Overview and analysis

Our objective is to deepen bilateral partnerships and promote and protect the rules and institutions that enable cooperation to tackle regional and global challenges. In doing so we serve the national interest by advancing the prosperity of Australians and safeguarding the independence of our decision-making, and the security, safety and freedom of our people. While the Indo-Pacific is of primary importance to Australia, our national interests and foreign policy objectives are global in scope.

Promoting an open, inclusive and prosperous Indo-Pacific

Australia’s prosperity and security are inextricably tied to the Indo-Pacific. The region encompasses our most important economic partners and its dynamism supports economic growth in Australia, creating jobs and increasing our standard of living.

Our cultural, people-to-people and educational links are also deep. The region is the source of many of our largest migrant communities, which are vital to our modern nation.

The Indo-Pacific’s rising prosperity has been built on the region’s stability. Today the region is undergoing a strategic transition as profound as the economic transformation that preceded it.

As the White Paper makes clear, no long-term foreign policy objective is more important to Australia than ensuring our region evolves peacefully and without an erosion of the fundamental principles on which the Indo-Pacific’s prosperity and cooperative relations are based.

In 2017–18 through the White Paper process, we reviewed our policy framework for the Indo-Pacific and set clear objectives. We seek to promote a region in which adherence to rules delivers lasting peace, where the rights of all states are respected, and where open markets facilitate the free flow of trade, capital and ideas.

The department is leading implementation of the White Paper. Our alliance with the United States is central to Australia’s approach. We are broadening and deepening our alliance and encouraging strong United States political, economic and security engagement in the region.

The government is equally committed to strong and constructive ties with China. The department seeks to strengthen our Comprehensive Strategic Partnership for the benefit of both nations.

To support a balance in the Indo-Pacific favourable to our interests, Australia is working more closely with the region’s major democracies, bilaterally and in small groups. Our partnerships with Japan, Indonesia, India and the Republic of Korea are of first order importance to Australia and we continued to invest in them.

As competition for influence in the region grows, the department is also increasing its efforts to ensure Australia is a leading security, economic and development partner for Southeast Asia. We support ASEAN’s central role in convening the region’s strategic forums, such as the East Asia Summit.

Closer to home, to support White Paper objectives, the department is helping to deliver a step-change in our engagement with Pacific island countries. This approach recognises that more ambitious engagement by Australia is essential to the long-term stability and economic prospects of the Pacific.

Engaging the United States

Our alliance with the United States is important for Australia’s security and sits at the core of our strategic and defence planning. The United States is also Australia’s largest investment partner and our third largest trading partner. Since the Australia–United States Free Trade Agreement entered into force in 2005, the stock of investment between both countries has more than doubled to $1.6 trillion.

The department is taking forward the White Paper objective of broadening and deepening our alliance cooperation, with a strong focus on the Indo-Pacific. In 2017–18 we facilitated 11 portfolio minister visits to the United States to ensure close engagement with the administration as it develops and implements its strategic and economic agenda in our region.

In early 2018 we facilitated a visit to Washington by the Prime Minister, accompanied by the Minister for Trade, Investment and Tourism, and state, territory and business leaders. This was the largest Australian Government-led delegation ever to visit Washington. Through high-level engagement, including an innovative partnership with the United States National Governors Association, the initiative opened doors to the United States administration, state governors and industry, strengthened relationships among governments and business, and created new opportunities for cooperation. Among these is a joint Australian–United States undertaking to support high-quality infrastructure development in the Indo-Pacific.

In the context of significant developments in United States trade policy, the department strongly advocated to United States leaders the shared benefits of bilateral trade and investment. This was pivotal to Australia securing an exemption from United States steel and aluminium tariffs for Australian companies, helping to protect Australian exports and jobs.

Working with China

Australia is committed to advancing our Comprehensive Strategic Partnership with China. Our broad and sophisticated relationship is underpinned by a bilateral free trade agreement, growing investment, cooperation to combat transnational crime, important research linkages, and significant flows of students, tourists and migrants.

China is our largest trading partner with total trade at $183 billion. Since the China–Australia Free Trade Agreement entered into force we have seen 21.4 per cent growth in trade and 33.7 per cent growth in exports. We continued to deepen this substantial economic engagement through the Minister for Trade, Tourism and Investment’s attendance at the Joint Ministerial Economic Commission and, together with the Treasurer, the Strategic Economic Dialogue which included a roundtable discussion with major Chinese investors on Australia’s investment climate. We facilitated a range of other bilateral interactions, including a visit to Shanghai by the Minister for Trade, Tourism and Investment and a meeting between the Minister for Foreign Affairs and her counterpart in the margins of the G20 meeting in Argentina.

People-to-people links continue to be a clear strength. China is our number one source of students and tourists. A total of 185,000 Chinese students studied in Australia in 2017 and over 1.4 million Chinese visited Australia in 20107– 2018. Australia and China celebrated the 45^th anniversary of bilateral relations during the year with a Melbourne dinner co-hosted by Australia’s Minister for Foreign Affairs, Julie Bishop, and China’s Ambassador, Cheng Jingye. The event was attended by senior business and community leaders. Beijing celebrations included the launch of the 45 Years, 45 Stories website (en.45stories.com/) celebrating the breadth and variety of China’s people-to-people links.

The department continues to build on these positive and mutually beneficial foundations of the bilateral relationship. At the same time, we also worked to ensure differing national perspectives on some regional and domestic security issues were managed constructively.

Working with Indo-Pacific democracies

The Indo-Pacific democracies of Japan, Indonesia, India and the Republic of Korea are major bilateral partners for Australia. We are committed to working more closely together to promote an open, inclusive and rules-based region, building on our shared values and interests. In 2017–18 we pursued new economic and security cooperation and people-to-people links to strengthen these relationships.

Australia’s special strategic partnership with Japan continued to develop and influence regional stability and prosperity. A significant achievement was our close cooperation to secure finalisation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP-11)—the most significant global trade and investment agreement in more than two decades. We strengthened the architecture of our bilateral relationship, with the first Ministerial Economic Dialogue chaired by the Minister for Trade, Tourism and Investment with his Japanese counterpart on 2 July 2018. This dialogue will help our two countries cooperate to address challenges to the rules-based economic order in the Indo-Pacific. The Japan–Australia Economic Partnership Agreement (JAEPA) celebrated its third anniversary in January and a fifth round of tariff cuts occurred in April. JAEPA has helped expand Australian goods exports to Japan by 24 per cent in 2017 from 2016 (to $45 billion), and services exports by 3.5 per cent (to $2.3 billion). Almost 96 per cent of eligible products exported to Japan made use of JAEPA’s preferential access in 2017, underpinning strong growth in trade and supporting Australian jobs.

We are doing more with Japan to address some of the region’s most pressing economic security challenges. We made progress with bilateral negotiations for a new treaty to facilitate joint military exercises and operations. To support an open, rules-based maritime domain, we are coordinating our maritime capacity-building assistance to regional states more closely. We are working to promote inclusive trade, investment and infrastructure in the region based on market principles. Australia and Japan are also deepening their cooperation with the United States and India, including through the quadrilateral dialogue, on strategic challenges in the Indo-Pacific.

Indonesia is one of our closest neighbours, the world’s third-largest democracy and the country with the largest Muslim population. We share key strategic, security and economic interests and one of the longest maritime boundaries in the world. We enjoy an extensive whole-of-government framework of cooperation spanning economic, trade, investment, development, people-to-people, defence and security, and maritime issues. We cooperate in the East Asia Summit, ASEAN Regional Forum, Indian Ocean Rim Association, and MIKTA (Mexico, Indonesia, Republic of Korea, Turkey and Australia).

The bilateral relationship is underpinned by regular high-level meetings, including the Indonesia–Australia Annual Leaders’ Meeting. People-to-people links are also strong. Around 1.2 million Australians visit Indonesia each year and Indonesia is the most popular host location for Australian students through the New Colombo Plan. Our security partnership continues to grow and Indonesia is a key partner in combating transnational crime and counter-terrorism. We co-chair a number of important international security processes, including the Bali Process on People Smuggling.

We concluded the Australia–Indonesia Maritime Cooperation Plan of Action in March, which reflects our joint commitment to maritime security. As our economic partnership with Indonesia evolves, we are changing the way we deliver aid and help Indonesia use its own resources more effectively. Our economic governance program (PROSPERA), as well as our new innovative infrastructure development facility (KIAT), are boosting inclusive growth and promoting mutual benefit from trade and investment. Finalising bilateral FTA negotiations will further advance our trade and investment interests.

As a like-minded democracy, India is an important partner in promoting Indo-Pacific security and prosperity. We are cooperating with India across a range of forums to bolster regional security architecture, including through the Indian Ocean Rim Association. We are focused on harnessing India’s potential as an emerging engine for growth in the Australian economy.

Australia continues to support Australian farmers and growers on current trade issues, notably by lobbying against India’s restrictive trade practices—such as measures placed on pulses, sugar and grains. At the same time, the department is leading efforts to invest in the long-term opportunities presented by India. The department conceived and designed the proposal for an independent report on an India Economic Strategy to 2035 (see below) and recast trade talks at the June Joint Ministerial Commission to focus around sectoral priorities identified by Mr Varghese’s strategy. These include facilitating two-way investment flows; prioritising collaborative research, education and skilling initiatives; and reducing volatility in India’s demand for pulses. During the Minister for Trade, Tourism and Investment’s September visit, the Australia–India CEO Forum was revived and the department supported the Australian Business Week in India to promote our commercial interests.

The government also announced a new consulate-general in Kolkata to better connect businesses with India’s minerals-rich eastern states and advance our interests in the Indo-Pacific.

At a time of increased tensions on the Korean Peninsula, we pursued closer engagement with the Republic of Korea. The 2+2 Foreign and Defence Ministers’ Meeting held in October enabled shared views and approaches to be discussed on regional and global security. This included threats posed by North Korea’s nuclear and missile programs, as well as developing our bilateral security cooperation.

Dealing with the threat posed by North Korea

The White Paper recognises that North Korea’s long-range missile and nuclear programs represent the region’s most immediate security challenge. We implemented Australia’s autonomous sanctions on North Korea’s programs as well as those mandated by the United Nations Security Council. We took a leadership role in advocacy in Southeast Asia and the Pacific on enforcement of United Nations sanctions, and worked with New Zealand and Pacific partners on a Pacific Islands Forum initiative to remove North Korean vessels from the region’s shipping registries. Australia welcomed the renewal of inter-Korean talks in May and the historic United States and North Korea leaders’ summit in June. But we recognise much work lies ahead to ensure the complete, verifiable and irreversible denuclearisation of North Korea.

Working with Southeast Asia

Southeast Asia’s strategic significance to Australia is growing as the region faces complex security challenges and its economies continue to develop.

In 2017-18 we delivered $633.7 million in bilateral development programs and $41.6 million in regional programs. Our support is helping partners achieve inclusive growth and effective governance, which strengthens stability and prosperity in the region.

We marked the 45^th anniversary of diplomatic relations with Vietnam during the year and elevated our bilateral engagement to strategic partnership in March. This will allow us to work better alongside Vietnam in supporting a prosperous, outwardly-focused and resilient Southeast Asia. In May, the Minister for Foreign Affairs opened Australia’s largest aid investment in mainland Southeast Asia, the Cao Lanh Bridge. This will create a crucial new transport link, spurring economic development and access to key markets and services for over five million people in Vietnam’s Mekong Delta region.

Singapore remains an important strategic and economic partner for Australia. In 2017-18 the Singapore–Australia FTA was upgraded, opening further markets for Australian exports and significantly reducing red tape for Australian businesses.

Countering terrorism and violent extremism in our region continues to be a high priority. The ASEAN–Australia Counter-Terrorism Memorandum of Understanding demonstrates our regional resolve to strengthen cooperation and bolster capacity building. We led whole-of-government counter-terrorism dialogues to strengthen cooperation with Japan, the United States, the Philippines, Indonesia, Singapore, China, India and Turkey during the year. We supported the Philippines following the Marawi siege in 2017. Our focus on bilateral and regional solutions to terrorism has helped strengthen regional security and keep Australians safe in Southeast Asia and at home.

The Bali Process is our primary vehicle for engaging with regional countries on People Smuggling, Trafficking in Persons and Related Transnational Crime, working closely as co-chair with Indonesia. Over the past year, the Bali Process has seen major achievements, including the launch of the Government and Business Forum co-hosted by the Minister for Foreign Affairs in Perth in August. The forum brought together business and government representatives from across the Indo-Pacific region to forge closer engagement on tackling human trafficking and modern slavery. Business committed to develop a set of practical recommendations to drive concerted action across our region where two thirds of the world’s victims of modern slavery are found.

The Bali Process also held its inaugural Consultation Mechanism in October—established to respond to sudden and large movements of irregular migrants in our region. The first meeting of the Task Force on Planning and Preparedness was held in March, bringing together operational-level government officials to better coordinate procedures between governments and identify capacity gaps in dealing with mass irregular migration events.

In May, Bali Process senior official co-chairs conducted ‘good office’ visits to Bangladesh and Myanmar to promote practical assistance and technical support to tackle people smuggling and trafficking in persons.

The Bali Process continued to deliver capacity building through the Bangkok Regional Support Office including the:

• Technical Experts Group on Returns and Reintegration
• Working Group on Trafficking in Persons, which finalised anti-money laundering guidelines on 14-15 May
• Working Group on Disruption of Criminal Syndicates involved in People Smuggling and Trafficking in Persons, which completed its 3rd Joint Period of Action resulting in 72 convictions, 10 arrests, the identification of 23 new suspects, the execution of search warrants, extradition requests, new investigations and the rescue of trafficked victims.
• Southeast Asia’s strategic significance to Australia is growing as the region faces complex security challenges and its economies continue to develop.

In 2017-18 we delivered $633.7 million in bilateral development programs and $41.6 million in regional programs. Our support is helping partners achieve inclusive growth and effective governance, which strengthens stability and prosperity in the region.

We marked the 45^th anniversary of diplomatic relations with Vietnam during the year and elevated our bilateral engagement to strategic partnership in March. This will allow us to work better alongside Vietnam in supporting a prosperous, outwardly-focused and resilient Southeast Asia. In May, the Minister for Foreign Affairs opened Australia’s largest aid investment in mainland Southeast Asia, the Cao Lanh Bridge. This will create a crucial new transport link, spurring economic development and access to key markets and services for over five million people in Vietnam’s Mekong Delta region.

Singapore remains an important strategic and economic partner for Australia. In 2017-18 the Singapore–Australia FTA was upgraded, opening further markets for Australian exports and significantly reducing red tape for Australian businesses.

Countering terrorism and violent extremism in our region continues to be a high priority. The ASEAN–Australia Counter-Terrorism Memorandum of Understanding demonstrates our regional resolve to strengthen cooperation and bolster capacity building. We led whole-of-government counter-terrorism dialogues to strengthen cooperation with Japan, the United States, the Philippines, Indonesia, Singapore, China, India and Turkey during the year. We supported the Philippines following the Marawi siege in 2017. Our focus on bilateral and regional solutions to terrorism has helped strengthen regional security and keep Australians safe in Southeast Asia and at home.

The Bali Process is our primary vehicle for engaging with regional countries on People Smuggling, Trafficking in Persons and Related Transnational Crime, working closely as co-chair with Indonesia. Over the past year, the Bali Process has seen major achievements, including the launch of the Government and Business Forum co-hosted by the Minister for Foreign Affairs in Perth in August. The forum brought together business and government representatives from across the Indo-Pacific region to forge closer engagement on tackling human trafficking and modern slavery. Business committed to develop a set of practical recommendations to drive concerted action across our region where two thirds of the world’s victims of modern slavery are found.

The Bali Process also held its inaugural Consultation Mechanism in October—established to respond to sudden and large movements of irregular migrants in our region. The first meeting of the Task Force on Planning and Preparedness was held in March, bringing together operational-level government officials to better coordinate procedures between governments and identify capacity gaps in dealing with mass irregular migration events.

In May, Bali Process senior official co-chairs conducted ‘good office’ visits to Bangladesh and Myanmar to promote practical assistance and technical support to tackle people smuggling and trafficking in persons.

The Bali Process continued to deliver capacity building through the Bangkok Regional Support Office including the:

• Technical Experts Group on Returns and Reintegration
• Working Group on Trafficking in Persons, which finalised anti-money laundering guidelines on 14-15 May
• Working Group on Disruption of Criminal Syndicates involved in People Smuggling and Trafficking in Persons, which completed its 3rd Joint Period of Action resulting in 72 convictions, 10 arrests, the identification of 23 new suspects, the execution of search warrants, extradition requests, new investigations and the rescue of trafficked victims.

Australia's Ambassador to the Philippines, Amanda Gorely, with Australian Amry officer, Lietenant Ewy De Guzman, at the arrival ceremony of HMA Ships Larrakia and Maitland at Zamboanga, Philippines, as part of Operation AUGURY [Department of Defence/Kyle Genner]

Building regional collaboration

Shifts in the Indo-Pacific region make ASEAN—Southeast Asia’s strategic convenor—more important than ever. That is why Australia hosted ASEAN leaders for the first time as a group in March. The ASEAN–Australia Special Summit was the first major domestic foreign policy endeavour following the launch of the White Paper and reaffirmed ASEAN’s central role in the Indo-Pacific. The 15 initiatives announced at the summit enhanced cooperation in areas such as counter-terrorism, infrastructure and digital trade.

The Sydney Declaration adopted by leaders sets out a clear, shared vision for the type of region we want to live in. The summit elevated our strategic partnership with ASEAN to a new level. It allowed leaders to discuss approaches to common challenges and encouraged the private sector to drive growth and prosperity in the region.

The East Asia Summit is the Indo-Pacific’s premier political and security forum. Centred on ASEAN, the summit—which also includes China, India, Japan, the Republic of Korea, Russia and the United States—is the only regional forum to bring together the leaders of all of Australia’s key Indo-Pacific partners to discuss the strategic, political and economic challenges and opportunities facing the region.

In recent years, summit leaders have sought to strengthen cooperation on security issues, including maritime security, counter-terrorism and counter-proliferation. At the 12th East Asia Summit in 2017, Leaders adopted the Australian-initiated Declaration on Anti-Money Laundering and Countering the Financing of Terrorism, strengthening the region’s commitment to fight terrorism. Also in 2017 Australia and Thailand hosted a seminar on non-proliferation, which enhanced our efforts to ensure that weapons of mass destruction do not threaten Australia or its region.

In addition to these forums, Australia is working to strengthen regional groupings that promote an open, prosperous and inclusive Indo-Pacific, including the revived Australia–India–Japan–United States quadrilateral dialogue. During the year, we worked closely with Japan and the United States in a trilateral security dialogue and established a new trilateral officials-level dialogue with India and Indonesia as well as a 1.5 track dialogue with France and India. We also continued to engage with the Pacific Islands Forum and focused the Indian Ocean Rim Association on maritime safety and security and women’s economic empowerment.

We continue to work within the region to promote an open, free and secure cyberspace. Australia has committed $30 million over four years to 2020 for cyber capacity-building initiatives in the Indo-Pacific. This will strengthen cyber incident response capability, combat cybercrime, promote freedom and democracy online, and maximise the opportunities offered by technology for sustainable development. Our efforts led to agreement by ASEAN foreign ministers in 2017 to establish a meeting on cyber issues at the ASEAN Regional Forum.

Safeguarding maritime security

As a major trading nation, Australia depends on the maintenance of a stable, open and rules-based maritime domain in the Indo-Pacific. In 2017–18 the department increased assistance to regional states to help build capacity to address maritime threats such as terrorism, people smuggling, illegal fishing and piracy, reducing risks to our shared security and prosperity. This included taking forward the package of maritime cooperation initiatives announced by the Prime Minister at the ASEAN–Australia Special Summit in March. We also deepened coordination of our maritime assistance activities with those of the United States and Japan to maximise the effectiveness of our efforts.

Adherence to international law underpins stability and security in the region’s oceans, enabling states to trade and cooperate with confidence. Through our advocacy, the department promoted international law, especially the United Nations Convention on the Law of the Sea (UNCLOS), and respect for the rights of all states to conduct freedom of navigation and overflight activities, including in the South China Sea. Our successful conciliation with Timor–Leste set a positive example for the region about the value of UNCLOS dispute resolution procedures for resolving disputes peacefully, without the threat or use of force (see case study).

Stepping up support for a more resilient Pacific and Timor-Leste

Expanding Pacific labour mobility is a key economic objective of Australia's step-up in the region. It benefits both Australia and Pacific island countries and supports Australian rural and regional businesses address labour shortages. In 2017–18 the Seasonal Worker Programme facilitated almost 8,500 workers from eight Pacific countries to undertake much-needed seasonal agricultural work in Australia.The stability and economic progress of Pacific island countries is of fundamental importance to Australia. Our cooperation with Pacific partners, for example, helps them manage challenges such as transnational crime, climate change, natural disasters and outbreaks of infectious diseases. This in turn mitigates potential risks to Australia. The White Paper identifies stepping up support for a more resilient Pacific as a key policy priority.

Over the year in review, we promoted economic cooperation and greater economic integration within the Pacific and between Pacific island countries and Australia. We developed new approaches to managing shared security challenges, with a particular focus on maritime security. We helped respond to natural disasters and built on already strong people-to-people links. We worked closely with Papua New Guinea to support its hosting of APEC.

Our development assistance to the Pacific was the largest to any region in 2017–18, totalling $1.04 billion. These initiatives will assist in sustaining our engagement in the Pacific and promoting a more resilient region. Four new Aid Partnership Arrangements were signed with Pacific governments, bringing the total number to 10. These supported a range of practical, mutually agreed measures to strengthen economic growth and resilience, enhance regional security cooperation, deepen people-to-people links, and support quality health and education outcomes in the region.

Counsellor Will Robinson with PNG ministers during a visit to Lake Murray, Western Province [DFAT]Security and stability have featured in our regional engagement for decades. Our law and justice programs and the Pacific Police Development Program continued to help improve the rule of law as a prerequisite for economic, social and political development.

To enable private sector growth, and increased trade and employment, we supported improvements in trade regimes and to business enabling environments. We also worked with other partners to help develop much-needed economic infrastructure, including designing a safe, deep-water port for Nauru. Another flagship initiative developed during 2017–18 is the building of a new high-speed undersea telecommunications cable to link Australia, Papua New Guinea and Solomon Islands. The new cable will provide more reliable telecommunications and significant economic and development benefits.

Enhancing skills and increasing job opportunities for the people of the Pacific is also a central part of Australia’s assistance, including through greater access to our labour mobility programs.

In response to calls from Pacific leaders, we have worked to strengthen information sharing and analysis to help Pacific partners better assert and protect their sovereignty, which will help address shared maritime and security challenges. To further boost security in the region, the Minister for Foreign Affairs signed a new security treaty with Solomon Islands foreign minister Milner Tozaka in August. This is the first security treaty signed in the Pacific after the conclusion of the Regional Assistance Mission to Solomon Islands.

During 2017–18 Australia also signed bilateral security partnerships with Tuvalu and Nauru. These new partnerships provide umbrella arrangements covering existing areas of security cooperation with these countries. We supported the Pacific Islands Forum Secretariat consultations for a ‘Biketawa Plus’ regional security declaration. The new security declaration aims to assist the region to respond more effectively to the emerging challenges ahead. We also worked closely with Pacific partners to design a new Australia–Pacific Security College—with courses to commence in early 2019—to build capacity and strengthen networking.

We facilitated regular high-level engagement between Australia and Pacific island countries, including 29 visits (three Guest of Government) to Australia by Pacific island leaders and 18 visits to the region by portfolio ministers.

Australia has an abiding national interest in supporting a Pacific that is resilient to the impact of climate change, disasters and humanitarian emergencies, and we continue to act as a reliable and long-term partner in responding to these crises. We supported Papua New Guinea in the aftermath of the February 2018 earthquake and Tonga after Tropical Cyclone Gita devastated the country that same month. Repairs to 34 schools were funded as part of Australia’s $35 million package of assistance to Fiji following Tropical Cyclone Winston in 2016.

The signing of the Maritime Boundary Treaty with Timor-Leste in March was a historic moment for Australia; we settled a long-running dispute, delimited our maritime boundaries and laid the foundation for a new chapter in our relationship.

Expanding Pacific labour mobility is a key economic objective of Australia's step-up in the region. It benefits both Australia and Pacific island countries and supports Australian rural and regional businesses address labour shortages. In 2017–18 the Seasonal Worker Programme facilitated almost 8,500 workers from eight Pacific countries to undertake much-needed seasonal agricultural work in Australia.

Global partnerships

The Middle East and Africa present economic opportunities for Australia, and their conflicts and protracted crises threaten international rules and put pressure on us for assistance. The department supported the visit by Prime Minister Turnbull to Israel and the Palestinian Territories to commemorate the centenary of the Battle of Beersheba and advance our strategic interests, such as defence industry and cyber security. This visit advocated a two-state solution for enduring peace. One practical way we contribute to peace is by supporting stability in the Palestinian Territories. The department’s development assistance in the region boosts economic growth and community cohesion, and helps to meet the needs of the most vulnerable. We have zero tolerance for the misuse of Australian aid funding.

During a time of political transition, we worked with partners, including the United Nations, as well as bilaterally, to support Kenya, Ethiopia and Zimbabwe. Our innovative South Sudanese diaspora engagement project provided critical space for diaspora representatives to rebuild trust and unity and to promote peace within the Australian community and in South Sudan. As well, our humanitarian assistance to South Sudan and Somalia, and the Australia Awards Africa program—which delivers courses to selected students from 22 countries in Africa—helped contribute to stability and development.

State fragility in the Middle East continues to affect Australia’s security interests through terrorism and irregular migration. To counter terrorism in Iraq and Syria, we worked closely with partners in the Global Coalition to Defeat ISIL. We worked with the Iraqi government to enable the Australian Defence Force to train and advise Iraqi forces—contributions that were important to the military wins achieved over ISIL. We also provided well-targeted humanitarian assistance in Iraq and Syria to help ensure these gains are sustained over time.

During the year we engaged with countries across the region to advance Australia’s commercial interests. We supported the Minister for Trade, Tourism and Investment to co-chair the first Australia–United Arab Emirates Joint Economic Committee with his Emirati counterpart, providing strong political support for deeper commercial ties with our largest trade and investment partner in the Middle East. On the issue of live sheep exports, our advocacy across government ensured our Middle East trading partners were kept well informed of developments and safeguarded Australia’s reputation as a reliable trading partner. We helped organise the annual Australia–Africa Week in Perth, bringing together Australian companies and African ministers to strengthen economic engagement, including in the mining sector.

We also continued to enhance Australia’s engagement with Europe. Our strategic and economic connections with the European Union (EU) and EU member states were strengthened, as were those with the United Kingdom as it prepares to exit the EU. These relationships are vital in advancing our national interest in a rules-based international order built on common values.

We led the conclusion of the Framework Agreement between the European Union and Australia, elevating our bilateral relationship across economic, security, environmental and human rights agendas. Once ratified, the agreement will guide future engagement between Australia and the EU, and will complement our negotiations for a FTA. We also used innovative ways to enhance our diplomatic presence and engagement with the launch in April of Australia’s first pop-up embassy in Estonia.

The department led Australia’s involvement in the Asia–Europe Meeting process, working to support a rules-based international order between two key regions fundamental to our prosperity and security. We also engaged with the United Kingdom, France, Germany, the EU and other European partners on the Indo-Pacific region, encouraging them to play a constructive strategic role.

Australia advanced a new era of cooperation with France. Prime Minister Turnbulls and President Macron’s vision statement set the scene for the future bilateral relationship during the president’s visit to Australia in May. We began work on the Australia–France Initiative (AFiniti), which will strengthen this relationship including in the Indo-Pacific. Our annual Australia–United Kingdom Ministerial Meeting in July reaffirmed the closeness of our relationship and set a path for deeper engagement.

We also led Australia’s efforts to resist Russia’s conduct where it is contrary to global security, including its activities against Ukraine, its involvement in the downing of Malaysia Airlines flight MH17 and the nerve agent attack in the United Kingdom.

Australia’s engagement with Latin America was also advanced during the year to take advantage of this region’s growing economic opportunities and increasing international influence. The focus was on our trade and investment interests, increasing people-to-people links and supporting a rules-based international order in line with our White Paper objectives. The conclusion of the TPP-11 and a bilateral FTA with Peru significantly strengthened our trade ties with the region and demonstrated a shared commitment to open markets. We also continued FTA negotiations with the Pacific Alliance bloc (Chile, Colombia, Mexico and Peru) and worked constructively with Latin American partners in the United Nations, World Trade Organization, G20, APEC and the Antarctic Treaty system.

Working with South and West Asia

Our bilateral and regional development assistance to South and West Asia—$254 million for 2017–18—supported regional stability, security and prosperity by addressing governance, infrastructure and economic opportunity, education, empowerment of women, and water, food and energy challenges.

For example, we improved energy efficiency in the textiles industry in Bangladesh, reducing water usage by 2.8 million litres and power use by 470,000 megawatts a year. By working with local and international private sector organisations in Pakistan, we successfully prosecuted the business case for women’s inclusion. This resulted in better child care facilities and agricultural extension services delivered by women.

In March the Minister for Foreign Affairs announced $60 million in humanitarian assistance to implement our multi-year regional humanitarian strategy for Afghanistan and Pakistan. Working in Bangladesh through our partnerships with BRAC and the World Food Programme, we responded to the largest humanitarian crisis in the Indo-Pacific region—the influx of over 700,000 displaced Rohingya. Australia is now a lead donor in the region and provides considerable influence with our United Nations partners.

Security is also an important focus in South Asia. Visits to Sri Lanka by the Minister for Foreign Affairs in July and the Prime Minister in November resulted in greater collaboration on defence and maritime security. Our economic diplomacy and aid program continued to support Sri Lanka’s economic reform and reconciliation agendas by building resilience. We further strengthened cooperation with Afghanistan where Australia participates in a NATO-led train, advise, assist mission to help that country’s security forces address international terrorism and other security challenges.

Results

Whole-of-government coordination and leadership to advance Australia’s interests internationally

Case study: Foreign Policy White Paper

In 2016 Prime Minister Malcolm Turnbull announced the Australian Government would develop a foreign policy white paper, the first in 14 years. An inter-agency taskforce was established in the department to undertake this project.

The project began with extensive consultation with governments, business, non-government organisations, communities and stakeholders. In drawing on the deep knowledge and expertise of the Australian community, the inter-agency taskforce convened 24 roundtable discussions across Australia, met more than 60 prominent Australians and subject-matter experts and received over 9,200 written submissions. The Prime Minister launched the Foreign Policy White Paper on 23 November 2017.

The White Paper provides a framework to advance Australia’s national interests in a more contested and competitive world. It identifies five objectives of fundamental importance to Australia’s security and prosperity:

• promote an open, inclusive and prosperous Indo-Pacific region
• deliver more opportunities for our businesses globally and stand against protectionism
• ensure Australians remain safe, secure and free
• promote and protect the international rules that support stability and prosperity
• step-up support for a more resilient Pacific and Timor-Leste.

At its launch Mr Turnbull said, ‘the Foreign Policy White Paper shows how we're lifting our ambition, sharpening our strategic focus, (and) redoubling our commitment to ensure we continue to benefit from an Indo-Pacific that is open, prosperous and free.’

The Minister for Foreign Affairs commended the inter-agency taskforce’s efforts in capturing the diversity and complexity of Australia’s international interests. ‘We can face the future with confidence and with ambition, and this Foreign Policy White Paper will enable us to pursue an agenda of opportunity, security and strength’, Ms Bishop said.

Having a whole-of-government strategic framework that clearly articulates Australia’s national interests and the government’s key international objectives has strengthened coordination and collaboration. It is driving an ambitious and agile foreign policy and fostering stronger links to the government’s domestic policy agenda. Both in its development and implementation, the White Paper is complementary to the 2016 Defence White Paper.

The White Paper has become a reference for international issues considered by Cabinet and its National Security Committee. Departments and agencies are now framing their own approaches and strategies within the document’s context.

Many Indo-Pacific states and close partners have welcomed the White Paper and its clear statement of Australia’s policy priorities. Some neighbours, including Papua New Guinea, have sought our advice to prepare their own foreign policy white papers.

Ministers and senior officials are regularly reviewing implementation of the White Paper, as well as the underlying assumptions that informed its policy framework in the context of significant developments in our external environment.

Our ability to shape outcomes which reflect Australia’s interests, including through coalition-building with international partners

Case study: Australia and Timor-Leste maritime boundaries

Australia advocates for compliance with international law and the peaceful resolution of disputes as a vehicle for achieving outcomes in our national interest and within our region. Following Timor-Leste’s initiation of the first compulsory conciliation under the United Nations Convention on the Law of the Sea, Australia and Timor-Leste successfully concluded an agreement on maritime boundaries and resource development.

While Australia and Timor-Leste had previously agreed to develop the resources of the Timor Sea jointly, we had not been able to agree maritime boundaries. Notwithstanding initial reservations, Australia accepted the jurisdiction of the Conciliation Commission and, through our good faith engagement, achieved an outcome that reflects the shared interests of Australia and Timor-Leste.

The department led a whole-of-government team to engage with Timor-Leste and the Conciliation Commission in meetings over 20 months. All agencies contributed expertise and insights to deliver new solutions. We worked to create the political space for an agreement, overcome our legal differences, and consider the rights of companies with existing interests in the disputed waters.

The result is a maritime boundary treaty that both Australia and Timor-Leste see as fair, balanced and consistent with international law. It recognises Australia’s stake in a strong and prosperous Timor-Leste and marks a new chapter in our relations. Importantly, the outcome respects Indonesian interests and provides certainty to companies with multi-billion dollar investments in the Timor Sea.

Despite best efforts, the conciliation process was not able to secure an agreement between Australia, Timor-Leste and relevant companies on the best model for developing the Greater Sunrise gas fields. This is an important priority for both governments that requires ongoing engagement between Timor-Leste and the companies with an interest in the Greater Sunrise field.

The Minister for Foreign Affairs, Julie Bishop, announced after signing the treaty that it was a historic day for both nations. ‘We recognise that it is a particularly important day for Timor-Leste and another step forward in Timor-Leste’s journey as a sovereign nation,’ she said. ‘By signing this treaty, both governments have judged it has delivered a fair and equitable outcome. Our treaty reflects the value and importance of those rules and institutions, and the benefits for states in abiding by those rules. In particular, our treaty reflects the importance of the United Nations Convention on the Law of the Sea—UNCLOS.’

The conciliation process and maritime boundary treaty are a testament to the value Australia places in international law and its institutions, particularly as a way of securing benefits for both small and large states.

Minister for Foreign Affairs, Julie Bishop, and Minister in the Office of the Prime Minister for the Delimitation of Borders and the Agent in the Conciliation, Hermenegildo Pereira, sign the Maritime Boundary Treaty at UN New York, in the presence of Conciliation Commission Chair (right,) and UN Secretary-General (middle) [Andrew Kelly]

The quality and timeliness of advice, briefings and support for Ministers in relation to Australia’s foreign policy interests

During 2017–18 the department arranged 65 visits for our four portfolio ministers to 44 countries for a combined duration of 333 days. We arranged all travel logistics, identified strategic objectives, prepared briefs and speeches, and managed meetings and events. Often our portfolio ministers travelled abroad simultaneously.

We worked with the Department of the Prime Minister and Cabinet to support seven prime ministerial visits to 12 countries. We worked collaboratively across government to support visits by the Governor-General, federal government ministers and parliamentarians, as well as visits by state and territory representatives.

Services to ParliamentCase study: ASEAN–Australia Counter-Terrorism Memorandum of Understanding

The ASEAN–Australia Special Summit in March was one of Australia’s highest foreign policy priorities in the year under review. A key objective of the summit was to strengthen strategic and security partnerships in our region, particularly in relation to countering terrorism and violent extremism. ASEAN countries are some of Australia’s key counter-terrorism partners.

On 17 March Australia and ASEAN signed the ASEAN–Australia Memorandum of Understanding (MoU) on Cooperation to Counter International Terrorism. The MoU gives effect to the 2016 ASEAN–Australia Joint Declaration to Combat International Terrorism. Working with the Department of the Prime Minister and Cabinet and other whole-of-government partners, we drew on our diplomatic network in Southeast Asia, including our ASEAN mission in Jakarta, and our regional expertise to win ASEAN support for the MoU and to negotiate outcomes that support our interests.

Timely and concise analysis and advice from Australian diplomatic posts in Southeast Asian capitals assisted in addressing ASEAN countries’ concerns about the MoU text. The advice from our missions supported the delivery of effective and targeted advocacy through individual foreign ministries and the ASEAN Secretariat. Drawing on departmental briefing and advice, the Minister for Foreign Affairs engaged ASEAN counterparts and the ASEAN Secretary-General, advocating for their personal support for the summit and key outcomes, including the MoU. Secretary Adamson also spoke to counterparts to advocate for their support.

The MoU now strengthens cooperation to combat terrorism, counter terrorism financing and violent extremism in Southeast Asia. It intensifies Australia’s annual engagement with ASEAN.

It is supported by a suite of programs, including practical technical and regulatory assistance to develop best practice counter-terrorism legislation. The MoU will translate into pragmatic measures that will assist partner governments in combating terrorism in areas including electronic evidence, financial intelligence and countering online radicalisation.

We are working with the Department of Home Affairs and other departments and agencies to implement the MoU through our overseas diplomatic network and in conjunction with ASEAN.

Minister for Foreign Affairs, Julie Bishop, Prime Minister, Malcolm Turnbull, and Indonesian President, Joko Widodo, at the ASEAN-Australia Special Summit in Sydney in March [DFAT]