Speech by

Stephen Smith MP
Minister for Foreign Affairs“Japan and Australia: an enduring partnership”

Japanese Institute for International Affairs
Tokyo
18 December 2008

Introduction

Thank you for that kind introduction.

I also thank Ambassador Satoh, the President of the Japan
Institute of International Affairs.

It is a great pleasure to be in Tokyo again and to have theopportunity to make some remarks at this distinguished venue.

This is my fourth visit to Japan this year. I welcome thisopportunity to engage with our Japanese friends and colleagues
as we take forward the partnership between our two nations.

Our relationship, built on a long term economic partnership, is
importantly underpinned by shared values, intersecting interestsand common approaches to international security challenges.

It is a relationship of increasing strategic importance to bothcountries.

Today Australia’s Minister for Defence, Joel Fitzgibbon, and I
will join our Japanese counterparts for the Australia-Japan Joint
Foreign and Defence Ministerial Consultations, the so-called
2+2 meeting.

1This strategic dialogue is of great significance to Australia andJapan.

It is the only formal 2+2 Foreign and Defence Strategic
Dialogue that Australia has in Asia. It is one of only three that
we have world-wide, the others being with the United States andthe United Kingdom.

This Australia-Japan 2+2 meeting builds on our sharedperspectives of regional and global security.

It also reflects the deep partnership of mutual respect, trust andfriendship built up between our countries, with a history of
successful security cooperation.

Such a meeting could only take place in the closest of
relationships. The 2+2 highlights the reality that Australia andJapan are firm friends, close partners and key players inaddressing regional and global security challenges.

I wish to focus today on Australia’s view of our enduring
partnership with Japan and why we regard it, now and into the
future, as a comprehensive strategic, security and economic
partnership.

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The foundations

The Australian Government’s first year has been an intensive
one, and diplomacy has been at the heart of our efforts tostrengthen Australia’s international engagement.

That engagement is directed towards the effective pursuit ofAustralia’s regional priorities and our global interests.

Our Prime Minister, Mr Rudd, noted in Australia’s inaugural
National Security Statement on 4 December, that Australia ispursuing an“activist diplomatic strategy aimed at keeping our region
peaceful and prosperous”.

A key pillar of our foreign policy is our relations with the AsiaPacific region.

Central to this enhanced Australian regional engagement is ourpartnership with Japan.

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Our bilateral relationship is an enduring and mature one. We
have a long history of cooperation, embracing security issues aswell as well-established economic links.

We have common interests in maintaining a stable, prosperous
and open Asia-Pacific. These interests, and our common
democratic values and virtues, have forged close bonds between
the Australian and Japanese people.

Our students and businesspeople have been driving thisinteraction in a practical way. In 2007, nearly 90,000 Japanese
went to Australia for education purposes. About 16,000 of theseare Japanese students who are studying full time in Australia.

Japanese has long been the most studied foreign language inAustralia.

Australia recognises that our prosperity and security are shapedby our relations with the countries of the Asia Pacific region.

Those relations will be built and sustained by increasing
numbers of Australians who can speak an Asian language andwho can operate and build links in Asian societies.

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In recognition of this, the Australian Government this year
committed $62 million to the teaching of Asian languages inAustralia.

The Australian and Japanese business communities have led theway in forging links between our countries. Our commercial
partnership has flourished over recent decades and brought ourpeople closer together.

Japan has been Australia’s largest export market for more than
40 years.

Australia is a reliable and stable long-term supplier of food,energy and resources to Japan. This will underpin our
relationship even as international competition in these markets
increases.

Japanese direct investment continues to play a key role in thedevelopment of many of Australia's export industries.

Australia is one of the largest recipients of offshore investment
by Japanese mutual funds. Similarly, Japan is one of the largest
destinations for Australian investment abroad.

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Our trade relationship has transcended the bilateral to become
regional in nature. Companies from both countries operate andinvest in third-country supply and manufacturing networks.

Both Governments recognise that our complementary andgrowing trade and investment relationship in energy and mineral
resources such as iron ore, coal, liquefied natural gas anduranium is also of strategic importance.

Australia and Japan understand the crucial importance of stable
and secure supply of resources. The Australian Government isenhancing our infrastructure to boost our energy and minerals
exports.

Australia and Japan are committed to building on this history of
successful cooperation. We believe we can take our economic
relations to a higher level.

We are actively pursuing a comprehensive Free Trade
Agreement.

We have held four negotiating rounds this year and we haveanother scheduled for early 2009. We have made good progressbut, naturally, there are sensitivities that need to be carefully
addressed.

6Our commitment to an FTA with Japan reflects our convictionthat the economic relationship can be further developed to ourmutual benefit. A comprehensive FTA would bolster trade andinvestment and strengthen the economies of both countries.

The Asia-Pacific Century

Australia has important, but different, relationships with thegreat and emerging powers of the Asia-Pacific region.

The importance of those relationships derives from the mutualinterests they embrace. The differences between them aredefined by their history, their scope, their intensity and theshared values on which they are based.

We have an alliance relationship with the United States that is ofcentral and indispensable importance to our national security
and economic interests.

Our comprehensive partnership with Japan is built on common
values, shared strategic priorities and vital economic links.

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We have an important and growing relationship with China thatis founded on critical areas of economic complementarity andshared regional interests.

We have an engagement with India that we are committed totaking to the front rank of Australia’s bilateral relationships andthat is established on strong historical ties, shared economic
interests and significant regional links.

We also have important and expanding relationships with theRepublic of Korea, with Indonesia, with the other countries of
ASEAN and with the countries of the South Pacific.

The depth and intensity, in particular, of the modern AustraliaJapan relationship is a significant asset for both countries, andwill serve each of us well as we advance into “the Asia-Pacificcentury”.

This new era is marked by an inexorable shift in global
economic and strategic influence to the Asia Pacific.

Within Asia we have the world’s two most populous countries,
China and India; two of the top three economies, Japan and
China; the largest democracy in the world, India; and the8country with the largest Muslim population in the world,
Indonesia.

By 2020, Asia will account for around 45 per cent of global
GDP, one-third of global trade, and more than half of theincrease in global energy consumption.

By 2020, 56 per cent of the world’s nearly 8 billion people will
live in Asia.

These rapid changes, however, are not just economic or
demographic. The global strategic balance is changing.

Two of the world’s largest military forces, China and India, arein Asia.

With this growing economic and strategic influence comes an
expectation of, and the actual exercise of, greater politicalinfluence.

The continuing rise of China and the emergence of India will
accentuate these trends.

Transnational challenges

9As this Asia Pacific era takes shape we are confronting
problems that cannot be effectively addressed by individual
nation states acting in isolation.

Today, climate change, the global financial crisis, weapons
proliferation, terrorism, transnational crime, environmental
degradation, energy security, health pandemics, people
movement, poverty and inequality all affect global and regional
stability.

In our first year in office, the Australian Government has lookedafresh at our strategic and national security challenges and how
to respond to them.

The Prime Minister’s National Security Statement two weeks
ago sets out how we intend to adapt and respond to thesechallenges.

We recognise that the challenges of globalisation demand acommitted and active bilateral, regional and multilateral
strategic engagement from Australia.

In each of these spheres we regard Japan as a key strategic,
security and economic partner.

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Australia and Japan are committed to cooperating on climatechange and reducing greenhouse gas emissions, as Prime
Ministers Rudd and Fukuda stated in June 2008.

Our two countries cooperate closely through the United Nations
Framework Convention on Climate Change (UNFCCC),
particularly in the ‘Umbrella Group’, as well as the Asia PacificPartnership for Clean Development and Climate (APP), APEC
and the East Asia Summit.

We applaud Japan making climate change a central theme
during its G8 Presidency in 2008, and support the G8’s goal tocommit to 20 large-scale Carbon Capture and Storage (CCS)
demonstration projects globally by 2010 with a view to
beginning broad deployment by 2020.

The strategic relationship

Prime Minister Aso recently described the Australia-Japan
relationship as reaching the most productive time in its history.

It is the increasing scope and depth of our strategic relationshipthat really bears out Prime Minister Aso’s judgment.

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As economically advanced democracies, we share importantcommon ground on today’s key global challenges.

Last year, we signed the Japan-Australia Joint Declaration on
Security Cooperation, which was the first such document Japan
has signed with any country other than the United States.

The Declaration affirmed our growing strategic partnership andset out an Action Plan to take forward practical measures thatenhance our partnership.

It facilitates Australia-Japan cooperation in contributing toregional and global peace and stability.

The Joint Declaration also established the “2+2” meeting
between our Foreign and Defence Ministers, the second meetingof which will be taking place in Tokyo today.

Australia and Japan have cooperated effectively on the groundmost recently in Iraq, but before that in East Timor andCambodia.

An important part of our ongoing security cooperation will bemaintaining some of the interoperability that we achieved during
these operations.

12Good progress has been made since the signing of the Joint
Declaration, including under our Memorandum on Defence
Exchange.

The visit of Japanese P3-C aircraft to Australia and theparticipation of the Japanese Maritime Self Defence Force in
Exercise Kakadu off the northern Australian coast this year were
important in expanding our practical defence engagement.

Defence Minister Fitzgibbon and I look forward tostrengthening this engagement through our talks this afternoon.

Trilateral Security cooperation

Australia’s cooperation with Japan in the Asia-Pacific region isstrengthened by the fact that we are both allies of the UnitedStates.

Australia’s alliance with the United States remains the bedrockof our foreign and security policy.

Both Australia and Japan understand the importance of thecontinuing presence and engagement of the United States in the
Asia-Pacific region.

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Our alliance relationships with the United States enhance ourown security and contribute to the stability of the Asia-Pacificregion generally.

Strengthened bilateral cooperation between Australia and Japan
in turn enhances our respective relationships with the UnitedStates, including through our security and defence cooperation
under the Trilateral Strategic Dialogue.

Former Foreign Minister Koumura and I joined Secretary ofState Rice for the Ministerial meeting of the Trilateral Strategic
Dialogue in Kyoto in June.

We decided then to jointly develop arrangements to exchange
information that will ensure the best use of assets and otherresources in preparing for and responding to natural disasters
and other humanitarian emergencies in the region.

Regional Security: a shared approach

The Japan-Australia Joint Declaration on Security Cooperation
provides a framework for us to work together on common global
and regional security challenges.

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Our region still contains potential security flashpoints, where
political miscalculation or adventurism could have dramatically
adverse consequences for Japan, Australia and our region as awhole.

Both our countries are committed to easing tension and finding
cooperative means to resolve ongoing disagreements.

The recent agreement between Japan and China to cooperate incontested areas of the East China Sea is a good example of thisapproach.

Australia warmly welcomes this dimension of the improved
relations between Japan and China.

While significant political disagreements remain unresolved,
Australia also welcomes recent progress towards better relations
across the Taiwan Strait.

Australia strongly supports international efforts to encourage
North Korea to denuclearise.

We work closely with Japan, the United States, the Republic ofKorea and others in support of the Six Party talks.

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We look forward to continuing our close cooperation with Japanon resolving the North Korean nuclear problem. We alsostrongly support Japan’s call for a full accounting of the fate ofJapanese citizens abducted by North Korea.

Australia places high importance on our cooperation with Japan
in wider efforts to promote nuclear non proliferation anddisarmament.

This year Australia and Japan established the International
Commission on Nuclear Non-proliferation and Disarmament.

The Commission is co-chaired by Ms Yoriko Kawaguchi, aformer Japanese Environment Minister and Foreign Minister,and Mr Gareth Evans, a former Australian Foreign Minister.

Both bring a wealth of experience to the Commission.

The Commission, which held its inaugural meeting in Sydney in
October, has received strong international support. It isreinvigorating global efforts to prevent the proliferation of
nuclear weapons and to seek a recommitment to the ultimate
goal of a nuclear weapon-free world.

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By establishing the Commission, Australia and Japan are
making a positive contribution to the prospects for a successful
Nuclear Non-Proliferation Treaty Review Conference in 2010.

Terrorism also continues to threaten global security. The
appalling attacks in Mumbai were a horrifying reminder of thatreality.

Australia is firmly committed to the fight against international
terrorism.

Afghanistan, and the border areas of Pakistan, remain crucial tothat effort. Failure there will have serious adverse consequence
for the region, and for the wider international community.

In this context, Australia welcomes Japan’s recent decision tocontinue naval refuelling activities in the Indian Ocean. The
decision is an important step in support of international
operations in Afghanistan.

Australian has made clear that it is committed to contributing tointernational efforts in Afghanistan for the long-haul.

We recognise that those efforts cannot be military alone, andthat collectively we need to pursue a comprehensive strategy

17that addresses not only security but governance, economic
development, genuine reconciliation and capacity-building as
well.

Australia has around 1100 defence force personnel deployed in
Afghanistan. They are engaged in vital security andreconstruction tasks. We have also provided more than $600
million in aid and reconstruction assistance since 2001.

We are also increasingly focused on ways to assist Pakistan deal
with the threat posed by Islamist extremists.

Australia is stepping up its engagement with Pakistan across a
range of areas and is supporting health and education initiatives,
good governance, counter-radicalisation and counter-terrorism.

Like Japan, we are a member of the Friends of Democratic
Pakistan Group which will support Pakistan in addressing its
internal challenges.

Japan has made a very strong contribution to these efforts,
particularly through its economic assistance along the AfghanPakistan border.

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We also welcome Japan’s contribution to Iraq’s reconstruction
and recovery. For our part, Australia is supporting progress
towards these goals through our provision of humanitarian relief,
reconstruction and capacity building in areas that include
agriculture and law enforcement.

Closer to home, Japan and Australia are working together topromote stability and economic development in the PacificIsland countries.

Japan makes a strong contribution to the development of the
Pacific Island countries, both as a major aid donor and as aregional partner with Australia in support of good governance.

Together, we can do much to assist the nation building anddevelopment efforts of countries like Solomon Islands and East
Timor.

The Australian Government has achieved much in its first year
to develop a new approach based on mutual respect and mutual
responsibility in our relations with our Pacific neighbours.

Prime Minister Rudd’s Port Moresby Declaration on 6 March,
welcomed by Japan, outlined a new vision for Australia’s
engagement in the region.

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Australia is committed, in particular, to helping our Pacificneighbours through our Pacific Partnerships for Development.
These Partnerships will build economic capacity in the Pacificand help our neighbours achieve progress towards theMillennium Development Goals.

Working to strengthen multilateralism

Many of the most imposing problems we face in the world today
require genuinely global cooperation.

Australia shares with Japan a firm belief that, in facing complex
global challenges, the work we can do in the multilateral systemand through the United Nations is vital.

The Australian Government has worked in its first year in office
to ensure that Australia plays a much more active multilateralrole, including in the United Nations.

The United Nations, however, needs reform to be more effective.
The UN Security Council needs to better reflect the modern
world and the emerging realities of global power and influence.

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Australia supported Japan’s successful bid for a non-permanent
Security Council seat in 2009 and we will continue to support apermanent seat for Japan on a reformed Security Council.

Australia is itself seeking election to the Security Council as a
non-permanent member for the 2013-14 term.

Australia has much to contribute to the Security Council. We
bring unique perspectives, creativity, energy and a practicalproblem-solving ethos.

We also bring a wealth of experience in peace-keeping, conflict
prevention and peace-building.

Much of Australia’s multilateral diplomacy is also aimed atstrengthening stability in the Asia-Pacific region.

That is why Australia, like Japan, contributes actively andconstructively in regional bodies such as APEC, the ASEAN
Regional Forum and the East Asia Summit.

Australia believes that now is the time for regional countries tofocus on and to think carefully about how regional architecturein the Asia-Pacific should develop to best address economic andstrategic challenges into the future.

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Australia has developed some broad ideas underpinning theevolution of an Asia-Pacific Community by 2020, and we haveinitiated constructive dialogues across the region on the mosteffective institutional architecture to meet the challenges we
face.

Australia and Japan have a history of working together todevelop and build the regional architecture which isfundamental to regional peace and prosperity.

APEC, established nearly 20 years ago with the active
engagement of Australian and Japanese diplomacy, is a clear
example of this. We are partners in APEC’s ongoing work andwe look forward to Japan’s chairmanship in 2010.

APEC has evolved into a powerful and influential economic
forum, representing economies that account for over half theworld’s Gross Domestic Product.

In that context, it was important that APEC Ministers in Lima
called for greater urgency in finalising the Doha tradenegotiations.

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APEC reflected the highly successful G20 Leaders’ meeting inWashington last month to galvanise practical internationally coordinated responses to the global financial crisis.

This global crisis poses difficult challenges for us all. The G20
Leaders meeting was the vital multilateral response anddemonstrated the capacity of the G20 to provide effective global
leadership to these unprecedented challenges.

The G20 Action Plan for the reform of financial markets
provides critical benchmarks for progress out of the crisis.

Importantly for both Australia and Japan, G20 Leadersrecognised that we must not allow unprecedented challenges to
the global economy to threaten one of the key drivers of global
economic prosperity - the liberal international trading system.

With nine of the G20 countries in APEC and with 6 of the G20
countries coming from our region (Australia, China, India,
Indonesia, Japan and Korea), the Asia-Pacific is well placed toensure that its voice is heard as the G20 countries continue torespond effectively to the international financial crisis.

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The East Asia Summit Leaders’ meeting early next year will be
another opportunity for a regional discussion in advance of the
G20 Summit scheduled for London in April.

Conclusion

Japan and Australia are natural partners, globally and in the
Asia-Pacific Region.

We share a vision of a cooperative and more integrated region.
We are committed to developing and strengthening ourpartnership to respond effectively to global challenges.

In a changing world, both Japan and Australia have afundamental interest in sustaining an open, prosperous andsecure global and regional environment.

That is why Australia sees building an even stronger andbroader partnership with Japan as a bilateral and regional
priority of the highest order.

Thank you.

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