Introduction
Governor Aso, Mr Ohno, Chairman of the Kyushu-Yamaguchi Federation,
distinguished guests, ladies and gentlemen.
I'm delighted to have this opportunity to visit the island of Kyushu
during my visit to Japan. It's a great pleasure to be here today
and to celebrate the strength of Australia's business relationship
with Kyushu - an important element in our broader partnership between
Australia and Japan as a whole.
Establishing Australia's Consulate-General in Fukuoka ten years
ago was a positive statement about our developing business relationship. Recognising the tenth anniversary of that event gives us an opportunity
to take stock of our relationship and think about where it might
lead us in the future.
It also is a good time to thank you, the local business community,
for your support. I am delighted that so many of you are able to
attend our function today. I look forward to meeting you shortly
at the reception.
The Australian economy
Why is Australia such a good business partner for Kyushu, and Japan
as a whole? Essentially, it's because the Australian economy is
so robust. Last year it grew by over 4% - the highest growth rate
in the developed world.
There are a number of reasons for this. We've gone through a long
period of structural reform that has left us much better equipped
to compete in the international marketplace. Our new tax system
has reduced the tax burden for Australian businesses, particularly
small business. Major reforms to our waterfront have made Australian
ports among the most efficient in the region.
We've also developed our services and high technology industry
sectors - Australian Governments are now 100% on line.
Our record of economic management and fiscal discipline is strong
- we've restrained government spending and retired public debt.
And all this has led to the lowest interest rates in thirty years,
lower inflation, lower unemployment and, importantly, significantly
higher productivity.
Put simply, the Australian economy is strong, 'new', innovative,
and highly productive. And our economic growth is increasingly linked
to our trading efforts.
Trade has always been good for Australia. It is a prime source
of our high standard of living. We have long relied on overseas
markets buying our commodities. And we now produce a huge range
of world-class goods and services.
Australia and Japan
Our current trade performance in Japan mirrors a very successful
Australian economy and export effort. Japan has long been our largest
export destination.
Let's break down that impressive fact a bit. Australia's merchandise
exports to Japan account for around 20 per cent of our total merchandise
exports.
Meanwhile, Japan is the second largest source of merchandise imports
for Australia. In 2001, those merchandise imports were valued
at A$15.3 billion.
Japan is Australia's second largest market for services exports,
while Japan is also the fourth largest source of services imports,
worth A$2.0 billion in 2000.
Last year our merchandise exports to Japan increased by eight percent,
despite the economic slowdown in this country. We still enjoy a
healthy merchandise trade surplus of $8.5 billion.
Our exports to Japan have traditionally been concentrated on five
products - coal, liquefied natural gas, iron ore, beef and aluminium. Exports of other commodities such as wine, cheese, fruit and vegetables
exports have also grown considerably.
But in recent years, our trade has diversified away from primary
products and resources. A new set of complementarities (in areas
like software, communications, financial services, health and medical
services and biotechnology) are emerging. Growth in the export
of manufactures, especially elaborately transformed manufactures,
is increasing. And with increased domestic deregulation in Japan,
more opportunities are emerging for Australian exporters.
Of course, one of the best examples of high technology trade between
Japan and Australia occurred just today right here on Kyushu.
The total stock of Japanese investment in Australia was A$49 billion
as at 30 June 2000, making Japan the third largest investor in Australia.
Japanese investments are concentrated in real estate, mining, commerce
and the services sector. Australian investment in Japan is
A$15 billion as at 30 June 1999. Although much smaller than
the amount your country has invested with us, in comparison to the
size of our economies Australian business has shown great confidence
in Japan.
These figures underscore the importance of the Australia-Japan
relationship, but it only takes a quick look at bilateral trends
to see that more can be done to help the relationship to reach its
full potential. Our bilateral trade and investment trends patterns
do not reflect those seen in economic relations with other industrialised
economies. Australia's exports to Japan in growth areas, such as
services and highly developed manufacturers are still dwarfed by
those to economies such as the United States and European Union. Similarly, bilateral investment flows are far smaller than those
with comparable economies.
It is because of this unrealised potential that Australia is pursuing
a bilateral trade and economic agreement with Japan. Such an agreement
would be an excellent way to increase bilateral economic integration
and cooperation. It could free up the cross-border movement of
business resources such as people, goods and services, capital and
information, and could focus on coverage of new sectors and areas
of growth.
An agreement would be complementary to initiatives under the WTO. And it would have a strong demonstration effect in updating perceptions
in the commercial relationship and highlighting new opportunities
from the changing structure of both our economies.
The business communities in Australia and in Japan are also looking
at ways to strengthen the bilateral relationship. Two separate senior
business study groups in Japan and Australia have just released
their reports recommending the development of a new economic partnership
between Australia and Japan leading towards a Free Trade Agreement.
It's an ambitious goal but in my discussions with Minister for
Foreign Affairs Kawaguchi, Minister for Agriculture Takebe and Minister
for Economics and Trade Hiranuma both Governments recognise the
importance of continuing to strengthen our business ties.
Australia and Kyushu
Australian Consulates were established in 4 regional cities of
Japan in 1992: Fukuoka, Nagoya, Sendai and Sapporo. It was recognised
at that time that, even though Japan had been Australia's largest
overseas market for more than 20 years, there were many untapped
opportunities for Australian business in regional Japan that could
not be serviced by our offices in Tokyo and Osaka.
As well as assisting Australian citizens in their regions, these
offices have made a valuable contribution to spreading and developing
political, economic, cultural and people-to-people links between
Australia and all corners of Japan. They have raised awareness
of Australia and developed close and friendly ties between local
governments and communities. They have helped to match hundreds
of small and medium sized local businesses with Australian businesses. And they have also helped to increase investment in both directions,
assisted thousands of Japanese students to study in Australia, and
encouraged many thousands of Japanese to visit Australia.
Thanks to particularly strong interest from businesses and people
in Kyushu, the Fukuoka office has been very successful in expanding
our ties. As a result, in 2000 the office was made a Consulate-General.
Over the last 10 years, the Fukuoka office has assisted around
750 Australian companies in their marketing activities in the Kyushu
region. The office assists from 30 to 50 Kyushu companies each
year to source products and services from Australia.
Key sectors and success stories
The Fukuoka office focuses on a number of important industry sectors,
including food and beverages, housing and building materials, education,
IT and marine and fast ferries. I'd like to mention a number of
success stories in those sectors along the way.
First, the food and beverages sector. With assistance by
our office, Kyushu companies have successfully introduced many Australian
food and beverage products into the Japanese market for the first
time, such as fresh chilled orange juice, semi-dried tomatoes, organic
grains and fresh strawberries.
One success story in this sector involves a cake shop owner in
regional Kyushu, Mr Matsuo, who was encountering difficulties during
the Japanese summer in securing reliable supplies of good quality
fresh strawberries. With assistance from our office in Fukuoka,
he determined that the potential existed for supplying strawberries
from Tasmania, the only area of Australia currently with quarantine
approval to export strawberries to Japan.
Mr Matsuo eventually established a company in Australia, Ichigo
Australia which made its first export sales to Japan in July 2000. Ichigo Australia intends to develop exports to a level of 2,000
tonnes valued at A$100 million, per annum, within 5 years.
Second, the housing and building materials sector. The
Fukuoka office has had a number of firsts in this area, including
the introduction of bricks and pavers into the DIY (hardware chain
stores) market and the introduction of an Australian softwood species
"Araucaria" (or Hoop pine) as a high grade building material.
And the first " mega brick" house in Japan was recently completed
by a local entrepreneur, Mr Mizumachi in Omuta City in the Fukuoka
Prefecture. Mega bricks are Australian clay bricks, which are twice
as large and heavy as traditional bricks and have large holes in
them similar to concrete blocks. Their fire proofing and insulation
properties are a good sales point. Once nationwide building approval
is given, these brick houses could help to revolutionise the cost
and appearance of Japanese housing.
Third, education. As a percentage of national numbers,
Kyushu send proportionately more students abroad than any other
region of Japan, and Australia ranks number 3 as a destination. Apart from generally promoting Australia as a destination for education
and training, the Fukuoka office works closely in building linkages
between Australian institutions and Kyushu institutions and education
providers.
A 'juku' (pron. "jookoo") [Minister: this is a cram school] operator
in Oita ("oyter") has, with help from our Fukuoka office, developed
a program with Insearch Language School in Australia which enables
Japanese students to improve their English to enable them to enter
a vocational course at the University of Technology at Sydney. They have created a " fast-track" and low cost "pathway" for Japanese
students who previously would not have been able to study abroad.
Fourth, information technology. Kyushu, known as " silicon
island" (because it has 10% of world integrated circuit (IC) production)
offers many opportunities for IT related businesses. The office
has taken a lead in promoting Australia's strengths in e-Government
to prefectural and city governments in this region. Already this
year the office has assisted IT/e-Gov missions to Australia from
Okinawa (sponsored by JETRO) and by Fukuoka Prefecture. In addition,
the office assisted a software company from Nagasaki and NEC on
e-Government visits to Australia.
Fifth, marine and fast ferries. Japan has the largest ferryboat
market in the world and the Kyushu region accounts for the major
share. Australia currently commands 30% of the world aluminium made
fast ferry market, but less than 1% of the Japanese market. We are
working to change that. Over the last year the Fukuoka office has
been focussing on introducing Australian fast ferries on new routes,
including routes between Kyushu and Korea.
This morning Iattended a seminar to mark the start of operations
on a new passenger ferry route between Kitakyushu and Ulsan in Korea
(the start of the official service is on 25 April), which will be
using a state of the art passenger ferry for this service.
I want to congratulate North West Bay Ships, a Tasmanian company,
on the sale of its first vessel to be used on this route. I understand
the companies involved have agreed to purchase a second vessel for
this route.
These new trimaran-hulled ferries will carry up to 420 passengers
at a level of speed and comfort currently unavailable on existing
Japanese-built vessels.
Moreover, they are some 25 per cent more fuel efficient than other
comparable vessels and have a range of highly attractive design
features such as "barrier-free" access for disabled people
and produce exceptionally low wash and wake - an environmental plus.
It is also significant that these ferries will contribute to the
boom in travelbetween Japan and Korea, and will be in operation
for the 2002 Soccer World Cup kick off on May 31.
We hope that they will contribute to closer ties between people
from Japan and Korea.
We recognise that Australian businesses cannot fully develop their
potential in the Japanese market without establishing themselves
in Japan. In recent years, many Australian companies, from wine
makers to IT, have established operations in Tokyo, but I am most
pleased to be able to announce here tonight, the opening of the
Fukuoka office for Australia's leading aquaculture producer of kuruma
prawns.
The company, Rocky Point Prawn Farms, has been exporting
all its production of live kuruma prawns to Japan for the last 7
years, mainly to the Tsukiji and Osaka auction markets. Rocky Point
has developed an entirely new business plan based on direct sales
to Japanese end users and the gift and catalogues sales markets.
Rocky Point chose Fukuoka not just because it is the most liveable,
affordable and friendly city in Japan, but because it offers easy
access to other cities both in Japan and in other parts of North
Asia. And most importantly, the owner of Rocky Point, Serena Zipf,
told me in Australia a few weeks ago, that she finds the people
here the most innovative and open in all Japan.
I hope you will support Rocky Point and its newly appointed representative
based in Fukuoka, Ms Sachiko Watanabe, who is sitting here in the
audience.
Conclusion
We in Australia are delighted that Kyushu has played such an important
role in developing further our trading relationship with Japan. The success stories I have mentioned demonstrate what has been achieved
in the very short time since the establishment of our office here
10 years ago.
We know that these successes could not occur without the generous
and vigorous support from the Central government agencies, Prefectural
and city governments, chambers of commerce, businesses, and the
local communities here in Kyushu.
On behalf of the Australian Government I would like to say Thank
You Very Much
