The Hon. Mark Vaile, MP
The Hon. Mark Vaile, MP


Australian Minister for Trade, Mark Vaile

Breakfast meeting of the Australia New Zealand Chamber of Commerce

New Otani Hotel
Tokyo, 4 June 2001

(Check against delivery)


Thank you; distinguished guests; ladies and gentlemen.

It is a great pleasure to be back in Japan at what I believe is a very important time in the Australia-Japan relationship.

I also appreciate this opportunity to talk with you who are at the sharp end of the relationship - the business men and women who are developing and expanding our trading ties. I - like all the staff in Australian missions in every corner of the globe - find that frequent contact with Australian business people helps keep us focussed on what really matters in any bilateral relationship. Put simply, your concerns must be our concerns, and I'm looking forward to hearing your views after I conclude my remarks.

I want to touch on three topics this morning. The first is the future of Australia-Japan ties, especially in the light of recent research done by our governments. The second is how our two countries might work together for our common economic benefit in the region and beyond. And the third is how our Government is helping position Australia to make the most of its opportunities, at home and abroad.

Further strengthening bilateral relations

I'm not here to tell this audience how to do business in Japan. In Australia, we call that teaching our Grandmother to suck eggs. But for some time, both the Australian and Japanese Governments have felt that more could be done to tap the true potential of the bilateral relationship.

That belief was given a more concrete focus recently with the release of the Strengthening Economic Relations reports by both governments, and the outcome of the Australia-Japan Conference for the 21st Century in Sydney in late April. The broad range of opportunities that exist in our relationship, both bilaterally and within the region have been highlighted. In particular, the changes taking place in both economies are creating many new, exciting complementarities. The challenge, for governments and for you business people as well, will be to make the most of them.

Australia and Japan have both come a long way since the signing of the Australia-Japan Commerce Agreement in 1957 and the 1976 NARA Treaty. Japan has been Australia's largest export market for more than thirty years, and is likely to remain so for the foreseeable future.

The casual observer could be forgiven for thinking that Japan is of diminishing importance to Australia, given the steady stream of bad economic news out of Japan. In fact, nothing could be further from the truth. Despite low growth in Japan over the last decade, Australia's exports to this country have grown 65 percent.

Last year, Australia provided goods and services to Japan worth $25 and a half billion - 25% more than was sold to the whole of Europe, 25% more than was sold to all of ASEAN and two-thirds more than was sold to the United States.

Of course, trade is only part of what underpins the Australia-Japan relationship. Even though our relationship has been so successful and is so strong, we must always be alert to new opportunities to develop it further.

We need to understand and anticipate the changing environment in which we operate, and to ensure the right frameworks and policy settings are in place for our trade relationship to continue to prosper. That was why both governments commissioned the Strengthening Australia-Japan Economic Relations reports, which underscore the continuing importance of the Australia-Japan relationship but also show that many firms haven't realised the full breadth of bilateral opportunities.

One of the Australian report's key recommendations, based on interviews with more than 100 businesses in Australia and Japan, is for a new Australia-Japan Trade and Investment Facilitation Agreement - a "TIFA". During this visit I will be discussing with my Japanese counterparts how we can further examine closer economic relations, particularly the idea of a TIFA.

A TIFA would enhance dialogue and cooperation in a whole range of areas - like biotechnology, energy and resources, financial and other professional services, information technology, competition, consumer and privacy policies, e-government, food standards, and mobility of business people. It would update the commercial framework of the relationship, and make it easier for people in both countries to build our trade and investment ties. I want to encourage you to tell us about issues that concern you and your Japanese counterparts in Australia so that we can address them in the TIFA. I want the TIFA to reflect your experiences as business people at the front-end of the trade relationship and I seek your support - and that of your Japanese partners - in taking forward our discussions on a TIFA.

I'm pleased to say that Austrade and JETRO are already working to implement another recommendation of the Australian SER report - and that is to establish a bilingual web-site with a comprehensive listing of Australian and Japanese firms in the Information and Communications Technology and biotechnology sectors.

Working together in the region

The Strengthening Economic Relations reports also highlighted the role of Australia and Japan in the region. Australia and Japan share many common interests in our region and both countries can feel proud of our contributions to a sense of regional community. The Australia-Japan Conference for the 21st Century, which I attended in Sydney in late April, supported this view. The Conference urged both Governments to cooperate more closely in forums like APEC and the WTO.

Australia and Japan enjoy a special relationship as central players in APEC's creation and development, and in helping to shape and drive APEC's forward agenda. APEC continues to play an important role in helping to free up trade and investment in the Asia Pacific region. Both Australia and Japan can work together and achieve substantive outcomes on trade and investment liberalisation this year - a particularly important goal, given the regional economic downturn.

I expect to work closely with my Japanese counterpart, Takeo Hiranuma, and other Ministerial colleagues during the APEC meetings in Shanghai later this week. We are already moving to ensure cooperation at senior officials level on the future directions of APEC.

With signs of a slowing world economy, the continued push for global trade reform becomes critically important. The opportunity for a WTO round launch is fast approaching - the next WTO Ministerial Conference will be held in Doha, Qatar, in November. Australia remains strongly committed to the launch of a round in Doha, recognising the significant benefits increased international access offer Australian exporters, especially agriculture.

But the launch of a new round is by no means guaranteed. The global economic downturn, limited signs of flexibility from important WTO members on key issues and an increasingly complex set of issues facing the diverse WTO membership, means there is a lot of ground to be covered between now and November.

Australia and Japan should work together closely to advance the cause of a new round, and help ensure it stays focused on the core issue of market access.

Promoting change and growth

Australia is a strong player in these processes because of the strong state of our economy. The recent OECD Growth Project report, The New Economy: Beyond the Hype, found that Australia had achieved an average annual economic growth rate over the last five years of 4.5 per cent - considerably higher than the OECD average of 3.2 per cent.

Our Government's aim is to build strength upon strength. As announced in the recent Budget, we expect that the Australian economy will rebound quickly after the recent slow down. Economic growth is predicted to be 3 ¼ per cent in the 2001-2002 financial year. We expect solid growth in exports, of around 5 per cent in 2001-2002, to contribute to this result, despite an expected slowdown in the world economy.

Lower inflation of around 2 per cent is forecast. Unemployment should be around 7 per cent, and the current account deficit is at decade lows.

The Budget for the 2001-2002 financial year maintains a surplus of $1.5 billion - the fifth surplus in a row. This is the longest run of cash surpluses in almost 30 years. At the same time, our Government will apply around $5 billion worth of tax cuts and simpler administration.

We've clearly got the economic fundamentals right. But we're also planning for our nation's future.

The confirmation in the Budget of our Government's $2.9 billion Backing Australia's Ability statement shows Australia's continuing commitment to the promotion of innovation. The program is designed to further enhance Australia's economic prosperity, competitiveness in the global marketplace, and social wellbeing. The initiative is a five-year plan to address three key areas of our national innovation process - strengthening our ability to generate ideas and undertake research, accelerating the commercial application of these ideas, and developing and retaining Australian skills.

Other budget initiatives reinforce this commitment like expanding the Government's Information Technology Online Program to accelerate the adoption of business-to-business e-commerce solutions, and a $163 million program to further improve telecommunications in regional, rural and remote Australia.

Our Government's approach to change and innovation helped to insulate Australia from the worst of the Asian economic crisis and contributed to the ongoing strength of the economy. The OECD's New Economy Report highlighted the dramatic changes in the Australian economy over the last two decades. These changes have transformed Australia into a highly efficient, modern economy. The OECD report found that these changes had resulted in Australia enjoying the second highest acceleration in productivity growth in the OECD in the 1980s and ′90s.

I was very interested to read the recent report by the Economist Intelligence Unit that showed Australia at the leading edge of information and communications technology. The report ranked Australia second only to the United States in a field of 60 countries in terms of "e-readiness". This backs up the OECD's finding of Australia's efficiency gains through innovation and the use of new technologies. The report notes that it is the use, rather than production, of ICT that is important for economic growth.

I am encouraged by the new Koizumi Government's commitment to reform of the Japanese economy. Japan has already made progress in some areas, but much more needs to be done. A dynamic, open and competitive Japan is good for the region, and for Australia, and I welcome the Japanese Government's enthusiasm to achieve this.


Change in both the Australian and Japanese economies is reinforcing old complementarities and creating many new ones. The challenge for our governments is to recognise these opportunities and to set in place structures through which we can take best advantage of them.

Closer cooperation between Australia and Japan will be the key to achieving mutually beneficial results, both in the bilateral relationship and in forums like APEC and the WTO. A Trade and Investment Facilitation Agreement would be an effective, flexible mechanism to update the framework of bilateral cooperation.

Our Government stands ready to play a leading role in this task. I will be using my visit to reinforce the importance of high-level political contact between our two countries, including the importance of the Australia-Japan Ministerial Committee. And officials from my Department will be working closely with Japanese colleagues on our shared trade agenda. But, as I noted at the beginning of my remarks, we can't act alone. The business communities of Australia and Japan must also rise to the challenge.

I hope that, through this visit, I can take our agenda a step closer toward our ultimate goal - achieving greater prosperity for both our countries. I look forward to your input into that process. I am confident that together we can build success upon success.

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Local Date: Tuesday, 07-Jan-2014 10:02:56 EST