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nberra in November 1989.
Å fOLDW ministerial-level meeting was held in Singapore last year, and a third is scheduled for Seoul in November this year. At the Seoul meeting, we will be discussing, among other things, the question of future participation in APEC by the three Chinese economies of the People's Republic of China, Taiwan and Hong Kong and progress reports from 10 working groups - established to look at data collection and exchange, trade and investment promotion, and various kinds of sectoral cooperation strategies.
Contrary to fears expressed in a number of quarters at the time and subsequently, APEC was not established as a trade bloc, with an express or implied objective to build protective walls around itself and the wage aggressive economic war against everybody else. It was designed to give strong regional support to international trade liberalisation, but not to be a regional competitor to an American bloc and a European bloc. As various commentators have been quick to point out, while regional arrangements of one kind or another can be GATT-consistent, trade-creating rather than trade-diverting, and while the European Community and the North American Free Trade
arrangement may fall into this category, any tripolar division of the global economy - around yen, dollar and deutschemark blocs - does have the potential to lead to new restrictions on trade to the disadvantage of everyone.
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The deliberate effort made in the inauguration of APEC to straddle the Pacific and engage the United States and Canada in the process is ample proof of the desire to avoid just that outcome. And that spirit continues to be evident in the very great caution with which the Malaysian concept of an East Asia Economic Grouping has been greeted at least in the original form of that proposal, which was something very closely resembling an Asian regional bloc designed to do battle with the giants of Europe and the United States.
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All 12 economies presently in APEC remain extremely com- mitted to the principle-echoed in every statement made since the process began that the future of all of us is served by the continued opening up of the international trading economy, not by retreats to bilateralism and the lures and temptations of so- called "managed" trade.
This is not to say that APEC's only role in trade matters is as a cheer squad for the Uruguay Round - although the group has played that role, and with it languishing as it is the round needs ail the political support it can get. Australia has been particularly keen to press the notion that there are many ways in which the Asia-Pacific region can lead by example in trade policy, and that there is scope for developing a strategy of non-discriminatory regional trade liberalisation which will do just that.
This is something which has just started to be seriously discussed, and it is too early yet to sketch out what form this strategy might eventually take. One starting point might be to identify one or more sectors where a high proportion of the region's trade is sourced from the region itself, and where gains for regional economies could accordingly be quite significant. A crucial element of any such region-based move would of course be that it be non-discriminatory as against the rest of the world, creating the potential to benefit countries outside the region as well.
Leading by example has its risks as well as its rewards, and no doubt a central element in any such strategy would be to develop means of negotiating reciprocal concessions from others in return for the marketing openings involved in non-discriminatory lib eralisation within our own region. I certainly do not underesti- mate the difficulty and complexity of the issues involved in translating these broadly stated aspirations into workable poli- cies. But the important thing is that these issues are now being addressed, and that APEC is the process through which this is happening.
No exercise in Asia-Pacific Regional Economic Cooperation can even begin to be complete without drawing in the economies of China, Hong Kong and Taiwan. At their last meeting in Singapore, ministers acknowledged the significance of these three economies for the region, both in terms of present economic activity and its future prosperity. As just one example of their importance, their trade with existing APEC economies in fact exceeds that of ASEAN itself.
Consultations with the three Chinese economies are now proceeding, with the Republic of Korea, the current chair of APEC, taking the coordinating role. There have been some en- couraging signs of flexibility. But at the same time all of us acknowledge that there are significant sensitivities and difficulties. We hope that there is the political will and imagination, by the authorities in Beijing and Taipei in particular, to address these sensitivities constructively and flexibly. That they should do so in all of our interests, and that is one of the messages I intend to convey to Beijing later this week.
Hong Kong
It is probably fair to say that Australia's relations with Hong Kong have in the past been conducted on a reactive and ad-hoc basis. With Hong Kong being such a leading exponent of free trade, there have been few significant bilateral trade issues arising between us. Politically we have confined ourselves to expressing support for the smooth and peaceful working out of transition arrangements negotiated between Hong Kong and China.
But given the tensions that have developed since 1989, it may be time to spell out just how much we in Australia value our relationship with Hong Kong, how importantly we regard the question of smooth transition, and how much we would be concerned at any developments - economic or political - which would undermine either international confidence in the future of Hong Kong, or the confidence of the people of Hong Kong themselves.
Australia has major economic, cultural and political interests in Hong Kong. Two-way trade amounted to just over $2 billion in 1990, with Hong Kong being Australia's ninth-most-important export market. Hong Kong is the fifth-most-important destina- tion for Australian investment abroad ($2.5 billion) and by mid- 1989 Hong Kong had invested some $6.8 billion in Australia. Hong Kong is Australia's third-largest source of migrants and largest source of business migrants. It is an important and growing source of tourists (27 000 in 1989-90) and fee-paying students (5120 in 1989-90). Over 12 500 Australians live in Hong Kong, and some 250 Australian companies operate on Hong Kong soil.
Australia has taken positive steps to promote Hong Kong's international economic autonomy, as provided for in the 1984 Sino-British Joint Declaration. Among other things, Australia has taken the lead in supporting Hong Kong's succession to the GATT in 1985 as a separate Contracting Party; Hong Kong's application (accepted in September 1990) to join the Pacific Economic Cooperation Committee (PECC); and Hong Kong's efforts to participate in the APEC process.
Australia has also assisted Hong Kong by taking a robust view about the appropriate definition of refugee status to be applied to the Indo-Chinese boat people, and by accepting an appropriate number of Vietnamese boat people screened in as genuine refugees. We also agreed to resettle 11 000 of the boat people who arrived in Hong Kong before the cut-off date of 16 June 1988-8500 of these had been accepted by the middle of last year.
Australia continues to support the transition arrangements agreed to in the 1984 Joint Declaration. In accordance with these principles we will seek to maintain a constructive dialogue about Hong Kong affairs with both China and Britain; continue to
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