1301.0 - Year Book Australia, 2007  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 24/01/2007   
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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.


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 US engagement contributes to security and prosperity.

At the heart of government relations between Australia and the USA is the ANZUS Treaty, signed in 1951. This 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. The two countries cooperate extensively to counter terrorism, combat the spread of weapons of mass destruction and enhance military interoperability.

The Australia-United States Ministerial Consultations (AUSMIN) are held between foreign and defence ministers on a regular basis to discuss strategic issues of mutual concern. The strength of the alliance with the USA was reaffirmed at AUSMIN 2005, held in Adelaide, which marked the 20th anniversary of the consultations.

Prime Minister Howard visited the USA in July 2005 and May 2006. In March 2006, US Secretary of State Rice visited Australia and participated in the inaugural ministerial-level Trilateral Strategic Dialogue with Foreign Minister Downer and Japanese Foreign Minister Aso. Australia and the USA also cooperate closely on climate change issues and in January 2006 were partner countries in the first ministerial meeting of the Asia-Pacific Partnership on Clean Development and Climate.

The Australia-US Free Trade Agreement entered into force on 1 January 2005, providing significant new opportunities for Australian business in the USA. The USA is one of Australia’s top merchandise trading partners, its largest services trading partner and the major source of foreign investment. In 2005 Australia exported goods and services to the USA worth $9.2 billion (b) and $4.4b respectively, and imported goods and services from the USA worth $21.4b and $6.4b. Major Australian merchandise exports to the USA are meat, alcoholic beverages and passenger motor vehicles.

People-to-people ties, including educational and cultural links, are extensive.


Australia’s close relations with Japan are built on 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 USA.

In March 2006 Foreign Minister Downer and Foreign Minister Aso signed a Joint Ministerial Statement declaring the Australia-Japan comprehensive strategic partnership to be stronger than ever. Cooperation on defence and security issues is becoming an increasingly significant part of the bilateral relationship. Australia and Japan are working together to identify new areas to broaden the existing partnership on security matters, including counter-terrorism and counter-proliferation, and in areas such as humanitarian relief and peacekeeping. The commencement in March 2006 of the ministerial-level Trilateral Strategic Dialogue involving Australia, Japan and the USA reflects the common strategic interests shared by all three countries.

Since signing the Australia-Japan Commerce Agreement in 1957, both countries have benefited from a dynamic and interdependent economic partnership. Japan has been Australia's largest export market since 1967 - almost 40 years. Merchandise exports to Japan totalled $28.4b in 2005, more than the combined value of goods exports to China and the USA. Australia’s top exports to Japan are coal, iron ore, beef and aluminium. Japan is also Australia’s third largest source of foreign investment.

The Australia-Japan Trade and Economic Framework, signed by the prime ministers of both countries in 2003, includes a joint undertaking to work towards comprehensive and balanced trade and investment liberalisation. In April 2005, the prime ministers agreed the two countries should undertake a two-year joint feasibility study into a bilateral free trade agreement (FTA). In March 2006 Australia and Japan agreed to intensify work on the feasibility study.

In 2006 Australia and Japan commemorated the 30th anniversary of the signing of the 1976 Basic Treaty of Friendship and Cooperation with the Australia-Japan Year of Exchange, a joint prime ministerial initiative to promote friendship, deeper mutual understanding and cooperation between the two countries. The Australia-Japan Foundation, established in 1976, promotes a wide range of bilateral professional, educational and cultural activities.

The fourth Australia-Japan Conference (AJC4) was held in Tokyo on 23 June 2006. These conferences bring together representatives from government, business, the arts and academia to discuss current issues of importance to Australia and Japan and to promote new areas of exchange. The AJC4 co-chairs statement delivered strong private sector support for the Government’s objective of continuing to enhance bilateral cooperation in political, security, trade and cultural fields.


Australia has constructive and friendly relations with China on the basis of mutual respect and recognition of shared interests and 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.

Australia engages with China on a range of issues of mutual interest, including regional security, cross-Strait relations, security on the Korean Peninsula and development assistance in the South Pacific. Australia and China have a regular bilateral human rights dialogue.

Two-way trade has increased significantly over the past decade and China is now one of Australia's largest merchandise trading partners. In 2005, Australia exported goods and services worth $16b to China. Major Australian merchandise exports to China included iron ore, alumina, wool and copper ores. In April 2005 Prime Minister Howard and his Chinese counterpart launched negotiations for a possible Australia-China FTA.

In April 2006 Premier Wen Jiabao visited Australia. During Premier Wen’s visit, twelve government-to-government agreements and memorandums of understanding were signed across a range of fields including cooperation in peaceful uses of nuclear technology, mutual legal assistance, coal mine safety, education and training, agricultural technical cooperation and agricultural market access.

The Australia-China Council, established by the Australian Government in 1978, plays a significant role in enhancing Australia’s cultural relations and people-to-people ties with China.

Within the parameters of its one-China policy, Australia promotes important economi, trade, cultural and people-to-people links with Taiwan.


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. There is extensive bilateral cooperation between Australia and Indonesia on counter-terrorism, people smuggling and transnational crimes.

Australia is committed to providing ongoing assistance for Indonesia’s economic and social development. Under the Australia-Indonesia Partnership, which includes $1b committed by Australia following the Indian Ocean tsunami on 26 December 2004, the Australian Government is providing funds to help rebuild communities in Aceh and in other disaster-affected areas, and to promote economic growth across Indonesia.

The Australia-Indonesia Ministerial Forum and the Australia-Indonesia Trade Ministers’ Meeting are key platforms for enhancing cooperation between the two countries. The former met in Bali on 28 and 29 June 2006 and the latter met in Canberra on 10 August 2006. In September 2005 respective trade ministers signed a Trade and Investment Framework aimed at enhancing commercial ties. Two-way trade in goods and services between Australia and Indonesia was valued at $8.8b in 2005, making Indonesia Australia's13th largest trading partner. Australia’s major merchandise exports to Indonesia include crude petroleum, aluminium, cotton and live animals.

The relationship is characterised by strong people-to-people links. Over 16,000 Indonesian students were enrolled to study in Australia in 2005. Australia promotes bilateral understanding and exchanges through the Australia-Indonesia Institute, established by the Australian Government in 1989.


Australia attaches priority to its relationship with ASEAN, which is a key regional institution comprising Brunei Darussalam, Burma, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam. As a dialogue partner, Australia participates in important ASEAN meetings, notably the ASEAN Regional Forum on promoting regional security and confidence building, and the ASEAN Post Ministerial Conference.

Australia’s close and long-standing engagement with ASEAN and the nations of East Asia generally was bolstered further when Prime Minister Howard attended the inaugural East Asia Summit (EAS) in Kuala Lumpur on 14 December 2005. The EAS brought together leaders from the ten ASEAN countries as well as Australia, China, Japan, India, New Zealand and the Republic of (South) Korea to discuss issues of strategic and economic importance to the region. On 10 December 2005 Foreign Minister Downer signed the instrument of accession to the Treaty of Amity and Cooperation in Kuala Lumpur following a meeting of EAS Foreign Ministers, paving the way for Australia’s inclusion in the EAS.

In 2004 at an ASEAN-Australia New Zealand Summit celebrating 30 years since Australia’s inclusion as an ASEAN dialogue partner, leaders announced the start of negotiations for an ASEAN-Australia New Zealand FTA. These negotiations are ongoing. Agreement was also reached in 2004 on an ASEAN-Australia Joint Declaration for Cooperation to Combat International Terrorism, which underpins regional cooperation on counter-terrorism and other regional security issues.

Australia has substantial relationships with many of the individual members of ASEAN. Australia has signed FTA's with Singapore and Thailand and negotiations have begun on a possible Malaysia-Australia FTA.

Singapore is Australia's largest trade and investment partner in ASEAN. In 2005 goods and services exports to Singapore were valued at $3.9b and $2.4b respectively, while goods and services from Singapore were valued at $8.6b and $2.8b. Australia’s largest export to Singapore is crude petroleum. High level exchanges continue to reinforce the strength of the bilateral relationship and in August 2005 the 5th Singapore-Australia Joint Ministerial Meeting was held in Perth. Singaporean Prime Minister Lee Hsien Loong visited Australia in June 2006.

Australia's bilateral relationship with Thailand is strong and close, with cooperation in a broad range of areas of mutual interest including trade and investment, law enforcement, counter-terrorism, education, defence, migration and tourism. In 2005 Australia exported goods and services to Thailand valued at $4.1b and $0.5b respectively and imported goods and services valued at $4.8b and $0.9b.

Australia’s relations with Malaysia have strengthened since elections in Malaysia in March 2004. In 2005, Malaysia’s Prime Minister Badawi paid an official visit to Australia - the first such visit by a Malaysian Prime Minister in 21 years. In addition to the launch of bilateral FTA negotiations, the Australian Government announced the establishment of an Australia-Malaysia Institute to enhance people-to-people ties. In 2005, Australia exported goods and services to Malaysia valued at $2.5b and $1.0b respectively, and imported goods and services valued at $6.0b and $0.8b.

Australia is promoting closer bilateral engagement with the Philippines across a range of shared political, security and economic interests. The inaugural Philippine-Australia Ministerial Meeting was held in Sydney in August 2005.

Australia takes appropriate opportunities to press for democratic reform and national reconciliation in Burma (Myanmar), including in the United Nations (UN) General Assembly.


Australia's relations with the Republic of (South) Korea (ROK) are underpinned by an expanding trade and investment partnership. A shared commitment to democratic values and market economies contribute to a similar strategic outlook, including strong alliance relationships with the USA and cooperation in support of a nuclear-free Korean Peninsula.

Australia's commodity exports have contributed significantly to the ROK's remarkable economic progress since the end of the Korean War in 1953. The ROK is Australia's third largest merchandise export market. There are further opportunities for Australia to supply goods and services to the ROK, including energy and resources products. In 2005, Australian exports of goods and services to the ROK amounted to $12.1b, with total two-way trade in the same period reaching $17.6b. Major Australian merchandise exports to the ROK include coal, crude petroleum, iron ore and beef. Over 250,000 Koreans visited Australia in 2005, and 26,000 Koreans chose Australia as their preferred study destination in the same period.

The Australia-Korea Foundation, established in 1992, promotes awareness of the importance of the bilateral relationship and fosters enhanced cultural and people-to-people links.

Australia actively supports efforts to resolve tensions on the Korean Peninsula. Australia resumed diplomatic relations with the Democratic Peoples Republic of Korea (DPRK) in 2000, but development of the relationship has been suspended pending progress by the DPRK on verifiably dismantling its nuclear weapons programs. Australia urged the DPRK to return immediately and unconditionally to the six-party talks which aim to resolve the nuclear issue. Australia has worked closely with regional partners to ensure the DPRK understands the extent of international concern over the nuclear issue and uses the DPRK embassy in Canberra to register these messages directly. The Australian Government liaised closely with key players in the region and other allies to ensure a strong and rapid international response to the DPRK’s missile tests on 5 July 2006. In November 2005, Australia cosponsored a resolution on the human rights situation in the DPRK at the Third Committee of the UN General Assembly.


Australia and New Zealand share a close relationship and a natural alliance based on common values and proximity. 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 Australia-New Zealand Leadership Forum, involving ministers, business representatives, academics and other senior community leaders from both countries met in 2004, 2005 and, most recently, in May 2006 to explore ways to broaden and deepen the bilateral relationship.

Two-way trade and investment takes place under the Australia New Zealand Closer Economic Relations Trade Agreement, which created a free trade area between the two countries in 1983. 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 $9b and $2.7b respectively in 2005. Australia imported goods and services from New Zealand valued at $5.4b and $2.0b over the same period. Australia’s major merchandise exports to New Zealand are refined petroleum, motor vehicles, medicaments and computers. Australia is New Zealand’s largest trading partner.

People-to-people contact between the two countries is extensive. The trans-Tasman Travel Arrangements of 1973 allow Australians and New Zealanders to visit, live and work in each other's countries without restriction.


Australia worked closely with the East Timorese people and the UN in support of East Timor’s transition to independence in 2002. In response to the breakdown in law and order in East Timor in April 2006 and at the invitation of the East Timorese leadership, Australia deployed troops and police as part of a multinational international force to help stabilise the security situation. Australia is at the forefront of international efforts to provide humanitarian assistance to East Timor and has advocated a new expanded UN mission in East Timor to address the country’s immediate and longer-term assistance and development needs. Australia signed an agreement with East Timor on maritime boundary and resource issues on 12 January 2006.


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 South 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 South Pacific. The Pacific Islands Forum is the region’s principal political institution bringing together the independent and self-governing states of the Pacific in an annual Leaders’ meeting. The 36th Forum meeting was held in Papua New Guinea (PNG) from 25-27 October 2005. At this meeting Forum Leaders adopted a new Agreement Establishing the Pacific Island Forum as an intergovernmental organisation. Forum Leaders also endorsed a Pacific Plan to strengthen regional cooperation and integration.

Australia is coordinating the ongoing state-building work of the Regional Assistance Mission to Solomon Islands. In 2006, Australia sent an observer team to the Solomon Islands elections and assisted the Solomon Islands Government to respond to subsequent civil unrest.

The Australian and PNG Governments established the Enhanced Cooperation Program (ECP) in 2004 under which Australian officials are deployed to assist PNG Government agencies strengthen governance and accountability. Australia worked with PNG to revise arrangements for the ECP following a PNG court ruling in 2005 determining that aspects of the program were unconstitutional. Australian officials have remained in PNG as advisers in the areas of economic and financial management, governance and the prevention of corruption, law and justice, border management and transport security.

In 2005 Australia and Nauru negotiated a fourth memorandum of understanding which covers the operation of the offshore processing centres and promotes better economic management. Australia continued to support Tonga’s political and economic reform process and has provided an Australian to head Tonga’s customs service.


The Australia-Canada relationship is mature, highly productive and broadly based. Trade relations go back more than 100 years and formal diplomatic links are over 60 years old. Visists to Canada by Prime Minister Howard in May 2006 and by Foreign Minister Downer in September 2006 reaffirmed the two countries’ close friendship and common interests. In addition to an active trade and investment relationship, Australia and Canada cooperate closely on international security, counter-terrorism and environmental issues, including in the UN. In 2005, Australia exported goods and services to Canada valued at $1.7b and $0.5b respectively. Australia imported goods and services from Canada of approximately the same value.

The European Union (EU) is an increasingly influential player in international affairs. The enlargement of the EU from 15 to 25 member states on 1 May 2004 created an economy comparable in size to the USA. Australia’s relations with the EU are underpinned by the 1997 Joint Declaration on Relations between Australia and the European Union and the 2003 action plan Australia-European Union: an agenda for cooperation. Ministerial consultations between Australia and the EU are held annually. Australia regularly holds broad-ranging policy dialogues at ministerial level with the EU Presidency, which rotates every six months.
Australia engages with the EU on global and regional strategic issues, with a growing and productive focus on security and development challenges in the Asia-Pacific region. Although Australia the EU differ over agricultural policy, they cooperate closely on other key international trade policy issues. Australia's total merchandise trade with the EU (exports and imports) was worth $48.9b in 2004-05. Bilateral trade in services is growing strongly. Services exports to the EU were valued at $7.6b in 2004-05, with imports worth $9.0b.

Australia has close ties with many countries in Europe. Australia and the United Kingdom (UK) share a particularly close and vibrant relationship, based on shared history and values, common strategic interests and strong trade and investment links. The strength of this relationship is underscored by regular high-level interaction. In March 2006 UK Prime Minister Tony Blair visited Australia. During the visit the establishment of an Australia-UK Ministerial Dialogue to enhance cooperation on international security issues was announced. Over 2005-06, Australia’s Governor-General, Prime Minister and Foreign Minister paid official visits to the UK.

Bilateral relations with other European states were also advanced by high-level visits over the past twelve months, including the Governor-General’s visit to Turkey, the Prime Minister’s visit to Ireland and visits by the Foreign Minister to France, Germany, the Czech Republic and Hungary. Marking the 400th anniversary of Australia-Netherlands contact and reflecting strengthening bilateral relations, a number of high-level visits took place between Australia and the Netherlands in 2006, including by Foreign Minister Downer in January and then Dutch Prime Minister Balkenende in April. As a demonstration of Australia’s expanding relationship with Turkey, the Turkish Prime Minister visited Australia in December 2005 when a series of initiatives to develop bilateral trade, political, education and travel links were announced.

Australians of European descent contribute to strong people-to-people relationships with a range of European countries.


India is a significant power and has become an increasingly important political, strategic and economic partner for Australia. The bilateral relationship has a strong institutional framework that includes a Foreign Ministers Framework Dialogue, a Joint Ministerial Commission involving trade ministers, senior officials’ talks and a strategic dialogue. During the Prime Minister’s visit to India in March 2006, the two sides signed a Trade and Economic Framework to provide a more strategic focus to bilateral trade and investment.

India now ranks sixth as a market for Australian exports and twelfth as a trading partner overall. In 2005, Australian exports of goods and services to India were valued at $6.9b and $1.0b respectively. Australia’s major merchandise exports to India are non-monetary gold, coal, copper ores and wool.

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

Australia maintains productive political and economic relationships with the other countries of South Asia. Australia contributed to relief and reconstruction efforts in northern Pakistan following the devastating earthquake in October 2005.

Australia continues to contribute to international efforts in support of Afghanistan’s democratic transition through military contributions and the aid program. Australia has intensified its engagement with Afghanistan through increased military deployments. These include an Australian Defence Force (ADF) Reconstruction Task Force (RTF) deployed to a Netherlands-led Provincial Reconstruction Team in Oruzgan Province, southern Afghanistan, commencing in the second half of 2006. The RTF will undertake infrastructure development activities and skills training for the local population. Australia made further financial commitments of up to $150 million (m) over the next five years for reconstruction in Afghanistan and has established an embassy in Kabul.


Australia’s relationship with Latin America includes strong bilateral economic interactions and 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. Two-way trade is increasing, mainly due to a surge in exports of Australian coal. The Council on Australia Latin America Relations, established in 2001, seeks to advance Australia’s economic, political and cultural relations with Latin America.


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 continues to support democracy and stability in Iraq. These efforts have seen progress with elections held in December 2005 and the subsequent establishment of a government of national unity. The ADF contribution to a stable and secure Iraq and in support of rehabilitation and reconstruction currently comprises up to 1,400 ADF personnel deployed to the Middle East Area of Operations. This includes a significant deployment to southern Iraq in a security overwatch role. Since 2003, Australia has committed over $173m to reconstruction, rehabilitation and humanitarian programs in Iraq.

Australia’s commercial interests in the Middle East are expanding, including in agriculture and services. Australia is considering whether to negotiate a broad FTA with the Gulf Cooperation Council (Saudi Arabia, Bahrain, Kuwait, Qatar, Oman and the United Arab Emirates). The Council for Australian-Arab Relations was established by the Australian Government in 2002 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 to find a diplomatic solution to the Iran nuclear issue.


Australia’s most significant relationship in Africa is with South Africa, which is its largest African trading partner. Australian mining companies are increasingly active throughout Africa and this sector is an important focus of bilateral engagement. In Zimbabwe, Australia applies a range of sanctions to encourage political and economic change, while continuing to provide emergency food and other humanitarian aid. Australia is working with the international community to address the humanitarian crises in Sudan, including Darfur. Since 2003 Australia has welcomed more than 15,000 refugees from Sudan, and the ADF and Australian Federal Police (AFP) have deployed personnel to the UN Mission in Sudan.

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