Australia's Prime Minister Scott Morrison speaks at the APEC CEO Summit during the 2018 Asia-Pacific Economic Cooperation (APEC) forum in Port Moresby, Papua New Guinea, Saturday, November 17, 2018. (AAP Image/Mick Tsikas)

Address to APEC CEO Summit 2018

Speech
17 Nov 2018
Port Moresby, PNG
Prime Minister
E&OE

Photo: AAP Image/Mick Tsikas

PRIME MINISTER: Well thank you very much for that very warm welcome. It’s great to be here in Port Moresby and I want to thank you all very much for the invitation to speak here today.

I also want to recognise the commitment of all of those who have given of their time and their efforts to be here and form part of the APEC Business Advisory Council. ABAC plays a very key role in ensuring that these APEC meetings get on with business, literally getting on with business as I am sure you are doing here today as you’re engaging with each other.

It is great to be here in Port Moresby. Papua New Guinea is not just Australia's closest neighbour geographically, we are family - wantok - and it’s right -

[Applause]

Thank you. But that’s true also if we were talking about Fiji or throughout Polynesia, we’re whanau. We see ourselves as part of a family in the Pacific. So it’s right that we gather together here in Port Moresby because we honour and recognised that he “P” in APEC; the Pacific and particularly the Pacific Island economies, as I said, that we refer to as our Pacific family.

I have already made it clear as Prime Minister that Australia is stepping up. We will step up as part of our ‘step-up’ initiative in Pacific. We are taking and will take our engagement in the Pacific to a new level. I was reminded recently of another new Australian Prime Minister addressing his first APEC ministerial meeting. It was 1996 and it was then Prime Minister John Howard. He said there were three preconditions for growth in our region. The first was responsible domestic economic management. The second was market access for exports and the third was tackling infrastructure constraints. As we gather today I believe those guiding principles for economic prosperity are as relevant today as when John first mentioned them all those years ago.

You know, no country gets rich selling things to itself. That’s why APEC encourages trade and by taking practical steps on the things that matter to business - faster customs procedures, facilitating supply chain connectivity, promoting sustainable development, facilitating the digital economy and digital connectedness. APEC must remain a very practical forum. It cannot be about talk, it has to be engaged in very practical measures with a focus on facilitating business and a business environments that set the right conditions for business. While most of you in this room understand full well the benefits of trade - if you didn’t you would not be here - we are living in an age though when leaders and business need to proactively prosecute the case for open markets and a market-led economy. We are witnessing a rising tide of trade protectionism around the world in our constituencies, along with financial market volatility in some emerging markets. Fortunately for all of us, the strong relationships between APEC economies and the strong relationship we share with the business community, gives us the right foundation to tackle global challenges together.

The test for us now, for all of us, is to stand up for the economic values we believe in. To show how they work, to demonstrate it. How they lift living standards and have lifted hundreds of millions of people out of poverty, as those key, core economic values have led to policies and achieved those goals. As they have done. To show people, all of our people in our APEC economies and nations around the world, what happens when you are open and when you work in partnership; that you create jobs, build prosperity and you create a more stable, secure and more peaceful region.

When it comes to trade, Australia's actions match our words. We have among the lowest tariffs in the world and we have a consistent record for negotiating free-trade agreements with partners. Stay still long enough and our Trade Minister will do a deal with you.

[Laughter]

We all need to look beyond our own market if we are to boost our prosperity and Australia has always looked outward to achieve our prosperity. In Australia, trade liberalisation has benefited our people, just as immigration has, just as foreign investment has. You know, one in five jobs in Australia exist because of our trade activities and recent research has shown that the average Australian family now earns $8,500 more a year than they would have, if we have not lowered barriers to our trade for the last three decades. That’s a generational shift. More than 50,000 Australian businesses are exporters, which contributes nearly $390 billion to our economy.

Australia is not alone in this success. More than 1 billion people have been lifted out of extreme poverty since 1991, in large part because of the jobs and access to more affordable consumer goods that free trade has enabled. It works and you should do what works and you should keep doing what works. That is what Australia is going to do. Nowhere have we have we seen that more, than in our own Asia-Pacific region. No single country would have been able to create this prosperity alone. Success has relied on all of us together, making a commitment to lower barriers, to support openness to play by the rules we set and ensure those rules remain in place.

In Australia, for every big business that benefits from free trade, there are dozens of small and medium-sized businesses who benefit as well. You don’t have to pick and choose. I believe APEC needs to find new ways of making it easier for  SMEs to embrace export opportunities, because small and medium businesses are the engine room of so many of our national economies. They have the capacity to really drive job-creation and the prosperity gains throughout our region.

So my message to you today is that Australia's commitment to free trade remains strong and always will. Of course we recognise that there are many challenges. But the solution is not throwing up protectionist barriers. Tit-for-tat protectionism and threats of trade war are in no-one’s interests economically and undermine the authority of the global and regional trading rules that benefit us all and importantly, the people, the families who live in our economies and are supported by our economies.

So our efforts must be about persuading and convincing our peoples again, about the domestic benefits of what we are doing here. I know there are legitimate questions around trade arrangements. But the solution to perceived unfair trade practices is more likely to be found around the negotiating table, than it is in building a tariff wall. Australia will continue to advocate for trade disputes to be resolved by negotiation and within WTO rules. But we know the WTO is not perfect. We will work with like-minded countries around the world to ensure that it is improved and to understand the issues that they are raising, independently listening and seeking to understand. We want to strengthen and improve the WTO and we will continue to pursue liberalisation wherever we can.

That is what we must do and that is what I will be discussing with APEC leaders and colleagues here at every opportunity. We do so because Australia practices what we preach. We recently ratified the TPP-11 agreement which sets 21st Century rules, modern rules, for trade and investment between 11 of the 21 APEC economies and create free trade partnerships where previously there were none.

The door to the TPP remains open. More can join and we welcome and look forward to those opportunities in the future. It set the standard for what an agreement should look like into the future, by being modern. With six countries now on board - and more - the benefits will kick in from the 30th of December this year. The TPP-11 shows that Australia is a nation committed to economic integration and to opening up new opportunities for businesses across the region. It shows that Australia will act and we will deliver on free-trade and that we have partners who are willing to do the same. Still, more nations, APEC members and others in the region are working towards the conclusion of the Regional Comprehensive Economic Partnership which we committed at the East Asia Summit and the RCEP summit, to ensure that this is concluded at the end of next year. As well, I believe the PACER Plus free trade agreement will open opportunities even further across the Pacific. PACER Plus has been negotiated between Australia and New Zealand and 12 other members of the Pacific Islands Forum, including six who are not members of the WTO. When in force, PACER Plus will foster trade and economic integration by aligning align regulatory regimes and allowing a smoother flow of goods, capital and people within regions. This is a region in the Pacific, full of opportunity where innovation and new business opportunities are being embraced. Whether it’s the already successful tourism industry, coffee from the PNG highlands or Bougainville’s award-winning chocolate, there is growing market for the output of the Pacific Islands. Australia, New Zealand and the UK are already buying Fiji-made sports uniforms and Fiji water has become ubiquitous across the world. Total two-way trade between Australia and Pacific Island countries is now worth more than $11.5 billion. The Pacific’s commitment to free trade and growth is another chapter in the extraordinary story of our region's economic transformation.

Across APEC, Australia wants to see more done to tackle non-tariff barriers to trade and structural reform, but no single economy can make this happen on its own. It does require reciprocity. As nations look for new trade opportunities they must also provide them. Trade is a two-way process by definition. There are plenty of opportunities before us, like developing digital infrastructure and creating the right regulatory environment that protects privacy, while enabling data to move across borders. Business tells us that we need rules that ensure the free flow of data and facilitate online trade, but at the same time protects consumers and recognises cyber risks. Australia is focused on creating that environment, which is why our Productivity Commission, working with New Zealand, is examining priority areas for removing barriers to growing the digital economy. But when we think about the reforms needed, particularly the potential for digital technology, we need to look out across our entire region and that includes the island states of the Pacific. Digital technology offers transformational opportunities for Pacific Island economies. It is why PNG's theme for APEC, “Harnessing Inclusive Opportunities, Embracing the Digital Future,” is so apt. The World Bank estimates digital transformation will grow GDP by more than $5 billion US and create 300,000 new jobs in the Pacific by 2040. That’s why Australia is supporting the construction of high-speed telecommunications cables from Australia to PNG and the Solomon Islands. Fiji has already shown us the commercial opportunities of high-speed telecommunication cables, leading the way in the Pacific with successful call centres and a business process outsourcing sector.

Together with partners we are looking at other projects in the very near future in this region. There is so much opportunity in the Pacific for citizens, businesses and governments and your attendance here is demonstration and affirmation of that.

This leads us to the third pillar of growth; infrastructure. The Asian Development Bank estimates the Pacific region needs $3.1 billion US in infrastructure investment, each year until 2030, a tall task. To contribute to that, last week Australia, the United States and Japan signed a memorandum of understanding to support trilateral cooperation in the Indo Pacific region and I had the opportunity to further the discuss those issues with Prime Minister Abe in Darwin yesterday. The MOU formalises the trilateral partnership for infrastructure investment in the Indo Pacific which was announced in July. Under the MOU, the three countries will work together to finance infrastructure projects and mobilise private sector investment to drive future economic growth, job-creation and poverty reduction. We will work closely with partners to identify projects for the trilateral partnership to support. So, together with the United States and Japan, we are working closely together, closely together, to drive this agenda.

As well, the Australian Government is setting up a $2 billion Australian Infrastructure Financing Facility for the Pacific, which will significantly boost our support for concessional infrastructure development. I am looking forward to giving EFIC, Australia’s export financing agency an extra billion dollars in callable capital and a new, more flexible infrastructure financing power to support at commercial rates, investments in the region which also have a broad national benefit for Australia. These new financing options have the potential to boost partnerships between the public and the private sectors, to create more projects like the Tina River hydropower project in the Solomon Islands, which when it opens, will be a great example of public-private infrastructure investment, bringing together the World Bank with public and private sector investors from Korea and Abu Dhabi. We are open to working with all partners in the region, all partners in the region. We want to see infrastructure investment though, that is transparent, that is non- discriminatory, that is open, that upholds robust standards to deliver long-term benefits that meets genuine needs and avoids unsustainable debt burdens. It must be in the interests of the country in which you are seeking to invest, to ensure we can deliver those projects that can benefit their economy which in turn benefits our entire regional economy.

We want a rules-based system that respect the sovereignty and the independence of every single country and a commitment then to regional security that is always the precondition for prosperity. But all of us in here in the room know there is more to do and always is. So the challenge is to strengthen our domestic economic foundations - which I can happily report is the case in Australia - to improve our market access for exports - because you never get rich selling things to yourself - and to finance and build vital infrastructure. That is as vital today as it has ever been.

Australia is committed to this proven path because we believe in it. Our external affairs policies are not just the sum of our deals. They are an expression of our values and our beliefs, whether they are economic or otherwise. And so we do this, motivated by our convictions, by our beliefs and our values, with a deep commitment to a strong, stable and secure Indo Pacific region.

That is why Australia is a trusted partner and a long-term partner; because our commitment is based on beliefs and values that have long been recognised in this region. It is the guiding principle for our foreign and trade policy.

No one country, no one economy can prosper without engaging with others. That is the lesson of the past half-century that has delivered so much to the people who live in our region. It is the lesson governments and the private sector must continue to use to guide us in the years ahead and to make the case, to make the case that this is the right way to go forward. To make that case in our communities, in our constituencies, in our boardrooms, whatever table we’re sitting around, the kitchen table or anything else, we need to make the case that trade is the right way forward to lift people out of poverty, to provide stability and peace in our region and to lift living standards.

Thank you very much for your attention.