government's cultural statement will significantly boost our
role in the information revolution, particularly as an international software
provider. Our security links, both bilateral and multilateral, make an important
contribution to regional stability.
But we also contribute because we think broadly about the region. We are a
source of ideas and we are good at implementing them. Our contribution has
been seen in many regional initiatives including APEC, the ASEAN Regional
Forum and the Cambodia settlement.
And, beyond that, Australia itself the sort of society we have created here
is an asset to the region.
I make this point not out of national vanity but because we see too often in
Australians the reverse of this an excess of national self-deprecation.
Australians can take a justifiable pride in the achievements of this country, in
the egalitarian, multicultural and humane democracy we have built.
It is a society in which the rights of the individual are protected against the
demands of the state.
This sense of human rights is intrinsic to our sense of ourselves.
The difficult task is not deciding whether human rights are universal. Of
course they are. It is deciding how to apply our own beliefs in the
international arena.

It is not surprising that many of Australia's neighbours have different
standards from our own.
Sometimes that is the result of different levels of political or economic
development.
Sometimes it is the result of a belief that the good of society at large is more
important than the rights of individuals.
Sometimes, there is no question that human rights are abused, by any
standards. Picking our way through this moral thicket is one of the most difficult things
we have to do.
But I am utterly convinced of one thing. We will get much further in advancing
human rights by talking to our neighbours than by shunning them. Cutting off
contacts is less likely to succeed than making human rights part of a broadlybased
relationship in which we are able to talk freely and openly about our
differences.
We do not, and cannot, aim to be " Asian" or European or anything else but
Australians. But we can and should aim to be a country which is deeply integrated into the
region around us. Which understands that our neighbours are increasingly
proud and justifiably proud of what their societies have accomplished the
amelioration of poverty, the growth of education, the massive improvements
in health standards.
By the turn of the century, by the centenary of our nationhood, I hope this will
be a country: in which more and more Australians speak the languages of our
neighbours in which our businesspeople are a familiar and valued part of the
commercial landscape of the Asia-Pacific
in which we are making full use of the great resource of the growing
number of Australians of Asian background
in which our defence and strategic links with the countries around us
are deeper than ever
in which our national identity is clearer to us and our neighbours
through the appointment of an Australian as our head of state
in which our national culture is shaped by, and helps to shape, the
cultures around us

Political scientists have recently been asking themselves what will be the next
big thing in global conflict to replace the ideological struggle of the Cold War.
Much of their discussion has centred around the prospect of a " clash of
civilizations" with suggestions that the coming great strategic divide will fall
between the western, Confucian and Islamic worlds.
If that is in any sense a real prospect, it is one which Australia, by nature and
inclination, stands strongly against. Contemporary Australia itself is evidence
that cultures can coexist and build on each other to create a strong and
cohesive society.
The enterprise in which we are now engaged, the creation of a thriving
community of nations across the Asia-Pacific the enterprise of APEC is an
extension of this model.
It is the best assurance we have that this will be the model for the world as
the next millennium approaches.
ends