Australian Premier Presses Ties to Asia


AUSTRALIAN Prime Minister Paul Keating's trip through Japan last week is being seen here as an historic step in an economic realignment away from the West and toward this country's Asian neighbors.

The main focus of his trip last week was to foster deeper regional cooperation with Tokyo. Mr. Keating said that if the current round of world trade talks does not succeed and President Bush goes ahead with his plan for a system of bilateral trade relationships, Australia would put a priority on its own relationship with Japan.

In several characteristically blunt speeches early in the visit, Keating seemed to pull away from Australia's traditional link with the United States. "Australia will always be willing to join you in telling our American friends that an inward-looking trade group is not the way to go," he said. He described Mr. Bush's recent proposal for an extension of US bilateral trade deals with Asia as "manipulative."

By Friday, however, after the Australian press had framed his remarks as a repudiation of the US in areas besides trade, he softened his stance with a speech that reaffirmed strategic links with the US.

While his remarks were taken in the context of an increasingly heated federal election campaign here, Keating remains concerned that that the US may be moving away from its commitment to free trade. Like many in Australia, he voiced concern over Bush's campaign initiative earlier this month to provide US farmers with $1.4 billion in subsidies.

Keating and Japanese Prime Minister Kiichi Miyazawa support a more open trade arrangement than the one Bush has proposed for a "hub and spokes" series of separate, exclusive bilateral trade agreements between the US and individual nations. Keating says the plan could harm the countries at the end of the spokes, which could be locked out of trading with each other.

And both leaders express concern about Bush's proposal for some European and Asian countries to be invited to join the North American Free Trade Agreement.

The prime minister has been moving toward a closer relationship with Asia for some time. In a speech in June, he told Australians that they needed to start thinking of the country more as an Asian nation and less as a British one.

"This is part of Keating's overall push in Asia; he's emphasized Asia more than other prime ministers," says Grant Bailey, chief economist with Citibank. "He's ahead of public opinion. He may be pressing the debate faster than public opinion because he realizes the economic necessity of Australia becoming more integrated with Asia."

Keating characterized his embrace of Japan as "a matter of arithmetic." Japan is the country's No. 1 trading partner. Nearly two-thirds of Australia's exports go to Southeast Asia, while only 12 percent go to the US.

During his visit, Keating sought to dispel the image of his country as one of exorbitant tariffs, too-powerful unions with "administered wages, crippling strikes, sleepy corporations, and steadily high inflation."

Last year, he said, Australia had the lowest number of strikes in 30 years. The inflation rate matches Japan's. Australia more than doubled its exports in the last nine years.

"The prime minister's message to Japan was that Australia changed a lot in the last 10 years. In spite of current economic problems, it has improved," says Gerard Henderson, executive director of the Sydney Institute, a privately funded think tank. "I think that's right."

But Keating went beyond just looking out for Australia's economic interests. He supported Japan's more active role in international and regional affairs and that country's efforts to be included in the inner sanctum of the United Nations Security Council.

And when Tokyo approached Canberra with the proposal of a joint working group that would keep each country abreast of the other's policy developments in the region, the Australian government welcomed the idea.

After his visit to Japan, Keating went on to Singapore and then Cambodia, where he gave his support to Australian soldiers working with United Nations peacekeeping force. It is the largest contingent of Australian soldiers to be sent abroad since the Vietnam War.

While the visit is being viewed as an international relations success, domestically Keating has been criticized for his attack in Japan on opposition leader John Hewson's trade and tariff policy.

The prime minister also managed to have the president of Toyota Corporation to warn that its investment in Australia could be harmed under the opposition's zero-tariff policy. Analysts say these actions are a breach of diplomatic protocol and could cost Keating politically.

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