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Cablegate: Corrected Copy -- Scenesetter for Secretary Clinton's New

DE RUEHWL #0003/01 0062107
R 062106Z JAN 10



E.O. 12958: DECL: 2020/01/07


DERIVED FROM: Derived from previous message.

1. (SBU) Secretary Clinton, Embassy Wellington and Consulate
General Auckland extend a warm welcome to you for your January
15-17 visit to New Zealand. We have worked closely on preparations
with your "Kiwi" hosts and share their excitement about your trip.
Your visit to New Zealand, a small Pacific nation of 4.3 million,
will further energize bilateral relations, which are already on an
upward trajectory. Washington is reviewing our decades-old policy
stemming from disagreements over New Zealand's nuclear-free
legislation in the mid-1980s and we expect that much closer
military-to-military relations will result. Our intelligence
relationship was fully restored on August 29, 2009 (which should
not be acknowledged in public). New Zealand is eager to work with
the U.S. on non-proliferation issues and Prime Minister (PM) John
Key is openly excited about being invited by President Obama for a
bilateral visit to Washington in March 2010 and to the April
Nuclear Security Summit. New Zealand depends on international
trade (the U.S. is its second largest trading partner, after
Australia) and influential constituencies across the society
reacted enthusiastically to President Obama's November 2009
announcement on the Trans-Pacific Partnership (TPP). New Zealand
Special Air Services (SAS) combat troops are deployed in
Afghanistan, and the NZ Defense Forces run a Provincial
Reconstruction Team (PRT) in Bamyan province.

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Your Hosts


2. (SBU) Your official host for this visit is Foreign Minister
Murray McCully, but PM Key--consistent with his strongly personal
pro-American outlook and that of the National Party-led coalition
government he heads--has involved himself heavily in your visit.
Key will lead the official bilateral meeting, hold a joint press
availability with you, and be your host for an informal dinner.
While delegating most foreign policy responsibilities to FM
McCully, PM Key keeps a close watch on bilateral relations with the
United States. PM Key and the rest of the New Zealand government
celebrates your visit as evidence that New Zealand is a welcome
partner of the United States and a reaffirmation of the positive
bilateral developments between our countries in recent years. We
do not anticipate that the New Zealand Government will raise any
contentious issues in your meetings.

PM Key's National-led Government - Riding a Wave of Popularity

--------------------------------------------- ----------------------

3. (SBU) On November 8, 2008, The John Key-led National Party won
the General Election ending the eight years of Labour party rule.
Key, a former investment banker who only entered politics in 2002,
announced the formation of a National-led minority center-right
government after he had signed separate agreements with the ACT
Party, United Future and the Maori Party to secure their respective
support. The governing arrangement with the three parties is not a
formal coalition. Rather, each party negotiated with National an
agreement that will enable National to survive no-confidence votes
in Parliament. PM Key and his governing National Party are now
extremely popular with voters with ratings well above 50 percent.
The opposition Labour Party, with a 30 percent rating, and its
leader, Phil Goff (8 percent), have struggled to be politically
relevant since losing the 2008 election. The Key Government
recently dealt with minor scandals involving two support parties
that briefly raised the specter of Government instability, but
faded rapidly.

Hot Domestic Issues: Maori Land Rights and Emission Trading Scheme

--------------------------------------------- ----------------------

4. (C) While domestic politics will have little influence on your

WELLINGTON 00000003 002 OF 005

visit, there are several issues that currently are at the forefront
of New Zealand politicians' minds. The most critical legislative
decisions since the National Party took office in 2008 are the
recent repeal of the controversial Foreshore and Seabed Act, which
permits Maori to pursue in court their customary rights to the
coastline and its natural resources, and the Government's Emission
Trading Scheme (ETS) bill, a contentious environmental measure
introduced to cap carbon emissions. Opposition parties derided the
ETS bill as incomplete and roasted the Government for the speed
with which it passed into law. Another issue of note is the
Government's plan to consolidate Auckland's eight existing councils
into one Super Council with a single mayor. This is a significant
undertaking as Auckland is New Zealand's biggest and politically
most important city.

New Zealand's Economy - On the Rebound

--------------------------------------------- ------------

5. (U) New Zealand's economy suffered a recession from the global
economic crisis, but is now on the road to recovery with real GDP
data showing signs of improvement. Economic forecasts suggest that
economic growth will return in 2010 with 1.6 percent growth in real
GDP. However, unemployment is still expected to top 7 percent in
early 2010. After substantial restructuring and sale of
government-owned enterprises in the 1990s, New Zealand is now one
of the most open economies in the world and is ranked 5th in the
world on the Heritage Foundation's economic freedom index. Close
economic ties with Australia are also a key part of the New Zealand
economy. New Zealand and Australia are partners in the "Closer
Economic Relations" (CER) agreement, which allows for free trade in
goods and most services. There is a free flow of labor between the
two countries with little to no impediments to migration, and the
two countries also consult closely on fiscal and monetary policy.

Trade is Vital to the Economy


6. (U) Trade is a vital part of the New Zealand's economy,
particularly trade in agriculture, which represents about half the
country's exports. New Zealand's four top trade partners are
Australia, the United States, China, and Japan. To boost trade,
the country has vigorously pursued free trade though the WTO and
the Trans-Pacific Partnership Agreement (TPP), as well as bilateral
agreements with other countries and regional organizations,
including Australia, China, Singapore, Thailand, Malaysia, Hong
Kong, ASEAN, and the Gulf Cooperation Council. New Zealand is the
first OECD country to sign a free trade agreement with China, and
it now pursuing FTAs with Korea, Japan, and India. In general, the
country's trade policy generally enjoys bi-partisan support.

The U.S. is a Major Trade and Investment Partner

--------------------------------------------- ----------------

7. (U) President Obama's announcement on November 14 of U.S.
engagement with the TPP countries was warmly welcomed and has
generated a great deal of enthusiasm among New Zealand Government
officials and the media. The U.S. is currently New Zealand's
second largest individual trading partner and second largest
individual export market, with the top four exports of frozen beef,
dairy products, sheep meat and wine. The U.S. is New Zealand's
third largest source of imports with the top four imports of
aircraft, aircraft parts, medical equipment and motor vehicles.
The U.S. is also the top destination for New Zealand investment
abroad (close to $1 billion) and New Zealand's second largest
source of FDI (11.5 percent of the total FDI in NZ). New Zealand
has a vibrant U.S. business community of approximately 400
companies, including well-known companies such as 3M, Citibank,
Microsoft, and Mobil. New Zealand's American Chamber of Commerce,
based in Auckland, has over 160 members.

WELLINGTON 00000003 003 OF 005

Supportive of the U.S. Internationally, Especially in Multilateral

--------------------------------------------- ----------------------

8. (C/NF) New Zealand, as a small country, places great store
in multilateralism and is a strong proponent of the UN system. It
generally supports the United States at the United Nations and
other international fora, only differing on a few issues such as
Cuba. When the U.S. Administration decided in March of 2009 to
seek a seat on the UN Human Rights Council, New Zealand, which was
also on the ballot, withdrew its name so the United States could
run uncontested. New Zealand has also been supportive of the U.S.
position on nuclear issues in Iran and North Korea and generally
desires to keep their policies towards North Korea in sync with our
objectives. On Iran, New Zealand supports our position, but their
trade relationship with Tehran and overall approach to the Middle
East precludes them from taking as tough a line with Iran as they
have with North Korea. New Zealand is also an active participant
in other fora, such as of Asia-Pacific Economic Cooperation (APEC),
Organization for Cooperation and Development (OECD), Pacific Island
Forum (PIF) and Proliferation Security Initiative (PSI).

New Zealand's Special Relationship with the Pacific Islands

--------------------------------------------- ----------------------

9. (SBU) The United States continues to draw on New Zealand's
deep experience and unique connection with the Pacific Island
region. New Zealand has a strong leadership role in the South
Pacific and views itself as having a special connection with the
island nations. Currently there are around 270,000 Pacific
Islanders living in New Zealand (about 6 percent of the
population), many of whom live in the Auckland region. There are
also many Pacific Islanders who come to New Zealand for temporary
work through the Recognized Seasonal Employer (RSE) Policy. New
Zealand established the program in October 2006 as a way to assist
employers in horticulture and viticulture, as well as provide
development assistance in the Pacific Island region. New Zealand
has a strong aid and development presence in the region and is
eager to collaborate closely with USAID, which is looking to return
to the South Pacific. We cooperated closely with New Zealand in
the aftermath of the recent earthquakes, tsunamis, and volcanic
eruptions in the South Pacific. New Zealand was one of the first
countries on the scene after the September tidal wave in Samoa,
providing aid and relief.

10. (C) We also cooperate and share concerns in the region on
political stability, climate change, energy and food security, and
protection of fisheries and marine environments. In the past
several years, New Zealand has played an active role in helping to
maintain the security environment in Timor Leste, the Solomons, and
Tonga. Likewise, we are unanimous in the need for a quick return
to democracy in Fiji. The New Zealand Government has had a
particularly rocky relationship with the interim Government in Fiji
and would like the United States to take a stronger position. In
November 2009, the New Zealand Acting High Commissioner was
expelled from Fiji after New Zealand delayed the issuance of a
medical visa for the sick child of a Fijian judge. We also share
concerns over the competing agendas of other actors and donors in
the region, such as China and Cuba, and their impact on stability,
governance, and sustainable development. We also share a concern
with the New Zealand Government over the need to help the Pacific
Islands control their Exclusive Economic Zones (EEZ) from illegal
fishing and to protect marine environments.

A Strong History of Collaboration on the Environment, Science and
the Antarctic

--------------------------------------------- ----------------------

11. (SBU) Science cooperation forms one of the longest threads of
the bilateral relationship; it dates back to the late 1950s in the
Antarctic. The United States and New Zealand continue to work

WELLINGTON 00000003 004 OF 005

together closely on scientific research in the Antarctic.
Christchurch is the staging area for joint logistical support
operations serving U.S. permanent bases at McMurdo Station and
South Pole, and New Zealand's Scott base (located just six miles
from McMurdo Station in the Ross Sea region). Collaboration
between the U.S. National Science Foundation and New Zealand to
install wind turbines in Antarctica to power McMurdo/Scott Bases is
a part of the joint logistical agreement and will eventually supply
up to 90 percent of our electricity needs for the two bases. There
is also collaboration on the Energy Development for Island Nations
(EDIN) project, which aims to develop renewable energy resources
for Pacific Islands and reduce their dependence on fossil fuels. A
Science and Technology cooperation agreement between the US
Department of Homeland Security and New Zealand, relating to
enhancement of each country's domestic and external security
capabilities, is slated to soon be signed. In addition, we are
working together on greenhouse gas reduction in the agriculture
sector through the Global Research Alliance on Agriculture
Greenhouse Gases. New Zealand's unique position of being a
developed country with roughly 50 percent of its carbon emissions
stemming from agriculture production will give it a unique
perspective and leadership role in this endeavor.

Defense Cooperation - Moving Around the Rock in the Road

--------------------------------------------- ----------------------

12. (C/NF) New Zealand-U.S. relations have improved
significantly over recent years as both countries agreed not to
allow the historic anti-nuclear dispute to unnecessarily damage the
overall bilateral relationship. New Zealand's legislation
prohibiting visits of nuclear-powered ships continues to preclude a
security alliance with the U.S. Certain restrictions on bilateral
military cooperation still remain, such as ship visits, but
official visits and multilateral cooperation is ongoing. Admiral
Keating visited in September 2009, and Secretary of the Navy Ray
Mabus is set to come in February 2010. Anti-nuclear legislation
enjoys broad public and political support in New Zealand, and there
is no sign it is likely to change. There is a perception among the
New Zealanders that the decision to prohibit nuclear ships has cost
them economically through lost trade opportunities. Despite
suspension of U.S. security obligations, the New Zealand Government
reaffirms the importance it attaches to continued close political,
economic, and social ties with the United States and Australia.
The Mission looks forward to an increase in frequency and
complexity of joint and multilateral military-to-military training
involving New Zealand when final decisions in a current review are

Shoulder to Shoulder in Afghanistan

--------------------------------------------- --

13. (C/NF) New Zealand is an active member of the global
coalition in the fight against global terrorism, and deployed both
Special Air Service (SAS) and regular armed forces personnel to
Afghanistan. In September 2009, SAS began its fourth deployment to
Afghanistan. PM Key also announced that the NZ Defense Force
contingent of the NZ-run provincial reconstruction team (PRT) in
Bamyan province will be drawn down in the medium term, which he
defined as three to five years. As the NZ military contingent in
the PRT draws down, the civilian contribution will increase and
focus on rebuilding local capacity in agriculture, education and
health. PM Key promised that NZ's efforts in Bamyan province would
"be aligned with the new policy of the U.S. Administration," which
includes building the capacity of the Afghanistan central
government and provincial governments. PM Key also announced that
New Zealand will establish a permanent diplomatic presence in
Afghanistan. Presently, New Zealand's Embassy in Tehran covers
Afghanistan. The SAS is slated to return to support internal
security requirements during New Zealand's hosting of the World
Rugby Cup in 2011, and future rotations to Afghanistan are
undecided at this time.

WELLINGTON 00000003 005 OF 005

Intelligence Cooperation Is Back on Track

--------------------------------------------- ---------

14. (S/NF) Despite the ANZUS break in 1985, New Zealand remained
a member of the Five Eyes intelligence community, but with access
to certain types of intelligence curtailed. Our intelligence
relationship was fully restored in August 29, 2009. While you
should mention intelligence restoration in your private bilateral
with PM Key and other New Zealand officials, this is a "no comment"
issue when the media inevitably raises it. New Zealand has been a
strong advocate of the Proliferation Security Initiative (PSI) in
the East Asian region and hosted its first PSI exercise (Operation
Maru) in September 2008 with 30 USG experts participating. New
Zealand is also an active participant in the Global Initiative to
Combat Nuclear Terrorism (GICNT).

Resources Needed As the Relationship Expands

--------------------------------------------- ------------------

15. (S) The Mission to New Zealand and Samoa is staffed by 149
employees (50 Direct Hire Americans, 99 Locally Engaged Staff)
across three posts and including the Department, DOD, Agriculture
and Commerce. With the recent rapid growth of our bilateral
relationship on key global issues the demands on this small Mission
have increased significantly. Over the past 10 years, non-ICASS
positions have grown by close to 200 percent and the ICASS position
growth has hovered around 22 percent. We need three additional
Locally Engaged (LE) ICASS positions to support the increased
staffing demands. The Defense Attache Office has requested an
additional permanent billet (U.S. Military officer, Major) to
support the demands of the two programs headed by DIA's Defense
Attache System and the Office of Security Assistance and
redeveloping the U.S. and New Zealand's military-to-military
engagement after years of hiatus. State needs an additional
officer in the Political/Economic Section to further expand on
science and technology, nonproliferation, and political-military
programs and allow the Economics Officer to focus on preparations
for Trans-Pacific Partnership trade negotiations.

Embassy and Consulate General


16. (SBU) The government-owned Chancery in Wellington recently
went through three projects - Information Programs Center (IPC)
upgrade, roof renovations and installation of new heating,
ventilation and air conditioning (HVAC) systems. Those upgrades
brought the Chancery closer to compliance with ADA laws and long
needed upgrades. Located in Auckland, the Consulate General (CG)
offices are on the third and fourth levels of a commercial office
building in downtown Auckland. The offices were refurbished in
2004-2005 and remain in good condition. The Embassy in Apia is
also located in a commercial office building. The Consulate
General in Auckland and the Chancery in Apia are both short term
leased facilities. The new government-owned Principal Officer's
residence in Apia is currently under construction and due to be
completed by the end of 2010.

17. (U) Madam Secretary, we look forward to your visit and are
doing all we can to make it a complete success.

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