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John Key

26 March, 2012

Speech to Kiwi Chamber Business Breakfast

PM addressing Kiwi Chamber breakfast in Seoul
PM addressing Kiwi Chamber breakfast in Seoul

Chairman Grant Phillips, members of the Kiwi Chamber and guests.

Thank you for inviting me here this morning to exchange views with you.

I’d like to take this opportunity at the outset to express my appreciation to the Kiwi Chamber for your tremendous fundraising efforts following the Christchurch earthquake of 22 February 2011.

I understand that as much as NZ$76,000 went to the Christchurch Earthquake Appeal and NZ$6,000 to the New Zealand Red Cross thanks to your efforts. Your support for the people of Christchurch is greatly appreciated. Thank you.

I am delighted to be back in Seoul. And can I say that I’m particularly delighted to be here on this day. Because it was on this day, the 26th of March, exactly 50 years ago, that the governments of New Zealand and the Republic of Korea entered into formal diplomatic relations. I think that’s a milestone we can be very proud of.

When I visited Seoul in July 2010 President Lee Myung-bak and I agreed that 2012 would be known as our two countries’ “Year of Friendship”.

Over the 50 years of our diplomatic relationship our two countries have created a web of cooperation that we can celebrate - and which we very much want to enhance.

This was the commitment President Lee and I made in 2010 – that we have a vibrant and broad relationship built on strong historic ties, shared values and mutual commitment. And that we will build a platform for our relationship to move forward.

We reconfirmed this commitment during our conversation yesterday.

Our strong historic ties were founded upon the battlefields of the Korean War over 60 years ago. Yesterday I visited the New Zealand and Australian Memorial at Kapyeong, the site of one of the most critical battles of the war.

At the memorial I remembered the 6,000 New Zealanders who served in the Korean War, those who survived and the 45 who sadly lost their lives. This was a horrendous struggle, the legacy of which endures today.

New Zealand is enormously proud of its ties with the Republic of Korea.
This is a nation that has demonstrated real grit and drive to succeed. It is a nation that has evolved, following the devastation of war, into a dynamic and innovative global world economy and international leader.

Determination and drive are characteristics we see in our 30,000-strong Korean community in New Zealand. In sport, in education, in the creative arts, in business and in community leadership, they are features we see in our own Korean community. And my colleague, the Honourable Melissa Lee MP, Parliamentary Private Secretary for Ethnic Affairs who has accompanied me on this visit, also exemplifies those characteristics.

Today, almost 60 years after the Korean War ended, New Zealand continues to work with the Republic of Korea and its allies to maintain peace on the Korean Peninsula.

We remain committed to our contribution to the United Nations Command Military Armistice Commission, which supervises the Korean Armistice Agreement.

We work with our Korean and other regional partners to build open and inclusive regional dialogue and cooperative programmes to advance our region’s economic growth and security.

We combine our efforts in international forums such as this week’s Nuclear Security Summit to build a safer environment for our children to inherit.

We are close to concluding an Antarctic Cooperation agreement and a defence-related Information Sharing Agreement. We are deepening our dialogue as aid donors with a shared interest in using international development as a way to improve the livelihoods and resilience of our partners.

And we have taken forward our cooperation in science and innovation by launching a third three-year programme of joint activities. This next programme will focus on green growth, Antarctic research, and new medicines and medical applications.

Two-way trade between our countries has reached NZ$3 billion and continues to grow. Korea is now our fifth-largest trading partner and remains New Zealand’s second-largest source of international students and seventh-largest source of tourists. More than 50,000 Koreans visited New Zealand last year. As Minister of Tourism, that’s something I’m delighted to hear.

And I’m pleased that some of our New Zealand businesses are breaking into the Korean market, not only in the food and beverages sector, but also with cutting edge technology.

An example is New Zealand post-production company Sauce, which recently signed a Memorandum of Understanding with major film VFX company CJ Powercast for development of film and related projects. This could lead to a stream of work worth many millions of dollars.

Similarly, we hope you are enjoying eating New Zealand-made Airborne Honey, which is available on the shelves of E-Mart. And if you are a pizza fan you may have tried New Zealand’s famous Hell Pizza at one of its three stores in Seoul.

I see you also have New Zealand products on your tables today, including Charlies’ juices, for which Korea is now the biggest export market outside Australia.

But while it’s good to see that our trade is continuing to grow, the fact remains that we can do better. The share of imports into each other’s market is slipping relative to each of our key competitors. To put it more simply, trade between our two countries is simply not growing as fast as our trade with other countries.

Korean products are well known and widely used in New Zealand. But imports from countries that New Zealand already has FTAs with – like China, the 10 ASEAN countries, and the P4 countries of Brunei, Singapore and Chile – are growing much faster than imports from Korea.

And while our exports to Korea are growing, our share of Korea’s imports has roughly halved since 2000.

The reasons for this are clear – as we both move to provide preferential access to other countries through bilateral and regional trade agreements, our exporters are each becoming relatively less competitive in each other’s markets.

We need to address this.

As New Zealand and Korea negotiate FTAs with a wider range of countries, this trend is only going to accelerate.

And while our relationship is much deeper than just trade, I do want to see Korean companies enjoying the same level of access to New Zealand’s market as some of your neighbours.

And I would also expect that, in this Year of Friendship, Korea would want to ensure that New Zealand exporters were not discriminated against relative to our competitors, including those from the United States and Europe.

Concluding an FTA in this Year of Friendship would be a great testament to our bonds, and it would create business and economic links that would drive growth and innovation.

It would make doing business easier and enhance flows of people and investment between our two countries. And it would ensure that, as we continue to reduce tariffs for other countries with which we have FTAs, our exporters will not be edged out of each other’s markets.

Before I conclude, I’d like to touch on one of the specific topics the Kiwi Chamber has asked me to cover today. That is, what New Zealand can do to enhance global food security at a time of growing uncertainty and volatility.
It may be no surprise to you that it is my view that a New Zealand-Korea Free Trade Agreement will enhance both New Zealand’s and Korea’s capacity to supply safe, healthy food in a cost-effective and competitive way.

New Zealand does not have unlimited capacity to grow food. Even if we converted all our land to farms, there is no way we could meet the growing demand in this part of the world for healthy and safe agricultural products.
But, what we can do, is help our trading partners take full advantage of what New Zealand has to offer.

We produce healthy and safe food for international consumers at a time of the year when their domestic growers cannot.

Our exporters supply high-quality food ingredients to Korean companies that are in the engine room of Korea’s drive to boost its high value food exports. And Korean consumers know and love New Zealand kiwifruit – and are getting to know more about New Zealand’s world-class wines.

An FTA with New Zealand will build the business links that will give Korean manufacturers secure and reliable access to products they want and need.
Korea is an export-focused economy. It doesn’t have the natural resources that countries like New Zealand are blessed with. So, to export more, Korea needs to import more. An FTA with New Zealand will help.

It’s also a fact that stronger commercial links will lead to commercialisation of our science and technology collaboration.

We’ve already seen the potential for that in the world-leading collaboration on healthcare robotics between the University of Auckland and Korea’s Electronics and Telecommunications Research Institute.

Innovation is a key driver of economic growth for Korea and New Zealand.
It’s a key component of my Government’s priorities and I’ll be happy to comment further on that in our Q & A session shortly.

But for now, I’d like to conclude by emphasising that I see exciting possibilities for Korea-New Zealand collaboration in areas that are priorities for both our economies.

As I was returning from Kapyeong yesterday, it struck me that New Zealand and Korea have shared many things throughout the years. When times were hard we were by each other’s side, with a shared vision of a better tomorrow.
I strongly believe that now is the time for us to once again forge ahead together to create continuing prosperity for our peoples.

Thank you.