Friday 13 December 2002
(NZ time)

Rt Hon Helen Clark
Prime Minister

THE UNITED STATES AND NEW ZEALAND: CO-OPERATING FOR PROSPERITY

ASIA SOCIETY/US CHAMBER OF COMMERCE

UNION CLUB, NEW YORK:

US Eastern time: 1pm, Thursday, 12 December 2002
NZ time: 7am, Friday, 13 December 2002

It is a great pleasure to be back in New York to see old friends and meet new ones.

Let me begin by thanking the Asia Society Vice President Robert Radke; the Society's sponsor of its New York Business Programmes, Dow Jones; and Myron Brilliant, Vice President for Asia of the US Chamber of Commerce, for providing this opportunity to speak on the subject of co-operation between New Zealand and the United States. I also thank the US Chamber of Commerce, under the leadership of our good friend, President Tom Donoghue, for the strong support it is giving New Zealand in our bid to negotiate a free trade agreement with the United States.

I thank too the sponsors of today's event, the Commonwealth Bank of Australia, the America Australia Association, and the United States-New Zealand Council for supporting this occasion.

During my last visit to New York in March, the scars of 11 September were still very evident. It was an emotional experience for me to go to Ground Zero and be presented with a New Zealand flag pulled from the rubble by New York policemen.

The shock of 11 September saw many nations come together to fight global terrorism. In New Zealand, we saw the attacks as attacks on humanity. We resolved to work with the United States and other nations to make a stand against this evil and those responsible for it.

New Zealand and the US have a long record of co-operation on security issues. Our relationship, which dates back more than 150 years, has seen us work together in two World Wars and in all the major conflicts in between and thereafter, including now against global terrorism.

The assertion and defence of our common values have also seen us work together over a long period of time on many international issues. They have included trade, human rights, the rule of law, sustainable development, fisheries and whale conservation, climate change, development assistance, disarmament, and protection of the environment, notably in Antarctica.

On trade, we have been partners in many policy initiatives, particularly, over the past decade, working together in the WTO and in APEC.

New Zealand/US Co-operation on Terrorism

Terrorism is at the extreme end of what UN Secretary General Kofi Annan has called the ¡§problems without passports¡¨. As we were reminded in Bali again only two months ago, terrorism is a common enemy. It is faceless, ideological and seemingly irrational; it is usually not state sponsored or managed; it is fragmented and easy to conceal.

Terrorism undermines peace and stability ¡V not only directly in the region where it occurs, but also globally where it undermines the confidence and trust needed for development and prosperity.

So what is New Zealand doing to protect itself and to lend its weight to global initiatives to combat terrorism?

Starting at home we have strengthened our domestic legislation on counter-terrorism measures, in line with UN Security Council resolutions and with recommendations from the OECD Financial Action Task Force passed in the wake of 11 September.

Internationally, New Zealand has joined the broad coalition led by the US to combat terrorism. We deployed special forces to Operation Enduring Freedom in Afghanistan last December. We have just deployed a frigate from the Royal New Zealand Navy to the Arabian Sea and the Gulf of Oman to help with the maritime interdiction operations there. We have also agreed to send a Royal New Zealand Air Force Orion to operate in that area in April next year for six months.

The commitment of special forces was made because we wanted to ensure that Afghanistan could not provide a base for terrorists to operate from. We also provided defence personnel to the peacekeeping force there, and provided humanitarian assistance to Afghanistan. We have increased our contributions to UN and other international efforts to assist the Afghan people in rebuilding their nation.

In our own region, we joined with the United States and Australia to assist Pacific Island countries raise their capabilities on counter-terrorism.

In the broader Asia-Pacific, we have been active in putting counter-terrorism co-operation on the agenda of the ASEAN Regional Forum (ARF) ¡V the only regional gathering dedicated to discussing security in the Asia-Pacific. New Zealand is co-Chair of the ARF for 2002/03. Terrorism, and the means to counter it, were the focus of discussions at the ARF meeting we hosted in Wellington recently.

For New Zealand, military contributions to the campaign against terrorism are just the latest steps down a well-trodden path of active commitment to common security. We have been participating in UN peacekeeping missions for 50 years, and currently have military personnel serving in 12 missions on five continents.

New Zealand Defence Force personnel spent three years in East Timor, helping to keep the peace and build the new nation. We are also active elsewhere in Asia, and in the Pacific, Asia, the Middle East, Europe, and Africa.

Currently the tension over Iraq is preoccupying the international community. New Zealand shares the widespread view that Iraq should get rid of any weapons of mass destruction which it still has ,and comply with the many UN Security Council resolutions which call on it to do so. Our view is that the United Nations is responsible for holding Iraq to account for its breaches of international law and of UN resolutions.

Recent reports about Iraq¡¦s WMD programmes reinforce the need for the weapons inspectors to be back in Iraq and establishing the status of those programmes. UNMOVIC's task is not easy. Inspections, however, remain the best means of ascertaining just how large and imminent a threat to international peace and security Iraq represents. To assist the inspections process, New Zealand has deployed support personnel from our defence forces to UNMOVIC to provide medical and communications services.

New Zealand is heartened by the fact that all members of the Security Council worked co-operatively together and agreed on the unanimous resolution which has the objective of disarming Iraq.

The resolution sends a clear message to Iraq that the international community is determined to see it disarmed of weapons of mass destruction. UNMOVIC has begun inspections in Iraq with a stronger mandate than its predecessor, UNSCOM (the Special Commission), had.

If Iraq is shown to be concealing weapons of mass destruction, the international community will have a tough decision to take about what to do next. We believe the Security Council, representing the will of the international community, must make that decision. The use of force remains an option available to the Council - if diplomatic, inspection, and disarmament processes do not succeed. Should the Security Council decide on the use of force, New Zealand as a committed member of the UN would endeavour to make a contribution.

In the United Nations and other international arenas like the WTO, New Zealand endeavours to help bridge the North/South divide and address some of the root causes of underdevelopment. Building a global community, where people can earn an honest living and operate under rules which are fair to everyone, is fundamental to raising living standards and improving human rights. Trade and economic development do not occur in a vacuum. The context in which they are enhanced is international stability and certainty.

New Zealand/US Co-operation in the WTO and APEC

Opening up markets through a successful WTO Doha Round remains New Zealand¡¦s number one trade policy priority. There is no developed country which has been affected as adversely by protection in foreign markets as we have been. Successful WTO negotiations, especially on agriculture, would deliver big gains for us.

Protected agricultural trade is a global problem which needs a multilateral solution. That is why we place such importance on advancing and securing a global WTO round.

There is strong convergence between United States and New Zealand interests in the WTO negotiations. While the United States does provide protection and subsidies to its farm sector in a way that New Zealand does not, the United States¡¦ commitment to agriculture liberalisation through the WTO means that we have common cause in these negotiations.

In recent weeks New Zealand and the United States have taken a lead at the WTO negotiations in proposing a tariff-free world for non-agricultural products. We have both aimed to raise the level of ambition in the negotiations. Bold ideas are needed to increase the chances of success.

These WTO negotiations, however, are not being conducted in clinical isolation from other global developments. Doha is but one forum ¡V albeit an important one ¡V where sovereign nations have come together to wrestle with genuinely global challenges. The Monterrey UN Financing for Development Conference and the Johannesburg World Summit on Sustainable Development represent other parts of what is an increasingly coherent approach to dealing with a global governance agenda. That agenda emphasises development as critical for building a peaceful and stable world.

Thus it is no accident that this WTO negotiation is called the Doha Development Agenda. Support from developing nations was critical in getting the round launched, and will be equally critical in getting a successful outcome. While a global development agenda must go well beyond a multilateral trade negotiation, this negotiation needs to be seen as a key part of a concerted international drive to lift more of the world's people out of poverty.

„h What is fair about citizens of poorer countries trying to sell their products into globalised markets facing barriers at least twice as high as those faced by developed countries?
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„h Does anyone really feel comfortable about subsidies to agriculture in high income countries running at one billion dollars a day or six times the total development assistance available world wide?.
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This WTO could make a real difference to development prospects and make major inroads into poverty, if the developed world is prepared to open its markets to poorer countries. That opening needs to be accompanied by support for infrastructure development and capacity building. That is how the goals of Doha link with the ambitions of Monterrey and Johannesburg, and with those of the UN Millennium Summit, the G8's New Partnership for Africa's Development, and the FAO's Food Summit.

Thus the WTO negotiations are not just about providing trading opportunity. They are also essentially about reinforcing international stability and order. The founders of the international system understood this well enough when the WTO's forerunner - the GATT - was instituted after the Second World War. To the founders of that system, including Cordell Hull of the United States and New Zealand's Peter Fraser and Walter Nash, the GATT was a central part of a strategy aimed at avoiding the disastrous political and security consequences of the beggar-thy-neighbour commercial policies experienced in the pre war years.

Regionally New Zealand and the United States work closely together in APEC (Asia Pacific Economic Cooperation), a unique grouping which represents more than half of global GDP, from both sides of the Asia-Pacific region.

I was in Mexico in October at the APEC Leaders¡¦ Summit where I met again with President Bush and other leaders. It is not surprising that the talk around the table was as much about terrorism and other international tension as it was about trade. The APEC agenda has evolved to give greater weight to security, reflecting the preoccupation of the wider international community, and the reality that greater international stability is a prerequisite for growth and development.

In consequence APEC is taking steps at the level of customs and border control to make it more difficult for terrorists to wreak havoc on international trade. New Zealand worked closely with the US to achieve the successful adoption of these recommendations by all APEC members.

In 1994 at Bogor, Indonesia, the APEC economies made a commitment to achieve free and open trade and investment in their region, no later than 2010 in the case of the industrialised economies, and no later than 2020 for the developing economies.

While some progress has been made towards these goals, much remains to be done. Just as APEC has the potential to spur progress in the WTO, so can APEC members, bilaterally or in small groups acting to free up trade among themselves, contribute to achieving the Bogor goals. It is notable that the US has cast its ¡§Enterprise for ASEAN Initiative¡¨ as helping APEC reach those goals. That is exactly the approach New Zealand looks to promote in its own intra-APEC initiatives.

Working Together towards a New Zealand/US FTA

Our next key trade priority is promoting stronger bilateral links.

New Zealand's ¡§Closer Economic Relations¡¨ treaty (CER) with Australia reaches its twentieth anniversary next year. It sets a high international benchmark for openness against which other bilateral trade agreements can be judged

In 2000 New Zealand became the first country to conclude an FTA with Singapore. We have an ongoing FTA negotiation with Hong Kong. We announced at APEC that New Zealand, Chile and Singapore would commence negotiations for a trilateral, or ¡§P3¡¨, free trade agreement, the first to link those three corners of the Asia-Pacific region. Furthermore, New Zealand is initiating an FTA study with Mexico.

For almost two years now, encouraged by the Bush Administration¡¦s renewed commitment to US trade leadership, we have intensified efforts on our longstanding interest in having a closer economic partnership with the United States, our third most important trading partner.

Fred Benson, who heads the US/New Zealand Council, and others here today have been closely involved in the effort to have New Zealand included as a negotiating partner of the US for a free trade agreement. We deeply value their support. Together, we have more work to do in the months ahead.

New Zealand has been a longstanding supporter of a US/Australia FTA, an issue on which Prime Minister John Howard and I have spoken frequently. We are delighted that the US Administration announced last month its intention to negotiate with Australia.

We were also pleased about the announcement at APEC of the US Enterprise for ASEAN Initiative, and happy to see that the US and Singapore have now substantively concluded their FTA negotiation.

From the perspective of New Zealand, and I know from that of many of our supporters here in the US, the obvious missing step in the current US trade policy engagement in the Asia-Pacific region is an FTA negotiation with New Zealand.

In his letter to Congress of 13 November notifying the Administration¡¦s intention to negotiate an FTA with Australia, USTR Ambassador Zoellick concluded with the statement that:

¡§Given the integration of the economies of Australia and New Zealand, New Zealand has been advocating its case to the Administration, as well as to Congress, that an FTA with New Zealand would complement our FTAs with Singapore and Australia. We will be soliciting the views of Congress on this matter as we move forwards with the Australia FTA.¡¨

That sounds to me like an invitation for New Zealand to continue to make its case for a FTA, and that is what we are doing !

We, and our many supporters in Congress and the US business community, believe there are excellent reasons why it is in the interests of the United States to negotiate with New Zealand.

Firstly, it is to the direct economic benefit of both economies. A study by the Institute of International Economics has demonstrated that under such an agreement exports from the US to New Zealand would rise by 25 per cent and virtually all sectors would benefit. The study is a crisply written and very readable account of why high-quality FTAs make good trade policy sense.

Second, it is important that trade liberalising countries like ours move quickly to establish model agreements as benchmarks. Such agreements need to cover all sectors and really be comprehensive. In the context of US trade policy, to my mind there is no economy in the world that could move as quickly to complete a very high standard agreement, across all sectors, with the US as New Zealand could. Such an achievement would make an important contribution to the multilateral trading system.

Naturally we are concerned that the negotiation of an FTA between Australia and the US without a similar process for New Zealand could be harmful to New Zealand. After two decades of a free trade agreement between New Zealand and Australia, our economies are closely integrated. While it would not be the intention of either the United States Administration or the Australian Government to affect New Zealand adversely, the reality is that there would be trade and investment distortion created. In contrast, FTAs between the United States and both Australia and New Zealand would be to the clear benefit of all three countries.

In summary, we welcome the opportunity to press our case for an FTA with the United States. We already have letters of support for such an initiative from key Congressional representatives in both the House and Senate.

We value the ongoing support of many in the US business community. 130 US corporations and business organisations have signed a letter of support for a US/NZ FTA. Let me take advantage of being here to say that if your company has not signed this letter but would like to, there are copies at the back of this room. I strongly encourage you to sign on the dotted line.

The New Zealand Ambassador to the United States last month extended our thanks to the US Chamber of Commerce in Washington for its outstanding leadership and advocacy of open trade. Let me reiterate those thanks to the members of the Chamber, the Asia Society, the US/New Zealand Council, and the America Australia Association here today. I hope you will maintain and step up your interest in New Zealand, visit us, and support us as we redouble our efforts to achieve an FTA with the US. The prize is the opportunity to enhance co-operation between our two countries, to the benefit of us both and with positive consequences for stability and prosperity in the Asia-Pacific region and beyond.

ENDS

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