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Keynote Address by Ian Sinclair

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Please let me extend Mr. Doug Anthony's sincere apologies for not

being here this evening as originally scheduled.

He has at short notice been required to hold trade talks in another

region - South America - which has in itself a whole different set

of challenges to the region that you are examining in your Seminar.

Over the next two days you have full programmes of discussions and ■ ■·


As I see it, my job then tonight is really to raise some questions

rather than spell out answers or offer solutions from a Government


You may recall Marc Antony, breaking into Cleopatra's tent at

midnight with a glint in his eye and saying, "I'm not here to

make a speech, Cleo". To which Cleo, rolling over, replied:.

"Well Marc, I'm not prone to argue".

To begin then, let me paint briefly the trading picture both in

the broad sense and the regional sense and then Australia's place

in it.

Abraham Lincoln put it succinctly in a speech on his way to the

White House when he said: "If we could first know where we are

and whither we are tending, we could better judge what to do and

how to do it."

- 2-

Most of us are aware of the situation facing the international

economy at the moment with slow economic growth, persistent

inflation and balance of payments difficulties facing many key


In essence there is an unfavourable environment for world trade

growth and the position has been thus for most of the last decade.

Fortunately, however, one group of countries has been able to

outpace the average over this period - and these are the countries

of the Western Pacific region. :

During the 1970's the average annual real growth rate of the world

as a whole was around 4%. However, nine of the thirteen economies

in the Western Pacific Region exceeded that figure.

Australia has been part of this generally healthy growth and has

relied increasingly on the region both as a market and as a

supplier. In the twenty years since 1960 our exports to the region

have grown from 28% of total to well over half of total.

So in examining the future for this region, what are the questions

you should be facing?

Basically you need to ask what the prospects are for the region's

economic growth over the next decade. What are its resource

endowments and requirements? What paths will the individual

countries of the area choose to follow in pursuit of further

economic development?

- 3-

And of course where does Australia fit in to all this and "whither

are we tending"? - '

I hope you will see your way to discuss all these questions in

human terms in an understanding of the dividends to be earned in

social terms as well as economic terms in an ever-increasing .

interchange at all levels between our countries.

It boils down to better communications, both the sort that you

are involved in through exchanges on business, government and % '

social terms, and in the sort that I am involved in in my present

portfolio. -

My main job tonight, as I see it, is to look at the individual

countries of the Western Pacific Region with the purpose of

focussing on questions and issues that may deserve some of your

time over the next two days.

The pivot of the Region is of course Japan. Japan's gross

domestic product now puts it as the second-ranking market economy

in the world. Excluding China, Japan's GDP is about two and a

half times bigger than all the other countries of the region

combined. For two decades now Japan's growth rates have been

roughly twice the average of the OECD countries, and the path

Japan has taken in its economic development is one many others

in the region are now seeking to follow.

- 4-

Whatever other qualities Japan has shown, it is hard to underrate Γ ■

the importance of its ability to restructure its industrial sector

to meet changing circumstances. Japan's economic performance has

depended heavily on this ability to compete in world markets.

To maintain and enlarge on that performance, it now faces a .

challenge of a particular kind. Japan, now a world economic power,

has mapped out for itself a path into high technology industries,

that in turn require an extremely heavy commitment to original,

innovative research and development, and to the translation of

the results of that research into products. .

It is of great importance to the international economy and the

economies of the region that Japan succeeds in this process, 6

and I believe it would be possible, in certain area's, for

Australia and the industrialising countries of the region to join

with Japan in research and development to the benefit of both.

One possible field is in the development and use of non-oil

energy sources.

Japan may be the most prominent nation of the region, but there is

a great deal more to the region than Japan. The Republic of Korea, * .

the Province of Taiwan, Hong Kong and Singapore, for example, are

all resource-scarce, newly-industrialising economies. Each has

based its economic development around export-oriented manufacturing

industries, in the case of Korea and Taiwan heavy industries in


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Singapore is of course a member of the Association of South East

Asian Nations. The emergence of the five countries of ASEAN as

a coherent, forceful and substantial voice within the region has

been a development of major political as well as economic


The countries of ASEAN differ significantly one from another.

Indonesia and Malaysia, for example, are in the fortunate position

of being significant oil producers as well as being rich in many

other basic resources. Singapore's major resource is the skill

and application of its people. Nevertheless all have shown

extremely solid rates of growth of GDP, running at a level often

twice that achieved by Australia over the same period.

Australia's dealings with ASEAN (as with other countries in the

region) provide a useful insight into the increasing complexity

of international commerce. Our future commercial prospects with

ASEAN involve much more than two-way trade. Investment (in both

directions) is increasingly significant, technology and know-how

are vital elements of the overall economic equation, and aid and

international loans make a major contribution to the resources of

individual countries, as does tourism. If one looks at these

countries simply as "trading partners" in the traditional sense,

then this diversity and complexity of commercial.relationships

is lost. Australia has to have particular regard to the means by

which we, as a relatively small economy, can participate in and

contribute to these wider commercial possibilities.

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More generally, it has become very apparent that country-to-country

economic relationships must have -regard to the overall balance of

opportunities. In all of our developing relationships it has

been necessary and desirable for each side to move away from total

self-interest and to accommodate as far as possible, the interests

and aspirations of the other country.

This same comment applies to our commercial relations with China.

That vast country is seeking to be more involved with the inter­

national community to diversify the nature of its economic

relationships. It has of course undertaken a far reaching

re-assessment of its ability to rapidly modernise its economy,

and of late encountered some not unfamiliar problems such as

Government overspending, inflation and youth unemployment. Of

all the countries in our region, China has the most difficult

obstacles to overcome. However, the medium to longer term prospects

for the region of continued Chinese economic development are very


There is an urgent need for China to harness its resources, coal,

oil and other minerals. It is interested in the agricultural

technologies of Australia and the West, to give its people their

basic food requirements, and something more besides. Australia,

Japan, and other countries in the region can all look to China as

a trading partner and in wider commercial activities.


- 7-

It is not facetious to recall the trade opportunities conjured

up by our parents when they talked of the great demands for oil

for the lamps of China.

In a similar spirit a farmer friend of mine talked longingly of

that huge market consuming meat pies and wearing woollen socks

to take up our entire production of wheat, meat and wool.

Pragmatically, America and Japan are already moving into that

arealof.consumer needs with coca cola and with . transistorised

electrical goods.

This change in consumer desires is of great importance in your

discussions in this seminar, with all the questions it raises.

My first involvement with most of you in this room began in the

601 s when as Minister assisting John McEwen in the then Trade

and Industry portfolio, I became conscious of the enormous

opportunities for commercial and trade interchange between the * countries of the Western Pacific region.

Those years were sufficiently separated from August 1945 to have

enabled significant recovery from the more obvious,destruction

that it represented. Yet the Vietnam War was raging and the

major consuming force in many countries in the region was the

US serviceman and the American military machine.

Today the consumer dollar is demonstrably in the hands of the

residents of each of the countries of the area, with, their significant

improvement in living standards and higher per capita income.

- 8-

These consumer desires and needs have been stimulated by the

availability of radio, television and print media, facilitated

by wider educational opportunities and of course the visual

and vocal impact of international advertising.

All the traditional marketing tools of packaging, labelling and

providing the sales back-up and service that are essential for

product acceptance, so dominant in western societies, are now

appearing in most countries of the Western Pacific region. There

is therefore a requirement from Australian traders to meet the

needs of the purchaser.

These signs of market change are important in any analysis of

future trade patterns. They havfe an impact in many directions,

and in a seminar such as this there is an opportunity to reflect

on the interaction of each of the countries of the region, because

no one of us can afford to take a completely parochial attitude.

The blue fin tuna fish production cycle in the whole Pacific area

is an example of an international growth industry. Some of you .

this week for example may have seen an Australian television

programme on this fish species which is one of the most mobile in

the oceans of the world. With improved fish identification methods,

these species have been tracked in their movements across thousands

of miles of ocean, enabling fishermen from a number of countries

to harvest them with certainty.

Significantly, the pattern of demand for tuna has been influenced

by the rising living standards in Japan, the Japanese palate for

$ushimi, the ability of the Japanese to purchase high quality

- 9-

sushimi and the facility of international transport to provide

(instantaneously from destinations quite remote from Japan) fresh

tuna in a highly marketable state for that preferred sushimi


This generates not only a cash flow for all involved in the trade

but is responsible for pressures in fisheries management in many

countries of the Western Pacific where there is a concern about

the future of the species and the impact of long line fishing

on the potential catch available for the domestic fishing industry

Another profound catalyst for change in marketing in the region

is the international flavour of the world communications system.

Satellite transmission of signals, the instantaneous availability

of data, telex and voice transmission facilities (subject to

a few current hiccups domestically) has narrowed the world

marketplace. ·

Indeed perhaps for Australians the facility of 747 jet airline

services in the Western Pacific region which make no centre more

than 12 hours distance from any other has brought an interaction

between businessmen and governments reflected in the attendance

in this fair Australian city tonight.

Let us then look at the Australian export performance over the

last decade and where we go from here.

-ΙΟ­ Ν .

So far tonight I have concentrated on the performance and prospects

of the nations of the Western Pacific Region other than Australia.

I have done so to give a background that is important for a close

look at our own circumstances. It is clear in this regard that

Australia's export performance over the past decade has been

somewhat less rosy than the performance of many of our neighbours.

Although the growth of world trade slowed significantly during

this period, Australian exports grew even more slowly. Our

share of the world market fell from 1.68 percent in 1970 to

1.24 percent in 1979. '

• ' > · .

However, we have begun to win the fight to reverse this trend.

1978 was perhaps the watershed year for Australia in export

performance. In that year, we turned the corner towards a stronger

export sector. This was the result of the significant improvement

in Australia's trade competitiveness, largely reflecting our success

in controlling inflation, and of better prices being received for

our major commodity exports. -

Following from that, the value of exports rose in one single year,

1979-80, by a very creditable 33 per cent. Moreover, major export

sectors shared in this growth, rural exports rising by almost

40 percent, manufactures by around 30 percent and minerals by

25 percent. .

I welcome that achievement. I also recognise, and I am sure you

all do too, that trade is a very dynamic process. We can't afford

to stand still, or rest on our laurels. The Western Pacific Region


ls undergoing continual adjustment. New trade opportunities

will emerge: old ones will disappear. We must be capable of

capitalising on such changes.

Talking of such changes allows me an opportunity for some

crystal ball-gazing on our trade prospects. I believe our

basic foodstuffs and raw materials will, apart from cyclical

variations, continue to enjoy reasonable markets in the region.

I must add, however, that with foodstuffs the activities of

certain of our heavily-subsidising industrialised competitors

are always a problem. The region also apparent requirement

for Australia's exports of energy resources. There is every reason

to expect this trade to expand strongly.

manufacturers however, the situation is different. While the

:V:?i#mand will exist, at the same time availability of supply will

be increasing from the developing economies of the region.

Competition will therefore increase, both in the Australian market

, and in the export field. It will be necessary therefore for

Australian firms to find their niche in the market and become

committed to it. Flexibility will be essential. That includes

flexibility of attitude and flexibility of operation on such issues

as investment in the region and joint ventures, purchase of inputs

from the region, licensing of technology, and joint manufacture

and assembly.

This also clearly underlines the fact that mere geographic proximity

to a prosperous Region, by itself, offers no cosy ride. We need

to consider how best to harness our resources, our skills, to the

requirements of the markets of the region.

- 1 2 -

Geographic proximity does not necessarily guarantee economic

proximity or economic inter-dependence. In a sense Europe is

closer to the region than Australia if the freight rates are to

its advantage. Affinity in culture and perception can be as much

a part of commerce as straightforward considerations of price,

quality, and reliability. Australia in particular needs to

understand the cultural, social and political factors motivating

each of the individual* countries in the region.

This seminar is part of this process. Australia is looking more

closely at its relationships with the countries'of the region,

and they are also involved in their own examinations of regional

relationships. .

The recent intensive examination of the concept of a Pacific Basin

Community is of itself evidence of an interest in the political

and economic ties between the countries of the Pacific region,

including the countries that are the subject of this seminar. It

reflects an unease at the way the international economic community

has tended over the past decade.

All of this needs to be made relevant to the circumstances, of

individual Australian enterprises, and the approach they take to

the region. It is up to those at this seminar to ask the right

questions, and move towards a judgement on the prospects of the

region and the part that,we, individually, and as a nation, can

contribute to its development. I wish you all the greatest

possible success. > -

- 1 3 -

Some 70 years ago President Teddy Roosevelt said: "We have

seen the era of the Mediterranean. We are now in the era of

the Atlantic. We are heading towards the era of the Pacific,

and it will be the greatest era of them all."

Today we are on the threshold of the era of the Pacific and

what an era it will be.

■- n -