Building Australia's Future in a Changing World

• In the Philippines, we've been helping them deal with questions of border security and port security.
• With the Indonesians we've reinstituted joint air patrols so that both of our countries can have a better idea of movements within our own region.
• Also in Indonesia, we’ve invested $36 million over the next five years to establish the Jakarta Centre for Law Enforcement Cooperation, designed to help countries in the region build up their capacity to fight terrorism.
• We have set up substantial and successful joint investigations with the Indonesians following Bali, the Marriott bombing, and the recent attempted bombing of the Australian Embassy in Jakarta.
• And we have worked to shift the focus of the Five Power defence arrangements with New Zealand, Britain, and significantly in this context, Malaysia and Singapore, toward counter-terrorism. Next month there will be exercises by those countries in South East Asia.

We have been investing so heavily, and doing so much in the region, it astonishes me to hear Mr Latham and some of his colleagues suggest we should do more.

Our co-operation with countries of the region has to be handled sensitively because they do not want Australia to be seen to be moving in and taking control of their intelligence or their police. (I'm sure Australia wouldn't want that in reverse either.) So, obviously, we don't boast about it too loudly or too often.

The Labor Party has said we should be out there doing joint maritime patrols in the Malacca Straits and other sensitive waterways in the region. But the whole question of maritime surveillance is actually a very sensitive issue in South East Asia. We have discussed it with them at some length. The governments of these countries insist on taking primary responsibility for maritime security. They are happy to receive assistance and we’re giving it to them - but they don't want us to take over maritime security and surveillance in their own part of the world. They are very sensitive about that. The cooperation with us on counter-terrorism has been enormous, but we do have to handle it with appropriate dexterity and sensitivity.

Terrorism isn't just a regional issue - it's a global issue. We need the co-operation of countries beyond South East Asia, the South Pacific and South Asia if we are to defeat terrorism. And there is no country on earth that can bring more resources to fighting terrorism than the United States of America.

The alliance we have with the US is not just fundamental to border security, it is fundamental to our capacity to wage war successfully against terrorists. And if we were to downgrade the alliance with America, that would downgrade our capacity to fight terrorism - including in our own region.

The greatest resource the US has in this region is its intelligence capability. Five days before the bombing at the Australian Embassy we upgraded our travel advisory. That upgrade came from intelligence we received about a possible attack on western-style hotels. That intelligence came from the Americans. They collect and pass on to us an enormous amount of intelligence in South East Asia and elsewhere. This is a massive force multiplier for us. We do have our own intelligence, but these American resources are critically important.

The US also carries enormous diplomatic weight, borne out of America's economy and its military capabilities. And if worse comes to worst, the United States has defence resources that can't be matched by anyone else on earth.

In the context of not only the traditional security threats but also today’s asymmetrical security threats - in particular the war against terrorism - our alliance with the United States is fundamental to our own security. We will gain nothing by downgrading that alliance relationship for the sake of politics.

As Foreign Minister I’m also deeply committed to expanding and developing our relations with our regional neighbours. We've achieved an enormous amount in South East and North Asia. And over the next few years I look forward to exciting developments building on what we've already done. We already have free trade agreements with Thailand and Singapore. Now we’re entering into negotiations with Malaysia about a possible free trade agreement.

Negotiations will be launched very soon to create an Australia, New Zealand, ASEAN free trade area. It’s something I have wanted for a very long time and it will be an enormously important development for Australia - economically, but also politically, in terms of our engagement with the region. That will happen at a summit on November 30th this year, a great day in Australian diplomatic history.

I'm enormously excited about the way our relationship with China is expanding. There are all sorts of contentious issues around a free trade agreement with China - issues to be debated within Australia as well as between us and China - and an agreement will be difficult to negotiate.  But the strength of the relationship is illustrated by the fact that we’re accelerating our scoping study. That study may conclude March next year, when we may well move into negotiation.