Speech by Australian Prime Minister John Howard
Chairman Jia Qinglin, Your Excellencies, my fellow Heads of Government, ladies and gentlemen.
I am really delighted to be able to participate in this Forum. I do so as the leader of a nation whose commitment to and involvement in this part of the world, the affairs, the hopes, the aspirations, and the future of the Asian region is unqualified. Perhaps to illustrate that I should point out to you that I attend this Forum having just completed two very important bilateral visits to China and Japan. When in Beijing I witnessed the signing of an agreement to commence negotiations for a bilateral Free Trade Agreement between Australia and China. When in Tokyo we reached an understanding for a feasibility study into the possibility of a Free Trade Agreement between Australia and Japan.
It also comes, this visit of mine, at the end of a period of very intense exchange and activity between Australia and the member nations of the Asian family. We hosted recently a visit to Australia, the first in 20 years, by a Malaysian Prime Minister from the speaker, the Malaysian Prime Minister who has just so eloquently addressed you. And a few days prior to that we hosted a visit from President Yudhoyono of Indonesia. I mention these things to emphasize the naturalness of the association and the exchange between Australia and the nations of this region.
It is common ground to this conference, ladies and gentlemen, that Asia has experienced extraordinary economic growth over the last decades, particularly over the last 10 years. Australia herself has been a great beneficiary of Asia's economic strength and Asia's economic growth. Japan has been Australia's best customer since 1969 and in the context of the answer given by the Prime Minister of Malaysia to the last question, can I point out that the foundations of that relationship between Australia and Japan were laid as far back as 1957 when a landmark Commerce Agreement was signed between the governments of Australia and Japan, only 12 years after the end of World War II. And it indicated a far sightedness on the part of the leadership of those two nations.
Bilateral trade between Australia and China has quadrupled over the last 10 years. And a Korean company, POSCO, remains the single best customer for Australians goods and services anywhere in the world. I mention these things to emphasize the benefits that Australia has derived from the growth of the Asian economy. But it's been a complementary process. There has been, as you all know, a huge growth in demand for Australian resources. And that will be the subject of a special session this afternoon. But it has been a two-way process, imports accounted for 30 per cent of the Australian textile, clothing and footwear market in 1991, by 2001 that had grown to 53 per cent. And can I also point out that Chinese clothing accounts for 73 per cent of all of Australian clothing imports. So it has not been a one-way process and there has been great complementarity to the exchanges.
There is of course immense optimism amongst all of us, and no doubt it will pervade this conference, that the momentum of economic growth in the Asian region will continue. And we have good reason to have that optimism. But I think we should also, amidst that optimism, remind ourselves that the experience of the past suggests that it should not be taken for granted, that it has to be nurtured and worked upon in order to be guaranteed. The Asian economic downturn of 1997 and 1998 was abrupt and brutal in its impact, and unfair in many respects in its impact on a number of the nations of the ASEAN region in particular. But it was nonetheless a reminder to all of us of how external shocks of that kind can come along and disrupt the flow and the momentum of seemingly inevitable growth. So drawing on that past experience, can I suggest to this Forum that there are some guiding principles which all of us need to adhere to to guarantee a continuation of the economic growth and prosperity that we regard as so important to the future of our peoples.
Firstly, I believe that the nations of the region must maintain strong and unwavering commitment to the principles of open trade and investment policies. There is plenty of evidence from the IMF and elsewhere that the most successful nations of the past 30 or 40 years have been those that have pursued open trade and investment policies. Those that have gone most quickly from being underdeveloped to rapidly developing countries have been those that have embraced open trade and investment policies. China's own growth, the extraordinary five times increase in GDP over the last 25 years dates from the decision taken by the Chinese leadership in the late 1970s to embrace more open policies. The same has been the case with India. And the spread of Free Trade Agreements in which Australia has been an active participant is an illustration of the desirability of continuing to embrace open trade and investment policies. Australia herself has signed Free Trade Agreements with Singapore and Thailand, we have commenced negotiations with China and also with Malaysia. All of these measures of course are consistent with our World Trade Organisation obligations, provided free trade agreements on a bilateral basis are consistent with the principles of free world trade there is no inconsistency at all with the goals of the WTO. And on the subject of the WTO, can I emphasize how important the gathering in Hong Kong will be later this year. We have not had a genuine world trade round successful concluded for a quarter of a century. And the future of the Doha trade round hangs critically in the balance. In the interests of the least developed countries of the world, who depend for 70 per cent of their income from exports from the agricultural sector, significant reductions in high agricultural tariffs, particularly from those areas of the world that maintain them at very high levels, will be necessary if a successful Doha round is to be completed.
Secondly, could I argue that there is a constant need for domestic economic reform within the individual member states of the Asian region. This applies just as much to highly developed countries such as Australia as it does to less well-developed countries. And the reforms that different governments in Australia have undertaken over the last 20 years stood our country in remarkably good stead when the Asian economic downturn hit in 1997 and enabled us to go through that downturn with little apparent damage.
Thirdly, I think we should remind ourselves that despite all the multilateral cooperation that exists we still live in a world of nation states. And in times of crisis, and this was no better illustrated at the time of the tragic tsunami a few months ago, it was the capacity of individual nation states to respond, and Australia included, Singapore and the United States, the three of us rendering particular and immediate assistance to our friends in Indonesia who were so heavily hit. It is the capacity of nation states to act quickly and decisively that is still very important. And this means that individual nation states should constantly look to the transparency of their governance arrangements, that world wide investment flows will always go to nations which have transparent legal and accounting systems, that have a transparent banking system, and have strong clear rules of governance that affect the business community. And those rules can only be made and improved and altered and reformed by the actions of individual nation states.
Fourthly, we must remind ourselves for all our natural focus on the interaction of nations within this region that Asia should not become in any way inward looking. That we live in a global economic environment, and that is our future forever, whether we live in Asia, Europe or in North America. The United States will remain the most powerful economy in the world indefinitely. And the linkages between this region and the rest of the world are many. Once again let me illustrate by reference to my own countryC Japan as I mentioned is our best customer, the European Union as an entity is our largest trading partner, the United States is our largest source of foreign investment, and we have recently signed, and it came into operation at the beginning of this year, a Free Trade Agreement with the United States.
Fifthly, let us also remind ourselves that threats of a non-economic kind and events of a non-economic kind can exact a fearful economic price. The tsunami hit hard many of the economies of the Indian Ocean area. The terrorist attacks that took place in Bali in 2002 had a terrible impact on the tourist industry of that lovely island. And the constant threat of terrorism exists as a danger in a very disturbing and disruptive way of the continued economic progress of so many of our member countries. And that of course reminds us of the need not only for the maximum cooperation amongst the nations of the region in a friendly, harmonious way of which the Malaysian Prime Minister spoke so eloquently. But it also means continued cooperation and association with other nations from outside the region in the worldwide fight against the scourge of terrorism.
Ladies and gentlemen, this is the first occasion that I've been able to attend this Forum. I think the concept of this Forum is quite outstanding, it has deservedly grown in prestige and esteem in the few years that it's been in operation. It's a chance for me at a very wide and prestigious forum to restate the unending commitment of my country to the prosperity of the region. We are forever together in this part of the world. We will forever need to work with each other, to respect each other, to help each other, to invest in each other's economies, to buy and exchange each other's goods and services. Australia has much to offer the region. The region has much to offer my country. Not least of course the resource of its people and one of the realities and one of the outstanding characteristics of modern Australia is the contribution that people from different parts of our region are making to the shaping of our national life.
My friends, I've enjoyed very much the privilege of being part of this Forum. I wish it well and I congratulate those who have conceived the idea of the Boao Forum only four or five years ago, they truly had the future of the region at heart.
Thank you.
Question: I am a member of the Bangladesh Parliament. My question is: it is a matter of relief to me this year that you all united in providing relief support to tsunami victims. Since developing countries' capacity is limited to continue providing possible help to the victims during the rehabilitation era, what can developed countries such as Australia can do to bridge this gap?
Answer: Well, I think there are a number of things we can do. Obviously in time of huge crisis such as the tsunami we do what we did. Let me remind you the aid package extended to Indonesia is the largest aid package in Australia's history. And in doing that, we were not only expressing the feelings of our government but we were also expressing the feelings of our people since their personal generosity in response to that crisis were quite outstanding and quite inspiring. I think the greatest thing that developed countries can do for the least developed countries is to cut their high trade barriers. I believe in that very strongly. It's a view I expressed in similar gatherings at the Davos Forum.
Question: Thank you, prime ministers. Firstly, can I congratulate the current Prime Minister on his speech. Sir, I represent the Australian Council of Chinese Businesses and Australian Businesses. I've been here for 4 years at this excellent forum. One of the things I've said this year to my Chinese interlocutors is that Australia is certainly here in this region forever and the depth of our participation with China particularly has strengthened. We had a traditional relationship about resources which you're going to talk about later in the day. And I have two quick points that I would like your response. Firstly, the development of services trade between Australia and China is also developing very rapidly and I'd like to have your comments about that prospect. And secondly, if you wouldn't mind just turning around and looking at the logo behind you, would you please join me in persuading our colleagues that Australia should be added to that map because we're definitely here forever?
Answer: I can announce on behalf of my colleague and friend, Bob Hawke, that the Australian political community has a bipartisan approach to that suggestion and we think it certainly should be added. On the question of services, one of the great advantages of commencing negotiations for a free trade agreement would be to open up further opportunities in the services area. Valuable as resources side of the linkage between China and Australia is, it is important not just to see it in terms of resources on our side and things like clothing and textiles on the Chinese side. That would be a mistake and it will underseal the relationship. You have a free trade agreement of substance, opening up the service sectorial value. That is one of the great advantages, in my view, is the you-can-buy of the free trade agreement between Australia and the United States because it would open up, for example, government procurement and open up the opportunities to the gradual dissolution of differences in qualifications in the light of capacity to do businesses in different parts of each other's nations. That there would be opportunities, if thus opened up, are very significant. That is one of the reasons why we argue very consistently for the commencing of negotiations. I think that would be one of the valuable byproducts of that process.