Australian Embassy

Nikkei CNBC Interview Transcript

Ambassador Designate Justin Hayhurst

Nikkei CNBC Interview Transcript

Interview date: 7 March 2023

Presenter (Ms Kaori Takahashi): So, Ambassador, how would you describe the current bilateral relationship between Australia and Japan?

Ambassador: I think it’s strong and getting stronger. We have always had a very strong economic partnership in energy, in minerals, and the supply of food to Japan, and now there’s a very strong strategic and defence element. We are working together, not just bilaterally, but also in the region to protect peace and stability. These two pillars of security and economic, complemented by the strong links between our people and our universities, put the relationship in a really good place. I think the new Australian government and the administration of Prime Minister Kishida have certainly prioritised engagement with each other, and so the partnership now is of more consequence, I think, to each country, but also to others in the Indo-Pacific region.

Ms Takahashi: Thank you. How about concrete planning that most government are putting emphasis on, such as hydrogen projects?

Ambassador: Well, hydrogen is important because both countries have a very strong commitment to decarbonise and reduce emissions, so the traditional exports from Australia to Japan, including coal, over time that’s obviously going to change. And I think there are big prospects for hydrogen exports from Australia to Japan. For hydrogen, you need land, you need renewable energy, and you need a good customer and partner, so I think with Japanese capital, Japanese technology, Japanese custom, Australia can be a reliable supplier of commodities based on renewable green technology, like hydrogen, as well as the more traditional energy inputs we’ve had over many decades.

Ms Takahashi: I see. And, let me ask you about China’s relationship with Australia. Under COVID 19, the relationship has somewhat deteriorated. How do you describe the current relationship, and its direction? Do you think it is heading towards normalisation with China?

Ambassador: Australia’s Minister for Foreign Affairs Penny Wong put it best, I think, when she said, “we are looking to stabilise the relationship.” Not to reset or normalise. Certainly there is a lot of benefit from our cooperation with China in areas like trade, also in climate change, but we can’t go back 15 years to the sort of relationship we had in the past. While there’s scope for cooperation, there are also some differences and disagreements. The Australian Government wants to handle those differences wisely and carefully. Certainly, we hope as China’s economy opens up, there will be more economic opportunities. On other issues where we have our own views, we will continue to pursue them, but directly with the government of China.

Ms Takahashi: How about the trade relationship? Some Australian produce has been banned or has had heavy tariffs placed upon them by the Chinese government. Has it improved?

Ambassador: I think there are reports that in some areas, like the export of coal, some Australian shipments are reaching the Chinese market, and of course that is a welcome development. Our principal position is that trade is of mutual benefit to the two parties, it should proceed according to agreed rules and all parties and all countries should fulfil their trading obligations. From Australia’s point of view, we want to be a reliable supplier of commodities to all of our partners, and certainly we want to see the removal of trade impediments as soon as possible.

Of course, when it comes to trade, there’s more than one market, there’s more than one commodity. It’s very much about diversification of partners and making sure you have a range of possibilities in the global economy. So, from our point of view, for example, our partnership with Japan, although the total quantum of trade is not as large as with China, it’s a very important and growing partner. No country wants to over-rely on one market. It doesn’t make sense. So, we are about diversification, we’re about spreading risk, and we’re about holding our partners to their commitments. Because when we follow the rules, when we trade freely, everyone benefits.

Ms Takahashi: The rules-based international order is very important for Japan and Australia.  You just talked about the diversification of supply chains. Let me ask you about IPEF, the US-led Indo-Pacific Economic Framework. What will be the goal of IPEF? Will it be about making new supply chains without China?

Ambassador: I think the IPEF agreement or process is really about writing the rules for the future economy, based on market principles. So, for example in digital trade, is there transparency, can partners trust each other, can we improve payment systems? Really, it is about the highest possible market standards. Japan is very committed, Australia is very committed and we are hoping to get some agreements delivered this year. IPEF is also very important because the US is involved in economic standard setting in Asia, which is very important because the integration of this region matters greatly to Australia, just as it matters to Japan.

Ms Takahashi: More involvement by the US Government could bring more transparency to the region?

Ambassador: Definitely, it is still the world’s largest economy and it is a technological and innovation powerhouse. Clearly the stronger the US economic engagement is, the more beneficial it is, and it complements the strategic agenda of the US, like it does the strategic agenda of Australia and Japan. We are both working similarly for a free and open Indo Pacific region with international rules to guide cooperation between countries, so we are very optimistic about IPEF. There is obviously still quite a lot of work to do.

Ms Takahashi: In the security area, the QUAD summit will be held in Australia this year. What will be the main agenda and goal of the Quad?

Ambassador: I think the issue of the Quad, as the Indian Foreign Minister put it  on the weekend, is that it is very much what we stand for. The Quad is about a regional vision of an open region based on international law, based on agreed rules for cooperation, where no one country dominates, that protects the sovereignty of smaller states and is about offering good development opportunities, whether it is in areas like health security, maritime security or even in climate change and renewable energy. The Quad Summit that Australia will host this year will be very much about the Quad’s vision for the future, working closely with Southeast Asia, working closely with the countries of the Pacific. Delivering a free and open Indo Pacific is so important to Australia and Japan.

Ms Takahashi: The United Nations is not functioning well due to systemic issues regarding China and Russia. What would be the presence of the so-called Global South Group? Between the US, Japan and Australia as a group, and Russian and China and other groups, now we have a third group, the Global South. How do you deal with the emerging Global South Group?

Ambassador: The Global South, or developing countries, are the majority in the United Nations and we don’t see them as a bloc or as part of a wider competition. We have to have our own relationships on their own merits with these very important countries. Whether we are tackling climate-resilient infrastructure or development issues or gender equality, we have our own relationships and I think the more we think about what other countries want in our partnership, the more effective we will be.

That is the approach Australia is taking, for example, in the Pacific. The Global South is very important. One other thing I would say is that I strongly welcome the emphasis of Japan on the Global South in its G7 chairing year, and with our Quad partner India, Chair of the G20. There is a good opportunity to make progress on that agenda.

Ms Takahashi: Your Prime Minister is just about to visit India?

Ambassador: He is going to India this week and I think it will be a successful visit.

Ms Takahashi: Are there any particular areas you would like to promote in our bilateral relationship?

Ambassador: Lots of areas – encouraging Japanese people to travel to Australia, it is a very safe destination. We are promoting the Women’s World Cup this year, which will be in Australia and New Zealand in July and August and just making sure we deliver what leaders have asked for in security and economic terms. There is much to do.

Ms Takahashi: Thank you very much for coming today.