Natural Partners – Australia and Japan

Australia and Japan enjoy a close and distinctive relationship that dates back more than a hundred years. It is a relationship that has flourished in broad areas of activity – not just in business and diplomacy, but also in cultural exchange and people-to-people links.

Japan is of fundamental importance to Australia for political, strategic and economic reasons. There has been dramatic growth over recent decades in familiarity with each other’s society and culture, and this has strengthened and deepened bilateral connections founded on complementary national interests. Our interaction not only brings benefits to both our nations, it contributes to the prosperity and stability of the region.

Political partners

Since the 1980s, Australia and Japan have developed as natural partners in the region. A ‘Joint Declaration of the Australia-Japan Partnership’ in May 1995 described our relationship as of “unprecedented quality”. Japan welcomed Australia as an “indispensable partner in regional affairs”.

Annual Prime Ministerial meetings were established in 1997, announced during Prime Minister Howard’s meeting with then Prime Minister Hashimoto in Australia in April that year. A ‘Partnership Agenda’ was finalised on 1 August 1997, covering cooperation in 18 specific areas, and this has been important in shaping our bilateral relationship ever since.

At the instigation of Prime Minister Howard and the late Japanese Prime Minister Keizo Obuchi, the ‘Australia Japan Conference for the 21st Century’ was held in April 2001 in Sydney. Wide-ranging discussions were held between leading representatives for the private and public sectors, academics, the arts and sciences from both countries, covering economic, political, strategic and cultural ties. The conference resulted in key recommendations for updating the relationship.

A follow-up conference (AJC2) was held in Tokyo in November 2002, generating further new recommendations on such areas as regional financial arrangements and agriculture.

Given the success of these two conferences, Australia and Japan have decided to convene a third conference, to take place in 2005. AJC3 will conduct successive dis-cussions in three focus areas:

• political/strategic;
• economic/trade, and
• cultural/education.

AJC3 will feature leading Australian and Japanese representatives from business, government, and academia, with a view to identifying further mutually beneficial areas for collab-oration between our two countries.

Trade partners

Japan has long been Australia’s largest export destination. In 2003, Japan was our top trading partner, our biggest merchandise export market (60% of Australia’s total) and third largest services market. Aust-ralia’s total exports to Japan in 2003 were valued at A$22.9bn (¥1.73 trillion), while total imports from Japan were valued at A$18.1bn (¥1.37 trillion).

Major Australian exports to Japan were coal, iron ore, beef, aluminium and LNG – Japan is our largest market for all five. Australia also exports diverse manufactures and agrifood products to Japan. While commodities remain important, there will be more opportunities for high value-added products and services as Japan continues to reform and deregulate.

Biotechnology is one such high-tech area where there is increasing interaction. Notable examples in biotech collaboration include cooperation between Suntory and Victorian company Florigene to develop the world’s first blue rose, and collaboration between Biota and Japanese pharmaceutical company Sankyo to develop an influenza drug program.

The Trade and Economic Framework (TEF) signed on 16 July 2003 reflects the fundamental importance of our trade relationship. It includes a commitment to comprehensive, balanced bilateral trade and investment liberalisation, and provides for a two-year joint study to examine the costs and benefits of such liberalisation. The TEF also includes a trade and investment facilitation package, which will deliver commercial and regulatory linkages in 11 areas. The Framework also commits both countries to afford the other the opportunity to exchange information on the implications of trade negotiations undertaken with third countries.

Investment partners

As at 30 June 2003, Japan was the third largest source of foreign investment in Australia, with total investments valued at US$34.4bn, or 8.9% of total FDI in Australia (up 1% on two years earlier).

The last collected figures (for 2000/1) for Australian FDI into Japan showed that total Australian FDI stocks in Japan and their share of total Australian FDI stocks abroad had been trending upward over the period 1998 to 2001.

Security partners

Australia’s security links with Japan are becoming stronger with Japan’s increasingly active contribution to international security. Australia has strengthened security cooperation with Japan, including improved and more regular security dialogue and military-to-military talks.

Japan and Australia are also working together to address common security threats, such as international terrorism. In 2003 Prime Ministers Howard and Koizumi issued a Joint Statement on Cooperation to Combat International Terrorism and announced an agreed action plan to carry this forward.

Australia at Aichi

One of the main objectives of Australia’s involvement in World Expo 2005 Aichi is to project a contemporary image of Australia as

culturally diverse and harmonious, with technologically sophisticated companies and consumers in a dynamic forward-looking economy.

 

The Future – 2006 Year of Exchange

To commemorate the 30th anniversary of the signing of the ‘Basic Treaty of Friendship and Cooperation 1976’ (the ‘Nara Treaty’), Prime Minister Howard and his Japanese counterpart Prime Minister Koizumi agreed in 2003 on a series of exchanges between Australia and Japan.

The year is not only an opportunity to stage new events – such as major performing arts events in each country – but also to put the spotlight on exchange that currently takes place between our two countries across a broad range of fields, including the arts, culture, politics, business, edu-cation, science and technology, sport, tourism, society and lifestyle.

Both sides are committed to the diversity and strength of the Japan- Australia relationship, to maintaining its vigour, and for never taking each other for granted.

>> www.dfat.gov.au