NZ FOREIGN MINISTER PUTS POSITIVE SPIN ON TOUGHER

C O N F I D E N T I A L SECTION 01 OF 03 WELLINGTON 000475

SIPDIS

STATE FOR EAP A/S HILL AND EAP/ANP
STATE PASS USTR FOR WEISEL AND KATZ
NSC FOR NSA HADLEY AND VCHA
SECDEF FOR OSD/ISA LIZ PHU
PACOM FOR J0051 HUSO, MUNIPALLI AND POST

E.O. 12958: DECL: 06/15/2015
TAGS: PREL PGOV NZ
SUBJECT: NZ FOREIGN MINISTER PUTS POSITIVE SPIN ON TOUGHER
WASHINGTON MESSAGE

REF: A. STATE 112199

B. WELLINGTON 452

Classified By: AMBASSADOR CHARLES J. SWINDELLS,
FOR REASONS 1.4 (B) AND (D)


1. (C) SUMMARY: Ambassador Swindells recently met with NZ
Foreign Minister Phil Goff to discuss the latter's visit to
Washington. Goff painted an upbeat message about his recent
U.S. visit, but obviously had heard Washington's tougher
message regarding the negative effect of New Zealand's
policies on its prospects for an FTA. Goff's unacceptable
response -- that New Zealand is happy working around the
edges of the status quo -- was considerably more inflexible
than the Prime Minister's words on the issue (ref B ). This
may reflect 1) Goff's own feelings regarding the importance
of the nuclear ban; 2) the refusal of National Party leader
Don Brash to admit during a weekend news interview that he
favors ending the ban; 3) the consensus of the Cabinet, which
met on June 13, that the ban must stay; or some combination
of the three. Whatever the reason, we appreciate
Washington's consistent message to Goff and will continue to
work quietly on a strategy for an improved U.S.- New Zealand
dialogue during the weeks or months before New Zealand's
general election . END SUMMARY.


2. (C) Ambassador Swindells met on June 13 with Foreign
Minister Phil Goff to discuss the latter's recent visit to
the United States and Canada. Goff was enthusiastic about
his meetings in Washington, which he said had offered him a
chance to meet with newly-appointed officials whose
responsibilities include New Zealand. He appreciated the
chance to talk with his counterparts about a wide range of
issues, including China, Indonesia, Iraq and Afghanistan.

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Still Bucking for an FTA
--------------


3. (C) Goff had obviously heard loud and clear in his
meetings that New Zealand will not be able to begin FTA
negotiations with the United States at this time. In
describing his FTA-related Washington conversations to the
Ambassador, the Minister nevertheless put a positive spin on
New Zealand's prospects for an eventual agreement. While
acknowledging that Deputy Secretary Zoellick had cautioned
that CAFTA must first get through Congress and the United
States must follow through on negotiations with countries
already in the queue, Goff stressed that Congress seemed
positive regarding a possible trade deal with New Zealand.
Furthermore, he noted that the Deputy Secretary had said that
USTR Portman would take the lead on any US-NZ FTA. The
latter is a good friend to New Zealand, Goff said. He added
that the Deputy Secretary had not said anything to indicate
he would oppose a trade deal.


4. (C) We could not help but notice, however, that Goff was
somewhat less exuberant about the prospects of an FTA in the
near term than he had been after his last trip to Washington.
He no longer spoke of the growing numbers of members in the
Friends of New Zealand caucus. Instead, he only said that
there seems to be an appreciation of New Zealand's position
in Congress. He also said for the first time that it is in
the end the Administration's choice whether or not to pursue
a trade deal. (He did add that it seems NZ is in a better
position for this than before.)


5. (C) Goff admitted things with CAFTA look difficult and it
is likely it will take Congress until December to approve it.
The Ambassador said that the Administration would also need
to get Congress to renew Trade Promotion Authority. Goff
said that New Zealand favored CAFTA as a way of assuring a
stable, prosperous Central America and a means by which the
United States could pass democratic values on to the region.
For this reason, Ambassador Wood would promote CAFTA on the
Hill, including with Friends of New Zealand Caucus co-chair
Congresswoman Tauscher, who opposes the Central American deal.

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A Line in the Sand
--------------


5. (C) Goff also played down any message he had heard
regarding Washington's continued concern over New Zealand's
nuclear ban. The only meeting in which he mentioned the
issue had come up was his session with Acting Deputy
Secretary of Defense England. Even here, Goff said he had

SIPDIS
anticipated the Acting Deputy Secretary would raise the
issue, and he had done so in the context of a broader,
positive discussion. DoD is pleased New Zealand is
increasing its defense budget, Goff stressed.


6. (C) The Ambassador then described his own recent trip to
Washington. He had heard nothing but positive things about
New Zealand, he said, but also a lot of questions about how
we could raise the level of bilateral cooperation. Because
of all the challenges in the world, it is important to find
flexibility. As he had remarked to PM Clark during their
meeting last week, the degree to which we can do this can
only be known if we keep talking. We should do this sooner
rather than latter, the Ambassador said. Goff said he
appreciated the Ambassador's wish to move the relationship
forward, and assured him that the PM and he shared this wish.
It makes not sense not to do so, when, for example, we are
cooperating so much in Operation Enduring Freedom. It is
strange not to conduct military exercises together when we
are fighting together.


7. (C) But, said Goff, like many small countries, New
Zealand fiercely maintains its independent way of thinking.
The Ambassador said he understood the country's sense of
independence and individuality, but NZ officials might be
surprised how much flexibility NZ could maintain and still
address Washington's concerns. Goff said flexibility is a
good thing. The Prime Minister has said that New Zealand
cannot alter its legislation. The key was therefore to try
to move forward within this limitation. There was no reason
why any ship other than a carrier or sub could not come to
New Zealand. New Zealand has no need or desire for nuclear
power, and Kiwis would not shift the anti-nuclear policy
willingly. In fact, Goff said, the harder they are pushed on
this issue the more dug in they will become. (Comment: The
same can obviously be said about Minister Goff's own views on
the legislation. End Comment.)


8. (C) The Ambassador said that the issue nuclear propulsion
was really the issue of America's naval presence in the
region. Japan, Taiwan, and Korea all want us here, he said.
We need to discuss this. Even if nothing changed, we'd know
we had tried. Goff said that New Zealand was happy living
with the status quo but loosening it around the edges. He
stressed that the Government has said and will continue to
say it wants the United States in the region. In fact, Goff
said that during his meetings he had encouraged U.S.
officials to engage more, given China's "charm offensive" in
Asia. He said he hoped that Secretary Rice would attend the
Asia Regional Forum meeting.


9. (C) Goff reiterated that his Government is keen to work
together with the United States within the parameters of no
change to the nuclear legislation. He said that NZ officials
feel in some sense that the initiative is with the United
States, and added that New Zealand would respond positively
to a non-nuclear U.S. ship visit if the United States Navy
made this offer. The PM's yearly blanket approval of C-17s
has not been a problem. The question is how we can improve
relations militarily and otherwise. The Ambassador asked if
this meant New Zealand officials would have an open mind and
come to a meeting, which would be "under the radar." Goff
said that the Government could not do anything other than
what it had committed to the electorate to do. Any Labour
attempt to repeal the legislation would be seen as a
betrayal, he said. Such a move would destroy the National
Party as well, he said, as witnessed by National Party leader
Don Brash's unwillingness to openly admit he supported ACT
Party's Ken Shirley's members bill that would revise the ban.
(NB: The bill, which had been submitted months ago, has
recently come up for inclusion on Parliament's calendar,
probably late next month or early in August.) U.S.
politicians would understand Labour's position, Goff added.

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COMMENT
--------------


10. (C) Comment: Goff's hard nosed approach after the PM's
apparently more conciliatory message last week is striking.
We suspect that because National's Brash has (understandably)
refused to make this an election issue, Labour feels
emboldened to harden its line. That being said, the wind is
going out of the Government's sails on the FTA and it is
obvious that they are reacting to a harder message from
Washington. Their probing for a ship visit while still
refusing to even discuss the ban is an indication that they'd
like to have their cake and eat it too. We thank Washington
officials for their unified message to New Zealand
counterparts, and continue to believe that -- after elections
-- the Government may be willing to come to a dialogue if
they know they need to. If they don't, calling them publicly
into account would be appropriate on our part. End Comment.


Swindells