Australian Outlook: Australian Policy Priorities for the Asia-Pacific

The Hon. John Howard, MP, Prime Minister of Australia

New York, NY
September 12, 2005

Thank you very much madam president, Mr Michael Andrews of Citigroup, His Excellency Dennis Richardson, the Australian Ambassador to the United States, ladies and gentlemen.

It’s a great pleasure for Janette and for me to be back in this wonderful city of New York and particularly coming as our visit does at the time of the fourth anniversary of the attack on Washington and New York, I again express on behalf of the people of Australia our sense of closeness and kinship with the people of the United States, particularly in the wake of the terrible suffering of the people of many parts of this wonderful country in the wake of Hurricane Katrina.

New York is a wonderfully vibrant, free and open city and no perverted ideology will ever cower the people of New York or take from them their sense of openness and involvement in the affairs of the world.

The values of the Asia Society, an organisation that has been at the forefront of promoting an understanding of the diversity of the Asian-Pacific region will I’m sure find a greater relevance as the years of the 21 st century go by. And the values of this society have a very easy resonance with the remarks that I want to make today. And I start in addressing the attitude of Australia towards the Asian Pacific area, by saying at the very outset that American’s global leadership, and Australia’s relationship with the United States, play very importantly into our outlook and our priorities for the region.

We believe that strong global leadership by the United States is crucial to Asia’s future stability and prosperity. The United States is not only a great global power, indeed the world’s only superpower, but America is importantly for the context of my remarks today, a great Pacific power and has so often been the case in the past, it fulfils its regional role most powerfully when it provides global leadership. As the Asia Pacific region changes dramatically in the decades ahead, some priorities will however remain constant. We believe that a strong United States presence in the Asia Pacific will remain quite vital for stability and security. And America’s alliance relationships, including with Australia, will be the anchors for the United States presence in the region.

One of the hallmarks of Australia’s policy in the past decade has been our capacity, simultaneously, to deepen relations with the United States, whilst expanding our relations with many nations in the Asian Pacific region. In our view and I say this unconditionally, close links with the United States are a plus – not a minus – in forging closer Australian involvement in the Asian Pacific area.

I’ve said before that history will have no larger stadium this century than the Asia Pacific rim. Asia is poised in coming decades to assume a weight in the world economy it last held more than 500 years ago. It is also home to eight of the world’s largest standing armies and after the Middle East, three of the most volatile flashpoints in the world – the Korean peninsula, the Taiwan Strait and Kashmir.

The stakes are large and will test the strategic maturity, restraint and adaptability of all nations. Australia approaches our rapidly changing region with clear assumptions and strategies, and importantly a sense of optimism. We recognise the great diversity of Asia – taking account of how differences in power, institutions and aspirations will shape regional politics.

We seek to engage most substantially with those countries with which our primary strategic and economic interests lie. We believe that what matters most for our regional engagement is the substance of relations between countries, more so than the formal architecture of any diplomatic exchange. We recognise that advancing our security and prosperity in the region requires a balance of principle and pragmatism. And we adopt a flexible approach to this task – one that combines bilateral, regional and multilateral instruments and that importantly elevates results over process and form. This outlet-look serves Australia well in a region of very rapid change, and in a world of increasing interconnectedness, and in an age of great uncertainty. It has seen Australia deepen her regional engagement and discharge our global responsibilities while keeping faith with our history, our interests and importantly our values.

Rather than try to touch on every aspect of Australia’s regional outlook, I’d like to focus my remarks on one strand – and that is our belief that regional engagement relies principally on the substance of relations between countries, more so than on either lofty statements or grand institutional designs. The truth of this proposition was brought home very forcibly to me at the start of this year in the wake of the terrible Boxing Day tsunami.

This epic human tragedy underlined how, especially in times of crisis, people look inevitably to nation-states for resources and for action. And while not belittling in anyway the role of international organisations and non-government organisations, nothing can or will replace national governments as the legitimate sources of order and justice in world politics. Worthy sentiments are important. Inclusive processes are important. But it is what nations actually do, and do quickly in times of stress that in many ways is the true test of good international citizenship.

Australia was able to offer swift and significant help to Asian countries, particularly Indonesia, affected by the tsunami, and we remain the world’s largest official donor in response to this disaster. Our emergency services personnel worked side-by-side with their regional counterparts on the task of dealing with the immediate consequences of that disaster. Through their generosity, the Australian people demonstrated the genuine compassion and connectedness they felt for the region.

The Australian Government’s $1 billion, Australian dollar package of assistance and loans for Indonesian reconstruction – the largest aid package in our history, was a singular demonstration of our commitment to stand by our near neighbour in its time of greatest need and greatest domestic peril. It’s sometimes said, and I think it’s probably true, that no two close neighbours are more dissimilar than Indonesia and Australia. Yet our two countries are forever linked by geography and by destiny – a point I made frequently to a man I would call my good friend, President Susilo Bambang Yudhoyono on the many occasions that we have met since he became President of that very big and important country.

As this audience probably appreciates better than most, the world has an enormous stake in encouraging the development of a secure, prosperous and democratic Indonesia. In the age of terrorism, it is about the most powerful weapon we can have against Islamic extremism in our part of the world. The success of Indonesia is crucial to the ongoing fight against terrorism in our region.

The world’s largest Muslim nation and the world’s third largest democracy, Indonesia deserves more credit than it has been given for the political reforms that have taken root in recent years. It’s a failing sometimes of mature democracies to forget how long it took their forebears to fashion the secure democracy we now openly enjoy and tend to take for granted.

It is important that the international community, not least the United States, continue to help Indonesia in its efforts to strengthen democratic institutions, to attract foreign investment, to maintain the pace of economic reform and to enhance her security.

Like many other countries we welcome the recent Aceh peace agreement, a significant achievement and a sign of how with goodwill and a spirit of compromise all Indonesians can look forward to a better and more peaceful future.

Of course, Indonesia faces huge challenges and its destiny is largely in its own hands. But Australia – with resources, friendship and importantly sticking power – is determined to help our neighbour achieve its ambition to be a just, safe and prosperous country.

In our immediate neighbourhood, Australia has entered a new phase of activism in the Pacific. This again is underpinned by a willingness to commit significant resources and to work cooperatively on practical problems where a positive impact can be achieved. For many fragile tiny states, and this applies particularly to the Pacific Islands, poor governance, crime and corruption pose a real threat to both economic development and to regional security. In an expansion of our large aid programme to Papua New Guinea, Australian police and officials are being deployed to help improve law and order, economic management, border controls and transport security. The Australian-led Regional Assistance Mission to Solomon Islands has made substantial progress in restoring stability, law and order. This operation underlines the point that a messy and uncertain world will not always tailor itself to a particular institutional response.

Australia’s intervention in the Solomon Islands was based on a formal request from its government. And given that government’s diplomatic recognition of Taiwan, there was virtually no prospect of a United Nations Security Council Resolution authorising the operation. What mattered however, and the true test of our engagement, was not the formal process but the outcome. This was a regional response to a fragile state and it was our responsibility as a Pacific power to take the lead.

No relationship of substance in Asia has been more important over the years to Australia than our relationship with Japan. And let me at this point take the opportunity of doing publicly what I did privately last night over the telephone, and that is to congratulate the Prime Minister of Japan, Mr Koizumi on his remarkable victory. He’s a person I admire enormously, he showed great political courage, he demonstrated an understanding of his people and very importantly he was prepared to take political risks to maintain the momentum of economic reform. And that is very important to not only Japan, but it is also very important to the whole of our region.

And despite changes in relativities in economic power, Japan remains the world’s second largest economy and Asia’s largest economy by a substantial margin. It has been the largest export destination for Australia for about 40 years and is likely remain so for many years in to the future. The partnership between Australia and Japan has continued to evolve off the back of a quiet revolution in Japanese foreign policy. This has been demonstrated by Japan’s contribution to operations in East Timor, its role in the six-party talks on North Korea and in the three-way dialogue with Australia and the United States on security issues. And importantly, Japan is also making a significant contribution to coalition efforts to help the Iraqi people build a secure, democratic future.

Australia currently has troops stationed in Iraq’s Al Muthanna province helping to maintain security for Japanese personnel undertaking reconstruction work, that itself is the latest demonstration of our strong commitment to cooperating with Japan on security challenges.

Australia is also a strong supporter of Japan taking a permanent seat at the table of any expanded United Nations Security Council. We see this as an important reflection, both of Asia’s economic and strategic weight in the 21 st century and also an additional element of future regional stability.

Australia’s relationship with China further illustrates what can be achieved when countries focus on the substance of common interests.The rise of China is reshaping Asia and the world. It has grown by around 9 per cent a year for more than 25 years. In the next decade, China will likely surpass Germany to become the third largest economy after the United States and Japan.It is already the world’s second largest holder of foreign exchange reserves, second largest consumer of energy and the third largest importer of oil.Australia’s trade with China has quadrupled in the last decade and China is now our second largest merchandise trading partner. We are keen to expand this economic partnership even further. Australia is only the second developed country to begin negotiations on a Free Trade Agreement with China.But again, let me stress, that innovations in institutional architecture must be kept in perspective.

Australia’s economic engagement with China is shaped most powerfully by underlying economic complementarities and business relationships. In other words, China will remain a large and growing economic partner for Australia whether or not we conclude a formal Free Trade Agreement.As China assumes a greater strategic and economic weight in Asia in the 21 st century, it will inevitably place some strain on the international system. But to see China’s rise in zero-sum terms is overly pessimistic, intellectually misguided and potentially dangerous. It is also a negation of what the West has been urging on China now for decades.

China’s progress is good for China and good for the world. Its economic liberalisation and integration into the world economy has lifted hundreds of millions of people out of poverty. Its growth in recent years has helped us sustain the expansion of the global economy and of world trade. In roughly a decade, China has moved from having import barriers comparable to those of high income countries in the 1950s to tariff levels close to today’s developed country average. And according to Morgan Stanley, American consumers in the last decade have saved more than $600 billion due to cheaper imports from China.

Australia’s strong relationship with China is not just based on economic opportunity. We seek to build on shared goals, and not become obsessed by those things that make us different. By widening the circle of substance, we are better able to deal openly and honestly with issues where we might disagree. An excellent example of the fruits of this approach in a regional setting is the recently announced Asia-Pacific Partnership on Clean Development and Climate. This important development currently includes Australia, the United States, China, Japan, India and South Korea. Together these nations account for roughly half the world’s greenhouse gas emissions. With a strategy centred on technology cooperation, for the first time, key developing and developed countries in the region are working together to address the challenges of climate change, energy security and air pollution.

This partnership exemplifies how countries in the region can work together on common challenges through open, market-oriented institutions. It is in keeping with a pattern of regional cooperation that Australia has long supported on economic and trade issues through APEC. We’ve also seen the inclusion of security issues on APEC’s agenda in the post-September 11 world with major initiatives on counter-terrorism and travel security. This is part of a natural evolution and one the Australian Government will build on as we prepare to host APEC, in Sydney, in the year 2007.

APEC has served us well as the pre-eminent regional institution and Australia remains strongly committed to ensuring that it remains responsive to emerging regional challenges. Australia also looks forward to participating in the East Asia Summit, to be held in Kuala Lumpur in December. This gathering will bring together leaders from ten ASEAN countries as well as those from China, Japan, South Korea, India, Australia and New Zealand. Again, we believe that such institutions work best when they are open, market-oriented and inclusive in character, focusing on key regional priorities.

In the coming weeks and months leadership by us and others, notably the European Union, will be especially important in the lead up to the World Trade Organisation meeting in Hong Kong in December. At Hong Kong, the world has a chance to break the back of global trade negotiations. We need a successful Hong Kong meeting if we are to complete the Doha Round in 2006. All countries – in the Americas, in Europe and in Asia, share an obligation to live up to the promise of making this a development round. The world’s richest countries must show leadership but so must developing countries, such as China, India and Brazil. They also have obligations to fulfil if we are to maintain the World Trade Organisation as a positive force for global development and poverty reduction.

Nations share a particular responsibility to rise to the occasion on cutting barriers to agricultural trade. I declare a national self interest, but I also point to the enormous advantages to developing countries of reductions in agricultural protection. I know that President Bush wants to progress on agriculture and I’ve also welcomed the recent call by the British Prime Minister, Tony Blair, for an end to agricultural subsidies by the year 2010. This week world leaders are gathering here in New York to amongst other things, commit again to making further progress on global poverty reduction. Can I say with some feeling that this discussion on aid sometimes obscures the fact that trade barriers in the developed world cost poor countries more than twice the amount of the official development aid they receive.

The experience of Asia is proof positive that market-oriented globalisation is the best poverty reduction strategy that mankind has developed. According to the World Bank, the proportion of the East Asian population living on less than a dollar a day fell from 56 per cent in 1981 to 16 per cent in 2001. This is, as Martin Wolf of the Financial Times has pointed out, is the biggest and fastest reduction in extreme poverty in world history. And that was the result of market oriented globalisation. And it’s a point that should not be lost, particularly on those who gather here in New York this week. Without a doubt, the greatest contribution nations can make to alleviate poverty is to conclude the Doha Round and further reduce trade barriers at the earliest opportunity.

My friends may I conclude by again thanking the Asia Society for the opportunity of addressing you. I do applaud the contribution that this organisation has made towards the cause of a greater understanding of the diversity and the complexity of the region we collectively, but I think sometimes simplistically call Asia. It’s an area of the world of course that will assume an even greater significance and greater role as the 21 st century unfolds. It’s a part of the world with which my own country is by reason of history and of geography and by increasing cultural interaction permanently connected. It’s an area of the world from which we derive a wonderful economic and human nourishment, and it’s an area of the world where the opportunities for growth and development are unlimited. And it’s an area of the world that contains many of the potential, strategic challenges and danger spots that are likely to occupy the time and attention of the nations of America and Europe in the decades ahead. And the contribution that your organisation makes to an understanding of this world is immense, and I thank you for the opportunity of sharing some remarks with you.

Thank you.