Speech to the Australia and New Zealand Chamber of Commerce
Tokyo, 14 November 2006
“Australia and Japan – Realising our Potential”
Introduction
Mr Lester, members of the Australia and New Zealand Chamber of Commerce in Japan, distinguished guests, I am very pleased to have the opportunity to speak to you during my first visit to Japan as Trade Minister.
The past week or so has been a pretty big one for Australia and Japan.
The rugby match played here in Tokyo ten days ago between Japan and an Australian Prime Minister’s XV, was not only a great display of rugby, but also of the close, friendly spirit of relations between Australia and Japan.
The fact that Prime Minister Abe attended the match as a mark of the importance he places on the relationship, highlights the high regard with which Australia and Japan consider each other. While Prime Minister Howard and I were very happy that the Australian team won, the game was less about the result and more about an affirmation of the great relationship we share.
Following less than a week later, last Friday’s game between Japan and the Queensland Reds, was a further display of our close links in the sporting arena.
But if it’s results that matter, many of you would probably have noticed that last Tuesday was a much better day for Japan, with not only first, but also second place in one of Australia’s premier sporting events.
Delta Blues’ victory in the Melbourne Cup, Australia’s richest and most famous horse race, was the first ever by an Asian-trained horse in the event’s 146 year history. The result brought Australia to its feet, Japanese jockey Yasunari Iwata to tears and made Japan the toast of Australia.
Sporting events like these play a big part in bringing Australia and Japan together and in developing relations between our peoples and our countries more broadly.
In a very different, but by no means less important way, business organisations such as the ANZCCJ also play a very important role in strengthening links among the Australian business community in Japan and between Australian and Japanese business. I value highly the opportunity to meet you and speak with you this morning.
My visit comes at a time when the Australian Government has a very active agenda in its relationship with Japan. The importance of this for Australia, and the importance which Japan also places on the relationship, was clearly borne out in my meetings with Japanese ministers yesterday.
Australia-Japan: A vitally important relationship
The Australia-Japan partnership is a vitally important relationship for both countries.
To use the words of Prime Minister Howard, “Australia has no greater friend in Asia than Japan”.
This friendship, as Prime Minister Abe rightly points out, has its basis in our shared values such as democracy, human rights, market-based economies and the rule of law.
Australia and Japan are two of the great democracies of the Asia-Pacific region.
We share alliances with the United States, and we share the view that the continuing engagement of the United States in Asia is fundamental to regional prosperity and stability.
And the cooperation between Australia and Japan reflects our shared values and interests and our growing strategic relationship.
For example, we are committed as partners in the fight against global terrorism and preventing the proliferation of weapons of mass destruction.
In Iraq, Australian soldiers worked hand in glove with Japanese service personnel. We are looking to build on that highly successful experience.
We are cooperating closely on the substantial security challenges presented by North Korea. Together we have urged swift and robust action to counter the DPRK’s recent nuclear test, just as we stood with Japan and the United States on financial sanctions.
Australia and Japan are cooperating to bring about a resumption of the Doha Development Agenda because we recognise that an ambitious and balanced outcome would make an important contribution to global development.
On climate change, Australia and Japan led by example as inaugural members of the Asia-Pacific Partnership on Clean Development and Climate Change.
In our own region, Australia and Japan cooperate closely together to promote open regionalism, through the development of APEC, the East Asian Summit and other regional fora. We are looking to work closely with Japan to advance the APEC agenda when Australia hosts APEC next year.
On the bilateral economic front, we have forged an economic partnership rivalled by few.
Bilateral trade and investment flows have made a profound contribution to both our countries’ development.
Australia is Japan’s number one supplier of energy and Japan’s number one supplier of many important minerals.
It was this supply of resources that provided the raw materials for the “economic miracle” that propelled Japan to become the world’s second largest economy.
Australia also supplies Japan with around 10 per cent of its food import needs.
For Australia, Japan is its largest trading partner and it has long been by far our largest export market.
Australia’s exports to Japan are equivalent to more than 3 per cent of our GDP, which is more than our exports to the US and China combined.
Our economic relationship has grown stronger over time, and has become ever broader.
Australia’s exports to Japan now include a wide range of manufactured goods and services, such as fast ferries and software for everything from cameras to slot machines.
As well as providing a growing destination for our exports, Japan has invested substantially in Australia, particularly in the resources industry, making a vital contribution to Australia’s economic development and contributing to the creation of more than 200,000 Australian jobs.
As another example of the impact of this mutually beneficial partnership, coal has been Australia’s number one export to Japan for much of the last 50 years.
In 1957, the trade in coal to Japan was worth $69,000 — then the value of about 30 family automobiles.
Today, it is worth over $7 billion each year – the value of about 30 Boeing aircraft.
This is also about the amount that Australians spend on imported Japanese cars and trucks each year. Australia is Japan’s second largest export market for motor vehicles — each and every year, Australia imports enough Japanese cars to sit bumper-to-bumper from Brisbane to Melbourne.
Building a comprehensive partnership
Australia and Japan have a longstanding close and vital relationship. But events are now developing in ways that make us even more important to each other.
The changing international environment – in particular, the challenging global security situation, evolving regional architecture, and the rise of China and India - is bringing us closer together.
It is incumbent upon us to ensure the structures are in place for us to adequately deal with these challenges, and for our relationship to reach its full potential.
Japan’s new Prime Minister, Mr Abe, in his first speech to the Diet, committed to strengthen ties between Australia and Japan, citing our shared values.
We very much welcome Prime Minister Abe’s sentiments and share his resolve.
Our governments are committed to the highest level of ambition in the future development of what has truly become a comprehensive partnership.
On the security side, we are considering a joint declaration on security cooperation.
This will provide the platform for increasing security cooperation in future, including in areas such as disaster relief, non-proliferation and the fight against terrorism.
A bilateral FTA: realising our potential over the next 50 years
As for the trade and economic relationship, as most of you probably know, our two Prime Ministers took the important step last year to commission a joint study into the feasibility of a free trade agreement.
Officials are making good progress on finalising their report to Prime Ministers on a bilateral FTA.
We are on track to complete the report so that Prime Ministers will be in a position to consider it before the end of the year.
As Australia and Japan move closer on a range of fronts, I believe now is the time for us to take the bold step to link our economies more closely through an FTA.
An FTA would deliver major benefits to both Japan and Australia.
The benefits are considerable because an FTA would provide assured and improved market access for goods traded in both directions, generating opportunities for Australian and Japanese companies.
At a time when both Australia and Japan are pursuing FTAs with other countries, it is particularly important to ensure our access to each other’s markets matches that which we enjoy with our other trading partners.
It is important to note that an FTA would be about much more than just lifting the tariffs on goods.
As the two most developed economies in the region, our objective should be a comprehensive agreement that would create a more closely integrated economic space – one in which goods, services, money, people and ideas can move more easily.
We want negotiations to begin with all products and issues on the table.
Of course, we know there are sensitivities and that finalising an FTA will be challenging and will require considerable flexibility on both sides.
Any eventual FTA will need to make political, as well as economic, sense in both countries.
This is an achievable outcome given the considerable trust and goodwill that exists between our two countries.
Conclusion
I feel a great sense of excitement about the Australia-Japan relationship.
I feel a great sense of responsibility that my government and our generation should provide a firm basis for the future prosperity of both our countries.
Next year is the 50th anniversary of the Commerce Agreement, signed in 1957 by the former Trade Minister and leader of my own party, Sir John, nicknamed ‘Black Jack’ McEwen, and Japan’s Prime Minister, who incidentally was Prime Minister Abe’s grandfather. So there is particular significance associated with the celebration of the 50th anniversary in our existing commerce arrangement.
The Commerce Agreement has underpinned one of the most successful economic relationships in the world, and it has delivered tremendous benefits to both countries.
It will be important to mark the anniversary through a new agreement that will set the scene for the next 50 years of the relationship.
Australia and Japan have an immensely strong sense of shared interests, based on our common values, our indivisible trade and economic links, and our common approaches to a range of security issues.
Given where our relationship stands both economically and strategically, along with global and regional developments, I think that now is the time to move forward to an FTA negotiation.
We would like to do this in cooperation with the ANZCCJ and would welcome the input of the ANZCCJ into this process.
We want an FTA to be one on which Governments can agree, but also one that addresses industry interests.
Finally, I would like to wish the ANZCCJ well in its activities here in Japan. I look forward to continuing to work together with you, through our Embassy, to develop further the bilateral economic relationship.
I also wish you prosperity in your individual activities here in Tokyo. I believe we are at the dawn of a new era in our relationship and the next few months, the next year or two of negotiations, have the potential to further cement the relationship that has meant so much to both of our countries now for half a century.
Thank you.