Speech Speech to the Kokoda Foundation Australia-US Trilogy
20th November 2008
The Australia-US Alliance is a relationship reflecting the deep and enduring interests of both our nations. It is an alliance whose long-term operation transcends any partisan divide. It is also in Australia’s view an alliance that has helped underpin the security and stability of the wider region.
Through its network of alliances in the region, the US presence in the Western Pacific has been a force for stability for more than half a century.
As I said to President-elect Obama when I spoke to him to congratulate him on his election victory, Australia is looking to further strengthen our relationship with the United States in the future. A strong and enduring US Alliance will continue to be the basis of our close security cooperation with his Administration, as it has been with all US Administrations for the last 60 years.
I very much welcome President-elect Obama’s commitment in his foreign policy plan to forging a more effective framework in Asia and working to build an infrastructure with East Asian countries that can promote stability and prosperity for the future.
Australia looks forward to working with the Obama Administration:
- on the ongoing coordinated response to the global financial crisis;
- on the long-term political, economic, and strategic architecture of the Asia-Pacific region;
- on the great and enduring challenge of nuclear non-proliferation; and
- ·on the great challenge of climate change, which is of major relevance to our region with the rise of China and the rise of India.
The Asia-Pacific region will in the 21st century increasingly become the focus of a global shift in the centre of geo-strategic and geo-economic gravity. I look forward very much to working with the Obama Administration in the future – just as Australia has worked closely on the great challenges that lie ahead with President Bush’s Administration in the past.
In this respect I would like to publicly acknowledge the contribution made by Ambassador Robert McCallum – a true friend of Australia. The theme for this year’s conference goes to the heart of Australia’s interests. Put simply, what goes on in the Western Pacific is vital to Australia’s enduring interests.
History makes this point very clearly. In 1941 and 1942, the direct security threat to Australia – the first we had faced as a nation – came from the Western Pacific. The Western Pacific became the battleground on which we fought for our survival. And our partner in that fight, our ally in that fight, was the United States.
For Australian policy makers, the geo-politics of the Western Pacific and our relationship with the United States have always been intimately linked. Today it is no different. The Western Pacific still contains potential military flashpoints that could have enormous ramifications for Australia.
The Taiwan Strait has not gone away as a potential source of instability. We welcome recent moves towards better relations between China and Taiwan. But the Taiwan Strait remains highly militarised and the core political disagreements are still unresolved. The Korean Peninsula too is home to unresolved tensions. North Korea maintains one of the largest armies in the world. And it has sought to develop nuclear weapons.
The armistice at the 38th parallel has held for 55 years but the fact that no peace treaty has been signed reflects the ongoing tension. We also face a range of other security challenges in our region.
International terrorism is far from defeated and we must maintain our vigilance. Fragile states face internal security threats and require our support. We face a complex range of security challenges in our region. For the first time in the nation’s history, the Government will soon deliver a national security statement to the Parliament.
This document will provide a conceptual framework for dealing with the complexity, the density and the interconnectedness of the security policy challenges Australia now faces. The document will bring greater discipline to the way we approach national security policy at all levels of government and across the full dimensions of the threat spectrum.
Sitting under the national security statement we will have a series of other guiding documents. The Defence White Paper will be delivered in the first half of 2009. The Government has made it clear that it will require a comprehensive White Paper.
The White Paper will set out the strategic terrain we foresee for the region and beyond. And we want a White Paper that addresses all of the defence enabling capabilities – such as personnel, IT, logistics and facilities – which are also critical to ensuring military success.
In addition, the Government has made it clear that we expect to see a White Paper that is properly costed. We want a properly costed resource plan that covers major capability projects, and the critical support areas that I mentioned.
The White Paper will outline how we propose to structure our defence forces to meet those challenges for the long-term future and it will outline how we fix any gaps in the short term.
It will be a long-term planning document that will bring new discipline to our defence capability planning. And I would like to say again tonight to this audience that this will include a particular emphasis on the maritime capabilities that will become increasingly important in our strategic environment in the Asia Pacific region over the period of the White Paper.
At the same time as planning for our long-term defence needs, we are strengthening our defence cooperation with crucial partners in our region. Enhancing our security and defence cooperation has been a theme of my visits to Japan, the Republic of Korea, Indonesia, Malaysia and Singapore.
We also propose to enhance our security cooperation with India and our security policy dialogue with China. Australia’s long-term national security also hinges on our long-term economic security. The Global Financial Crisis is an important reminder of the close links between economics and security.
The Western Pacific will be the leading centre of global change in the 21st century. The region’s economic weight is increasing rapidly. This is also driving substantial changes in strategic weight.
The challenge for all nations in the region is to cooperate effectively to manage the economic and security changes and challenges that are unfolding. It will take some time for the full effects of the crisis to be felt.
But unless we handle the crisis effectively on a global and regional basis, it has the potential to increase the fragility of some of the economies of the region and to reduce their ability to respond to the challenges that lie ahead.
History should be our teacher. That is why the common resolve of the G20 recently convened in Washington to shun protectionism and to embrace free trade is a positive sign for the future..
We know now that closing our borders is a counter-productive approach to economic problems such as the global financial crisis. But history also highlights the need for a coordinated global response to the crisis.
President Bush’s initiative in convening the G20 Summit was important, positive and necessary. But the Washington Summit is but the first step in a long process of global economic recovery. The crisis needs to be addressed through determined, coordinated and positive action in the critical months that lie ahead.
G20 leaders have laid down a clear path to help us weather the current crisis to prevent this type of crisis from happening again, and by acting on the demands of the real economy. Of these measures, coordinated fiscal stimulus is critical for the difficult period that lies ahead.
A range of countries have announced fiscal stimulus packages to respond to the crisis. The US has announced a 168 billion US dollar package. China has announced a package totalling 585 billion US dollars. Japan has announced a package of 68 billion US dollars. Korea has announced a package of 11 billion US dollars. And Australia’s own package amounts to 7.7 billion US dollars (or 10.4 billion Australian dollars).
These packages will go some way to responding to the estimated three per cent reduction in global growth resulting from the crisis. But more will still need to be done. The packages announced so far highlight a common understanding that targeted and timely fiscal measures remain an important tool that governments must use to support economic growth.
In our discussions at the G20 Summit on Financial Markets and the World Economy last weekend, leaders frequently came back to this as the reference point for future action.
And this was explicitly recognised in the Declaration from the meeting. This summit brought governments together to deal with the critical challenges of the global economy.
The statistics on the G20 speak for themselves. The members account for:
- 80 per cent of world trade;
- ·85 per cent of the world’s banking system;
- 85 per cent of global gross national product.
But the importance of this group is about more than the statistics. It brings together developed and emerging economies. It brings together nations from the Americas, from Europe, and from Asia.
Its strategic economic weight and its representative nature provide the G20 with potential for real long-term authority. Of great importance for Australia – and for the United States – is that the G20 includes key Asian partners.
China and India as two emerging economic giants must be part of solutions to global economic and financial challenges. So too must Japan – still the world’s second-largest economy.
South Korea also has an important role to play – it is a major exporting nation and a country that weathered the 1997 Asian financial crisis and came out stronger.
Indonesia is a voice for South East Asia in the G20 – in addition to being the largest Muslim country in the world. What this means is that – alongside Australia – these nations give our region a greater voice in the affairs of the global economy.
There will be another Summit by the end of April next year to confirm the action agenda agreed in Washington. With the increasing economic importance of the Asia-Pacific region, the G20 will provide a continuing forum for the countries of the Asia-Pacific to craft the international responses to the financial crisis and its impact on the real economy.
Coming as it does just a week after the G20 Summit, the APEC Economic Leaders’ Meeting in Lima provides an opportunity for APEC economies to commit to the actions agreed in Washington.
APEC has always demonstrated an ability to respond to new challenges that threaten its core objectives of trade and investment liberalisation.
The crisis and the international response is already at the top of the APEC leaders’ agenda.
As a group of economies accounting for more than half of global GDP and around half of world trade, APEC is well placed to provide political and practical support to the consensus reached on the crisis in Washington.
APEC can also assist by staying focussed on removing barriers to trade across the region and beyond. Australia has been a leading proponent of the removal of trade barriers in the region And Australia will continue to emphasise the importance of free and open trade.
The international community must at every level work together to ensure responses to events such as the global financial crisis do not include a resort to protectionism nor undercut efforts toward economic growth and development in the region.
Regionally, the Bogor Goals of removing trade and investment barriers in developed countries by 2010 and developing countries by 2020 remain the clearest commitment of APEC leaders to open markets across the region.
And Australia has demonstrated its commitment to the goals of free trade through the negotiation of free trade agreements with a range of economies throughout the region.
On top of our free trade agreements with the United States, New Zealand, Thailand and Singapore, we signed a free trade agreement with Chile in July this year.
We are actively negotiating FTAs with Japan and China. When I met President Hu Jintao in Washington on Sunday, we agreed to adopt a fresh approach to speeding up the conclusion of this agreement. And we are both committed to achieving a high-quality outcome as soon as we can.
We have finalised an ASEAN-Australia-New Zealand Free Trade Agreement which covers a combined market of around 600 million people with a total GDP of more than two trillion US dollars.
FTAs can boost trade by expanding the size of the market that exporters have good access to.
When you look at the size of the combined market we have delivered though all of our FTAs taken together, it amounts to nearly 30 per cent of global GDP. If we succeed with China and Japan the size of that market reaches around 45 per cent of global GDP.
And we are committed to promoting APEC’s agenda on regional economic integration and continuing on the path towards a Free Trade Area of the Asia Pacific. These developments are important, and bilateral and regional free trade agreements are a valuable means of achieving significant trade liberalisation outcomes
But it is important to note that an ambitious outcome from trade liberalisation negotiations through the WTO remains the best way to bring about trade liberalisation that has the greatest positive impact on the global economy.
The reinvigoration of the Doha Round of trade negotiations will be an important basis of economic growth by helping promote a free and open global trading regime.
And Australia remains strongly committed to achieving an outcome from these negotiations. I was very pleased that the G20 Summit agreed to the goal of reaching a new global trade agreement by the end of 2008. And Australia will be working to encourage cooperation toward the successful conclusion of the Round.
As a striking example of the interdependence of nations and the interconnectedness of the challenges we face, the global financial crisis highlights the need for coordinated approaches to resolving problems.
We need to ensure that we have a regional architecture that can drive regional cooperation to meet existing and emerging challenges. Regular dialogue across all areas of government and at all levels will be essential to positioning the region to address the range of security and economic challenges which it is set to face.
Challenges such as:
- Managing the geostrategic changes taking place in the region;
- Responding to threats such as terrorism and natural disasters and emerging challenges such as food and resource security;
- Maintaining and building on free, open trading regimes; and
- Acting on climate change.
The development of ASEAN is a great example of how regional organisations can contribute to security and stability. ASEAN was created at the height of the Cold War when the future of the region was less than certain. The South-East Asia of the 1960s had been divided by the conflict in Indochina. It was a group of countries with few substantive ties and diverse political, social and religious systems.
Today, ASEAN has helped to forge a sense of community across what remains a diverse region. Through building dialogue, ASEAN has developed cooperation, rather than confrontation as the driver of responses to new challenges the region faces. And it has played a crucial role in maintaining peace in the region.
This experience illustrates the importance of pre-emptively shaping our future environment to position the region to address future challenges. And highlights the need for us to develop strong institutions which foster trust and cooperation to underpin peace and stability. This is a key factor driving the Government’s proposal for an Asia-Pacific Community.
Through this we have started a constructive dialogue on the development of a broad-ranging, effective forum for engagement between regional countries.
I am pleased that the initial consultations in the region of my Special Envoy for the Asia Pacific Community, Richard Woolcott, have gone well. More discussions will occur. As I outlined in my speech to the Asia Society in June, this will be a gradual process. That is as it should be.
Our ambition remains to create an Asia-Pacific Community by 2020. And that is a single pan-regional body that brings together the United States, China, India, Indonesia, Japan and the other countries of the region with a broad agenda to deal with the political, economic and security challenges of the future.
The challenge will be to determine the best option for the development of such a body which best meets the interests of the region.
I will be discussing the proposal further with leaders in Lima this weekend. Our discussions will continue in capitals as well in the year ahead. And my Special Envoy will be looking to consult with the new US Administration at the earliest opportunity.
The Western Pacific is a dynamic environment. The geo-political terrain is shifting. The economic character is changing as new powerhouse economies emerge. It is the emerging centre of the climate change agenda. The challenges this presents highlight the need for cooperative responses to developments in the region. And the importance of shaping our future environment by developing mechanisms to address these challenges.
Australia and the United States are well placed to work together in the region. We have shared values. We have shared interests. And we have a shared future. May our common resolve be to build an Asia Pacific century that does not repeat the errors of the European century of the past – one characterised by national conflict; but instead a century that by dint of our efforts together is peaceful, prosperous and sustainable for all the peoples of the region.