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"The New Zealand - South Africa Relationship"

Thursday 5 August 2004

Rt Hon Helen Clark Prime Minister - Address to South Africa – New Zealand Charitable Trust

“The New Zealand - South Africa Relationship: Alive with Possibility”

Tamaki Yacht Club Auckland

12.40 pm

Thursday 5 August 2004 Thank you for the invitation to speak to you today.

This year, 2004, is the tenth in which South Africa and New Zealand have enjoyed the mutual benefits of full diplomatic and trade relations.

It is also the year in which South Africa celebrates ten years of democratic governance. How fitting it is that in this year South Africa has succeeded in securing the rights to host the 2010 Soccer World Cup.

The theme for South Africa’s 2004 celebrations, “Alive with possibility”, could also be applied to the relationship between South Africa and New Zealand.

In my speech today, I want to outline a little of the political and economic history linking our two countries.

I will talk about New Zealand’s interest in South Africa and how it has impacted on this country for more than a century.

I will outline the current prospects for trade and economic co-operation which New Zealand offers South Africa.

And, finally, I will highlight the measures our government is taking to ensure that New Zealand’s growing economy has the skilled workforce it needs, and where South Africans fit into that picture.

Diplomatic Relations

New Zealand’s engagement on issues affecting South Africa in the past was often so intense that it shaped political debate in New Zealand and even affected the outcome of at least one general election.

While South Africa and New Zealand first initiated diplomatic relations in 1962, our histories were intertwined long before then. They began with New Zealand’s involvement in the South African War at the end of the nineteenth century.

New Zealand’s participation in the 1899 war established traditions and precedents of international involvement which were distinctly New Zealand in origin and flavour.

Our country’s rush to become involved was essentially based on the premise that by helping to bear the burden of empire, New Zealand would build up a case for having a voice in the Empire’s, that is to say Britain’s, Government.

New Zealand’s leaders of the time hoped to achieve more effective independence by influencing the formulation of imperial policy. Indeed, some historians consider that the South African war was a decisive factor in stopping our country federating with Australia in 1901.

Our later engagement on the issue of apartheid had an impact on the development of our nation. When New Zealand supported a 1958 United Nations resolution urging the South African Government to react positively to international concern over apartheid, we had made a conscious shift away from the notion that racial injustice was just an internal affair.

From that point, our relationship with South Africa often required New Zealanders to weigh our nation’s conscience against the national passion, namely rugby.

After those first tentative steps towards diplomatic relations in 1962, it was to be a further 32 years before New Zealand and South Africa enjoyed the full and mutually beneficial partnership which could only occur with the end of apartheid. Links which continued, for example through sport, were often the subject of great controversy, and the cause of great division within families, communities, and the country as a whole.

With the end of apartheid and with the establishment of a New Zealand High Commission in Pretoria in 1996, our relationship took a quantum leap forward.

Today New Zealand and South Africa work closely together in many international forums. We share similar views on environmental issues, on disarmament, on most aspects of human rights, and on trade. But we do not always agree with each other, and on some issues, like Zimbabwe at present, our views and approaches have differed sharply. We have, however, been able to discuss those differences openly as good friends should when they differ.

South Africa is also the window through which we engage with Africa. It is the only country on the continent where we have a diplomatic post – although we will open in Cairo within the next eighteen months.

For my part I have been privileged to meet former President Nelson Mandela twice, and President Mbeki many times. I last visited South Africa nearly two years ago for the World Summit on Sustainable Development, and have also visited twice as a private citizen. I have had a life long interest in South African affairs, and will do whatever I can to build the links between our countries.

Trade Relations

The development of the overall relationship since 1994 has had a significant effect on the trade between our two countries.

South Africa is now our biggest trading partner in sub-Saharan Africa. Since 1990 the bilateral trade has increased nine-fold. Still, South Africa is only New Zealand’s 32nd most important export market, and our eighteenth most important source of visitors.

In the year to December 2004, New Zealand exported goods worth $106 million to South Africa, and imported almost $130 million worth of South African products in return.

Our main exports are dairy and red meat products, while the major imports from South Africa include vehicles, paper, iron, steel, machinery, and wine.

This year our Minister for Trade Negotiations, Jim Sutton, attended President Mbeki’s inauguration and South Africa’s tenth anniversary of democracy celebrations in April.

While there, Jim Sutton met with his South African counterparts to discuss our common interests within the WTO.

New Zealand and South Africa share similar views on multilateral trade. We work closely together in the WTO. That’s because we share an appreciation of and a commitment to a rules-based trading system, and we both champion the position of developing countries within that system.

As major agricultural producers, both countries can take heart from the recent good progress in Geneva on taking the WTO Round forward. Agreement on negotiating the elimination of agricultural export subsidies, better market access, and reduced domestic subsidies has been central to moving the Round ahead.

During his recent visit, Mr Sutton also met with representatives of New Zealand businesses operating in South Africa.

For example, he visited the premises of Fonterra, which has some reasonably interesting initiatives on the go.

While South Africa and New Zealand are competitors in many areas of primary production, there are other areas where our goods and services complement each others.

Information and communications technology is one such sector. New Zealand is a specialised supplier and South Africa is an important market and gateway to other markets.

New Zealand companies currently supply microwave radio transmitters, billing systems, and content for mobile applications to South Africa. We can also provide leading edge software in the banking, business, and healthcare sectors which could find markets in South Africa and the wider region.

Another example of complementarity is to be found in the marine industry. South Africa has a competitive boat-building sector, and it purchases a range of fittings from New Zealand.

Food and food technology is another area in which, despite healthy competition, both countries’ companies have managed to identify niche markets. New Zealand companies have had some significant successes exporting designer alcoholic beverages and other processed food products to South Africa.

Another example of collaboration is to be found in the dairy sector. In recent years, the link between diet and health has led to a rise in the demand for "functional" foods - foods which are not only nutritious, but which also improve health and wellbeing. In 2003, supermarket chain Woolworths launched a new range of yoghurt across its South African stores. The immune-boosting bacteria which set these apart was first identified in Fonterra’s research and development laboratories in Palmerston North.

New Zealand Trade and Enterprise believe it is important that New Zealand's expertise in a range of technologies is kept in front of key players in South Africa on an ongoing basis.

From their office in Johannesburg, NZTE staff are well-placed to promote New Zealand products and technology to the South African market, and stand ready to assist New Zealand-based companies which need to spend time networking and enhancing their profile there.

South Africa’s successful bid to host the 2010 Soccer World Cup should result in further opportunities for economic growth from which New Zealand companies may benefit.

Hosting the Cup will require significant infrastructure investment and expenditure on goods and services. New Zealand companies found opportunities around the Sydney and Athens Olympics in similar circumstances, and can be expected to look for them in South Africa.

At government level, we will continue to pursue initiatives to build the trade and business relationship.

In February 2002 a Double Tax agreement between New Zealand and South Africa was signed. It came into effect earlier this month, and represents a significant step forward for mutual trade and investment between the two countries.

We are also exploring possibilities for mutual assistance in legal matters.

Migration

Migration from South Africa to New Zealand is playing a growing role in linking our two countries.

We estimate that around 44,000 South Africans now live in New Zealand and make a significant contribution to our growth and prosperity. South Africa is a key market for many employers and industry associations here wishing to attract skilled employees.

The New Zealand economy has been growing steadily and has generated a demand for skills which cannot be filled locally in the near term.

Immigration policy aimed at filling labour market skills gaps is a critical part of our economic policy. The new Skilled Migrant Category (SMC), introduced in December 2003 and replacing the previous broad brush points system, links eligibility for permanent residence with the contribution which can be made to driving New Zealand’s growth and development.

In essence, immigration policy has moved away from the passive acceptance of residence applications to one which promotes the active recruitment of the skills New Zealand needs.

The Priority Occupations List (POL) was also implemented in 2002 to prioritise skills recruitment in occupations in absolute shortage here. The list contains highly-skilled occupations such as medical specialists, secondary teachers and IT professionals.

Those coming under this policy are able to move through to permanent residence after two years in the normal course of events.

The Talent Visa (Accredited Employers) and Talent Visa (Arts, Culture and Sports) enables accredited employers to recruit overseas workers without requiring a labour market test, and facilitates the entry of individuals with an international reputation in a cultural or sporting field.

Those who obtain these visas can also move through to residence after two years. Accredited employers presently include tertiary education institutions, private training establishments, and District Health Boards. Companies in the energy sector and petroleum industries have also been accredited.

Let me conclude on a note of optimism about the New Zealand economy.

This country continues to be one of the best performers in the OECD, both in terms of growth rates and in lowering unemployment.

3.6 per cent for the year to March was an excellent result, and growth for the March quarter at 2.3 per cent was outstanding.

This is a continued strong run for the economy. Since our government came to office, growth has averaged around 3.5 per cent per annum, a very respectable figure for a developed country.

Unemployment has fallen during our time in office from over seven per cent to 4.3 per cent – the lowest level in sixteen and a half years, and the fourth lowest in the OECD.

The growth path New Zealand is on is stronger and more sustainable than it has been for many decades. We continue to out-perform official forecasts, and consensus forecasts have underestimated our growth for four of the past five years.

In my view our growth is being driven by a more skilled workforce, an increased commitment to R&D and design, a willing to invest in new technologies, and smarter branding and marketing. These are key attributes for high value economies, and the government, by adopting a growth and innovation strategy, is determined to play its part in promoting them.

The growing South African community has a big part to play in these developments. You have brought your skills and talent, and you are known for your commitment to the work ethic. You also have valuable links with your homeland which can help build trade, tourism, education, and other relationships. Your presence here is mutually beneficial to both New Zealand and South Africa.

Thank you for inviting me to speak to you today.

ENDS


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