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Chile And New Zealand : Partners In The New World

Hon Phil Goff

Goff Speech To Chile Manufacturers Federation ¡V delivered 28 March 2001(NZ time) in Santiago.

Chile And New Zealand : Partners In The New World

It is a real pleasure for me to be with you today. This is my first visit to Latin America, and it is very appropriate that I should begin my acquaintance with this continent in Chile, a country with which New Zealanders can so readily identify.

The memoirs of Chile¡¦s great poet, Pablo Neruda, begin with the words: ¡§Under the volcanoes, beside the snow-capped mountains, among the huge lakes, the fragrant, the silent, the tangled forest...¡¨

Neruda was of course writing about his birthplace of Temuco in the south of Chile.

He could equally be speaking of New Zealand, a country which shares with Chile the southern Pacific ocean between the 35th and 45th parallels - or roughly between Santiago and Puerto Aisen.

I am told that if you stand on the green pasture of a farm in the Los Lagos region, you could think that you are standing on a beef or dairy farm in the central North Island of New Zealand.

Or if you walk through the beech forests around Coyhaique, you could be walking through the great forests of the west coast of our South Island, an unspoilt land of rain, forest and glaciers.

We may be almost 10,000 kilometres away across the southern Pacific ocean. But the ocean has not been a barrier. The great Polynesian navigators found both of our lands: the inhabitants of Rapa Nui are cousins to the Maori of New Zealand. I was struck by the similarity between these two indigenous cultures during my stopover on Isla de Pascua yesterday. This is a special link between Chile and New Zealand that we are proud of.

Chile and New Zealand share other things in common:

„h we are known internationally for our economic reforms, which have helped to create two outward-looking competitive economies. Our economies are regularly rated highly in international surveys for their openness and transparency. In the global competition for investment, these are attributes that help Chile and New Zealand to stand out,
„h both of us are world traders. Given our relatively small domestic markets and our natural resource based areas of comparative advantage, we depend on exports to create the prosperity to which we aspire. Chile¡¦s trade is around half of its GDP; New Zealand¡¦s is not much less at about a third;
„h Both of us are ¡§New World¡¨ countries who are open to new ideas and innovation, who do not feel bound by tradition. An old saying in New Zealand is that we can do anything with a piece of number 8 fencing wire. Our geographic distance encourages us to innovate. From wine-making to film-making, Chileans and New Zealanders have a new and different vision;
Now we have two governments with a common social democratic purpose - a vision which combines the goals of economic liberalism and social justice.

This common vision is seen in the excellent understanding between our leaders, who met no less than five times last year, beginning with Prime Minister Helen Clark¡¦s attendance at President Lagos¡¦ inauguration - her first official visit overseas after assuming office.

Their discussions on the way in which small democratic countries with open economies can best meet the challenges of globalisation have been sustained through their participation in the Progressive Governance Group of leaders and the UN Millennium Summit, President Lagos¡¦ state visit to New Zealand in October and their participation in the APEC meeting in Brunei.

On her return from Santiago, Prime Minister Clark called for a programme to revitalise and expand New Zealand¡¦s links with Latin America. The potential of those links is clear; we decided it was necessary for the government to act as a catalyst and to demonstrate our commitment to realising the potential.

We launched this programme - known as the Latin American strategy - late last year. It focuses on three themes: economic and trade links, international and regional cooperation, and people-to-people contact.

This initiative was conceived in Santiago, and Chile is a prime focus - as the Latin American country with whom we have the longest tradition of relations, and as a country which has long served as a gateway for New Zealand into Latin America.

Economic and Trade Links

Chile holds a special place in our economic and trade relations with Latin America.

The question often arises: if we are so similar, and produce so many of the same goods, what prospect is there for trade and commercial relations between us? Are we not natural competitors in overseas markets?

The paradox is that precisely because we do produce many similar goods and are competitors, there is much to be gained by cooperation and sharing of experience.

In the past one and a half decades, our economic relationship has been characterised by some very large New Zealand investments in Chile, particularly in the forestry and food sectors, as New Zealand companies saw strategic benefit in collaborating with their Chilean counterparts and in investing in Chilean production.

As this audience will be aware, some of that investment has moved on - for company specific reasons rather than any general lessening of interest in Chile.

The New Zealand interest in collaboration with the Chilean private sector remains. There is a steady stream of private sector representatives from New Zealand to Chile - and in the other direction - to share experience on industry trends, and particularly to discuss the challenges that we both face in overseas markets.

In the forestry sector, for example, as exporters of radiata pine, we have a common interest in addressing such issues as environmental certification, tariff escalation on value-added wood products, and ensuring that international environmental agreements do not discriminate against countries with large plantation forests.

This month our kiwifruit executives visited Chile; one of their aims was to explore the potential to invest in production of new varieties of kiwifruit in Chile. We have also hosted in New Zealand a high-level Chilean delegation to look at possibilities for technical and wider cooperation in the dairy sector. Late last year a group of New Zealand fishing company representatives visited Chile to discuss cooperation in the area of fisheries management.

With common interests in all these sectors, it makes sense for us to work together. The sad fact is that agriculture and other natural resource industries - which are so important to both of us for jobs and export earnings - remain the most distorted areas of international trade.

Within the Cairns Group of agricultural exporting nations, Chile and New Zealand have long worked together to liberalise world agricultural trade and to end the subsidies which distort world markets. As products from the farm, orchard, forest and sea make up over 60% of New Zealand¡¦s exports, this is for New Zealand a national priority of the highest order.

Chile and New Zealand have also worked actively together in APEC to make progress towards the goal of open trade and investment in the Asia-Pacific region. Thirty percent of Chile¡¦s trade is with Asia, as is some 35% of New Zealand¡¦s exports. This is a region of fundamental importance to both of us, which is why I have come to Santiago for the inaugural ministerial meeting of the East Asia-Latin American Forum.

Trade between us is growing too. We may never be each other¡¦s largest market - because of similarities of production - but we are becoming useful markets for each other. For New Zealand, Chile is in the third rank of export markets in Latin America, behind Mexico and Venezuela, but interestingly ahead of both Brazil and Argentina.

I am particularly excited to see that we are trading not only in traditional products, but also increasingly in new technologies and elaborately manufactured products:

„h A New Zealand company, Glidepath, is installing software-driven baggage handling systems in Santiago¡¦s new international airport
„h Another New Zealand company Transflux - working with Chilean company Greentek - has designed an innovative electric water heater specifically for the Chilean market, responding to the demand for safe and environmentally friendly energy systems in Santiago.
I believe these are examples of the new kind of commercial relationships we are going to see develop between Chile and New Zealand.

A Closer Economic Partnership

For these reasons - both commercial and strategic - our two governments have discussed the idea of entering into a Closer Economic Partnership agreement.

New Zealand uses this term of a Closer Economic Partnership, instead of the more common term Free Trade Agreement, deliberately. We do so because such agreements go beyond traditional questions of tariffs on merchandise goods. Market access is certainly a fundamental aspect of such an agreement. But to respond to the dynamics of modern business, these agreements also embrace matters of investment, competition, intellectual property rights, government procurement and ¡§behind the border¡¨ measures which can be impediments to trade, as well as providing for consultation and dispute settlement if and when difficulties arise.

Chile and New Zealand are on the same wavelength on the need for our bilateral and regional trade agreements to be comprehensive and trade-enhancing, not trade-diverting. We are facing a new world of more open markets, more cross-border competition and cooperation, new technologies and new challenges. We have so much in common we should seize the opportunity before us to identify where we can each benefit from enhanced cooperation.

When our leaders discussed this possibility in Brunei last October, President Lagos said that in any process towards a CEP the way forward would need to meet Chilean concerns about open trade in dairy products. The two leaders agreed to embark on a programme of bilateral cooperation in the dairy sector. This has moved forward with a high-level mission of government, farming and industry representatives from the Chilean dairy sector to New Zealand this month. Other initiatives of technical cooperation are in the pipeline.

I am confident that Chile and New Zealand can find common cause in the dairy sector - and that we can reassure the farmers in the south that New Zealand presents not a threat, but a set of opportunities for the Chilean dairy sector to develop and strengthen its domestic and export business.

We all know that personal relationships and interests are fundamental to business and trade. A Closer Economic Partnership between Chile and New Zealand - and involving our latest trade partner Singapore - would serve to sustain and stimulate the mutual interest of our private sectors in each other.

The evidence of our agreement with Singapore, signed last year, is that even before the ink was dry on the signatures, trade and investment between New Zealand and Singapore was increasing. The same thing happened a decade ago when we entered into our trade agreement with Australia. Through these agreements, governments send an important signal to their business communities, and the business people respond.

A Closer Economic Partnership with New Zealand would also serve to advance both our commercial interests in each other¡¦s region. It would encourage New Zealand companies to use Chile as a springboard into Latin America - taking advantage of your highly efficient business environment - and it would encourage Chilean companies to use New Zealand and Singapore to leverage themselves into Asian markets.

International Cooperation

I would like to speak briefly about the other two areas of cooperation. My government¡¦s foreign policy is premised on the assumption that quality foreign relationships have to be multi-dimensional, and that New Zealand should project itself in the world in a rounded way.

Because of its geographical isolation, New Zealand looks actively beyond its shores. We have our own ideas, goals and interests that we are prepared to back. Chile has the same approach.

There is a lot in common between New World countries like Chile and New Zealand when it comes to debating the Law of the Sea, marine conservation, Antarctica and disarmament. There are many examples of our cooperation in these areas:

„h We have been grateful for Chile¡¦s support for our proposal for a South Pacific Whale Sanctuary, and we are sympathetic to Chile¡¦s concerns about the problems of managing international fishing in the high seas.
„h Chile has supported the work of New Zealand and other New Agenda countries in disarmament at the United Nations by co-sponsoring our resolutions, and we share similar concern about the transport of nuclear material.
„h As gateway countries to Antarctica we also share a common concern to maintain that white continent as an unspoilt place of scientific research and international cooperation.
„h As southern hemisphere temperate countries in the Valdivia Group, we share interests across the international environmental agenda.
„h We keep in close contact on international human rights issues, where Chile¡¦s voice as a democracy carries great moral authority. The advancement of the rights of indigenous peoples is an important issue for both of us.

People-to-People Contact

We are very keen to build up people-to-people links. Our aim is to increase understanding and awareness of each other, and to break down the perception that we are far away from each other.

Already we are seeing increased interest in both countries in building links in science, the arts, culture, academia and education. Our universities have a range of links for academic exchange and collaborative research, and New Zealand government scholarships provide opportunities for postgraduate Chilean students in New Zealand.

On our side, Spanish is the fastest growing foreign language taught in New Zealand schools and universities. This year Otago University started a Spanish language programme with a Chilean teacher, joining other universities like Auckland and Victoria that already offer Spanish. Language is a key to appreciating the culture of others, and I believe that we will see many more New Zealanders visiting Chile and the rest of Latin America as their confidence in the language increases.

To expand contacts between our young people, Foreign Minister Alvear and I hope to later this week sign an agreement for a Working Holiday Scheme. This agreement will enable the young people of New Zealand and Chile to travel and work in each other¡¦s country. Chile will be the first country in Latin America with whom we have this agreement.


The title of my speech is about Chile and New Zealand as New World partners, so it is perhaps ironic that I finish with a story going back to the 19th century.

The story features your much-loved late cartoonist ¡§Lukas¡¨, who I understand was also an expert on Valparaiso. He was visiting the home of a New Zealand resident in Chile, and noticed a framed colour print on the wall. Lukas said, ¡§You know I thought I had seen every painting and picture that exists of old Valparaiso, but that¡¦s one I¡¦ve never seen. Who did it and where you get it.¡¨ He was astonished to learn that it showed, not Valparaiso but the dockside area of Wellington in the 19th century.

Chile and New Zealand have much in common, and I look forward to working closely with Chile to advance our common cause as New World partners in this new millennium.


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