Govt urged to use 'resources diplomacy'

Australian resources are helping to power Asia - and the federal government should use this clout to gain more political power in the region, experts say.

The Australian Strategic Policy Institute (ASPI) is urging "resources diplomacy" in its latest paper.

With Australian exports of iron ore, natural gas and uranium key ingredients for economic growth in China and India, ASPI wants the federal government to leverage greater political power from the supply of resources.

Australia has not sought to use its commodity exports "for broader national interest calculations", according to the paper, written by Richard Leaver and Carl Ungerer.

"Australia's role as a stable, low-cost supplier of key commodities gives it a greater diplomatic bargaining tool than previous governments have been willing to acknowledge," the paper said.

The authors recommend greater state involvement in commodity marketing, pressing Beijing for more acceptable rules on competition and foreign investment, and campaigning against speculation in commodity markets.

The paper said the ban on uranium sales to India should be lifted.

Australia won't sell uranium to India for use in nuclear power stations because it has not signed the Nuclear Non-proliferation Treaty.

The paper said the export ban "creates a major obstacle to (the government's) efforts to improve the general standing of bilateral relations with a country of emerging strategic importance in Asia".

The report said the strategic and environmental benefits - such as the low greenhouse gas emissions of nuclear power - would outweigh concerns about nuclear proliferation. And there were other ways to check the spread of nuclear weapons outside the NPT regime.