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PM's Address: Asia-Pacific Network Dinner

Rt Hon Helen Clark Prime Minister

Address at Asia-Pacific Network Dinner

Stamford Plaza Hotel Auckland

6.00 pm

Friday 10 December 2004

Thank you for this invitation to join you this evening.

This is a timely gathering, coming so soon after both the APEC and the ASEAN Summits in which New Zealand has been fully involved.

First, I want to thank those who have worked to set up this network aiming at bringing together business interests with a common stake in the Asia Pacific.

When the Seriously Asia process was launched last year, I was conscious that there needed to be a number of initiatives taken if New Zealand Incorporated was to be more effective in its dealings with the nations of Asia.

We have been working across government to improve our capacity to deal with Asia, and I see the development of AP-Net as very important in bringing those outside government with commercial interests in Asia together.

For me, the Seriously Asia process was about focusing New Zealand attention on the importance of strategic trends in Asia, the opportunities in the region for New Zealand, and the risks were we to be excluded from the emerging regional structures.

The Forum’s recommendations recognised that building a modern relationship with Asia requires concrete initiatives as well as goodwill. It recommended forging more links between the peoples of New Zealand and Asia as a vital investment in the future of such relations.

Since the Seriously Asia Conference, much has happened. The FTA with Thailand has been concluded, negotiations with China have begun, negotiations with ASEAN have been launched, and an FTA study is being done with Malaysia. The first prime ministerial visit from New Zealand to India in nineteen years has occurred, with an enthusiastic ICT delegation accompanying me. Many projects are underway within government and the Asia New Zealand Foundation to revitalise relationships with Asia, and we look forward to a successful presence at the Aichi Expo in Japan next year.

Our commitment through the Seriously Asia process has given a context and a purpose to the initiatives we are taking to build our Asian relationships, and I believe that is widely appreciated by our Asian neighbours.

Now, let me update you on what transpired at the APEC Summit in Santiago and the ASEAN Summit in Vientiane, both held in November.

APEC Chile

For Chile, hosting APEC was a tremendous achievement. It brought together the leaders of more than a third of the world’s population and sixty per cent of its GDP. For New Zealand, the organisation is also of vital importance. Six of our top ten markets are APEC members, and from the APEC community we draw seventy per cent of our visitors each year.

Under the able chairing of President Lagos, the leaders’ discussion was open and very successful. Issues which would have been difficult to discuss in the past are now tackled with relative ease as the organisation matures.

For example, discussion occurred on both corruption and infectious diseases, acknowledging the crippling effect both can have on growth and development.

There was a commitment to work together to combat the spread of HIV-AIDS and the threats posed by other infectious diseases such as SARS, avian flu, pandemic influenza, tuberculosis, malaria, and polio.

The current strength of oil prices was a topical issue, with agreement reached for APEC economies to co-operate on energy conservation and on the development of alternative energy sources and technologies.

These and the other specific initiatives agreed in Santiago are all recorded in the Santiago Leaders’ Declaration and the preceding Statement from Ministers, and I won’t dwell on them tonight. But let me comment on some of the broad themes under discussion at APEC.

At the CEO Summit I spoke on a platform with Malaysian Prime Minister Abdullah Badawi on the subject of regional responses to the threat of terrorism.

From the first meeting of APEC leaders in 1993, it was recognised that security is inter-related with prosperity and security. That’s been particularly obvious in the aftermath of September 11 and other terrorist attacks. We’ve all had to step up to the new international requirements set by the UN Security Council and other organisations like ICAO and IMO.

Many countries, like New Zealand, have changed their domestic laws to ensure that they comply with their new international counter-terrorism obligations, and we will continue to update our laws as is necessary.

Just as a careful balance on these issues has to be struck at home, so does it have to be struck at APEC. We don’t want the critical economic focus of APEC sidelined. We also need to balance the costs to business and society of securing the movement of goods and people against the cost of not doing so.

These concerns underpinned the ‘Bangkok Commitments’ on human security which APEC leaders agreed on last year, and built on this year. Security will continue to be a big item on APEC’s agenda.

Turning to trade, our Summit this year took place in much better circumstances than in 2003. The Bangkok meeting followed the failure of the Cancun WTO Ministerial. The imperative then was to get the Doha Round back on the rails.

That was achieved with the July frameworks agreement in Geneva, which itself was substantially driven by the leadership shown by APEC Trade Ministers at their June meeting in Pucon in Chile.

In Santiago we were united in identifying the Doha Round as APEC’s top trade policy priority. We called for “substantial results” at the Sixth WTO Ministerial Conference to be held in Hong Kong next December.

That’s political code for needing to make as much progress as possible. With a one-time, two-year extension of US Trade Promotion Authority due to kick-in from mid 2005, we need at the very least to reach agreement on the framework at Hong Kong.

APEC leaders are looking to their trade ministers, meeting in Korea next June, to help build early political consensus for an ambitious outcome in Hong Kong.

APEC also has its own trade agenda, centred around the Bogor Goals - now ten years old. An initial review of progress towards the goals was undertaken during New Zealand’s year as APEC Chair in 1999.

Next year in Korea there will be a further stock-take of progress. That so-called mid-term review will be just five years short of the 2010 date by which APEC’s industrialised economies committed to free and open trade and investment.

New Zealand is continuing to make progress towards those goals. By 2009, under our tariff reduction programme, we will have no tariff higher than ten per cent. In 2006, we are due to do a further review of policy to apply beyond 2009. By then, the outcome of APEC’s mid-term review will be known. We will be taking a good look at what others are doing in determining our own approach.

Meanwhile, like others, we’re also liberalising trade with other APEC economies which are prepared to do so with us.

We have concluded or are negotiating FTAs or CEPs with eleven of the twenty other APEC economies. We already have agreements with Australia and Singapore, and a one-way agreement with Papua New Guinea. We have just finished negotiations with Thailand; we’re negotiating with Chile; and we have launched negotiations with China. We’re also negotiating collectively under the ASEAN umbrella.

Beyond this we have partially negotiated with Hong Kong, we have undertaken studies with Korea and Mexico, we remain interested in entering negotiations with the United States, and we have indicated willingness to negotiate comprehensive agreements with others.

We are not alone in this. Work done by Chile earlier this year suggested that APEC economies could soon be party to eighty FTAs, thirty-three of them within the APEC region. I suspect the number has further increased since that estimate was produced.

The extent of this activity is fast changing the regional business landscape. The APEC Business Advisory Council (ABAC) which met here in Auckland last August expressed concern that differing rules and approaches in FTAs could increase the costs of doing business throughout the region.

I can understand the concern. That’s why it was good to see APEC this year agree a set of ‘best practices’ for FTAs in the region. They are designed as reference points on how APEC economies can best use FTAs to contribute towards achieving the Bogor Goals.

ABAC this year expressed concern at the pace of APEC’s progress towards the Bogor Goals, arguing that ‘business as usual’ would not be enough to get us there. They proposed consideration of a Free Trade Area of the Asia Pacific in which all APEC economies could participate.

While we were cautious about ABAC’s Pacific regional concept, we did agree that greater effort was needed on APEC’s trade agenda. This is reflected in the ‘Santiago Initiative on Expanded Trade in APEC’.

This initiative, among other things, requires that Ministers report to leaders next year on how to advance APEC’s liberalisation agenda, based on the 2005 mid-term review and progress in the Doha Round. Further input has been invited from ABAC, thus keeping the Asia Pacific regional FTA idea on the table. It may gain traction as the likely outcome of the Doha Round becomes clearer and the 2010 Bogor target comes closer.

Overall, this was a particularly useful APEC meeting. There was real engagement round the table, good strategic discussion, and a clear focus on the key issues confronting the region.

ASEAN

Economic integration and security were also key themes for the ASEAN Summit with New Zealand and Australia. The meeting was historic. The last time New Zealand and Australian Prime Ministers were invited to meet with the leaders of ASEAN was in 1977 !

At that time, ASEAN comprised five members; today its ten member countries have a combined population of 530 million, and a combined GDP of some US$737 billion.

ASEAN takes more than eight per cent of New Zealand’s exports; it is a significant source of our students and visitors; and it offers good scope for growth in areas such as services trade. The ASEAN region is also strategically significant for New Zealand, in terms of secure transport lanes and efforts to counter terrorism. New Zealand was one of ASEAN’s earliest dialogue partners. Next year will be the thirtieth anniversary of that partnership. The summit in Vientiane was intended to commemorate the long, constructive, co-operative relations which New Zealand and Australia have had with ASEAN. I saw it also as an opportunity to look to the future and to outline some ideas for advancing our shared interests.

ASEAN is at the heart of dynamic developments taking place in Asia. In Vientiane, ASEAN leaders also met with their counterparts from China, Japan, Korea, and India, as they have been doing for some years. Those Summit partners regard their South East Asian relationships very seriously, and there are a number of new trade and economic arrangements being agreed between them and ASEAN. The ASEAN/China FTA was signed at the Summit, and trade and economic arrangements were also advanced between ASEAN and India, Japan, and Korea.

Broader arrangements covering co-operation in a variety of non-economic fields were also agreed, some accompanied by commitments of substantial support. China signed a wide-ranging strategic partnership agreement with ASEAN.

At the Summit the ASEAN leaders issued the Vientiane Action Plan, aimed at establishing an ASEAN Community by 2020, covering economic, security, and socio-cultural issues.

Their aspiration is that the community will be based on principles and norms of good conduct, including respect for human rights. It will be “democratic, tolerant, participatory, and open”. It will seek to accelerate economic integration among ASEAN countries, and it will be outward looking in its external relations.

The achievement of such a Community is some way off, and it will be no easy task. But I made clear New Zealand’s support for ASEAN’s aspirations, in particular for the political evolution which it implies, and our interest in long term partnerships with ASEAN.

The negotiations for the ASEAN-Australia-New Zealand FTA were launched in Vientiane, something we have been working on for around five years. Such an agreement would bring both strategic and economic benefits over time. Many of you have been closely associated with these efforts, and will share the Government’s satisfaction that serious negotiations are now under way.

It is very important that our links with ASEAN are not one-dimensional. We have a rich history of involvement with South East Asia which was fully recognised by the ASEAN leaders at the Summit. In Vientiane I announced new measures to build on that, including:

an allocation of twenty to thirty per cent of the government’s new international undergraduate scholarships to ASEAN students; and a visiting ASEAN academic programme; annual Prime Minister’s Fellowships for ASEAN visitors; modelled on our successful schemes for Japan, Korea, and Latin America; a media programme to give more New Zealand journalists the opportunity to visit South East Asian countries and bring influential journalists from that part of the world to New Zealand; sponsorship of a one-off high profile ASEAN/NZ workshop and forum at the Institute of South East Asian Studies in Singapore; and the development, using DVD technology, of a programme to showcase the quality of contemporary New Zealand music and the technical skills of New Zealand producer, aimed at young people in South East Asia.

As well, our development assistance to the less developed ASEAN nations continues; we are working on a declaration with ASEAN on co-operation in counter terrorism; and we are studying with positive intent the possibility of acceding to the Treaty of Amity and Co-operation with ASEAN.

At the Summit, the ASEAN leaders were warm in their praise for the collaboration between their countries and New Zealand over the years. We have a full agenda before us and ASEAN leaders want to work more closely with New Zealand.

Conclusion

I have returned home from both Summits energised by the fast pace of development in our relations with the nations of Asia. Our approach is strategic, it covers many sectors, and it will benefit New Zealand.

But revamping our Asian relationships is not a job for government alone. It calls for engagement across business, academic, research, education, and other communities, and for an interest by news media.

Seriously Asia was a big step forward in getting New Zealand Incorporated to think more strategically, and I am sure the government can count on the continued engagement of AP-Net as we take our Asian relationships forward.

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