I am pleased to join representatives of the newly expanded ASEAN today. Engagement with Asia, and particularly our nearest neighbors in ASEAN, is my Governments highest foreign policy priority. Australia contributes to both the prosperity and security of ASEAN, just as the region contributes to our own prosperity and security,

Australia has a long and honourable record of engagement with ASEAN. We were ASEAN’s very first dialogue partner and our record in development assistance, security and political cooperation, economic engagement and people-to-people links has been second to none. Our co-operation continues in our work together in APEC, in the ARF, in AFTA/CER, in the development of die Mekong Basin and in many other regional issues. Most recently, we have all put considerable effort into consulting on the best way to deal with the deeply concerning developments in Cambodia. I can assure you that, in this spirit, Australia intends to work at pursuing a constructive, open and frank relationship with all the countries of the ASEAN nine.

Regional Issues

Australia welcomed the initiative taken by ASEAN to promote consultation and reconciliation among Cambodia’s political leaders and is keen to maintain a dialogue with ASEAN countries on this issue and on the evolution of ASEAN policy in regard to Cambodia. Australia’s close consultation with ASEAN is reflected in the ARF’s decision to support and and work with ASEAN’s lead role on Cambodia. The Australian Government has made several calls for all parties in Cambodia to desist from resort to violence and armed force and to uphold the rule of law and the rights of all Cambodian citizens. Furthermore, there must be a return to stability in the country and the fulfilment of the commitments given recently by the Cambodian Government concerning the continuation of a coalition government which includes FUNCINPEC members; a constitutional resolution of the leadership; the holding of free and fair national elections, and the implementation of policies which will ensure respect for law and human rights.

Regional Achievements

The inauguration of the Australia-Indonesia Development Area (AIDA) was one of the major developments in Australia’s relations with the region over the past year. This is the first regional growth zone between an ASEAN nation and Australia. It aims to improve the enabling environment for private sector trade and investment in Eastern Indonesia. It signals the change from a government-led and development assistance-based strategy to a dynamic private-sector led partnership between Indonesia and Australia. The signing of the historic Maritime Boundaries Agreement in March, concluding over a quarter of a century of negotiations, was another of this year’s highlights. We have also negotiated a revitalised trade Agreement with Malaysia and set ambitious trade and investment targets for Australia’s relations with Thailand. Only yesterday, Australia and Malaysia announced plans to hold high regular Ministerial dialogues. Australia and Thailand agreed at the conclusion of the first Ministerial Economic Commission meeting in Canberra in February to aim to double two way trade and two-way investment by the year 2000. And today, I have announced the commencement of bilateral regional security dialogues with three ASEAN members, Thailand, Philippines and Vietnam to complement those security dialogues we already have with Singapore Malaysia and Indonesia.

Trade relationship

We have a robust and expanding trading relationship with ASEAN. Australia export more to ASEAN than we do to the EU or the US. Two countries in ASEAN – Singapore and Indonesia – are among the top ten of Australia’s merchandise trading partners. Australian imports from ASEAN have also risen rapidly over the past decade. 1996 figures show a 13% increase over the previous year, with import from ASEAN representing around 10% of Australia’s total merchandise imports, Australian exports to ASEAN grew at l.7% over the same period.

The AFTA/CER linkage, which aims to reduce barriers to trade and investment is of growing importance in enhancing Australia and New Zealand economic relations with the ASEAN countries.

Expanding relationship

As ASEAN countries know, Australia has a long, expert and productive involvement in the development of the Mekong region. We have extensive bilateral development programs in the basin, contributing nearly A$2 billion over the last twenty years. Australia looks forward to continuing its constructive involvement in Mekong basin development through participation in the core group for the ASEAN Mekong Basin Development Co-operation initiative. Australian companies have responded positively to a proposal to set up a coordinating body to facilitate private sector cooperative development in the Mekong region. A private sector consulting group, the Australian International Projects Group (AIPG) will act as the focal point for the group.

Australia’s relationship with ASEAN is expanding in many other directions. Earlier this months Australian experts attended a meeting of the ASEAN Committee on Culture and Information (ASEAN COCI). They presented several proposals for joint activities, including an exciting initiative from AusHeritage to deploy Australian expertise to assist ASEAN to develop a cultural heritage strategy. ASEAN-COCI has now agreed in principle to advance this proposal to the feasibility stage, subject to funding being secured.

Over recent years Australia has successfully completed several collaborative projects with ASEAN-COCI, the highlight of which has been a series of workshops run by the National Film and Sound Archive on preservation of audio visual media material, which has resulted in the establishment of regional network of specialists in this field.

South Pacific Issues

Australia’s other closest neighbours are the countries of the South Pacific for which we maintain an abiding interest in promoting economic stability and growth. Our aid to Pacific Island countries, including PNG totals over A$500 million per year. We have welcomed the reforms to the South Pacific Forum and the South pacific Commission. These institutions are now cost-effective and contribute substantially to reform in the islands.

Papua New Guinea

The introduction of mercenaries into the South Pacific was an unwelcome and regrettable step, and a disruptive influence. While we welcome their departure, we note that the underlying problem of Bougainville remains. The Australian Government remains strongly committed to a peaceful resolution of the Bougainville crisis and stands ready, if requested by the PNG Government, to support PNG in carrying the peace process forward. We welcome the rule of the New Zealand Government in the developments in Burnham.

We welcome, too, the election of a new Papua New Guinea Government and look forward to working with it.

The PNG economy returned to relative stability in 1996 with a return positive economic growth, lower inflation, comfortable levels of external reserves and a stable exchange rate, The underlying strength of the economy was tested during the political crisis surrounding the introduction of mercenaries, and it held up surprisingly well.

International Issues

ASEM – ASEAN members of ASEM are well aware that Australia has the credentials’s to make a substantial contribution to the ASEM process on the Asian side. We have received strong support for our inclusion in the first expansion of ASEM from nearly all Asian members of ASEM and look forward to contributing to the development of strategic economic and political links between Asia and Europe.

Olimpycs – As you will all have heard Australia will host the Olympic and Paralympic Games in Sydney in 2000. These Games will provide a global spotlight on Australia through the attendance of an estimated additional 1.5 million visitors and a world-wide television audience of 4 billion people. The Commonwealth Government is working closely with the Sydney Organising Committee for the Olympic Games, the Sydney Paralympic Organising Committee and the NSW State Government to ensure the success of the games. The Games will not only focus attention on Australia, they also have the potential to bring great benefit to our regional neighbours. Only yesterday I announced with my Malaysian counterpart an agreement to exchange sports officials between the two countries so that we can learn from their experience in organising the Commonwealth Games in 1998.

Climate change – Australia is concerned about moves to set binding targets for the reduction in greenhouse gas emissions. We believe that efforts to reduce emissions will impact on international trade and investment flows and will impose significant costs on countries with energy intensive and resource processing industries (including countries like Brunei who are not party to the Convention).

Modelling by the Australian Bureau of Agricultural and Resource Economics demonstrate that under a uniform stabilisation approach, ASEAN will suffer significant falls in their terms of trade, while the EU’s terms of trade will improve. A flat rate target would impose a disproportionate burden on Australia and other countries in our region. Australia is therefore vigorously promoting differentiated targets which recognise the widely differing costs of emission reduction. We also believe that differentiation is sustainable over the long Haul that will be required to address the global problem of climate change.

Development cooperation

Australia has been pleased to support the Australia-ASEAN Economic Cooperation program (AAECP) over the last two decades. Since its inception in 1974 Australia has contributed some $135 million to the program. AAECP Phase III commenced in July 1994 and since then we have seen four major projects commence implementation and an increasingly strong demand for the Linkages Stream component of the program. While Australia regards AAECP as having made a significant contribution to the relationship between ourselves and ASEAN in the Past, it is clear that it is now only one strand in a much broader and maturing relationship which is based on close political cooperation and strong trade and investment flows.

Funds provided for AAECP Phase III are now fully committed, due to recent unexpectedly high demand for the Linkages Stream of the program, and the decisions already made in consultation with ASEAN about the Projects Stream. I would welcome ASEAN views about the nature of a nature successor to the AAECP program.

In conclusion I would like to highlight Australia’s ever increasing links with the countries of the region. Just as the expansion of ASEAN will bring benefits – so deeper engagement with the countries of the greater region will further benefit us all. As I said at the beginning of my address-engagement with Asia, and particularly our nearest neighbours in ASEAN, is my Government’s highest foreign policy priority. And I assure you that Australia’s commitment the region is rock solid.