Fifty years on from the Basic Treaty of Friendship and Cooperation, Australia and Japan have grown into far more than economic partners. What began as a formal framework has, over time, become a relationship built on trust, familiarity and a strong sense of shared interest. In this interview, Richard Andrews, CEO of The Australia Japan Business Co-operation Committee, looks at how that relationship has evolved, why it has endured, and where he sees the greatest opportunities for cooperation as both countries face a more uncertain and fast-changing world.
Bridges: As Australia and Japan mark 50 years since the Basic Treaty of Friendship and Cooperation, how do you assess the significance of this milestone for the bilateral business relationship, and what does it represent in today’s geopolitical and economic environment?
Andrews: The NARA Treaty is best known for its contribution to building the people-to-people relationship between Australia and Japan — for example, kicking off a significant boom in Japanese language learning in Australia. But it has also been very important to the business relationship, for a couple of key reasons.
Most importantly, the Treaty marked a change in the way we thought about the relationship. By 1976 Japan had already become Australia’s largest trading partner, but the relationship’s focus had been quite transactional. By establishing “friendship and cooperation” as an objective to be pursued by both countries, the NARA Treaty arguably sparked the flowering of interest among new generations of Australian and Japanese people in each other that took us beyond that transactional focus, and into a real partnership.
Secondly, by extending equal rights to Japanese companies to invest in Australia, the Treaty opened the door for the business relationship to develop beyond trade into one where we actively cooperated to build major new industries together — in coal, iron ore and gas, for example. That has been crucial. In the succeeding years, cooperative ventures between our countries — particularly through Japanese direct investment in Australia — have made a huge contribution to the prosperity of both our peoples.
Where do you see the Australia-Japan partnership carrying the greatest strategic weight in the years ahead, particularly as both countries navigate a more complex regional and global environment?
Current international complexities only highlight the strategic value of our partnership. In an age of uncertainty, you need to stick with your friends. The extent of the alignment of interest and trust between Australia and Japan will see us working even more closely together as our world continues to change rapidly. That was highlighted by the recent signing of contracts for Mitsubishi Heavy Industries to supply the enhanced Mogami class frigates to Australia – something that both countries have described in essence as a joint investment in our shared security.
Our traditional relationship in resources and energy will continue to grow in importance. Recent events have highlighted growing concerns over energy security in both our countries; and we are also facing the challenge – and opportunity — posed by the need to decarbonise our economies. Given the size of our energy relationship, if Australia and Japan can get this transition right together, in a way that enhances our energy security, then that will create a tremendous example for the broader region.
We’re also seeing emerging new areas of cooperation as the world changes, in areas such as space, cybersecurity and quantum technologies. Here, there is a premium on trust – and the relationship the NARA Treaty has helped us to build should again stand us in good stead.
The extent of the alignment of interest and trust between Australia and Japan will see us working even more closely together as our world continues to change rapidly.
Richard Andrews, CEO of The Australia Japan Business Co-operation Committee
Australia and Japan are increasingly working together across areas tied to long-term resilience, from energy security to innovation and industrial cooperation. In your view, what gives this partnership its staying power, and what continues to make it so relevant?
The key words here are complementarity, trust and experience.
We know each country has something the other needs to reach its full potential. Critical minerals are a case in point, where Japanese investment and technology can be crucial to the development and processing of Australian resources; and in many technology fields there is scope to combine world-leading research from Australian institutions with Japan’s unparalleled ability to take ideas to commercial scale.
We know, too, from more than fifty years of experience, that we can partner reliably and well with each other. The energy and resources relationship is the obvious example. Japan has been able to rely on Australia for crucial industrial inputs to an enormous degree – and Australia has benefited hugely from Japan as a stable customer and active partner. That builds trust.
We know, of course, that in a turbulent world, problems will emerge; but our experience gives us the confidence that we will not lose sight of the fact that our interests are aligned and our objectives are shared. This provides an ideal basis for ongoing collaboration.
As the relationship enters its next chapter, what do you believe business leaders in both countries should do to ensure Australia-Japan cooperation remains ambitious, practical and meaningful for the next generation?
Our past successes give us grounds for confidence – but we have to understand that they were built on hard work and perseverance, and the same will be required as the relationship expands into new areas. It is a very competitive world, and success cannot be taken for granted – we need to plan actively for it; and we need to do that together. It will be crucial that businesspeople in both countries step up their dialogue at all levels to ensure key issues are addressed. The AJBCC is committed to assisting in this, through our annual Joint Business Conference and through our increasing program of work and forums on key issues throughout the year.
With the Japanese government now actively promoting inbound investment, we are also hoping to see more Australian investment emerge in Japan – something that is already happening in fields such as data centres, for example.
In an era where economic security is at a premium, businesses will also have to work more actively with governments, particularly where, in new industries, desirable activities are not immediately commercial and risk is high. Again, regular, structured dialogue is vital in assisting both countries to develop policies in a way that ensures business concerns are heard and addressed.
Business and government alike also have a responsibility to develop our workforces in ways that maximise the chances of success. We have already seen the dividends that have been reaped from the enhanced people-to-people contacts triggered by the Basic Treaty of Friendship and Co-operation. We need to maintain and build on that mindset and continue to build cadres and networks of people in both countries who understand each other and have the ability to work effectively together.
Over the years, Australia and Japan have built several landmark business partnerships. Which examples do you believe best capture the strength of the relationship, and which emerging areas of collaboration are you most encouraged by today?
The major bilateral resources projects, whether in relation to iron ore, coal or liquefied natural gas, exemplify better than anything else the strength and durability of the relationship, and its mutually beneficial nature. They involve huge investment and long-term mutual confidence; they demonstrate that we can overcome huge technical issues together; and they prove that, where there is trust and unity of interests, one country can successfully rely heavily on another for inputs that are absolutely critical for its own prosperity. These projects are the very foundation of the trust that is the hallmark of our successful partnership.
Important though those ventures remain, the most encouraging aspect of recent times has been the way our collaboration has now expanded well beyond these foundational sectors. There are now major Japanese investments in Australia’s food, beverage and agricultural sector, financial and life insurance sector, and real estate sector, as well as increasing numbers of partnerships between Japanese corporates and Australian universities and research institutions in areas of high technology. With the Japanese government now actively promoting inbound investment, we are also hoping to see more Australian investment emerge in Japan – something that is already happening in fields such as data centres, for example. All these point to the emergence of a truly cross-cutting and comprehensive partnership that can only be to the benefit of both countries.
