Craig Emerson (Rankin, Australian Labor Party) Share this | Hansard source

As the deputy chair of the Australia-Japan Parliamentary Friendship Group, it is a privilege for me to be able to take the opportunity, in debating this legislation, to pay tribute to the relationship between Australia and Japan—a relationship that is very rich both economically and culturally, but one which I believe could well do with some revitalisation in the future. I will elaborate upon that in the remarks I make today.

The Australia-Japan Foundation (Repeal and Transitional Provisions) Bill 2006 abolishes the Australia-Japan Foundation as a statutory authority, but that in no way diminishes the importance of the government’s attitude towards the relationship or the Labor Party’s attitude towards the relationship. Instead, the foundation will be brought under the wing of the Department of Foreign Affairs and Trade. That puts it on an equal footing with other foundations or relationships, namely the Australia-China Council, the Australia-India Council, the Australia-Indonesia Institute, the Australia-Korea Foundation, the Australia-Malaysia Institute and the Australia-Thailand Institute. It is very important to acknowledge that this repeal arrangement has no implications for the relationship at all. The relationship is very strong, although I do say it could be revitalised to further build on the good work of both sides of politics since the Second World War.

The first formal milestone in cementing that relationship was the establishment of the Australia-Japan Commerce Agreement of 1957. That was done by Mr McEwen, and Labor certainly acknowledges that. This year we celebrate the 30th anniversary of the Basic Treaty of Friendship and Cooperation between Australia and Japan. That treaty was signed in Tokyo on 16 June 1976 by the coalition government. It was initiated by the Whitlam government in 1973. The key provisions of that treaty expressed the mutual interest of each country in being a stable and reliable supplier to and market for the other and mutual interest in wide-ranging areas, including political, human rights, legal, scientific, technological and environmental issues.

There have been further developments in the relationship since 1976. The two countries, Australia and Japan, led the charge in establishing APEC. The institution was established under the Hawke-Keating government in 1989 and this government has carried it on. APEC has become one of the paramount institutions for economic and political cooperation in the world, and we are all very proud of it. In 1994, Australia and Japan were founding members of the ASEAN Regional Forum. That is the leading multilateral cooperative grouping that aims to develop dialogue and confidence-building measures to advance security in East Asia. A third development was the advancing of the relationship by Prime Minister Keating in 1995 with the Joint Declaration on the Australia-Japan Partnership, which committed the two countries to advance prosperity, to reduce tensions and to advance political stability in the region.

I also take the opportunity to acknowledge the wonderful work that has been going on at the Australian National University over all these years, following its foundation after the Second World War. I would not have time to acknowledge all of those who have contributed to that relationship, but I will mention Sir John Crawford, Professor Heinz Arndt, Professor Peter Drysdale and Professor Ross Garnaut. There are many others who have worked very hard to ensure that we have great cooperation across all fronts between Australia and Japan. It is also true that, although Labor opposed and continues to oppose the Australian engagement in Iraq, the Japanese and Australian soldiers have served side by side in an attempt at least to build democracy in that country. So our relationship is very much a rich one both economically and culturally.

I want in that context to spend a little bit of time talking about our economic interests and particularly about oil security. When Iran started behaving in what was really an unacceptable way on its nuclear aspirations, I am sure that Japan was concerned. You do not know what could happen to oil supplies from the Middle East. Indeed, Iran is a major supplier of oil to Japan. Japan would be very concerned, given the experience of the 1970s, when there was an embargo by the Middle East on oil supplies to Japan. That is one reason why Japan has been so interested in buying natural gas from Australia. It is also very much the reason that the North West Shelf has been established.

That oil price surge following the behaviour of Iran reminds us that there is a terror premium on the world price of oil. Of course, the increased oil price is partly due to very strong growth in China and in the rest of the world, but there is no doubt that there is a terror premium. Australia’s folly in being one of the members of the coalition of the willing and attacking Iraq in the first place has, far from reducing oil prices, dramatically escalated them. Australian motorists are paying the price for that today—just as the Iraqi people have paid a very heavy price in lives lost, which is running into the order of about 1,000 a month, as Iraq descends ever closer to civil war. All this instability has not helped Japan, has not helped Australia and has not helped the people of Iraq who have lost their lives in the process.

Notwithstanding that, I am pleased to be able to report that the Japanese economy is growing again. That is terrific for the people of Japan. It is also good for Australia, given the very close trading relationship that has been forged over the years. Japan’s real gross domestic product increased by 3½ per cent over the year to the end of March. That is really quite strong growth, given that for a very long period of time there was virtually no growth in the Japanese economy. The business sector is far more confident. Investment intentions are up and, indeed, are reported to be at their highest level since the early 1990s. So there is good news on the investment front.

Also, consumers are getting a lot more confident. Breaking the habit of a lifetime of saving most of their extra income, they are actually spending it. So we have had pretty strong consumer spending growth, and consumer sentiment is way above its long-term average—all of which reminds us of the importance of revitalising the relationship.

There are proposals for an Australia-Japan free trade agreement. I have to say, with all candour, that I do not think that is necessarily a good idea—only for this reason: that what would be proposed would not be a bilateral open trading arrangement but a preferential trade deal, a discriminatory trade deal, building on the proliferation of discriminatory trade deals that really began in earnest at the beginning of the 1990s and continues through to this day.

Coalition ministers have argued that these discriminatory or preferential trade deals are building blocks for global trade liberalisation rather than stumbling blocks. The Doha Round appears to have collapsed; it has been suspended. I do not recall Australia or the United States saying: ‘We’ve got all these preferential trading deals, so these are the building blocks for Doha. Let’s go ahead with Doha.’ In fact, the United States was really quite intransigent in terms of trade liberalisation as one of the countries that contributed to the suspension of those negotiations. So the folly of preferential trading deals is there for all objectively to see.

Australia and Japan have negotiated bilateral trading arrangements in the past. The previous Labor government did that, but it did it on a non-preferential basis. All Australia sought was the opening up of Japanese markets and an opportunity to compete. Australia did not say to Japan that it wanted preferential access to the beef market or to other markets, only that Japan should open up its markets, as Australia was opening up its markets, and give us an opportunity to compete. That, rather than these preferential trade deals, is the correct basis for bilateral trading arrangements.

Indeed, during the 1930s, a lot of the tension that contributed to the Second World War was created out of the negotiation of preferential discriminatory trading arrangements, including the establishment of discriminatory trading blocs—discriminating against the country of Japan. A country such as Japan, which is so heavily dependent on resources from other countries, is always going to feel vulnerable when countries get together and come up with trading arrangements that discriminate against it. That is what happened during the 1930s, and that was one of the contributing factors to the Second World War. We do not want anything like a repeat of the Second World War. My colleague the member for Batman has described the horror of the bombing of Japan. Combine that with the horror of so many Australian, American, Chinese and other lives lost during that Second World War—so many lives lost. The folly of preferential trading arrangements is just one of the contributors to the sorts of tensions that can lead to that sort of horror scenario.

I will finish on the idea of a preferential trading arrangement with Japan. Australia of course will want access to the Japanese rice market. I find it passing strange that Australia should want to export rice to Japan. I think the chances of the Japanese saying to Australia, ‘Here’s an open market for Australian rice,’ are absolutely stone, motherless, cold zero. So you would not want, if you were a government negotiator, to make a requirement for the negotiation of a preferential trading arrangement with Japan the opening up of Japan’s rice market. Therefore, it would not be a free trade agreement. There would be restrictions. We found in relation to the US-Australia free trade agreement that in many areas it was trade restricting, not trade creating. So let us get on and put all our efforts into revitalising and restarting the Doha Round of multilateral trade negotiations and move away from this folly of preferential trade deals.

There is enormous extra potential in the relationship between Australia and Japan, not only in commodity exports but very much in cultural exchange and services exports between the two countries. Today has been an opportunity to traverse some of that ground, to congratulate Japan on the relationship that it enjoys with Australia and to look at the options for revitalising the relationship so that we can enjoy further growth and prosperity between our two great countries. As deputy chair of the Australia-Japan friendship association, it gives me great pleasure in congratulating Japan on the 30th anniversary of the treaty.

See this speech in context