Australian Commonwealth Coat of Arms

E&OE

18 January 2009

Joint press conference with New Zealand Minister for Foreign Affairs, Murray McCully

Subjects: Fiji an NSW trade

MURRAY MCCULLY: Thanks for coming along this afternoon ladies and gentlemen. Can I just say that I know there has been a meeting around waterfront issues in Auckland. As a courtesy to our Australian guests I will deal with any domestic political issues later if you want to liaise with my office. Can I take the opportunity to welcome my colleague, Stephen Smith, to New Zealand. This is a follow up. This is our second six monthly talks this year. We met in February in Perth for formal discussions. We have a tradition of six monthly discussions and this time we have met for the afternoon in Wellington. I think it is the first time that Stephen you have been in Wellington for the six monthly discussions and so it is a pleasure to host you in the Parliamentary precincts.

The New Zealand Australia relationship I can report is in good heart. In fact one of the things that become abundantly clear to any new minster of foreign affairs in this country is just how close the relationship is not just in terms of policy settings but in terms of day-to-day contact. In addition, to the six monthly formal discussions that now we have had twice this year, Stephen and I seem to bump in to each other at international meetings on a regular basis and always take the opportunity to have a good discussion about the issues of the day and we talk frequently by telephone, often comparing notes and reflecting on our respective position. And I just want to record my personal appreciation to Stephen Smith for the way in which he has made the job of a new foreign affairs minister in this country easy; made the relationship with Australia such an enjoyable and constructive process and thank him for the spirit with which he has approached the new relationship which we have.

Today we have had the opportunity to run through the full agenda of regional issues and bilateral issues. We have had a talk about many of the issues on the international stage which affect our collective interests. We would be happy to deal with those without me perhaps giving you a shopping list to pick from. We have some significant business on the agenda up ahead. Australia has, of course, the hosting responsibilities for the Pacific leaders' forum later this year in Cairns. Our prime minister I think has indicated that he will be in Australia for a visit over the coming months. I think he has indicated probably around August and of course we have the Trans Tasman Leadership Forum which is a very important item on our agenda in a little while.

We have had the opportunity to discuss most issues that will be reflected in those various meetings and make sure that the work that our prime ministers would expect to have done, to prepare for those important occasions, is well progressed at this a stage. With those general introductory remarks can I again welcome Stephen Smith formally here to Wellington and invite him to say a few words.

STEPHEN SMITH: Thank you much Murray. I am pleased to be here. It is not my first visit to New Zealand as foreign minister but it's my first visit to Wellington. Last year I was here of course for the formal consultations, which were held in Auckland. But as Murray has said we do Australia-New Zealand ministerial consultations at foreign ministerial level every six months. I was very pleased to welcome Murray to Perth in February when we had our first formal bilateral as foreign ministers and that was both enjoyable and productive and the same has occurred today.

The relationship between Australia and New Zealand from Australia's perspective is it is Australia's closest and most comprehensive relationship. We have both been the beneficiaries of the World's most successful trade agreement, our Closer Economic Relations for over 25 years. We also pursue formally defence and security cooperation under our Closer Defence Relations. We have extensive people-to-people exchanges and extensive high level visits. Our Prime Ministers have met on numerous occasions. Murray and I have met on numerous occasions. Australia's Treasurer and your Finance Minister, whom I will see shortly this afternoon meet regularly, and our trade ministers as we speak are together in Samoa. They meet regularly. So this reflects a close and comprehensive partnership.

We also work very importantly very closely together in the region, whether it is the Pacific Islands Forum or whether it is particular aspects of our Pacific regional cooperation for example the RAMSI Mission. We also work closely together in East Timor. We also work closely multilaterally and through the international institutions, whether that is for example the WTO or the United Nations itself. And as Murray has said on a regular basis, separately from our formal meetings in Australia or New Zealand or in the margins of regional or multilateral meetings, we are regularly on the phone to each other. The strength of the relationship is such that from an Australian perspective or a New Zealand perspective, it doesn't matter whether the governments are Labor or Liberal in Australia or Labour or National in New Zealand, the relationship goes on at very high level and that's a very good thing.

We have traversed, as Murray has said, the array of regional and international issues today. From Australia's perspective we have spoken very particularly about our relationship in the Pacific; how we work together on development assistance issues; how we work together on some of the region's problems in particular Fiji and how we are very much looking forward to hosting the Pacific Island Forum Leaders' meeting in Cairns in August and how we are also looking very much forward to the Prime Minister's visit to Australia and in addition to the Prime Ministers' visit as Murray has said we do the annual Australia-New Zealand Leadership Forum, which is a very successful combined business and government forum and that takes place in the near future as well.

Murray I am very pleased to be here. I have been to Wellington before but I was very much younger. I was a young official from the office of the Western Australian Attorney-General and I spent a day in Wellington but I have to say that on that day the weather was nowhere as nice as it is today. Thank you for the hospitality that you have shown to the Australian delegation. Our meeting has been both productive but also very enjoyable and we look forward to the remainder of our visit here tonight and tomorrow. Thank you.

MURRAY MCCULLY: Any questions?

QUESTION: On the issue of Fiji what did you discuss about the current situation and any further action that might be taken by the two countries?

STEPHEN SMITH: We personally reaffirmed Australia's and New Zealand's support of the unanimous positions of the Pacific Islands Forum; our disappointment at Fiji's retreat from democracy and the abrogation of the constitution; and our support of the unanimous decision of the Pacific Islands Forum Special Leaders meeting in Port Moresby in January to effectively see the suspension of Fiji from the councils of the Forum. We also spoke about our concern about Fiji's deteriorating economic situation. One of the adverse consequences of Fiji's retreat from democracy has been a decline in Fiji's economic and social circumstances. We fear that this is being very substantially compounded by the global economic downturn and we spoke about the need to try and find some form of dialogue to get Fiji back on the path to democracy. But I think it is true to say that given the conduct of the Interim Administration that we are not necessarily imbue with a great sense of optimism that that will occur in the near future. We continue, from Australia's perspective, and also I think it is true to say from New Zealand perspective, to want to ensure that we can assist the people of Fiji themselves while at the same time continuing to place pressure on the Interim Administration to start a path back to democracy.

QUESTION: (inaudible) about the fact that there is maybe perhaps a way of putting more pressure on the UN and others to stop using Fiji military as peace keepers. Was there any discussion about that or (inaudible) reaction?

MURRAY MCCULLY: Yes there was, and in fact we have discussed this I think on most occasions that we have discussed the problems surrounding Fiji. I think I have made it pretty clear that the New Zealand Government regards the on-going use of Fijian peacekeepers by the United Nations as unhelpful. It is particularly unhelpful in the context of the previous Secretary-General having warned the Commodore that if he proceeded with his coup then the withdrawal of the, or the sending home of the Fijian Peacekeepers would be a consequence of that. The fact that there has been no action on that front hasn't sent a very useful signal on behalf of the international community. And I think the Interim regime in Fiji has gained comfort and considerable amounts of cash from those on-going peacekeeping activities. We have tried to, if you like, step up the level of dialogue with the United Nations in that respect and I intend to keep doing so. The Australian Prime Minster a couple of moths ago indicated that we had at least managed to establish a position where the position would not get any worse if you like, there would be no new deployments but we would like to see if we can make some advance on that.

I see that not just as a means of securing some progress in the short term but also it involves an acceptance of the fact that there can be no good long-term prospect for Fiji so long as there is an oversized military being sustained by UN deployments.

QUESTION: Are there countries, New Zealand or Australia willing to impose more restrictions or more bans or anything to put more pressure on? It is not going to come from any other area.

MURRAY MCCULLY: I think we have not taken the view over some time that we need to take not to further damage the prospects of people in Fiji who are already suffering as a result of the actions of their government over which they have no control. So we have looked to try and target our actions to send a direct message to those who are in a position to change the course that Fiji is on. We have I think from time-to-time looked at the sanctions that are in place and asked ourselves whether they could be recalibrated in some way to become more effective. I think that ultimately that this is a problem that which we are simply going to be reasonably patient. I think that that's been the theme I have been rehearsing for some time and continues to be my view. I share the Australian perspective that the situation economically in Fiji has deteriorated quite significantly and we are watching events in that respect very closely.

QUESTION: Is it quite frustrating the see two years down (inaudible) Fiji going down this path and the Forum has left the door open in terms of dialogue, which seems to have been rejected. What else can be (inaudible)?

STEPHEN SMITH: It is deeply frustrating. Australia strongly supports the unanimous decision of the Forum to suspend Fiji from the councils of the Pacific Islands Forum, particularly at ministerial level. But at the same time we do need to continue to find ways of having a dialogue with the administration to try and persuade them to move down a path towards democracy. At the same time, let me underline and reinforce the point that Minister McCully has made which is Australia's sanctions, for example, are targeted to members of the regime, in terms of travel sanctions. We don't want to do anything which would adversely impact on the people of Fiji which is why, for example, we don't have trade bans or trade sanctions. And in terms of United Nations peace keeping missions containing members of the Fijian military, this is precisely the same issue that Prime Minster Rudd has taken up with Secretary-General Ban Ki-moon which I have also taken up with Secretary-General Ban Ki-moon and other UN officials. And the UN has determined not to increase or expand its use of Fiji military for peace keeping purposes. But both Australia and New Zealand continue to make the point to the United Nations Secretariat that the much preferred position would be for the United Nations not to have Fiji military as a part of their peace keeping arrangements until such time as Fiji returns to democracy.

We do have to, as the Minister says, be patient. The minister and I have been both members of the Pacific Islands Forum Ministerial Contact Group. We have been to Fiji twice together and often with the Interim administration it is one step forward and a mile back and we went very many miles with the abrogation of the constitution. But we are very deeply concerned about the combination of Fiji's withdrawal from democracy and the adverse implications that that has clearly had for its economy. Now compounded by the difficulties in the Pacific of the adverse consequences of the global down turn and that general issue is one of the issues that we have agreed ought to be a focus of the Pacific Islands Leaders Forum in Cairns in August; not just how Fiji is suffering from the economic downturn but more generally how our friends and partners in the Pacific are coping with the deleterious economic circumstances that the global financial crisis has currently left us with.

QUESTION: (Inaudible) New Zealand and Australia might be offering some kind of help to Fiji to help it cope with the economic deterioration?

STEPHEN SMITH: No we are not so much offering help, we are urging them to return to democracy. We are seeking not to do anything which would impact adverse on the economic circumstances of their people. On the contrary both Australia and New Zealand were very generous in the aftermath of the floods in Fiji a few months ago, which caused very serious dislocation to the Fiji community. So we continue, for example, to apply humanitarian assistance but we are watching their economic difficulties with very close interest and it maybe in the not to distant future that Fiji itself has to call upon the international financial institutions for assistance.

QUESTION: Do we understand from what you are both saying that you have agreed at your talks today to make a fresh approach the United Nations Secretary-General on this issue?

STEPHEN SMITH: The approaches are ongoing. I think as Murray said every time New Zealand meets with UN officials it makes the point. I can't remember in recent times a meeting where I have had with a UN official where I have not made the same points. So these representations are on-going.

QUESTION: How does the UN justify keeping them?

STEPHEN SMITH: I am here to reflect the Australian position. It is a question you should put to the United Nations Secretariat and I would be very pleased if you did so.

QUESTION: Mr. McCully in regards to obviously a request we have had from the US for Special Forces (inaudible) for Afghanistan did you seek the Minister's advice about how we go about whether we should send troops there or not?

MURRAY MCCULLY: We did what we normally do which is to have a good discussion about what we are each engaged in doing that theatre. Australia has recently made some announcements with regard to their commitment to Afghanistan. Stephen Smith was good enough to ring me in advance of those decisions being made public and convey the contents to me. I am expecting that in the next few weeks we will have the conclusion of our formal review of our commitment to Afghanistan to hand and I said I certainly will be on the phone to him to let Stephen Smith know where the New Zealand Government gets to in relation to our own review. I think it would be fair to say that there is a sharing of information as an on-going process rather than a seeking of advice in that sense.

QUESTION: Was the New South Wales trade issue brought up today and what was the (inaudible) of the discussion?

STEPHEN SMITH: I think we spoke it in the corridor but not in the actual meeting.

MURRAY MCCULLY: As I think I have indicated to one or two who have pressed the matter with me before this discussion, we have made some inquiries about the initative that has been taken by the New South Wales Government. New Zealand's position is that New Zealand firms are entitled to be treated as local in terms of the CER government procurement regulations. We are seeking clarification that that in fact will be the practice that is followed by the New South Wales administration. We have observed that there is some dialogue, some of it fairly robust, between Commonwealth ministers and the New South Wales administration. We are pleased to see that that is happening and very keen not to get in the way of it.

QUESTION: Mr. Smith can this potentially throw a spanner in the works for Australia's international trade interests?

STEPHEN SMITH: I have made the point very clearly in Australia in the face of firstly publicity in advance of the New South Wales budget but also in the aftermath of the budget earlier this week. The same point's been made by my colleague Minster Crean. There are two very important points here: firstly no Australian state can do anything which is inconsistent with Australia's international obligations. That includes, for example, any obligation that we might have to the WTO. But it also includes, and this is the relevance of Minster McCully's point, it also includes any obligation we might have through any free trade agreement of which the CER between Australia and New Zealand is such compact arrangement. Secondly and more importantly both Minster Crean and I have made the point that this is not a time for any jurisdictional country to retreat to protectionism. In a time of economic downturn it is precisely the time to move to those policies which we know will enhance and expand economies and enhance and expand job opportunities and growth opportunities.

QUESTION: This initiative does seem to breach those agreements though maybe not for New Zealand but with the EU and US and other trading nations.

STEPHEN SMITH: I think Mr. McCully has a very strong point about procurement policies and the CER, so I am not proceeding on the basis that New Zealand has a difficulty or a problem with that. Australian officers and officials are looking very carefully at the design of the program to see whether it does fall foul of any of our international obligations. But there is a more fundamental point, we don't believe that the signals that are being sent at this time reflect a retreat to economic policies which in our view shunt growth rather than enhance growth.

QUESTION: But you have been unable to given an assurance that New Zealand will be covered that local provision?

STEPHEN SMITH: No I have not given the assurance, Mr. McCully has been, and his officers as I understand it, have been dealing directly with the New South Wales government to confirm that point. But it is very clearly the case that no procurement approach affected by a state or territory government of Australia can be breech of a free trade agreement obligation which Australia has seized and the CER arrangement between Australia and New Zealand is a free trade agreement.

QUESTION: So would the Federal government have to potentially step in? Could they override the New South Wales government?

STEPHEN SMITH: I am entirely happy for the government of New Zealand to be advancing its own case in this matter and I have got not doubt that it is doing it very effectively.

QUESTION: Just to return to Fiji for a moment, perhaps (inaudible) in the United Nations there is finding or locating peace keeping forces to replace those from Fiji if they were removed. Would Australia and or New Zealand offer to troops to replace the Fijian forces?

STEPHEN SMITH: Well Australia has been one of the most substantial peace keeping nations for 60 years. We continue to make substantial peacekeeping arrangements and we would not be proposing on the basis of making a greater contribution for, or in return, for the United Nations doing something which in our view it should be doing anyway.

[Ends]

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