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Q+A: Winston Peters on China and the Pacific "reset"

PR: Foreign Minister Winston Peters appears on Q+A to talk about China and the Pacific "reset"

Foreign Minister Winston Peters is interviewed by Q+A’s Corin Dann, suggesting New Zealand’s approach to China will change under the Labour-NZ First Government. He says New Zealand must do more to maintain its influence in the Pacific.

Q + A
Episode 1
Interviewed by Corin Dann

CORIN All right, well, joining me now is Deputy Prime Minister and Foreign Minister Winston Peters. He’s waiting for me on the set over here. Good morning to you, Mr Peters.

WINSTON Good morning.

CORIN How was Australia?

WINSTON Very good, thanks.

CORIN Excellent. You’ve announced a major foreign policy reset – quite a significant policy reset for this government. Why the Pacific? Why is that your focus?

WINSTON Well, it’s our neighbourhood. It’s the place where we matter more, we can do more, and it matters that we, ah, understanding of the changes that have happened in recent years in the Pacific and that both Australia and New Zealand step up to the mark here.

CORIN Changes – you mean the influence of China?

WINSTON Well, not all outside influences are good, and sometimes from the same country can come good influences and bad influence. Our job is to ensure that the engagement of other countries in the Pacific is for the interests of the Pacific and the security and prosperity of the neighbourhood.

CORIN You say China has had bad influences in the Pacific?

WINSTON I didn’t say that at all. I said other countries – in this case you could cite a number of countries whose interventions have not been helpful. Our job is to ensure that the two countries that matter most, I believe, in the Pacific – Australia and New Zealand – that we work closely together. We realise that for probably no time since 1945 have we needed each other more than we do now to be the influence we should be if the Pacific is going to maintain the tranquil peace that it currently has.

CORIN Look, I know a lot of foreign policy is about tone and signalling. Are you signalling that this government might be taking a slightly less proactive stance with China in terms of the relationship? You said in Sydney on Friday that you felt maybe we signed up too quickly to this Belt and Road vision that President Xi has for much of the world. Do you think that we need to slow down with China – pull back a little bit?

WINSTON Look, there are belts and roads all around the world. That’s, first of all, what you would hear from Europe, you’d hear from the United States and other parts of the world as well, so let’s not get carried away with that. But I think the speed with which they did it showed a lack of, in the case of New Zealand, preparation and thought and consideration as to what it all means.

CORIN This is interesting, though, because New Zealand has been at the forefront of signing up firsts with China they love to champion – first for the WTO, first free trade agreement—

WINSTON Well, we all know that, but let me tell you, within seven years they were trying to renegotiate that deal. The fact is Australia did far better out of China than we did. We should own up to the fact that when things aren’t what they should be then we need to dramatically improve them. Our deal with Korea wasn’t great. 173% tariffs is not fantastic, and what’s most important – the CPTPPA is going to see us doing twice as well in terms of our tariff reductions than the ones we’re currently enjoying in some countries.

CORIN The thing is with the Belt and Road, this is President Xi’s vision for the world. It’s an alternate vision, if you like, to the American imperialism—whatever you want to call it – their push into the Pacific, their pivot. Are you saying that we could pull out of it? Because we have signed a memorandum of understanding.

WINSTON No. I didn’t say that. When you sign a memorandum of understanding, the question is what does it substantially, in detail, mean? And neither Mr Key, Mr English or anybody in the National Party can tell you that.

CORIN I just want to come back before I move on. What sort of sense can we take about your tone here? Are you signalling that we need to take a soft—a slightly different approach in future with China that, say, the last government?

WINSTON It’s in the speech. It is a case of shifting the dial. It’s a case of having our eyes wide open, and it’s specifically a reset in circumstances where we must do far better than we’ve been doing. Our aid, for example, is on the decline to go down to .21 from .30 just eight years ago. These sorts of things won’t stack up against countries with a big cheque book who are printing money and are prepared to assist the Pacific, not always in the Pacific’s interests.

CORIN But there are consequences, aren’t there? I mean, we’re already hearing that Australia – which has taken, arguably, a tougher line with China on things like the South China Sea and other areas of Chinese influence – is being—

WINSTON Well, so have we. We are—

CORIN Well, have we?

WINSTON We have. We say we’re for the rule of international law. We’re for the thing being sorted out in a peaceful way. But there is a basis for it to be sorted out, and that’s the rule of law.

CORIN That’s not in the white paper that was put out by the last government, where it was in the Australian one.

WINSTON Precisely. Well, I’m not defending the last government. I’m defending the rule of law, which the last government claimed to support internationally, but did not mirror it in its report on that issue to do with the South China Seas. Now, we don’t want to be engaged in anything other than a peaceful solution, and I would think the mass majority of countries in Asia in particular want that to happen.

CORIN You know full well that the Chinese will be watching every word you’re saying right now. Are you worried that there could be—? They don’t like public declarations about the South China Sea from New Zealand. I know that. Are you concerned?

WINSTON No one has been more respectful of the place of modern China in the world than New Zealand First and Winston Peters. Make that very clear. I’ve said so for a long, long time – the reason why I am concerned that our country has taken a certain attitude is that they think they’re in the same league and they’re not. We are not. So our job is to ensure that when we speak to China, if there are things we don’t agree with, we have the candour and the frankness and the relationship to say so up front, rather than just remaining numbingly silent, as has been the case, when we don’t like things.

CORIN In the campaign trail, if I could just move back a little bit, you said, ‘All over the country, national and local government politicians have talked of Chinese interests funding infrastructure. China is quietly starting to dominate the lives of New Zealanders and clearly our economic direction. National must explain.’ What did you mean by that?

WINSTON (CHUCKLES) You just saw a guy on from Fletcher’s. What does he mean by 300 million-plus projects? Where’s this partner that he’s talking about funding that? And then when you talk about, for example, the Marsden Point to Whangarei super-highway that National promised, where was the partner for that? Well, that was Chinese as well. So what I’m concerned about is when that sort of investment shades into undue influence and ownership, and we’re not the first country to be worried about that.

CORIN So do think there is too much? Because, I mean, we’ve got Anne-Marie Brady’s report. We’ve got Rodney Jones, Michael Reddell, others raising concerns and wanting a debate about Chinese influence in New Zealand – politics, but wider life. Do you think there is too much influence?

WINSTON Look, if you’re concerned about too much Aussie influence when it comes to banking you should say so upfront, and I have. If you think there’s been too much untoward American influence in this country in some ways then we should be upfront and say so, and I have. It doesn’t matter where it emanates from. We’re a sovereign nation with a great democracy with an unbroken line of holding elections since 1854. We’ve got something to stand up for and we mean something in the Pacific. We’ve got people that regard us as their cousins and they’re looking to leadership from us. They’re looking to standards in the best quality of government from us, and we demand the same, because our taxpayers’ money is engaged in the Pacific, from them. So it’s not going to be easy, but if we don’t make this intervention in a positive way now and pick up our game, then our place in the world will be worse for it and the Pacific will be much worse for it.

CORIN $26 billion dollars is the two-way trade between New Zealand and China. That’s been a remarkable success story. What’s the problem here? This has been great for New Zealand.

WINSTON No problem at all, except that as you well know that our greatest added value componentry in dairy – namely infant formula, which is a potential $50 billion business – is now in the control of the Chinese economy. That’s what’s wrong when people don’t have vision about what they’re dealing with, because the Chinese would have bought our infant formula regardless, but now they’ve got control of the New Zealand production, the approval of construction formation of those industries and the marketing of it into China. What am I going to do about it? Well, I’m alerting you and the rest of the country as to who failed in the past and how we don’t intend to fail in the future.

CORIN All right. Let’s flip this around to Donald Trump. I mean, you could argue that surely his influence now is far worse than China. He’s talking about trade wars. He’s going to put tariffs in into America on steel and he’s saying trade wars are easy to win. I mean, how concerning is that?

WINSTON Look, this is not new. Bill Clinton slammed a serious tariff on New Zealand steel. Have you forgotten that? That was over 20 years ago.

CORIN No, this is new. This is a broad-based tariff that has already sparked talk of retaliation from Europe. They’ve been specific about bourbon from the US. This is a trade war. That’s the danger. It’s about New Zealand, is it? It’s about a trade war, and how concerned are you? And will you raise it with the United States?

WINSTON Well, let me just say this here – we are a country that has spent an incredible amount of time being a good friend to the United States, and yet Morocco and Chile have free trade deals and we don’t. How do you explain that? So in short, we’re not going to go around kowtowing to anybody in our national interest. What we’re going to do is stand up for things that are important in this world, and there are a growing number of countries around the world beginning to understand that. The Indians are starting to understand now. The Japanese do.

CORIN So should we retaliate?

WINSTON Well, the Americans aren’t in the CPTPPA, are they?

CORIN No, but we could make a symbolic gesture that we think that talking of trade wars is a disaster for a small country in a globalised world.

WINSTON I do not think that we have the capacity, with the greatest of respect, to retaliate against the United States.

CORIN But it’s symbolic, isn’t it? I mean, surely as a country we need to stand up. We’re a proponent of free trade.

WINSTON Well, if symbolism leaves your businesses and industry starving and the people in the street far worse off then it’s not worth anything.

CORIN So you’re not worried about Donald Trump talking openly about winning trade wars?

WINSTON Look, I am far more concerned to talk to a rational, sane, stand-out person who has got a great background in business called Rex Tillerson, because in the end—

CORIN Sure. Can you ring him up and raise concerns about it?

WINSTON Because in the end, foreign policy is about the relationship between people, not temporarily empowered politicians.

CORIN Yeah, but he’s not making any exemptions—they’re not making any exemptions for New Zealand.

WINSTON Well, I just told you, the last person to slam a tariff on New Zealand steel was a guy called Bill Clinton, and he was over here being feted by Jenny Shipley and everybody else. Do you remember that? Sort of, just, only 20, 21 years ago. Now, with respect, nothing’s new about this, and there always was a time when there was going to be a reaction. What was the American campaign about? The American campaign was about small people, small businesses being totally shut out because of the vagaries of globalism. It’s what Brexit was about in the end. It’s what the Australian election, which saw the upper house in parliament totally hung and 10 seats lost in the last snap election—

CORIN Are you saying you’re sympathetic with this protectionist measure?

WINSTON No, no, no. I’m not saying I’m sympathetic. I’m saying let’s have our eyes wide open here. Let’s be realistic, rather than dumbing down statements which take us nowhere, and see the disparity between our exports to China against our imports just grow larger and larger. That deficit is all debt.

CORIN All right. A couple of quick things. I’ve got your coalition agreement here. It’s one of my favourite documents to read. (LAUGHS)


CORIN The last thing on it on foreign policy says you would record a Cabinet minute regarding the lack of progress prior to the National-led government’s sponsorship of the UN resolution on Israel and the occupied territories. New Zealand was criticised a lot from Israel and other pro-Israeli countries. Have you recorded a cabinet minute on that?

WINSTON It’s lack of process, not progress.

CORIN Yes, process, sorry. Let’s be clear.

WINSTON What happened was before Christmas 2016, they got railroaded by interests actually for New Zealand offshore into a pre-Christmas denunciation of Israel without that going – as is required by the Cabinet manual – to go to Cabinet. And then it went to Cabinet, and we were saying straight-up, we don’t like processes which are just ignored when they’re in the national interests of—

CORIN So you’ve recorded the minute? It’s been recorded?

WINSTON We have.

CORIN Just quickly, why? Is it because of the process or is it because you’re concerned that we should never have done that, that that resolution was wrong?

WINSTON Oh, look, you had that happen. You had the claim that we had to make that compensatory statement in Saudi Arabia because we were being sued. That was a lie. We were never being sued in Saudi Arabia, and no one’s being held responsible. I want to know why we’re offshore doing serious foreign policy things without following the process, and we recorded our disquiet about that last week.

CORIN OK, so that’s on the record. Just a couple of quick questions about the coalition. I know you’re not big on polls – fair enough – but they have shown—

WINSTON Guess why I’m not big on polls.

CORIN (CHUCKLES) Because you—

WINSTON Because your polls are chaff, and I’ve gone through campaign after campaign, more than probably anybody else, where sometimes I’ve been down at one—

CORIN I agree with you. You will come back strongly in the campaign.

WINSTON Well, if you agree with me, can you stop your— TV 1 publishing them? Because they’re nonsense.

CORIN Are you concerned that maybe some of the others in New Zealand First – supporters of New Zealand First – might be worried when they look at the polls and see you being swallowed up by the larger party? Is there anything you can do about that?

WINSTON We’re not being swallowed up. First of all, get the lexicon or the language right. This is a Labour-New Zealand First coalition. I don’t want to hear you talking about Labour-led this and Labour doing that when you know it’s a coalition. Other countries after 21 years of change would surely grasp the lexicon or the language. Why can’t the New Zealand media? But that’s not new. It tends to happen in all areas of New Zealand society. But more importantly, I’m looking at where we’re going to from here, and we’re building our legacy as we speak with a huge initiative out in the provinces and, dare I say it, being the soul and the heart of a new government. When I say that, Mr Parker and I agree entirely about the CPTPPA. He was the leader of the changes in Da Nang and the Philippines.


WINSTON But he went to the wire, and I’m proud of the fact that he did it. He deserves an enormous amount of credit. We agree with that.

CORIN A couple of quick questions. Firstly, the Greens have come out yesterday – they look like they’re trying to differentiate – with a transparency policy. They don’t want to accept any corporate responsibility – tickets to rugby matches or something. Will you match them on that?

WINSTON Well, let me just tell you, we’re required to match them now. That’s what the Cabinet rules say. I don’t know which part of that they missed, but the Cabinet rules specify that now. Just one last thing – you don’t see any huge money behind New Zealand First, do you? Go and have a look at the returns when they come in as to who got what money in the last election, or the one before that, or the one before that. Other parties are awash with money, and we have to make one eighth or sometimes one sixth of the money go as far.

CORIN And just finally, how’s the relationship with Jacinda Ardern as Prime Minister? Do you think some of her positivity has rubbed off on you?

WINSTON Yes, well, she is seriously positive, (LAUGHS) to be honest, and to be honest, it’s a very attractive quality.

CORIN That’s an interesting word, Winston Peters. (CHUCKLES)

WINSTON Oh, well, let’s just—

CORIN No, I don’t mean like that. I just mean—

WINSTON Yeah, but let’s have an end to this PC attitude and the language police we’ve got. Sometimes—I mean, if somebody says that Simon Bridges is an attractive man, is everybody going to get offended with that? Why don’t we just grow up and realise that we live in a modern world where people express themselves differently?

CORIN Very good. Winston Peters, Foreign Minister, thank you very much for your time.

Transcript provided by Able.

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