A Weekly Report from the Keyboard of Murray McCully
MP for East Coast Bays

Mr Key Goes to Washington

Last week’s visit to Washington by National Party leader John Key set the scene for a serious consolidation of what has been a sub-optimal NZ/US relationship for some time. Accompanied by his humble spokesman on Foreign Affairs (whom modesty will not permit us to name) and his not so humble (because he, of course, has so much less to be humble about) spokesman on Trade, Tim Groser, John Key met senior US figures in foreign affairs, trade, defence, agriculture, climate change and finance. The meetings left a strong impression that a relationship that has been drifting for the past twenty years could well be upgraded a few years hence.

The purpose of the visit was the establishment of good relations with key players at the coalface of the relationship, and to maintain a command of the key issues. The near collapse of the Doha trade round, the expiration of the President’s Trade Promotion Authority (his ability to negotiate trade treaties) at the end of June, and the reality of elections in both countries by the end of 2008 have cast the relationship into a medium term focus. And that focus carries the prospect of a serious upgrade in the relationship.

The National Party’s commitment to maintain the anti-nuclear legislation moves this country much closer to a bi-partisan foreign policy. Only what the boffins call differences of “tonality” remain. For the layman, that means that domestic media reports of Prime Ministers taking cheap shots at the US president and senior Ministers conjuring up imaginary US bagmen interfering in New Zealand politics have been widely read in Washington. They represent a serious impediment to progress. But there is now hope that the National Party’s moves will be reciprocated with the Clark Government adopting a more professional and disciplined US pose.

The Key visit provided an opportunity to reinforce the case for an NZ/US free trade agreement. The fact that Australia enjoys an FTA with the US will act as a serious magnet for New Zealand capital and skill to move across the Tasman, until this country achieves an equal trade agreement. And Mr Key reinforced the message that with Australian after-tax incomes now moving over 35% ahead of those in this country, New Zealand can ill afford the additional challenge of Australia’s more favourable trade relationships with the US.

The chronicle of the NZ/US relationship of the past 20 years makes unhappy reading. From the US perspective, there is every reason to believe they were profoundly misled by New Zealand’s Prime Minister during the mid 1980s, and have been the subject of occasional cheap shots ever since. From the New Zealand perspective there is room for grievance as nations that have little shared history with the US, and which have made little contribution to international good works, have been rewarded with free trade agreements with the world’s largest economy, while New Zealand has not. The US is now moving into a phase which is no longer dominated by those with bitter memories of the relationship. And after the 2008 election, New Zealand should have a Prime Minister able to embrace a more positive phase in NZ/US relations.

“Independent” Electricity Commission

Yesterday’s decision by the Electricity Commission allowing the Transpower pylon project to proceed across the Waikato will likely lead to judicial review proceedings. One ground being asserted by opponents is that the Commission was influenced by the political wishes of the Government. Surely not.

The Commission currently has no chair. But the acting deputy chair, Peter Harris, is a former trade union economist. In more recent years he has been located in the office of Finance Minister Michael Cullen as his chief economic advisor. Also on the Commission is former Labour Cabinet Minister Stan Rodger. Surely not the sort of people who would give a moment’s thought to the political convenience of those who appointed them.

The Vacant Chairs

Readers of this publication several weeks ago will know that the Accident Compensation Corporation chair, which has been held vacant for nearly a year, is soon to be filled by retiring CTU boss Ross Wilson. That announcement must be due any day soon.

Meanwhile over at the Electricity Commission, there is a widespread expectation that former Labour Party Minister David Caygill is to be appointed to fill the long term vacancy. The hold-up? Well, Caygill is currently the Labour Party representative on the Representation Commission, redrawing the electoral boundaries. That role will conclude soon.

It is felt, apparently, in both cases, that appointing these gentlemen to their new roles while still serving in their highly partisan current roles would somehow be a little obvious. As if the public are too silly to notice.

ENDS

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