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RUEHPB RUEHRN RUEHROV
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ZNR UUUUU ZZH
R 080059Z SEP 08
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 5409
INFO RUEHNZ/AMCONSUL AUCKLAND 1730
RUEHBY/AMEMBASSY CANBERRA 5243
RUEHSG/AMEMBASSY SANTIAGO 0104
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RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
RUEHSS/OECD POSTS COLLECTIVE
RUCPDOC/USDOC WASHDC 0244
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUCNMEM/EU MEMBER STATES COLLECTIVE

UNCLAS SECTION 01 OF 02 WELLINGTON 000285 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/ANP AND EEB, STATE PASS TO USTR, PACOM FOR 
J01E/J2/J233/J5/SJFHQ 
 
E.O. 12958: N/A 
TAGS: ECON ETRD PGOV PREL NZ
SUBJECT: NEW ZEALAND'S EXPECTATIONS ON EVE OF P-4 TALKS IN SAN 
FRANCISCO 
 
Ref A)  WELLINGTON 121 
 
WELLINGTON 00000285  001.2 OF 002 
 
 
¶1.  (SBU)  Summary:  A member of the New Zealand delegation to the 
P-4 talks says that GNZ expectations remain positive, and that all 
sides will make progress in San Francisco.  He noted that this 
second round will not be the last, but that discussions should 
result in consolidated text for both chapters on Investment and 
Financial Services.  New Zealand has been in contact with the other 
countries' negotiators, and he predicted that there would be more 
detailed interventions during this round than had been the case for 
some delegations in Queenstown in June.  End Summary. 
 
P-4 Talks:  No Final Results But Progress Expected 
--------------------------------------------- ----- 
 
¶2.  (SBU) Emboffs met on September 4 with Ben King, senior policy 
officer in the Trade Division of New Zealand's Ministry of Foreign 
Affairs and Trade (MFAT) to ascertain New Zealand's 
expectation/concerns prior to the upcoming "P-4 talks" to be held in 
San Francisco from September 10 to 14.  King said the NZ delegation 
was fully prepared to work through the section on Investor-State 
Dispute Settlement (CISDS) and that he expected there to be four 
sets of developed CISDS proposals submitted by the respective 
parties with the expectation that a consolidated text would result 
by end of the session.  He did caution that there may still be some 
unresolved policy differences among the participants but he did not 
see these as insurmountable.  He also did not see upcoming New 
Zealand national elections (likely to occur in November) as slowing 
down any momentum for New Zealand commitment to moving ahead with 
further P-4 discussions or negotiating rounds. 
 
¶3.  (SBU) While Mr. King is not directly negotiating the Financial 
Services section (responsibility of MFAT's Brian Wilson), he did 
proffer that he felt there were still some "technical issues" that 
needed to be addressed by the GNZ.  These relate to proposed 
legislation granting the Reserve Bank of New Zealand (RBNZ) expanded 
powers to regulate investment institutions, i.e. non-traditional 
banking/investment entities.  He did not see this as a deal breaker 
but merely a developmental step still to be taken by NZ.  Mr. King 
further relayed that his sense was that all participants have had 
extensive consultation since the Queenstown meeting and he expected 
all parties to be fully briefed and prepared. 
 
Background 
---------- 
 
¶4.  (SBU)  In 2005, New Zealand, Singapore, Chile, and Brunei 
concluded the first multilateral Free Trade Agreement (FTA) in the 
Asia-Pacific region, the so-called Trans-Pacific Economic 
Partnership (nicknamed the "P-4").  At the time of signing, the P-4 
members were not able to reach agreement on the Financial Services 
and Investment provisions, but agreed to revisit those chapters in 
¶2008.  In February this year, USTR Ambassador Susan Schwab announced 
that the United States would begin Investment and Financial Services 
section negotiations with the P-4 countries, and would also begin a 
detailed exploratory process to determine whether it should 
participate in the full Trans-Pacific Strategic Economic 
Partnership. 
 
¶5.  (SBU)  The parties held a round of exploratory talks in Santiago 
in early March.  The first negotiating round was held in Queenstown, 
New Zealand from June 16-19.  At the start of the Queenstown talks, 
New Zealand announced that it could consider inclusion of CISDS in 
the Investment chapter, subject to the inclusion of appropriate 
safeguards, along the lines of that provided for in the New 
Zealand/China FTA (Reftel A).  NZ's previous opposition to CISDS had 
apparently been a major obstacle to reaching an agreement on 
Investment among the P-4 in the initial FTA negotiations. 
 
¶6.  (SBU)  In Queenstown, the United States presented proposed texts 
on Investment and Financial Services, and most of the negotiations 
were spent comparing provisions in the US text with the draft P-4 
chapters.  At the end of the discussions, side-by-side texts were 
agreed upon that now form the basis of the San Francisco round of 
negotiations. 
 
WELLINGTON 00000285  002.2 OF 002 
 
 
 
MCCORMICK