John Key: Speech To US/NZ Council
Speech Notes to US/NZ Council
New Zealand Embassy, Washington DC
It’s great to be here in Washington.
And it is a pleasure to be with so many good friends of New Zealand.
I want to acknowledge the strong support the US/NZ Council and its counterpart back home give to the relationship between our two countries.
Your positive approach is welcome. Your tireless advocacy on the trade front is something I thank you for.
As you know I am in Washington at the invitation of President Obama to attend the Nuclear Security Summit.
Along with about 40 heads of government, we have been talking about working together – to improve the security of the world’s nuclear material and to prevent nuclear smuggling and terrorism.
New Zealand is nuclear-free. That means we are able to bring a unique and valuable voice to the table.
The Nuclear Security Summit is part of a vision laid out by President Obama to work towards a world free of nuclear weapons.
It is a vision New Zealand shares. Because nuclear issues are global issues.
It is obvious that we would all be affected if an act of nuclear terrorism was to take place.
Through security, commerce, travel or transport, New Zealand would feel the impact.
That is why we are working alongside the United States and others to do what we can to prevent nuclear terrorism from ever occurring.
New Zealand has a long record of promoting nuclear disarmament and non-proliferation. New Zealanders feel strongly about the issue.
We have joined the Proliferation Security Initiative, the Global Initiative to Combat Nuclear Terrorism, and the G8 Global Partnership to secure nuclear materials in the former Soviet Union.
While I have been in Washington I have announced a further financial contribution in support of the United States’ Nuclear Smuggling Outreach Initiative
I am pleased that we are seeing progress from the fresh impetus given to this important cause by President Obama.
A new Strategic Arms Reduction Treaty was signed only days ago between the United States and Russia.
It Damatically cuts the number of nuclear weapons held by the two countries
And New Zealand also warmly welcomes the results of the United States’ own Nuclear Posture Review.
The review clearly states the long-term objective of United States policy is the complete elimination of nuclear weapons. It also implements the first of the actions that will be needed to get there.
New Zealand welcomes this momentum and it is good to be in Washington, working with the United States on an issue of such global importance.
Of course, there are many other areas where New Zealand is working in partnership with the United States.
Our relationship continues to go from strength to strength.
In Afghanistan, New Zealand’s SAS and Provincial Reconstruction Team are working alongside their American and international counterparts.
Their contribution to build a more stable and secure Afghanistan is significant and it is valued.
I am delighted, too, that a strong US contingent travelled to New Zealand last week to attend the inaugural meeting of the Global Research Alliance.
This Alliance was launched on the sidelines of difficult and complex climate change negotiations in Copenhagen.
It is a partnership of countries which will together search for ways to reduce the intensity of greenhouse gas emissions from agriculture.
The United States was an early and particularly strong supporter of the Alliance.
I am grateful to Secretary Vilsack for lending his personal support and energy
New Zealand and the United States also work closely together in the South Pacific, promoting good governance.
In Antarctica, we have shared more than 50 years of close cooperation.
But I don’t think I need to point out to this audience the full breadth and depth of the relationship between New Zealand and the United States.
Even in the most difficult of times, in my view, the relationship maintained a solid foundation.
That is because we are natural partners with shared values.
We share a commitment to democracy.
We share a commitment to the rule of law.
We share a commitment to good governance and respect for human rights.
And we are prepared to defend these values - together.
Our like-minded approach makes me ambitious for the relationship between our two countries.
And my government is strongly committed to taking this relationship to yet another level.
The current focus of our energies and ambitions is the crafting of a unique, modern, 21st century free trade agreement spanning the Asia Pacific region.
I am delighted that our American colleagues have also seized this vision.
Negotiations for an eight-member Trans-Pacific Partnership free trade agreement began in Melbourne last month.
These negotiations will be testing.
But we must not lose sight of the objective.
That objective is to increase our trade and economic engagement, so that Americans and New Zealanders are able to improve their standard of living through new and higher-paid jobs.
Those of us in the Asia Pacific region are very aware of the dynamism and future prospects of the region.
We know it is where New Zealand must be.
And there is absolutely no doubt in my mind that it is where the United States must also be.
The region is changing fast.
So are the trade flows and the ways that our companies are doing business.
We all know that Asia’s economic growth over the past 50 years has been phenomenal.
And it is projected to continue this strong upward trajectory over the next few decades.
Asia will be a strong engine of growth for the global economy.
If we are to build new and better jobs for New Zealand and American families, we need to be actively engaged in the area.
New Zealand has been particularly active on this front.
In the late 1990s, my current Trade Minister Tim Groser was a New Zealand trade negotiator.
He was part of a team of officials who saw the need to build a trade agreement linking New Zealand to the dynamic regions of Asia and the Pacific Rim.
We took our first step towards this goal through negotiating an FTA with Singapore, which we concluded in 2001.
Since then, we have concluded a number of agreements.
We now have FTAs with Thailand, Malaysia and China. Just last week, we signed an FTA with Hong Kong.
With our good friends the Australians, we concluded a regional FTA with the 10 countries of ASEAN.
We are currently negotiating with Korea. We expect to launch negotiations with India soon.
My government sees this work on trade agreements as a central pillar in our economic agenda.
The results speak for themselves.
The high-quality FTA New Zealand concluded with China has brought about a surge in trade between the two countries.
Only a few days ago official statistics showed China overtaking the United States as our second-largest trading partner.
New Zealand has already captured more than a billion extra dollars of export revenue following the China trade deal. And there is the potential for much, much more.
In 2005 we concluded the high quality, regional FTA, which is commonly referred to as P4.
This agreement with Chile, Singapore and Brunei is now the basis for negotiations toward an expanded Trans-Pacific Partnership.
I was delighted to hear President Obama confirm the United States’ intention to engage with TPP last November.
A month later, US Trade Representative Ron Kirk gave formal notification to the Congress of the Administration’s intention to formally join the TPP negotiations.
I know that the prospect of joining the TPP will challenge some representatives here in the United States.
I can understand it.
But I also strongly believe that the United States would get solid benefits from being part of the TPP.
Being part of the TPP could turn the tide for the United States’ share of exports to Asia, which has been declining over recent years.
As I said before, we have also seen this weakening trend in New Zealand.
Although exports from the United States to New Zealand have grown on average by two percent each year since 1990, the United States’ share of New Zealand imports has fallen from 18 percent to 11 percent over the same period.
This trend is mirrored for United States exports across the region.
A large part of the trend has been driven by the development of preferential trade agreements across Asia. The United States has largely not been a part of that growing network.
I know that New Zealand and United States exporters share the same frustrations with the failure of trade policy and regulations to keep up with the evolution of business practices.
TPP is our chance to change this.
We need policies and regulations which help make transactions happen – not hinders them.
At the heart of this trade push are living standards and jobs.
Both of our countries experienced a rise in unemployment as the global economic crisis took its toll on businesses.
In my view, trade must form a crucial part of the global economic recovery.
We must not lose sight of the potential for higher-paid jobs to be created from increased exports into the Asia-Pacific region.
New Zealand and our TPP partners feel a strong sense of urgency to seize the momentum this negotiation now has.
We want to make sure our negotiators deliver this deal in a timeframe that will deliver for business.
We want to bring forward the agreement’s economic benefits for families.
I would like to acknowledge, here, the support within the United States for TPP.
I know there are people in this city and further away who are backing this agreement, and I thank them for that.
You, the Council, have also been lobbying hard and effectively.
Back at home, the government’s eyes are squarely on the economy as we continue to implement our economic policies.
We came into office inheriting an economy deep in recession and with the world’s financial system experiencing its worst crisis since the Great Depression.
By necessity, our first year was focused on getting New Zealand through the global crisis in as good a shape as possible, while at the same time fulfilling our election commitments and maintaining our international credit ratings.
The worst of the global crisis has now passed and the economy has begun to grow again.
New Zealand has weathered the storm better than many other developed economies.
The depth of the recession in New Zealand, and resulting unemployment, have been relatively modest compared with most western nations. Unlike a number of countries, our banking system has not suffered major stress, nor are we facing an impending fiscal crisis.
To help sustain economic activity and support jobs, the Government significantly increased its borrowing, absorbing much of the shock of recession on its own balance sheet.
Temporary measures helped increase liquidity and assist banks to raise funds offshore. The Reserve Bank sharply lowered the Official Cash Rate.
We are now looking to encourage a sustainable recovery that creates jobs and lifts the incomes of New Zealand families.
We are keeping a tight lid on new spending for the foreseeable future, and you will see that in next month’s Budget.
It will enable us to keep public debt under control.
We are also reforming social sectors, like the welfare system, education, the justice system, and state housing.
I know that New Zealand’s wealth is ultimately generated by the private sector, and that it is businesses which will ultimately bring about a step change in our economy.
So my government is also making changes to help strengthen New Zealand businesses, and to make our country an even more attractive place for companies like yours to do business.
We have already completed the first stage of reform of the Resource Management Act, our major environmental legislation.
We are reviewing other areas, too, because New Zealand’s economic recovery cannot be held back by inefficient and costly red tape.
We are pouring billions of dollars into a major infrastructure building programme to unclog the arteries of the country.
We are also looking at reforms to the tax system to encourage saving and productive investment rather than borrowing and consumption.
I’d like to tell you more, but decisions around tax reform will be announced in the Budget in just over a month from now.
Finally, I’d like to say how much I value the relationships New Zealand has with the companies that many of you in this room represent.
The contribution you have made to New Zealand’s growth and development is welcomed.
I believe New Zealand will offer more opportunities for you in the future.
The measures that we are taking domestically, along with the partnerships we are forging through our trade agenda and the TPP, will stand us in very good stead.
And with organisations like this council, building and strengthening personal relationships, I think we can all look to the future with optimism.
I look forward to seeing many of you at the Partnership Forum in New Zealand early next year.