The warmth of your welcome to our Australian contingent epitomises the warmth of the enduring friendship between our countries.
Australia's Prime Minister, Julia Gillard, has asked me to pass on her best wishes for the Dialogue.
She fondly remembers being given the honour of addressing a similar gathering here at the State Department in 2008.
You do Australia a great honour in receiving us in this place – in rooms which are a tribute to the vitality of American democracy and to the successes of the international statecraft which has guided and protected it.
These rooms not only commemorate the past, they celebrate it.
They are the venue for a great deal of work every day, in the present and for the future of the United States and of the international community.
That intelligent, constructive union of past, present and future informs the Alliance we endorse and uphold, just as it defines and pervades the rooms in which we are meeting tonight.
On this the 20th anniversary of the American Australian Leadership Dialogue, it is appropriate to reflect on the close ties and history of our two great nations.
My personal experience of the friendship and trust between American and Australian governments spans the terms of five Presidents, four of whom I have had the honour of meeting.
Back in 1988, President Reagan and his Cabinet hosted Prime Minister Bob Hawke and his entourage for a meeting and lunch at the White House.
As a 33 year-old economic adviser to Bob Hawke, I was to hear President Reagan speak of the friendship he and Nancy had developed with Mikhail Gorbachev and his wife Raisa.
I heard of the President's desire to end the spectre of nuclear war and the crippling arms race – but also of his determination that it be ended in a way that protected America's and the world's security.
We reaffirmed the Alliance, disagreed on American grain export subsidies, and retired for lunch where we told jokes.
The President's was a corker, Bob Hawke's was a ripper and Jim Baker's brought the house down.
Such was the hilarity that not even the most disciplined of the waiters was able to contain his laughter.
I relay this anecdote not to breach national security but to reflect upon the easy camaraderie of our two countries.
It is a camaraderie built on a loyalty to each other forged not only in peaceful times but in the searing heat of bloody conflict.
This year marks the 70thanniversary of the battle of the Coral Sea, a naval battle of pivotal importance to the defence of Australia.
By the end of the Second World War, more than a million American service men and women had staged through our country.
The sacrifice of your fathers and mothers and of ours is a shared sacrifice that we will never forget.
My father fought in World War II, was captured and spent the remaining war years in a German prisoner of war camp.
My son, Ben, is studying in Berlin right now.
American power liberated Europe from Nazi tyranny.
And American military and economic power liberated Eastern Europe from Communist oppression – the Berlin Wall coming down just a year after our meeting with President Reagan.
On behalf of my father and my son, and on behalf of the people of Australia, I thank you.
The Alliance between Australia and the United States means we trust each other, we rely on each other, we know each other extremely well – as mates.
Tonight, as we speak here, young Australians and Americans are risking their lives together to bring a better future for the people of Afghanistan.
They are in our hearts and in our minds.
We are gathered for a leadership dialogue in which we seek peace and prosperity.
America is still recovering from the deepest global recession since the Great Depression.
It's not the first time the American economy has done it tough.
But America's economic history has taught us this truth – America always bounces back.
America's economic resilience is a product of the irrepressible creativity, risk taking and entrepreneurial talent of the American people.
And America has especially mobile labour and capital, enabling it to adapt to changing patterns of competitiveness.
It's estimated that 80 per cent of the post-War improvement in America's living standards is due to new American ideas and their successful commercialisation.
Creativity and a willingness to take risks – defining features of American culture – will again spur your great country's economic revival.
This time of year, you remember your Founding Fathers.
Let me tell you how they look from the other side of the Pacific.
We see a group of individuals prepared to challenge the conventional wisdom and the established order.
We see a group of leaders prepared to think anew and act anew.
Mr Jefferson promised that the United States would "always be puzzling and prospering beyond the imagination of mankind."
We need you to keep puzzling – to re-invent yourselves, to re-build industries and build new ones.
Can we keep going forward, re-inventing our economies in order to sustain our competitive edge?
To paraphrase a well-known American politician: yes, we can.
The productivity program we are implementing in Australia resembles your own work program here in the United States.
We are better rewarding innovation.
We are enabling superfast communications and information transfer through a National Broadband Network.
We are reforming our education and training systems.
We are creating a seamless national economy, removing duplication and inconsistencies in federal and state regulations.
We are putting a price on carbon, joining 50 jurisdictions around the world in doing so, including 10 American states.
And we are spreading the benefits of the mining boom through tax relief for small businesses, productivity-raising infrastructure investment and extra superannuation savings – funded by a profits-based mining tax.
All this is being done while maintaining taxation as a share of the economy well below the levels of the period 2001-2007.
And investment as a share of the economy is at 50-year highs.
But achieving competitiveness through productivity growth will amount to little if our products and services are locked out of international markets.
In the aftermath of the Great Recession of 2008-2009 protectionism is on the rise.
To succumb to protectionist pressures would be to squabble over a fixed or declining number of jobs worldwide.
It's far better to open up markets and tap into the gains from trade through specialisation to create more and better jobs.
We need to overcome the mindset that is gripping much of the world that politicians are better at allocating scarce resources than markets.
Never in the post-War era has the international environment been less conducive to trade liberalisation, but never has opening up markets been more important.
Australia and the US have been at the forefront of efforts to find a way through the long-stalled Doha Round of world trade talks.
At the WTO Eighth Ministerial Conference in December last year the Membership agreed that we would look at new pathways to progress the Doha Round.
Now we are working hard to pave those new pathways.
Australia and the US are working hand-in-glove in Geneva to lead a group of more than 40 WTO members accounting for 70 per cent of the global economy to advance services trade liberalisation.
And we are working together in lowering the cost of doing trade where there would be enormous benefit to developing countries.
We need to keep the machinery of trade reform in Geneva well-oiled.
Because that machinery needs to be working if we're to succeed in tackling some of the harder issues, such as agriculture, where we have a shared interest in correcting some of the worst distortions in global trade and production.
This is not to understate the importance of bilateral trade agreements and an eventual free trade area of the Asia-Pacific which the Trans-Pacific Partnership can help deliver.
Since the Australia-US free trade agreement came into force, trade between our countries has doubled.
But the big difference is in patterns of investment.
It could be said that we sell to China and invest in America.
The United States is the biggest investor in Australia and the largest Australian foreign investment destination.
Our industry superannuation funds, with $300 billion under management, have 30 per cent of their investment in the US.
About 10,000 Australian companies operate here, most of them small and medium sized high-tech service-based businesses.
The TPP is a broader partnership, but it will only deliver on its goals if it reflects a commitment from all its participants to genuine trade liberalisation.
A 21st century TPP agreement must, at its core, resolve the remaining 20th century market access barriers if it is to truly succeed.
America is showing leadership again through its conscious decision to become more actively engaged in Asia.
By 2030 the middle classes of Asia will have grown to an astonishing three billion people, more than 100 times the size of the entire Australian market and almost 10 times that of America's.
That's a lot of well-heeled customers.
China's will be the world's largest economy, America's second, India's third, Japan's fourth and Indonesia's will be at the very least knocking on the door of the top ten.
By plugging into this economic powerhouse, integrating our economies, meeting Asia's resources, energy and food security needs, Australia and America can advance the causes of peace and prosperity in the Asia-Pacific region.
Prime Minister Gillard has launched a White Paper on Australia in the Asian Century.
Its purpose is to chart a course for Australia as we journey through the Asian Century, making the most of the splendid diversity of career opportunities on offer for our children.
It's a journey our two countries should share.
A journey of open trade and investment.
A journey of peace and prosperity.
A journey of enduring friendship and mateship between us.
We pay tribute to you, we celebrate America's greatness and we thank you for your leadership.
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