Distinguished Chairmen, Ambassadors, Ladies and Gentlemen

It gives me great pleasure to be with you today and to speak to you about the progress we, by working together, have made over the last year in building the economic relationship with Japan.

I am delighted also to welcome our Japanese friends and colleagues to New Zealand and to wish you a most enjoyable and productive stay in our country.

Since we met in Tokyo last year a lot has happened in the relationship.

My good friend Ambassador Ian Kennedy ? who is doing a fantastic job for New Zealand in Japan ? has drawn my attention to a Japanese term ? “ondo-sa”

“Ondo-sa” means “change in temperature” ? Ian tells me it was a term used by a distinguished former Chairman of this Business Council, to refer to what needs to be done to enhance relations between two long term friends and partners.

And a change in temperature is exactly what we have seen over the past year.

At the time of our last meeting New Zealand Paradise Week introduced New Zealand, its award winning cuisine, scenic and adventure attractions, dynamic culture and pace-setting fashion to 17,000 people in downtown Tokyo.

Then in May the first ever Japan NZ Partnership Forum took place attracting over 90 senior participants from government, business and wider community.

The Forum was the occasion for the Prime Minister of New Zealand, Rt Hon Helen Clark, to announce that she and her Japanese counterpart, HE Yasuo Fukuda, had agreed to commission a study into a possible Economic Partnership Agreement between our two countries.

Just two weeks ago in New York ?ahead of all the bad news about the financial  crisis ? it was announced that the United States would negotiate to join New Zealand, Singapore, Chile and Brunei in the Trans Pacific Economic Partnership.

That agreement is being designed as a template for trade liberalisation in the wider Asia Pacific region and may in time interest Japan.

It is against this background that I want to talk to you today about the outcome of the Partnership Forum and the next steps we have planned, about the opportunity the study with Japan represents and how my own company, ANZCO Foods, works with Japanese partners, in the words of our conference theme “to advance the frontiers of the relationship”.

Partnership Forum

I suspect that at last year’s meeting when I announced that the first ever Japan NZ Partnership Forum would take place in Tokyo in May of this year there was a little scepticism in the room.

After all, the NZ International Business Forum which I chair was a new organisation with no track record, although with a high level Board drawn from New Zealand’s leading international businesses and peak business organisations.

Some may have wondered about the potential for overlap between the Forum and the Business Council, although we assured you that we intended the initiative to be a partnership between our respective organisations.

Even so there was bound to be some doubt that it would be possible to organise a ground breaking meeting with high level participation on both sides which would have a catalytic effect on the relationship,

In the event the first Partnership Forum exceeded all our expectations.

Much of the success was due to the hard work of our Executive Director, Stephen Jacobi, who is with us today; Ambassador Kennedy and his team in Tokyo; and our business supporters in both countries.

We were particularly grateful for the support we received from the Japan NZ Business Council, for the address that Chairman Yano on behalf of Sumitomo Forestry made on sustainable forestry and for the contribution by Denham Shale.

The Council’s Vice Chairman Mr Semoto spoke at the Forum. Mr Dobashi, Chairman of Sojitz; Mr Kawamura, President of TJK; Mr Nakazawa, President of Nakazawa Foods; Mr Takeda Managing Director of Wood One; Ambassador Takahashi and Mr Shimojima, the Council’s Director General all of whom are with us at this meeting also participated.

In fact the Forum was supported by the leading business organisations in Japan ? the Japan Chamber and the Keidanren- and by the Foreign Ministries in both countries.

A number of generous sponsors made possible the hosting of the event.

I must also thank my good friend Ambassador Takahashi for the advice and encouragement we received from the Embassy in Wellington and the Ministry in Tokyo.

As I mentioned the Forum was attended by over 90 invited economic leaders ? all Chairs, CEOs, Vice Presidents, MPs, senior officials, leading academics and journalists.

The Forum was co-chaired by distinguished business leaders on both sides, Mr Yoshihiko Miyauchi, Chairman and CEO of ORIX Corporation and the Honourable Philip Burdon, Chairman of the Asia New Zealand Foundation.

The Forum was addressed by New Zealand Prime Minister Rt Hon Helen Clark and by Vice Minister Usamo Uno speaking on behalf of Prime Minister Fukuda.  The New Zealand Trade Minister Phil Goff also addressed the event and National Spokesperson on Trade Tim Groser attended throughout.

One of the other participants was MP Hirofumi Nakasone who has recently been appointed Foreign Minister of Japan.

We extend our warmest congratulations to Minister Nakasone and thank him for his interest in New Zealand which has extended over the many years of his role as an Honorary Advisor to the Asia New Zealand Foundation.

Former Japanese Prime Minister Mori attended the Forum lunch which was addressed by John Kirwan, National Coach of the Japan Rugby Team.

The New Zealand Rugby Union presented Prime Minister Mori with a rugby jersey which was the occasion for some very generous remarks about the relationship between the two countries.

The Forum was opened with a magnificent reception at the New Zealand Embassy at which Prime Minister Clark spoke and was ended by a stunning Japanese cultural display and banquet.

A shodo master drew the caligraphy “kizuna” meaning “a bond” and all delegates were presented with a fan incoporating the kizuna character.

The Forum took the theme “New Thinking, New Partnership”.

The Forum was organised in three business sessions examining how New Zelaland and Japan can and do work together to:

·       promote growth and sustainable development in the Asia Pacific region
·       promote innovation ; and
·       address climate change and sustainability.

Japanese companies Nissui, Toyota and Sumitomo Forestry presented alongside Fonterra, Zespri and Air New Zealand.

The discussion was facilitated by thoughtful presentations from academic and official commentators and extended by contributions from the floor.

The Forum focused on how the two countries can address new business challenges at the regional and global levels: it told a story – the story of how Japan and New Zealand can benefit from continuing economic integration in the region, develop new business models and unite our efforts to address common business challenges.

I believe that we were successful in ensuring the Forum’s agenda did not overlap with that of this Business Council.

Whereas the Business Council deals with business issues between the two countries, the Forum looks at strategic issues in the relationship and involves wider government and academic participation.

It could be asked why an initiative like the Forum was needed:  it was precisely to bring together a new constituency for the relationship in Japan, to demonstrate the value of New Zealand to Japanese interests and vice versa and to focus high level attention in both countries on the significance of the relationship for each country’s future.

So where to next?

Stephen Jacobi and I have just returned from Japan where together with Ambassador Kennedy we met with Mr Miyauchi and the group of informal advisors brought together to plan the event last May.

The feedback we have received from the Japanese side was most complimentary about the event and, more importantly, about the wider initiative.

Without exception all those we met were keen to remain involved and all agree we should hold a second Forum within the 18 month timeframe agreed by the Co-Chairs last May.

I am pleased to announce today that a second Japan NZ Partnership Forum will be held in 2009.

We are currently examining a number of options for timing ? much will depend on other events being held next year including the 36th Business Council meeting.

There may also be scope for a smaller, inter-sessional event to be held around a key theme in the relationship.

We would envisage such an event bringing together experts and a smaller number of Forum participants to prepare the ground for a deeper discussion at the Forum itself.

We believe that in time the Forum has the potential to become an important institutional building block in the relationship and we are excited at the prospect of next year’s event.

FTA study

Let me turn now to the decision by Japanese and New Zealand Governments to commission a joint study into a future Economic Partnership Arrangement.

The Prime Minister’s announcement certainly electrified the Forum ? it was not expected but most welcome.

It provides a good focus for our efforts as we move forward and some reassurance that New Zealand’s interests are not being overlooked even as Japan negotiates an EPA with Australia.

The key question at this point is what we – as Business Council and International Business Forum – can do to support the process.

It seems clear from our discussions in Tokyo that what is envisaged is not an independent economic assessment but rather an official process, the end point of which is an agreed document setting out the benefits and costs of an EPA and if positive how the concept might be taken forward.

While we as business are inclined to want to move as fast as possible I think it realistic to expect that the process will take some time and will need to factor in sensitivities on both sides.

At the same time the commitment of the two Prime Ministers seems clear enough and we have no reason to expect that incoming Japanese Prime Minister Taro Aso will think differently.

Prime Minister Aso has spoken previously of an “arc of freedom and prosperity” which extends from Japan down through South East Asia to Australia and New Zealand.

An EPA between our two countries would fit naturally within that framework.

The role of business is to provide support and encouragement to officials to act promptly and to deliver on the Prime Ministers’ commitment.

I have no doubt that the communiqué from this meeting will express support and encouragement for the study to be completed within a reasonable timeframe.

But we also need to move beyond words: what is required is nothing less than an ongoing, concerted and well co-ordinated strategy.

Such a strategy would remind officials of the fundamental interest that business in both countries has in this process and would find ways to demonstrate that interest to governments and other interested and influential groups especially in Japan.

This is not just something for one of us, Japan or New Zealand, Business Council or International Business Forum ? it is something that all of us need to work on co-operatively.

I hear from time to time that what we face is an impossible task, that there are interests in Japan, mostly agricultural, that see an EPA with New Zealand as the “thin end of the wedge” and will not allow the study to proceed.

I reject such a defeatist view.

I am very conscious that in this room are several Japanese organisations which have considerable influence to bring to bear back home: we need to find ways in which this influence can be leveraged.

The fact of the matter is that things change ? too slowly perhaps – but they do change.

International commodity prices have risen significantly in recent years and food shortages have been felt in Japan: securing long term supply from reliable offshore suppliers has become a national imperative.

The WTO negotiations continue to splutter on and Japan’s competitors including Korea and China are busy negotiating FTAs in the region and beyond which risk putting Japan at a disadvantage.

Our own FTA with China which took effect on 1 October and the negotiating process now underway with Korea are cases in point.

New initiatives for trade liberalisation are emerging ? the Trans Pacific agreement now extended to the United States and of declared interest also to Australia, Peru and Viet Nam, could in time become a model of interest to Japan.

The financial crisis, the effects of which are just beginning to be felt, requires a strong response from the international trading system ? trade liberalisation can be an important means to promote growth and opportunity in a financially constrained world.

So I look forward to further discussions with you in the context of this meeting as we address our strategic options moving forward.

ANZCO Foods

I’d like to conclude by talking about my own company, ANZCO Foods.

ANZCO is a global business with a turnover of over NZ$1 billion and 2,500 employees.

Beef and related products account for the majority of our business.

ANZCO is an example of a successful partnership which brings value to both countries – Japanese capital and distribution are combined with New Zealand resources, marketing and technology.

Another example is Sealord which today has a successful partnership with Nippon Suisan Kaisha (Nissui) ? Nissui’s President and my old friend Naoya Kakizoe helped us look at this example in depth at the May Partnership Forum.

It seems to me that these models are at the heart of the value proposition for the Japan NZ relationship and the sort of models that could be expanded in the context of a future EPA.

In the case of ANZCO we have supplied sheepmeat for 25 years and beef since Japan removed quota access restrictions in 1991.

When Japan announced a beef market liberalisation access schedule in 1988 ANZCO moved to form separate joint venture partnerships with Itoham Foods and Nissui.

Both Japanese partners later became ANZCO shareholders and today, with Directors and Management, own the company.

We have seven overseas offices, seven meat processing facilities and three food manufacturing sites, as well as a jointly owned cattle feedlot with Itoham.

This feedlot is the source of practically all New Zealand’s grain fed beef exports to Japan.

We are New Zealand’s sixth largest agri-business and the country’s sixth largest exporter overall.

In Japan nearly 25 years after establishment we are still the only foreign based company which physically imports and distributes the bulk of meat products we supply to this market.

ANZCO’s experience in the Japanese market has provided the platform to develop opportunities in other markets in the Asia Pacific region and beyond.

It has also assisted the development of stronger relationships for our shareholder partners, Itoham and Nissui, outside Japan.

There is a powerful story to be told in Japan about the value of Japan-New Zealand partnerships such as ANZCO, Five Star Beef and Sealord.

There are other examples ? Zespri and its growing operations in Ehime prefecture; Sumitomo’s involvement with Nelson Pine; Mitsubishi and its co-operation with Meridian on electric cars.

We told some of these stories at the Partnership Forum and we need to find more of them to help our Japanese friends and supporters to spread a powerful message about the value of an expanded relationship.

Conclusion

Ladies and Gentlemen I am here today to tell you that the “ondo-sa” is rising !

There is an energy and commitment in the relationship between New Zealand and Japan that we have not seen for some time.

All this is very positive but will require ongoing commitment and the careful implementation of a deliberate strategy in the coming year.

The EPA study is an important opportunity but we need to continue to place emphasis on the broader relationship and tell the story of a relationship which delivers value to both partners.

The Partnership Forum is a concept whose time has come.

It will be repeated in 2009.

At the nineteenth meeting of this Council held in Christchurch in 1992 Chairman Barrie Downey composed this haiku:

“Later spring winds blow cold                 Samui haru
We meet in emerging sun                       Hi ga sashi hajime
Planning bright future”                            Asu kataru

As the “ondo-sa” continues to rise, we look for the support of the Business Council to build that bright future for both New Zealand and Japan.