“New Zealand and Japan – New thinking, new partnership” Remarks to the Australia-New Zealand Chamber of Commerce in Japan Tokyo, 24 September 2008 Stephen Jacobi, Executive Director, New Zealand International Business Forum

Thanks for the opportunity to join you this evening to talk about the first ever Partnership Forum event we held here in Tokyo last May.  This event took place in the year in which we mark 50 years since the signing of the Treaty of Commerce between our two countries.  This week has also seen the United States decide to join a trade negotiation with New Zealand and its Trans Pacific partners ? that has some implications for the work we are doing with Japan as I will explain.

The Treaty of Commerce was signed in 1958 but it was a hundred years earlier that the Japanese Prime Minister Ii Naosuke signed the Harris Treaty which first opened up Japan to the outside world.  In the garden just outside there are some statues which once belonged to Ii Naosuke so hopefully we can take some inspiration for tonight’s meeting from his memory.

Tonight I’d like to speak about the NZ International Business Forum, which I have the honour to lead, then about NZ’s relations with Japan and lastly about the first ever Japan NZ Partnership Forum that was held in Tokyo in May.

About the NZ International Business Forum

According to our vision statement, the Forum exists to generate wealth for New Zealanders.  It does this by helping ensure that New Zealand enterprises are fully integrated and engaged in the global economy and New Zealand’s global competitive position is maximized

The Forum is a relatively new organisation, started only last year, but founded by some of the country’s largest and most successful international businesses and the leading business organisations ? Graeme Harrison, well known to many in this room as Chairman of ANZCO Foods and a Board member of Sealord and Westland Dairy Products is our Chairman.

The companies cover the dairy, meat, seafood, kiwifruit, technology and services sectors and the business organisations represent New Zealand’s export, manufacturing and services industries. The International Business Forum marks the first time that the Chairs and CEOs of these organisations have come together in this way.

As we develop our strategy for promoting New Zealand’s international business engagement we intend to work closely with the Government and other business organisations and focus on a small number of key projects.  We have chosen Japan as our top priority.

We had no hesitation in coming to that conclusion.  Japan is not only the world’s second largest economy, it is a longstanding partner for New Zealand and a country with whom we share abiding democratic and free market values.

We don’t always agree on everything of course ? our different views on whaling or agricultural trade are a case in point – but what we have in common is greater than what we see differently.

At the International Business Forum we believe there is more that can be done to develop even closer relations and to find ways for industries in the two countries to work together to develop new global business.

NZ and Japan

That makes sense because our two countries are natural partners in the Asia Pacific region.

Our relationship has been built up both steadily and over a long period of time –  a network of people to people contacts,  tourism, language learning and sister-cities underpin a relationship which is today one of New Zealand’s most enduring in Asia and most rewarding ? for both partners.

For Japan New Zealand is a reliable, secure and sustainable supplier of safe food and important natural resources.  For New Zealand Japan is a major market for dairy products, fruit and vegetables, beef, wood products and fish.  There are opportunities in Japan also to expand sales of non-traditional products particularly from New Zealand’s expanding information technology, biotech and creative industries.

Since the 1960’s Japan has been New Zealand’s second or third largest trading partner, after Australia and the United States.  Today over 9,000 New Zealanders depend for their livelihoods on Japanese investment in fishing, forestry and wood processing, aluminium and other sectors.  The figure is significantly higher if indirect employment is counted.

The traffic here is not all one way.  Japanese partnership with the Maori people through joint ownership of Sealord, the country’s largest fishing company, has enabled the development of a global business to the benefit of both shareholders.

Japan, with its remarkable technological prowess, is also an important source of innovation and technology vital for developing new businesses, expanding productivity and adding value to New Zealand’s primary production.

When it comes to securing better conditions for trade, we are by and large doing business with the same people:

·         We both have FTAs with Singapore, Thailand, Brunei and Chile
·         Japan has an FTA with Malaysia and New Zealand is negotiating with Malaysia
·         New Zealand has an FTA with Australia and Japan is negotiating with Australia
·         We have both been negotiating with ASEAN and New Zealand’s negotiation has just concluded
·         New Zealand strongly supports the Japanese concept of a Comprehensive Economic Partnership in East Asia
·         We both want to seen an end to the tortuous negotiations in the WTO.

It’s not at all surprising that both of us should follow a similar approach to seeking closer relations and developing trade with countries in our region: we share similar values and interests which go beyond the economic sphere, encompassing broader policy co-operation in fields such as climate change, sustainable development, peacebuilding and security.

The question for us today is whether the relationship is as good as it can be and delivering the maximum value to both countries.  Even the strongest of relations need to be constantly updated to take account of changes in the global and regional economy and Japan/New Zealand relations are no different.

We are old friends but the world is changing rapidly. Asia and Europe are vying with the United States as the driver of global economic growth and China’s economy has continued to advance.

China has recently passed Japan as New Zealand’s third largest trading partner and largest in Asia. That growth can only accelerate as China continues to grow and becomes increasingly sophisticated both in its consumer tastes and in the goods and services it has to offer.  New Zealand was the first developed country to conclude an FTA with China which enters into force next month.

Australia is negotiating an FTA with Japan (Chile has one already).  That could put New Zealand suppliers to Japan at a significant disadvantage and it’s essentially why New Zealand would be interested to negotiate an FTA with Japan when the time is right.  In that context we were delighted to welcome the announcement made during the Partnership Forum that NZ and Japan would be co-operating on a new study into a possible FTA.

At a time when higher commodity prices look here to stay, and when newer markets are easily able to absorb New Zealand’s increasing production, it is likely that the old patterns of trade and investment will come under increasing pressure.  That should be a matter of concern for Japan.

As I said at the beginning the expansion of the existing Trans Pacific agreement to include the United States along with New Zealand, Singapore, Chile and Brunei, announced in New York on Monday, has a lot of relevance to the trade agenda in the region: it is not inconceivable that one day Japan might be persuaded to join such a grouping.

Japan NZ Partnership Forum

It was against this background that we developed the concept of the first ever Japan NZ Partnership Forum.

New Zealand already has similar structures which operate in respect to our other key relationships, Australia and the United States.  Japan too has high level dialogues with a range of countries including the United States, Australia, Canada and the European Union.

Our experience is that these events can provide an effective independent platform for leaders from both countries to identify common approaches to global and regional challenges. The Partnership Forum is strategic in nature ? rather than focusing on the nuts and bolts of business between the two countries it concentrates on the bigger picture of the economic relationship.

And so, on 14 and 15 May, in Tokyo,  at the International House of Japan we gathered over 90 prominent leaders from government, business and the wider community from both countries to meet together.

The Forum was possibly the largest gathering of Japanese and New Zealand economic leaders ever held drawing interest from across a range of sectors.

Support for the Forum was offered by the Government of Japan and by leading business organisations, the Nippon Keidanren and the Japan Chamber of Commerce and Industry.  We worked very closely with both the New Zealand Government and the Japan New Zealand Business Council.  Ambassador Kennedy brought together an informal group of advisors, all eminent and influential Japanese personalities, who were generous with their time and advice.  Ambassador Takahashi in Wellington was also generous with his encouragement and advice.

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 Helen Clark and by Vice Minister Uno speaking on behalf of Prime Minister Fukuda.  The New Zealand Trade Minister Phil Goff also addressed the event.  Former Prime Minister Mori attended the Forum lunch which was addressed by John Kirwan.

The Partnership 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
·         address climate change and sustainability.

The Forum focused on how the two countries can address new business challenges at the regional and global levels. It told 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.  It brought together a new constituency for the relationship here in Japan and provided a platform for the announcement of the FTA study.

Where might this dialogue lead us?

It’s important that we take one step at a time.  Having held an event which exceeded our expectations in terms of the interest it generated we need to work to continue working to consolidate and enhance the constituency – that’s essentially been the focus of my visit this week.  We also need to do what we can to support the FTA study process now underway. As agreed at the May meeting second Forum will be held in late 2009, most likely in November: we will be looking to stage some intersessional activity also around the middle of the year probably we think in the form of a seminar on food safety and food security.

Clearly we’d be interested in hearing from the Chamber about how we can work together on common objectives in Japan.

Conclusion

I began these remarks by talking about history, about Ii Naosuke who signed the Harris Treaty and about our own Treaty of Commerce signed 100 years later.

There is history already in the relationship between NZ and Japan and there was history made at the Partnership Forum in May and in the new momentum for an expanding relationship that the Forum is helping to create.

With Japan there is a good news story waiting to break out:  this relationship which been built with persistence and dedication and has the capacity to grow even further in the years ahead.