VZCZCXRO1982
RR RUEHPB
DE RUEHWL #0003/01 0062107
ZNY SSSSS ZZH
R 062106Z JAN 10
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 0287
INFO RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHMCSUU/CDR USPACOM HONOLULU HI
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHBY/AMEMBASSY CANBERRA 0071
RUEHPB/AMEMBASSY PORT MORESBY 0014
RUEHWL/AMEMBASSY WELLINGTON

S E C R E T SECTION 01 OF 05 WELLINGTON 000003 
 
SIPDIS 
NOFORN 
 
E.O. 12958: DECL: 2020/01/07 
TAGS: PGOV PREL ECON EAID ETRD OVIP AMGT SENV MARR NZ
SUBJECT: CORRECTED COPY -- SCENESETTER FOR SECRETARY CLINTON'S NEW 
ZEALAND VISIT 
 
REF: 10 WELLINGTON 1 
 
DERIVED FROM: Derived from previous message. 
 
¶1.  (SBU) Secretary Clinton, Embassy Wellington and Consulate 
General Auckland extend a warm welcome to you for your January 
15-17 visit to New Zealand.  We have worked closely on preparations 
with your "Kiwi" hosts and share their excitement about your trip. 
Your visit to New Zealand, a small Pacific nation of 4.3 million, 
will further energize bilateral relations, which are already on an 
upward trajectory.  Washington is reviewing our decades-old policy 
stemming from disagreements over New Zealand's nuclear-free 
legislation in the mid-1980s and we expect that much closer 
military-to-military relations will result.  Our intelligence 
relationship was fully restored on August 29, 2009 (which should 
not be acknowledged in public).  New Zealand is eager to work with 
the U.S. on non-proliferation issues and Prime Minister (PM) John 
Key is openly excited about being invited by President Obama for a 
bilateral visit to Washington in March 2010 and to the April 
Nuclear Security Summit.  New Zealand depends on international 
trade (the U.S. is its second largest trading partner, after 
Australia) and influential constituencies across the society 
reacted enthusiastically to President Obama's November 2009 
announcement on the Trans-Pacific Partnership (TPP).  New Zealand 
Special Air Services (SAS) combat troops are deployed in 
Afghanistan, and the NZ Defense Forces run a Provincial 
Reconstruction Team (PRT) in Bamyan province. 
 
 
 
Your Hosts 
 
-------------- 
 
¶2.   (SBU) Your official host for this visit is Foreign Minister 
Murray McCully, but PM Key--consistent with his strongly personal 
pro-American outlook and that of the National Party-led coalition 
government he heads--has involved himself heavily in your visit. 
Key will lead the official bilateral meeting, hold a joint press 
availability with you, and be your host for an informal dinner. 
While delegating most foreign policy responsibilities to FM 
McCully, PM Key keeps a close watch on bilateral relations with the 
United States.  PM Key and the rest of the New Zealand government 
celebrates your visit as evidence that New Zealand is a welcome 
partner of the United States and a reaffirmation of the positive 
bilateral developments between our countries in recent years.  We 
do not anticipate that the New Zealand Government will raise any 
contentious issues in your meetings. 
 
 
 
PM Key's National-led Government - Riding a Wave of Popularity 
 
--------------------------------------------- ---------------------- 
--------------------- 
 
¶3.   (SBU) On November 8, 2008, The John Key-led National Party won 
the General Election ending the eight years of Labour party rule. 
Key, a former investment banker who only entered politics in 2002, 
announced the formation of a National-led minority center-right 
government after he had signed separate agreements with the ACT 
Party, United Future and the Maori Party to secure their respective 
support.  The governing arrangement with the three parties is not a 
formal coalition.  Rather, each party negotiated with National an 
agreement that will enable National to survive no-confidence votes 
in Parliament.  PM Key and his governing National Party are now 
extremely popular with voters with ratings well above 50 percent. 
The opposition Labour Party, with a 30 percent rating, and its 
leader, Phil Goff (8 percent), have struggled to be politically 
relevant since losing the 2008 election.  The Key Government 
recently dealt with minor scandals involving two support parties 
that briefly raised the specter of Government instability, but 
faded rapidly. 
 
 
 
Hot Domestic Issues:  Maori Land Rights and Emission Trading Scheme 
 
 
--------------------------------------------- ---------------------- 
--------------------------- 
 
¶4.   (C) While domestic politics will have little influence on your 
 
WELLINGTON 00000003  002 OF 005 
 
 
visit, there are several issues that currently are at the forefront 
of New Zealand politicians' minds.  The most critical legislative 
decisions since the National Party took office in 2008 are the 
recent repeal of the controversial Foreshore and Seabed Act, which 
permits Maori to pursue in court their customary rights to the 
coastline and its natural resources, and the Government's Emission 
Trading Scheme (ETS) bill, a contentious environmental measure 
introduced to cap carbon emissions.  Opposition parties derided the 
ETS bill as incomplete and roasted the Government for the speed 
with which it passed into law.  Another issue of note is the 
Government's plan to consolidate Auckland's eight existing councils 
into one Super Council with a single mayor.  This is a significant 
undertaking as Auckland is New Zealand's biggest and politically 
most important city. 
 
 
 
New Zealand's Economy - On the Rebound 
 
--------------------------------------------- ------------ 
 
¶5.   (U) New Zealand's economy suffered a recession from the global 
economic crisis, but is now on the road to recovery with real GDP 
data showing signs of improvement.  Economic forecasts suggest that 
economic growth will return in 2010 with 1.6 percent growth in real 
GDP.  However, unemployment is still expected to top 7 percent in 
early 2010.  After substantial restructuring and sale of 
government-owned enterprises in the 1990s, New Zealand is now one 
of the most open economies in the world and is ranked 5th in the 
world on the Heritage Foundation's economic freedom index.  Close 
economic ties with Australia are also a key part of the New Zealand 
economy.  New Zealand and Australia are partners in the "Closer 
Economic Relations" (CER) agreement, which allows for free trade in 
goods and most services.  There is a free flow of labor between the 
two countries with little to no impediments to migration, and the 
two countries also consult closely on fiscal and monetary policy. 
 
 
 
Trade is Vital to the Economy 
 
--------------------------------------- 
 
¶6.   (U) Trade is a vital part of the New Zealand's economy, 
particularly trade in agriculture, which represents about half the 
country's exports.  New Zealand's four top trade partners are 
Australia, the United States, China, and Japan.  To boost trade, 
the country has vigorously pursued free trade though the WTO and 
the Trans-Pacific Partnership Agreement (TPP), as well as bilateral 
agreements with other countries and regional organizations, 
including Australia, China, Singapore, Thailand, Malaysia, Hong 
Kong, ASEAN, and the Gulf Cooperation Council.  New Zealand is the 
first OECD country to sign a free trade agreement with China, and 
it now pursuing FTAs with Korea, Japan, and India.  In general, the 
country's trade policy generally enjoys bi-partisan support. 
 
 
 
The U.S. is a Major Trade and Investment Partner 
 
--------------------------------------------- ---------------- 
 
¶7.   (U) President Obama's announcement on November 14 of U.S. 
engagement with the TPP countries was warmly welcomed and has 
generated a great deal of enthusiasm among New Zealand Government 
officials and the media.  The U.S. is currently New Zealand's 
second largest individual trading partner and second largest 
individual export market, with the top four exports of frozen beef, 
dairy products, sheep meat and wine.  The U.S. is New Zealand's 
third largest source of imports with the top four imports of 
aircraft, aircraft parts, medical equipment and motor vehicles. 
The U.S. is also the top destination for New Zealand investment 
abroad (close to $1 billion) and New Zealand's second largest 
source of FDI (11.5 percent of the total FDI in NZ).  New Zealand 
has a vibrant U.S. business community of approximately 400 
companies, including well-known companies such as 3M, Citibank, 
Microsoft, and Mobil.  New Zealand's American Chamber of Commerce, 
based in Auckland, has over 160 members. 
 
WELLINGTON 00000003  003 OF 005 
 
 
Supportive of the U.S. Internationally, Especially in Multilateral 
Fora 
 
--------------------------------------------- ---------------------- 
---------------------- 
 
¶8.   (C/NF)   New Zealand, as a small country, places great store 
in multilateralism and is a strong proponent of the UN system.  It 
generally supports the United States at the United Nations and 
other international fora, only differing on a few issues such as 
Cuba.  When the U.S. Administration decided in March of 2009 to 
seek a seat on the UN Human Rights Council, New Zealand, which was 
also on the ballot, withdrew its name so the United States could 
run uncontested.  New Zealand has also been supportive of the U.S. 
position on nuclear issues in Iran and North Korea and generally 
desires to keep their policies towards North Korea in sync with our 
objectives.  On Iran, New Zealand supports our position, but their 
trade relationship with Tehran and overall approach to the Middle 
East precludes them from taking as tough a line with Iran as they 
have with North Korea.  New Zealand is also an active participant 
in other fora, such as of Asia-Pacific Economic Cooperation (APEC), 
Organization for Cooperation and Development (OECD), Pacific Island 
Forum (PIF) and Proliferation Security Initiative (PSI). 
 
 
 
New Zealand's Special Relationship with the Pacific Islands 
 
--------------------------------------------- ---------------------- 
---------- 
 
¶9.   (SBU) The United States continues to draw on New Zealand's 
deep experience and unique connection with the Pacific Island 
region.  New Zealand has a strong leadership role in the South 
Pacific and views itself as having a special connection with the 
island nations.  Currently there are around 270,000 Pacific 
Islanders living in New Zealand (about 6 percent of the 
population), many of whom live in the Auckland region.  There are 
also many Pacific Islanders who come to New Zealand for temporary 
work through the Recognized Seasonal Employer (RSE) Policy.  New 
Zealand established the program in October 2006 as a way to assist 
employers in horticulture and viticulture, as well as provide 
development assistance in the Pacific Island region.  New Zealand 
has a strong aid and development presence in the region and is 
eager to collaborate closely with USAID, which is looking to return 
to the South Pacific.  We cooperated closely with New Zealand in 
the aftermath of the recent earthquakes, tsunamis, and volcanic 
eruptions in the South Pacific.  New Zealand was one of the first 
countries on the scene after the September tidal wave in Samoa, 
providing aid and relief. 
 
¶10.   (C) We also cooperate and share concerns in the region on 
political stability, climate change, energy and food security, and 
protection of fisheries and marine environments.  In the past 
several years, New Zealand has played an active role in helping to 
maintain the security environment in Timor Leste, the Solomons, and 
Tonga.  Likewise, we are unanimous in the need for a quick return 
to democracy in Fiji.  The New Zealand Government has had a 
particularly rocky relationship with the interim Government in Fiji 
and would like the United States to take a stronger position.  In 
November 2009, the New Zealand Acting High Commissioner was 
expelled from Fiji after New Zealand delayed the issuance of a 
medical visa for the sick child of a Fijian judge.  We also share 
concerns over the competing agendas of other actors and donors in 
the region, such as China and Cuba, and their impact on stability, 
governance, and sustainable development.  We also share a concern 
with the New Zealand Government over the need to help the Pacific 
Islands control their Exclusive Economic Zones (EEZ) from illegal 
fishing and to protect marine environments. 
 
 
 
A Strong History of Collaboration on the Environment, Science and 
the Antarctic 
 
--------------------------------------------- ---------------------- 
-------------------------------------- 
 
¶11.   (SBU) Science cooperation forms one of the longest threads of 
the bilateral relationship; it dates back to the late 1950s in the 
Antarctic.  The United States and New Zealand continue to work 
 
WELLINGTON 00000003  004 OF 005 
 
 
together closely on scientific research in the Antarctic. 
Christchurch is the staging area for joint logistical support 
operations serving U.S. permanent bases at McMurdo Station and 
South Pole, and New Zealand's Scott base (located just six miles 
from McMurdo Station in the Ross Sea region).  Collaboration 
between the U.S. National Science Foundation and New Zealand to 
install wind turbines in Antarctica to power McMurdo/Scott Bases is 
a part of the joint logistical agreement and will eventually supply 
up to 90 percent of our electricity needs for the two bases.  There 
is also collaboration on the Energy Development for Island Nations 
(EDIN) project, which aims to develop renewable energy resources 
for Pacific Islands and reduce their dependence on fossil fuels.  A 
Science and Technology cooperation agreement between the US 
Department of Homeland Security and New Zealand, relating to 
enhancement of each country's domestic and external security 
capabilities, is slated to soon be signed.  In addition, we are 
working together on greenhouse gas reduction in the agriculture 
sector through the Global Research Alliance on Agriculture 
Greenhouse Gases.  New Zealand's unique position of being a 
developed country with roughly 50 percent of its carbon emissions 
stemming from agriculture production will give it a unique 
perspective and leadership role in this endeavor. 
 
 
 
Defense Cooperation - Moving Around the Rock in the Road 
 
--------------------------------------------- ---------------------- 
------------ 
 
¶12.   (C/NF)  New Zealand-U.S. relations have improved 
significantly over recent years as both countries agreed not to 
allow the historic anti-nuclear dispute to unnecessarily damage the 
overall bilateral relationship.  New Zealand's legislation 
prohibiting visits of nuclear-powered ships continues to preclude a 
security alliance with the U.S.  Certain restrictions on bilateral 
military cooperation still remain, such as ship visits, but 
official visits and multilateral cooperation is ongoing.  Admiral 
Keating visited in September 2009, and Secretary of the Navy Ray 
Mabus is set to come in February 2010.  Anti-nuclear legislation 
enjoys broad public and political support in New Zealand, and there 
is no sign it is likely to change.  There is a perception among the 
New Zealanders that the decision to prohibit nuclear ships has cost 
them economically through lost trade opportunities.  Despite 
suspension of U.S. security obligations, the New Zealand Government 
reaffirms the importance it attaches to continued close political, 
economic, and social ties with the United States and Australia. 
The Mission looks forward to an increase in frequency and 
complexity of joint and multilateral military-to-military training 
involving New Zealand when final decisions in a current review are 
made. 
 
 
 
Shoulder to Shoulder in Afghanistan 
 
--------------------------------------------- -- 
 
¶13.   (C/NF)  New Zealand is an active member of the global 
coalition in the fight against global terrorism, and deployed both 
Special Air Service (SAS) and regular armed forces personnel to 
Afghanistan.  In September 2009, SAS began its fourth deployment to 
Afghanistan.  PM Key also announced that the NZ Defense Force 
contingent of the NZ-run provincial reconstruction team (PRT) in 
Bamyan province will be drawn down in the medium term, which he 
defined as three to five years. As the NZ military contingent in 
the PRT draws down, the civilian contribution will increase and 
focus on rebuilding local capacity in agriculture, education and 
health.  PM Key promised that NZ's efforts in Bamyan province would 
"be aligned with the new policy of the U.S. Administration," which 
includes building the capacity of the Afghanistan central 
government and provincial governments.  PM Key also announced that 
New Zealand will establish a permanent diplomatic presence in 
Afghanistan.  Presently, New Zealand's Embassy in Tehran covers 
Afghanistan.  The SAS is slated to return to support internal 
security requirements during New Zealand's hosting of the World 
Rugby Cup in 2011, and future rotations to Afghanistan are 
undecided at this time. 
 
WELLINGTON 00000003  005 OF 005 
 
 
Intelligence Cooperation Is Back on Track 
 
--------------------------------------------- --------- 
 
¶14.   (S/NF) Despite the ANZUS break in 1985, New Zealand remained 
a member of the Five Eyes intelligence community, but with access 
to certain types of intelligence curtailed.  Our intelligence 
relationship was fully restored in August 29, 2009.   While you 
should mention intelligence restoration in your private bilateral 
with PM Key and other New Zealand officials, this is a "no comment" 
issue when the media inevitably raises it.  New Zealand has been a 
strong advocate of the Proliferation Security Initiative (PSI) in 
the East Asian region and hosted its first PSI exercise (Operation 
Maru) in September 2008 with 30 USG experts participating.  New 
Zealand is also an active participant in the Global Initiative to 
Combat Nuclear Terrorism (GICNT). 
 
 
 
Resources Needed As the Relationship Expands 
 
--------------------------------------------- ------------------ 
 
¶15.   (S) The Mission to New Zealand and Samoa is staffed by 149 
employees (50 Direct Hire Americans, 99 Locally Engaged Staff) 
across three posts and including the Department, DOD, Agriculture 
and Commerce.  With the recent rapid growth of our bilateral 
relationship on key global issues the demands on this small Mission 
have increased significantly. Over the past 10 years, non-ICASS 
positions have grown by close to 200 percent and the ICASS position 
growth has hovered around 22 percent.   We need three additional 
Locally Engaged (LE) ICASS positions to support the increased 
staffing demands.  The Defense Attache Office has requested an 
additional permanent billet (U.S. Military officer, Major) to 
support the demands of the two programs headed by DIA's Defense 
Attache System and the Office of Security Assistance and 
redeveloping the U.S. and New Zealand's military-to-military 
engagement after years of hiatus.  State needs an additional 
officer in the Political/Economic Section to further expand on 
science and technology, nonproliferation, and political-military 
programs and allow the Economics Officer to focus on preparations 
for Trans-Pacific Partnership trade negotiations. 
 
 
 
Embassy and Consulate General 
 
------------------------------------- 
 
¶16.   (SBU) The government-owned Chancery in Wellington recently 
went through three projects - Information Programs Center (IPC) 
upgrade, roof renovations and installation of new heating, 
ventilation and air conditioning (HVAC) systems.  Those upgrades 
brought the Chancery closer to compliance with ADA laws and long 
needed upgrades.  Located in Auckland, the Consulate General (CG) 
offices are on the third and fourth levels of a commercial office 
building in downtown Auckland.  The offices were refurbished in 
2004-2005 and remain in good condition.  The Embassy in Apia is 
also located in a commercial office building.  The Consulate 
General in Auckland and the Chancery in Apia are both short term 
leased facilities.  The new government-owned Principal Officer's 
residence in Apia is currently under construction and due to be 
completed by the end of 2010. 
 
¶17. (U)  Madam Secretary, we look forward to your visit and are 
doing all we can to make it a complete success. 
CLARKE