Rt Hon John Key
Prime Minister
29 July 2013 Speech
Speech to Kiwi Chamber
Seoul, South Korea
It’s great to be back here in Seoul. This is my third visit to Korea in four-and-a-half years as Prime Minister. This
is because we value the importance of the Korea relationship for New Zealand and for Korea’s rapidly expanding role in
the world.
On this occasion we have a large contingent of New Zealand veterans and their supporters here for the 60th anniversary
of the armistice which took place over the weekend. Over 6,000 New Zealand army and navy personnel took part in the
Korean war, in which 45 New Zealanders lost their lives.
New Zealand has a tradition of honouring our war veterans and I am immensely proud to have this opportunity to accompany
them back to Korea for the commemorations.
The veterans were quite literally the pioneers of our relationship with Korea. They were here long before the first
diplomats, businesspeople or teachers. Their contribution is still hugely appreciated by the Korean government and
people.
The New Zealand-Korea Year of Friendship in 2012 highlighted our historic ties, shared values and cooperation. In
putting Korea before a New Zealand audience we had invaluable help from Psy and Gangnam Style. It is a mark of how far
we have come that we now have thousands of young New Zealanders emulating Psy’s dancing style.
I had the pleasure of meeting President Park during this visit. Her election marks a milestone for Korea and I was able
to extend New Zealand’s best wishes for her leadership and ambitions for this country.
And I am delighted at the connections she holds to New Zealand. She was part of the delegation which her father led to
New Zealand in 1968 – the first ever by a Korean leader – which really got the bilateral relationship going. She
visited again in 2008 as a guest of government and I have now invited her to make an official visit in her new capacity
in the near future.
President Park and I are able to draw much satisfaction from a bilateral relationship that is close and strong and which
has deepened significantly in recent years.
There are frequent high level political contacts between our two countries. We enjoy strong people linkages, including
significant numbers of visiting tourists and students. There is also important collaboration in areas such as film
production, science and technology, defence, and the environment.
New Zealand and Korea also cooperate closely on regional security issues. In this regard, I applaud President Park’s
aspiration for peace and stability on the peninsula, including her efforts to reach out to North Korea.
We are conscious that North Korea can be an uncertain neighbour for South Koreans and for expats here in Seoul. New
Zealand has made clear our views. We reject North Korea’s provocations. We call on them to commit firmly to abandon
nuclear weapons and to engage constructively with the international community.
Bilateral Economic Relationship
Turning to our bilateral economic relationship, the trade figures show the value of the relationship to both countries.
Korea remains comfortably our fifth largest export market and trade is highly complementary.
While the trade relationship has grown, we can do better and growing trade and business ties with Korea remains an
important goal.
In this regard, I appreciated the opportunity to discuss with President Park the way forward in our two countries’
negotiations on a free trade agreement. There is still work to do, but the arguments in favour of an FTA are strong.
An FTA can help both our countries to achieve economic growth and prosperity, since greater levels of trade and
cooperation will make us stronger and more efficient.
We both want to promote growth opportunities for small and medium sized enterprises, and removing tariffs and other
barriers to trade is a great way to improve margins and spark new business.
Investment is crucial for successful business growth. A Korea/New Zealand FTA would help create the right environment
for businesses to flourish, commercialise their products and go global. We have an example of that in Zespri kiwifruit,
which is now produced here in Korea thanks to commercial collaboration with New Zealand.
An FTA can facilitate innovation and creativity by bringing our two countries closer together in research and
development. Already, we know the value to be gained when New Zealand and Korean know-how is work together.
The FTA will also assist Korea to address the challenges associated with food and resource security. It is worth
recalling that New Zealand and Korea do not compete in most sensitive agricultural sectors like rice, and many of our
products compete primarily with other imported products, so we do not see ourselves as a threat to Korean farmers.
I have mentioned some of the potential benefits of concluding an FTA, but we also need to be alert to the urgency of our
work.
I am mindful that New Zealand has completed agreements with China, ASEAN, Hong Kong and most recently Chinese Taipei,
and Japan has just joined TPP negotiations. Korea too has completed a range of major FTAs and is negotiating others.
We need to get our deal done to ensure that the bilateral trade relationship keeps pace with the trade relationships we
have with other countries.
There is also the risk of growing disadvantage. While the current two-way trade figures seem healthy, we know that New
Zealand firms are hurting as they are gradually disadvantaged by Korea’s preferential trading arrangements with existing
FTA partners.
No relationship, no matter how strong, can afford to stand still. If we want to take the relationship forward, and reap
the benefits I’ve just outlined, then concluding the FTA is an important step. It is win-win for both our countries.
New Zealand
I also want to take some time to talk about developments in New Zealand, and particularly on the economy.
The Government has been concentrating on four key issues. Briefly, these are:
· getting the Government’s books in order following the recession, the global financial crisis and the
Canterbury earthquakes – we are on track to post a budget surplus in 2014/15 and to keep net government debt under 30
per cent of GDP
· building a more productive and competitive economy, through a whole range of measures, including tax reform,
planning reform, addressing housing supply constraints, and introducing 90-day trial periods for new workers
· delivering better public services within tight financial constraints
· and supporting the rebuilding of Christchurch, which is the biggest economic project in the history of New
Zealand.
That focus is paying off.
The New Zealand economy has come out of the recession and the global financial crisis in good shape, especially when you
compare it with our peers around the world.
In the year to March, the New Zealand economy grew 2.4 per cent, which was the sixth-highest growth rate in the OECD.
Wages have been increasing and inflation is low. In the last year, for example, weekly wages grew 2.5 per cent on
average, and inflation was only 0.9 per cent.
The unemployment rate is a bit higher than anyone would like – it has been between 6 and 7 per cent for the last three
years – but a net 50,000 new jobs have been created over the last two years and the outlook is improving all the time.
Forecasts are for annual growth of between 2 and 3 per cent over the next few years, and that includes the impact of the
nationwide drought we experienced earlier this year.
Low interest rates, increased activity from the Canterbury rebuild, and strong commodity export prices will all
contribute to growth.
Business confidence is at a three-year high.
Growing numbers of Asian consumers are demanding the goods and services New Zealand produces.
And the New Zealand economy is expected to grow more strongly over the next two years than many other developed
countries, including the United States, Canada, the United Kingdom, Japan and the Euro area.
So New Zealand is well placed to take advantage of the opportunities that lie ahead of us.
Thanks for being here today and thank you for the work you do to further strengthen the Korea New Zealand relationship.
You are doing a great job.
ENDS