Keynote Address - Australia New Zealand Chamber of Commerce in Japan
Thank you ladies andgentlemen, it is a great pleasure to be here with you.
It is an especiallygreat pleasure to be here in Tokyo during the 60th anniversary year of theAgreement on Commerce struck between our two countries in 1957.
It really would bedifficult to overstate the role this agreement has played in the economicdevelopment of both our countries.
You will all of coursebe familiar with the story of Japan's economic miracle – her rapid industrialisationin the post war years, realised in part of course by that historic decision toopen up trade with Australia.
Perhaps less known herein Japan, is just how important it was for Australia, then a very youngcountry, to find new markets for our exports in our own post-war economictransformation.
Sixty years ago, almosta third of our trade was still with the United Kingdom.
We were a heavilyagriculturally based economy, protected by high tariffs and constrained byrigid and regulated markets for labour and capital.
Today, Australia is aninnovative, diverse and highly open economy deeply integrated into the dynamicgrowth markets of Asia.
The Commerce Agreementcame at a time when Australia was starting down a road of more trade opennessand diversification – with an emphasis on trading within Asia - that hasculminated in our current 26-year run of unbroken annual economic growth.
Indeed, the Agreement wesigned in 1957 was a progressive, politically challenging and highlyliberalising trade deal for its time.
To coincide with the60th anniversary, the Australian Trade and Investment Commission has commenceda major study entitled, Japanese Investment in Australia: A TrustedPartnership.
The report willdemonstrate how Japanese investors have set a high standard for productiveinvestment in Australia - facilitating job creation, regional development,access to global value chains, innovation, and the development of newindustries through the introduction of cutting-edge technologies.
Recent investments inthe services sector, notably with the Japan Post acquisition of the Toll Groupfor $6.1 billion in 2015, demonstrate the continuing diversity of Japaneseinvestment into Australia.
The project is alsoforward-looking: it aims to identify new opportunities for Japan to invest orre-invest in Australia and for us to partner with Japan in global value chains.The project will complement outcomes in the Japan-Australia EconomicPartnership Agreement.
I am delighted at thesupport we have received from the Japanese Government for this important work,and I look forward to launching the study over coming months.
The core attributes ofour relationship today - trust, mutual respect, compatibility and economiccomplementarity – are a strong foundation for the future.
Like Japan, Australiaremains committed to open markets and a strong, rules-based global tradingsystem.
We remain committedbecause we've seen positive effects of the liberalising actions we've taken,for ourselves and our trading partners.
It was in this very samespirit of optimism and shared values that we approached the negotiation of theJapan Australia Economic Partnership – JAEPA, a worthy successor to the 1957Commerce Agreement.
JAEPA has eliminatedtariffs on more than 3,400 Australian product lines since it entered intoforce, boosting trade with Japan, our second biggest trading partner.
We remain the only majoragricultural producer to have an FTA with Japan, and I'm thrilled to see thattwo-way business is booming under this landmark agreement.
I am also delighted withthe feedback we're getting from Japanese consumers experiencing our world-classagricultural products thanks to JAEPA.
Australia's table grapes, carrots, chilled beef and honey are experiencing huge increases in demandfrom Japanese consumers. Exports of beautiful Australian grapes to Japanesetables have increased by 50 fold since the JAEPA's inception. Our honey exportshave doubled. Our beefs exports have increased almost 25 per cent to almost$1.1 billion.
And what better toaccompany a high quality steak than a bold Australian wine: exports of ourbottled wine have increased by 13 per cent to over $35 million.
In the other direction,JAEPA has also delivered significant gains for Japanese exporters.
We have seen the valueof Japanese passenger motor vehicle exports to Australia increase by more than17 per cent. Likewise, Japan's exports of engineering equipment and opticalgoods are up by more than 40 per cent.
JAEPA sets up oureconomic relationship for a great degree of success in the future, for both ourcountries.
Not just in thetraditional areas in which our cooperation thrives as I've just outlined.
We'll also seesignificant benefits from the Asia Region Funds Passport, a mechanism tofacilitate cross border distribution of managed fund products across theregion.
Once operational, thiswill permit Australian-domiciled investment funds to be sold directly to retailinvestors in Japan and vice versa.
Essentially, the AsiaRegion Funds Passport is an FTA for fund managers. It will overcome existingdifferences in licencing, regulating and operating the trading of managedfunds.
The scheme will helpunlock the growing pool of savings available in the region and provideinvestors with a more diverse range of investment opportunities. This in turnwill deepen the region's capital market to attract finance for economicdevelopment and growth.
Just as our economiccooperation flourished as Japan became a technological powerhouse, ourcomplementary strengths position us well for future cooperation.
Blockchain, the complextrust network that underpins the bitcoin currency – holds immense promise inall sorts of future applications and it's a great example of what ourpartnership can achieve with energy and creative thinking.
Australia is pioneeringthe development of international standards on blockchain and distributed ledgertechnologies, while the recent recognition of cryptocurrencies as legal tenderalso puts Japan at the forefront of innovation in this field.
Several major Japanesebanks, for example, are investing in bitFlyer, the country's largest bitcoinexchange.
As leaders in thisspace, blockchain forms a natural cooperation point between us.
Trust is king, as youall know, in the brave new world of digital commerce.
This Japanese-Australiancooperation – right at the cutting edge of technological advances – can set usup for the next evolution of financial and banking services globally.
It's also very relevantto other industries such as agriculture. Australian start-up, AgriDigitial, forexample, has developed the world's first blockchain-enabled commoditymanagement platform. This real-time settlement platform provides secure paymenton delivery enabling producers to maintain cash flow and allowing them tofurther invest in their businesses.
Agriculture,specifically ag-tech, is another great field of joint endeavour.
There is a definitesynergy between the agricultural aspirations of our two countries.
Japan is looking to useits supply chain capability, skills and technology to access the growing middleclass markets of Asia.
Australia, for its partis looking to develop its sparsely populated north, a region that offers greatpotential for new agrifood production in a pristine environment, close to thosegrowth markets.
In my mind, thisrepresents an extraordinary opportunity to take our relationship into new andprofitable areas.
On that point, I will behosting the next Northern Australia Investment Forum in Cairns in November thisyear.
It will provide anopportunity for Japanese businesses to engage with project owners, proponentsand experts on the opportunities and challenges of developing agriculture inAustralia's north.
We're alreadylong-standing trading partners in food and agriculture, and both countriespossess a rich pool of industry-focused research organisations and a reputationas early adopters.
So we're naturalpartners for innovative ways that can increase productivity and quality.
Hitachi, for example,recently announced a $1.25 billion investment in its Australian SocialInnovation business, to bring government, corporations and the communitytogether to collaborate on technical solutions that improve societies.
For example, a number ofpower utilities are using Hitachi's "Visualization Suite" to monitor and reporton the condition and safety of power poles across Australia's vast electricitynetwork.
Hitachi is also testingthe use of advanced global positioning systems for trials of a robotic tractorin NSW and Queensland.
Featuring what is knownas the Quasi- Zenith Satellite System, this work is being conducted with anumber of Australian and Japanese partners.
In Tasmania, Mitsui& Co is working with farmers to create a counter-seasonal supply for a newsuper onion with high levels of antioxidants, improving longevity andsupporting heart health, endurance, and the immune system.
JA Biei, anentrepreneurial agriculture cooperative in Hokkaido is also collaborating withTasmania's Technical and Further Education institute to deliver short-courseeducation programs for young Japanese farmers in Tasmania.
As part of this, trialprojects will help Tasmanian and Japanese farmers establish a horticulturalproduction platform to export counter-seasonal produce to Japan or elsewhere.
There is also greatpotential for us to do more in emerging life sciences, and in providing highquality care to our ageing populations.
Globally, the market formedtech – biopharma and medical devices is booming – and Australian firms areright at the cutting edge.
They're making a globalimpact with niche products such as 3D-customised titanium implants,bio-scaffolds for cardiovascular repairs, implantable hearing solutions andadaptive diagnostic platforms for molecular diagnostics and cancer detection –to name just to name a few.
Japan's interest andexpertise in this area is also well known and we'd like to encourage more jointwork.
A bilateral memorandumof understanding on regenerative medicine, for example, signed in 2015, isproviding a platform for greater business engagement in this field.
For my part, I havechallenged Austrade and DFAT to think differently, to think more widely, toembrace new ideas and chase new opportunities.
The Turnbull Governmentis committed to pursuing an ambitious trade agenda and creating new exportopportunities for Australian businesses.
As we all know, moreexports means more jobs – and openness to the international trade andinvestment drivers that deliver jobs growth is central to Australia'sprosperity.
I know that Japan sharesthe same view that trade and investment are critical to its prosperity.
Groups like this verychamber are at the forefront of bringing these ideas together.
But I would lay thatsame challenge out to you.
I see so much potentialfor us to do more together – building upon JAEPA.
Australia's commitmentto open markets, active membership of the WTO, APEC and G20, and network ofexisting FTAs, as well as those under negotiation, all contribute to itsposition as a leading trading nation and partner for Japan.
I look forward toworking with Japan in these forums to strengthen the global rules-based system,to combat protectionism, and to making progress in trade deals that will be centralto creating future jobs and growth in both our countries.
Japanese investment hasbeen crucial to the development of new sectors in Australia over many decadesand the efforts of Japan's corporations to diversify their investments are astrong signal of their confidence in the Australian economy.
Australia will continueto welcome Japanese investment across the economy, to build prosperity forfuture generations.
At a time when some arecalling into question the benefits of international trade, demonstrating thebenefits of opening access to new markets through agreements like JAEPA is moreimportant than ever.
Ladies and gentlemen Iwant to thank you for the opportunity to be here with you today.
I am immensely proud ofthe strong trading relationship our countries have built over 60 years – andI'm truly excited by the potential for us to do much more in the years ahead.