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