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Speeches, Statements and Media Interviews

"The Strategic Partnership between Australia and Japan - Implications for the Global Outlook for the 21st Century"

Address by HE Mr Murray McLean OAM, Australian Ambassador to Japan

17 February 2009
Speech DFAT_20090217

Thank you for this opportunity to talk to you on a topic that is both important and timely. We are at a crucial point in the relationship between Australia and Japan. We no longer think about it simply as a relationship between two countries, but, as our Prime Ministers have described it, we have a relationship which is "a comprehensive strategic, security and economic partnership". It is a partnership that lends itself naturally to our cooperating closely to help meet the challenges of the changing world of the 21st century and particularly what is often referred to as "the Asia-Pacific Century".

I recognise that a number of you present today have made a major and direct contribution to the extraordinarily broad and deep relationship which Australia enjoys with Japan, while others may have had little direct involvement in it. Therefore, I would like to start my remarks by giving a brief overview of the nature of our extensive and profound relationship and then move on to discuss its relevance to the issues faced by the world today.

The bilateral relationship

While our relationship is generally known as one which dates back effectively to the post war period, it is in fact one which extends well back into the 19th century.

Our relationship began to blossom from the very early years of the Meiji Era, when Japan was opening up to the outside world. Japanese began to make their way to Australia in the 1870s, settling in Queensland and Western Australia as pearl divers, sugar-cane workers, labourers, traders and doctors.

But, in fact it was 1865, three years before the Meiji Restoration, when the first recorded trade took place between the two countries, when a shipment of Australian coal arrived in Japan.

By 1879, Western-style uniforms were introduced into Japan for soldiers, policemen, postal workers and railway workers. In order to supply the uniforms and meet the growing demand for Western clothes, the first state-run wool spinning mills in Japan were established. Japan initially imported wool from China and England, but quickly discovered that most English fabric was made from Australian wool. At that point, Japan turned its eyes south.

Those shipments of coal and wool sowed the seeds for a bilateral trade relationship that is now one of the most important trade flows in the Asia-Pacific. It is a trade that means Australia is by far the largest single supplier of primary energy to Japan; and one which has provided many of the inputs ? such as coal, iron ore and other minerals, - for Japan itself to become a major exporter of industrial goods to the world. Australia provides other inputs too: the next time you have a bowl of soba, or a glass of beer, remind yourself that it is probably made from Australian grain.

Likewise, Japan has contributed enormously to Australia's own domestic prosperity and development over the years. Toyota is Australia's largest producer and exporter of passenger motor vehicles. And whole sectors of the resources, agriculture and tourism industries in Australia would not be as large or successful as they are today without Japanese investment. Indeed, there have been huge investments by Japanese companies in Australia across many industrial and a range of other sectors.

Of course, for some years over the period of the Second World War and the occupation, our bilateral trade effectively ceased. But it is timely to observe that Australia was the first country other than the United States to have concluded an Agreement on Commerce (in 1957) which once again opened the doors to trade and investment flows and which laid the basis for the next 50 years (till now) of mutually highly beneficial trading between the two countries. For 40 years Japan was Australia's number one trading partner (until surpassed by China last year; we import a great deal more from China than we do from Japan). But Japan has remained Australia's largest export market and this is likely to continue for some years to come.

But now we need to lay the basis for the next 50 years and to that end Australia and Japan have negotiations well underway to expand the benefits of this huge economic relationship still further by negotiating a bilateral Free Trade Agreement ? or as it is usually called in Japan an "Economic Partnership Agreement". This is a tough negotiation not least because of resistance by some sections of the Japanese agricultural sector, but it is one we believe is well worth the big effort involved as it will contribute even more to economic growth and prosperity in both countries.

For example, at a time of greatly increased global competition for quality food and rising prices,

• an FTA with Australia would allow Japan to remove taxes on imports from Australia, including food
• this would help keep prices low for Japan's consumers
• an FTA would also help strengthen the supply of safe, high quality Australian food to Japan, and encourage Japan's own agriculture sector to become more competitive.

Secondly, pressure on global energy markets strengthens Australia's strategic importance to Japan as a supplier of a wide range of key energy and minerals commodities. An FTA could strengthen Japan's energy security by

• integrating our economies more closely, thereby reinforcing our mutual inter-dependence
• making it easier for Japanese companies to invest in the Australian energy and resources sector
• including specific provisions on energy and mineral resources security.

Thirdly, beyond these traditional areas of trade, we will also look to the FTA to open up promising new sectors, such as clean green technology, bio-technology, food technology, education exports and financial services.

So, the fact that Australia and Japan are major economic partners is quite well known here in Japan.

What is perhaps less well known, but equally remarkable, is the extent of other parts of the relationship between our two countries. From a relatively low base as late as the early 1990s, Australia's relationship with Japan on strategic issues has blossomed to become one of the closest and most important that either of us has.

Like the trade relationship, security cooperation goes back further than many people know. Many of you will know that in 2005-06 Australian forces provided the security for Japanese SDF troops in Iraq. But in fact, our Defence forces first started working together back in November 1914, when the Imperial Japanese Navy despatched a cruiser (the Ibuki) to escort an Australian troop convoy from Perth to the Suez Canal. The Australian troop convoy was en-route to the Middle East to join British Forces in the First World War, when it was threatened by a German cruiser (the Emden). Although the German cruiser was eventually forced aground, there was some confusion between the Australian and Japanese ships about how best to defend the convoy because the two sides had never worked together before, and communications weren't functioning effectively.

Today the Japan Maritime Self-Defense Force and the Royal Australian Navy have regular opportunities to conduct training and exercises - both bilateral and multilateral - to prepare for future peacekeeping operations, as well as supporting humanitarian and disaster relief operations. And in recent years, Australia and Japan have recorded a significant history of successful cooperation on security, not only in Iraq, but also, earlier in East Timor and Cambodia, and more broadly on such issues as non-proliferation, the fight against terrorism, natural disasters such as the 2004 tsunami, the earthquake in Pakistan in 2005, and the threat of avian influenza.

The Australia-Japan Joint Declaration on Security Cooperation, signed in March 2007, was the first such document Japan has signed with any country other than the United States. While this is not a Declaration of the same order as the United States/Japan Security Treaty, it is a significant step.

The Declaration affirmed our growing strategic partnership and set out an Action Plan to take forward practical measures that enhance our cooperation on security matters, including an annual "2+2" meeting between our Foreign and Defence Ministers, the second meeting of which took place in Tokyo in December last year. This is the only formal 2+2 Foreign and Defence Strategic Dialogue that Australia has in Asia, and the only 2+2 Dialogue Japan has with any country other than the United States.

Australia's cooperation with Japan in the Asia-Pacific region is strengthened by the fact that we are both allies of the United States. Australia's alliance with the United States remains the bedrock of our foreign and security policy.

Both Australia and Japan understand the importance of the continuing presence and engagement of the United States in the Asia-Pacific region. Our alliance relationships with the United States enhance our own security and contribute to the stability of the Asia-Pacific region generally. Strengthened bilateral cooperation between Australia and Japan enhances our respective relationships with the United States, including through our security and defence cooperation under the Trilateral Strategic Dialogue.

All of this is underpinned by very healthy people-to-people relationships, including through education. An good example of this is the special relationship between Deakin University and Shiga University. This university partnership resulted from a chance meeting between the Head of Victoria College (which later became Deakin University) and the President of Shiga University at a train station in Kyoto in the early 1970s. The Head of Victoria College was lost. The then President of Shiga University could speak English and wanted to help. This chance meeting led to the forging of not only a great friendship, but also wonderful exchange opportunities for staff and students of the two universities.

Since a partnership agreement was formally signed in 1988, many Deakin staff have spent time working with Shiga University to develop programs and share expertise, and hundreds of Shiga students have undertaken short study tours at Deakin University. Every year there are also two Exchange students.

This is but one of many linkages between Australian and Japanese educational institutions. To put these sorts of people-to-people links in a broader context, in 2007 alone, nearly 90,000 Japanese went to Australia for education purposes. About 16,000 of these were Japanese students who were studying full time in Australia.

Japanese has long been the number one foreign language studied in Australia, and the Australian Government has recently moved to boost that study still further, announcing an additional $62 million in expenditure on new programs to teach Asian languages in Australian schools.

Gentlemen

The Australia-Japan bilateral relationship is built on solid foundations. We have a long term economic partnership based on strong complementarity ? in other words, each of us is good at producing things the other needs. We have developed common approaches to international security challenges and have a record of close cooperation on those issues. And we have robust people-to-people links, both through education and the large numbers of tourists who travel between our countries each year.

However, perhaps most important in considering the relevance of this relationship to global challenges is that it is underpinned by shared values and intersecting interests. It is this that makes our bilateral relationship such a potentially crucial one in the shaping of the "Asia-Pacific Century".

Australia and Japan are the two key developed economies ? one at the south end and one at the north ? of the Asia-Pacific region. As such, we share a commitment to democracy, the multilateral system, free market economics and human rights, as well as close and long-standing ties as allies of the United States. How we work together in putting those values into action can have a crucial impact on the future of our region. Moreover, the ever-increasing centrality of our region in world affairs means that, in turn, we can, if we work closely and effectively as partners, make a major contribution to the resolution of the many crucial and difficult issues that now face the world

Shaping the Asia-Pacific Century

The 21st century will continue to feature an inexorable shift in global economic and strategic influence to the Asia Pacific. Within Asia we have the world's two most populous countries, China and India; two of the top three economies, Japan and China; and the largest democracy in the world, India. By 2020, Asia will account for around 45 per cent of global GDP, one-third of global trade, and more than half of the increase in global energy consumption.

By 2020, 56 per cent of the world's nearly 8 billion people will live in Asia.

Asia and the Pacific will, therefore, be the crucible for the dynamic of change that is currently under way in the international order, with the emergence of new key players ? not only China and India but also potentially others such as Vietnam and Indonesia ? that will increasingly have both the ability and the desire to play a role in international affairs commensurate with their economic power.

By no means do all of those nations share the democratic, liberal values that bind Australia and Japan ? and for that matter the United States ? together.

It is important in dealing with such changes to take a long-term view. How can we facilitate the integration of these new powers into a regional and global framework that gives everyone the best chance of pursuing their legitimate desires for wealth and prosperity in a peaceful and secure regional climate?

The first important role the Japan-Australia partnership has in this regard is to continue to ensure the United States maintains its active and benign engagement in this region. This is fundamental to the development of an open and stable regional security environment; and as I have already noted, this is something that we are able work on actively through our Trilateral Security Dialogue and through our separate bilateral ministerial and officials-level dealings with the United States.

The second key role we have to play is in the development of effective, functioning, inclusive and transparent regional institutions. Australia and Japan already have a strong track record in this regard; we were, together, instrumental in the founding of APEC, currently the most established and comprehensive regional economic forum; and we are now both actively involved in the development of the East Asian Summit, which, critically, also brings India into regional dialogue.

We work closely together, too, on regional security issues. Australia works closely with Japan, the United States, the Republic of Korea and others in support of the efforts to encourage North Korea to denuclearise through the Six Party talks process. Australia also strongly supports Japan's call for a full accounting of the fate of Japanese citizens abducted by North Korea.

Implications for the global scene

Moving beyond the region, it is clear that the extent to which we are successful in shaping our region can have an important impact on global issues too. Moreover, Australia and Japan, as the key developed economies in the Asia-Pacific committed to the international multilateral system, we are ideally placed to maximise the extent to which the voice of our region is heard in world events. It is for this reason, for example, that Australia has been a long-time and staunch supporter of Japan's efforts to gain a permanent seat on the United Nations Security Council; and it is for this reason, too, that Australia is currently campaigning to hold a seat on the Council for the first time in some twenty years, an effort for which we hope Japan will be a key supporter.

We are pushing together, too, for changes in the way the international community approaches major issues, to ensure a more inclusive approach that will better reflect the importance of a range of economies, including in the Asia-Pacific. For example, we have actively promoted the G20, which includes the majority of key players in the international economy, as the best forum for taking forward international cooperation in relation to the global economic crisis - the single most critical issue facing the world today.

Closely related to this is Australia's commitment to keeping trade open. The Australian Government's top trade negotiating priority is to conclude the Doha Round as soon as possible. A successful conclusion to the Doha negotiations would provide a huge injection of confidence - and would assist in the global economic recovery.

Japan too is working towards this same end. Following the breakdown of the July Ministerial Meeting in Geneva, Australian and Japanese Ministers have been working closely to find a way forward to conclude the Doha negotiations.

Australia and Japan are natural partners, too, on another crucial international issue that will require long-term and coordinated international action ? that of climate change. Our trade and investment relationship is heavily focused around energy ? especially fossil fuels such as coal and Liquefied Natural Gas ? so it is critical to both our economies that solutions be found. Again, as highly developed, industrialised partners, Japan and Australia have both the technology and the incentive to play a leadership role in dealing with climate change; and indeed we are already doing so.

To give one example, this year, Australia and Japan are also collaborating on climate change in an unlikely place ? Antarctica ? where our respective scientists are conducting joint research. Australia's Antarctic Icebreaker, the Aurora Australias this year carried the Japanese winter expedition to its Showa Base, because its own icebreaker the Shirase, has been decommissioned and its replacement was not yet ready for deployment.

This cooperation illustrates perfectly the sort of easy and constructive working relationship enjoyed by Japan and Australia, and it goes back a long way.

The Shirase was named after Captain Nobu Shirase, Japan's first Antarctic explorer, and a Japanese National Hero. After his first expedition to Antarctica in early 1911 had met with serious misfortune, Shirase found himself in Sydney with little money or food. There he met leading Australian Antarctic explorer, Professor Edgeworth David. With David's assistance with logistics, and the support David aroused in the Australian public for Shirase's mission, Shirase was able to go on to complete an historic mission, and complete the first crossing of the Ross Ice Shelf in January 1912, only days after the first successful mission to the South Pole by Roald Amundsen of Norway.

Our two countries continue to cooperate closely on climate change today.

We applauded Japan for making climate change a central theme during its G8 Presidency in 2008, and support the G8's goal to commit to 20 large-scale Carbon Capture and Storage (CSS) demonstration projects globally by 2010 with a view to beginning broad deployment by 2020.

We work closely in the United Nations Framework Convention on Climate Change (UNFCCC), particularly in the 'Umbrella Group', as well as the Asia Pacific Partnership for Clean Development and Climate (APP), APEC and the East Asia Summit.

We in Australia place high importance on our cooperation with Japan in wider efforts to promote nuclear non proliferation and disarmament. Last year Australia and Japan established the International Commission on Nuclear Non-proliferation and Disarmament, chaired by former Australian and Japanese Ministers Gareth Evans and Yoriko Kawaguchi. The Commission is reinvigorating global efforts to prevent the proliferation of nuclear weapons and to seek a recommitment to the ultimate goal of a nuclear weapon-free world.

Both Australia and Japan are firmly committed to the fight against international terrorism, which continues to threaten global security. The horrific attacks in Mumbai reminded us all too clearly of this reality.

We both recognise that efforts in Afghanistan, and the border areas of Pakistan, are critical in this struggle. Australia welcomed Japan's decision to continue naval refuelling activities in the Indian Ocean in support of international operations in Afghanistan, and its more recent commitment of civilians to a the Lithuanian Provincial Reconstruction Team. Australia is itself committed to international efforts in Afghanistan for the long-haul, through security, reconstruction and aid contributions. And we are both contributing to development and counter-terrorism capacity building in Pakistan, including as members of the Friends of Democratic Pakistan Group.

Closer to home, Japan and Australia are working together to promote stability and economic development in the Pacific Island countries. Japan makes a strong contribution to the development of the Pacific Island countries, both as a major aid donor and as a regional partner with Australia in support of good governance. Together, we can do much to assist the nation building and development efforts of countries like Solomon Islands and East Timor.

Conclusion

Prime Minister Aso recently described the Australia-Japan relationship as reaching the most productive time in its history. This is a view that I strongly share. It's the increasing scope and depth of our strategic relationship that really bears out Prime Minister Aso's judgment.

As economically advanced democracies, we share important common ground on today's key global challenges. That is why Australia continues to regard an even stronger and broader partnership with Japan as a bilateral and regional priority of the highest order.