ADDRESS TO ANU AUSTRALIA-JAPAN RESEARCH CENTRE’S 5^TH ANNUAL JAPAN UPDATE CONFERENCE DINNER

WEDNESDAY, 6 SEPTEMBER 2017

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Minasama Konbanwa – good evening. Let me begin by acknowledging the elders and traditions of the Ngunnawal and Ngambri people, the traditional owners of the land on which your conference takes place.

We meet at a very difficult and uncertain time. And our countries have been friends long enough to air their grievances openly and honestly. There is a tension tonight in our relationship and I really must address it. I’m referring of course to the qualifying rounds for the Soccer World Cup.

If the Japanese hadn’t beaten us last week and then lost to Saudi Arabia this morning our boys would have their bags packed ready to go. Instead we’re in limbo and it pains me to say the Japanese are to blame. Please convey to Tokyo our deep unhappiness, our anger even, over this avoidable threat to our friendship.

With that off my chest, ladies and gentlemen, can I acknowledge:

• His Excellency Ambassador Sumio Kusaka and Madam Ikuko Kusaka;
• Former Ambassador to Japan and Chair of the Australia-Japan Foundation Murray McLean;
• Professor Peter Drysdale; and
• All of the guests from Japan who join us this evening and indeed all the participants in this fifth update from both countries.

In some respects as Shadow Minister for Finance I’m an unorthodox choice tonight, being given a rare opportunity to talk about foreign policy, but I’m a grateful one too. Grateful for the opportunity, and for the company.

It’s characteristically kind of my friend Shiro Armstrong to invite me to provide some remarks, but also for advising me and other colleagues, along with Peter here, on trade policy and the geo-politics and geo-economics of the region for the past few years. So thank you Shiro and congratulations to you and Ippei Fujiwara, your co-director at the Australia-Japan Research Centre, as well as the ANU Japan Institute and Professor Jenny Corbett, for hosting another successful conversation.

The theme of this update is “seeking new directions”. But relations between two countries like ours are never divorced from their broader historical context and sweep. I’d like to take you back six decades. There were a lot of very significant things that happened in 1957:

• The Soviet Union kicked off the space race by launching Sputnik 1, the first artificial satellite, into orbit;
• Ghana became a nation, the European Economic Community – the precursor for the European Union – was formed;
• And, of course, then 22-year-old Elvis Presley bought the Graceland mansion – and having spent an evening in the karaoke bars of Kyoto I know how significant that is as well.

1957 was also the year we signed the Australia-Japan Agreement on Commerce – the founding document of our modern relationship, 60 this year. Signed just 12 years after the end of the war – a remarkable achievement in itself – the agreement normalised trade between our two countries and laid the foundations for what is one of the most important economic relationships for both sides. For Japan, it opened up market access to energy and natural resources trade that would help fuel its rapid development. For Australia, it brought new consumer goods, like cars and electronics, within reach of many Australian families for the first time.

More than that, as our first ever trade deal into Asia, it marked a turning point in the way Australia looked at the region through an economic lens. And it opened the way for the close people-to-people relationships; the trust between our countries; and the deepening security ties we enjoy and depend on today.

You’d all be familiar with what followed that original Agreement – achievements of both sides but I’m proud of the leading role that the Labor Party played over the subsequent years. Whether it was Gough Whitlam’s initiatives in the 1970s – the conception of the Treaty of Friendship and Cooperation in particular, which was eventually signed in 1976 and which truly cemented our relationship; or the creation of the Australia Pacific Economic Cooperation forum in 1989 under Prime Minister Hawke and its elevation to a leader’s meeting under Paul Keating, soon after; or the Australia in the Asian Century White Paper during the Gillard Government and the Japan-Australia Economic Partnership Agreement it signed in 2013 and which was enacted in 2015 by its successor.

All crucial pillars of a relationship which has delivered:

• About $60.3 billion worth of two-way goods and services trade between Australia and Japan in 2015-16, making Japan our third-largest trading partner and second-largest export market;
• An investment stock as of 2016 of $213.5 billion from Japan – our largest source of investment in Asia and fourth-largest overall, and;
• An investment stock of $108.3 billion in Japan from Australia – representing our third largest destination for foreign investment.

But a friendship like ours is about more than numbers, or complex deals. It’s about people. And not just political leaders, as crucial as leadership is to the conception and execution of foreign policy. It’s about the workers employed, the standards of living lifted. And it’s also about many of you here tonight.

The hours and years and lives you have poured – and are pouring – into bringing Australia and Japan closer together. The late nights of deal making and diplomacy and communique drafting – the dedicated scholarship, the wrestling with key questions.Take Peter for example, an instrumental player along with his Japanese counterparts in getting APEC off the ground. Or Ambassador Kusaka, who oversaw key economic partnership agreements with Australia and other countries during his illustrious Japanese Ministry of Foreign Affairs service spanning four decades. Or Murray, for seven years our ambassador to Japan, one-sixth of a distinguished DFAT career.

I remember meeting Murray in November 2010 when I accompanied the Treasurer and Deputy Prime Minister, Wayne Swan, as his chief of staff to an APEC meeting in Japan dedicated to infrastructure and climate change. But more vividly, I recall 11 March 2011 – a Friday – landing in Brisbane to the news a massive tsunami was heading for Japan and as Wayne was Acting Prime Minister I would need to help get the National Security Committee of Cabinet together to agree a response.

Murray was a big part of that. And soon after, he welcomed Prime Minister Julia Gillard as the first foreign leader to visit Japan after the devastation – a pretty remarkable demonstration of our friendship.

We will need to draw on all of this history and experience as we look forward now, to many challenges but I think three in particular – one political, one economic, one strategic. Firstly, the threat to openness brought on by a global wave of populism – a growing shift towards simple, one-dimensional solutions being pitched up to solve complex and in-depth problems. Think Brexit, Donald Trump, the rise of fringe parties across Europe and elsewhere; even Pauline Hanson here in Australia. Their desire to turn back the clock; their protectionist and isolationist tendencies; their failure to understand that openness done right is an opportunity not a threat – even for, especially for, the middle classes. That’s the first challenge – the political one, but with economic consequences.

The second is the growth challenge. Growth has been sluggish in Japan for years, as made clear by the four recessions endured since the Global Financial Crisis. I’m pleased to see things have picked up recently with a G7-best 4% annual growth rate in the latest quarter on the back of Shinzo Abe’s stimulus spending and increased investment ahead of the 2020 Olympics. But the spectre of low growth and the problems that come with it would surely linger in the minds of your countrymen and women, particularly when we have these growing shifts towards populism and protectionism.

Australia avoided a recession during and after the GFC thanks also to a reliance on stimulus spending – a similar approach to what your country is now employing. But in today’s numbers our annual growth still isn’t where we’d like it be and we have a gamut of other economic and fiscal concerns – record low wages growth, record high underemployment and debt and deficit blowouts in the Budget just to name a few.

Of course, the first two challenges are intertwined. Trade openness accompanies strong economic growth and better living standards. We can’t have growth without engagement. It’s why we need three-dimensional domestic and foreign policies, which are forward-looking, upward-climbing and outward facing. That is, they should look beyond the day-to-day political cycle, care about aspiration and social mobility, and be founded on openness, not protectionism. To do that, we need to make sure everyone has a stake in the economy.

The third challenge is different, but front of mind. North Korea’s provocative acts in recent times – the past few weeks in particular – have been nothing short of alarming for anyone who cares about peace and security in our region. I know that you must be particularly concerned about your friends and loved ones back home, as are we.

The idea that people in Hokkaido were asleep in their beds when a ballistic missile hurtled above their heads is chilling to say the least. It’s hard to imagine the fear felt by those who were stirred from their sleep by alarms, loud speakers and urgent text messages warning them to find cover. Or the sense of dread that lingers on, as North Korea belligerently continues its missile and nuclear tests in the face of global condemnation.

Of course, both sides of politics here in Australia also condemn North Korea’s actions in the strongest possible terms and support efforts among the international community to de-escalate any potential conflict.

With economic and security threats like these, your update couldn’t be more timely. Your collaboration, your scholarship, your deep thinking gives us a greater chance of navigating difficult times. And it’s the willingness of our political leaders to consider and adopt these expert ideas that will ultimately determine whether we succeed or not. I assure you that when it comes to the Australia-Japan relationship and its value to our region, there is political consensus in Australia.

We all understand how precious and valuable our friendship with Japan is. That’s why the Labor Leader Bill Shorten, our Foreign Affairs Spokeswoman Penny Wong, will be heading to Japan and South Korea later this month. We are up to the challenge of building on our relationship for the future.

So, korekaramo yoroshiku – thank you and I look forward to staying in touch with you and your important work.