UK Policy Exchange Virtual Address

23 Nov 2020
Prime Minister

PRIME MINISTER: Thank you very much and I’m pleased to join you from Canberra this evening. I want to start, as is our custom, by acknowledging the traditional owners here of this land the Ngunnawal people and pay my respects to their elders past, present and emerging.

And as is my custom, I also acknowledge any Australian defence force personnel or veterans who have joined us today, and say on behalf of a very grateful nation, thank you for your service.  

I would also like to extend the same gratitude to any participants in today’s discussion and those watching on who may have served in the British or other allied defence forces and I extend our thanks to you also.

I also want to thank my good friend Prime Minister Boris Johnson for our great relationship and I look forward to being able to see him in person again. We spent the weekend at the G20 Summit virtually.  

Boris is known for his many enthusiasms, too many to review in my time tonight. 

But one striking characteristic is, I think, his unshakeable belief in the British people. 

He has great ambitions - global ambitions - for Britain. He is rightly proud of Britain’s contributions to the world, making it a better and a safer place. From the resilient institutions of Westminster democracy and our justice system, to the defiant and resolute role played in defending those freedoms, at great cost. 

We remain true partners in these great endeavours, Australia and the United Kingdom, and many more.

We welcome, in particular, the transformational defence and security agenda Prime Minister Johnson announced last week which we will partner with, as we implement our own Defence Strategic Update we announced earlier this year.

We commend his ambitious new economic plans - including for engagement in the Indo-Pacific through direct bilateral trade ties, as well as including through the UK-Australia FTA and potentially joining in on the TPP-11. 

We also share his ambitions for the G7, and appreciate his invitation for Australia to attend again next year. To align the interests of the world’s great like-minded liberal market democracies, to preserve and promote the primacy of private sector, business-led growth to drive the global economic recovery out of this pandemic recession, and to ensure that the liberal worldview of economic and political freedoms continue to underpin global peace and stability, as they have done successfully since the Second World War.

We are also pleased to partner with the United Kingdom on our shared task to create a pathway to net zero emissions driven by practical, scalable and commercially viable technologies, not economy destroying taxes. 

Boris and I share an ambition to chart a course on emissions reduction, consistent with our values and priorities as leaders of Governments from Liberal/Conservative traditions.

We are also already working on a similar partnership with Germany, Japan, Singapore and Korea.

As I said to the G20 this week, effective action in this area is no longer about if or when, but importantly how. 

Our focus on technology reflects our firm belief that targets must go hand in hand with practical action and a clear pathway to their achievement, or they risk becoming only symbolic.

It is why my Government has launched a Technology Roadmap to drive our efforts of reaching net zero emissions as soon as possible.

I also noted at the G20 that emissions, they don’t have accents, they don’t have languages or nationalities. 

To achieve global reductions in emissions, we must also have technology-led practical solutions for developing countries that will not impede their development.

If developing nations believe the global climate change agenda is likely to make their nations less competitive and lower their living standards of their peoples, well their response will be obvious and straightforward. They will simply turn away. 

So we look forward to working with the UK to make COP26 a major step forward in dealing with the
challenge of climate change. 

Ladies and gentlemen, it is a great delight and indeed a humbling honour to be with Policy Exchange and to accept this very kind inaugural Grotius Prize.

I want to particularly thank the Chairman of Policy Exchange, Dean Godson and of course the Chairman, the great Australian Alexander Downer, for the invitation to speak with you today.  

Few Australians, if any, are as well versed in the practical realities of modern statecraft as Alexander, our nation’s longest serving Foreign Minister from 1996 to 2007 and our former High Commissioner to the United Kingdom.

It is nearly now 400 years since Hugo Grotius published The Rights of War and Peace

Grotius wrote most of the book while imprisoned in the Loevestein Castle, in the south of the then United Provinces, now known as The Netherlands. 

Given that I join you today from quarantine isolation, having recently returned from Japan, I hope my own isolation will be nearly as productive.  

The backdrop to Grotius’ work was the Thirty Years War, a catastrophic political and sectarian conflict in which nearly a quarter of the population of Central Europe died from combat, disease or starvation.  

Grotius’ work, one reviewer noted, was “a triumph of intelligence over irrational impulses and barbarous propensities.”

The late Hedley Bull, the eminent Australian international relations scholar, wrote that Grotius gave us the idea of international society: the notion that states and rulers are bound by rules and form a society or community with one another, of however rudimentary a kind.

Grotius advanced the idea of a community of nations built around common understanding of international law.  

An example was his view that the oceans are international territory which all nations are free to use for trade.

Shortly after his death, the Treaty of Westphalia in 1648 established the notion of international community composed of individual, sovereign nation-states, on the platform Grotius had laid down.

This development should not be underestimated. 

Nation-states mattered then and they matter now. 

The task is not to subjugate their interests through international activity, but to channel them wherever possible into mutual benefit, either individually or collectively.

For this purpose, nation-states are the building blocks of an international order and community, established for their welfare and to protect against the Hobbesian nightmare.

So we, as nation-states, are not simply boats being tossed around in an angry sea.

We are all participants, with agency and purpose.

We can shape our destiny, individually and collectively. 

We can make our world more Grotian and less Hobbesian.

And that is the key point I want to draw out today, this evening here in Australia.

Why the collective efforts of like-minded nation-states can make a difference. 

Why our alliances and structures of collective security are so important.

Why groupings and institutions like the G7, the WTO and the OECD matter in a turbulent world and indeed the G20.

Why it is critical that like-minded liberal democracies work together in common cause.  

To maintain the peace and security, to keep our economies open, to tackle common challenges, consistent with liberal, market-based principles, whether that be COVID-19 or climate change.

International institutions are most effective when they are driven by, and responsive to, accountable to, the society of sovereign states that forms them. 

Their task, those institutions, is to align interests and achieve an order through consensual participation. 

Their only authority is that afforded to them by sovereign states. 

This is especially true for liberal democratic states, where no authority can ever rise higher than the people who elect their own governments. 

As I said in a speech to the Aspen Institute in August, well-functioning international institutions are a symptom of an international society, not the cause. 

The challenge is to ensure that sovereign nations, working in concert, create deeper habits of co-operation on economic, security and global environmental issues, while exhibiting a natural preference for rules-based solutions.

Freely submitting to such rules because it is in their broader national interest to do so.

This is a world where there is no need to build global spheres of influence in order to secure economic opportunity or exert influence, previously only secured by great militaries.

Our international institutions can now provide this access. 

Where states willingly honour the rules-based order, both in letter and spirit, importantly, by their actions. This removes any necessity of containment. This is desirable, as containment only serves as a negative energy in the global system, reducing the sum of the whole in which we all benefit.

Now this means in an age of institutions we can reduce and remove such constraints, whether in trade, health, technology, education or the many other areas of progress and facilitate cooperation.

This is the pragmatic compromise demanded for success in our international order.

So what does that mean for us at the end of 2020, a truly remarkable year, and not for good reason.

We are confronted by a range of formidable challenges. 

After a ‘unipolar moment’ lasting just two or three decades, a new era of geopolitical competition is underway. 

It is a form of geopolitical contest though, that different to the Cold War.

The world is not divided into two blocs, each with their own economic realm.

One world, our world I should say, is one shaped by decades of growing economic interdependence.

At its peak during the Cold War, trade between the two major superpowers was around $2 billion per year.

Today, the value of bilateral trade between the US and China is $2 billion per day

Today, the two biggest powers are the largest or second largest trading partners for most of the world.   

This economic interdependence and openness has created unprecedented wealth and prosperity and lifted billions of people out of poverty. Importantly, it facilitated the economic rise of China.  

Now that is a good thing for the global economy.  It is good for Australia.  And, of course, it’s certainly good for the Chinese people.  Australia is not and has never been in the economic containment camp on China, no country has pulled more people out of poverty than China. And  Australia is pleased to have played our role in the economic emancipation of millions of Chinese through the development of the Chinese economy.

In our newly globalised economy, the real time interaction of geopolitical, economic, technological, information and ideological dynamics is creating new dilemmas in our international relations, arguably even more complex than those during the Cold War.

Most significant is the challenge of dealing with the complexities of new tensions between the world's largest economic and military powers, the United States and China.

The global competition between China and the United States presents new challenges, especially for nation-states in the Indo-Pacific.

Like other sovereign nations in the Indo-Pacific, our preference in Australia is not to be forced into any binary choices. 

Our present challenge in the Indo-Pacific though is a foretaste for so many others around the world, including the United Kingdom and Europe.

Australia desires an open, transparent and mutually beneficial relationship with China as our largest trading partner, where there are strong people-to-people ties, complementary economies and a shared interest especially in regional development and wellbeing, particularly in the emerging economies of Southeast Asia.

Equally we are absolutely committed to our enduring alliance with the United States, anchored in our shared worldview, liberal democratic values and market-based economic model.

And at all times, we must be true to our values and the protection of our own sovereignty.

These are our Australian national interests.

Pursuing these interests in the midst of strategic competition between the United States and China is not straightforward.

It is made more complex by the assumptions sometimes cast on Australia’s actions. 

Our actions are wrongly seen and interpreted by some only through the lens of the strategic competition between China and the United States. It’s as if Australia does not have its own unique interests or it’s own views as an independent sovereign state. This is just false. And worse it needlessly deteriorates relationships.

If we are to avoid a new era of polarisation, then in the decades ahead, then in the decades ahead, there must be a more nuanced appreciation of individual states’ interests in how they deal with the major powers. Stark choices are in no-one’s interests.

Greater latitude will be required from the world’s largest powers to accommodate the individual interests of their partners and allies. We all need a bit more room to move.

Our international institutions also have an important role to play as circuit breakers. To provide the space and frameworks for meaningful and positive interaction to be maintained, as a bulwark against any emerging divide.

All of this is further complicated again, by having to deal with the stresses and strains that COVID has brought to global politics.

The global recession was not caused by structural weaknesses in our global economy. 

The world has been hit by an economic meteor in the form of the COVID-19 pandemic and the failings of our global public health system to provide an effective warning and an integrated response. 

For this reason, I support a global pandemic treaty as proposed at the G20, to ensure we are better prepared next time.

But nor is the pandemic recession the product of the failure of world capitalism or liberal, free market-based values.

It is actually these values that have provided the platform for the greatest period of peace and prosperity the world has ever known, and has underpinned the very global institutions that has helped sustain it. 

It is these values that must now drive our economic recovery out of the pandemic recession. 

These same values are also the best way for us to pursue greater economic inclusion and poverty alleviation as a result, the empowerment of women, environmental sustainability, climate resilience, as well as continuing to combat transnational crime and extremism, terrorism in all its forms.

We don’t need to ‘reset’ our economic agenda, we just need to get on with it. 

Ladies and gentlemen, this is a moment for concerted leadership and action by like-minded liberal democracies. 

For inspiration, there is no finer example than the Atlantic Charter, signed by US President Franklin Roosevelt and UK Prime Minister Winston Churchill on the deck of the USS Augusta anchored in Placentia Bay off the southeast coast of Newfoundland in August 1941.

Eight common principles. 

Just 347 words.  

Commitments to the “right of all peoples to choose their form of government.” 

To the “fullest collaboration in the economic field.” 

That “their countries seek no aggrandisement, territorial or other.”

And respect for the ability “to traverse the high seas and oceans without hindrance.”

Principles that resonate so strongly with us today.

The Atlantic Charter galvanised and arguably laid the framework for many of the norms, rules and international institutions that have guided interactions between democratic nations in the post-World War II era.

To achieve our common goals, we must strengthen and reinforce existing networks and build new habits of cooperation and partnerships. 

The institutions we need to bind our shared interests, they already exist.

The World Trade Organisation. 

The G7 and the emergence of the G7-plus, and I look forward to that UK stewardship of the G7 in 2021. 

Then there is the Five-Eyes arrangement, the contribution of which has never been more important and consequential.

One of the most promising recent developments is how quickly the co-operation among Five-Eyes nations has extended beyond its traditional security to the economic realm. 

In the Indo-Pacific, many other nations are stepping up. 

Last week I had the pleasure of meeting, being the first leader to meet with Japan’s new Prime Minister, Suga Yoshihide, in Tokyo – the first of what I hope will be many such meetings.

Australia and Japan are Special Strategic Partners committed to fundamental shared values, and to an Indo-Pacific that is free, open, inclusive and resilient.

And I agree with Yoshi -  as he invited me to call him, that way - when he said:

“In the Indo-Pacific region, the security and defence cooperation between Japan and Australia, having the will and capacity to contribute to regional stability, are becoming increasingly important.”

So together we announced in-principle agreement on a Reciprocal Access Agreement for our Defence Forces, a landmark treaty that will facilitate even closer co-operation on defence and security between our two liberal democracies. 

We also reinforced our commitment to the Quad, where we join with our US and Indian friends in supporting a strategic balance in the Indo-Pacific, underpinned by agreed rules and norms.

Under Prime Minister Modi, India’s contribution to regional peace and stability has never been more influential, while its economic weight has never been more consequential.

But there are some notable gaps to fill.

In recent years, two large regional trade agreements have been forged in the Indo-Pacific, including the 11-nation TPP in 2017 and the 15-nation Regional Comprehensive Economic Partnership, or RCEP, just a few days ago.

Unfortunately, two of the most important economies in our region – the United States and India – have decided not to join the TPP or RCEP respectively. 

Of course, we respect those decisions. But they both remain welcome to join. Our response is straightforward. 

Working with our partners, we plan to make the TPP such a powerful force, a compelling force for open trade and investment that the US and, in the future, India and others will join without reservation. And that also includes the United Kingdom.

Interestingly, President Xi Jinping has also now expressed at the APEC gathering on the weekend, an interest in China’s possible participation in the TPP.

The critical thing about the TPP is that it developed WTO-plus disciplines in key areas of intellectual property, digital commerce and state-owned enterprises. 

These are some of the areas where the WTO has frankly fallen short.

As a former director of the OECD wrote recently:

The TPP has the potential to be the best mechanism for a solution to the biggest global trade problems.

The OECD also has a critical role to play in support of open trade and market-based principles.  

The world will not recover from the COVID-19 recession if we trade and invest less or relinquish hard-won lessons on market-led wealth creation. 

The world’s 38 open market democracies that comprise the OECD have a responsibility to lead the way.  

Australia takes this challenge so seriously and values the OECD so highly that we have unusually nominated one of our own for the job of the Secretary-General, former Finance Minister, Mathias Cormann, to replace Angel Gurria when he steps down as Secretary-General of the OECD next year. 

Now, Mathias is a compelling package. 

I worked together with him for seven years, around the Cabinet table. and many years before that.

A German-speaking Belgian native, who studied in French and Flemish, Mathias emigrated to Australia at the age of 24 to become, in time, Australia’s longest serving Finance Minister.

It’s a great Australian story.

And he brings a unique perspective that can bridge Asia, the Americas and Europe in this outstanding liberal market based economic institution.

Now closer to home,  Australia welcomes the UK’s acknowledgement of the strategic significance of the Indo-Pacific region and a renewed interest in their own involvement.

In 1941, Europe was certainly in the cockpit of history. 

Now, in the 21st century, the Indo-Pacific will shape the destiny of the world. 

It is a point made well in the timely publication by Policy Exchange’s Indo-Pacific Commission, A Very British Tilt: Towards a new UK Strategy in the Indo-Pacific region, published I understand today. 

The report notes that “the time is right for Britain to shift the weight of its strategic policy toward the Indo-Pacific as it reviews its role in the world.”

I couldn't agree more and have conveyed the same to Boris.

And I endorse the report’s vision for “a reinvigorated community of free and independent nations with a single overriding goal”, namely: reinforce a sustainable rules-based order in the Indo-Pacific that is resilient but adaptable to the great power realities of the 21st Century.

So what does success look like?

I find it hard to improve on the goal once articulated by former US Secretary of State, Condoleezza Rice.

A strategic balance of power that favours freedom.

A judicious balance of the Hobbesian, Kantian and Grotian traditions.

American leadership will always be indispensable in pursuit of that goal. 

And the commitment of the incoming Biden Administration to multilateral and regional institutions is critically important. He’s relayed that to me in our first conversation.

For decades, American leadership has been essential to the success of collective efforts in support of peace, security and open markets.

And US alliance arrangements - whether with European nations and others through NATO or the bilateral alliances with Indo-Pacific nations - including ANZUS with Australia, will remain the bedrock of our security. 

US weight and convening power is vital to preserving the rules, norms and standards of our international community,  including in the Indo-Pacific.

European engagement will also be critical.  

We need an outward-looking Europe that recognises that its interests extend beyond the Occidental. 

We welcome the United Kingdom’s aspiration to engage more actively in the Indo Pacific. 

Both in the pursuit of peace and security and economic prosperity.   

The Johnson Government’s response to the Integrated Review is an exemplar for others to follow. 

It recognises, as Boris Johnson put it, that we all depend on the world’s oxygen pipes remaining open - shipping lanes, a functioning internet, safe aircorridors, undersea cables and tranquillity in distant straits. 

The UK’s commitment is also demonstrable through its pursuit of new trade agreements, most recently with Japan, soon with Australia and the United States and, in the foreseeable future, with the Trans Pacific Partnership.

So in conclusion, it was in April 1973, then US Secretary of State Kissinger gave a speech in New York making the case for a new Atlantic Charter, more than 30 years after the one drafted by Churchill and Roosevelt. 

He was worried about the impact of Cold War détente on the unity of Western nations.

He feared complacency and drift.  And the corrosive impact of petty disputes.

The nature of our challenge today is maybe different in many respects. 

But the importance of unity and shared purpose amongst like-minded sovereign nations has not diminished. 

The UK and Australia have an important role to play here.

More than 400 years ago, Grotius dreamt of a new framework for inter-state relationships. 

We can take from his analysis the encouragement that our path is not fixed. 

Free nations, liberal democracies, we have a fundamental role to play in securing peace and stability, fostering commerce and trade, and solving the global challenges we cannot solve ourselves.  

We have done it before. We can do it again.

We have a rich history of co-operation to draw on.  We must all play our part.

Thank you for your very kind attention.