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Thursday, 30 June 1994
Page: 2537


Senator TEAGUE (10.14 p.m.) —I rise to speak briefly about the economic links between Australia and Chile. I had hoped that Senator McMullan would have been able to return by today so that I could address a question to him in question time in the Senate. But on his having not returned I put the question now in the terms that I had prepared it. I ask that when Senator McMullan does return he, together with the Department of Foreign Affairs and Trade officers, gives careful attention to maximising the three points that I make.

  My question was directed to the Minister for Trade, Senator McMullan. I refer to Australia's economic relationship with Chile, the country in South America with the most prospective trade and investment opportunities for Australia and a country which will become, in November, the newest member of APEC. I wish to ask the minister: first, in addition to our efforts in the GATT and in APEC, why should Australia not secure a bilateral free trade agreement with Chile—a positive opportunity which our CER partner New Zealand is, I understand, completing this week and stealing a march on us?

  Secondly, what political clout will the government now give to ensure that Qantas and Lan Chile conclude a direct air link between Australia and Chile, a transport corridor essential for Australia taking up our best opportunities in Latin America? Thirdly, will the minister commission a Garnaut style specific economic and trade study by the analytical unit within DFAT of Chile and neighbouring Latin American economies on which an Australian business and trade strategy can better be established?

  The starting point for my question, and for what I now urge, is the report of the Senate Standing Committee on Foreign Affairs, Defence and Trade on Latin America which has been welcomed as one of the best researched reports undertaken in this parliament and for which the response of the government was overwhelmingly positive. There was an important sense of direction given in this report and, in particular, in the some 70 recommendations. The government is seeking to implement those recommendations and that sense of direction as substantially as it can.

  Right at this juncture there are three particular aspects of our links with one crucial country in Latin America, Chile, to which my question is addressed. The first concerns a bilateral free trade agreement. This past week we have seen the Prime Minister (Mr Keating) rightly discussing Australia and New Zealand joining the ASEAN Free Trade Association. President Suharto has expressed a welcome for that in Indonesia in the discussions in recent days. Similarly, other ASEAN members have welcomed that. It may mean that there is a mini regional agreement for a wider free trade agreement between the ASEAN six and Australia and New Zealand.

  Of course, for many years now we have had a free trade agreement with New Zealand. The CER partnership is well established and I believe that it is also, to some extent, a feature of our special relationship with New Guinea and with other countries in the south Pacific. But we have not, to this point, established any bilateral free trade agreement with a Latin American country. The most prospective two countries are Chile and Mexico.

  Mexico now has a free trade agreement in NAFTA with the United States and Canada, and NAFTA is looking south to possibly include Chile. It is undoubtedly the case that Chile has the most disciplined and sound economy amongst the South American countries. It is a country which is looking to build a bilateral relationship with Australia—a relationship which is innovative and which will maximise the best interests of Australia and Chile.

  Chile sees itself as going through an Australian door and making inroads into the whole of Asia, not just South-East Asia. Similarly, Chile is saying to Australia that it is a door through which Australians can go to South America. Now that there are 100 Australian companies with offices in the capital of Santiago and a huge amount of Australian investment in that country, we have trade and investment links that can be wrapped up with a bilateral free trade agreement.

  Up until now my urging and the urging of others in both houses of parliament for bilateral free trade agreements have fallen on rather deaf ears. But I am enormously encouraged by the fact that the Department of Foreign Affairs and Trade, Senator Gareth Evans and Senator McMullan have now taken a positive approach to examining the merits of a bilateral free trade agreement.

  For too long we have put all our eggs in the GATT and APEC baskets. We have neglected the advantages we might pick up from a one to one agreement with prospective countries. The time for that has come and the country that Australia should include in such an agreement is Chile. I urge Minister McMullan and his department during this winter break to map out that relationship. I know that not only is Chile in favour of such an agreement but it is also making requests of Australia to conclude such an agreement. New Zealand has already gone along that path and will be making such an agreement this week.

  Secondly, recommendation No. 27 of the Senate report urged Qantas and Lan Chile to come to an agreement. Over the last two years there have been very useful talks between the two airlines and, to some extent, with the Commonwealth transport department. Only for a disagreement over five or 10 seats on one flight a week, no agreement has been finalised.

  I ask the government to use some political clout in this matter. For the sake of the whole relationship between Australia and Latin America, it is important that this transport corridor is established in addition to the one established between New Zealand and Argentina. I believe that with the use of political clout and good reasoning Qantas and Lan Chile can conclude a direct air link.

  Thirdly, we saw this week—especially in the hands of the Prime Minister on his visit to Jakarta—an important study on Australia-Indonesia economic relations published by the East Asia Analytical Unit. This study follows others: one earlier this year into Australia's commercial links with India, with a trade and investment strategy for Australians in India; the famous study on Korea; and before that, the Garnaut report into Australia's relations with East Asia—hence the name of the unit.

  Expertise, professionalism, vision and energy has been put together in this analytical unit and I ask the minister for his department to give a direct reference to this unit to look at the relationship between Chile and Australia and through Chile to neighbouring countries. I believe that by the time Chile is admitted to APEC in November it would be extraordinarily strategic if we could conclude these three matters so that we could have an established link on which the rest of the region might build to the great advantage of Australia and Chile.