The Rudd Government is committed to comprehensive and active engagement with the Asia-Pacific region.

Date:  17 October 2008

It is one of the pillars of the foreign policy approach we adopted on coming to office last year and it is critical to Australia’s future economic and strategic interests.

Global economic and strategic influence is inexorably shifting to the Asia Pacific.

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

It is also forecast that by 2020, 56 per cent of the world’s nearly 8 billion people will live in Asia.

China and India are adding their enormous energy to the already considerable economic strength embodied in Japan and Korea.

By 2020, it is forecast that 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.

Asia’s surging growth is driving Australia’s own economic prosperity.

In 2007, Australia’s total global merchandise trade stood at over $350 billion. Of that, over $200 billion, nearly two thirds of our merchandise trade, was with Asia.

Last financial year, Australia’s top three merchandise export markets were Japan, China and Korea. These three markets combined accounted for 47 per cent of Australia’s exports. Japan represents our largest export market, and China is now our largest bilateral trading partner.

India, our 10th largest trading partner, is Australia’s fastest growing export market. Over the past five years Australian goods and services exports to India have risen at an annual average of more than 30 per cent. Indians are the second largest group of foreign students seeking an education in Australia and the largest group of skilled migrants supporting our economic growth.

The shift of influence to the Asia Pacific is not just economic or demographic. It is also strategic.

Three of the world’s five largest military forces, China, India and the Democratic People’s Republic of Korea, are located in Asia and East Asian military spending alone is now equivalent to that of all the European NATO countries combined.

Australian Governments have long recognised the importance of actively engaging with Asia to advance Australia’s long-term national interests.

Australia has supported ASEAN, one of our region’s oldest institutions, and the stability and regional cooperation it has fostered since its establishment in 1967 and was ASEAN’s first dialogue partner.

I recently announced Australia’s first Ambassador to ASEAN and the Trade Minister has also completed negotiations for an FTA with ASEAN and New Zealand. These developments provide a solid platform for deeper economic integration and enhance our ability to work closely with ASEAN on key regional issues.

Under Hawke and Keating, the Australian Government was one of the original architects of APEC and its evolution from a forum for foreign and economic ministers to an annual leaders meeting.

Australia has also been an active participant in the ASEAN Regional Forum since its establishment in 1994, as well as in the recent formation of the East Asia Summit.

Each of these institutions are essential conduits and catalysts for common action in the Asia Pacific region.

Australia shares a common objective with our partners in these regional organisations.

We all want to see a stable and prosperous Asia-Pacific.

With the increasing transfer of economic and strategic influence toward Asia, Australia has a responsibility and an interest to work with our region to ensure we take advantage of these changes and advance our common interests. It is unambiguously in our long term national interest to do so.

For this reason, we need to think about how to position our region to adapt to and exploit the significant political, economic and strategic changes that are occurring in order to better shape and influence them.

That’s why, consistent with our commitment of comprehensive engagement with the Asia-Pacific region, the Prime Minister recently announced an Asia Pacific community initiative.

At present, we don’t have a single piece of architecture where all of the key regional players can be in the same room at the same time talking about both economic and strategic matters.

India, for example, is not part of APEC and the United States is not part of the East Asia Summit.

The Prime Minister’s initiative has started a conversation with our friends and neighbours about how the Asia Pacific region might evolve to meet future strategic, security, economic and political challenges and opportunities.

This is just one example of our determination to respond creatively to, and remain engaged in, this century’s inexorable shift of global economic and strategic influence to the Asia Pacific region.