Groser Tim: InquiryInquiries — Inquiry into New Zealand's Relationship with Latin America Consideration of Report of Foreign Affairs Defence and Trade Committee 
Groser Tim: InquiryInquiries — Inquiry into New Zealand's Relationship with Latin America Consideration of Report of Foreign Affairs Defence and Trade Committee 
[Volume:629;Page:1861] 
TIM GROSER (National) 
: 
 Our relationship with Latin America has as I think most members of the House are aware been a particularly thin relationship historically but for very good reasons. 
First of all as we all know from whatever we have studied of its history Latin America has only recently had the armies returned to the barracks in some permanent sense and for the last 20 years has been moving towards open political markets and open economic markets and that has created the conditions for us to have a fresh look at that part of the world. I would also draw members’ attention to the fact that in the Mercosur agreement which unites Brazil with three of the other smaller members of the region there is even a provision that is unique I believe that if any of the countries concerned turns away from democracy—in other words the armies get out of the barracks again and back into politics—it automatically loses its right to the benefits of the trade agreement. 
So there is a sort of historic move fairly recently towards open markets and we are seeing the evolution of societies that I think New Zealanders can be very comfortable with. But a lot of ground has still to be met. These countries are still for the most part impoverished countries. Fundamental issues have not been addressed with respect to their indigenous peoples and vast poverty is yet to be eradicated. 
The first question that I want to address in the report is the matter of New Zealand representation. I personally am a little conflicted here because I naturally would like to see New Zealand build up its pattern of representation. But I have to say on the basis of my experience that spreading the jam too thinly is a real risk. When embassies are spread over vast areas of distance with very few resources—and necessarily so I do not think this is a political statement I am making here; it has been the same inside the Ministry of Foreign Affairs and Trade over successive Governments—there is a real danger of spreading the jam too thinly. We had a post of course in Peru. We closed it down during the period in which Peruvian society collapsed. My sense would be that that is a country that I hope has a better future ahead. Lima has 8 million people many of whom are highly educated and sophisticated but I doubt that it is quite the right moment now. I have always been in favour of a more active policy of cross-accreditation visits as a way of providing some reasonable coverage at very little cost. 
On the question of the trade and investment linkages I see that falling under three different categories. The investment relationship in many ways is more important than the trading relationship because of the strong complementarity of these resourced-based economies with our own. There was a period during the 1980s as I am sure many members will know when New Zealand I think had the third largest stock of foreign investment in Chile in the world and in 1 year the net inflow I think was the largest in the world. We have the technology inside our primary industries that they need but in fact investment in this region has often turned out—as is often the case for New Zealand investment anywhere overseas—to have a very murky track record. It is a record that suggests “proceed with caution.” I know that Fonterra has been looking very closely at some operations in Brazil but this needs very careful scrutiny because a lot of people have lost a lot of money in these markets. 
In respect of the direct trade relationship well it is neither here nor there. I think it is around 2 percent from memory of our total exports. I think I once calculated when I was leading a team of New Zealand officials to look into the Chilean-Singapore option that we sold more to Japan in 1 week than we did to Chile in a year. It will not be that today—but it will not be far from that figure. 
I think the most powerful aspect of our trading relationship with these countries is of course the cooperation on multilateral trade policy. We have had this long and incredibly strong—I would say at times even strong emotional—relationship of collaboration solidarity with the Latin American countries in the Cairns group. I remember going to Bariloche for I think the second Cairns group meeting with Mike Moore when he was the Minister of Trade and we have carried on that very strong and proud tradition of cooperation over the last 15 years with these Latin American countries. 
The situation has changed in Geneva over the last few years because essentially Brazil has moved into a leadership position taking over the mantle of the Cairns group from Australia. But we have worked very closely with the Brazilians. They have a very sophisticated operation and I think that is probably from a New Zealand point of view the single most important aspect of the trading relationship. Their objectives having been European immigrant societies cut off by agricultural protectionism are essentially identical to ours. We do have commercial differences of course and I see that as a very positive issue for us going forward. 
 With respect to culture again the heavy European influence in their societies provides a point of contact for our two societies. I suspect now it would have been more useful for somebody like me to have studied Spanish rather than French as a second language but that is past history. There are certainly many more people in the world who speak Spanish than speak French so I see that as a hugely useful international language and I hope that agencies in New Zealand continue to do what they can to promote interest in the Spanish language amongst young New Zealanders. 
I share the view in this report about going slow in establishing an Asia 2000 - type foundation. I am sorry; I should call it the Asia New Zealand Foundation. I used to be the executive director and I cannot remember the new name on any occasion. I think it is formidably difficult to get funding out of private sector entities for these organisations and I do not think we are at that point in the relationship where we could sustain such an organisation. But I think that as a longer term goal that is an eminently sensible idea and I think it would energise in the long term the efforts of a number of New Zealanders who have a strong personal commitment to or strong company interest in the region. 
I agree with the general thrust of the argumentation in the report about people-to-people linkages particularly in terms of trying to get student exchanges going and building up people-to-people skills. The only lacunae that I see in this report is that I have always considered Latin America as potentially a source of long-term New Zealand residents. I never quite comprehended why the New Zealand Immigration Service did not make a bigger effort in trying to attract young people from that region to come and look at New Zealand. There is as one would imagine an obsession in that region with obtaining a green card—that is becoming an American resident. There are huge obstacles in the way. If members have had the privilege as I have of spending quite a bit of time in that region and meeting the young people they will know that time and time again one comes across highly educated highly motivated and highly sophisticated young people who are trying to get a green card into the United States. I talk to them about New Zealand and they have never thought about it. So I think the longer-term issue of trying to attract migrants from the sophisticated middle classes of these regions deserves a little bit of attention. 
In summing up I think this report maps out the right directions but it is important to be realistic about the resourcing required for these types of projects. The relationship is still too thin I think to support grandiose ideas but I think the report sets them out in the right general direction.