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McCully: German Council on Foreign Relations

Hon Murray McCully
Minister of Foreign Affairs
2 December 2009 Speech Notes
NZ and the EU: a new relationship

Speech to the German Council on Foreign Relations
Delivered overnight NZT, 1 December 2009

Thank you for your invitation to speak to you about New Zealand’s relationship with the European Union.

I am conscious of the fact that this is a very significant day in the history of the EU.

The entry into force of the Lisbon Treaty marks the beginning of an important new chapter in the life of the EU.

New Zealanders have been following these developments with great interest because they will have a significant impact on our relationship.

The EU is already the world’s largest economy, accounting for over 30 per cent of global economic production.

Its consumers represent the largest affluent market in the world.

And whether it happens quickly, or over time, it is clear that the European Union is set to become an even more significant player in international affairs.

New Zealand welcomes that development because it represents a new impetus and influence for values and principles that we share: respect for human rights, the rule of law, and the operation of transparent, democratic institutions.

That is an important part, but by no means the only part, of the relationship I wish to speak to you about today.

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Over time there have been a great many analyses of New Zealand’s evolving role and outlook in world affairs.

My own view is that New Zealand has a tri-polar approach to the world.

For reasons of geography, New Zealand looks to both Asia and the Pacific.

But despite its geography New Zealand also looks to Europe.

Let me explain.

All nations are defined, at least in part, by their geography.

For New Zealand, the geographical location that for many decades has been seen as our strategic disadvantage is rapidly, in this century, becoming our major strategic advantage.

Our location on the rim of Asia, close enough to be part of the region that will be the powerhouse of world economic growth for as far ahead as we can see, is our key area of strategic advantage.

For that reason it is a key objective of our Government to complete the negotiation of a web of free trade agreements that will give us access to these vast and growing markets.

New Zealand was the first developed nation to complete a free trade agreement with China.

In its first year of operation, New Zealand’s exports to China have increased by 62 per cent.

On 1 January 2010, the free trade agreement between New Zealand, Australia and the ASEAN nations will come into operation.

The very substantial growth in trade we have enjoyed with nations like Indonesia, Malaysia, and Vietnam is about become an even more significant part of our economy.

We are currently in free trade talks with India and with Korea.

And the TransPacific partnership discussion that President Obama has just announced that the USA will join, opens the door to expanding a free trade agreement currently involving New Zealand, Singapore, Brunei, and Chile, to include the USA and a number of substantial Asian players.

It is not just the trade architecture of the region into which New Zealand is integrating.

As a long-standing dialogue partner of ASEAN, we are part of the important regional conversations that occur in relation to security, development, diplomacy and economic stability.

We are members of APEC, a gathering of regional economies that met a few weeks ago in Singapore.

We are part of the East Asian Summit, the ASEAN Regional Forum, and the plethora of offshoot gatherings that now occur within the region.

And we have now applied to join ASEM – the meeting of key players from Asia and Europe.

We invest heavily in our place in the evolving architecture of the region.
And our population is becoming increasingly Asian – eight per cent at last count.

If Asia could, as a result of our geography, be described as our zone of opportunity, then the vast expanse of Pacific Ocean that surrounds us could correctly be described as our zone of responsibility.

New Zealand is truly a Pacific nation, not just in terms of geography, but also terms of our increasing Pasifika population.

Over six per cent of our population is of Pacific ethnicity, and that percentage is rising quickly.

We now have 131,000 New Zealand Samoans, in comparison to the 180,000 Samoans living in Samoa.

There are 50,000 Tongan New Zealanders, and just over 100,000 Tongans in Tonga.

There are 12,500 Cooks Islanders in the Cooks, but 60,000 Cook Island New Zealanders, and 22,000 New Zealand Niueans, but only 1000 residents remaining in Niue.

New Zealand is the centre of a complex web of family relationships throughout the Pacific.

Auckland is now the largest Polynesian city in the world.

This rich demography gives New Zealand both a responsibility and a unique capacity to play a leadership role in this far-flung, challenging, and sometimes not very stable region.

In this respect we are increasingly brought into harmonious contact with the EU as the largest single global funder of development assistance.

We have a shared commitment to helping some of the poorest people on the planet.

And we have a shared interest in maintaining stability and security in a region that is too easily open to the unwelcome attentions of drug-dealers, terrorists, money launderers, petty despots and other assorted undesirables

But despite being, for reasons of geography, both part of Asia and part of the Pacific, there is at least an equal part of the New Zealand entity that is European.

The largest part of our population is European.

Europe is our second largest trading partner, behind, of course, Australia – but it is fair to observe that China is closing in fast.

There are other huge commercial and investment linkages between New Zealand and Europe, many of very long standing.

But equally important is the fact that New Zealand is founded very firmly on principles of democracy, the rule of law, and human rights, which are also the hallmark of the EU.

In a way that it would be possible to ascribe to very few other
countries outside of Europe, New Zealand is an unambiguous, dependable, consistent advocate for these core values across the range of international organizations and institutions that shape our world.

Currently, that commitment is underscored by our presence in Afghanistan where we have led the Provincial Reconstruction Team in Bamyan since 2003, and where we have recently re-deployed special forces – our SAS – to serve around Kabul.

And we have, at any time, peacekeepers stationed in trouble spots around the world, such as the Sinai, where we are soon to take over leadership of the MFO peacekeeping forces.

For these reasons we are, but for an accident of geography, European.

All of the above is a very long-winded means of introducing to you the proposition that New Zealand is engaged, along with the Commission and our friends in Europe, in exploring the concept of a comprehensive partnership agreement with the European Union.

It is important to us that as we become increasingly involved in the architecture of the dynamic Asian region, and as we step up to play a more constructive leadership role within the Pacific region, that we do not take either of those paths at the expense of our relationship with Europe.

Indeed, I would argue that we bring so much more to the partnership with Europe as a result of our extensive and intensive engagements in the Asia-Pacific region.

We provide a gateway and we provide important insights into the complex, dynamic, yet highly challenging markets of Asia.

And we bring a high level of engagement in the evolving architecture of the region.

We bring an opportunity for a growing development partnership in the Pacific, where, despite its remoteness from Europe, the EU currently commits around 100m Euros a year.

Because our Pacific neighbourhood is unashamedly the focus of our ODA budget, we spend a little more than that in the region.

And in spite of a year and a half of negative economic growth, which has thankfully just ended, we have increased our ODA commitment this year, and committed to further increases in each year going forward.

We bring a strong partnership with our larger neighbour, Australia, not just in the manner in which we co-operate in delivering aid, but in the manner in which we jointly underwrite the stability and security of the region, with military and civilian personnel currently in Timor Leste, and in the Solomon Islands, in places like Tonga when required in late 2006, and of course in both Samoa and Tonga recently to deal with the tragic consequences of the tsunami.

And, of course, in the United Nations, and other key multilateral institutions, it would be fair to say that New Zealand and the nations of Europe could hardly work together more closely to promote the principles of democracy, the rule of law, and respect for human rights.

As a Foreign Minister, on call to authorize voting positions across the range of international institutions on a frequent basis, I am reminded daily of the closeness of our thinking, and of the depth of our shared commitment to bedrock principles and values.

I do not seek to disguise the fact that, as part of the proposed Comprehensive Partnership Agreement, we envisage the inclusion, over time, of provisions granting freer trade access to the EU.

That, in our view, is simply part of a comprehensive package.

We are not threateningly large players on the international economic stage.

As I pointed out earlier, New Zealand has had a free trade agreement in place with China for over a year.

Our exports have increased substantially, but there have been substantial economic gains for China too.

At last report, the Chinese economy seemed to be surviving the impact of freer trade with New Zealand with reasonable resilience!

Since we are in Berlin, I make the additional point that trade between New Zealand and Germany currently favours your country by a ratio of about two to one.

We do not see that as a problem: but rather as a challenge.

So, while there will be some discussion over trade elements in the proposed CPA, I am confident that these are challenges that can be resolved over time.

Earlier this year, Prime Minister Key and President Barosso agreed to take discussion of an EU/New Zealand CPA to the next stage.

And some weeks ago we submitted a discussion paper to the Commission outlining opportunities for enhanced cooperation, which is now in the hands of members.

Over the coming months we will engage in meetings and discussions to seek to advance a process that we believe can add value to both parties, and one that can add contemporary impetus and depth to a relationship of long standing.
This proposal is important to us. We want to do it justice in our discussions throughout Europe.

I thank you for giving me this opportunity to present my views today.


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