Speech to Boao Forum for Asia

Accelerating Asian Growth: Evolution of the Asian Economic Community

20 April 2007, Boao

Introduction

Thank you Mr Greenwood [C. Lawrence Greenwood - Vice President of the Asian Development Bank]

Let me say how very pleased I am to be invited to the Boao Forum for Asia and to share Australia’s ideas about accelerating growth in Asia with the leaders of our region. This forum brings together some of the region’s outstanding thinkers and I am pleased to be able to contribute to the discussion.

Let me start by saying that the long-term economic growth and prosperity of the Asia-Pacific region is critical to Australia’s own prosperity. This is a fact that has shaped our foreign and trade policy for many decades.

Outside of London, Australia’s first five diplomatic missions in the early 1940s were to Washington, Ottawa, Tokyo, Noumea and the then capital of China – Chongqing. Our diplomatic commitment to the Asia-Pacific region still remains today.

Nearly 60 per cent of our two-way trade in goods and services is with countries in the Asia-Pacific region. And seven of our top ten trading partners are in Asia. If you travel to any large Asian city these days, you will most likely find a large number of Australians working and contributing to the city’s commerce.

If you add this to the flow of people from Asia to Australia - as visitors, students or new immigrants - then it is clear that Australia is now more enmeshed with Asia than ever. Our Asian engagement is shaping our economy and it is also shaping who we are as a people - more than 1.3 million Australians today claim Asian ancestry – that’s more than 1 in 20 people.

Australia’s rapidly-expanding ties with the region are not unique. The depth of trade links within the Asia-Pacific region is remarkable – on average, nearly three-quarters of each APEC economy’s trade is with other APEC economies. These trade links are mirrored in the growing numbers of tourists, students and business people travelling within the region and our futures are becoming even more linked.

Economic ties

Australia has been blessed with significant natural resources that have contributed to the region’s growth and economic prosperity. Our mineral resources were as important to Japan and South Korea’s industrialisation as they are to China’s progress today. As an energy supplier, we believe we have much to offer as the region considers energy security into the future.

This exchange of goods, services and people, and growing investment adds to the sense of opportunity that many people feel about the Asia-Pacific region. We certainly feel it in Australia and we encourage leaders in Asia to see our country as a place of opportunity.

Our role in the region

Australia’s economy is strong and our democratic institutions are sound. As the world’s economic weight shifts to Asia during this new century, we believe we are well-placed to contribute to the region’s growth.

We are doing this by working hard multilaterally in the Doha negotiations to create new trade opportunities and to strengthen the WTO rules framework. We are working bilaterally and regionally to find ways to boost trade and commerce. We have signed Free Trade Agreements with New Zealand, Singapore, Thailand and the United States.

We are currently negotiating FTAs with China, Japan, Malaysia and the Gulf Co-operation Council. Together with New Zealand, we are negotiating a regional FTA with ASEAN. Officials have commenced a preparatory process with Chile with a view to negotiating a comprehensive FTA and we are studying the benefits of a potential FTA with the Republic of Korea.

At the regional level, Australia has been at the forefront of economic community building. APEC is the region’s pre-eminent economic forum and involves all of the major players. Its agenda focuses on promoting economic growth through free and open trade and investment. Freer trade drives our economic prosperity and regional economic integration.

Put simply, APEC is an economic heavyweight and when it speaks, the world listens. This is why, as the APEC host this year, we hope APEC can help deliver a successful outcome to the World Trade Organization’s Doha Round. The Round is a once-in-a-generation opportunity to advance global trade reform, and APEC can use its weight to make sure the opportunity does not pass us by.

The East Asia Summit also has a valuable role to play in addressing strategic issues for the region, as identified by our Leaders. It is well positioned to make a significant contribution to the evolution of regional economic integration and community building in coming years.

To deliver continued prosperity to the region, an economic community has to based upon the principles of inclusivity, and free and open trade and investment.

Let me finish by saying that regional economic integration and the evolution of its economic architecture is important. But a world with lower trade barriers is the biggest prize of all.

If Asia, as the world’s most economically dynamic region, can help win this prize, then we are on our way to securing growth and prosperity long into the future.