The Interview: New Zealand's Prime Minister John Key (Page 2 of 2)

A major hallmark of New Zealand's foreign policy under your leadership has been enhancing your country’s strategic partnership with the U.S. through the signing of the Wellington and Washington Declarations in 2010 and 2012 respectively. In what ways have these agreements expanded strategic and defense cooperation between the two countries and what are the primary goals of the bilateral relationship moving forward?

The relationship between New Zealand and the United States has never been better.

As a result of the Wellington Declaration, signed on the occasion of Secretary Clinton’s visit to New Zealand in 2010, there has been a substantial increase in the number of Ministerial and senior officials meetings, including my own visit to the White House in 2011.  We are cooperating on practical projects in the Pacific, including unexploded ordinance and maritime surveillance, and providing humanitarian and civic assistance to Pacific communities.

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I was particularly delighted that Secretary Clinton attended the Post Forum Dialogue in the Cook Islands in 2012 – the first time a U.S. Secretary of State has attended such an important regional event.  I would like to personally acknowledge the role Hillary Clinton played in transforming the relationship between our two countries. She is a great friend of New Zealand and a powerful advocate for our bilateral relationship.

The Washington Declaration, signed in June 2012, sets out areas of closer bilateral defense and security cooperation, including increasing cooperation in the South Pacific, building New Zealand’s amphibious capacity and its capacity in peacekeeping, humanitarian assistance and disaster relief.

We were pleased to host U.S. Secretary of Defense Leon Panetta in New Zealand last year – the first visit here by a U.S. Secretary of Defense in over 25 years. Secretary Panetta described his visit as marking a “new era” between the two countries.  His decision to lift the formal restrictions on military staff talks and New Zealand ship visits to U.S. ports represented a positive step forward in defense relations. We look forward to building on this agenda of cooperation with Secretary Panetta's successor

Moving on to trade, the year you became Prime Minister, China surpassed the U.S. as New Zealand’s second largest trading partner and New Zealand and China signed and ratified a free trade agreement (FTA) to be implemented over a number of years. How do you foresee New Zealand’s economic relations with China maturing in the years and decades ahead?

I am very optimistic about the future of the New Zealand-China economic relationship. 

China’s growing role in the world economy is positive for New Zealand.  For the first time in New Zealand’s history, the engine of world economic activity has shifted to our geographic region, the Asia-Pacific. Last year marked forty years since the establishment of diplomatic relations between New Zealand and China.  In that time the relationship has developed from limited beginnings to one of broad and substantial connections that is among New Zealand’s most important.

The trade relationship has grown strongly in the past few years, supported by the China New Zealand Free Trade Agreement (FTA).  China is now New Zealand’s second-largest trading partner after Australia, our largest source of imports and our second largest and fastest-growing export market.  New Zealand is still the only developed country with a comprehensive FTA with China.  We have exported more to China in the years since 2008 when the FTA entered into force than in the previous 20 years combined. China is New Zealand’s largest source of overseas students and our second largest (and fastest growing) source of tourists.  This growth is remarkable given the context of the global economic crisis.

During my visit to China in 2010, Premier Wen Jiabao and I agreed on the goal of doubling two-way trade to $20 billion by 2015.  We remain broadly on track to reach this goal, with two-way trade in the year to September 2012 increasing by 8.2 percent to $14.16 billion – up 66% on the levels in 2008 when the FTA entered into force. 

New Zealand’s exports of high quality dairy, meat, fish, kiwifruit and wine are significant but there is potential for significant further growth.  Continuing growth in both residential and infrastructure investment should also mean substantial demand for New Zealand wood products. Growing Chinese incomes should also boost services exports to China.  More households can afford to come on holidays to New Zealand and send their children to New Zealand for education.

Speaking of free trade agreements, last month Trans-Pacific Partnership (TPP) negotiations were held in Auckland. As an original member of the TPP, is New Zealand happy with the progress these talks have been making? Will the TPP be your focus moving forward or do you intend to concentrate on concluding new bilateral FTAs like the one you’ve discussed with South Korea?

New Zealand was pleased to host Round 15 of Trans-Pacific Partnership (TPP) negotiations in December 2012, when we welcomed new participants Mexico and Canada to the table.  TPP is the most ambitious FTA negotiation currently under way in the Asia‑Pacific region.  Negotiations are at an advanced stage, and the process enjoys sustained political will from the highest levels. TPP Leaders and Trade Ministers have reiterated their expectations for high-quality, standard-setting outcomes, particularly on comprehensive duty free access to TPP partners’ goods markets, elimination of tariffs and removal of other barriers to trade and investment. 

While TPP will assume very high priority for New Zealand this year, we will continue to pursue a wide-ranging brief in our trade policy efforts.  A country like New Zealand can’t afford to put all its eggs in one basket.   For 20 years now we have sought to conclude high quality, WTO consistent agreements with many partners.  We won’t slow down here – we have on-going negotiations with Korea, India and the Russia/Kazakhstan and Belarus Customs Union amongst others.  Completing these will remain high on our to-do list.  I was also pleased to join Leaders from ASEAN, Australia, China, Korea, India and Japan in November last year to launch the new Regional Comprehensive Economic Partnership FTA negotiations, which will formally begin in the first part of this year.

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