Introduction
Ladies and gentlemen
I am very pleased to be here this evening to launch American Australian
Business 2003.
I would like, at the outset, to acknowledge the work of the American
Chamber of Commerce and Stroudgate in putting together the AAB publication.
And I acknowledge the presence here tonight of Charles Blunt, CEO
of AmCham, and Bruce Adams, CEO of Stroudgate, and their respective
staff.
I also welcome those from the foreign diplomatic community in Sydney,
including the Deputy US Consul-General, Sylvia Johnson, and the
Senior Commercial Counselor, Robert Connan.
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Ladies and gentlemen
Australians and Americans have much in common.
We have similar values and ideals, and shared traditions, and together
we have sacrificed much to defend what we have in common - in every
major war of the 20th century, and a now a new struggle
for the 21st century.
Our sense of horror at the events of September 11 last year - where
many Australians also lost their lives - was intense.
And now we have had to go through a similar experience, with the
bombings in Bali on October 12 , that killed Australians, Indonesians,
Americans and people from many other nations.
None of those casualties has tempered our resolve to fight, and
win, the war on terrorism.
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Ladies and gentlemen
The depth of our kinship extends to our economic and commercial
relations.
The United States, by some measures, is now our largest overall
trading partner.
Two-way merchandise trade, for example, has increased $4.6 billion
over the past three years, to $33.5 billion.
And the United States continues to enjoy a substantial trade surplus,
at some $9.5 billion.
The United States is also the largest investor in Australia, with
some $63 billion invested directly in our country.
Indeed, US firms in Australia, such as Coca Cola, GM, Ford, Campbells,
Philip Morris, NRG Energy and Con-agra, employ nearly 300,000 Australians.
Of course, many other US companies - household names - have recognised
the value of investing in Australia and basing their headquarters
for regional operations.
They include IBM, Unisys, American Express, Citibank and Western
Union.
Given our size, we also are not an insignificant player in the
United States.
Australia ranks 15th as an export market for US goods,
and 11th as an export market for US services.
We are the 11th largest provider of foreign direct investment
in the United States, with direct investment of $95 billion in 2000-2001.
It is interesting that Australia invests more in the United States
than does the United States in Australia.
Indeed, Australian companies are the eighth largest foreign owner
of US assets, employing around 85,000 American workers.
They are leaders in broadcasting, mining, shopping malls, real
estate management, construction, building materials and steel manufacturing.
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Ladies and gentlemen
Australia's overall international economic strategy is to pursue
opportunities for market opening at the multilateral, regional and
bilateral levels.
Those opportunities must complement each other - and ultimately
must support the global trade negotiations now under way at the
World Trade Organisation.
That is why we continue our work in APEC - on transactions costs
. on governance . on non-tariff barriers . and on trade and investment
facilitation.
That is why we have established a closer economic partnership to
better integrate Australia, New Zealand and the ten members of
ASEAN.
That is why we are negotiating free trade agreements with Singapore
and Thailand, and bilateral economic agreements with China and Japan.
It is also why we have proposed a Free Trade Agreement with the
United States.
I am much encouraged by the recent passage of Trade Promotion Authority
in the United States Congress.
And we are delighted by the announcement by the Administration
last month that an FTA with Australia is a high priority for the
United States.
A number of arguments for an FTA have been put forward on both
sides of the Pacific.
We think many of them are compelling.
First of all, of course, there would be the straightforward economic
gains from reducing remaining barriers to trade between us.
Second, there would be a very significant 'head turning' effect
from an FTA in attracting investment, with subsequent gains in employment
and productivity.
Third, an FTA would result in greater business integration, as
Australian and US companies realise synergies in innovation, research
and development, material sourcing, product development, marketing
and information technology.
Fourth, an FTA could be an important factor in "competitive liberalisation",
whereby an FTA has an important 'demonstration effect', raising
the bar for other trade negotiations, in particular at the WTO.
Fifth, an FTA would help engender a broader appreciation - in both
countries - of our alliance and our common role in helping underpin
the stability and prosperity of East Asia and the Pacific.
This is now doubly important given the nature of the threats to
security - and especially to Western interests - in the region.
Of course, the proposal for an FTA deserves vigorous and thorough
debate - a contest, in Australia and in the United States, that
has begun in earnest.
Personally, I find this development very encouraging: it means
the proposal has legs, and that people are sitting up and noticing.
Some critics have suggested that negotiating FTAs will detract
from the global trade negotiations underway at the World Trade Organisation.
They argue that it risks creating commitments that are at odds
with our commitments made at the WTO.
But it is in both US and Australian interests for any FTA to be
comprehensive, and thereby entirely consistent with our WTO obligations
and commitments.
Otherwise we risk the proliferation of third party FTAs that are
not WTO consistent.
And as I have just stated, we think an FTA is a way of improving
what we get out of the WTO negotiations, which often risk being
a lowest common denominator outcome.
The second broad criticism of the proposed FTA has been in relation
to agriculture.
Critics suggest we will get nowhere on agriculture given the extent
of vested interests, and the sorts of demands each country is likely
to make.
I would not for a moment seek to deny the sensitivity and difficulty
agriculture will pose in negotiating an FTA.
No-one is under any illusion about the extent of our distaste for
the US Farm Bill, the disruptive export enhancement and food aid
programs, or their blatantly protectionist quota regimes on sugar
and dairy products.
That agriculture will be difficult is not under question. But
that is no reason simply not to try.
Some people have asked why an FTA with Australia should be a priority
for the United States.
Well, of all the FTAs the United States is currently negotiating,
or is proposing to negotiate, Australia is by far the single largest
and most advanced economy.
In fact, our economy is bigger than the combined GDP of the twelve
other countries with which the Administration is either negotiating,
or has proposed negotiating, bilateral FTAs.
[Singapore, Chile, Morocco, the members of the Southern Africa
Customs Union (5), and four central American countries - Guatemala,
Nicaragua, Honduras, and El Salvador].
Not only is Australia a significant and advanced economy in its
own right - it is also a strategic economy vis-ą-vis the Asia-Pacific
region.
We are the fourth largest economy in East Asia, and heavily enmeshed
in the future growth of the region through our role as a leading
supplier of primary goods - minerals and agriculture, in particular
- and associated services.
The same qualities that makes us attractive for US companies to
invest and base their regional headquarters in Australia also make
an FTA with Australia a strategic asset for the United States.
In short, what we offer is the prospect of a high quality agreement
with a dependable and mature partner in a vital strategic location.
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Ladies and gentlemen
In the end, the biggest single benefit of an FTA - between nations
with already strong historical, cultural, and political ties - is
still closer integration.
An FTA is not an end in itself, but rather a means to an end -
stability, security and prosperity.
And to that end, I call on you all to lend our proposal for an
FTA your strong and consistent support.
That way we can all look forward to a more assured future.
I declare the Australian American Business publication officially
launched.
Thank you.
