NZ ELECTIONS: WHAT'S IN IT FOR US?

S E C R E T SECTION 01 OF 03 WELLINGTON 000702

SIPDIS

NOFORN

STATE FOR D (FRITZ),EAP/ANP, EAP/RSP, EAP/EP, INR/EAP
NSC FOR VICTOR CHA AND MICHAEL GREEN
SECDEF FOR OSD/ISA LIZ PHU
PACOM FOR J2/J233/J5/SJFHQ

E.O. 12958: DECL: 09/11/2015
TAGS: PGOV PREL NZ
SUBJECT: NZ ELECTIONS: WHAT'S IN IT FOR US?

REF: A. WELLINGTON 696


B. WELLINGTON 695

C. WELLINGTON 682

D. WELLINGTON 635

E. WELLINGTON 594

F. WELLINGTON 566

Classified By: Charge D'Affaires David R. Burnett,
for reasons 1.4 (b) and (d).


1. (C) Summary: No matter who wins New Zealand's general
elections this Saturday, the stage is set for a comprehensive
U.S.-New Zealand dialogue should Washington desire one. Well
before the election, Labour officials indicated they would
welcome such an exchange, and even in coalition with the
Greens that position will not change. National would also
welcome a dialogue as a way to improve ties, although
ironically they would be less able to engage us publicly.
Labour, which would gain from close ties with us if in
Government, would in opposition win more by opposing
National's efforts to engage us. Embassy has had several
preparatory discussions with senior Foreign Affairs and
Defense officials to prepare for a dialogue should Washington
decide to move forward. End Summary.

--------------
Dialogue with Labour Is Possible
--------------


2. (C) New Zealand's closest general election campaign in a
decade is winding down. The stakes are high for the Kiwi
voter in this very close race: Labour and National represent
truly different policy choices. But the consequences for
U.S.-New Zealand relations may be less extreme: either party
should be open to new, comprehensive US-New Zealand talks if
Washington decides such a dialogue is in order. Either party
would also have to work around obstacles to pursue such
talks.


3. (C) As noted refs E and F, Labour has not been shy about
playing the anti-American card during this campaign. A
Labour-Green victory would not, however, preclude a
productive, comprehensive US-NZ dialogue as called for by
former Ambassador Swindells. Well before the campaign,
Labour officials had been quietly leaving themselves room for
such an exchange.


4. (C) There are many reasons for this. For all the Labour
Government's annoying tendencies to declare unilaterally that
the nuclear ban no longer matters to the United States, Prime
Minister Clark, Foreign Minister Goff and others recognize
the ban is an impediment to better relations with us and has
adverse effects on regional security. Obviously, their desire
for a free trade agreement is a motivating factor in
maintaining ties. But these leaders also recognize that
without a good relationship with the United States, the
Government is vulnerable to opposition charges that Labour is
too close to China and too far apart from New Zealand's
second largest trading partner. The opposition will only be
stronger in such attacks against a left-leaning, Labour-Green
alliance. Senior Government leaders also know -- more than
the Party caucus or backbenchers do -- that New Zealand
benefits from its remaining military and intelligence ties
with the United States. The country's engagements in
Afghanistan and in peacekeeping operations in which we
cooperate help keep their increasingly limited military
forces trained and ready. Without us, the defense force
would be almost totally reliant on Australia, and that
country makes no secret of its views that New Zealand is
shirking on defense. Labour's decision to sizably increase
defense spending was at least in part meant to demonstrate
that they intend to meet their obligations to us and other
partners.


5. (S) New Zealand also gains access to U.S. intelligence
concerning any country in which it has troops. As noted in
our "Two Worlds" cable, Prime Minister Clark continues to
guard this information jealously, the surest sign of its
value to her. The Greens have gone on record this campaign
as being opposed to our intelligence cooperation. But by
declaring they will automatically join Labour in a coalition,
they have lost their negotiating leverage to determine a role
in Government should Labour win. Clark will ensure that the
Greens are kept well away from foreign affairs, defense, and
intelligence matters should the Labour-Green coalition form
the government.


6. (C) Ambassador Swindells observed in his July 4 speech
that U.S. and New Zealand are drifting apart and that the
"status quo" of our relationship is meaningless in a changing
world. The Government was initially furious at his message,
but it also clearly touched a nerve, especially after a
surprising percentage of the public is still responding
positively to the speech months later. FM Goff, in his final
meeting with Ambassador Swindells (ref D) for the first time
did not rule out discussion of the anti-nuclear issue in a
comprehensive dialogue. He also told journalists waiting
outside the meeting room that the Government could support a
broad exchange with the United States: the first time a
Labour Government official had said this publicly. We have
noticed how, even in the midst of their anti-American
campaign rhetoric, senior Labour officials have checked in
with us to make sure we were not taking the language too
seriously. On the campaign trail, they also now talk of the
importance of maintaining New Zealand's anti-nuclear policy,
rather than using the word "legislation."


7. (C) This is of course not to say that Labour would be
willing to change either the anti-nuclear legislation or the
policy. Nor that the Greens won't affect the contour of our
dialogue in any way, or slow things down at times. But it
does seem that for the first time the Government appears to
want to keep the window open for a frank discussion of all
issues, including the ban and its implications for us in the
region. At a minimum, such a discussion would allow both
sides to explore other ways to work through some of the
problems that Labour's policies cause for us. Labour MPs on
the Foreign Affairs Select Committee and senior bureaucrats
in the Ministry of Foreign Affairs and Trade have also
responded positively, albeit quietly, to our calls for a
dialogue, and have said they wish to discuss things farther
after elections.

--------------
National: The Spirit is Willing, but...

--------------


7. (C) With National, the desire for good relations is
there, but the impediments to seeing things through are
possibly greater than for Labour. Well before the election
campaign kicked off, National's Foreign Affairs spokesman
Lockwood Smith and other senior National leaders told us that
it would be very difficult for National to convince New
Zealanders to consider amending the county's nuclear ban,
even though National believes that the propulsion ban should
go. During the campaign, Labour's claims that under Brash
the nuclear policy would be "gone by lunchtime" have caused
problems for National and proved Smith correct. Brash was
forced to say -- repeatedly -- that a National Government
would only change the policy following a referendum or having
been elected on a platform of making the change. Neither
possibility is in the offing, and National clearly could not
do anything on this issue in the near term. There is no
"Nixon goes to China" possibility for Brash to talk with us
openly about the ban's implications, the way there in theory
is for Clark, one of the legislation's authors.


8. (C) In fact, National's entire foreign policy has come
under scrutiny this election, and Labour has succeeded in
raising concerns in the minds of the electorate that National
has a "secret agenda" to once again make New Zealand what FM
Goff calls "a junior sheriff" to the United States and
others. Many National officials are committed to New
Zealand's multilateralist policies even as they wish for
closer relations with the United States. Because of this,
and because National is now vulnerable on all foreign policy
issues, the party's recently released foreign policy is very
conservative -- with a small "c." Indeed, it's hard to
differentiate it from Labour's current policies, a fact
trumpeted by the Government as proof of National's perfidy.
The policy paper signals to us just how hard it would be for
a National Government to engage in a high-profile dialogue
with the United States, at least over the shorter term.
Similarly, National's defense policy only commits to keeping
Labour's current plans and reviewing the country's overall
military needs. The Nats recognize that New Zealand's
defense forces have been drawn down so much over the past
decade that the Ministry of Defence will be unable, over the
shorter term, to absorb more that the extra NZD 4.3 billion
that Labour has already allocated for recruitment and
retention.


9. (C) The real difference between working with a National
Government and Labour would be the issue of trust. Even if
National could not change the nation's policies or openly
admit to talking about the nuclear ban and other security
issues with us, we very likely could quietly work on a "road
map" of sorts to try and align our policies more closely.
Over time, we could then build on that process to work
through many of the issues that divide our countries.

--------------
The Role of Parliament
--------------


10. (C) No matter who wins Saturday's election, we will need
to work with both the Government and opposition if we decide
to pursue a comprehensive dialogue with New Zealand. We have
already had several preparatory discussions with senior
Foreign Affairs and Defense officials, as well as key MPs, to
prepare for a dialogue should Washington decide to move
forward. A Labour government could probably count on an
opposition National to support such an initiative, but
engaging National would still be key to helping keep Labour
on track. Conversely, a National Government would be far
less likely to be able to count on an opposition Labour
party's support, as Labour's goals for closer relations with
us would be mooted outside Government. Nevertheless, Labour
foreign policy stalwarts are generally well disposed to us
and would likely respond to direct outreach on our part. We
will need to help all parties work around the likely
skepticism of their constituents, many of whom have
knee-jerk anti-American views. This includes maintaining the
Embassy's active public relations campaign to raise the case
for better U.S.-New Zealand relations. We've had surprising
success with this over the past years, but we need to keep up
the fight.
Burnett