Australia And Japan: Adapting To A Rapidly Changing Environment
Address by the Deputy Prime Minister Leader of the National Party Minister for Trade The Hon Tim Fischer MP to the CEDA Australia-Japan Dinner
ANA Hotel, Sydney, 5 May 1999
(Check Against Delivery)
Introduction
Ladies and gentlemen.
It's a great pleasure to be able to speak tonight on the state of play in this most important of Australia’s bilateral relationships.
I'm very much aware of the good work that CEDA's Australia-Japan Committee has been doing, and I'm looking forward to hearing from you on this subject at the conclusion of my address.
What I'd like to do tonight is to give you a brief outline on the Australia-Japan relationship from the Government's point of view, looking at the many positive aspects but also at those issues where we do differ. I will also say something about our response to the challenges of the Asian economic crisis.
Australia and Japan: Strong and Growing Ties
There is no denying the fact that Australia and Japan have an excellent long-standing relationship. This is something we ought to celebrate in these days when trade frictions and political differences, real or imagined, are all the media is interested in.
Since coming to office in 1996 our Government has worked hard, together with our Japanese colleagues, to strengthen and deepen this relationship further.
Perhaps the most obvious example of our progress has been the agreement by Prime Ministers Howard and Hashimoto to hold annual bilateral summit meetings. The third of these meetings is scheduled for later this year.
Of course, there have been some very momentous regional developments for us to deal with over the past two years, including the implications of the regional economic crisis, on which I will expand shortly.
And we are working closely together on issues like Indonesia and East Timor, developments on the Korean Peninsula, and the danger of further nuclear proliferation in South Asia.
The bedrock upon which the relationship is built is, of course, trade. Even with the current economic downturn, Japan is still the world's second largest economy and ranks as our largest export market and trading partner.
In 1998 our total trade with Japan was A$30.7 billion. Of that figure, A$17.4 billion was Australian exports (which accounted for around 20 per cent of our total merchandise exports), and A$13.3 billion were Japanese imports.
Our exports rose by 3.5 per cent for the year, while Japan's exports to Australia were up by 16.7 per cent - not a bad result in the middle of the region's worst crisis for half a century!
During that time, Australian companies have scored some remarkable successes. To mention just a few:
Outside the trade sphere, our ties continue to flourish. 12,000 Japanese are currently studying in Australia, and 750,000 Japanese tourists visited Australia last year. In turn, 17,000 young Australians are studying Japanese in their final year of secondary school or at tertiary level.
During his visit to Australia earlier this year, Foreign Minister Komura announced that Japan would allow visa-free entry for short-term Australian visitors to Japan. This reciprocates Australia's Electronic Travel Advisory System (ETAS) which effectively provides equivalent treatment for Japanese visitors.
I said at the beginning of my remarks that I would refer to some matters on which Australia and Japan differ. That differences exist should come as no surprise, since even in the best of relationships, viewpoints will never be completely identical. But such matters should always be kept in perspective. Our relationship is mature enough to handle the odd bump.
Most recently, we have differed over rice tariffication. We understand Japanese sensitivities in this area, but Australia is committed to giving our agricultural products a fair go in the international market-place, just as Japan has benefited from lower barriers to its exports through the WTO.
On this matter - and on other matters like the management of Southern Bluefin Tuna stocks - Australia and Japan maintain a "robust" dialogue, to use the diplomatic jargon. The very fact that we have such close and strong ties allows us to differ strongly every now and then.
There are other challenges ahead for Australia as our relationship heads towards the new millennium.
In the short term, we will have to respond and adapt to the decline in Japan's need for some raw materials like iron ore and coal, which currently account for around 35 per cent of our total exports.
We both must also closely examine the longer-term implications of implementing the Kyoto greenhouse gas reduction targets. We need to increase co-operation in new fields like information technology and financial services while we continue to develop more traditional and very important areas such as food exports, automobiles and tourism.
Responding to Asia's Crisis
The other area where Australia and Japan have been working very closely together is on our response to the Asian economic crisis.
Both our countries recognised very early on that the crisis was not merely a blip on the region's economic radar, and have worked hard to meet the challenges presented by the downturn. It is no accident that we are the only two countries to have contributed to all three IMF packages for Asian countries.
Part of the longer-term international response to the crisis must be a thorough and level-headed examination of the global financial architecture. I believe that there is good scope for Australia and Japan to work together to improve the effectiveness of the system.
Australia has had two other advantages in being able to deal with the onset of the Asian crisis. The first has been the determination by the Government to develop markets for Australia outside our traditional markets in East Asia.
The success of this policy has allowed us to avoid some of the harsher impact of the crisis, as significant growth in markets like Europe and North America has helped to offset export declines in the crisis-hit countries of Asia.
Our second advantage has been solid and strong domestic growth. With one of the highest growth rates in the developed world, we've sustained low inflation and low interest rates, have a budget in very healthy surplus, and have unemployment and industrial disputes at record lows.
Such a result, in the middle of the worst regional crisis since the Second World War, is nothing short of outstanding, and is due in no small measure to our Government's commitment to economic reform and liberalisation. When we came to office in 1996, we were determined to make the Australian economy more competitive and more responsive to global change. I believe we have done so. But the task of reform is not complete, and we will stick with it.
Australia must not isolate itself and stagnate. It must embrace the world. And ours is an example which we unashamedly encourage the world - Japan included - to embrace. It is in the interests of both countries that Japan quickly re-vitalises its economy and continues the process of reform that will ensure its return to sustainable economic growth. We want to see a strong and confident Japan on the global stage, one that will remain a key partner for Australia and for the foreign and trade policies we both wish to pursue.
Conclusion
Ladies and gentlemen, Japan has been Australia's most important export market for three decades and we expect it to remain so for at least the next ten years. This is a trade relationship we value highly, and Australia will do all it can to ensure it prospers.
But bilateral relations are, of course, much more than trade. I am encouraged that Australia's relationship with Japan in all its facets - economic, trade, security, and people-to-people - continues to grow in size and maturity, to the ever-increasing benefit of both countries.
I thank you for your attention this evening, and I wish you every success with your efforts to strengthen and expand our bilateral relationship.