Ministry Statements & Speeches:
Chairman of the Kiwi Chamber, Mr Tony Garrett, and members of the Kiwi Chamber Board of Directors MOFA Director of Bilateral Economic Affairs Mr Chang Ho-Seung Dongwon Group Vice Chairman and New Zealand’s Honorary Consul to Busan, Mr Park In-gu
Introduction
New Zealand and the Republic of Korea have a very good relationship. We are very good friends. But the main thing I want to say to you this morning is that in today’s turbulent times we have a critical opportunity to work a lot more closely together and to create a lot more value for both of us.
We have been thinking hard about our relationship with Korea lately, and have come up with three themes, or challenges, that we want to pursue during my term as ambassador here:
- There is real momentum in the business and people-to-people relationship, but we have the potential to go further and make the Republic of Korea one of New Zealand’s top-tier trading partners across all measures.
- New Zealand’s brand image of being 100% pure – clean, green and safe, the land of the Hobbits – is well known, but needs to be updated to reflect the modern, high-tech and innovative sides to New Zealand society today.
- At this time of unsettling turbulence around the globe, in both security and trade, we see real value for both sides in leveraging our shared values to work together to address common challenges and anxieties.
Security
Let me start with the nuts and bolts of our relationship. New Zealand and the Republic of Korea have an excellent relationship that goes back to our shared experience during the Korean War, where 6,000 Kiwi troops served in Korea, and from which 45 of them never returned.
We continue that strong commitment to the peace and security of the peninsula through our continuing participation in the United Nations Command Military Armistice Committee (UNCMAC). We currently have 6 New Zealanders serving in UNCMAC on the ground here in Korea. We work together with the Republic of Korea as partners in regional security as well. Our Foreign Ministers are meeting later this week in Singapore and the series of meetings around the ASEAN Regional Forum to discuss how we can better secure our region.
New Zealand has recently underlined our continuing commitment to regional security by announcing the purchase of 4 Boeing P-8A Poseidon maritime patrol aircraft for our air force. Our navy is currently building, right here in Korea, the largest ship we have had since the Second World War, a supply vessel being built by Hyundai Heavy Industry at Ulsan. And of course we strongly support the efforts of the Korean Government, and the US in seeking to bring denuclearisation and permanent peace to the Korean peninsula.
After a disquieting 2017 where we witnessed increasing tensions due to the unbridled behaviour of North Korea, this year has seen a very welcome turn towards dialogue, with historic summits between the Republic of Korea and the DPRK, and between the US and the DPRK, and other countries too.
New Zealand welcomes the commitment towards resolving the long-standing tensions on the peninsula. The Singapore meeting has brought North Korea to an important crossroad. North Korea has an opportunity for a much brighter future, which New Zealand and the rest of the international community stands ready to support.
Trade
Parallel to security collaboration, we have a strong partnership with the Republic of Korea in trade, education, tourism, and people to people flows.
Many here today will have benefited from the Korea-New Zealand Free Trade Agreement (FTA) which entered into force in December 2015. The Kiwi Chamber can be proud of its work in advocating for the agreement – and in supporting and promoting New Zealand business since it came into effect.
While it is still early days, the FTA looks to be delivering on its promise to boost business between the two countries. Two-way goods trade between Korea and New Zealand grew an impressive 17 percent in the year to June 2018, surpassing NZ$4 billion for the first time. Total goods and services trade now totals NZ$4.5 billion (as at March 2018). The trade is well balanced, with Korea’s surplus in goods trade cancelled out by New Zealand’s surplus in services.
We have been very pleased at the way the agreement has been implemented smoothly by both sides. Our food and beverage exporters have been one of the main benefactors from the FTA, with exports increasing over 36 percent since entry into force to almost NZ$700 million.
If there is one gap in the relationship it is probably investment. Two-way investment is surprisingly thin given the potential. There are huge opportunities in particular in New Zealand in hotels, infrastructure, transport, and housing. It is predicted that New Zealand will need between $160-$200 billion in additional productive capital to fund the projected growth of our export sector, and $125 billion for infrastructure, over the next 10 years.
New Zealand’s visitor arrivals are expected to grow over 30 percent in the next 5 years, creating the need for hotel infrastructure and new air routes. In the global opportunities index, New Zealand ranks 3rd globally for having an environment that attracts foreign investment, and I hope to see Korea play an increasing role in this story.
Education
We are particularly proud of New Zealand’s record as a great place to get an education and prepare kids for the future. New Zealand is one of the best, safest, and most effective places in the world to get an education.
That’s not just my opinion. In 2017 the Economist Intelligence Unit ranked New Zealand first in the world at preparing students for the future (88.9/100) with the best education system overall. New Zealand’s universities placed in the top 50 institutions for 32 subjects in the QS World University Rankings, and all 8 New Zealand Universities are among the world’s top 3 percent.
Not surprisingly then, New Zealand remains very popular among Korean students. Korea is our fourth largest international student market with 7,660 students enrolled with New Zealand providers in 2017, and numbers have been growing for the last 3 years.
Tourism
In tourism as well, we have a great story to tell. Korea is New Zealand’s 7th largest market for visitor arrivals and 6th for holiday arrivals. We have had double digit growth for the last 3 years. More than 93,000 Koreans visited New Zealand last year, as 12% increase on the previous year. That number now threatens to overtake the number of Japanese visiting New Zealand – despite the far higher population in Japan.
Updating the NZ Brand
So good things are happening, and business is good. In terms of how we think about each other – things are also tracking well. We like each other. In New Zealand, Korea is increasingly seen as cool – certainly by all my nephews and nieces under 30. Particularly my niece who loves gaming – she sees Korea as leading the world best in gaming design and competitions - and she’s probably right. K-Pop, anime, Korean film, hi-tech are leading a wave of enthusiasm for Korean popular culture in New Zealand, as elsewhere around the world, which is bringing a new element of excitement to the relationship.
On the New Zealand side, New Zealand is well known here for our 100% pure brand, for our green and beautiful environment, our safety, and our quality of life. This is all true. But one aspect of New Zealand’s profile that gets overlooked is the innovative, hi-tech part of modern New Zealand. As you’ll see in the Upstarters brochures on your table, New Zealand has a unique way of looking at challenges, which has seen us leading the world in many fields. We were the first country to recognise women’s right to vote, the first to split the atom, and the first to bring Middle-Earth to life. Now we also launch rockets into space: a NZ/US company called Rocket Lab is putting low-cost satellite into orbit in rockets launched from the east coast of New Zealand. We also believe that a New Zealander, Richard Pearse, invented the world’s first flying machine before the Wright Brothers, although the US may not agree!
New Zealand is well known for leading the world in transparency and the ease of doing business – we are ranked as the least corrupt country in the world according to the Corruptions Perceptions Index, and we are ranked 1st by the World Bank for the ease of doing business.
The tech and innovation sector represents a third of New Zealand’s global export earnings. The Government wants to make it the second largest contributor to GDP by 2025. We are making a lot of progress. Did you know, for example, that Auckland has the largest per capita population of gaming designers in the world?
Another good example is in film. Weta Workshop and associated businesses have created a world class film hub in Wellington bringing to life blockbusters from Lord of the Rings to King Kong to Avatar.
Less well known is that Auckland similarly now offers world-class film-making facilities. In addition to the existing Auckland Film Studios and Studio West, the newest Kumeu Film Studios, built in partnership with Warner Bros. Pictures and Gravity Pictures and owned by a Korean family, is a 27 hectare facility 20 minutes’ driver from central Auckland. It features New Zealand’s largest stage area, workshop and manufacture spaces, production offices, 12 hectares of forest, and two water tanks.
It was here that the new action-adventure film The Meg was filmed, starring Jason Statham and Li Bingbing. The movie opens here in Korea in 2 weeks – don’t miss it!
Taking the Relationship to a new level
I’ve talked about two of the three challenges I have set for us: 1. Taking our trade and economic relationship into the top tier 2. And modernising our profile around hi-tech and innovative New Zealand
The third challenge is perhaps our biggest opportunity. Korea and New Zealand share a critically important set of values: respect for the rule of law, global and regional institutions and frameworks, transparency, open markets, human rights, social justice, fairness and diversity. We need those values now more than ever.
As you all know, we are currently going through a particularly – I will be polite - turbulent time in our history. On the security front we face major challenges around ensuring the peace of this peninsula, but also around maintaining peace and stability in the wider region in the face of threats such as proliferation of weapons of mass destruction, terrorism, cyber aggression and climate change.
On the trade front, we are now confronted with serious; some would say existential, threats to the system of multilateral rules and institutions which has underpinned the growth of world trade since the Second World War.
Countries like New Zealand and Korea are critically exposed to risk to our trade and investment flows. The prosperity of both countries is founded in international trade – being able to sell the products we are good at making, in order to be able to buy products from others that we want and need.
That’s not just in products like steel and aluminium (of which NZ exports small amounts) and automobiles (which we import). In many sectors of the global economy, country borders now matter less than global value chains. Not just computers, cars and iPhones, but even complex food products like infant dairy formula are now made from component parts and ingredients all around the world.
Higher tariffs, non-tariff barriers and new subsidies threaten the basis of our shared prosperity and our future ability to do business. Refusal to abide by the rules of the game, such as WTO rules, threatens to take away both the ability to hold others accountable for breaking rules, and the basis of trust that underpins all business. In the face of these threats to our prosperity and our security, New Zealand sees great value in strengthening the level of our engagement and interaction with good friends who share our values. When we look around the Asia-Pacific region, we see few others better placed than Korea with whom we can work.
We have a common interest in defending the multilateral rules and institutions, and in building new frameworks and communities of common interest, ensuring that smaller economies can stand up to very large ones, and that the rule of the jungle does not prevail in international trade. What might that mean? There are many options that can be explored but let me cite two:
First, as one of the founding members of the CPTPP New Zealand sees that grouping as a good example of plurilateral cooperation that can help grow trade for the region. New Zealand expects to ratify CPTPP later this year, and for the agreement to come into force by the end of this year or early in 2019. For all the reasons I mentioned, we are keen to see Korea join in the agreement as well. Conversely, New Zealand is very interested in the New Southern Policy that President Moon Jae-in has laid out. We can understand the rationale for the policy, on both the security and trade sides, and we see New Zealand, along with our near neighbours Australia and the Pacific Islands, as contributing to its success.
In addition to our international challenges, New Zealand and Korea share a remarkably similar set of domestic policy goals. After a decade of conservative government, both countries now have governments led by centre-left parties. Both governments are aligned on a very similar agenda of inclusive and equitable growth.
The New Zealand Government has laid out a new approach to trade, entitled Trade for All, which emphasises not just growing trade and prosperity, but ensuring the benefits are shared around society. This approach I believe has a lot in common with the approach that President Moon Jae-in has laid out for Korea. Issues such as the minimum wage, how to ensure reasonable levels of income for the least advantaged in society, how to improve the quality of life, and how to ensure our young people have the education and the technical skills required to prosper in a high-tech society – these are common challenges for us both. When our Minister of Finance was in Seoul in February he had some fascinating discussions with Korean leaders about – for example – how we can develop new benchmarks for well-being that go beyond traditional measures such as GDP. I am not talking about theoretical issues. I think the temperature outside right now is 32 degrees. Our Prime Minister has described climate change as the ‘nuclear-free moment’ of her generation, and is passionately determined to make a difference in this area. Our Government has begun by introducing a ‘Zero Carbon’ bill to Parliament – net zero carbon emissions by 2050.
Renewable energy is a particular area where New Zealand has a great success story – approx. 80% of New Zealand’s energy already comes from renewable sources and we’re bringing more online – so this is another area where New Zealand and Korea can do more together. Korea and New Zealand have a shared set of values, a strong history, and a great relationship. We now face an increasingly demanding and urgent set of international and domestic challenges. We have the opportunity, and indeed the obligation, to take our relationship to a new level as we do so.
Done well, we will add enormous value to our people in both countries, and – I believe – to our region and the world.