Address by The Hon Tim Fischer MP, Deputy Prime Minister, Leader of the National Party, Minister for Trade, to the Japan-Australia Commerce Agreement 40th Anniversary Seminar,Sydney, 14 July 1997)

  Introduction

I am delighted to have the opportunity to address this Seminar, along with my colleague, Japan's Minister for International Trade and Industry, Mr Sato.

Mr Sato's visit to Australia is a highly symbolic gesture, commemorating the visit to Japan of Australia's Trade Minister forty years ago to sign the Commerce Treaty. It is also symbolic because Mr Sato is the nephew of Prime Minister Kishi, who was also Foreign Minister, and who signed the Commerce Treaty on behalf of Japan in 1957. I am pleased Mr Sato and I can be here together today to share our thoughts on the closeness of the Australia-Japan partnership and the prospects for even closer ties in the future.

At the outset I am pleased to say that, today, Australia and Japan have a thoroughly modern and mature relationship. This is in large part due to the ground-breaking 1957 Commerce Treaty which represented a formal shift in attitude for both Australia and Japan. By signing the Treaty, our countries signalled they were embracing a new era, through forging closer ties and engaging more fully with our region.

The Treaty was the product of sustained hard work on both sides, a genuine desire for mutual understanding and friendship, and a vision of a shared and prosperous future. These themes, I believe, also characterise Australia-Japan ties now.

Today I would like to discuss three things:

• the historical significance of the Commerce Treaty and how it led to deeper and broader ties;
• the importance of the Australia-Japan partnership to Australia; and
• the excellent commercial outlook for the Australia-Japan partnership as Japan's economy rejuvenates and Australian exporters capitalise on the wealth of new opportunities with our largest trading partner.

The 1957 Commerce Treaty - A New Beginning

The 1957 Commerce Treaty resulted in both immediate and long term achievements.

Its immediate impact was that it began a higher level of official interaction which has deepened and broadened immeasurably since then.

Reciprocal Ministerial visits started after the war when Australia's then Prime Minister, Robert Menzies, made his first visit to Japan in April 1957. This was followed three months later by John McEwen, then Minister for Trade, who signed the Commerce Treaty on Australia's behalf. Prime Minister Kishi reciprocated these visits - the first by a Japanese Government leader - in December 1957.

Australia's then Minister for External Affairs, Richard Casey wrote to John McEwen in 1959 that "the goodwill shown on both sides and the business-like administration of the Trade Treaty have contributed much to the steady improvement in general relations".

This shared goodwill - along with ever more extensive high level exchanges - has flourished since 1957 and today we have many contacts at official and unofficial levels.

The visit to Australia by Prime Minister Hashimoto earlier this year resulted in the announcement of annual Prime Ministerial exchanges and the promise of a `Partnership Agenda' to deepen our ties still further.

The second major consequence of the Commerce Treaty was that it gave tangible form to two of Australia's most fundamental and enduring policy commitments.

The first was Australia's desire to engage constructively with countries in our region. And the second was Australia's desire, where possible, to promote an international role for Japan commensurate with its economic importance.

The Treaty showed a great deal of farsightedness on both sides. Those who negotiated and supported it recognised that the long term national interests of Australia and Japan were moving closer together. As Prime Minister Kishi said during his visit to Australia in December 1957, the Commerce Treaty and the Colombo Plan were evidence not only of Australia's desire to assist the development of the region, but of Australia's "awakened Asia-mindedness". It was a formal recognition that our future was tied to our region.

The third major consequence of the Commerce Treaty was that it assisted the subsequent dramatic growth in trade relations between our two countries. This is something I would like to speak a little more about.

Trade with Japan and Jobs for Australians

Australians often have genuine concerns about how overseas trade and investment translates into jobs and economic security. Let me say there is no better example of how trade creates jobs than our long standing trade ties with Japan.

The opening statement of the Department of Foreign Affairs and Trade's new publication - "A New Japan: Change in Asia's Megamarket" - underlines the commercial significance of Japan and its close relationship with Australia. It is worth quoting:

Japan has been Australia's largest trading partner for three decades, and is our third largest foreign investor. Japan buys one fifth of Australian exports, supplies nearly one sixth of Australian imports, provides one fifth of our inbound tourists [about 800,000 Japanese visitors a year], is Australia's principal market for major commodities and is an increasingly important buyer of highly value-added goods and services. Japan and Australia also enjoy strong people-to-people, cultural, academic and strategic ties, creating the basis for an increasingly important partnership in the twenty first century.

This snapshot of the diverse Australia-Japan partnership certainly makes you stop and think. But what does it mean for jobs in Australia ?

The Australian Bureau of Statistics calculates that 345, 000 Australian jobs are directly or indirectly linked to our export trade with Japan - I repeat : 345,000 jobs.

The modern Australia-Japan partnership is anything but a one-way street - it has been forged through strong commercial ties which have provided immense benefits to both countries.

Japan has long been Australia's most important trading partner. In turn, Australia has literally fuelled Japan's post-war economic growth.

Australia continues to be a reliable supplier of agricultural commodities and mineral and energy resources. We now supply over half of Japan's coal needs as well as a large percentage of its liquid and natural gas requirements.

Small wonder, then, that rural Australia was so supportive of the Commerce Treaty in 1957 - they saw clearly the immediate and long term complementarity of our two economies.

More than that, the steady two-way flow of investment and expertise has made a vitally important contribution to the economic development of both countries.

Natural Partners in the Asia Pacific Region

Australia and Japan are also natural partners that cooperate extensively in our Asia Pacific region.

Our shared commitment to trade liberalisation is one example of this. We believe that freer and more open trade and investment encourages a more efficient allocation of resources. But, above all, it is the best means of sustaining the sort of economic growth that produces new jobs and improved standards of living for all.

Australia and Japan are deregulating our own economies. And I am pleased to say that tariffs and other trade barriers across the region have been reduced substantially, bringing real benefits to Australia, Japan and all regional economies. There is, of course, plenty more scope for further liberalisation across the region.

Australia and Japan were among the first countries to promote the concept of closer regional economic cooperation and trade liberalisation, which eventually led to APEC. Our two Prime Ministers recently reaffirmed our shared view that APEC is of central importance and we will continue to work closely together in APEC. This is essential for two main reasons.

First, APEC members come together with the aim of promoting sustainable growth in the region, with a vision of free trade and investment by 2010/2020. And, second, in that important collaborative process, APEC encourages a greater sense of regional community, shared values and common interests.

At the global level, Australia and Japan continue to work together closely to make the multilateral trading system more effective. Last year, for example, we cooperated with other APEC economies to achieve the ground-breaking Information Technology agreement at the Singapore Ministerial Meeting of the World Trade Organisation.

The outlook for even closer and more constructive ties between Australia and Japan is uniformly bright. Australia will remain a natural partner for Japan in the Asia Pacific region. The ease and frankness of our dealings and our common interests, objectives and values will continue to bind us together.

A New Japan and Prospects for the Energetic Australian Exporter

With the deregulation of the Japanese economy underway, and the implementation of its Uruguay Round commitments coming into effect, Japan's import market is booming. Australian businesses should therefore think seriously about Japan when exporting.

Japan is doing its best to encourage foreign investment and has great potential in exciting new areas. I cannot emphasize enough that right now is the time to look again at Japan.

In that context, DFAT's report on Japan I mentioned earlier explores these opportunities in detail and I recommend it to you. Points worth noting include:

• Australian exporters should remember Japan's eight regions are large Asian markets in their own right, with the three largest regions - Kanto, Kansai and Chubu - having larger GDPs than all other Asian economies, including China. Even the smallest region, Shikoku, has a GDP larger than Hong Kong, Malaysia and Singapore.
• Many exporters think Japan is too costly to enter, but Japan has committed itself to deregulation and cutting costs to generate growth. Japan is becoming more open, financial reform is underway, the distribution system is being streamlined, land prices are on a downward turn, and tariff levels are below US and EU levels.
• Furthermore, Australia has long established trading channels and networks with Japan. We have an excellent reputation and we can offer expertise and high quality products in booming import sectors such as housing and construction, processed foods, certain elaborately transformed manufactures and services.
• In housing and construction we offer world-class methods in building services.
• In processed foods, we should branch out into new niche markets as Japanese tastes become more internationalised. We have a clean environment, are a counter-seasonal supplier and have comparative advantage in agricultural production.
• In manufactures, Australia is building a fine reputation in Japan in the areas of multimedia software, medical equipment and fast ferries, to name a few.
• In services, we can offer assistance to Japan in meeting the pressing needs of an ageing population - a social issue we also face here - and Australia has excellent standards in health, aged care and nursing training services.

Conclusion

In conclusion, the 1957 Commerce Treaty was only possible because Australian and Japanese leaders exercised great leadership and foresight. They saw that a prosperous future for all Australians and Japanese lay in greater engagement with each other and the Asia Pacific.

What is obvious to us in 1997 was not so obvious in 1957 - their achievement required vision and perseverance.

Today, I have given just a few examples of the enduring value of our partnership and the many fresh opportunities available in our trading relations. If we are to harness and exploit these new opportunities to the fullest, we must continue to employ imagination and sustained energy in all areas of the bilateral relationship.

Last - but certainly not least - I would like to draw you attention to an important document. To mark the 40th anniversary of the Commerce Treaty, today Mr Downer and I launched the Department of Foreign Affairs and Trade's compilation of documents on the Treaty, covering the years 1951 to 1959. This compilation is the first in a new series of Documents on Australian Foreign Policy.

It is most fitting that the first country chosen in this series was Japan and the first topic was the Commerce Treaty as the Treaty is a very significant landmark in Australian trade and foreign policy.

Without doubt, it laid the essential basis for a dramatic strengthening of our ties with Japan in the postwar years, a country of absolutely central and enduring importance to all Australians. And this Government is committed to continuing to build on that foundation for an even brighter future together.