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Australia's new approach to the Pacific: speech to the Australian Institute for International Affairs, Melbourne.

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Speech by

Stephen Smith MP

Minister for Foreign Affairs

‘Australia’s New Approach to the Pacific’

Australian Institute for International Affairs,


7 August 2008

(Check Against Delivery)



Mr Clive Hildebrand (National President), thank you for that


Thank you too for giving me the opportunity to speak to your

members today about the Australian Government’s new

approach to international relations and in particular the

Government’s new approach to Australia’s relations with the

countries of our Pacific neighbourhood and our broader Asian


The Australian Institute of International Affairs has a long and

distinguished record of encouraging informed debate about our

country’s foreign policy.

I’m pleased to contribute to that debate, particularly in relation

to the Government’s ambitious and co-operative new approach

to our Pacific neighbours.

Australia has an abiding interest in helping Pacific nations

secure a better future for themselves and for the region as a



To help bring that about, we have brought a different approach

to our neighbours: an approach based on mutual respect and

mutual responsibility.

This new tone and this new spirit of cooperative engagement

are elements of a wider ambition to play a more active and

responsible role in our region and the global community.

The Government’s foreign policy approach

The new Australian Government came to office determined to

make a difference as a good international citizen, determined to

embark on a foreign policy shaped by, and reflecting, our

democratic values, our respect for the rule of law both domestic

and international, our tolerance and our deep-seated belief in

others getting a fair go.

We have three pillars of foreign policy to guide Australia’s

relationship with the international community.

One pillar is our commitment to Australia’s Alliance with the

United States.


This Alliance remains the fundamental and indispensable

bedrock of Australia’s security, strategic and defence


Continued active engagement by the United States in the Asia-Pacific is essential to the peace, stability and prosperity of our


Our close Alliance endures and flourishes because it is based on

shared values and interests, a common democratic heritage, and

a genuine commitment to work together to address the difficult

strategic issues of the day.

Secretary Rice remarked during her visit to Perth two weeks ago

that "there is no better friend for the United States than


Secretary Rice's visit was both a celebration and a reaffirmation

of the value of the Alliance and of the commitment that

Australia and the United States share to deepening and

strengthening it.

Our commitment to the Alliance transcends political boundaries

- Labor, Liberal, Republican and Democrat - and will endure no


matter what the outcome of the forthcoming US Presidential


A second foreign policy pillar is our re-engagement with the

United Nations and other multilateral organisations.

The Australian Government does not view the United Nations

and its agencies as peripheral to Australia’s national interests.

Australia’s approach is to ensure we are active within the United


It is counterproductive and wrong to simply criticise the United

Nations from the sidelines. There is no point just standing

outside throwing rocks at the building.

The Government’s approach reflects the growing realisation

that there are a number of issues, foremost of which is climate

change, that Australia can only address in concert with the

international community. There is equal futility in not acting

or acting alone.

For too long Australia has been too quiet and too inactive in

the major councils of the world.


We have a strong wish to see Australia speak and act on the

world stage as a good international citizen.

Our first act as a Government was the ratification of the Kyoto

Protocol. Since then, Australia has played, and will continue to

play, a leading and constructive role in international climate

change negotiations.

The challenge of nuclear proliferation is another issue which

can only be addressed through effective multilateral action.

That’s why Australia will convene an International

Commission on Nuclear Non-Proliferation and Disarmament,

to be co-chaired by Gareth Evans.

The Commission will aim to shape a global consensus in the

lead up to the 2010 review of the Nuclear Non-Proliferation


Its objective is to reinvigorate the global effort against the

proliferation of nuclear weapons and to seek a recommitment

to the ultimate goal of a nuclear weapons-free world.

The Government is very encouraged by the reaction we have


received to date from both nuclear and non-nuclear weapons


On peace and security, the Security Council is at the heart of the

United Nations’ response to such pressing issues.

Just as Australia has in the past contributed directly to the

Security Council’s work, we believe Australia should be

prepared do so again.

It’s for this reason that Australia is seeking election to the

United Nations Security Council in 2013-14.

Our commitment to being a good international citizen is also

reflected in our determination to make better use of our

considerable prosperity to help those less fortunate than


Guided by our commitment to the realisation of the Millennium

Development Goals, we have pledged to increase our Overseas

Development Assistance from 0.3 to 0.5 per cent of gross

national income (GNI) by 2015.


This reverses a trend which for most of the last decade saw

Australia’s commitment to Overseas Development Assistance

going backwards.

The Australian Government is also determined to play its part

in addressing the misery and instability being caused by steeply

rising world food prices.

In May, I announced an additional $30 million contribution to

the World Food Programme to help meet immediate

humanitarian needs associated with high food prices.

At the G8 Summit last month, the Prime Minister announced a

further additional contribution of $50 million to a new World

Bank trust fund, to stimulate agricultural production in

developing countries suffering the adverse effects of increases in

food prices.

To complement these initial responses the Australian

Government, through AusAID, the Australian Centre for

International Agriculture Research (ACIAR), the Department of

Foreign Affairs and Trade and the Department of Agriculture,

Fisheries and Forestry is developing a comprehensive long-term

plan to address food security.


This will include initiatives to increase production by providing

much needed seeds and fertilisers to poor farmers and to

increase agricultural productivity through agricultural and

scientific research - an area in which Australia leads the world

through ACIAR.

Despite recent setbacks, the Government remains committed to

global trade reform as a vital element in addressing the food


The Asia-Pacific region

The third pillar of our foreign policy, and the one I’ll focus on

today, is comprehensive engagement with Asia and the Pacific.

The global centre of gravity for economic and strategic

influence is shifting undeniably towards the Asia-Pacific


In 2007, over A$200 billion, or nearly two thirds of our

merchandise trade, was with Asia.

China and India’s rapid economic growth has led to forecasts

that 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.

The tremendous growth in our region drives Australia’s own

economic prosperity.

Rapid economic and demographic development is mirrored by

the region’s increasing strategic importance. And with this has

come growing global political influence.

Against this backdrop we must focus on the implications for

Australia’s strategic interests and position ourselves to help

shape the way our region evolves.

Our bilateral relationships in the region are, of course, the

building blocks of our regional diplomacy.

The Government from the Prime Minister down has from the

outset embarked on an energetic program of bilateral visits to

demonstrate how seriously we take these relationships.

Regionally, our efforts are centered on the institutions that

matter most to us - ASEAN and its related fora, the East Asia

Summit, and the ASEAN Regional Forum, as well as APEC.


Last month, I travelled to Singapore to take part in the annual

series of ASEAN-related meetings. These meetings reinforced

Australia’s positive and constructive engagement with ASEAN,

including in the areas of education and development assistance.

I also held numerous bilateral meetings with my regional

counterparts and emphasised Australia’s intention to build on

our key relationships in the region.

ASEAN countries expressed considerable support for

Australia’s strong engagement in the region. I was pleased to

note support within the grouping for the early conclusion of a

Free Trade Agreement between ASEAN, Australia and New


This will improve flows of goods and service between Australia

and a region forecast to reach an aggregate GDP of almost

US$1.5 trillion this year.

In recognition of the importance of our links with ASEAN

across many fields I announced in Singapore that Australia will

appoint an Ambassador to ASEAN to further our relationship.


APEC is the other regional grouping we consider vitally

important. I’m proud of Australia’s role in forming that

grouping in the late 1980s and early 1990s.

Since that time, APEC has played a vital role in promoting trade

and investment liberalisation and business facilitation. It is now

engaging on the challenge of structural reform behind borders.

APEC reinforces the United States’ engagement in our region,

something Australia regards as essential.

Each of these regional fora makes a unique and positive

contribution to regional relations and regional cooperation. But

in this rapidly changing region we need to think about how to

best develop our cooperative arrangements into the future.

This is why the Prime Minister recently launched an initiative to

engage our neighbours in considering how the Asia Pacific

regional architecture might evolve to meet future strategic,

security, economic and political challenges and opportunities.

It makes sense to address this issue through a discussion with

our friends in the region, to ensure Australia is involved in

influencing and shaping the future regional architecture.


Australia will now have the opportunity to engage even more

deeply with the region following the invitation we have this

week received to participate as an Observer to the South Asian

Association for Regional Cooperation (SAARC).

The member countries of SAARC are Afghanistan, Bangladesh,

Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka.

Current Observers to SAARC are China, the European Union,

Iran, Japan, Mauritius, South Korea and the United States.

The invitation recognises Australia’s potential for strong

relationships in the South Asian region.

Observer status at South Asia’s premier regional body will

enable Australia to annually engage South Asian Governments

at the highest levels.

The Pacific: A different approach

I’ve spoken about Australia’s broad approach to the countries of

our Asian neighbourhood. Let me now deal with our relations

with our Pacific Island neighbours.


As friends and neighbours we confront many of the same

problems. The Government is determined to engage our Pacific

neighbours in a conversation as equals, to work collaboratively

to realise shared economic and social aspirations.

In any conversation, the tone you adopt can matter as much as

the substance of your discussion. The tone of exchanges with

our friends in the Pacific certainly needed changing when we

came to office.

We committed ourselves from the outset to change. Progress

and reform are far more likely to be achieved through a

respecting and respectful relationship.

The change has been evident in the personal commitment that

the Prime Minister and Ministers have shown in making it a

priority to visit our close Pacific neighbours, including New

Zealand, Papua New Guinea, Solomon Islands, Vanuatu,

Samoa, Kiribati, Tonga and Fiji.

These visits - and reciprocal visits by Pacific leaders to

Canberra - highlight the priority afforded to Australia’s

investment in the high-level personal relations that underpin our

Pacific bilateral relationships.


As does our decision to appoint Duncan Kerr as Parliamentary

Secretary for Pacific Island Affairs and Bob McMullan as

Parliamentary Secretary for International Development

Assistance, who will play a major role in advancing Australia’s

Pacific Partnerships for development.

In April, the largest-ever Australian Ministerial Delegation

attended the Australia/PNG Ministerial Forum in Madang.

I’ve only recently returned from my second visit to the Solomon

Islands and my first to Fiji.

It is of significance that both of these visits were under the

auspices of the Pacific Islands Forum and involved Foreign

Minsters from across the region. Ministers from Papua New

Guinea, Tonga, Samoa, Tuvalu, New Zealand, Niue and

Australia have been nominated to represent all of the nations of

the Forum in discussions on two of the region’s most pressing


These approaches show how regional partnerships based on

equality of membership and mutual respect can be used to

effectively address serious challenges faced by all the countries

of the Pacific.


Mutual respect, mutual responsibility and mutual commitment

to building a better future for the Pacific is what underpins our

Pacific Partnerships for Development, which were at the heart of

the Prime Minister’s Port Moresby Declaration on 6 March.

When you recognise that nations are ultimately responsible for

their own development, and respect - as we do - our Pacific

neighbours and their national leadership responsibilities, you

can’t be prescriptive about defining for them their issues and


You have to pay close attention to each country’s political,

social and economic conditions.

In this process, you need a policy framework that goes beyond

treating everyone the same.

That’s what our Pacific Partnerships are designed to be.

We have already had very productive, practical discussions at

officials’ level with the governments of Samoa and Papua New

Guinea about their respective priorities for Partnership



I'm confident we'll soon see equally good outcomes in our talks

with other neighbours, commencing with talks over coming

months with Solomon Islands, Kiribati, Vanuatu, Nauru and


We want to establish a series of Pacific Partnerships to support

our neighbours meeting their Millennium Development Goals

by 2015.

Pacific Partnerships will assist them to strengthen the economic

performance and governance frameworks they need to achieve


Through these Partnerships, Australia will make available

increased development assistance to assist partners who share

these ambitions.

We’ll commit jointly to improvements across the spectrum of

priority areas, public infrastructure, governance, economic

growth, education, health and public sector and public

institutions capacity building.

In helping to address these immediate needs, we aim to build on

individual countries’ own development strategies and their

commitments to progress and reform. This is essential in


promoting higher growth and more effective delivery of basic


To do all this, we need to go beyond traditional modes of

development assistance.

We need to widen our discussion to involve trade and economic

cooperation, as well as policy and political dialogue to

strengthen a shared sense of mutual responsibility and


In pursuing the goal of a stable and more prosperous region, we

are working even more closely with New Zealand.

As well we will coordinate closely with Japan, the United States

and the European Union, and with leading international

financial institutions such as the World Bank and Asian

Development Bank.

And we will also seek to engage new and emerging donors on

playing a positive and constructive role in the region.

Constructive regionalism

Australia is committed to close, strong relationships with the


Pacific Islands Forum and other regional institutions.

We look forward to the 19 August Forum Leaders’ meeting in

Niue, which the Prime Minister will attend.

Australia will engage our neighbours at the meeting on a range

of issues including climate change, trade liberalisation, fisheries

and food security.

To underscore a renewed commitment to multilateral

engagement with our region, we have offered to host the 2009

meeting of the Pacific Islands Forum.

Australia fully supports the Forum’s Pacific Plan. It sets out

practical overall approaches to addressing important regional


As the Plan notes, it is ‘based on the concept of regionalism:

that is, countries working together for their joint and individual


In addition to the goals of good governance and regional

security, the Plan also focuses on economic reform and

sustainable development.


In recent years we have seen encouraging economic growth in

parts of the Pacific, including PNG and Vanuatu.

But the record is not uniformly encouraging.

The smaller and more remote Pacific nations still face

considerable obstacles to growth, and, as a region, the Pacific is

falling behind other developing nations.

The twin threats of fuel and food price rises have a

disproportionately adverse impact on the Pacific nations because

of their fuel import dependency and relative geographic


Our new development approach goes beyond traditional

development assistance to the Pacific, significant though that

remains, at $1 billion this year.

Much of our development assistance is designed to support the

drivers of growth, promoting the skills, infrastructure and trade,

regulatory and investment policies to support growth.


Towards Economic Integration

The more the Pacific nations are integrated with Australia, New

Zealand and the global community, and the freer the flow of

goods, services and investments within the Pacific, the better

the prospect of genuine, stable and long-term economic growth

in the region.

Aid is no substitute for sustainable and productive growth.

The time has come to take forward negotiations for a region-wide Free Trade Agreement - the so called ‘PACER Plus’


This would build on the existing Pacific Island Countries’ Trade

Agreement, and the original Pacific Agreement on Closer

Economic Relations (PACER).

To achieve this goal we will work with interested countries on

bilateral packages of trade capacity and trade development

assistance to strengthen national capacities to trade with the

region and beyond.

These packages must be tailored in close consultation with

Pacific island countries. Australia has committed to fund


further discussions with Pacific island countries to progress the


Our mutual interests lie in ensuring the Pacific islands are well

positioned to benefit from trade liberalisation and closer

economic integration with the economies of Australia and New


Our aim will be to secure new opportunities for Pacific Island

countries and to assist in adapting to the challenges of an

increasingly globalised economy.

It will also be important to ensure that, when it comes to formal

negotiations, Pacific island countries are given the means to

properly represent their individual national interests.

Their individual positions should be informed by national

studies which identify impacts, benefits and opportunities.

Australia has already pledged to fund independent national

studies for each partner country in 2008-09 and will continue to

do so throughout the negotiations.


The sooner negotiations commence, the sooner we can work

with our Pacific neighbours to ensure they benefit from, rather

than fall behind, the globalisation of markets that affects us all.

There are other measures we will examine in parallel.

One that has generated considerable interest across the region is

labour mobility.

The Prime Minister will announce our approach to this at or in

the run up to the forthcoming Forum Leaders’ Meeting in Niue.

If any pilot program were to proceed, it would necessarily be

demand driven and start with a limited number of countries

participating on a trial basis.

The Government has been examining New Zealand’s seasonal

labour policy, the “Recognised Seasonal Employer Scheme”. It

is appropriate that we learn from New Zealand’s wisdom and

experience when thinking about the possibility of a pilot

program in Australia.

Remittances from Pacific Islanders working overseas are

already worth over $430 million a year. They are an important

source of income for families back home.


As a separate but related measure, we are co-funding with New

Zealand, the development of a new website to help migrant

Pacific Islanders cut the cost of sending money home from

Australia and New Zealand.

The Pacific Islands are among the costliest destinations in the

world to send money. Modelled on successful European

examples, the website will allow migrants from eight Pacific

Island countries to more easily compare costs, transfer methods,

speed, and exchange rates when sending remittances home to

family and friends.


The Pacific Partnerships approach on which we’re now

embarked provides opportunities for Australia to assist in the

vital task of building regional skills and capabilities, especially

through education.

Education is crucial when you recall that, in some Pacific

countries, nearly 40 per cent of the population is under 14,

compared to just 19 per cent in Australia.


The pace of population growth threatens to outstrip economic

capacity and infrastructure development. Without adequate

education, training or employment opportunities, young people

- especially young men - face the bleak prospect of idleness or

leading at worst to criminality.

We are committed to a program aimed at enhancing regional

education institutions.

And to a significant program of scholarships to study at

Australian education institutions.

Our existing commitment to the Australia-Pacific Technical

College -- $150 million over four years starting in 2006 - is

intended to provide Pacific Islanders with skills that will enable

greater regional mobility.


Australia and other Forum members are working energetically

to secure the restoration of democracy and the rule of law in


In a region in which economic performance has been improving

in recent years Fiji, is going backwards. The latest economic


data suggests the Fiji economy contracted by 6.6 per cent in

2007, an appalling result.

Just three weeks ago I visited Fiji in the company of Foreign

Ministers from five other Pacific Countries.

The report of our visit, and our meeting with Commodore

Bainimarama, will form the basis of the Forum Leaders’

discussion at Niue in two weeks’ time.

The Ministerial Contact Group came to the view that there was

nothing that would prevent Fiji going to an election by March,

in line with Commodore Bainimarama’s faithful commitment,

if the political will was there.

An end to military government will help all the people of Fiji.

Their fundamental political and human rights have been

seriously infringed and they have been hurt economically by the

succession of coups.

A return to democracy in Fiji is also vital for the region. Fiji is a

hub for tourism, trade and commerce, and home to key regional

institutions such as the Pacific Islands Forum Secretariat and the

University of the South Pacific.


So we are doing all we can to help Fiji return to its rightful place

as a fully-fledged member of the regional community.

This includes strong support for the efforts of the

Commonwealth Secretariat to promote a constructive dialogue

between political leaders in Fiji.


I’ve outlined for you today our engagement in the Asia-Pacific

region and our determination to help our Pacific neighbours

address the issues we face.

The Government is working to build a deeper spirit of regional

engagement. We have made a fundamental change in the way

we work with and talk with, rather than at, our neighbours.

Our desire to assist practically is a real reflection of the values

and expectations of the Australian people, a partner committed

for the long haul to accepting responsibility in building a better

future for the nations and the people of the Pacific.

Thank you.