Address to Asia:NZ Foundation

A review of some key developments in regional integration and co-operation of importance to New Zealand.

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I am pleased to have this opportunity to provide an overview of the recent APEC meeting I attended in Sydney, to touch on the EAS Summit I will be attending in Singapore in November, and to review some of the key developments in regional integration and co-operation of importance to New Zealand.

This year's APEC Summit was anticipated as a meeting of some significance for a number of reasons.

Firstly, there was the political resonance of APEC 'returning home' for the first time to Australia, which 18 years ago had the vision to propose a process for regional economic co-operation in the Asia-Pacific region.

APEC has of course evolved and grown considerably since then. It has shown itself to be an insightful and successful piece of regional diplomacy which has served the interests of New Zealand and the wider region well.

There was therefore much to celebrate in its return to the land of its birth - particularly given the leadership, energy, and resources Australia brought to its year as host.

Expectations for this year's APEC Summit were also heightened by the presence of a number of new challenges on APEC's formal agenda - specifically climate change, behind the border reform, and regional trade and economic integration. In addition, APEC Leaders met against the background of the lack of progress in the WTO's Doha Round.

All these factors set the scene for another important and timely Summit.

Climate change was the flagship issue for APEC 2007. This was the first time it had been formally addressed as an agenda item by leaders.

It was a New Zealand initiative at the Ha Noi Summit last year to include reference to the climate change challenge in the Leaders' communiqué. This year Australia, as host, picked up the issue and ran with it.

The APEC Leaders agreed in Sydney to a stand alone Declaration on Climate Change, Energy Security, and Clean Development. This statement outlines a number of principles to guide discussions on future action in other international fora, as well as a number of practical initiatives for APEC economies to carry forward collectively.

It is appropriate for APEC to have a voice on climate change. APEC is an organisation of economies, and climate change unmitigated would have a significant economic impact.

APEC's membership includes many of the world's largest energy producers, as well as some of the world's most significant CO2 emitters. Moreover, the Asia-Pacific region is likely to remain the primary engine of global economic growth in the coming decades. Any successful global strategy to combat climate change will require active and constructive engagement from the APEC group of economies.

The Declaration agreed in Sydney represents a positive step forward in regional co-operation on climate change. In it, APEC Leaders reaffirmed their commitment to the UN Framework Convention on Climate Change; and called for a post-2012 international framework which strengthens, broadens and deepens current arrangements for reducing global emissions of greenhouse gases.

In the Declaration, Leaders accept the need for all APEC economies - developed and developing - to contribute toward shared goals in addressing this challenge. Aspirational targets have been set for improvements in energy efficiency and for the expansion of forestry. The Declaration represents a big step forward, for the first time bringing together on the same page major global economies such as China and the US.

Overall the key contribution APEC made in Sydney was to galvanise and lock in high level political commitment to action by the region's developed and developing countries. This is an important political signal in advance of the UN Climate Change Conference to be held in Bali in December.

As in previous years, the trade agenda was also foremost in the minds of Leaders in Sydney.

Uncertain prospects for the troubled Doha Round remained the key worry for all economies. With the Round rapidly approaching crunch point, it was vital that APEC members delivered a strong message at this meeting. This was achieved, with Leaders reinforcing their commitment to an early and successful conclusion to the Round, based on an ambitious and balanced result which could deliver new trade flows.

APEC economies stressed the urgency of making progress, and - importantly - committed themselves to re-engaging on the basis of the existing Chairs' texts for agriculture and industrials. In our judgement, these texts represent the best hope for breaking the current impasse.

As we have seen in the past, however, such sentiments mean little unless they translate into greater flexibility and engagement by delegations in Geneva. Our Government was particularly pleased therefore that agreement was reached in Sydney that APEC economies should co-ordinate more closely in Geneva, to ensure that the commitments made by Leaders are acted upon. That way, APEC collectively can play an active and constructive role in bringing the Round to a successful conclusion in the coming months.

The Doha Round - while unarguably still the 'No. 1' trade priority for APEC - is not the only track we have available now for pursuing greater trade and economic openness in the region. Last year APEC crossed an important threshold with its acceptance of a Free Trade Area of the Asia Pacific - or FTAAP - as a long term goal.

As a long term proponent of this initiative New Zealand welcomed its inclusion in APEC's formal agenda, as a means to respond to the proliferation of bilateral FTAs in the region, and to help bring new energy and direction to efforts to achieve the Bogor Goals of free trade and investment in the region.

It is important to stress, however, that the proposal for an FTAAP remains a long term project. Given the varying levels of comfort with the concept among the membership, we are still some way off from any formal agreement to launch negotiations.

New Zealand's goals for the FTAAP this year therefore, were calibrated accordingly : to bed in understanding and acceptance of the concept as a long term goal; and to establish a forward work plan which could get APEC to a point from which negotiations could be launched at a future date.

These objectives were achieved in the report endorsed by Leaders in Sydney. It usefully set the initiative within the context of APEC's broader agenda in support of regional economic integration, including its work on trade facilitation, investment, and behind the border reform.

The FTAAP concept received an appropriate level of prominence in the report to Leaders, and -importantly - a set of discrete, practical steps were agreed on for taking the initiative forward in the coming years.

Many uncertainties remain in the process for advancing the FTAAP in the years ahead. But what I feel has changed during the past year is the growing acceptance that this is an idea whose time is close to arriving.

Leaders also agreed to renew APEC's current moratorium on new members for a further three years. This was certainly not for any lack of credible candidates for membership - far from it.

At a time, however, when APEC is wrestling with new long term challenges and when it is seeking to overhaul its own internal structures and procedures, it was agreed that expanding its membership would only further complicate matters. New Zealand agrees with this decision.

I would like to acknowledge the important role the APEC Business Advisory Council (ABAC) has played in APEC's work in the past few years.

This was evident in Sydney, where the majority of 'headline' issues - including climate change, the FTAAP, and structural reform - were ones which had benefited significantly from the support and/or advocacy of ABAC, prior to agreement being reached on their inclusion on the formal APEC agenda.

This is a reflection of the maturing engagement between ABAC and APEC Leaders and Senior Officials, and the increasing influence of ABAC in ensuring that APEC's agenda continues to be relevant.

APEC's political significance to us also lies in the opportunities it provides for New Zealand to pursue its bilateral interests.

Between me, Mr Peters and Mr Goff, some eighteen bilateral meetings were held in Sydney with counterparts from eleven different regional partners. In addition, the fact that the Leaders' Summit and associated ministerial meetings were nearby in Sydney enabled us to arrange leaders' visits from APEC partners Mexico, Hong Kong, and Viet Nam on their way to or from the meetings.

In Sydney, Mr Goff, Mr Peters and I also had good discussions with our United States counterparts, building on the ongoing relationship strengthening process both countries have been working on.

After the summit a number of influential US leaders from business and government travelled on to Auckland for the New Zealand United States Partnership Forum. It was remarked upon on several occasions at that Forum how far the NZ-US relationship had developed over the last eighteen months. I think this is a fair assessment - we've made some significant progress over that period.

The Minister of Trade and I also both met with our Chinese counterparts, to discuss the final steps which would be necessary to conclude our FTA negotiations . Conclusion could see New Zealand achieve that historic first of an FTA between China and a developed economy. We are in what we believe can be the final stages of these negotiations, with the core issues where agreement still needs to be reached now clear.

President Hu and I were able to express our continuing commitment to overcoming these differences and I hope we can conclude negotiations within the two year timeframe set during the Chinese Premier's visit of April last year.

Also looming large on our calendar of engagement with China is New Zealand's participation in Shanghai Expo 2010. With more than 200 participants and over 70 million visitors anticipated, the Shanghai Expo is expected to be the largest ever. China accordingly is putting a huge amount of resource into the event. Along with the 2008 Beijing Olympics, the Expo is an opportunity for China to showcase its astounding development to the world. It also represents a real opportunity for New Zealand to showcase our areas of innovation and unique culture to China and the world.

Recognising this, in April last year our government took the decision that New Zealand should participate in the Expo. Since then, we have agreed to take a prime 2,000 metre space allocation, which is four times the size of our pavilion at the Aichi Expo in 2005. The planning for our participation is well advanced, and officials are now evaluating proposals for the design and construction of the New Zealand Pavilion.

An event of this magnitude requires an appropriate level of leadership and co-ordination. Tonight, it gives me great pleasure to announce that New Zealand's current Ambassador to Indonesia, Phillip Gibson, has been appointed as New Zealand's Commissioner General for the Shanghai Expo 2010.

Phillip Gibson played an important role in New Zealand's success at the Aichi Expo in 2005 as Commissioner-General there. I have every confidence that he will do an excellent job as New Zealand's Commissioner General for the Shanghai Expo.

I want to also touch briefly on the East Asia Summit meeting which I will be attending in November in Singapore.

This will be the third EAS, and since the second Summit in Cebu in January the process has matured significantly, consolidating the Summit's place as an important and enduring part of the regional landscape.

Task forces have been meeting regularly throughout the year to take forward co-operation in the areas of energy and financial policies. Study groups on proposals for an Economic Research Institute for East Asia (ERIA) and a Closer Economic Partnership for East Asia (CEPEA) have made progress. In August this year Associate Minster for Energy the Hon Harry Duynhoven represented New Zealand at the first ever meeting of EAS Energy Minsters.

This year's host Singapore has nominated climate change and environmental sustainability as the main theme for the EAS Summit. We are supportive of this choice, and we are keen to see EAS discussions on these issues - like those of APEC - facilitate collective efforts regionally and globally to address these challenges.

At the EAS, New Zealand is also promoting discussion on how the UN Alliance of Civilisations initiative can be taken forward in the region. This global initiative seeks to establish greater respect between civilisations, cultures and religions, to reject extremism in any society, and to strengthen social cohesion.

Our inclusion in the inaugural EAS meeting in 2005 was a significant milestone for New Zealand in its relations with Asia. As the EAS further cements its place in the region's architecture, including potentially over time forming the nucleus for a nascent East Asia community, New Zealand's participation will enable us to further deepen our relationships in the region.

Questions are likely to hang for some time over the respective roles of the EAS and APEC in promoting regional integration. I do not believe that the two processes are inherently competitive or duplicative, although it is only natural for there to be a period of evolution as they both seek to define their respective roles.

From New Zealand's perspective there is clearly no benefit in seeking to pick 'winners' in such a process. Given the strategic significance of integration with the region to New Zealand's future security and prosperity, we must remain committed to engaging with the region through all avenues open to us.