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Clark: NZIIA Seminar ‘Beyond P4'

Embargoed until 9.15 am
Tuesday 7 November 2006


Rt Hon Helen Clark
Prime Minister


Address at the
NZIIA Seminar ‘Beyond P4: The Outlook for Further Regional Integration in Asia-Pacific – A Latin American Perspective’


Auditorium, National Library
Wellington

9.15 am


Tuesday 7 November 2006

I am delighted to open this seminar organised by the New Zealand Institute for International Affairs, in co-operation with the Latin America-New Zealand Business Council and the New Zealand Centre for Latin America Studies, to consider the enhanced opportunities for co-operation between New Zealand and Latin America in the context of growing Asia-Pacific regional integration.

I congratulate NZIIA for securing such an experienced line up of Latin American speakers to present views from the region. I extend a special welcome to the four speakers who have made the long journey to be here today, and wish you each a successful stay in New Zealand.

I acknowledge the personal participation of all five Latin American Ambassadors resident in Wellington. We value your presence at this forum, and all the other contributions which you make to enhancing New Zealand’s relations with your countries and region.

This is a timely forum, with the P4 Trans-Pacific Strategic Economic Partnership Agreement between New Zealand, Chile, Singapore and Brunei due to come into full force tomorrow, thirty days after ratification by Chile; with a P4 leaders gathering scheduled to be held in just over 10 days time during of the APEC Leaders’ Meeting in Ha Noi, to mark the full coming into force of P4; and with the President of Chile, Michelle Bachelet, due to make a State Visit to New Zealand in November.

Latin America Strategy

The forum is well timed also against the background of the review and renewal by Cabinet earlier this year of the Latin America Strategy which has framed and guided New Zealand’s development of relations with Latin America successfully since 2000. The Latin America Strategy focuses on the enhancement of political and foreign policy, trade and economic, and people-to-people links with key countries in the region.

Topical and important as our relationship with Chile is - and it is New Zealand’s longest, closest, and most developed in Latin America - we must also maintain clear sight of the importance and weight of the region’s other centres of gravity, in particular the other five countries identified as focuses for New Zealand under the Latin America Strategy, namely Argentina, Brazil, Mexico, Peru and - smaller but with a special quality - Uruguay.

A key objective from successful development of the more advanced relationship with Chile is to acquire and enhance New Zealand knowledge and skills and approaches with wider application in the development of our relationships in Latin America. Language and cultural skills are an obvious case. Accessing high quality regional academic and other research networks is another.

New opportunities

The Latin America Strategy has set a new priority and approach towards Latin America for New Zealand during the last six years. It is informed by a vision of new opportunities opened up for New Zealand and Latin America as a result of three major positive developments in the potential of the relationship:

First, the increased value which modern New Zealand can offer Latin America as a partner in the Asia-Pacific;

Second, the enhanced trade and economic opportunities which Latin America can offer us; and

Third, the big advances in the practical feasibility of doing business together to realise our new potential.

Doing business together

The wider global communications revolution of the last decade has brought much faster, more reliable, plentiful, and cheaper means of communication and transport within and between countries and regions, transforming our ability to overcome physical distance.

For two parts of the world as geographically distant from each other as New Zealand and Latin America, the implications have been profound. The development of the internet, the dramatic drop in international telecommunications costs, and the expansion of air links have greatly facilitated our ability to explore and realise new connections – whether related to business, education, tourism, working holidays, migration, or any other purpose. The process has been supported by the rapid spread of English language ability among Latin Americans and – now growing rapidly, albeit from a small base – Spanish language study by young New Zealanders. Portuguese also is attracting interest.

While pressure on availability of airline seats remains and the routes are relatively costly by some international standards, in the last five years the frequency of direct air links between New Zealand and Latin America has more than doubled, and Santiago has been added to Buenos Aires as a regional gateway. The prospects for continuation of this trend appear hopeful.

Looking wider, between two regions as genuinely physically distant as Asia and Latin America - broadly one another’s antipodes - the implications of the communications and transport revolution are even more profound. New Zealand, positioned approximately half way between South America and East Asia - a roughly 12 hour direct flight from each – should be a significant beneficiary of the enhanced two way interaction now building up.

New Zealand as an Asia-Pacific partner to Latin America

We believe New Zealand has strong value to offer Latin American countries as a partner in the Asia-Pacific. It of course will be for Latin American countries to decide how relevant we are. In that regard we are pleased to have passed the test with Chile in concluding P4. Chile is well known for its business acumen and strategic approach.

In the next stage of building on and beyond P4, it will be even more essential that New Zealand’s case is convincingly articulated, well promoted and actively supported in Latin American centres. We need to ensure the most effective use of our inevitably scarce resources to promote relations with a region as vast and varied and full of future opportunities for New Zealand as Latin America. Our “NZ Inc” approach to Latin America was further developed in October when our Ambassadors to the region, New Zealand Trade and Enterprise’s regional team, and senior managers from the Ministry of Foreign Affairs and Trade, NZTE and the Ministry of Education met to chart the way ahead.

Some of the key messages New Zealand seeks to convey and reinforce through the promotion of political, trade and economic, and people to people links with Latin American countries under the Latin American Strategy include the following:

* New Zealand has strong credentials as a committed and forward looking participant in the Asia-Pacific regional integration process:

We are a founding member of APEC; a CER partner with Australia; an FTA partner with Thailand, Singapore, Brunei, and Chile; an FTA negotiating partner with China, ASEAN and Malaysia; a longstanding ASEAN dialogue partner; a member of the East Asian Summit; a member of the Pacific Island Forum; and a responsible trade and economic partner of Pacific Island countries.

* New Zealand’s vision is of open regionalism and of an inter-connected world where global linkages contribute to peace and prosperity and sustainable development for all:

Asia is our largest trade and economic partner, but we also have vital trade and economic interests with North America and Europe, and important interests with Latin America as well as the Middle East. We are committed by both interest and conviction to promoting the most open, transparent, comprehensive, multilateral rules-based international trading system possible.

* New Zealand sees Latin America as its neighbour across the Pacific and views Latin American participation in the process of Asia-Pacific regional integration as natural and desirable: we are conscious at the same time that Latin America is a large and varied region which looks to the Atlantic and the Caribbean as well as to the Pacific and is engaged in its own important integration processes:

The opportunities represented by the Asia-Pacific naturally will differ in character and priority of interest for different countries in Latin America; as well as engaging Chile, Mexico and Peru in APEC, New Zealand values the opportunities presented by FEALAC - the Forum for East Asia Latin America Cooperation - for engagement with a wide range of Latin American as well as East Asian countries aimed at building collective collaboration.

* New Zealand sees scope for increased future co-operation with Latin America underpinned by positive long term demand prospects for our common products and reasonable prospects for structural reform in northern hemisphere agricultural subsidy policies:

Due to similarities in natural resource endowment and international comparative advantage, in particular with the Southern Cone countries, we have a strong affinity in terms of shared production technology interests and market access concerns. For New Zealand, new co-operation with Latin America increasingly is likely to take the form of investment, joint ventures, and technology participation throughout the region’s Food Value Chain, rather than involving big increases in traditional commodity export. Education co-operation and exchanges and growth in tourism also hold strong potential.

Latin American opportunities for New Zealand

Latin America also has become more accessible and interesting in new ways for New Zealand.

Electoral democracies exist in almost every Latin American country. 2006 has been a bumper election year in the region with Chile, Costa Rica, Peru, Colombia, Mexico, Nicaragua, Ecuador, Brazil, and Venezuela all holding Presidential elections. Healthy oppositions exist in most countries and the influence of the military in political life has faded.

Some challenges do remain in governance issues and in overcoming structural poverty and inequality. That leaves room open for populism in some countries.

Overall we see the political trend as positive. In foreign policy terms, many countries of the region are closely like minded with New Zealand on a considerable range of issues.

Thus the opportunities for New Zealand to enjoy healthy political relations and constructive foreign policy dialogue with key countries in Latin America today are stronger than ever before.

Trade and economic opportunities are also evident. One of the key pillars of our Latin America Strategy is the effort to enhance trade and economic links with the region, including through the P4 Trans-Pacific Strategic Economic Partnership Agreement and the Joint Experts Group on the pursuit of a Closer Economic Partnership with Mexico, our largest trading partner in the region. Another key interest is building up the broader economic relationships with Brazil, Argentina and Uruguay which are increasingly destinations for New Zealand investment and joint ventures, including by Fonterra, the major fisheries companies, and PGG Wrightson. Making the most of the opportunities presented by Peru’s hosting of APEC in 2008 is also very much on our radar screen. New Zealand, through NZAID, is currently providing English language training for a substantial group of Peruvian officials to assist Peru’s build up of capacity for running APEC year.

These objectives are reflected in the priorities of the Latin America Strategy approved by Cabinet in early 2006. They include: implementing the new strategic partnership agreement with Chile; continuing to work for a closer economic partnership agreement with Mexico; increased focus on economic and political relations with Brazil; support for New Zealand’s growing investment interests in Argentina and Brazil; developing a strategy for enhanced education links with the region; promoting the opportunities offered by the region to New Zealand young people and to business; and making the most of Australia’s hosting of APEC in 2007 and, as I have noted, of Peru’s hosting of APEC in 2008 to increase ministerial contacts.

Recent progress

The high level of activity this year has illustrated that useful progress has been made during 2006 in taking the Strategy forward.

Senior political exchanges have included my visit to the Chile Presidential inauguration in March, and shortly we look forward to receiving President Bachelet; visits by Conservation Minister Chris Carter to Argentina and Brazil in March; visits by Jim Sutton as Minister of State to Argentina, Brazil and Chile in May with an agri-tech business delegation; and visits to Argentina and Chile in July by the Minister of Agriculture and Fisheries, Jim Anderton. High level exchanges in the other direction have included a visit by the Argentine Foreign Minister, Jorge Taiana, in August and a visit by the Brazilian Minister of Agriculture Carlos Guedes Pinto in September.

In terms of foreign policy dialogue, formal Foreign Policy Consultations were held with Mexico in July, and with Brazil, Argentina, Chile and Peru in respective capitals during October. A highlight in the other direction was a visit in February by President Lula’s special international affairs adviser, Prof Marco Aurelio Garcia.

On the trade and economic front, besides the final coming into force of the P4 Agreement, a major achievement has been the positive conclusions in the report of the Joint Experts Group of NZ and Mexican officials, academics, and business people on the benefits of a Closer Economic Partnership between the two countries. Significant trade and economic exchanges further to the Latin America Strategy during 2006 have included a visit to Mexico by a Crown Research Institutes’ delegation in March; a P4 trade delegation visit to Chile in June organised by NZTE; and in July, a visit by Marcos Jank, President of the Brazilian Institute for International Trade Negotiations.

New Zealand’s two way trade with Latin America totalled $1.3 billion in the year to June, up fourteen per cent over the previous year.

Significant people to people developments have included continuing strong demand for Working Holiday visits to New Zealand from Argentina and Chile with the quotas of 500 places fully taken up in each case, and growth also in demand from Uruguay. Other exchanges have included a visit by the Director of Te Papa, Seddon Bennington to five regional countries in July and a Regional Science and Technology Journalists’ delegation visit to New Zealand in March. I would also like to make particular mention of visits by Prime Minister’s Fellows Peruvian Cecilia Blume and Mexican Adriana Gonzalez in April and May respectively.

With the entry into force of the P4 Agreement for Chile tomorrow, it is useful to emphasise that both the New Zealand and Chilean Governments have already put much effort this year into ensuring its success. Two New Zealand business missions have visited Chile over the winter, and a large Chilean mission will be here later this month. Already there have been follow up visits by New Zealand companies back to Chile. Visits focusing on the environment have been exchanged, a joint study has been carried out on business opportunities, and the Chief Executive of New Zealand Trade and Enterprise had talks with his Chilean counterparts on a future strategic partnership. A Chilean science and technology delegation visited late last year. Very importantly, we have announced the appointment of an education counsellor to our Embassy in Santiago during next year. The Te Papa visit was a first step towards fleshing out the cultural chapter of the agreement. Active implemention of the agreement will continue to be a high priority for both governments. This will be a central topic of discussion with President Bachelet during our forthcoming meetings both in Na Hoi and Wellington.

Conclusion

The picture, then, is of the New Zealand Government devoting resources – intellectual and economic – in a strategic manner to enhance our relationships with an increasingly important region.

We can see the potential in closer relationships with Latin America, economically and politically and by increasing connections between members of our societies.

We aim to demonstrate to Latin countries that we can be a useful partner for them, not least as they consider expanding their interests in the Asia-Pacific region.

Modern communications make it easier for us to do business together, notwithstanding the physical distance.

In sum, New Zealand is committed to working hard and creatively to further develop ties with Latin America. We are keen to be a valued partner for Latin America in the Asia-Pacific.


ENDS

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