Embargoed until 7.00pm (Berlin time)
Monday 13 November 2006
(7am, Tuesday 14 November NZ time)

Rt Hon Helen Clark
Prime Minister

Address to the
Bertelsmann Foundation,
Berlin

New Zealand and Europe – Natural Partners in a Globalising World

6.10 pm
Monday 13 November 2006

(6.10am, Tuesday 14 November 2006 – NZ time)
My thanks go to the Bertelsmann Foundation for hosting my address this evening.

My topic is New Zealand and Europe – Natural Partners in Globalising World – and indeed I believe we are.

This audience will be well aware of New Zealand’s historical links to Europe, dating back to the seventeenth and eighteenth centuries, and to the formal colonisation of New Zealand by the United Kingdom. That paved the way for large flows of migrants from Europe, mainly of British people, but with a significant minority coming from Germany too.

Thus 12,000 miles away from this continent, Europeans adapted their way of life to a new country, bringing their heritage, culture, and values with them.

That led to the early establishment of representative democracy, with our first Parliament being elected in 1864, and New Zealand being the first nation in the world to extend the right to vote to women in 1893. New Zealand was also one of the very few countries in the world to enjoy democratic government throughout the twentieth century.

New Zealand’s strong ties with Britain saw us heavily committed as an ally in the two world wars of the twentieth century – and we suffered tremendous loss of life and casualties as did all involved.

So the search from within Europe for peace and prosperity in the post-war period has always had our support – even though some of the trade ramifications of the formation of the EEC, and then the EU, have not always made our life easy.

For so many years Berlin symbolised the division of Europe. Now it sits at the heart of a European Union which, from January, will stretch from the Atlantic Ocean to the Black Sea. This is a breathtaking achievement, bringing not only a permanent peace between the nations involved, but also lifting the living standards of the less developed and setting high benchmarks for governance, the rule of law, and human rights across the Union.

In essence, the European project has established a large community of shared values. Central to my message tonight is that those values do not stop at Europe’s borders.

Europe has natural partners like New Zealand with a deep commitment to the same values of democracy, the rule of law, and respect for human rights, and to the sense of international citizenship which the European Union exhibits.

These values and that commitment see us working together on so many issues, bilaterally and internationally. We are exceptionally like-minded on most issues.

My government has embarked on a deliberate policy of even greater engagement with Europe to ensure that our ties, far from withering with the passage of time, extend into new areas of policy dialogue and co-operation.

In trade terms, the EU is New Zealand’s second largest partner, after Australia. New Zealand is a first-world agricultural producer with high environmental standards and well functioning rural communities, which operate without subsidies or other forms of protection. Our experience could be of interest to a Europe which must redesign and adjust its agriculture to a more open trading environment.

Within the EU, Germany is second only to the United Kingdom as an export destination for New Zealand goods, and is a key market for our venison, kiwifruit, and apples in particular. Europe is a discerning market, demanding freshness and quality, in its foods Consumers are willing to pay a premium for that, and New Zealand’s uncompromising focus on quality in food exports meets those demands.

There was a time when New Zealand ministers visiting Brussels and other European capitals carried a narrow brief, based around agricultural market access and subsidy issues. While those still exist as issues for us, there are many other areas of policy dialogue and co-operation which have come on to the agenda.

For example, both our economies are working to foster innovation, competiveness, and productivity in order to maintain our first world living standards. The EU has its Lisbon Agenda – New Zealand has its economic transformation agenda. We aim to build a qualitatively different and stronger economy, producing goods and services for which the world will pay a premium price.

Those who knew the old Kiwi economy would hardly recognise it today.

Tourism competes with the dairy industry as the top export dollar earner.

The turnover in the screen production industry almost equals that of forestry and of horticulture.

International education, the technology sectors, the marine industry, and niche manufacturing are all very important second tier export earners.

In wine, New Zealand competes exceptionally well at the premium end of the market.

We launched Kiwifruit to the world as an exotic fruit, and still set the standard for its quality and branding, commanding high prices in world markets.

Meantime our mega dairy co-operative is the world’s largest trader of internationally traded dairy products, and along with our meat industry has made considerable strides in lifting the value of what it exports – in dairy’s case by focusing on the development and branding of functional foods.

New Zealand has been unusual as a developed economy in having such a large primary sector base. But that base itself is being transformed beyond recognition, as it must be to thrive in the 21st century.

Our relatively small land mass and first world living standards combined mean that our commodities will find it increasingly hard to compete on volume and price in a more open agricultural trading system. The low cost, high volume producers stand to be the big winners from a successful WTO round.

So we have to be more strategic, innovative, smart, and skilled in how we take our primary industries and indeed our whole economy forward.

My government has a strong focus on investment in education and skills; science, research and development; on exporting, and on the enabling technology and creative sectors which help lift the value and profile of our industries and of New Zealand as a whole.

Current priorities for us are heavy investment in the transport infrastructure; far reaching telecommunications legislation to get faster, cheaper broadband services; getting more effective commercialisation of our innovations; reviewing the business tax regime to encourage more investment; working with major sectors like food and beverage and tourism on higher value strategies; and lowering the barriers to our trade through bilateral and regional agreements - and through the Doha Round if it can be revived.

New Zealand has longstanding bilateral co-operation in education and in science with Germany and Britain. Opportunities now exist to expand that co-operation across the EU. We have appointed specialist counsellors in education and science at our Brussels Embassy to help us do that.

During the term of the German Presidency of the EU, we expect to finalise an updated New Zealand-EU Action Plan. Within that, there are three areas where we want to negotiate new agreements with the EU.

The first is on scientific co-operation. We want to upgrade our current arrangement into a full agreement, so that we are well placed to co-operate strongly with Europe and its member states both bilaterally and under the Seventh Framework Programme for Research which the EU is about to launch.

A second area is civil aviation. New Zealand is a top quality destination with product ranging from eco- and adventure tourism, to heritage, cultural, wine, golf, and other specialist visitor interests. New Zealand also benefits from the freedom our citizens have to travel and explore the world. We believe in open and efficient air services markets. We have recently concluded an agreement with the EU, at its request, on some civil aviation issues, but we want to go further in opening up travel between New Zealand and Europe, by putting in place a comprehensive air services agreement.

Then there is the prospect of a wine agreement. New Zealand is a small producer of quality wines, as well as an importer of European wines. Europe is an important market for us, and we want simple, but clear and predictable rules to underpin this trade.

There may also be merit in exploring the many avenues for deeper co-operation between us in the context of a comprehensive New Zealand-EU agreement or partnership. It could cover our trade and economic relationship, and encompass the other key areas in the relationship. Our formal relationship needs to keep pace, at government to government level, with the reality of our deepening engagement.

I also hope that during the German Presidency over the coming months the European Union will be able to use all its influence to take the Doha Round of the World Trade Organisation forward.

New Zealand believes these negotiations are vital for making international trade rules fairer and more predictable, and for helping the less affluent nations enter the mainstream of world commerce.

Over the years, Germany has been, for the most part, a committed multilateralist on trade. We look to Germany to help advance the European Union’s negotiating position on agricultural market access, while acknowledging that other major players such as the United States and the G20, also need to advance their offers for the Doha Round to succeed.

European multilateralism is also critical in facing the challenge of climate change. New Zealand recognises Germany’s strong environmental credentials and willingness to show leadership in this area too.

New Zealand has ratified the Kyoto Protocol, even though it poses major challenges to us. Of our top four trading partners, two – the European Union and Japan, have ratified, and two – Australia and the United States – have not.

We believe in being part of the solution to global problems, and, as a major primary producer, we have much to lose from unstable and extreme climatic conditions. We are also a nation with a very long coastline where communities dwell and are exposed to rising sea levels. Our neighbours on the small South Pacific atolls are in an even more dire situation.

Our problem in meeting our Kyoto commitments is that around half our greenhouse gas emissions come from our agricultural sectors, and there are neither quick nor easy solutions to lowering them – although we will be world leaders in the research into how that might be achieved.

As well, the combination of a high exchange rate and low commodity prices have led to land being deforested for the more profitable pastoral agricultural uses – which both diminishes our forest sinks and increases methane emissions.

We are now engrossed in a comprehensive revamp of our climate change policies – ranging across policies for forestry and agriculture, and the energy and transport sectors. Policy dialogue with the European Union will be extremely useful in helping us develop the leading edge strategies which can enable us to meet our Kyoto Protocol commitments over time.

It will take bold strategies for us and for other nations to achieve greater sustainability, and perhaps even carbon neutrality.

But future generations won’t forgive us if our legacy to them is an irretrievably damaged planet.

Sustainability of course is not just about dealing with threats to the environment; it also presents significant opportunities. As the world has seen through the industrial, technological, and digital revolutions, the development and adoption of new technologies are, in themselves, drivers of greater wealth and prosperity. Nations at the forefront of the sustainability revolution will not only benefit environmentally, but economically too.

I would, however, sound a word of warning about any rush to judgment in our distant markets like Europe about what is sustainable production.

New Zealand gets very nervous when concepts such as taking into account so called “food miles” are raised as potential barriers to our food exports, as they have been by our competitors in the United Kingdom. It should be noted that the energy used in the production of lamb, for example, in the United Kingdom is four times higher than the energy used by New Zealand lamb producers, even after including the energy used to transport New Zealand lamb to the United Kingdom. The equivalent figure for dairy products sees the UK using twice as much energy per tonne of milk solids produced as New Zealand does, again including the energy associated with transport of the product.

After years of working to lower Europe’s trade barriers to our food products, it would be a rich irony indeed if new, ill founded, environmental barriers were erected in their place.

In a fast changing world, environmental issues have leapt to the top of the global agenda, along with trade and terrorism. The big challenges nations large and small face often defy national solutions and demand multilateral action.

New Zealand is a firm multilateralist – as small countries must be. We depend on a stable, rules-based international environment. We don’t have hard power, only soft.

Our changing world has seen us increase our focus on our immediate neighbourhood and broader region. I believe we can offer the insights and perspectives to our European partners which can only come from those immersed in the architecture of these regions.

The European Union has a hugely influential role to play in the South Pacific as a major development partner, committed to best practice in those partnerships.

The very word ‘Pacific’ conjures up images of peace and tranquillity. Alas, that rather belies reality in parts of the Pacific today.

Fiji is going through another trying period, with its military rumbling yet again about the elected government. The three coups it has suffered since 1987 have held it back for years, and a fourth would be deeply dispiriting. Intense regional diplomacy has been going on to support the processes of constitutional government in Fiji.

In recent months, we have had troops and police in East Timor again, after the serious outbreak of armed conflict and disorder there. East Timor, while regarded as part of South East Asia by virtue of its position in the Indonesia archipelago, shares many of the characteristics and vulnerabilities of small island nations and economies. It is an observer at the Pacific Island Forum.

In the Solomon Islands, the worst also happened with a serious breakdown of law and order, culminating in 2003 with a request for help. All Pacific Island Forum nations have participated in the Regional Assistance Mission to the Solomon Islands, mainly through police contingents. New Zealand, Australia, Papua New Guinea, and Fiji have all contributed defence force personnel as well.

A great deal of progress was made in restoring internal security in the first three years, allowing basic services in health and schooling to resume and the economy to begin to function better.

But the serious riots after the general elections a few months ago were a setback, and the consent environment for the regional mission is not what it was.

The issue of the future of the regional mission dominated the Pacific Island Forum Leaders’ Meeting in Nadi, Fiji three weeks ago. I believe it can be secured if the mission has a broader Pacific flavour about it, and if clear benchmarks towards an exit strategy can be set.

The nations of the South Pacific have small economies with limited resources – and run the risk of even greater marginalisation this century.

New Zealand has played a significant role in the development, by the Pacific Island Forum, of the Pacific Plan, which takes a more strategic approach to growth and development, environmental sustainability, and better governance in the region.

In line with the Pacific Plan, the Forum countries are moving forward on freeing up trade, labour mobility, waste management, development of renewable energy plans, health strategies to address HIV/AIDS, enhanced support for good leadership and accountability, a digital strategy for sharing internet and information technology, and support for judicial and public administration training.

The Pacific Plan represents the agreed regional priorities for the Forum Island Countries, and will also be reflected in their individual development plans. This gives good guidance to development partners like the European Union on where resources would be best targeted. We would like to see all donors into the region work to the priorities set by the Pacific Plan.

Acknowledging the importance of remittances to small island economies, New Zealand has permanent migration quotas for five small nations, and has just announced a new seasonal labour policy which will enable Pacific people to work in New Zealand’s horticultural and wine industries where we are short of labour.

Our own goals in the region prioritise good governance as a bedrock for development. Maintenance of law and order is a precondition too. We want to see the Pacific’s precious natural resources, such as fisheries and forests, sustainably managed for future generations. We want to see poverty addressed and maximum engagement in the social, political, and economic life of each country by all sectors of the population, including the most vulnerable.

How we achieve our goals in the Pacific is important and goes to the heart of New Zealand values. We cannot act effectively without the agreement of our partners in the region. A hallmark of New Zealand’s diplomacy in the South Pacific is our commitment to seeking a strong consent environment for what we do.

That involves much consultation, a lot of listening, a commitment to building a sense of shared objectives, and checking that support for actions exists at each step of the way.

It’s about being prepared to be patient, to work for the long haul, and to provide resources for goals which may take years to achieve.

I believe New Zealand can offer useful perspectives to the European Union on South Pacific development, as we share goals for the region as a zone of peace and tranquillity, and not of poverty and conflict.

The same applies to East Asia where New Zealand immerses itself in the regional architecture, taking its place within each new grouping as it emerges and is open to us.

New Zealand has been a dialogue partner of ASEAN for 32 years, and a participant in the ASEAN Regional Forum on security issues since its formation. We are also a founder member of APEC.

The most significant recent addition to the regional architecture has been the establishment of the East Asia Summit. It brings together the ten ASEAN countries with their ‘plus three’ partners, China, Korea, and Japan, and includes India, Australia and New Zealand. Its objectives are to promote political, security, and economic co-operation region-wide. The initial concept was for a community of thirteen members. But New Zealand, Australia and India were included by ASEAN in the inaugural EAS meeting in Kuala Lumpur last December. The reasons for that relate to recognition of India’s dramatic economic growth and ‘look East’ policies, and of the deepening involvement of New Zealand and Australia in the region, including through our accession to ASEAN’s Treaty of Amity and Cooperation.

Early commentary from Europe was sceptical about what the EAS would amount to, and indeed the destination is unclear. But we should not underestimate the value of a regular dialogue which brings together the leaders of major players like China, India, and Japan in the same room. In time, we hope the Summit will develop into a force for East Asian integration and community building, and contribute to ongoing regional stability and prosperity.

While Europe has its own mechanisms for dialogue with East Asia, New Zealand is able to offer perspectives from its position within the regional institutions.

APEC too has become an immensely important trans Pacific institution for us, and, over time, its Leaders’ Summits have become one of the most significant annual international meetings. They are underpinned by regular ministerial and official contact, and by growing economic co-operation across the Asia-Pacific.

Initiated as an economic forum, APEC has broadened its focus to consider a wide range of issues which impact on trade and economic growth – from terrorism to communicable diseases and corruption.

APEC brings the United States, China, and Russia to the same table; linking the Americas to Asia, Russia’s Far East, and Australasia; and encouraging the development of shared views on trade and security issues across a very wide range of nations and political systems. That this happens at all, let alone that it happens harmoniously, has to be considered a major achievement, and is certainly very positive for peace and prosperity in the Asia Pacific.

For New Zealand, the benefits have been not only in the deepening of multilateral co-operation, but also in enhancing bilateral relations with a focus on the economic.

Without APEC, it’s hard to imagine that we would today be parties to new trade agreements in the region, and be negotiating others.

In the APEC region, New Zealand now has bilateral free trade agreements with Singapore and with Thailand; and a trans-Pacific FTA with Singapore, Brunei, and Chile – which is also open for others to accede to.

We have found these agreements have had ramifications stretching beyond the narrowly economic, leading to more dialogue and agreements in other spheres – from education and science, to culture and to working holiday arrangements for young people – giving much more substance to the relationships.

As well, we are currently in FTA negotiations with China, Malaysia, and all of ASEAN.

The China negotiations have been through their ninth round, with reasonable prospects that New Zealand will be the first developed nation to enter a FTA with China. This follows our being the first nation to conclude a bilateral WTO accession agreement with China, the first to recognise China’s market economy status, and the first Western nation to enter FTA negotiations with China. As the country of the three firsts, we are well positioned for the fourth.

And we are convinced of the benefits for us. Ours is an open trading economy, with around 95 per cent of goods by value entering free of tariff. Considerable barriers, however, greet many of our products going the other way to China.

For China, the benefit of concluding an agreement with New Zealand will be in the demonstration effect of showing that it can enter such agreements with developed economies. This will be of interest to the European Union.

Overall, New Zealand is seeing its relations with East Asia grow and develop at a very fast rate. East Asia accounts for a significant amount of our trade. It is also a source of tourists and migrants. Our universities and cities have many linkages. Increasingly we feel at home there.

There is also a new dimension to our outreach to the region – and that is through interfaith dialogue.

Next year, New Zealand will host the third regional interfaith dialogue, bringing together multi-faith delegations from South East Asia, Australasia, and the South Pacific.

As so many conflicts in the region and worldwide arise from tensions between faith communities, so a solution to those conflicts may lie in seeking to increase understanding between faiths.

New Zealand can be seen as a relatively honest broker in this respect, with its even-handed policy on Israel and Palestine, and its non-participation in the war in Iraq.

At home too we are emerging as an increasingly multi-ethnic, multi-faith society which, by world standards, lives harmoniously.

There is much about New Zealand today which makes us a natural partner for Europe. We are facing the same challenges of stepping up the pace of innovation in our economies to maintain our living standards; and we acknowledge the need for effective multilateralism in tackling the many issues which require solutions beyond the level of the nation state.

New Zealand today has a sophisticated economy, a multicultural society, and a great deal of confidence about the part it can play as a small nation in its wider region and internationally.

We seek to maintain very close contact with those who form part of our wider community of values in the European and North American democracies, and we engage fully and willingly in international efforts to make our world more sustainable, more peaceful, fair, and just.

ENDS

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