Keating’s ‘alliance of one’ sought new friends

In October 1996 when the Howard cabinet met to discuss the nation’s trade strategy, it faced an inconvenient truth.

Former PM Paul Keating in 1996.

In October 1996 when the Howard cabinet met to discuss the nation’s trade strategy, it was confronted with a stark reality: “Australia is fundamentally in an alliance of one’’ and its best trading opportunities lay in Asia.

It was a somewhat inconvenient conclusion. It was Paul Keating who had campaigned extensively on the opportunities available in Asia and how Australia needed to take its place in the region in his losing re-election pitch in early 1996.

By October, when trade minister Tim Fischer sought agreement for an overall trade policy strategy, the cabinet-in-confidence submission echoed Mr Keating’s election mantra: “Australian trading interests differ significantly from other OECD countries and we are heavily dependent on Asian markets.

“We have no constant ‘allies’ on trade matters but need to rely on our own efforts and the building of issue specific coalitions.’’

The submission conceded that Australian producers were under pressure from “the rapid pace of globalisation and the increasing contestability of markets’’.

It canvassed striking bilateral and regional deals with countries and not just relying on the multilateral edifice of the World Trade Organisation.

APEC had committed to a trade liberalisation process with the Bogor Declaration in November 1994 and at Osaka the following year leaders had agreed to submit action plans in The Philippines by November 1996.

Security and strategic interests were also on the mind of the Howard cabinet.

In May 1996, the National Sec­urity Committee approved a ­security agreement with Indo­nesia that had been signed in Jakarta between then prime minister Mr Keating and Indonesian president Suharto in December 1995.

A paper marked Australian eyes only, which accompanied the cabinet submission, underlined the need for stability in the region and the fact that Australia could be militarily threatened most easily through Indonesia or PNG.

However, the paper said the agreement did not imply any ­commitment for Australia to become involved in internal Indo­nesia security matters such as East Timor.

In November, cabinet also considered a paper on the strategic importance of India, noted it was the only country in its region that could affect Australia’s security interests and was wary about its continuing desire for nuclear weapons. It agreed to expand ministerial contacts and enhance “high-level’’ dialogue.

The Department of Prime Minister and Cabinet was cool on India’s push to become part of APEC, warning it would be a drag on the pace of liberalisation in APEC if it were a member.