15 May, 2008
Japan-New Zealand Partnership

Address at the inaugural Japan-New Zealand Partnership Forum. International House, Tokyo

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It is a pleasure to speak here today at this first Japan-New Zealand Partnership Forum. I congratulate the New Zealand International Business Forum and its sponsors and supporters, in both Japan and New Zealand, for making this event possible.

Mr Miyauchi and all Japanese friends of New Zealand here today, I thank you for making yourselves available. Mr Burdon and all who have travelled here from New Zealand, I thank you for participating in this new initiative. I know that your interest, commitment, and discussions will serve the Japan-New Zealand relationship well in the future

In 2008 we mark an important anniversary for the New Zealand-Japan relationship : the fiftieth anniversary of the bilateral Agreement on Commerce which opened the way to the modern trade and economic relationship between us.

Yesterday we built once more on our network of formal arrangements, with the signing of the Customs Mutual Recognition Arrangement – the first agreement of its kind in the world. Its purpose is to help our exporters move their goods more quickly and effectively between our two countries.

New Zealand’s relationship with Japan was our first with a major Asian economic power.

Over the decades New Zealand has enjoyed the benefits of flows of trade, investment, and tourism which have made our relationship with Japan truly one of our “bedrock” relationships.

It is a relationship built on our reliability to each other as partners; on quality in what we export to each other; and on a depth of understanding which enables us to ride through tough times.

Japan today is our third largest export destination and fourth largest trading partner overall. The two way trade between us in the year to December 2007 amounted to $7.3 billion, and was fairly closely balanced.

The investment we have made in each other goes far beyond the financial. Our people-to-people links, arising from education, travel, and business, are extensive, – and let’s not forget those 47 sister city relationships which have done so much to build friendship.

An especially valued link for New Zealand is our relationship with the Toshogu Shrine in Nikko, where for more than forty years white horses from New Zealand have served the shrine.

For more than thirty years, those horses have been gifted by the New Zealand Government. It was a privilege for me on Tuesday to visit the shrine, which is an outstanding feature of the cultural heritage of Japan, and indeed of the whole world.

This gathering of senior business and other leaders will take a high-level strategic look at the Japan-New Zealand relationship. We need to ensure that it keeps pace with wider developments in the Asia-Pacific region and beyond.

We live in a dynamic and changing region, and the relationship we have must be seen in its wider regional context.

In particular the significance of the emergence of China has led many countries – including Japan and New Zealand – to focus much effort in building relationships there.

I well recall the decision of the New Zealand Government in 1972 to develop diplomatic relations with China.

Our leaders said it was absurd not to recognise a nation which at that time represented a quarter of the world’s population. That decision to engage then was right, as is the work we have done since to engage with that great nation and see it take its place in the multilateral institutions.

But it’s also essential that we continually renew longstanding relationships in our region to keep them up to date. This Partnership Forum is part of that process, so that the Japan-New Zealand friendship can engage future generations.

Another aspect of dynamism in the Asia-Pacific today is the pace of economic integration, which has enjoyed strong business support. Business councils like ABAC have worked alongside governments and leaders to develop proposals which promote economic development and trade around the Asia Pacific rim.

New Zealand has been at the forefront of this process. Our small, open economy has a big interest in opening up markets for our goods and services.

This year we celebrate 25 years of our Closer Economic relationship with Australia. We have also negotiated FTAs with Singapore and Thailand, and a four way deal with Singapore, Brunei and Chile.

We are currently negotiating an FTA with the Gulf Co-operation Council; have had a number of rounds of talks with Malaysia and Hong Kong in the past; and are studying the potential with India.

Last month New Zealand became the first developed country in the world to sign an FTA with China. Negotiations between ASEAN and New Zealand and Australia are ongoing and well advanced; and jointly with Korea, we have completed a study on the potential of an FTA between us.

Japan has also been busy in the trade sphere, including through its FTA negotiations in train with Australia and India, and with negotiation looking likely for an ASEAN Plus Three FTA in the not too distant future.

For some years now, Japan has promoted an inclusive process for developing East Asian regionalism. Japan supported participation by New Zealand and Australia in the new East Asia Summit, and has promoted the concept of a Closer Economic Partnership of East Asia. We welcome and support these initiatives.

I am pleased to say that yesterday Prime Minister Fukuda and I agreed that Japan and New Zealand should embark on a study of the potential benefits of a bilateral FTA between our countries. This is a development of considerable significance to New Zealand.

Our officials are now tasked with developing terms of reference for the study and getting it underway.

We recognise the longstanding political sensitivities on agriculture for Japan, but believe ways can be found to manage these concerns.

In the 21st century, the world’s food supply is under great pressure, fuelled by demand from growing populations and, within that, the demand for more food from the growing middle classes in the emerging economies.

Climatic conditions, such as those which led to prolonged drought in Australia, have also exacerbated supply problems.

In these circumstances, it is vital for major food importing nations, like Japan, to secure their supply chains. So at this time, there is a growing coincidence of interest between New Zealand’s needs as an exporter and Japan’s needs as an importer.

Traditionally the Japan-New Zealand trade relationship was characterised by our sales of New Zealand food and commodities to Japan, and purchases by us of Japanese industrial goods – especially cars and electronics.

The same was true of tourism and education, where the flows were seen as primarily one-way – from Japan to New Zealand.

But both our economies are evolving, as they must for our goods and services to continue to attract a high value premium.

In the food area, New Zealand is no longer simply a commodity producer. We are positioning ourselves as a supplier of high quality, environmentally sustainable food products. We are drawing increasingly on our scientific expertise to develop and market functional foods which are promoted for their health benefits.

We are keen to find ways to deepen co-operation with agricultural producers in Japan. There are already cases where New Zealand has helped provide Japanese farmers with new technologies and income opportunities. We should be looking for more win-win solutions of this kind.

In the area of advanced technologies, the previous one-way pattern of trade is changing.

New Zealand has strengths in innovation – particularly in biotechnology, environmental science, and ICT – which we are keen to promote.

New Zealand’s strongest science and technology relationships are currently with the United States and in Europe. We need now to strengthen such connections with Japan, at both governmental and business levels.

Prime Minister Fukuda and I agreed yesterday that our governments should negotiate a formal inter-governmental science and technology agreement. This will be a significant upgrade from the Memorandum of Understanding which exists now between our science agencies.

At the business level, our companies need to be seeking niches within Japanese value chains. New Zealand innovation linked to the scale and distribution chains of Japanese companies, can also be a win-win.

For Japan, New Zealand can also be seen as a potential test bed for its new technologies.

For example, New Zealand seeks to be an early adopter of electric vehicle technologies, as part of our efforts to reduce our greenhouse gas emissions.

We are excited by the developments in the Japanese vehicle industry to design electric and hybrid cars. I saw some of the latest models yesterday. As well, New Zealand designed electric buses are running on Tokyo’s streets today.

Both Japan and New Zealand seek to play a leadership role in responding to climate change.

Japan has put the issue at the top of the agenda for this year’s G8 summit, and has announced significant programmes to assist developing nations develop low carbon economies. New Zealand is working on how to initiate emissions trading; on more sustainable energy, transport, and waste strategies; and on ambitious targets for reafforestation.

We are keen to work with Japan on all aspects of the international climate change agenda. Together we have supported the issue coming onto both the APEC and the East Asia Summit agendas, and the resulting communiqués have helped move forward the debate on how to design the post 2012 arrangements.

Lastly let me mention tourism. These are tough times for all long-haul tourism destinations from Japan. New Zealand is fortunate to have a wide range of sources of tourists, and our tourism industry is robust.

We have made sustainability a central plank in our national tourism strategy. Increasingly first world travellers in particular want to know that their travel is not contributing to ecosystem degradation, and that their travel experience is authentic.

Our national airline, Air New Zealand, aims to be a leader among airlines in setting standards for environmental responsibility. Our tourism industry overall is conscious of the need to minimise its carbon footprint.

There is scope for the tourism industries in both our countries to work together to improve the marketing of New Zealand as a sustainable travel destination. There is good business to be done in Japan through promoting travel to New Zealand.

I also see opportunities for Japan to market itself as a tourism destination to New Zealanders. You will find a ready and appreciative market in New Zealand for Japan’s natural beauty, cultural heritage, dynamic cities, and - for winter sports enthusiasts like me – it’s skiing!

If tourism as part of our bilateral relationship becomes less one-way and more reciprocal, that benefits us both.

It will also help generate more two way travel by younger generations of our people, which is so vital to keeping our relationship modern and dynamic.

I referred last night at our reception to the privilege it was for me as a young New Zealander to take part in the Japanese Youth Goodwill Cruise, and the life long interest in Japan which that stimulated for me.

Now a new generation of young New Zealanders is being invited to take part in the Future Business Counterparts Invitation Programme, an initiative of the Government of Japan which we greatly welcome.

In conclusion let me reiterate that New Zealand wants to see its relationship with Japan move forward at all levels. My visit and that of this large and senior delegation of New Zealand is a clear demonstration of that.

My government welcomes new ideas from business and others present here today on how we can make that happen.

I wish you all the best for today’s discussions.

ENDS

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