The Australian Financial Review


By John W.H. Denton,
Partner and Chief Executive Officer
Corrs Chambers Westgarth
Chairman, BCA Trade and International Relations Task Force

There’s a new role for Australia in regional engagement, writes John W. H. Denton.

Australia’s future economic prosperity is, more than ever before, directly linked to East Asia. We therefore have a responsibility to look beyond commercial priorities to consider how we might play a constructive role with China as the key emerging power in that region.

There is already a need for clear security arrangements in order to encourage greater economic integration by East Asia with the rest of the world. Unless security policy is on a solid footing, it can become a stumbling block to the relationships between the most powerful nations.

The challenge then is to fully engage China in regional and international institutions that underpin trade, economic and broader political relations. We must encourage and support China in taking on increased responsibilities as a stakeholder in global affairs.

In focusing on China we are not ignoring Japan or South Korea, both of which have, over a number of decades, been playing leading roles in advancing global commerce and investment. Our objective must be to encourage China to reach the same level of economic integration.

Prime Minister Kevin Rudd’s address to the Brookings Institution in Washington on March 31 was a defining step for Australia in terms of our own regional and global role. The Prime Minister has set down a positive yet realistic framework for working with China to become an active and engaged international citizen. Achieving this goal is the great strategic challenge of the 21st century.

I see it as incumbent on business and the wider community to support and reflect in their actions and words the priorities outlined on behalf of the Australian government. Through engagement at a number of levels we can help give effect to deeper Chinese integration into bilateral, regional and global institutions.

The Prime Minister has nominated five specific priorities in which Australia should work with the United States to encourage broad-based engagement with China and further integration into regional and global endeavours. These are: broadening the six-party talks as a security mechanism; greater regional co-operation through the Association of Southeast Asian Nations; concluding the Doha Round of international trade negotiations; addressing global climate change; and co-operatively delivering development assistance from nations such as Australia to the Pacific region and to other parts of the world.

To these priorities, the Business Council of Australia would add the importance of securing another element of integration, the Australia–China free trade agreement. On this front, in order for progress to be made, some tough decisions might be necessary. We should not jeopardise progress with wider economic integration by failing to decide what we must have versus what we would like to have in particular areas of the negotiations.

We would also like to see China involved in advancing the ‘behind the border’ agenda for reform agreed by the Asia–Pacific Economic Cooperation forum leaders in Sydney last year.

Such an approach is not about lecturing China. On the contrary, it is centred on developing effective partnerships in which China has a mutually beneficial stake.

The challenge then is to fully engage China in regional and international institutions that underpin trade, economic and broader political relations. We must encourage and support China in taking on increased responsibilities as a stakeholder in global affairs.

The key to achieving a constructive role for China is through its relationship with the United States. Some have argued that it is unrealistic for Australia to expect that we can have a real influence in contributing to constructive relations between China and the United States, given the differences between the nations. The Prime Minister has shown how, through a measured and practical framework, we can play a leading and beneficial role.