General Background
The ASEAN-Australia relationship has evolved and matured considerably since Australia became ASEAN's very first Dialogue Partner more than two decades ago in 1974. Initially the dialogue was focused on providing technical assistance through regional projects, primarily in research and development in food-related areas to ASEAN.
However in the early 1980s, the dialogue experienced a marked shift in emphasis in response to the rapid changes in ASEANs economic environment which saw the expansion of the ASEAN-Australia relations. The economic issues, in particular the problem of ASEANs access to Australian markets for its growing exports of manufactured goods, dominated the agenda of ASEAN-Australia relations.
Consequently, initiatives were taken to enhance and broaden cooperation activities to reflect the economic transformation and needs of ASEAN and Australia. The 14th ASEAN-Australia Forum in 1991 agreed to expand the theme of cooperation so that it would be based on mutual interest and benefit, encompassing new areas such as education, environment, telecommunications and science and technology. This development was followed by the inclusion of political and security issues as a topic for discussion during the 15th Forum in 1993.
The strength of the partnership between Australia and ASEAN, aside from the advantages presented by their geographic proximity, is in part due to the increasing complementarities of the relationship and the dynamism of the economies in the region. It is also due to both partners determination to continually assess the relationship and implement changes to suit the needs of the two sides.
Institutional Framework
Australia participates in a series of consultative meetings with ASEAN which includes the ASEAN Regional Forum (ARF), ASEAN-Australia Forum, the Post Ministerial Conferences (PMC) 9+1 and 9+10, Joint Planning Committee (JPC) Meeting, ASEAN-Australia Economic Programme (AAECP) and ASEAN-Australia Business Council (AABC). The ASEAN-Canberra Committee Meeting also assists in conducting and maintaining the dialogue with Australia.
At the apex of the dialogue process is Australias participation in the PMC process immediately following the annual ASEAN Ministerial Meetings. The PMC 9+1 and 9+10 meetings offer an opportunity for the Australian Foreign Minister to review contemporary political, security, economic and development cooperation issues affecting the dialogue with the ASEAN Foreign Ministers. Australia also participates in the ARF which takes stock of key regional political and security issues of interest and consequence to the region. Dialogue meetings are held at regular intervals at the level of ASEANs Directors-General and Australias Secretary of Foreign Affairs and Trade to provide a more in-depth examination of economic and functional cooperation activities.
In particular, the ASEAN-Australia Forums have been an important component in the formal institutional relationship between ASEAN and Australia. The first ASEAN-Australia Forum took place in Canberra in April 1974 and the most recent, the 17th Forum was held in Bandar Seri Begawan, Brunei in 1996.
ASEAN and Australia both share the belief that close consultations between government and private sectors are essential in enhancing economic cooperation. At the 12th Forum, for the first time, the Australian and the ASEAN private sectors under the auspices of the AABC took part in some of the proceedings. To further maximise private sector participation in the ASEAN-Australia Dialogue, the Forum is currently reviewing the suggestion from the Chair of the AABC during the 17th Forum that the dialogue consider inviting the private sector to major events such as the ASEAN Economic Ministers (AEM) meeting, where the high profile participants would generate stronger interest in the business community.
Economic Cooperation
The trade relationship between ASEAN and Australia has also expanded steadily since the Memorandum of Understanding on ASEAN-Australia Trade Cooperation was signed in 1976. ASEAN and Australia have emphasised expanding trade-related activities and the need to narrow the trade gap as discussed during the PMC with Australia in 1989. During the 17th Forum, it was noted that there has been a substantial increase in the volume of two way trade and investment, although ASEAN remains concerned with the trade imbalance. In 1994, total ASEAN exports to Australia was approximately A$5.4 billion while total ASEAN imports from Australia was A$9.5 billion, resulting in a trade surplus of A$4.1 billion in favour of Australia.
Australias exports to ASEAN is now higher than that of the EU and the US, accounting for 16% of Australias total export. On the other hand, imports from ASEAN in 1996 recorded a 13% increase, representing approximately 10% of Australias total merchandise imports. This strong growth in trade has also been accompanied by an increase in investment. In 1994, Australias investment in ASEAN was valued at A$6.6 billion whilst ASEANs investment to Australia has registered a strong 17% growth rate.
As a further step in strengthening the trade relations, the ASEAN Economic Ministers in Thailand in September 1994, examined possible linkages between the ASEAN Free Trade Area (AFTA) and the Australia New Zealand Closer Economic Relations (CER) with a view to further increasing the size of the market as well as enhancing the complementarities between ASEAN and Australian economies.
Following this, the ASEAN Economic Ministers met their Australian and New Zealand counterparts in Bandar Seri Begawan in September 1995 for the inaugural AEM-CER Consultative Meeting. The meeting focused on practical steps towards the removal of impediments to trade and investment rather than the reduction of tariff barriers or formal integration. The Ministers identified seven areas of cooperation between the two regions namely, the exchange of information, human resources development, customs matters, standards and conformance, trade and investment, facilitation and promotion, competition policy and industrial cooperation.
A package of cooperation activities such as the creation of a customs compendium for ASEAN and the CER countries, the development of a trade and Investment database, cooperation in areas of standards and conformance beginning with the exchange of information and collaborative work on ISO 14000 environment certification system and information promotion on standards and conformance by featuring developments in CER standards and conformance in the ASEAN Standards and Quality Bulletin were launched immediately.
This linkage created another useful avenue for the ASEAN-Australia Dialogue and provided an important vehicle for facilitating trade and investment links between the two sides. An Informal Consultative Meeting between the ASEAN Economic Ministers and Ministers from the CER are also held annually to further discuss trade cooperation issues.
Development Cooperation
The ASEAN-Australia Economic Cooperation Programme (AAECP), the cornerstone of ASEAN-Australia dialogue relations was the first collaborative development programme between ASEAN and a Dialogue Partner. The programme remains the main mechanism for channelling Australian assistance for ASEAN projects. Since its establishment in 1974, the AAECP has evolved to keep pace with the significant economic progress of the region, while at the same time maintaining its aim of facilitating broad-based economic cooperation between ASEAN and Australia.
During the first ASEAN-Australia Forum in Canberra in 1974, Australia announced the establishment of the ASEAN-Australia Economic Cooperation Programme (AAECP) Phase I, covering the period 1974-1989, to assist joint ASEAN-Australian projects. The high level of success in the early years of the programme, mainly in research and development of the food and agricultural sectors and the rapid economic growth experienced by most ASEAN countries, led to an agreement that future collaborations should be based more on mutually beneficial programmes, and that all future projects be assessed and appropriately adjusted to reflect this changing relationship.
Two thirds of the AAECP Phase I commitment was spent on projects in this sector. However, in 1992 responding to the structural transformation of the rapidly growing ASEAN economies, there was a notable change in emphasis which led to a shift in focus of the AAECP to science and technology. Subsequently, during AAECP Phase II (1989-1994), the bulk of the funds was spent financing projects involving microelectronics, biotechnology, non-conventional energy research and marine science.
Under the current AAECP Phase III, which was launched during the 27th ASEAN Ministerial Meeting in Bangkok on July 1994, expanded opportunities were offered for ASEAN-Australia cooperation through two cooperative mechanisms, i.e. the Projects Stream and the Linkages Stream, both of which contributed towards enhanced trade and investment links between ASEAN and Australia.
The Projects Stream focuses on long-term technology transfer projects on mutually agreed priority sectors namely environment, electricity, telecommunications and food safety. So far, six projects at various stages of development have been selected by the AAECP Joint Planning Committee-Sub committee (JPC-SC). Five of these projects have also successfully convened their Project Coordination Committees (PCCs), marking a milestone in AAECP project implementation.
The Linkages Stream Programme (LSP), is the major facilitator of ASEAN-Australia private sector networking activities. It provides an avenue for private sector participation in ASEAN-Australia activities. The LSP involves cooperative activities in the private, research, academic and government sectors in ASEAN and Australia in the agreed priority sectors which include environmental management, transportation, biotechnology, telecommunications, information technologies and agriculture and agro-based industries. In August 1997, the 8th and final round of LSP under AAECP III was successfully completed and attracted a record 101 applications, of which 27 were submitted by applicants from the ASEAN Member countries.
Outside the scope of AAECP, Australia's relationship with ASEAN is also expanding with priority being given to other areas of cooperation. In the case of cultural exchanges, priority has been given to expanding exchanges and to strengthening ties between cultural institutions in ASEAN and Australia. At a recent ASEAN-COCI Meeting in Udon Thani in March 1997, Australia presented several proposals for joint activities including an initiative from AusHeritage to deploy Australian expertise to assist ASEAN to develop a cultural heritage strategy.
Current ASEAN-Australia Relationship
The A$45 million ASEAN-Australia Development Cooperation (AADCP) saw its first stages of implementation during the period 2002 to 2003, although a few projects in the fields of culture, social development and energy are still going-on under its forerunner, the ASEAN-Australia Economic Cooperation Programme – Phase III (AAECP), which is nearing completion. The First Meeting of the AADCP Joint Planning Committee (JPC), held on 7 May 2003 in Bandar Seri Begawan, adopted its own Terms of Reference and endorsed the AADCP Framework Document.
Under the AADCP’s Regional Economic Policy Support Facility, a range of priority regional policy research activities to provide ASEAN with high quality, high priority and timely regional economic policy analysis have been identified. The current research programme of the Facility addresses substantive and strategic policy issues ranging from developing indicators of ASEAN integration to studying options for managing revenue losses and other adjustment costs of CLMV countries in their participation in AFTA. The Facility supports policy needs for frontier integration areas such liberalization and facilitation of movement of individual service providers, as well as in preparing for an ASEAN open sky.
The Regional Partnerships Scheme (RPS) of the AADCP aims to support the implementation of a range of smaller scale regional development activities, which are to be developed by ASEAN and Australian entities, to be funded in rounds over a period of five years. The first and second meetings of the Joint Selection and Review Panel formalized the project selection guidelines for the RPS, which were subsequently endorsed by ASEAN and Australia. Three project proposals have been approved in principle for funding, such as (a) Eco-labels and certification in forestry; (b) Energy policy and systems analysis; and (c) Project design support program.
The Program Stream, which forms the largest component of the AADCP, consists of two subprograms, namely “Strengthening ASEAN Economic Integration” and “Enhancing ASEAN Competitiveness.” Each component comprises of a series of smaller joint ASEAN-Australian activities contributing to the broader program objectives and implemented over periods longer than those of the other two components. Eleven projects have been identified for implementation under the Program Stream.