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Official News - June 2008

► Further progress in the Australia-India Relationship

This week's Australia-India Foreign Ministers' Framework Dialogue highlighted the Australian Government's commitment to enhancing the depth and breadth of the Australia-India relationship and affirmed a large number of new initiatives for bilateral cooperation.

On 23 June Australian Foreign Minister Stephen Smith hosted the fifth Australia-India Foreign Ministers’ Framework Dialogue in Canberra with Indian Minister of External Affairs Pranab Mukherjee. Both governments recognise there is significant potential for further cooperation across a broad front and are committed to taking the relationship to a new, higher level. Several Australian ministers are planning to visit India in the second half of the year, and seven Indian Ministers have visited Australia so far this year.

Mr Smith and Mr Mukherjee welcomed the diversification and strengthening of links between Australia and India, noting in particular the importance of cooperation in resources, science and technology and education.

They highlighted the capacity of Australia and India to work together regionally and internationally. Mr Smith reiterated Australia’s support for India’s permanent membership in an expanded UN Security Council and APEC membership when the moratorium ends in 2010. Mr Mukherjee welcomed Australia’s bid for a UNSC seat in 2013-14 and supported Australia’s application to become an observer at the South Asian Association for Regional Cooperation.

Mr Smith and Mr Mukherjee underlined their governments’ strong support for nuclear disarmament and non-proliferation. They highlighted the need for comprehensive action to address climate change. They issued a joint statement which outlined a large number of new initiatives including:
- allocating up to $10 million over the next five years under Australia’s development assistance program to build public sector linkages between the two countries to address policy issues; 
-  setting up a new bilateral water dialogue; 
-  establishing a new Australia-India Roundtable; 
-  an Australia India Council funded training programme for elite Indian women cricketers; and 
-  a new joint working group on visas, passports and consular matters.
Mr Smith and Mr Mukherjee reiterated that the two governments looked forward to receiving the report of the Joint FTA Feasibility Study Group by the end of 2008. They welcomed the proposal to launch an Australia-India CEOs Forum.

Mr Smith and Mr Mukherjee underlined the importance of enhanced defence and strategic cooperation, welcoming the decision to hold regular talks between the chiefs of defence forces. They reaffirmed the need for Australia and India to work together to fight terrorism, including by stepping up practical cooperation.

Mr Smith and Mr Mukherjee also signed extradition and legal mutual assistance treaties, which will also help combined efforts in the fight against crime.

► ABARE: record commodity export earnings in sight

The Australian Bureau of Agriculture and Resource Economics (ABARE) latest Australian Commodities report shows that Australia’s commodity export earnings are forecast to increase by 40 per cent to a record $212 billion in 2008-09.

Australia’s commodity export earnings are forecast to increase by 40 per cent to a record $212 billion in 2008-09. This and other commodity forecasts for 2008-09 are contained in the June issue of Australian Commodities released by ABARE.

The strength of Australia’s minerals and energy exports continues to underpin commodity sector performance. The value of Australia’s minerals and energy exports is forecast to be around $178 billion in 2008-09, compared with an estimated $120 billion in 2007-08. Following significant rises in 2007-08, further price increases in 2008-09 are forecast for many minerals and energy commodities, including iron ore, coal, crude oil, gold and aluminium. In addition to higher prices, the volume of Australian mineral resources exports, in aggregate, is forecast to rise markedly.

Export earnings from the farm sector are forecast to be around $30 billion in 2008-09, a rise of 12 per cent on 2007-08. Prospects are encouraging, though ABARE has cautioned that seasonal conditions will be a critical factor in achieving those estimates.

Agricultural commodities for which export earnings are forecast to increase in 2008-09 include wheat, barley, canola, pulses, grain sorghum, cotton lint and seed, sugar and wine. It is forecast that there will be a near record area sown to winter crops in 2008-09. Up 65 per cent in 2008-09 to 37 million tonnes and export earnings from these crops are forecast to increase by 66 per cent.

► Outcomes from the Jeddah Energy Meeting

Australia is pleased to have been an active participant at the recent Jeddah Energy Meeting.

In response to concerns raised on recent high and volatile global oil prices, King Abdullah bin Abdulaziz of Saudi Arabia convened the Jeddah Energy Meeting of Ministers and representatives from many oil producing and consuming countries, as well as oil industry representatives, in Saudi Arabia on 22 June 2008. Australia was represented by the Hon Martin Ferguson, Minister for Resources and Energy and Minister for Tourism, who made a presentation at the conference.

Outcomes from the Jeddah Energy Meeting included: 
-  an agreement to work toward greater stability of global oil markets; 
-  recognition of the need for more upstream and downstream investment to ensure that the markets are supplied in a timely and adequate manner; 
-  a call to improve the transparency and regulation of financial markets; 
-  a commitment to improve the quality, completeness and timeliness of oil data submitted through the monthly Joint Oil Data Initiative (JODI) to help improve market transparency and stability; 
-  a call for immediate collaboration between the International Energy Agency (IEA), the Organization of Petroleum Exporting Countries (OPEC) and International Energy Forum (IEF) to prepare shared analyses on oil market trends and the impact of financial markets on oil prices; 
-  a commitment to provide assistance to alleviate the consequences of higher oil prices on the least developed countries; 
-  a call for enhanced cooperation between international, national and service companies from all producing and consuming countries in investment, technology and human resource development; 
-  and a commitment to promote energy efficiency through passing on market price signals.

A working group will be established to pursue these actions and a follow-up conference will be held in London to review progress before the end of the year.

The factors affecting global oil prices can only be solved through international pressure and cooperation, and this meeting represents a very important first step on this front. Australia recognises that the Jeddah Energy Meeting represents the continuation of a long-term dialogue; an international effort will be required to address these important issues and the Australian Government intends to play a constructive role in this process.

In addition to the oil conference, Mr Ferguson met with the Saudi Chamber of Commerce in Jeddah to discuss opportunities for two way investment flows and the diversification of the Saudi economy. Saudi Arabia is conscious of its international reputation and wants to play a responsible and constructive role in the international community.
The Minister also met with officials from the UK and Japan to discuss global oil prices.

► Australia’s commitment to advancing nuclear non-proliferation and disarmament

Australia has announced the establishment of an International Commission on Nuclear Non-Proliferation and Disarmament. The Commission offers a chance to re-commit to the ultimate objective of a nuclear weapons-free world and to form a global consensus to strengthen the Nuclear Non-Proliferation Treaty (NPT).

The Commission offers a chance to remind people that despite the end of the Cold War, the threat posed by nuclear weapons has not disappeared. The NPT is the most significant and successful arms-control instrument of the nuclear age and the cornerstone of the non-proliferation and disarmament regimes, but recently it has been under significant strain as some countries seek to circumvent its controls.

The objective, therefore, of the Commission is to reinvigorate the global effort against the proliferation of nuclear weapons and seek to shape a global consensus in the lead-up to the 2010 NPT Review Conference. The 2010 Review Conference is an opportunity for Australia and like-minded countries to ensure the treaty continues to provide a robust framework for nuclear disarmament and non-proliferation.

The Commission will be co-chaired by former Foreign Minister Gareth Evans. Australia will be consulting other governments and international organisations, and seeking the participation of senior international experts in the Commission. Japan has welcomed the initiative, and the Australian government is discussing the form of their participation with the Japanese government.

The Commission’s findings will be considered by an Australian-sponsored international conference in late 2009, in preparation for the 2010 NPT Review.



► Australian Prime Minister’s visit to Japan

The Australian Government is strongly committed to the relationship with Japan, to strengthening bilateral and trilateral strategic cooperation with Japan, and to furthering our broad-based trade and economic ties with Japan. The relationship with Japan delivers major benefits to Australia.

Prime Minister Rudd made a highly successful bilateral visit to Japan 8-12 June. He visited four cities over four days and met a very wide range of senior politicians, business people, and other members of the Japanese community.

This was the tenth visit to Japan by a member of the Cabinet since the Federal Election – a clear sign of the Government’s commitment to the relationship.
The Prime Minister used the visit to launch a major initiative on nuclear disarmament and reaffirmed continuing cooperation in defence and security, climate change, and in Free Trade Agreement (FTA) negotiations. Japan welcomed Mr Rudd’s proposal for a high-level international commission on nuclear non-proliferation and disarmament (see item above).

During the visit, Toyota announced that it would build its hybrid Camry in Australia – a major boost for Australia’s manufacturing industry and a real contribution to addressing climate change. The two prime ministers agreed to encourage their financial regulatory authorities to have a regular dialogue, which could involve business and others, to discuss financial services – an area of huge commercial opportunity for Australia. They also reaffirmed their commitment to working towards a comprehensive and mutually-beneficial FTA. Mr Rudd said that Australia would remain a stable supplier of food to Japan. They agreed to continue to expand bilateral and trilateral strategic cooperation, including in disaster relief. Mr Smith will attend the Trilateral Strategic Dialogue ministerial meeting in Kyoto on 27 June. They discussed climate change policy ahead of the G8 Summit – in which Australia will participate as an outreach partner. Mr Rudd announced a proposal for a joint climate study of the Antarctic.
These are substantial and substantive outcomes, which reflect the depth of substance in the relationship and the Australian Government’s commitment. Ours is a quality bilateral relationship which is vitally important to a wide range of Australian interests.

On whaling, the two prime ministers acknowledged the two countries’ clear differences but agreed to use diplomacy to try to find a solution.



► Australia and Indonesia: A new era of partnership

Australia and Indonesia have a strong bilateral relationship and are close partners in the region, reflecting our shared interests and commitment to advance cooperation on many issues of importance to both countries.

The Australian Prime Minister, The Hon Kevin Rudd MP, made his second visit to Indonesia on 13-14 June. Mr Rudd and President Yudhoyono launched a new development partnership strategy which will provide around $2.5 billion over 5 years to help tackle poverty and promote regional peace, stability and prosperity, including $49 million to make pregnancy and childbirth safer for women in Indonesia's poorest areas. They announced the Australia-Indonesia Forest Carbon Partnership to establish a framework for long-term cooperation on reducing emissions from deforestation and forest degradation.

Mr Rudd signed Memoranda of Understanding with Nahdlatul Ulama and Muhammadiyah to provide additional funding of $2.4 million to progress their important work in disaster preparedness. Major initiatives were also announced on democracy and interfaith cooperation and a conference on bilateral relations in 2009.

There have been 11 Ministerial-level visits to Indonesia in the Government's first six months in office. Mr Rudd and the Australian Foreign Affairs Minister, Stephen Smith made their first overseas visits as Prime Minister and Foreign Affairs Minister to Indonesia to attend the UN climate change meetings in Bali last December, along with four other ministers, and two Indonesian ministers have visited Australia.

In February this year, Indonesia's Foreign Affairs Minister, Dr Wirajuda and Mr Smith exchanged notes to bring the Australia-Indonesia Framework for Security Cooperation (the Lombok Treaty) into force. The Treaty provides a framework for expanding bilateral cooperation and exchanges on matters affecting the security of both countries.

Australia intends to hold the next Australia-Indonesia Ministerial Forum – the peak bilateral consultative forum – later this year to explore further opportunities and initiatives to take forward the bilateral relationship.

Indonesia is Australia's 13th largest trading partner and we are currently exploring options for strengthening the commercial relationship, including examining the merits of a bilateral FTA.

► Australia to Contribute to Darfur Peace Process

Australia will join an international force under the United Nations African Union Mission in Darfur (UNAMID) to help implement a plan to restore peace and stability to the strife-torn region of Sudan. The Australia Government has also pledged an additional $5 million dollars in humanitarian assistance to the people of Darfur.

Australia will join an international force under the United Nations-African Union Mission in Darfur (UNAMID) which is mandated to ‘take necessary action’ to protect civilians and humanitarian workers, and to support implementation of the 2006 Darfur Peace Agreement. Preliminary planning has commenced for the ADF deployment to UNAMID.

This contribution demonstrates the Australian Government’s commitment to the United Nations (UN) and to restoring peace and stability in Darfur. An estimated 300,000 people have died from the combined effects of war, famine and diseases since 2003 and an estimated 2.7 million people have been displaced.

In addition, the Australian Government has pledged a further $5 million in humanitarian assistance to the people of Darfur. This brings Australia’s contribution to Darfur to more than $62 million since 2004. Australia has also provided $11 million to address spill-over effects of the Darfur conflict into neighbouring countries.

This year marks the 60th Anniversary of UN Peacekeeping, which the Foreign Minister, Stephen Smith, recently acknowledged in a Ministerial Statement in Parliament. Australia’s commitment to UNAMID is another demonstration of our long-standing tradition of contributing to UN peacekeeping operations.

Australia has made many contributions to efforts to resolve international disputes by supporting peace and humanitarian operations under the auspices of the UN but also as part of other multinational efforts:
- more than 30,000 Australians have served around the world as peacekeepers:
Australian peacekeepers have made contributions to UN peacekeeping operations in Africa, Europe, Central America, the Middle East and the Asia-Pacific region;
- Australia is currently the 12th largest financial contributor to the UN peacekeeping budget;
- the non-UN peacekeeping operations to which Australia has contributed include the Multinational Force and Observers (MFO) in Sinai, the International Force in East Timor (INTERFET) and the Regional Assistance Mission to the Solomon Islands (RAMSI).

ADF participation in UNAMID is subject to final agreement by the Government of Sudan.

► Australia’s response to rising world food prices

The Australian Government has been active in helping shape the international community’s response to high food prices. It has provided an additional $30 million to the World Food Programme to meet immediate humanitarian needs and is actively engaged in international efforts to address the root causes of food insecurity in developing countries.

Food prices have been rising steadily since the early 2000s and particularly since 2006, but have spiked recently. The World Bank has estimated that higher food prices could push another 100 million people below the poverty line, on top of the existing 850 million people already short of food.

The Government has been active in helping shape the international community’s response to high food prices. The Australian Foreign Affairs Minister, Stephen Smith, represented Australia at the FAO’s High Level Conference on Global Food Security in Rome this week and delivered a clear statement of Australia’s support for tackling the challenges to food security. The Australian Trade Minister, Simon Crean, attended the APEC Trade Ministers’ Meeting in Peru on 31 May and 1 June at which ministers issued a strong statement on the importance for food security of concluding the Doha Round this year. Mr Crean and the Treasurer are also attending the OECD Ministerial Council Meeting in Paris this week at which food prices will be discussed.

On 1 May the Government (Mr Smith) announced that Australia would provide A$30 million in emergency assistance in response to an appeal by the World Food Programme (WFP), addition to over A$60 million in contributions Australia is providing to the WFP in 2007-08.
In the longer term, Australia will work to strengthen food security in developing countries through:
- increased development assistance to improve agricultural productivity, rural livelihoods and community resilience; 
-  constructive participation in multilateral processes, such as the recently formed UN Task Force on the Global Food Crisis; and 
-  continued advocacy for international trade policy reform.

Australia is urging the international community to remove the trade barriers that distort global agricultural and food markets. These barriers restrict the available sources of food supply, distort world markets, stifle the incentive for farmers to increase production, and deny opportunities to many farmers, especially in developing countries, to trade their agricultural goods on the world market. The Doha Round is the best opportunity the world has to reform international trade in agriculture; Australia urges WTO members to show the necessary political will and flexibility to conclude the negotiations this year.

Australia has long recognised the importance of improving agricultural and food production and distribution systems in developing countries. In the past decade alone, Australia has provided more than A$2 billion for rural development programs, with the largest share going to Asia and the Pacific. The Government is looking at doing even more to help improve agriculture and food productivity in developing countries.


► Dublin Diplomatic Conference on Cluster Munitions (19-30 May)

Australia has welcomed the agreement by the Dublin Diplomatic Conference on a treaty that will ban those cluster munitions that cause unacceptable harm to civilians. The Government is very confident that Australia will be in a position to sign this treaty in Oslo in December this year. 

The Australian Government strongly supports a ban on cluster munitions that cause unacceptable harm to civilians.  The Government has welcomed the agreement by all 111 Participating States at the Dublin Diplomatic Conference (19-30 May), as part of the “Oslo process”, to adopt a treaty text that delivers this important humanitarian objective. The text provides a particularly strong result on the protection of civilians in conflict zones, victim assistance and clearance of affected areas. 

The Government will review the treaty carefully prior to its opening for signature in Oslo in December. The Australian Foreign Affairs Minister, Stephen Smith, told the House of Representatives (29 May) that he was “very optimistic – indeed, very confident – that Australia will be in a position to sign this treaty before the end of the year”.

Australia participated constructively in the lead up to the Conference in Dublin, and during the negotiations, to achieve this very good outcome for the international community, while ensuring our core national security interests were safeguarded. Mr Smith spoke to Norwegian and UK ministers. The Prime Minister, Mr Rudd, spoke to Norwegian and NZ prime ministers during the Conference. The Government worked constructively with the Australian NGO community throughout the “Oslo process”. Australian Red Cross, World Vision Australia, Australian Network to Ban Landmines (ANBL) and Austcare representatives were part of our expert delegations to the “Oslo process” meetings at different times. Australia anticipates the text will attract wide adherence as it addresses a concern of a number of States, including Australia, to ensure that cooperation between nations through peacekeeping and other joint operations with States who may not become Party to the treaty is able to continue, for example with the United States. This cooperation, formally known as “interoperability”, is a vital pillar of Australia’s strategic security and defence arrangements.

Australia has a good and proud record in these areas, and is committed over $175 million for mine action assistance to countries where explosive remnants of war, including cluster munitions, pose a humanitarian hazard.

Australia continues to engage States who have chosen to remain outside the “Oslo process” in the parallel negotiations on cluster munitions under the UN-based Convention on Certain Conventional Weapons (CCW), which will next meet in July.


► The Importance of the Australia-India Relationship

Australia is committed to taking its relationship with India to a higher level and engaging with India on a strategic, long-term basis.

Australia’s Trade Minister, Simon Crean, recently co-chaired the annual Australia-India Joint Ministerial Commission with India’s Minister for Commerce and Industry, Kamal Nath. Discussion covered the WTO Doha Round, as well as key regional and bilateral trade issues. The ministers underlined the growing importance of the bilateral economic relationship for both countries. They welcomed the good momentum established in the joint FTA feasibility study, highlighted the importance of adopting a bold and ambitious approach, and agreed that conclusion of the study report should be brought forward to the end of 2008. The ministers also witnessed the signing of a memorandum of understanding on intellectual property cooperation and welcomed new bilateral dialogues and exchanges on economic policy, water management and competition policy.

The Australia-India Joint Business Council met at the same time as the ministers, and emphasised the potential of the commercial relationship.
India is the world’s second fastest growing major economy, with growth rates around 8-9 per cent per annum. Its economic rise is a key opportunity for Australia this century.

India is already Australia's fastest growing major export market for both goods and services. Combined goods and services exports increased at over 32 percent annually over the last five years. India is already Australia's sixth largest merchandise export market and seventh largest services market.



► WTO Doha Round: Release of a revised negotiating text on services and a working document on the Rules negotiations

The release of the WTO negotiating text on services – the third pillar of the Doha Round market access negotiations – and a working document on the Rules negotiations were further important steps towards bringing the Round to a conclusion. However, pressure will need to be maintained to ensure ambitious language on the level of new market opening for foreign services suppliers is retained in the services text.

The WTO Doha Round took another step forward last week with the long anticipated release of revised negotiating text on services. The new text on services will help guide the services negotiations.

Australia supports the efforts that have been made to capture the common ground of WTO Members across the vast majority of the text, except in relation to the level of new market opening for foreign services suppliers.

Australia considers the text to be sufficiently developed to be fed into the horizontal process with Senior Officials and Ministers to resolve outstanding differences across the Doha negotiations.

Australia considers that services negotiations need to be driven by the same level of ambition and political will as negotiations on agriculture and industrial products.
Australia also strongly supports a ministerial ‘signalling’ conference on services at which Ministers can foreshadow the sorts of new market openings for services suppliers that can be achieved through the Round. This will help maintain the momentum for a substantive services outcome in the Doha Round.
Australia cannot support a Doha outcome that does not deliver commercially meaningful new market access for foreign service suppliers.

Australia welcomes the release of a working document on trade rules that preserves the Chair’s draft text on anti-dumping, subsidies and fisheries subsidies while providing a thoughtful, balanced reflection on Members’ contributions and their reactions to the Chair’s earlier text.

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