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PP RUEHWEB

DE RUEHWL #0086/01 0322025
ZNY CCCCC ZZH
P 012025Z FEB 06
FM AMEMBASSY WELLINGTON
TO RUEHBY/AMEMBASSY CANBERRA PRIORITY 4291
RUEHSV/AMEMBASSY SUVA PRIORITY 0437
RUEHC/SECSTATE WASHDC PRIORITY 2339
INFO RHHMUNA/USCINCPAC HONOLULU HI PRIORITY
RUEKJCS/JCS WASHINGTON DC PRIORITY
RUEKJCS/OSD WASHINGTON DC PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHDC PRIORITY

C O N F I D E N T I A L WELLINGTON 000086 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/ANP 
OSD FOR LIZ PHU 
PACOM FOR ADMIRAL FALLON 
 
E.O. 12958: DECL: 01/24/2013 
TAGS: PREL MNUC NZ
SUBJECT: PACOM VISIT TO NEW ZEALAND 
 
REF: 06 WELLINGTON 0041 
 
Classified By: DCM David R. Burnett; Reason 1.4 (A and D) 
 
¶1. (C)  Summary:  Admiral Fallon's January 20-21 visit to New 
Zealand came at a time of media interest in the bilateral 
relationship, sparked by a TV mini-series on the ANZUS 
breakup and public release of former Prime Minister David 
Lange's private papers (reftel). The Admiral met with Prime 
Minister Clark, Defense Minister Goff and Opposition Leader 
Don Brash, as well as with Chief of Defense Forces Bruce 
Ferguson and other Defence Force (NZDF) officials.  He also 
toured the Devonport Naval Base and the First New Zealand 
Special Air Services Group.  He and Prime Minister Clark 
talked with local media after their meeting.  The meetings 
and media coverage of the visit focused welcome attention on 
the importance to New Zealand of its defense relationship 
with the United States and the need to think strategically 
about future cooperation. In his public remarks, Admiral 
Fallon gave no ground on the nuclear issue, but made clear 
the extent to which the United States was willing to work 
with New Zealand on issues of common interest in spite of 
that long-standing dispute. He urged New Zealanders to 
"challenge some of the perceptions we all take as bedrock," 
in the light of all the changes that have taken place in the 
world since the mid-1980s.  End Summary. 
 
¶2. (C)  Admiral Fallon's January 20-21 visit to New Zealand 
could not have been timed better.  The summer holiday season, 
a TV mini-series on the ANZUS breakup, and release of former 
Prime Minister David Lange's private papers (reftel) created 
an appetite for public discussion of the U.S.-NZ 
relationship.  The visit was hosted by outgoing Chief of 
Defence Forces Bruce Ferguson, who is due to retire in April. 
 Perhaps because of his lame-duck status, Ferguson was much 
less guarded in his comments than he has been in the past. 
He was particularly critical of the Labour Government's 
unwillingness to think creatively about how to restore the 
trust and credibility New Zealand has lost by Labour's 
handling of the anti-nuclear dispute.  He confirmed that new 
Defence Minister Phil Goff had been briefed on the negative 
impact on the NZDF of the anti-nuclear legislation and the 
U.S. Presidential Directive limiting U.S.-NZ military 
cooperation, noting in particular increasing difficulty in 
working with an Australian military that was regularly 
training and exercising with U.S. forces.  Ferguson was also 
critical of the National Party's unwillingness to address 
directly the need to resolve the anti-nuclear dispute as a 
long-term national security issue. 
 
¶3. (C)  Defense Minister Phil Goff kicked off the 
political-level meetings, welcoming the Admiral, stressing 
the importance of the bilateral defense relationship and 
pointing to New Zealand's contributions to the War on Terror, 
including NZDF deployments to Afghanistan and support for the 
Proliferation Security Inititiative (PSI).  Admiral Fallon 
expressed U.S. appreciation for those contributions, noting 
that the NZDF's Provincial Reconstruction Team in Bamiyan 
provided a good general model for future PRTs and its SAS 
contingent had worked extremely well with U.S. counterparts. 
Goff said the Cabinet would decide by the end of February 
whether to extend the PRT beyond September 2006; he did not 
comment on further SAS deployments.  Goff noted Senator 
McCain's comment that New Zealand should think about 
replicating its success in Bamiyan by heading a PRT in Iraq. 
The Minister said he told McCain that New Zealand was not 
averse to doing so once the security situation had 
stabilized.  (Comment:  Embassy believes the Bamiyan PRT will 
be extended even though such a relatively large deployment 
stretches the NZDF's increasingly limited human resources. 
Without it, New Zealand's small,scattered military 
contributions elsewhere would not be enough to maintain the 
NZDF's access, influence and reputation.  If New Zealand were 
to engage in Iraq, it would most certainly have to disengage 
in Afghanistan.  End Comment.) 
 
¶4. (C) The Admiral said he saw potential to do more with New 
Zealand in a rapidly changing region.  He urged Goff to look 
at how we could move forward, adding that, in his opinion, 
Washington was willing to do so, but needed to see signs that 
Wellington recognizes the extent to which the world has 
changed since the mid-1980s.  Admiral Fallon underscored the 
importance of trust in bilateral relationships, and called on 
the GNZ to think of ways to rebuild the trust lost over the 
nuclear issue over the past two decades.  He went on to 
outline a number of areas of mutual concern.  We both need to 
encourage China to contribute to the world's stability and to 
work toward a cooperative, rather than competitive future, he 
said. The U.S. was engaging the Chinese at all levels, 
including military-to-military contacts.  Another area to 
watch was Russia's continued backsliding under President 
Putin.  Admiral Fallon also lauded New Zealand's efforts to 
shore up non-functional island states, adding that Kiwis are 
better attuned to those states than is the U.S. and clearly 
has an important role to play. 
 
¶5. (C)  The Minister agreed that the Chinese "charm 
offensive" in the region had potentially destabilizing 
effects, especially on some of the less stable island states. 
 New Zealand was doing what it could, with Australia and 
other partners, to build governance capacity and ensure 
long-term stability in the South Pacific.  However, money 
spent on education, job creation, investment promotion or 
health care did not seem to have the same appeal to island 
state governments as "big ticket" Chinese-funded projects 
like sports facilities.  He said the GNZ used every 
opportunity to engage the Chinese on this and other issues, 
and pointed to the large number of Chinese delegations, 
military and otherwise, that New Zealand had hosted over the 
past year.  He also discussed New Zealand's views on the East 
Asia Summit process and disappointment over China's efforts 
to sandbag the EAS in favor of the ASEAN 3. 
 
¶6. (C)  On the nuclear issue, Goff said New Zealand's 
position was two-fold.  The country has no need for nuclear 
power and is concerned over the long-term problems associated 
with the nuclear power industry.  While the Government 
understands the science and relative risks of nuclear power, 
New Zealand depends heavily on its image as "clean, green and 
non-nuclear."  He said two-thirds of New Zealanders don't 
want nuclear-powered vessels in New Zealand waters.  The 
second issue is U.S. bullying.  There is a widespread 
perception among New Zealanders that the U.S. wants to send 
nuclear-propelled vessels to New Zealand and is constantly 
pressing the Government to make that happen.  The Admiral 
explained that the U.S. Navy has no operational need to send 
any kind of ships to New Zealand.  Indeed, the only reason 
for doing so would be to exercise with the New Zealand Navy, 
at its request.  He asked Goff what the GNZ might do to 
dispel some of the myths that had grown up around the dispute 
over the past 20 years.  Goff said the whole issue had become 
a political "third rail" which even the opposition National 
Party would not touch.  The Charge pointed out that, while 
the U.S. Government has done its best to address the bully 
myth directly and objectively, as soon as we show any 
success, someone stirs it up again for domestic political 
purposes.  The problem is clearly one of New Zealand's own 
making and only New Zealand could begin to resolve it. 
 
¶7. (C)  Admiral Fallon and Charge then met briefly with Goff 
and Prime Minister Helen Clark, prior to a larger meeting 
with the Prime Minister and her staff.  Clark began by 
apologizing for the inadvertent release to the media of a 
highly sensitive intelligence document in former PM Lange's 
private papers.  She explained that neither the National 
Archives nor Cabinet staff had followed prescribed oversight 
procedures and said her Government had moved quickly to 
remove the document from public scrutiny.  The Prime Minister 
stressed several times that there was no political motive 
behind the release of the document at a time when President 
Bush was facing considerable domestic pressure over NSA 
activities, and was clearly concerned that the White House 
might believe there was.  She underscored the importance to 
New Zealand of continued intelligence cooperation both as an 
area where New Zealand could make a modest contribution and 
as a means of enhancing New Zealand's understanding of 
rapidly evolving events in the region. 
 
¶8. (C)  The PM noted that this was why the intelligence 
relationship had survived the dispute over New Zealand's 
anti-nuclear legislation relatively intact.  She then gave a 
brief overview of where New Zealand is on the nuclear issue, 
consistent with the points made by Goff.  Admiral Fallon 
responded by noting how much the world has changed since the 
legislation had been enacted.  He explained that the U.S. 
Government had periodically looked at its policy response to 
the legislation to see if it were still relevant, and 
continued to believe that it was, though minor modifications 
had been made, such as the restoration of high-level 
political contacts. He said that while no one expected New 
Zealand to return to ANZUS, there was significant scope for a 
broader, deeper strategic relationship between the U.S. and 
New Zealand if we could find a way to move beyond the current 
impasse over the anti-nuclear legislation.  He repeated the 
comment he had made to Minister Goff that Washington was 
waiting for a sign from New Zealand acknowledging how much 
the world has changed since the mid-1980s.  The Prime 
Minister fell back on the political "third rail" argument. 
Charge pointed out again that it was a third rail of the 
Government's own making and whenever the USG tried to reduce 
the sensitivity of the issue in New Zealand, something always 
seemed to happen to stir it up again.  The PM replied with an 
embarrassed laugh, "Yes, like our election campaign." 
 
¶9. (C)  Staff from both sides then joined in, with Minister 
Goff excusing himself to attend a funeral.  The Prime 
Minister welcomed Admiral Fallon, and repeated Minister 
Goff's assessment of the importance of the bilateral defense 
relationship to New Zealand.  She noted that, despite the 
disparity in size and technology between our forces, New 
Zealand could still add value to the relationship, especially 
in the South Pacific.  The Admiral thanked the PM for New 
Zealand's contributions to the War on Terror and to regional 
stability, especially through its work in the Pacific Islands 
Forum.  Clark then gave a brief overview of New Zealand's 
views on regional security architecture, noting the 
multiplication of regional fora.  The PM said this was not 
necessarily a bad thing. Noting that China and Japan were 
both present and polite to one another at the East Asia 
Summit and the APEC Summit, in spite of rising public 
tensions between the two, Clark opined that this was perhaps 
the real utility of having such meetings.  The Prime Minister 
said she had told her Chinese counterpart that China's 
preference for limiting regional security debate to the 
ASEAN 3 was foolish in New Zealand's view, but said she 
expected Chinese attempts to manipulate or weaken the EAS 
would likely continue unabated.  She said New Zealand was 
increasingly concerned about "unofficial" Chinese activity in 
the region, such as rising Chinese criminal activity in Papua 
New Guinea, worrying that the perpetrators might have links 
with some in the Chinese Government. 
 
¶10. (C)  PM Clark agreed with Admiral Fallon that recent 
Russian activity in East Asia had not been helpful.  She said 
Russia's pressure on Ukraine over natural gas pricing had 
raised fears in the region that Russia would "play the energy 
card" similarly with China and Japan.  In response to the 
Admiral's query on New Zealand's priorities in the South 
Pacific going forward, the PM said her Government was doing 
some strategic thinking on the contribution of primary and 
secondary education to economic and political stability in 
the Pacific Island States.  She expected that New Zealand 
would increase its funding of scholarships and other 
educational support over the next few years, though she 
ruefully admitted that such spending did not have the 
immediate impact on current governments that a Chinese-funded 
sports stadium might have.  Still, said Clark, the long-term 
benefits of educational ties and the potential impact on 
employment for island youth made the investment worthwhile. 
 
¶11. (C)  Admiral Fallon and Prime Minister Clark then 
adjourned to a stand-up meeting with the media, where they 
were immediately asked if the nuclear issue had been 
discussed.  Clark said it had, but the subject had not 
dominated the talks.  She said there would not be a U.S. ship 
visit "anytime soon" but said that did not keep the U.S. and 
New Zealand from working together on "many, many other 
things."  Admiral Fallon acknowledged that the nuclear 
dispute had been around for a long time, but said the world 
was changing rapidly despite our desire to have things the 
way they have been in the past.  He said we all have a 
different view of security than we might have had back in the 
1980s, adding that "the willingness to be open to discussion, 
to ...challenge some of the perceptions we all take as 
bedrock, might be in our best interests."  Asked if he was 
indicating a softening of the U.S. attitude toward New 
Zealand's nuclear-free stance, the Admiral replied "This 
isn't about softening or hardening," and said the purpose of 
his visit was to get to know the leadership of New Zealand. 
The Admiral stressed the importance of mutual trust in 
relationships, playing successfully on a theme raised in 
former Ambassador Swindells' farewell speech, Ambassador 
McCormick's initial press conference, and a spate of recent 
editorials on the need for New Zealand to address the "trust 
issue" stemming from New Zealand's handling of the nuclear 
issue from the mid-1980s onward. 
 
¶12. (C)  Later that afternoon, Admiral Fallon and Charge met 
with National Party leader Don Brash to get his views on the 
issues discussed with Goff and Clark.  Brash conceded that 
the National Party had not done enough to address the nuclear 
issue, but said there was little point in doing anything that 
would just be undone by the next Labour Government that came 
along.  However, National was willing to engage in creative 
thinking on how to address U.S. concerns over the legislation 
and had formed a "ginger group" consisting of key political 
operative Murray McCully and former diplomats Tim Groser and 
John Hayes to work on how to enhance the bilateral 
relationship.  Brash was eager to have Emboffs meet with them 
for further discussion. Charge said he had had a good meeting 
with McCully just prior to the summer holidays, and would 
meet with all three MPs later in January.  Admiral Fallon 
welcomed Brash's openness to discussing the nuclear issue and 
its negative impact on the larger relationship.  He said 
Washington was looking for signs that New Zealand was serious 
about closer ties and a more strategic approach to the 
relationship.  Anything National could do to encourage such 
signs would be welcomed.  Brash said he was planning a trip 
to Washington in April, and hoped he would be able to meet 
appropriate Administration officials. 
 
¶13. (C)  Comment: Admiral Fallon's visit added impetus to the 
ongoing public debate in New Zealand about what it should do 
to move from an ad hoc to a strategic relationship with the 
United States.  His comments on trust and on the need to 
rethink cherished views have played well in the media.  They 
will no doubt increase public pressure on the Labour 
Government to give Washington some sign that it is serious 
about taking the relationship forward and addressing the 
underlying policy and trust problems that have limited the 
relationship for the past two decades.  While neither Clark 
nor Goff gave any hint of creative thinking on the nuclear 
issue, they must deal with a Foreign Minister who has 
declared that a closer relationship with Australia and the 
U.S. are his top priorities, and a strong opposition party 
who is of the same view.  Editorial comment on the "pointed 
exclusion" of Foreign Minister Winston Peters from the 
Admiral's schedule (we suspect the Minister would have been 
included if he had really wanted to be) has added to pressure 
on the Prime Minister to show publicly that she understands 
the importance of the U.S.-NZ relationship. We will do our 
best to take advantage of that. 
 
¶14. (U) Admiral Fallon has cleared this message. 
 
McCormick