SCENESETTER FOR A/S HILL'S MARCH 18-20 VISIT TO

C O N F I D E N T I A L WELLINGTON 000195 SIPDIS NOFORN SIPDIS STATE FOR EAP/FO A/S HILL, D (FRITZ),EAP/FO, AND EAP/ANP NSC FOR VICTOR CHA SECDEF FOR OSD/ISA LIZ PHU PACOM FOR JO1E/J2/J233/J5/SJFHQ E.O. 12958: DECL: 03/09/2016 TAGS: PREL PGOV OVIP NZ SUBJECT: SCENESETTER FOR A/S HILL'S MARCH 18-20 VISIT TO NEW ZEALAND Classified By: Ambassador William McCormick, for reasons 1.4 (b) and (d). ¶1. (C) The Embassy welcomes your upcoming visit to New Zealand, which will enable you to meet a broad range of New Zealanders, including academics, journalists, lawyers, and students. Your meetings with GNZ officials will allow for productive discussions about regional/Pacific Island and security issues as well as the bilateral relationship. GNZ officials are anxious to ensure that your visit here will be both interesting and productive. They regard you highly, and have followed closely your travels throughout the region. -------------- Political Scenario -------------- ¶2. (C) Having squeaked into a minority government with a 2% margin, the Labour Government remains relatively cautious and is not proposing any sweeping new programs or initiatives. It is not helped by Parliamentary rules that have cost a shrunken Labour its majority vote in all committees and the chair in some. An emboldened opposition National Party continues to try to embarrass the Government. Attempts to pick apart the governing arrangement have failed, as Foreign Minister and NZ First leader Winston Peters is a veteran Parliamentary pitbull and has out-debated his opponents. But National's attack on Social Development Minister Benson-Pope's repeated attempts to cover up damning information about his allegedly inappropriate and abusive behavior while a teacher 20 years ago have silenced one of Labour's most aggressive, effective voices in Parliament. Indications that the economy may be taking a tumble are more serious for Labour. Finance Minister Cullen says things are slowing down but not crashing, and admonishes analysts not to talk the economy into recession. ¶3. (C) Meanwhile, National's MPs tell us there is no truth to media rumors that Don Brash is facing a leadership challenge from Finance Spokesman John Key or Education Spokesman (and former leader) Bill English. But the opposition is failing to articulate a clear, distinct vision for New Zealand. This extends to foreign and security policy: the party caucus is debating whether to formally declare support for maintaining New Zealand's anti-nuclear legislation. Senior party officials tell us they have lost votes because of Government accusations that National wants to force a public referendum on the issue. They believe if they remove the issue from debate they can more easily attack Labour for its anti-American tendencies. They are, however, aware that a change in policy could work against their goal of rebuilding a security relationship with us. They also know that Labour has already seized on the proposed change to claim National is untrustworthy and malleable. -------------- Your Visit -------------- ¶4. (C) Labour will continue to attack National over nuclear flip-flops, but we predict they will be on their best behavior with you on this visit. We see no indication they intend to hijack your meetings for domestic political purposes. Nor did they do so for the recent visits of CDR PACOM, CDR CENTCOM, or Codel McCain. The PM and other Government officials are fully aware that their anti-American comments during last year's general election campaign were damaging to the relationship. We have noticed a lot more positive comments about the United States coming from the Beehive these days. This applies even to quasi-negative remarks: Minister Peters, Defense Minister Goff, and others balanced their recent claims that the United States does not appreciate all New Zealand does in the Pacific Islands with the observation that we play a key role in the region. ¶5. (C) Minister Goff will be out of the country during your time here, and the Prime Minister will probably be unable to see you because she will be with Cabinet. You are however scheduled to meet with Minister Peters, and we predict he will repeat the claim that we should recognize New Zealand's active role in the Pacific Islands. This seems to be the Government's new mantra encouraging us to overlook our differences on the nuclear issue, replacing last year's, "we agree on 95 percent of things, why focus on the negative?" It also builds on Peters' recognized strength as interlocutor in a region where he has many friends. ¶6. (C) But the Minister will not focus on the negative. He clearly wants to improve bilateral ties with both the United States and Australia, and has personally reached out to me. In a recent speech, Peters said bilateral relationships are as important to New Zealand's interests as international institutions are, a heretical remark since many Kiwis regard the UN as helpful world government. There remains little love between Peters and the press, but journalists seem to be developing a grudging respect for his abilities and his willingness to rely on expert advice. MFAT contacts also tell us he has developed a good working relationship with the PM and Minister Goff. ¶7. (C) Senior MFAT officials also hope to start to build a good working relationship with you. CEO Simon Murdoch and Deputy Secretary John McKinnon greatly regret that bilateral ties are not all they should be. They have privately told us they think New Zealand should be thinking far more strategically about its relationship with the United States, including more cooperative efforts in the region. Although they (and we) are obviously limited by the current Government's policies and outlook, we are encouraging Murdoch and McKinnon -- and other GNZ officials -- to build towards this goal. For example, US Customs and Border Protection Assistant Commissioner Thompson recently discussed with GNZ possible joint CT-capacity building assistance in the Pacific Islands. MFAT's CT Division tells us New Zealand might like to host a PSI planning session, but fears an embarrassing reaction from us. The Ministry of Defense is concerned about Chinese military assistance and crime by Chinese nationals in the Pacific Islands. These are the sorts of issues we believe could form a good basis for longer term US-NZ cooperation, even given the policies that divide us. McCormick