1301.0 - Year Book Australia, 2009–10  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 04/06/2010   
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Contents >> International Relations >> Australia's bilateral relationships


Australia fosters significant relationships with a range of countries on the basis of shared interests. As a medium-sized power, Australia’s international engagement focuses on those countries with the greatest influence on its strategic and economic situation.

United States of America (USA)

The USA is Australia’s closest security ally and its most important economic partner. Australia engages closely with the USA and advocates views across a broad range of international issues. The relationship with the USA complements Australia’s commitment to the Asia-Pacific region, where the US’s engagement contributes to security and prosperity.

At the heart of security relations between Australia and the USA is the ANZUS Treaty, signed in 1951 and in effect since 1952. The treaty binds the two countries in mutual cooperation on military and security issues and contains a commitment that both Australia and the USA will act to meet common dangers. Australia invoked the ANZUS Treaty for the first time following the terrorist attacks on 11 September 2001, when it deployed forces to Afghanistan.

Strengthened by nearly 60 years of cooperation, the ANZUS alliance continues to underpin a dynamic and broad-ranging security relationship. Under the alliance, Australia and the USA hold joint defence exercises, share strategic assessments and exchange intelligence and personnel. Defence technology and procurement cooperation under the alliance is vital to maintaining the qualitative edge of Australia’s defence forces. The two countries cooperate extensively on counter-terrorism, non-proliferation and humanitarian and disaster relief activities.

The Australia-United States Ministerial Consultations (AUSMIN) are held between Australian foreign and defence ministers and their US counterparts, the Secretaries of State and of Defense, on a regular basis to discuss strategic issues of mutual concern. The strength of the alliance with the USA was reaffirmed at the last AUSMIN, held in Washington, USA in April 2009. AUSMIN outcomes included an agreement to explore strengthening bilateral civil-military cooperation, including in addressing the needs of fragile states; and an agreement on principles that will guide greater cooperation on intelligence, surveillance and reconnaissance, and cyber security.

Australia's Prime Minister Kevin Rudd visited the USA in March, September and November 2008 and in March, September and December 2009. The Minister for Foreign Affairs Stephen Smith visited the USA in January and September 2008 and in April and September 2009. The Minister for Trade Simon Crean visited the USA in January, June and December 2008 and in March and October 2009. At Mr Smith’s invitation, former US Secretary of State Ms Condoleezza Rice visited Australia in July 2008. Other Australian Ministers visited the USA in the past year to advance Australian priorities in defence, the G20, climate change, innovation, economic recovery, education and environmental cooperation.

The Australia-US Free Trade Agreement (AUSFTA) entered into force on 1 January 2005, providing significant new opportunities for Australian exporters and investors. The Australia-United States Ministerial Trade Talks (AUSMINTT), which review implementation of AUSFTA and provide the opportunity to discuss a broad range of bilateral, regional and global trade and economic issues that impact on Australian and US interests, met in Newark, New Jersey in June 2008 and in Washington in October 2009.

The USA is one of Australia’s top merchandise trading partners, its largest services trading partner and its leading source of foreign investment. In 2008 Australia exported goods and services to the USA worth $18.3 billion and imported goods and services from the USA worth $36.5 billion. Major Australian exports to the USA include professional services, beef, alcoholic beverages, and crude petroleum. Investment remains a strong feature of the economic relationship, with two-way investment valued at $813 billion at the end of 2008.

People-to-people ties, including educational and cultural links, are extensive. In 2008-09, 370,866 visitor visas were granted to US citizens - the second-largest source after the United Kingdom. Over the same period, 9598 student visas were granted to US citizens - the eighth-largest source. A Work and Holiday Memorandum of Understanding between Australia and the USA, which allows tertiary students to undertake a gap year in the USA, came into effect in October 2007.


Australia’s close relationship with Japan continues to draw strength from long-established common interests and values. Both countries are industrialised democracies, committed to prosperity and stability in the Asia-Pacific region and key allies of the United States of America. Australia and Japan are working together to identify new areas to broaden the existing partnership on security matters, including counter-terrorism and counter-proliferation. Japan and Australia also have an extensive record of cooperation in areas such as humanitarian relief, peacekeeping, responding to the global financial crisis, and responding to climate change.

Japan underwent an historic change of government in August 2009 with the Democratic Party of Japan winning power after 54 years of nearly continuous rule by the Liberal Democratic Party. The Australian Government has engaged early with the new Government. The Prime Minister Kevin Rudd and the Minister for Foreign Affairs Stephen Smith both met their counterparts at the UN General Assembly in New York in September 2009. The Minister for Trade Simon Crean’s visit to Japan in October 2009 - the first there by an Australian Cabinet Minister since the new Japanese Government’s election - highlighted Australia’s continued commitment to working closely with Japan across a range of issues.

Cooperation on defence and security issues continued to develop strongly. Australia and Japan are implementing the Joint Declaration on Security Cooperation, signed by the then Prime Ministers of Australia and Japan in 2007, through an Action Plan. The Declaration is the most ambitious security arrangement that Japan has entered into with any country other than the United States and encompasses regular foreign and defence ministers talks, joint exercises and training. The Action Plan to implement the Joint Declaration will be updated in due course to reflect the evolving security relationship. The second joint Foreign and Defence Ministers’ meeting was held in Tokyo in December 2008.

Mr Smith and his US and Japanese counterparts, Ms Hillary Clinton and Mr Katsuya Okada, held the fourth ministerial meeting of the Trilateral Strategic Dialogue (TSD) in September 2009 to exchange views on a number of regional and global issues of mutual interest. The TSD is a valuable forum for cooperation on common strategic interests which promote stability and security in the Asia-Pacific region and globally. Australia and Japan also co-chair the International Commission on Nuclear Non-proliferation and Disarmament, established by Prime Minister Rudd and his then Japanese counterpart, Mr Yasuo Fukuda, in July 2008. The two countries are working closely through the Commission in support of the international non-proliferation regime and to bring about nuclear disarmament.

Japan has been Australia’s largest export market for 40 years. Merchandise exports to Japan totalled $52.5 billion in 2008-09, more than the combined value of goods exports to China and the United States. In 2008-09, Japan was Australia’s top export market for coal, beef, aluminium, liquefied natural gas (LNG), dairy products and woodchips. Japan was also Australia’s third largest source of foreign investment, with a total stock of investment worth $89.5 billion at the end of 2008. The inaugural Australia-Japan Trade and Economic Ministerial Dialogue was held by Mr Crean and his Japanese counterpart, Mr Masayuki Naoshima, in Tokyo in October 2009.

Negotiations on a bilateral Free Trade Agreement (FTA) commenced in 2007, and have continued to make good progress. The tenth round of negotiations was held in November 2009. Both sides have recently reaffirmed their commitment to a comprehensive, World Trade Organization (WTO)-consistent FTA which will deliver economic benefits to both countries.

The cultural relationship between the two nations continues to grow. There are currently 16 Australia-Japan and Japan-Australia societies providing grass-roots community support to the relationship, as well as 99 sister city alliances. The Australian and Japanese Governments are also supporting grassroots efforts to increase Japanese language learning in Australia and related exchanges, including proposals made at the 5th Australia-Japan Conference in November 2008.


Australia’s relationship with China has continued to grow and mature. Australia’s constructive and friendly relationship with China is built on the basis of mutual respect, and recognition of shared interests as well as differences. China's importance to Australia has grown with China's increasing economic, political and strategic weight in the Asia-Pacific region, and in the global economy. In 2008-9, China was Australia’s largest trading partner.

Australia engages with China on various issues of mutual interest, including the G20 response to the global economic crisis, climate change, nuclear non-proliferation, the WTO Doha Round and development assistance in the South Pacific. Australia and China have regular bilateral dialogues on climate change, consular issues, human rights and regional security.

In 2008-9, Australia's trade with China reached $83.0 billion. Australia exported goods and services worth $44.4 billion to China. Major Australian exports to China included iron ore, education services, coal, alumina, wool and copper ores.

Frequent high-level visits between Australia and China have strengthened the relationship. Over the past year, the Minister for Trade Simon Crean has made four visits to China to promote Australia’s trade and economic interests in China’s rapidly developing inland regions, and to advocate Australia’s interests in the FTA negotiations.

In March 2009 the Minister for Foreign Affairs Stephen Smith visited China for the second Australia-China Strategic Dialogue with his counterpart Mr Yang Jiechi.

Australia and China concluded a joint statement on the bilateral relationship during Vice Premier Li Keqiang’s visit in October 2009. The joint statement - the first since 1972 - reaffirmed the two sides’ willingness to enhance cooperation in various fields, and promote the expansion of the relationship.

Chinese Communist Party Politburo Standing Committee members, Mr Zhou Yongkang (November 2008) and Mr Li Changchun (March 2009) visited Australia. These visits were part of the regular bilateral exchange of visits by senior government and political leaders.

The Australia-China Council continued to play a significant role in building understanding in China of contemporary Australia’s scientific, technological and educational outlook.

Within the framework of its one-China policy, Australia promoted important economic, trade, cultural and people-to-people links with Taiwan.
Korean Peninsula

Australia’s bilateral relationship with the Republic of Korea (ROK) continues to grow stronger and deeper, building upon shared democratic values, common strategic interests and substantial and complementary economic ties.

The ROK was Australia’s third largest merchandise export market in 2008-09, with exports totalling $19.2 billion for the financial year. This is an increase of 35.1 per cent year-on-year, due to the higher value of iron ore and coal sales, which accounted for over half of merchandise exports. The largest merchandise export items in 2008-09 were coal ($7.0 billion), iron ore ($3.4 billion) and crude petroleum ($2.3 billion). Refined petroleum and passenger motor vehicles are Australia’s largest import items from the ROK. Services exports in 2008-09 were valued at $1.8 billion. The ROK was Australia’s eighth-largest source of visitor arrivals and third-largest source of overseas student enrolments.

Visits to the ROK by the Prime Minister Kevin Rudd in August 2008, and by the President of the ROK, H.E. Mr Lee Myung-bak, to Australia in March 2009, and ministerial visits both ways (ROK Minister for Trade Kim Jong-hoon in May 2009, Minister for Trade Simon Crean in October 2009, Foreign Minister Stephen Smith in December 2009), enhanced significantly relations between the two countries.

On 5 March 2009, in Canberra, Prime Minister Rudd and President Lee released a Joint Statement on Enhanced Global and Security Cooperation between Australia and the Republic of Korea. The Statement built on the significant security cooperation that already existed and paved the way for closer cooperation bilaterally, and in regional and multilateral fora, across a range of fields, including law enforcement, border security, counter-terrorism, disarmament and non-proliferation and disaster response. It also provided a framework for expanding practical defence cooperation in areas such as military information sharing, peacekeeping, civil-military cooperation, joint exercises and training, and defence industries.

Prime Minister Rudd and President Lee also agreed to launch negotiations on a bilateral free trade agreement. The Minister for Trade Simon Crean and the ROK Minister for Trade, H.E. Mr Kim Jong-hoon, launched the first round of negotiations in Melbourne on 18 May 2009. Officials then held four days of negotiations in Canberra. The second round of negotiations was held in Seoul from 31 August to 4 September 2009, and a third round was held from 30 November to 4 December 2009.

Australia continued to work closely with the United States, Japan, the ROK and other countries in support of international efforts to bring about an end to the nuclear weapons program of the Democratic People’s Republic of Korea (DPRK).

The Australian Government publicly condemned the DPRK’s launch on 5 April 2009 of a long-range ballistic missile and its nuclear test on 25 May 2009. Australia urged members of the United Nations Security Council (UNSC) to respond strongly to the nuclear test and welcomed the UNSC’s unanimous adoption on 12 June 2009 of Resolution 1874 condemning the test and building upon the sanctions imposed against the DPRK in Resolution 1718, which the UNSC had adopted following the DPRK’s first nuclear test in October 2006.

Australia implemented the sanctions mandated by UNSC Resolution 1874 with the necessary amendments to Australian regulations, made on 11 July 2009. Australia continues to implement fully UNSC Resolution 1718 and to maintain autonomous sanctions comprising restrictions on travel to Australia by DPRK nationals, a ban on port entry by DPRK·flagged ships and financial sanctions against named entities linked to the DPRK’s weapons of mass destruction (WMD) programs.

Australia continued to support the Six-Party Talks process comprising the ROK, DPRK, the United States, China, Japan and Russia, including by supporting efforts to persuade the DPRK to reverse its position to quit the talks (announced in April 2009). During visits to Pyongyang by Australia’s non-resident Ambassador (based in Seoul) in March 2009 and June 2009, and in other diplomatic exchanges, Australia urged the DPRK to work constructively with its Six-Party partners, abide by its Six-Party Talks commitments and its obligations under UNSC Resolutions and abandon its nuclear weapons program. Australia also urged the DPRK to work to improve relations with Japan and the ROK, and raised Australia’s concerns about the DPRK’s human rights record.

Australian bilateral development assistance to the DPRK has been suspended since 2002, but Australia has continued to provide humanitarian assistance, without linkage to political considerations, through UN agencies and the Red Cross. The value of this assistance in 2008-09 totalled $6.75 million.

Australia and Indonesia are close neighbours enjoying a wide-ranging relationship encompassing political, security, commercial, cultural and people-to-people links. The relationship is underpinned by frequent two-way high-level visits. Australia and Indonesia are cooperating closely on counter-terrorism, people smuggling, transnational crime, illegal fishing and climate change.

On 13 November 2006, Australia and Indonesia signed the Agreement on the Framework for Security Cooperation (the Lombok Treaty), which came into force in February 2008. Indonesian and Australian officials adopted a Lombok Treaty Plan of Action in November 2008, which outlined a work agenda to enhance cooperation in a range of fields, including defence, law enforcement, counter-terrorism, and disaster response.

Australia provided an estimated $482.4 million in official development assistance to Indonesia in 2008-09, through a country program and ongoing commitments under the Australia-Indonesia Partnership for Reconstruction and Development (AIPRD), which saw $1 billion committed in grants and loans following the Indian Ocean tsunami of 2004. Australia’s assistance focuses on four areas: sustainable growth and economic management, improving service delivery, democracy, justice and good governance, and safety and peace.

The Australia-Indonesia Ministerial Forum (AIMF) and the Australia-Indonesia Trade Ministers’ Meeting (TMM) are key platforms for enhancing cooperation between the two countries. The AIMF last met in Canberra on 12 November 2008, and was attended by seven Australian and six Indonesian ministers. After the forum, Ministers released a Joint Statement on People Smuggling and Trafficking in Persons. The AIMF, established in 1992, is the peak bilateral consultative forum between the two governments.

The last TMM was held in Sydney in February 2009. At the TMM, the Australian and Indonesian Trade Ministers welcomed the public release of an Australia-Indonesia Free Trade Agreement Joint Feasibility Study, which found that a comprehensive FTA between Australia and Indonesia could build on the solid foundation of the ASEAN-Australia New Zealand FTA.

The bilateral trade relationship remains steady with two-way trade totalling $11.5 billion in 2008, making Indonesia our 13th largest trading partner. Australia’s merchandise exports were valued at $4.3 billion and services exports were valued at just over $1 billion in 2008. Australia’s major exports to Indonesia include wheat, aluminium, live animals, education-related travel and copper.

People-to-people links are an important part of Australia-Indonesia relations. From 19-21 February 2009, Australia hosted a major conference, Australia-Indonesia: Partners in a New Era in Sydney. The conference drew the largest Indonesian delegation to ever visit Australia. Over 140 Australian and Indonesian delegates participated from a range of sectors, including politics, business, the public service, media, academia, civil society and the arts. Participants engaged in a lively exchange of ideas on the core conference themes of democracy and governance, economic development, trade and investment, the environment, and people and perceptions. In 2008-09, there were over 16,000 Indonesian student enrolments in Australia. Australia also promotes bilateral understanding and exchanges through the Australia-Indonesia Institute, established by the Australian Government in 1989.

Australia has placed India in the front rank of its international partnerships and is engaging with India on a long-term, strategic basis. Both Governments recognise there is significant potential for further cooperation across a broad range of areas. The bilateral relationship has a strong institutional framework that includes a Foreign Ministers Framework Dialogue (FMFD), a Joint Ministerial Commission involving trade ministers, senior officials’ talks and a strategic dialogue. Seven Australian Ministers, including the Prime Minister, visited India in 2009.

The Prime Minister Kevin Rudd visited India from 11-13 November 2009. He and Indian Prime Minister Manhoman Singh issued a joint statement that included agreement to upgrade relations between the two countries to the level of a “Strategic Partnership.” As part of the Strategic Partnership, Australia and India issued a Joint Declaration on Security Cooperation that will see the two countries intensify their efforts to maintain peace, stability and prosperity and put in place mechanisms to ensure closer and more regular collaboration in security areas. The Prime Minister announced that Australian representation in India would significantly expand with six additional Australia-based staff in New Delhi, including new positions from the Treasury, the Department of Resources, Energy and Tourism, the Australian Federal Police, the Department of Immigration and the Australian Customs Service. Mr Rudd also announced Australia would expand Austrade’s network of Indian national trade and commercial staff across a large number of regional cities and also establish a new Investment Commissioner position in Mumbai. Australia will expand its official presence in Mumbai by three Australia-based staff and in Chennai by four Australia-based staff, opening new DFAT posts in each city.

The Australia-India economic relationship has grown steadily in recent years and has the potential to increase considerably as India's economic expansion continues. Australia's strength in exporting primary products, particularly minerals and fuels, positions us well to supply growing Indian industrial and consumer demand. Two-way trade totalled nearly $19 billion in 2008.

The Australian Government established the Australia-India Council in 1992 to broaden and deepen bilateral contacts and understanding.

Association of South-East Asian Nations (ASEAN) and regional issues

Australia attaches priority to its relationship with ASEAN, which is a key regional institution comprising Brunei Darussalam, Burma (Myanmar), Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Australia was the first country to become a dialogue partner of ASEAN, in 1974, and participates in a number of important ASEAN-related meetings, notably the East Asia Summit (EAS), the ASEAN Regional Forum (ARF) and the ASEAN Post Ministerial Conference.

In 2009, a comprehensive ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) was signed and came into force on 1 January 2010. Australia and ASEAN signed a Joint Declaration for Cooperation to Combat International Terrorism in 2004 and finalised a work programme to implement the Joint Declaration in June 2007, which is currently being updated. On 10 December 2005, then Minister for Foreign Affairs Alexander Downer signed the instrument of accession to the ASEAN Treaty of Amity and Cooperation.

In August 2007, Australia and ASEAN signed a Joint Declaration on an ASEAN-Australia Comprehensive Partnership which provides a framework for the future direction of Australia’s engagement with ASEAN. The ASEAN-Australia Development Cooperation Program Phase 2 (totalling $57 million over seven years), is a flagship program supporting ASEAN’s economic integration and demonstrating Australia’s commitment to promoting economic growth in the ASEAN region.

In June 2008 the Prime Minister launched an initiative to create a new Asia Pacific community to cover the full range of challenges facing the region. In December 2009, after extensive regional consultations, Australia hosted a conference involving over 140 senior government officials, academics and experts from the region to discuss the initiative.
East Asia Summit (EAS)

Australia's close and long-standing engagement in the east-Asian region was bolstered further when Australia became a founding member of the EAS, with then Prime Minister John Howard attending the inaugural Leaders' meeting in Kuala Lumpur on 14 December 2005. The Prime Minister, Kevin Rudd, attended the Fourth EAS on 24-25 October 2009. The EAS brings together leaders from the ten ASEAN countries as well as Australia, China, Japan, India, New Zealand and the ROK for strategic dialogue and action on key challenges facing the region. EAS leaders meet annually as part of the ASEAN Summits, with a number of ministerial and senior officials' meetings held during the year to progress initiatives agreed by Leaders.

The 16 EAS countries represent collectively 49 per cent of the world's population and account for almost 30 per cent of global GDP, and the region is expected to see sustained economic growth. With the 15 other EAS member countries accounting for nearly 60 per cent of Australia's goods and services export markets, the grouping is of key economic and strategic importance.

Bilateral relationships with ASEAN member countries

Australia has substantial relationships with many of the individual members of ASEAN. Australia has signed FTAs with Singapore and Thailand and negotiations are ongoing on a possible Malaysia-Australia FTA.

Singapore is Australia's largest trade and investment partner in ASEAN. In 2008-09, goods and services exports to Singapore were valued at $5.5 billion and $3.9 billion respectively, while goods and services imports from Singapore were valued at $13.4 billion and $4.8 billion. Australia's largest export to Singapore in 2008-09 was crude petroleum. Singapore is a significant source of foreign investment into Australia, with total Singaporean investment stock at the end of 2008 valued at $43 billion. In May 2009, the Prime Minister, Kevin Rudd, visited Singapore to deliver the keynote address at the Shangri-La Dialogue. In July 2009, Singapore hosted the sixth Singapore Australia Joint Ministerial Committee meeting, attended by the Foreign, Defence and Trade Ministers of both countries. Ministers discussed wide-ranging areas of bilateral cooperation, including in relation to the Memorandum of Understanding on Defence Cooperation signed by Prime Minister Lee and Prime Minister Rudd in August 2008. In addition, the Trade Ministers announced the substantive conclusion of the second review of the Singapore Australia Free Trade Agreement (SAFTA).

Bilateral cooperation with Thailand continues to be enhanced by people-to-people links through the work of the Australia-Thailand Institute. The Thai economy felt the impact of the global economic crisis. However, trade and commercial relations with Thailand have remained robust, with total two-way trade in 2008 reaching over $18 billion. The inaugural Australia-Thailand Joint Commission on Bilateral Cooperation, co-chaired by Foreign Ministers Mr Stephen Smith and Mr Kasit Piromya, was held in Perth in May 2009.

Australia's relationship with Malaysia is diverse and underpinned by strong people-to-people links, notably in education. The Australia-Malaysia Institute was established in 2005 to strengthen further people-to-people and institutional links between Australia and Malaysia, and to deepen mutual understanding and cooperation. Substantial defence cooperation takes place through the Malaysia-Australia Joint Defence Program, an ongoing Australian presence at the Royal Malaysian Air Force Base at Butterworth and common membership of the Five Power Defence Arrangements. Prime Minister Rudd visited Malaysia in July 2008 and again in July 2009. Foreign Minister Smith visited Malaysia in July 2009 to attend the inaugural Australia Malaysia Foreign Ministers’ Forum. In August 2009, the Minister for Trade Simon Crean hosted an Australia Malaysia Joint Trade Committee meeting. In 2008-09, Australia exported goods and services to Malaysia valued at $3.7 billion and $1.5 billion respectively, and imported goods and services valued at $8.3 billion and $1 billion. Negotiations towards a Malaysia Australia Free Trade Agreement are ongoing.

Bilateral contacts with the Philippines are growing, particularly within the development cooperation, counter-terrorism, defence and commercial fields. The Minister for Foreign Affairs and the Minister for Trade visited the Philippines for bilateral talks in October 2008 and President Arroyo made an official visit to Australia in May 2007. Australia will provide an estimated $123 million in development assistance to the Philippines in 2009-10, intended to contribute to economic growth, basic education, national stability and human security. Bilateral economic cooperation has focused on enhancing opportunities for Australian businesses in the mining sector as well as enhancing the Philippines’ capacity in sustainable mining development practices.
Australia's relations with Burma have, for many years, been held back by Burma's political circumstances. Australia takes all appropriate opportunities to urge the Burmese regime to work towards genuine democratic reform and national reconciliation, and to address human rights concerns, both in direct representations to the Burmese regime, and in regional and international fora, including UN bodies. Australia supports UN engagement on Burma and works closely with partners in the region to encourage political reform. Australia maintains pressure on the Burmese regime through financial sanctions and travel restrictions. Australia made strong representations to the regime over the conviction of Aung San Suu Kyi in August 2009, and over the ongoing detention of more than 2000 political prisoners. Australia’s Chargé d’Affaires in Rangoon, together with the UK Ambassador and the US Deputy Head of Mission, met Aung San Suu Kyi on 9 October 2009 to discuss sanctions. This was the first opportunity for a substantive exchange of views by Australian officials with Aung San Suu Kyi since 2003.

The Australia Vietnam Comprehensive Partnership was signed on 7 September 2009, in Canberra, by Deputy Prime Minister Julia Gillard, and Dr Pham Gia Khiem, Vietnam’s Deputy Prime Minister and Minister of Foreign Affairs. The signing took place during the visit to Australia of Mr Nong Duc Manh, General Secretary of the Communist Party of Vietnam. The Comprehensive Partnership was developed to reinforce the strong relations between Australia and Vietnam, and to provide a framework around which to focus and measure bilateral effort. Key areas under the Comprehensive Partnership include: expanding political ties and public policy exchanges; promoting economic growth and trade development; ongoing development assistance and technical cooperation; supporting people-to-people links; building defence and security ties; and advancing the global and regional agenda.

East Timor (Timor-Leste)

Australia is at the forefront of international efforts to help East Timor become a peaceful and more prosperous nation. Australia led the International Force for East Timor which restored security after the August 1999 ballot on East Timorese independence, and continues to lead the International Stabilisation Force (ISF) which helped restore stability after unrest in mid-2006. The ISF remains in East Timor in support of the United Nations Integrated Mission in Timor-Leste. Australia is also supporting the development of East Timor’s own defence and police forces. As the largest bilateral aid donor, Australia has demonstrated a commitment to East Timor’s long-term future development, providing an estimated $820 million in Official Development Assistance from 1999 to June 2009. The Prime Minister of East Timor, Mr Kay Rala Xanana Gusmao, paid an official visit to Australia in August 2008.

South Asia

Australia maintains productive political and economic relationships with the countries of South Asia. Economic links are dominated by Australia's partnership with India (see separate entry). We have long standing and good relations with Bangladesh, which is an important counter-terrorism and security partner for Australia. Australia welcomed the end of the decades-long conflict in Sri Lanka in May 2009. Australia is committed to helping Sri Lanka in efforts to resettle displaced population and rehabilitate communities. Australia’s historic links to Sri Lanka provide potential for greater bilateral engagement, including through increased trade and investment.


The Australia-Canada relationship is mature, highly productive and broadly based, and has its foundations in our historical and cultural links. Trade relations stretch more than 100 years and 2010 will mark the 70th anniversary of formal diplomatic links. People-to-people contact between our parliaments, government officials, private sectors and academia is wide-ranging. A comprehensive range of bilateral agreements cover trade, social security, air services, consular services abroad, mutual assistance in criminal matters and avoidance of double taxation. Canada is Australia's 21st-largest merchandise trading partner, with two-way trade amounting to approximately $4 billion in 2008 ($1.5 billion in exports and $2.5 billion in imports).
In addition to an active trade and investment relationship, Australia and Canada cooperate closely on international security (including in Afghanistan, where both countries have troops deployed), counter-terrorism, human rights and environmental issues. In multilateral forums Canada and Australia, along with New Zealand, work closely in the UN (in the informal CANZ grouping). As agricultural exporting countries, Australia and Canada also cooperate in the WTO and as members of the Cairns Group to work towards freer trade in agricultural products. Canada will host the G20 Summit in 2010.

New Zealand

Australia and New Zealand share a close and diverse relationship, underpinned by extensive and high-level government-to-government interaction and strong business and people-to-people linkages. Bilateral meetings between foreign ministers from the two countries reflect the close foreign policy interests Australia has with New Zealand. Strategic and defence relations are set out in the Canberra Pact (1944), the ANZUS Treaty (1951) and the Australia-New Zealand Closer Defence Relations Agreement (1991).

The trade and investment relationship is underpinned by the 1983 Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA), which creates a free trade area between the two countries. An annual ministerial meeting addresses ways of further facilitating the free flow of trade between the two countries. Exports of Australian goods and services to New Zealand were valued at $9.4 billion and $3.5 billion respectively in 2008. Australia imported goods and services from New Zealand valued at $7.6 billion and $2.5 billion over the same period. Australia’s major merchandise exports to New Zealand are crude and refined petroleum, medicaments and motor vehicles. New Zealand is Australia’s seventh-largest trading partner and third-biggest investment market.

People-to-people contact between the two countries is extensive. Over half a million New Zealanders live in Australia, while around 65,000 Australians live in New Zealand. The trans-Tasman Travel Arrangements of 1973 allow Australians and New Zealanders to visit, live and work in each other’s countries without restriction.

The business-led Australia New Zealand Leadership Forum brings together ministers and business representatives, academics and other senior community leaders to create an independent platform for ways to broaden and deepen the bilateral relationship. The Forum last met in Sydney in August 2009 and involved the two Prime Ministers, 15 ministers and over 100 participants from both countries.


Australia enjoys close relations with Europe - both with the European Union (EU) and with individual European countries.

As the world’s largest economy, trader and aid donor, and home to almost half a billion people, the EU is an important partner for Australia. As a bloc, its 27 member states constitute Australia’s largest trading partner and largest source of foreign direct investment. Total two-way trade in 2008-09 was worth $90.2 billion.

In April 2008, the Prime Minister Kevin Rudd and the European Commission (EC) President José Manuel Barroso jointly committed to a new era of creative, broad-based engagement between Australia and the EU. They agreed to develop an Australia-EU Partnership Framework which, since its launch in October 2008, has been the primary underpinning and driver of the relationship. In its first year the Partnership Framework delivered substantive outcomes, including the signing of the Australia-EC Wine Agreement and the EC’s becoming a foundation member of the Global Carbon Capture and Storage Institute. The second iteration of the Framework, launched in October 2009, contains new commitments to further enhance cooperation across five broad objectives. The weblink: <http://www.dfat.gov.au/geo/european_union/australia_partnership_framework.html> provides further information.

Increased high-level contact between the two sides during 2008 and 2009 is evidence of the strong and growing relationship, with many Australian Ministers visiting the EU and three European Commissioners visiting Australia. These visits have helped underline commitment by both sides to work together on a range of pressing international issues, including in response to the global financial crisis and climate change.

Australia and the United Kingdom share a particularly close and vibrant relationship based on close historical and people-to-people links, aligned strategic interests and strong bilateral trade and investment. The strength of the relationship is underscored by regular high-level contact. A new National Security Partnership was announced in March 2009 by the two countries’ Prime Ministers.
Bilateral relations with other European countries were enhanced by high-level visits from Australia in 2008 and 2009, including Ministerial visits to Belgium, Cyprus, France, Germany, Hungary, Ireland, Italy, Malta, the Netherlands, Norway, Poland, Sweden and Russia. The Prime Minister’s visit to Berlin in July 2009 significantly enhanced our relationship with Germany. Attendance by Ministers at Anzac Day commemorations in Turkey and France in 2008 and 2009; the visit to France by the Governor-General and Ministers for the 90th anniversary of Armistice Day in 2008; and Ministerial attendance in 2009 at commemorations of the 70th anniversary of the outbreak of World War II in Poland underscore the continuing relevance of our shared history. The first State Visit by an Australian Governor-General to Malta took place in November 2008. High-level visitors to Australia in 2008 and 2009 included the King and Queen of Spain, the Presidents of Bulgaria, Hungary and Malta, the Prime Minister of the Former Yugoslav Republic of Macedonia, and Ministers from Belgium, Cyprus, Estonia, Ireland, Italy, the Netherlands, Portugal, Slovakia and Turkey. Bilateral agreements signed with European countries during 2008 and 2009 covered a range of issues, including taxation with Belgium, health care with Slovenia, and social security with Finland and Poland.

Latin America

Australia’s relationship with the diverse countries of Latin America includes strong bilateral economic interactions as well as cooperation on multilateral issues of mutual concern such as UN reform, multilateral trade negotiations, sustainable fishing and environmental protection. Latin America is an important destination for Australian investment, primarily in the mining and mining services sectors. Total two-way trade increased by 40 per cent in 2008 over the previous year to reach over $7 billion. Latin America is one of the fastest-growing sources of foreign students in Australia, with some 28,400 enrolments from Latin America in 2008. Australia is working to enhance its bilateral relationships with a number of Latin American countries through initiatives such as developing a Plan of Action with Brazil for an enhanced partnership, establishment of a Joint Experts Group with Mexico to investigate ways to strengthen the bilateral economic relationship, and negotiating an MOU to strengthen trade and investment links with Colombia. The Australia-Chile Free Trade Agreement came into force on 6 March 2009. Australia will reopen its Embassy in Peru in 2010. The Council on Australia Latin America Relations has contributed to advancing Australia’s economic, political and cultural relations with Latin America since its formation in 2001.


Australia values its close historical, political, economic and community links with the island countries and territories of the Pacific. Australia is the largest provider of development assistance to the Pacific and is playing an active role in the region in support of enhanced security, economic reform and good governance.

Australia is a founding member and major donor to a number of key regional organisations in the Pacific. The Pacific Islands Forum (PIF) is the region’s principal political institution bringing together the independent and self-governing states of the Pacific in an annual Leaders’ meeting. The 40th Forum meeting was held in Cairns, Australia, from 4-7 August 2009. The key themes of the meeting were addressing climate change, building economic resilience for future growth and strengthening development coordination. Australia’s Chairing of the Pacific Islands Forum in 2009-10 is a practical demonstration of Australia’s new approach and commitment to the Pacific as outlined in the Prime Minister Kevin Rudd’s Port Moresby Declaration of March 2008.

Another outcome of the Forum Meeting was an agreement among Leaders to launch negotiations for a regional trade and economic agreement, known as PACER Plus. Australia’s primary motivation for undertaking these negotiations is to improve the economic outlook for Forum Island countries.
Australia has also consolidated key bilateral relationships in the region. The 19th Australia-Papua New Guinea Ministerial meeting, held in Brisbane in June 2009, attracted 17 ministers from PNG, and eight Ministers and three Parliamentary Secretaries from Australia. Eight Pacific Partnerships for Development have been signed - with PNG, Samoa, Kiribati, Solomon Islands, Vanuatu, Tonga, Tuvalu and Nauru. These Partnerships are designed to provide a framework for achieving progress towards the Millennium Development Goals, and aim to, for example, improve access to quality education, combat malaria, and develop infrastructure to improve access to markets and services.

Australia leads the Regional Assistance Mission to Solomon Islands (RAMSI) which was endorsed by the PIF and deployed to Solomon Islands in July 2003. The intervention followed the collapse of law and order and government institutions as a result of ethnic tensions in Solomon Islands which dated back to the late-1990s. Today, all 16 Forum members participate in RAMSI. Currently there are 561 personnel (including 362 Australians) deployed to Solomon Islands under RAMSI. RAMSI has seen real achievements including the restoration and maintenance of law and order, development of infrastructure projects in rural communities, and progress in telecommunications.

Unfortunately, Fiji’s military regime took a number of backward steps, including refusing to meet its commitment to hold elections by March 2009 and the abrogation of its constitution in April 2009. We continued to work with other Pacific Islands Forum Countries and the international community to press the regime to hold elections and return Fiji to democracy and the rule of law.

Middle East

The Middle East is an area of global strategic and commercial importance. Australia has long supported a resolution of the Middle East conflict which recognises the right of Israel to exist within secure and recognised boundaries and establishes a viable Palestinian state. Australia has given more than $75 million in development and humanitarian assistance to the Palestinians since late 2007.

Australia continues to support democracy and stability in Iraq including for the national election in 2010, the first since 2005. With the cessation of the ADF’s Operation Catalyst in Iraq on 31 July 2009, Australia’s relationship with Iraq has been focussed on reconstruction and development, and expanding two-way trade. Since 2003, Australia has committed over $360 million to reconstruction, rehabilitation and humanitarian programs in Iraq.

Australia’s commercial interests in the Middle East are expanding, including in agriculture, manufacturing, metals and services. Australia is negotiating a Free Trade Agreement with the Gulf Cooperation Council (GCC) (Saudi Arabia, Bahrain, Kuwait, Qatar, Oman and the United Arab Emirates). The GCC is a key merchandise export market, and Australia’s largest export market for passenger motor vehicles. Egypt remains an important destination for Australian tourists, merchandise (wheat, coal and copper) and investment in mining and resource processing sectors. The Council for Australian-Arab Relations was established by the Australian Government in 2003 to strengthen ties between Australia and Arab countries.

Iran’s nuclear program remains of deep concern in the Middle East region and globally. Australia is working closely with the international community in support of finding a diplomatic solution to the Iran nuclear issue.


Australia is strengthening engagement with all African countries and with the African Union, as the principal body for coordination and integration in the continent. Australia has a significant presence in the mining sector in Africa: current and prospective investment by Australian companies is estimated at $20 billion and Australian companies are active in 34 of Africa’s 53 countries. Australia’s largest trading partner in Africa is South Africa.

Australia increased development assistance to Africa by 40 per cent to $163.9 million in 2009-10 focusing on food security, water and sanitation, and maternal and child health. The Government has increased its scholarship and fellowship program tenfold, expanding to 1,000 by 2012-13, and established the Australia-Africa Partnerships Facility for technical assistance cooperation. Australia provides assistance to Zimbabwe for humanitarian purposes and the restoration of basic services, and maintains sanctions to encourage positive change. Over the past two years, Australia has provided significant humanitarian assistance and food aid to the countries of the Horn of Africa. Since 2005 the Australian Defence Force (ADF) and Australian Federal Police have deployed personnel to the UN Mission in Sudan, and since 2008 the ADF has committed personnel to the UN African Union Mission in Darfur.

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