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Australia, Japan need to deepen economic ties

16 October, 2012

Australia and Japan need to reinvest in their 55-year-old bilateral trade agreement and deepen their economic ties if they are to gain from the Asian Century, a leading expert from ANU has warned.

Delivering the keynote address at the 50th annual Australia-Japan Joint Business Conference, Professor Peter Drysdale from the ANU Crawford School of Public Policy said Australia and Japan needed to take their long-standing relationship in new directions to help sustain and take advantage of the region’s unprecedented economic growth.

"Australia and Japan have achieved so much together through their economic relationship and also in our work building regional cooperation through APEC," Professor Drysdale said.

"The relationship that has grown since the 1950s is one of the most remarkable diplomatic and political achievements in the past half century. It has been critical in building a vision and example for how the huge plurality of people in the Asia Pacific region might live on good terms and in prosperity.

"We have been underutilising the assets of our relationship in recent years. Inter-ministerial meetings have fallen into disuse. Our free trade agreement (FTA) needs to be dealt with promptly and clear the way for credible Japanese economic diplomatic initiatives. Both countries have approached these negotiations too narrowly, without strategic purpose. Setting our sights on a traditional bilateral FTA is selling the relationship short.

"Rather our strategic focus needs to be on the achievement of deep and efficient economic integration of the two economies in Asian and global markets and serving as a model of regional integration with open participation to regional partners able and willing to comply and sign on automatically.

"The absence of strategic engagement from both sides infects bilateral and regional initiatives. Having a resilient, internationally-open, competitive, well regulated economy with strong micro and macro-economic policy settings and institutions allows us best to capture external opportunity as well as protect against external shocks.

"There are things that we have yet to do, that we can do better, but what we have achieved in the Australia-Japan bilateral relationship in our regional partnership is a model, a reference point in what we need to do with others."

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