Australia today – What does ASEAN mean for Australia
Ms Jane Duke, Australian Ambassador to ASEAN
Remarks at ASEAN 50 Years Celebration Business Forum
hosted by the Council for International Trade and Commerce
31 March 2017
Thank you Jack for that wonderful welcome to country.
I also wish to acknowledge the traditional owners of the land on which we meet today, the land of the Kaurna people, and pay my respects to Aboriginal and Torres Strait Islander people, past and present, who may be among us.
Acknowledgements: Francis Wong, OAM, Chair, Council for International Trade and Commerce South Australia (CITCSA), the Right Honourable Lord Mayor of Adelaide, Martin Hease, His Excellency Zakaria Ahmad, High Commissioner of Brunei, Ms Christine Holgate, CEO Blackmores and Chair of the Australia -ASEAN Council, Excellencies, distinguished guests.
Thank you to CITCSA for the invitation and arranging this important event. I am delighted to be here to discuss the importance of ASEAN to Australia’s interests in the year of ASEAN’s 50th anniversary. Foreign Minister Bishop regrets not being here, and I am honoured to represent her this morning.
ASEAN at 50
Regional peace, security and stability
ASEAN has an influence throughout Asia that is not always well understood.
It’s easy to overlook ASEAN’s contribution to South East Asia’s transformation from conflict and poverty to peace and prosperity just as it is easy to be frustrated by the slow pace of Asian multilateralism.
There are those who are critical about ASEANs cohesiveness and effectiveness. Singapore’s Ambassador at large Bilahari Kausikan has responded to criticism of this kind by saying:
“Too often criticisms of ASEAN by people who ought to know better, amount to accusing a cow of being an imperfect horse: too often suggestions on how to improve ASEAN amount to fervently wishing that pigs might fly”.
As we celebrate the 50th anniversary of ASEAN this year, it is instructive to recall its remarkable achievements. ASEAN’s half-century of building trust, creating habits of cooperation and fostering regional economic integration has been integral to the changed regional landscape. ASEAN has proven itself to be resilient in minimising conflict between its 10 members. It has provided stability for the region more broadly, including by building relations with external powers.
Australia benefits from this achievement, which, in making our neighbourhood more secure and prosperous, has supported our own peace and prosperity.
ASEAN gives its diverse members a greater collective voice on the global stage and brought major powers such as the US, China, Japan, India, to its platforms like the leaders-led East Asia Summit of which Australia is also a member. The EAS provides a vital opportunity for leaders to discuss regional issues of concern and reinforce expectations of acceptable strategic behaviour.
We are witnessing a historic shift of power in the Indo-Pacific region and many uncertainties. Some say we are at an inflection point. Strategic competition between the major powers is playing out in places like the South China Sea. ASEAN member states – like many others- are wrestling with the implications of China’s rise. The collective response of regional countries has the potential to shape China’s decisions about its strategic goals and how to pursue them.
In her Fullerton address in Singapore earlier this month, Foreign Minister Bishop noted that
“as one of the guardians of regional norms, ASEAN should never underestimate the moral force it can exert in the form of collective diplomatic pressure”.
Talk of regional norms and a rules-based order might sound rather abstract but essentially it is about the legitimacy that respect for international law carries over the alternative unchecked use of raw power. ASEAN and Australia’s interests are not well served by a culture in the region of “might being right”.
Southeast Asia has no regional grouping alternative to ASEAN and its forums through which to collectively defend and promote this rules-based order. A region without ASEAN, or an ASEAN that finds its centrality and unity fractured would be detrimental to all of us.
It is in Australia’s interest to support ASEAN in grappling with these challenges - their sea lanes are our sea lanes; their security challenges are our security challenges.
ASEAN is also very important to Australia’s economic prosperity.
As a bloc, ASEAN is currently Australia’s third largest trading partner accounting for 15% of Australia’s total trade. In 2015, two-way trade totalled $90 billion while two-way investment reached $227 billion.
With its large and growing population of 630 million people, young working age population and rising middle class, it has the right metrics to underpin its prospects for continuing economic dynamism.
Over the past 15 years, ASEAN’s combined economy has quadrupled to US$2.5 trillion. On average, market growth is about 4.5%, making it one of the top three centres of global growth. It is an increasing destination for global FDI. Since 2013, it has attracted more FDI than China, although China is four times larger.
Of course ASEAN is not a monetary or customs union and is not governed by supranational legislation; it is comprised of ten very diverse economies presenting distinct market opportunities. ASEAN never intended to be another European Union.
But while each individual market may be quite distinct, it is important to take into account ASEAN’s plans for deeper economic integration under the ASEAN Economic Community.
In ASEANs own words, the AEC will promote the “seamless movement of goods, services, investment, capital and skilled labour”. It will also support a suite of business enabling measures to make ASEAN countries more competitive in trade and investment over the next ten years. ASEAN wants to further integrate member states based on the principle of an open, inclusive market driven economy.
It’s an iterative process and its changes will be felt over time. Early gains in the lead-up to the 2015 declaration of the AEC, were in eliminating virtually all intra-ASEAN tariffs.
The next wave of reforms has proven more challenging and will continue to be slow work.
ASEAN has the ability to deliver on its integration aspirations but its 10 members have differing capacities to implement national level reforms. It is up to each member state to implement the domestic reforms required. Singapore for example is at a very different stage of development to some other newer members of ASEAN, so is able to move ahead at a different pace.
To be sure, this is a long game with gradual changes, in an environment which rewards those who can adjust their thinking over longer horizons. But there is a strong fit between the region’s primary growth drivers and Australia’s capability to meet them. Sectors where Australia can help meet ASEANs needs include infrastructure, construction, resources, education, financial services, logistics, health care, agribusiness and many other sectors besides.
Last year’s inaugural Australian Business in ASEAN survey shows that Australian companies that have made the move to the region are thriving and bullish about their growth prospects and that a key driver of this growth is greater ASEAN integration.
However, key challenges for business in the region include lack of access to skilled labour, barriers to ownership and investment, corruption and services restrictions.
The Australian Government is working to secure FTA solutions to some of these challenges while simultaneously supporting economic liberalisation and trade facilitation through our aid programs in ASEAN countries, both regionally and bilaterally.
Complementing our bilateral FTAs with Singapore, Malaysia and Thailand, is our Free Trade Agreement with ASEAN & New Zealand (AANZFTA), which remains is ASEAN’s most comprehensive trade agreement to date. A General Review of AANZFTA is scheduled for 2017-18 and we will be seeking feedback from business.
In addition, we are currently negotiating an FTA with Indonesia which we hope to conclude in 2017 and the Regional Comprehensive Economic Partnership or the RCEP.
RCEP aims to enhance the economic links between ASEAN and the six regional countries with which it has existing FTAs (China, Japan, India, ROK, Australia, NZ). It is important to recall that RCEP is an ASEAN initiative, and that its guiding principles were crafted not in China but in Indonesia and the process is supported by the ASEAN Secretariat. We trust that this group that is home to around half the world’s population and a combined GDP of US$23 trillion will provide greater opportunities for Australian business once RCEP is concluded.
Until recently our private sector engagement at the regional level in ASEAN had lagged somewhat behind the rest of our relationship. While we had excellent business engagement in many of the individual countries, we were lacking coordination to channel key messages at the regional level, which puts us at a disadvantage compared with our competitors.
We are delighted to see that this is changing. The Australia-ASEAN Business Council, which is affiliated with the Australian Chamber of Commerce and Industry, is being reinvigorated. Similarly, the newly established Australia-ASEAN Chamber of Commerce based in Singapore will be a great voice for Australian business in the region. They produced the excellent 2016 Australian Business in ASEAN Survey and will update it this year. I’m pleased to see representatives of both the Council and the Chamber here today.
I am well aware that more Australian businesses are seized of the opportunities in the region, have capital and want to invest, and want to the AEC to be fully realised. Business leaders should take advantage of these new Chambers to advocate the advantages of economic reform and integration.
Australia’s relationship with ASEAN
Australia’s engagement with ASEAN dates back over 40 years. We understood from ASEAN’s inception its strategic importance to our interests. It’s why we were ASEAN’s first dialogue partner in 1974, why we negotiated the AANFTA last decade and why we upgraded our relations to a Strategic Partnership in 2014. It’s why we secured a commitment to biennial leader’s summits in 2015.
We have extensive cooperation across government, with regular Foreign Minister, Trade Minister, Defence Minister and senior officials’ level dialogue with ASEAN and its forums. We engage in practical cooperation in fields as diverse as counter-terrorism, cyber security, maritime cooperation, immigration and border control, anti-human trafficking, law enforcement, education and disaster management.
Many of you may be aware that Prime Minister Turnbull has taken the historic step to invite ASEAN Leaders to Australia for an ASEAN-Australia Special Summit in 2018. It will be held in Sydney in March 2018.
The Special Summit is an unprecedented opportunity to reinforce Australia’s commitment to strengthening our partnership with ASEAN and generate fresh momentum. The Prime Minister is personally very invested in it.
It is also a sign of how much ASEAN values Australia as a partner, as this is an opportunity afforded to very few.
We want it to deliver practical outcomes that will advance our shared interests in peace and security and economic prosperity.
The centrepiece will be a Leaders’ Summit and Retreat, chaired by the Prime Minister.
A Business Summit will be held in conjunction with the Summit. The Business Summit will bring together business leaders from ASEAN and Australia to seek insights about how to further boost trade and investment. We envisage that business leaders will report to Leaders on their discussions. There will be an SME and CEO component to it.
Of course, I would be remiss if I did not mention the strong, long standing and extensive people to people links we share with ASEAN countries. Our links through education go back decades and are being enhanced through new programs like the New Colombo Plan. Since 2014, over 7,700 NCP Alumni are participating in the scheme.
The ASEAN diaspora is also an important part of the fabric of our community. Over 1.3 million Australian residents were born in ASEAN countries or have Southeast Asian ancestry. Francis Wong, the Chair of CITCSA and the convener of today’s ASEAN 50th event is a great example of this. These close personal ties between Australia and ASEAN enhance our understanding of each other, our policies and systems, which is vital to our cooperation.
It is great to be joined by the Chair of the ASEAN-Australia Council (AAC), Ms Christine Holgate who can talk to the work of the AAC to enhance awareness, understanding and links between the people and institutions in Australia and ASEAN including each other’s culture, values and traditions.
In closing, Australia has a profound and enduring interest in ASEAN. With the shift in strategic and economic weight to the Asian region and ever-growing demand for resources among emerging economies, Southeast Asia is an arena where the interests of world powers are at play. It is our immediate neighbourhood where our future will be built.
Australia has invested heavily in building the partnership with ASEAN over 40 years and as a result we have achieved recognition in ASEAN’s top tier of partners.
But we can’t rest on our laurels. Competition for influence in ASEAN is rising. We need to continue to work more creatively to stand out as a partner of choice. Australian business has a key role to play in this too.
Many iconic Australian companies have made important investments in ASEAN and have successful stories to share, along with lessons learned. As business leaders here today you are already aware of the opportunities the region has to offer. You can be powerful business advocates to share your experiences and reinforce this message to others who may have overlooked the region in favour of other markets in Asia.
It is incumbent on all of us to take a closer look at what is on offer in the region more broadly and think deeply about whether an ASEAN strategy might work as part of your organisation’s plans. We can’t afford not to.