TNAG-2917-FCO40-4192-International-support-from-Australasia-regarding-the-future--1993 — Page 90

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24. Mr Smith said Australia was impressed by Mr Rao. DFAT was looking again at policy towards India (Sir J Coles underlined the real changes now taking place). Australia had made some progress over non-proliferation with India; Pakistan was harder. Both sides agreed that adequate time should be set aside for discussion of Indian Sub-Continent non-proliferation issues at 4 June bilateral arms control talks.

25. Sri Lanka: Mr Smith recalled Australia's offer of Commonwealth mediation: there was little that could be done if external assistance was not wanted.

APEC

26. DFAT team made the following points:

(a) The US clearly wanted to develop APEC into a useful vehicle

for strengthening relations with Asia. US focus was on regional trade liberalisation.

(b) More permanent machinery was needed in APEC to deal with

trade and investment issues.

(c)

(d)

흐

(e)

Australian longer-term objectives were articulated in Mr Keating's 8 February speech: debate was about new preferential arrangements or "open regionalism".

Australia wanted to build on existing arrangements by incrementally liberalising sectors. A free trade agreement was unrealistic and probably undesirable.

Premature to consider an EC-APEC dialogue arrangement.

(f) Membership: process was manageable. Mexico would probably be

admitted soon. PNG under consideration. Early rapid increase of membership unlikely: consolidation first would be best.

Agreement (with Sir J Coles's point that) if Chilean accession to NAFTA would be a spur to APEC membership. But extending US regional free trade agreements (Sir J Coles believed this would happen) would have significant reverberations in the Asia-Pacific region, especially with the ASEANS and NICS.

(g)

(h)

Important to maintain APEC as a bridge across the Pacific, to keep the US engaged. Strong support in the region for APEC, except in Malaysia which had some reservations.

Pacific Island States

27. DFAT team said:

(a)

Pacific Island States were characterised by increasing uncertainty and social unrest. Picture was gloomy.

A

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