Hon Phil Goff, Minister of Foreign Affairs and Trade Keynote Speech for Conference on "Looking to Latin America" New Zealand Centre for Latin American Studies (NZCLAS) 9.00am, 19 July 2005, the Northern Club, Auckland Professor Stuart McCutcheon, Vice-Chancellor of Auckland University, thank you for your words of welcome. Matthew O’Meagher, coordinator of the New Zealand Centre for Latin American Studies, thank you for the invitation to be here today. Greetings to all conference participants, and especially warm greetings to our overseas participants. Welcome to New Zealand. NZCLAS I am delighted to be here to open this conference on Looking to Latin America, organised by the New Zealand Centre for Latin America Studies. The Centre is itself a prime example of New Zealanders looking to Latin America. I had the privilege of officially opening the Centre on 21 May last year. The Centre has done a lot since then to bring together people and organisations interested in Latin America. In arranging this Conference, the Centre has focused not only on academic links but also on the broader economic and political relationship between New Zealand and the Latin American region. Personal Experiences The Prime Minister's visits and my own as Foreign Minister to Latin America have confirmed and strengthened our conviction that there is a growing area of shared interest between New Zealand and many of the countries of this region. While trade has historically been a key part of our relationships, today those relationships encompass cooperation on many international political and economic issues, as well as people-to-people links. My most recent visit was to a region of Chile – Rapanui – whose cultural links with New Zealand go back centuries, to the time of the great Polynesian voyages. Positive Developments The aim of the government's Latin America Strategy launched in 2000 was to strengthen New Zealand’s relationship with the region across three main pillars: political links, economic links, and people- to-people links. We've concentrated our efforts on six priority countries: our APEC partners Chile, Peru and Mexico, and Cairns Group members Argentina, Brazil and Uruguay. We realise that building relationships takes resources, patience, and time. When the government assessed the first three years of the Strategy it decided to continue the programme, with increased funding. Perhaps the most significant achievement in New Zealand’s relations with Latin America over the past year has been the conclusion of the Trans-Pacific Strategic Economic Partnership Agreement, or P4, with Chile, Brunei and Singapore - signed in Wellington just yesterday. The Parties to the Trans-Pacific SEP have made a commitment to cooperate in a range of fields, including primary industry, education, and scientific and technical research. All stand to gain from this. This has ushered in a new era in the relationship between New Zealand and Chile. Traditionally, New Zealand and Chile have been competitors and saw each other in those terms. We produce similar products, we target the same markets, and our climate and geography are remarkably similar. But last year, when President Lagos visited New Zealand, we talked about a new vision for the relationship - one in which the emphasis would be on cooperation and strategic partnership. There would still, of course, be healthy competition, but there would also be a focus on collaborative partnership - working together in a globalised world. When we look to our west our neighbour Australia competes with most of our key exports, yet we still manage around $14 billion of two-way trade per year. On this basis we should aspire to more than the current level of trade with Chile which is about $80 million per year. In Chile, as in other Latin American markets, traditional commodity products remain important. But we need also to develop new niche marketing opportunities. One example which I saw and which impressed me when I visited Chile in 2001 was Glidepath's success in winning the contract to supply Santiago International Airport with its automated baggage handling system, and the software to run it. In this a small company from a small country was successful against competition from much bigger companies in the world's largest countries. This year has seen promising developments in our relationship with Mexico, by far our biggest trading partner in the Latin American continent. Two-way trade totalled over $460 million last year. Mexico is one of New Zealand’s top markets for dairy products and is also important for meat and agritech. We also import significant amounts of vehicles, electronic equipment, and beverages from Mexico. Mexico could become an even more significant economic partner in the future, but New Zealand exporters suffer from high tariffs and from competition with countries with free trade agreements with Mexico. Mexico has been one of the world’s most prolific signers of free trade agreements. The government has made it a priority to work towards improving the climate for trade and economic links with Mexico. An encouraging step towards closer economic relations came with agreement in January this year between our two Trade Ministers to establish a Joint Experts Group to look at ways to strengthen the bilateral economic, trade, and investment relationship. The Group includes not only government officials on each side, but also business and academic representatives. New Zealand hosted the first meeting of this group last month. Participants discussed ways to build up knowledge of economic opportunities that a closer economic relationship would offer to both countries. As is the case with Chile, we see New Zealand's future economic relationship with Mexico as going beyond trade access to include other important elements of a strategic economic partnership. The Joint Experts Group will work to identify such opportunities. The next meeting of the group will be in Mexico later this year. We await the conclusion of its work and its recommendations. For New Zealand, a Closer Economic Partnership with Mexico would be the single most significant step forward in our economic relationship. There’s also been progress elsewhere. The Mercosur countries (Argentina, Brazil, Paraguay and Uruguay) have in the past year increased their contacts with New Zealand, reciprocating our efforts through official visits and other mechanisms to raise New Zealand's profile. I was pleased that we have reopened the dialogue between Mercosur countries and CER members New Zealand and Australia. The first meeting of the renewed dialogue was held in Brasilia in November last year; the second is scheduled for New Zealand early next year. Argentina has been a long-standing market and source of visitors for New Zealand. Although these contacts reduced significantly during Argentina’s economic crisis of 2001-2002, the situation there is improving, and opportunities have returned. New Zealand investors have realised this and are becoming established there. Argentina is a substantial dairy exporter and its leading dairy cooperative is working closely with Fonterra in developing international dairy markets. And in another dimension to the relationship, Argentina’s Under- Secretary for Democracy and Institutional Reform recently visited New Zealand as a Prime Minister’s Fellow, to look at our experience with citizens’ involvement in democracy. Brazil, an emerging major power, has shown an interest in building its relationship with New Zealand. Over the past year we have had visits by Brazil’s Chief Trade Negotiator, and by senior Foreign Affairs officials for Foreign Policy consultations. During an official visit here, the Minister of Agriculture shared with us his vision of a world in which biomass will become a key energy source. He also envisaged successful farmers more and more coming to resemble business people tuned in to world markets. Brazil itself is fast becoming a major agricultural exporter. In 2004 it became for the first time a net dairy exporter and has the potential to become a major global dairy player in the years ahead. We would expect New Zealand and Brazil to work together in ever-closer partnership in the future, as we currently do in the Cairns Group. Peru as an APEC partner and traditional market is also a priority for New Zealand. It's our fourth largest merchandise export market in Latin America. We're looking for ways to continue to strengthen ties with that country, including through using the Latin American Strategy Fund to support growing people-to-people links. The recent signing of a cooperation agreement between the National Institute of Water and Atmospheric Research (NIWA) and its Peruvian counterpart organisation has highlighted the scope to expand linkages in the area of science and technology – with Peru and other Latin American countries. Across the board, people-to-people links with Latin America have grown in the past year, with support from the funds allocated by the government through the Latin America Strategy Fund. This seed funding has supported cultural events, journalist visits, indigenous peoples’ interaction, scientific and conservation links. We've seen growing numbers of visitors from Latin America. In the year to September 2004 we saw a 33% increase in visitor numbers from Chile, and a 14% increase in visitors from Brazil, our largest tourism market in Latin America. In the case of Argentina, Chile and Uruguay we have Working Holiday Schemes. Such schemes are also under negotiation with Brazil, Mexico and Peru. New Zealand has recently increased the annual quota for Working Holiday visitors from Argentina and Chile to 500 places each. As other speakers will describe, growing education links between New Zealand and Latin America are making a strong contribution to increasing awareness of each other. The Centre for Latin American Studies has involved universities and other interested parties in the Centre’s Advisory Board to help it become a truly national centre.