New thinking, new partnership sought with Japan Dominion Post – 12 May 2008 By Stephen Jacobi

Building the business and economic relationship with Japan will be the focus of the first ever Japan NZ Partnership Forum which opens in Tokyo on 14 May.
Winston Churchill’s oft-quoted remark ? “nations have no permanent friends and no permanent enemies, just permanent interests” ? applies even more particularly to New Zealand in this first decade of the 21st century.

In these credit-crunch, carbon-constrained, coalition-building times New Zealand’s permanent interests are to achieve a triple bottom line of security, prosperity and sustainability in its dealings with the rest of the world.

While, for many, foreign affairs may seem not to change much, who would have thought even ten years ago that New Zealand would have negotiated a free trade agreement with China ? well in advance of similar agreements with our long-time friends the United States and Japan.

Over thirty years ago when the United Kingdom joined the European Economic Community, New Zealand learned a valuable lesson about the need to trade with a diverse range of partners. That lesson is one that still has relevance today. Simply put, the greater number of trading partners you have, the less impact a change to the economic or political environment of one partner will have on your economy.

The China FTA has taught us another lesson. That it is possible to make progress in a relationship despite political differences by concentrating on the areas of mutual benefit and so produce an excellent result for both economies.

The lesson is one that we are learning with the United States where a highway is being built around the rock in the road of nuclear weapons.  It is a lesson worth bearing in mind as a group of over 40 New Zealanders heads to Tokyo this coming week for the first ever Japan New Zealand Partnership Forum on 14-15 May.

New Zealand and Japan are likeminded on most global issues ? human rights, the rule of law, sustainable development ? and both have signed the Kyoto Protocol.  This paper has in recent months highlighted the differences between us on whaling.   Many readers will recall that under former Prime Minister Muldoon it was our different views on agricultural protection which hit the headlines.

These differences of view are strongly held and need to be addressed through engagement and diplomacy.  Our permanent interests are multi-faceted and sophisticated relationships need to be able to deal with difference.

For much of the last thirty years Japan has been either New Zealand’s second or third largest trading partner. Japan is still the second largest economy in the world ? twice as large in fact as China.  It is often claimed that China is set to become Asia’s largest economy ? that time may well come but it is certainly not here yet.

The point is that in our commendable moves to develop the relationship with China we run the risk of neglecting other critically important markets.  Helen Clark’s visit to Japan and Korea this week reflects the Government’s view, backed by business, that there are important opportunities in both markets to be  explored.

In the case of Japan there are very real risks for New Zealand if the business and economic relationship is not further strengthened. Our competitors, Australia and Chile, are actively seeking closer relations with Japan, and are making progress. Australia is negotiating an FTA and Chile has one already.
Today there is a 38.5 percent tariff for imports of New Zealand and Australian beef to Japan. The impact on beef exports to Japan will be severe if Australia manages to secure an FTA and this tariff was removed.

For the time being while Japan is reluctant to enter into FTA negotiations with New Zealand, otherpressures coming to bear.  The pace of economic integration is accelerating in the region as important new FTAs are concluded such as that between Korea and the United States. An FTA between New Zealand and Korea is also on the cards.  The rise in commodity prices is already leading to shortages of dairy products in Japan as the Japanese supply chain struggles to respond.

The only way to nurture and grow New Zealand’s ties with Japan is to maintain constant dialogue.

This is the background against which this first Japan New Zealand Partnership Forum is being held.  With the theme of “New Thinking, New Partnership”, over 90 participants, including over 50 on the Japanese side, will focus on the potential for expanded co-operation in the areas of Asia Pacific growth and development, business innovation and responses to climate change and sustainability.

The Forum provides an unparalleled opportunity to raise New Zealand’s profile in Japan, capture the imagination of influential Japanese community leaders and show how the permanent interests of both countries can be advanced through an enduring partnership.