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Thank you very much for that kind introduction.

I’m delighted to be here on this, my first visit to Mexico as Trade Minister, addressing such a distinguished audience.

There are many esteemed guests here this morning, but I would like to particularly acknowledge Mr Fernando Solana, President, COMEXI, and Jose Carral, President of the Industrials Club. I would also like to thank our moderator, Mr Jaime Zabludovsky, Vice President, CONMEXICO, and our commentator, Mr Juan Redbolledo, Vice President of International Relations, Grupo Mexico.

I have had a number of meetings while I’ve been here - the most important with my counterpart Gerardo Ruiz. This was followed by a meeting of the business communities between our respective countries - one that was jointly hosted by ProMexico and Austrade.

While at the Government level it is important to establish the framework – the Government-to-Government exchange - it is also essential, if the commercial relationships are to go forward, to foster not just the business-to-business exchange, but to join the dots between government and business.

In setting the framework, we are going to be far more effective if we have a better understanding of the barriers to better trade between our two countries.

In terms of joining the dots, we need to challenge ourselves as to how we can be creative in forging new partnerships going forward.

There are three themes that I wanted to touch on today. First, how Australia weathered the economic storm.

Second, the importance of the international trade agenda and why Doha still remains the most important trade agreement to conclude.

Third, the question of where we can take the bilateral relationship.

I would also like to outline to you Australia’s approach to trade policy and our strategic positioning as a gateway to Asia. I think this presents an opportunity for Australia and Mexico to strengthen our relations, with a creative approach to what I see as the new forms of trade: investment and services, and for cooperation in areas such as climate change, and energy, water and food security.

The Australian Economy

Let me start with the Australian economy, which I think is of great interest to Mexico, as I discussed with Minister Ruiz, given Mexico’s current focus on competition policy and reform.

Australia’s GDP actually grew by 1.3 per cent in 2008-09 in the middle of the worst global recession in 75 years.

That made Australia the world’s fastest growing advanced economy, and the only advanced economy to record positive GDP growth over that period.

In 2009, we were one of only three OECD countries to record positive economic growth. And in a year in which world trade volumes fell by 12 per cent, Australia was one of only two OECD countries to have shown an increase in export volumes in 2009.

I attribute the Australian economy’s remarkable resilience to three factors.

First, the Government acted swiftly and decisively in response to the Global Financial Crisis with a A$43 billion stimulus package that bolstered business confidence, supported employment and invested in future long-term economic growth. One third of the stimulus went into consumption and two-thirds went into investments in infrastructure, in education, in innovation – the things that drive productivity growth.

Second, the Australian Government undertook a series of painful but necessary structural reforms in the 1980s and early 1990s that led to a more productive and competitive economy in 2010. Under the Hawke Labor Government, we floated the Australian dollar – the single most important decision that we ever took to make us a more competitive nation. At the same time we unilaterally reduced tariffs. We also introduced wage reform tied to productivity, compulsory superannuation and safety nets. We achieved the highest productivity in our history and led the world.

The twin pillars approach to trade policy is fundamental to our strategy and I continue to urge the importance of structural reform for economic development. In trade policy terms, there is no point opening up markets if you are not competitive.

A third factor is Australia’s strong economic links with Asia. As a key supplier of energy and raw materials to the region, Australia is well-positioned to benefit from Asia’s growth.

These three factors - the stimulus package, structural reforms and Asian markets - helped insulate Australia from the economic downturn.

Today, Australia’s unemployment and government debt levels are low. Moreover, the IMF expects the Australian economy to grow by 2½ percent in 2010 and 3 percent in 2011.

Australia’s international trade agenda

One of the key lessons of the Global Economic Crisis – and this is as relevant to Mexico as to Australia - has been the importance of international trade to economic health and prosperity.

The OECD estimates that a 10 per cent increase in trade is associated with a 4 per cent rise in per capita income.

In fact, in Australia, as a result of trade liberalisation, Australia’s GDP over the past two decades has been boosted by between 2.5 and 3.5 per cent.

This translates to an extra $2,700 to $3,900 in real income each year for the average Australian family.

As the world plunged into recession, we saw significant pressures from some countries for a retreat back into protectionism and the imposition of new trade barriers.

The anti-protectionism pledge by G20 countries last year has helped to restore confidence in markets.

Australia’s experience shows that protectionism is not the answer. Protectionist measures do not protect jobs in the long run. In Australia, 1 in 5 jobs are involved in trade-related activities, both exports and imports. That means 2.5 million people have jobs that exist because of trade.

G20 and APEC Leaders have underlined the importance of bringing the Doha Development Round to an early conclusion.

So if we’re concerned about protectionism, if we understand the insurance policy that a rules-based system is, let’s take out some more insurance so there’s a double benefit – the economic stimulus and the re-enforcement of the insurance policy. That’s why concluding Doha still should remain the top priority for all nations.

Mexico, like Australia and other countries, stands to benefit from the successful completion of the Doha Round. Doha offers a vital stimulus to growth without hitting budgets.

The benefits would be unparalleled by any other trade agreement. It would lock in reforms to the global trading system. It would deliver global tariff reductions, and eliminate export subsidies.

We know that trade is a key factor in generating prosperity.

The Peterson Institute estimates that conclusion of the Doha Round could see annual world trade increase by a total of approximately $ 600 billion and an almost $300 billion gain in world GDP.

Last month’s stocktake meeting in Geneva demonstrated there is an ongoing commitment by WTO members to conclude the Doha Round – and to engage in horizontal negotiations, across all pillars of the Round. And next week, Cairns Group Ministers will meet in Uruguay to inject political will and outline the way forward to achieve an early conclusion to the Round.

But we know that the current package will have to be improved, that more ambition is needed, and that all WTO members will be called on to show greater flexibility.

I have always said concluding the Round would be challenging and would take time. So, while Australia has been a driving force behind efforts to try to find convergence on the remaining issues, we are not confining out efforts to Doha alone.

Australia as a gateway to Asia

We are developing trade relationships on many fronts, including complementary multilateral, regional and bilateral free trade agreements.

Most recently we saw the entry into force of ASEAN Australia New Zealand Free Trade Agreement (AANZFTA), which secures access to a market of 600 million people, with a combined GDP of $A3.1 trillion. This is the first milestone in the continuing process of Australia’s engagement with Asia, since the Labor party returned to Government.

Australia is negotiating FTAs with China, Japan, Korea and hopefully India. The ASEAN + agreements will open up a market of 3 billion people.

With APEC, Australia is instrumental in the Trans Pacific Partnership (TPP) negotiations and we recently hosted the first round of TPP negotiations in Melbourne, with three more rounds to come this year. We are on the way to designing a high quality, comprehensive 21st century agreement that will make doing business in the region easier, faster and cheaper.

Australia and Mexico in the 21st century must also increasingly be able to succeed in a global economy without borders.

These days trade is not just about shipping goods around the globe – it’s increasingly about trade in services and investment, which add a new dynamic to trading relationships and a different focus for negotiations. It is now much more to do with behind the border issues.

Australia and Mexico

Australia and Mexico have a great deal to offer each other.

During my meeting with Minister Ruiz last week, we signed an MOU on Cooperation in Mining. We discussed the potential for cooperation in expanding trade in an area of expertise for Australia.

In a world where every country is seeking resource security, Australia’s expertise and competitive advantage in all aspect of a mining project, and in mining services and investment, creates great potential for cooperation between Australia and Mexico.

And last week, I also signed a new Air Services Agreement with Mexico that we hope will lead to direct flights, further impetus for stronger people-to-people links and encouragement for increased business travel between Australia and Mexico.

Ours is a bilateral relationship not just based on strong economic complementarities, but also on convergent interests and growing people-to-people links. We have made good progress on these fronts in recent times.

An important aspect of strengthening people-to-people links is the promotion of education exchanges between our two countries. Australia has also, just last week, announced 200 new scholarships for Latin America over the next four years as part of the Prime Minister’s Australia Awards.

Australian Prime Minister Kevin Rudd also recently announced that we will resume negotiations on the Work and Holiday visa arrangements with Mexico.

These sorts of initiatives, as well as fostering people-to-people links through high level visits and business delegations, are important, particularly given the Joint Experts Group finding last year that greater awareness between Australia and Mexico is a factor that is inhibiting trade between our two countries.

I will also sign later today, an MOU on Cooperation in Agriculture. The potential for cooperation though goes beyond two-way trade in commodities. Increasingly countries are looking for food security and water sustainability, creating opportunities in services, agribusiness, water management and land practice.

Beyond the bilateral relationship we must also look at what we can do together on a multilateral and regional basis, and take advantage of the opening up of third markets. We may be positioned on different sides of the Pacific, but what once might have been described as the tyranny of distance is becoming – in the new global economy – the power of proximity. We need to embrace that.

Australia and Mexico also have a great deal to offer each other in dealing as our two countries deal with the major challenges of climate change and energy security.

Australia, for example, could be playing a larger role in the Mexico’s energy sector, not only through Australian coal exports but potentially LNG exports as well. Australia and Mexico also share interest in solar, wind, hydro and geothermal power. We are keen to promote the liberalisation of environmental goods and services as a further tool for climate change policy.

Clearly, our challenge – as policy makers and business people - is to embrace these changes, and try to anticipate what the next decades will bring.

Opportunities also arise in the automotive sector as part of the global response to climate change. The challenge is to build greener and lighter cars, and so rather than look at our respective markets, it is a good opportunity to look at how we can creatively respond.

On Saturday I visited the Metalsa plant in Monterrey. Metalsa has recently expanded to acquire two automotive factories in Melbourne, my home town. While I was there we discussed the great potential for cooperation to take advantage of the potential that Australia offers Mexico as a gateway to Asia for the automotive sector.

One of Australia’s leading imports from Mexico is automotive parts and accessories.

The interesting point about that is that these parts are currently assembled into vehicles in Australia and exported to countries like Saudi Arabia, UAE and New Zealand.

In that way, we’ve formed creative and mutually beneficial links in a rapidly evolving and increasingly complex global supply chain.

Our approach is to be creative and innovative and positioning ourselves as the gateway to Asia, for countries such as Mexico, has capitalised on our expertise in doing business in Asia and has allowed us to develop as a regional hub.

Conclusion

Let me conclude by thanking COMEXI and Club de Industriales again for inviting me here today.

From Australia’s perspective, our economic partnership with Mexico is something we value highly, and that we are committed to strengthening.

To do so requires political will on both sides, which we have, and the strong support from business.

I thank you for your warm welcome and would be happy to answer your questions.