Hon Phil Goff
Minister of Trade

25 May 2007
Speech Notes

ASEAN at Forty: Reflections and Visions
New Zealand Asia Institute, University of Auckland

Firstly, congratulations to the Asia Institute for putting together tomorrow’s conference, marking forty years of ASEAN.

ASEAN at Forty
When ASEAN was established in 1967, many were uncertain about its chances of survival. It was born amidst regional tensions – particularly the escalation of the Viet Nam war. High in ideals, ASEAN developed an institutional base slowly.

The Treaty of Amity and Cooperation was signed in 1976, stressing core ASEAN principles of mutual respect and non-interference in each others’ affairs.
ASEAN established a Free Trade Area in 1992 but economic integration made little progress.

The first meeting of the ASEAN Regional Forum was held in 1994. It has become a key regional political and security dialogue, with a current membership of twenty-six countries.

Hit by the economic crisis of 1997 and 1998, the region bounced back fairly quickly. That crisis affected also the New Zealand economy – a reminder, if we needed it, of our growing trade ties to and dependence on Asia.

Since then, ASEAN has sought greater internal economic, social, political and cultural cooperation. It is also looking to place itself at the center of greater regional cooperation and integration.

First, through the ASEAN plus 3 process (involving China, Japan and South Korea). And then by establishing the East Asia Summit, which added New Zealand, Australia and India to the ASEAN plus 3 grouping.

ASEAN has been, and still is, criticised for being ineffectual. Burdened – so the argument runs - by principles of consensus decision-making and non-interference.

But it has attained a notable international standing perhaps exceptional among regional groupings of post-colonial states. It faces many challenges – not least an extraordinary 400 plus meetings a year.
But it has survived, and the region has remained remarkably stable.

We should also not underestimate the extent to which the countries have become intertwined in a web of personal and institutional networks. These links can be vital, especially in difficult times, and are slowly creating an ASEAN sense of community.

New Zealand – ASEAN Relations
Where does New Zealand fit into all of this?

New Zealand’s foreign policy in the years following the Second World War involved a growing awareness of our place and interests in the Asia region. We became an ASEAN Dialogue partner in 1975.

At that time, we were only the third country to be granted Dialogue Partner status. When we opened an embassy in Manila in 1975, we achieved representation in the capitals of all five founding ASEAN country members.

Our relationship with ASEAN – economic, political, trade, educational and cultural – developed gradually, but it has accelerated in the last three years.

This reflects ASEAN’s greater focus on external relations; the key role it is playing in the increasingly dynamic East Asia region; and New Zealand’s growing recognition of the importance of ASEAN to us.

In 2005, in a key move appreciated by ASEAN, we acceded to the ASEAN Treaty of Amity and Cooperation. We also signed an "ASEAN-New Zealand Joint Declaration to Combat International Terrorism".

And last July we agreed on a framework for New Zealand-ASEAN cooperation through to 2010, covering a wide range of areas.

Our trade relationship with ASEAN is expanding but not as fast as it could.

For the twelve months ending 30 December 2006 our exports to ASEAN were NZ$2.7 billion – compared to NZ$2.1 billion three years ago.

Indonesia, the Philippines, Malaysia, Thailand and Singapore are our top export markets in ASEAN. New Zealand exports to Thailand and Viet Nam are enjoying strong rates of growth. Trade with Thailand has benefited from the Closer Economic Partnership we signed in 2005. Exports to Thailand increased sharply in 2006 to $432 million, up 30% from 2005.

We are also, with Australia, negotiating an FTA with ASEAN. This is a challenging undertaking, since it involves 12 countries with widely differing levels of development.

For the first time, ASEAN has also agreed to negotiate a single undertaking - that is, commitments on goods, services, investment and other rules must be agreed at the same time.

The eighth negotiating round was completed in Wellington in March. An FTA with ASEAN has the potential for significant commercial benefits, as well as the opportunity to embed New Zealand within the evolving East Asian regional architecture.

Negotiations on goods, services and investment have now moved into the substantive phase including request/offer negotiations. Rules of origin negotiations are promising. Progress is being made on sanitary and phyto-sanitary rules, technical barriers to trade, and customs cooperation.

However, there remain significant areas where ASEAN and Australia /New Zealand perspectives differ and detailed work still needs to be done to conclude this agreement.

Turning to commercial activity, increasing numbers of New Zealand firms – particularly in the services and technology sectors – are looking to develop business in Southeast Asia.

There is growing willingness to enter into new business models, with more New Zealand firms looking to develop joint ventures, licensing and franchising agreements and strategic alliances as a way to penetrate the markets of Southeast Asia.

In recent years we have seen the region attract substantial foreign investment, significantly changing the infrastructural and technological landscape. This investment, together with the speed of implementation have been a key contributing factor in the high levels of economic growth we have seen in the region.

Fast growing and changing markets, increasing disposable income and a desire for new, different and high quality products make the ASEAN region a more attractive market for New Zealand exporters than ever before.

Where to From Here?
Finally, how do we see our relations with ASEAN developing over the next few years?

The short answer is, we see them becoming closer and deeper – and forming a key element in our enhanced ties with East Asia as a whole. Our success in developing our interests in and with Asia is going to be vital to New Zealand’s future prosperity.

Last year ASEAN Leaders agreed to advance its timetable for economic integration from 2020 to 2015.

More fundamentally, ASEAN is currently drafting an ASEAN ‘charter’ which would put the association on an international legal footing, and move it to a rules based-regime. There is recognition among many members that there needs to be much greater compliance with ASEAN decisions.

Current charter discussions on issues such as human rights, non-interference, sanctions and more flexible decision-making are difficult ones for ASEAN.

But we are confident that ASEAN will reach agreement on some concrete changes that will help the organisation meet the challenges of the twenty-first century.

Greater internal ASEAN integration and efficiency will make it a more effective organisation with which to do business. When ASEAN has achieved greater internal integration, it will be more confident and comfortable about deepening its external relationships.

We are following the charter discussions with interest and will be looking particularly to what the charter will say about enhancing ASEAN’s relations with its dialogue partners.

The Government will continue actively to expand New Zealand’s relations with ASEAN, at all levels. Our cooperation agreement provides the framework and action plan for this.

Person-to-person links are important. We will continue to fund journalist, academic and cultural exchanges through ‘Seriously Asia’ and the Asia - New Zealand Foundation.

In June we will have the first visit – from Indonesia – of Muslim youth leaders under the Muslim Youth Exchange programme. Last year a senior Vietnamese parliamentarian visited us as the first Prime Minister’s Fellow.

The next Fellow will be from the Philippines. And in July, Asia-New Zealand Foundation will hold an Asia business summit to enhance business awareness of opportunities in Asia, including ASEAN, and to build capability to seize these opportunities.

In conclusion, our future is increasingly tied to the Asia region. ASEAN is important to us in itself.

But it is also at the fulcrum of a broader, dynamic and powerful region. Notwithstanding, indeed perhaps because of, the size of some of its near neighbours - China and India in particular - the ASEAN countries have the potential to play a greater role in securing a prosperous, stable and secure East Asia.

I hope you have an interesting and productive conference tomorrow.

ENDS

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