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Ladies and gentlemen, it is an honour to be here in Tokyo, representing the Australian Government.
The Australian Government attaches great significance to the relationship with Japan and our close cooperation bilaterally - and on matters of regional significance.
In their Joint Statement of 12 June, the Prime Ministers of Australia and Japan said the relationship was based on a long history of cooperation, trade, and investment links of enduring significance to both countries.
Their statement also noted our growing strategic relationship reflecting shared strategic interests and democratic values.
The two Prime Ministers expressed their determination to strengthen these important pillars of the relationship and explore new areas of cooperation.
They also called on the Australia-Japan Conference to present forward-looking recommendations for the future of bilateral relations.
There are many areas where this Conference can contribute.
Japan is of fundamental importance for each of the three pillars of Australia's foreign policy:
- The US alliance
- Comprehensive engagement with Asia and the Pacific
- The reinvigoration of Australia's engagement with the United Nations and other multilateral bodies.
To advance regional security, both countries have a close and active strategic alliance with the United States, and all three countries work together through the Trilateral Security Dialogue.
Security links continue to grow through initiatives such as the Joint Declaration on Security Cooperation and regular bilateral Foreign and Defence Ministers' meetings.
Australia and Japan also co-chair the International Commission on Nuclear Non-Proliferation and Disarmament, a joint initiative of the two Governments.
In the UN, Australia and Japan have a shared approach on issues such as climate change, aid, and peacekeeping.
I would like to congratulate Japan on its recent successful election to the Security Council in 2009-10.
Our countries are working to expand engagement with the UN; Japan through permanent and non-permanent membership of the Security Council - which we strongly support - and Australia through its candidacy for the Security Council in 2013-14.
And Japan is a key partner for Australia in promoting security, trade, and development in the Asia-Pacific region, including through our active joint engagement in important regional organisations such as APEC, ASEAN, and the East Asia Summit.
Economic links have nourished the Australia-Japan relationship.
Japan's economy is vital to the region, never more so than during the current economic downturn.
Japan's bilateral relationship with Australia is even more important.
Japan is Australia's largest export market, taking almost one-fifth of all our merchandise exports last year.
This is almost as much as China and the United States combined.
Japan delivers Australia its largest trade surplus: $14.6 billion in 2007.
Australia is very happy to be able to meet many of Japan's needs relating to clean and reliable food and energy.
Japan sources approximately 60 per cent of its coal and 60 per cent of its iron ore from Australia.
It is a little-known fact that it was Japanese investment and faith in Australia's ability to deliver on its promise of iron ore in the 1960s that led to the vast expansion of Australia's iron ore industry.
In the decades since, Australia has welcomed Japanese investment; investment which continues to reflect the new challenges our countries face.
Only last week, I had the pleasure of launching a world-leading low-emission coal demonstration plant in Australia.
The first of its type in the world, this $206 million project will retrofit an existing Power Station to enable carbon dioxide to be captured for geological storage.
It is a project of global significance - and one which would not be possible if it were not for the involvement of both Australian and Japanese governments and commercial partners.
The Japanese Government is contributing $17.5 million to the project, while three Japanese companies - Mitsui, JPower and IHI - are each contributing $5.8 million. In addition to this important funding, the Japanese companies are providing significant technical expertise.
The Australian Government has contributed $50 million, the Queensland State Government has contributed $35 million, and the Australian coal industry a further $65 million.
This important R&D partnership recognises that the widespread deployment of low emissions coal technology is essential for Australian power generation, Australian exports, as well as the millions of people across the world relying on Australian coal.
Australia is the world's largest exporter of coal.
The sustainability of our coal industry directly impacts Australia's economic prosperity. It also affects the world's environment and energy security.
The challenges with which we are grappling are significant - and Japan's involvement and support is most welcome.
Australia is - and will continue to be - a reliable partner for Japan, with a democratic system and an open investment environment.
Japan's economic miracle is in large part due to free and open trade in resources with Australia.
While we can expect trade in traditional areas to continue to thrive, this Conference gives us the opportunity to consider new areas of economic activity.
Financial services - and services generally - are currently under-represented in our trade, even though services make up over 70 per cent of the economies of both countries.
This is surely a sector which we can expect to grow to the benefit of both our countries.
Japanese investment has contributed to the development of Australia's resources, manufacturing and agribusiness industries.
Moreover, investments such as Kirin Holdings' recent acquisition of Dairy Farmers also contribute directly to Japan's food security.
Japan is Australia's third largest source of investment, with a stock of $57.5 billion at the end of 2007.Less well known is the fact that Japan is also Australia's fifth largest destination for investment, with Australian businesses and individuals holding $35.1 billion worth of Japanese assets at the end of 2007.
One outstanding success story in our relationship is the concentration of Australian tourism operators in the resort town of Niseko in Hokkaido.
There are approximately 30 Australian companies in that region providing skiing and other leisure services, hospitality, real estate and construction.
These companies have invested approximately $300 million - many of them working with Japanese joint ventures partners - to create welcome growth and employment in the region.
This example demonstrates how creative businesspeople in both Australia and Japan can find new ways to expand the relationship.
Niseko's success has seen the number of Australian tourists visiting Hokkaido rise throughout the past six years from 1,550 to more than 20,000.
Such tourism links - as with education links - are vital.
On matters of trade, the Australian and Japanese Governments are negotiating a Free Trade Agreement that will enable companies to achieve similar successes in other sectors.
The Australian Government is confident we can conclude a comprehensive and high-quality FTA to give further impetus to the trade relationship.
Such an FTA would increase growth, production and consumer welfare in both Australia and Japan through increased opportunities for trade in goods and services, as well as greater investment.
Seven rounds of negotiations have been held so far, the next will be held in Tokyo in February.
Australia and Japan need to work creatively and constructively to find ways to address the interests and sensitivities of both sides.
Australia is conscious that Japan's sensitivities will need to be reflected in the final outcome.
However, the benefits from an FTA are significant for both countries, both in dollar terms and in showing that Japan and Australia are committed to taking the commercial relationship to a new level.
The value of this conference has been proved year after year.
With the current economic crisis, it is more important than ever that we come up with new ideas to sustain momentum in the relationship by considering challenges and opportunities, in particular:
keeping business focused on the opportunities, especially in services, which are currently under-represented in our trade
- working through the global financial crisis together
- shaping regional architecture in response to change, and establishing a genuine Asia-Pacific Community
- consolidating a strategic relationship that supports regional and global security
- meeting the challenge of climate change together in a way that preserves gains in economic relationships and harness our scientific talent.
I very much look forward to taking part in these discussions today and to hearing from participants their own views on how to advance the Australia-Japan relationship.
Thank you.