E&OE
Thank you Toru and thank you to Nikkei! What a wonderful conference.
Can I also acknowledge the many world leaders, past and present, who are here in Tokyo this week.
It’s great to be here in Tokyo, one of the world’s most exciting cities and home to one of the great global economies.
I’ve just met with your Prime Minister, Abe Shinzo, who in an uncertain world is a leader of character, consistency and conviction - a steadying influence in troubled times.
Despite the winds of protectionism blowing around the world, Shinzo Abe is steadfastly committed to free trade, open markets, democracy and the rule of law, the foundations upon which our region’s prosperity has been built.
We are living in a time of change unprecedented in its scale and pace in all of human history - these are the most exciting times, and nowhere more so than here in Asia.
Just 40 years ago China barely participated in the global economy. Now it is the largest or second largest economy in the world, depending on your measure.
Their leaders are making China great again, with the emphasis on “again”, today’s pre-eminence is seen as a return to the natural order of things - demography marching hand in hand with destiny.
Here in Japan, the economy proved the experts wrong and grew by 2.1 per cent during the first quarter of this year under Prime Minister Abe’s leadership. Your companies are some of the most advanced and innovative in the world - driving global jobs and creating investment opportunities.
Now is not the time for protectionism - it isn't a ladder to get out of a low growth trap, but rather a shovel to dig it deeper. Combined with xenophobia, protectionism can develop into a toxic populist mix all too often stirred up by those who want to undermine our democracies.
We are operating in a radically transformed media environment. A decade ago almost all our media was curated - to get your views across you needed to persuade an editor or a director to gain access to their platforms be they in print or broadcast.
Now in the age of social media, anyone can be a publisher, the financial model of publishing and broadcasting has been shaken if not shattered, and politics is being rocked by more lies and, I regret to say, more hatred than ever.
The moderate and the rational are shouted down by the extreme and unhinged.
So more than ever we have to make the case for the values on which our free societies are founded - freedom, democracy, the rule of law and the mutual respect that makes it all possible.
It is important that the nations of Asia speak truth to the super powers and working together seek to ensure the current tensions over trade are resolved.
After all, the measure of whether trade is fair is not the amount of the trade balance. As I said to Shinzo Abe and Donald Trump on one occasion - Australia has a trade deficit with the United States, we don't say that is unfair. We have a trade surplus with Japan and Japan does not say that is unfair.
The objective must be to make sure the playing field is level, that the rules which apply on one side of the border apply on the other and then let comparative advantage work out whether there is surplus or deficit.
US-China trade relations are deteriorating rapidly with adverse consequences for all nations including Japan, Korea and Australia.
With global nervousness on a range of fronts now embroiling markets now is the time for Asia to take the lead.
This is no time for watch and wait, we need to have the confidence to take a leadership role to ensure continued economic growth and prosperity.
Australia and Japan have already done so to great effect, and in particular with the Trans-Pacific Partnership, now often known as the CPTPP, or as I prefer the TPP-11
As you know the TPP-11, which is in force, is a trade deal between Australia, Japan, Canada, Mexico, Chile, Malaysia, Peru, New Zealand, Singapore, Vietnam and Brunei Darussalam. This trading pact will cut 98 per cent of tariffs on trade between these nations, opens up 11 countries to an economic pool with the total GDP worth more than $13 trillion dollars.
It is one of the great trade deals in the world.
But without the leadership of Japan and Australia there would be no TPP-11.
Countries like Australia and Japan wouldn’t have access to the new markets and opportunities created by this global super deal.
It is a deal that Shinzo Abe and I revived from the dead.
The Trans-Pacific Partnership was - as you will all recall - President Obama’s most important project in the Asia Pacific, more valuable to security, Defence Secretary Ash Carter once observed, than an additional Carrier Task Group for the 7th Fleet.
But when Donald Trump fulfilled his election pledge and pulled out of the TPP, everyone believed it was dead. I was determined that we should persevere.
When Shinzo Abe and his wife Aki came to our home for dinner in Sydney in January 2017 we agreed that if we did not resuscitate the TPP quickly it would die forever, consigned to dustbins in government legal offices around the world.
So during that visit, at our home and walking along the cliffs above Sydney Harbour, we resolved to keep going - and secure the deal without the United States.
So one by one, Shinzo and I argued our case to each and every leader involved in the agreement as to why we should revive the TPP and how it would provide value even without the United States.
Initially there was a lot of scepticism, and criticism. My political opponents in Australia said I was “deluded” and on “a vanity project”. There was plenty of criticism here in Japan for Shinzo Abe pursuing it too.
But we made the point that once the TPP was in place - as it is today - other nations would likely join. Perhaps a new United States administration, whenever that may be, would want to re-join.
Far from offending the United States, we were actually giving them a free option - and I figured that a former property developer like Trump would appreciate that, even if he didn’t want to exercise it at the time!
Now other nations like South Korea could follow as could Indonesia and Thailand. Further afield, the United Kingdom has expressed strong interest in joining after it achieves, if it ever does, an exit from the European Union. There was no reason why the TPP-11 couldn’t become a TPP-12, 13 or 14, given time.
After months of negotiations and making our case, all nations agreed in principle.
Our goal was to have it signed off at the 2017 APEC meeting in Da Nang in Vietnam. It was in fact to be the highlight of the whole summit.
The cameras were ready, and the leaders were ready to proceed when Canada’s Prime Minister Justin Trudeau said he would not go ahead, although his trade minister had agreed to sign on the day before.
It was a disaster and the deal appeared dead yet again. But Shinzo and I did not give up and we resolved to press ahead with or without Canada.
We were just determined to get the deal done. We resolved there in Da Nang we were not going to stop.
Happily within a few months Justin Trudeau agreed to stay in the TPP, this time for good and the deal is now ratified and in force, creating thousands of new jobs across the region.
The point of the story is that our region showed we can lead global economic policy and we can shape the future direction of the global economy.
REGIONAL SECURITY
I want to touch briefly on one of the risks to economic growth and opportunity in our region. With growth comes stronger strategic ambitions and stronger militaries which can lead to regional flashpoints.
Our region is a remarkable mix of giant nations like the United States, China, Japan and India and some of the smallest states of all - small island states in the Pacific. Yet the region has been successful because we have joined forces to push our common interests and we respectfully manage our differences.
There has been an overwhelming commitment to the rules based order that has underpinned the prosperity we enjoy today.
Nations like Japan and Australia and throughout the Asia Pacific region have a responsibility to stand up for the rules based order. Trade deals like the TPP act as strategic agreements. They create communities among countries. Economic co-operation enables political co-operation.
I referenced earlier the great opportunities that have risen from the rapid economic rise of China. A strong China creates stronger neighbouring nations. But it should not come at the expense of the rules based order.
All nations have a right to enhance their strategic interests and to defend their sovereignty but that growth should never be at the expense of the rule of law which has served our region so well.
It is vital that nations like Japan, Australia, Korea, the United States, ensure the South China Sea remains a “corridor of commerce” where all nations have a right to freedom of navigation and overflight. Where the militarization of artificial islands is not accepted. We are stronger when we work together.
The same must be said for tensions on the Korean Peninsula which I know has been a great cause for concern here in Japan and was raised - a subject of much discussion - during President Trump’s very successful visit here earlier this week.
We must maintain maximum pressure on the North Korean regime - allegations of its bizarre brutality have been in the news again just today.
Nothing short of full denuclearisation is an acceptable outcome. We should welcome the progress that President Trump has made. He should be congratulated for those efforts but we must work harder to ensure we achieve the ultimate outcome.
Like minded nations should not be mealy mouthed about the need to respect and enforce the rule of law.
Might must not be allowed to be right - all of us have a vested interest in defending each other’s sovereignty as we defend our own.
CONCLUSION
There truly has never been a more exciting time to do business in Asia.
Trade deals like the TPP-11 have created more export and investment opportunities than ever before.
Our region’s growth over the last forty years has no precedent in human history, and it is the peace founded on the rule of law which has enabled it.
Now is the time for leaders in the Asia Pacific region to take a greater leadership role than ever before to shape the direction of the global economy for generations to come.
We must take advantage of our enhanced global power.
Working with Shinzo to revive the TPP was one of my most important foreign policy achievements. It will lay the foundation for more free trade, open markets and economic opportunity, thousands of jobs, billions of dollars in trade in the years ahead.
It showed that we do not need a super power sponsor to shape global affairs.
Our commitment to free trade, open markets and the rules based order will be the foundation of future peace and prosperity in the region for generations to come. But only if we maintain it - the challenge is as enduring as the opportunities are without limit.
Thank you very much.
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