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C O N F I D E N T I A L SECTION 01 OF 02 WELLINGTON 000128 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/ANP, EEB/TPP 
STATE PASS TO USTR B. WEISEL 
STATE PASS USDA/FAS E.MANGINO 
STATE PASS TO DEPT OF AGRICULTURE 
 
E.O. 12958: DECL: 06/04/2019 
TAGS: EAGR ECON ETRD PREL NZ
SUBJECT: NEW ZEALAND'S MINISTER OF TRADE ASSESSES 
HIGHLIGHTS OF WASHINGTON VISIT 
 
Classified By: CDA David J. Keegan; Reason:  1.4 (b) and (d) 
 
¶1. (SBU)  Summary:  New Zealand's Trade Minister Tim Groser 
categorized all his meetings in Washington as extremely 
successful; he also expressed decidedly negative reactions to 
recent dairy export subsidy measures by the U.S. and EU. 
Groser outlined his plans to revamp NZ development assistance 
to focus more on developing the trade and economic capacities 
of Pacific Island nations.  He was particularly encouraged by 
his discussions with U.S. officials in advance of the Cairns 
Group meeting regarding marrying efforts to address climate 
change concerns with agricultural initiatives. End Summary. 
 
Background 
---------- 
 
¶2. (SBU)  On June 2, Charge', Ag Attache' and Econoff met 
with New Zealand's Trade Minister Tim Groser to get his 
assessment of his series of meeting and speaking events in 
Washington between May 12-15, 2009.  Also acting in his 
capacity as NZ's Associate Minister for Climate Changes along 
with Adrian Macey, NZ's Climate Change Ambassador at the 
Ministry of Foreign Affairs and Trade (MFAT), they covered 
issues of concern to NZ in both the trade and environment 
arenas.  Graeme Harrison, Chairman of the International 
Business Forum in NZ accompanied the delegation and was 
present at events with NZ business interests and the U.S. 
Chamber of Commerce. Minister Groser also met with the 
President of the World Bank, Robert Zoellick, USTR Ron Kirk, 
Mike Froman, Deputy NSC Advisor for International Economics 
Affairs and Todd Stern, the State Dept.'s Special Envoy for 
Climate Change. Groser also gave a speech to the U.S. Chamber 
of Commerce entitled, "Trade and the Road to (Economic) 
Recovery - An Asia Pacific Perspective." 
 
New Direction in New Zealand's Development Assistance 
--------------------------------------------- -------- 
 
¶3. (SBU)  The first half of the Minister's readout was 
devoted to his plans/vision for changing New Zealand's 
economic aid and development assistance programs. He spoke 
about merging NZAID (NZ aid agency) back into MFAT and using 
economic assistance to focus more on building trade and 
economic development in and with Pacific Island countries. 
Groser said he liked some of the studies and policy advice 
that was being produced by the Lowy Institute in Sydney. 
Groser stressed that GNZ's vision was not so narrow as to 
shift focus in assistance merely as an attempt to increase 
export opportunities to Pacific nations but a genuine desire 
to build more sustainable economies. He said that one measure 
of New Zealand's success could be a negative trade balance 
with the islands as they improve their ability to export to 
New Zealand and Australia. 
 
Trans-Pacific Partnership 
------------------------- 
 
¶4. (C)  Turning his attention to the issue of closer trade 
relations with the U.S., Groser said he was "absolutely 
thrilled" at the positive signals from Secretary of State 
Clinton, USTR Ron Kirk and others regarding the improved 
relationship between the United States and New Zealand. He 
noted that the recent visit of Foreign Minister Murray 
McCully to Washington had been very successful from New 
Zealand's perspective, and they were intently focused on 
finding ways to continue improving the relationship. Turning 
specifically to prospects for a Trans-Pacific Partnership 
Agreement (TPP). Groser said he expected the announcement 
soon to restart negotiations, but the shape and tone of the 
announcement could/would be worded differently from what was 
originally announced (e.g., perhaps a different configuration 
of countries and/or issues). He said he was realistic and 
recognizes that it has to be a U.S. decision and that NZ 
cannot influence that decision but would be very surprised if 
the U.S. were to say no to restarting TPP negotiations. If 
U.S. were to say no (to TPP), he sees negative consequences 
for the United States as well as its friends in the region, 
with China taking on a more dominant role among the Asia 
 
WELLINGTON 00000128  002 OF 002 
 
 
Pacific economies. "The question would be, who is going to 
lead the trade and investment integration in Asia in the 
future in the absence of a leadership role played by the 
United States and the answer is clearly China." With China 
extending its influence in the Asia-Pacific region, Groser 
"would rather see more U.S. involvement in the region and the 
sooner the better." 
 
Dairy Export Incentive Program (DEIP) 
------------------------------------- 
 
¶5. (C)  Groser stressed that he was "deeply disappointed" 
with the U.S. announcement of its support for dairy export 
subsidies (DEIP).  "At the end of the day, it is impossible 
to reconcile the U.S. action with the recent G-20 
communique'." Groser went so far as to say that if the 
upcoming OECD Ministerial drafted a similar communique', "I 
could not let New Zealand be associated with such hypocrisy 
and I would not sign it." Groser expressed his concern that 
the U.S. decision to implement DEIP will lead us down the 
slippery slope of a larger future trade war as evidenced by 
the recent French initiative to get pig meat subsidies in 
place. In the strongest of terms he said, "the U.S. can't 
expect the rest of the world to take trade liberalization 
seriously if the U.S. says one thing and does another." 
 
¶6. (C)  Comparing the EU and U.S. approach to dairy export 
subsidies, Groser indicated he was "informed" that the EU's 
Dairy Management Committee (DMC) made its decision to 
introduce export subsidies in a vacuum without an 
understanding of the bigger picture while the U.S. made the 
decision in spite of a recent Congressional Research Service 
(CRS) paper predicting minimal benefits accruing to U.S. 
dairy sector as a result of DEIP. He said it was his desire 
to eventually see the U.S. and EU issue a joint statement 
saying the EU will abolish export refunds and US won't 
reintroduce DEIP. In the near-term, Groser believes it would 
be good for the advancement of trade liberalization if the 
U.S. and EU could jointly agree on at least 4 or 5 basic 
principles that would restart momentum to resist further 
protectionism. Groser added that he expected a degree of 
"head bashing" on DEIP at the upcoming Cairns Group meeting 
in Bali, but he said for his part he intends to remain even 
handed. 
 
 
Climate Change and Trade Policy 
------------------------------- 
 
¶7. (SBU)  Mark Sinclair, lead trade negotiator for TPP at 
MFAT, noted that there was a "meeting of the minds" in the 
session between NZ Ambassador Macey and Mike Froman, Deputy 
NSC Advisor regarding the intersection between the WTO trade 
policies and Climate Change policies. According to Sinclair, 
Groser was pleased with the level of engagement and feedback 
he got from his U.S. counterparts on calling for greater 
attention to be paid to the effects of climate change 
produced by agriculture and cooperative efforts to mitigate. 
Groser also said his expectations for the upcoming Cairns 
Group were measured. 
KEEGAN