Fran O'Sullivan: Key's golden chance in Peru

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John Key is set to be catapulted on to the global stage at next week's Apec leaders meeting in Lima, Peru.

In his first international gig as New Zealand's Prime Minister, Key is scheduled to deliver the opening remarks at a major session on the global financial crisis at the adjoining chief executives summit.

Key's attendance is dependent on getting his Government negotiations in place first, and Cabinet announced. But it is a golden opportunity.

His name isn't on the Apec CEO Summit programme. The programme simply states the opening remarks are to be made by H. E. Prime Minister of New Zealand. This indicates the berth would have been filled by his highly accomplished predecessor, Labour's Helen Clark, if she had won Saturday's election.

Clark has a huge track record in Apec leading moves to put climate change on the agenda at the Busan (2005) leaders' meeting and having played a strong role on trade issues over her eight meetings as Prime Minister.

She used her bilateral meetings with Chinese President Hu Jintao at the Bangkok and Santiago meetings to pave the way for the opening of negotiations on the free trade deal that was ultimately signed last April in Beijing.

Key has no track record in foreign affairs. But his background as a finance sector high-flyer will enable him to play to his own strengths as he sets the scene for an open forum to address issues ranging from the implication of the current financial turmoil, through to where the global economy is heading and what the economic outlook will be for 2009.

If he is smart he will use his address to underpin a number of areas where New Zealand is well qualified to exert leadership: The global trade agenda where this country is pushing ahead with major regional deals is the most significant. But there is also an opportunity to stress the importance to small Apec nations like our own that the big elephants (US and China) don't trample over others as they seek to ballast their own economies.

As the first international leader to follow Peruvian President Alan Garcia on to the stage, Key has an opportunity to help create a favourable agenda ahead of the later leaders' meeting.

A high-level panel will pick up on Key's themes. Among them: Singapore's Foreign Minister George Yeo, the peripatetic US economist David Hale, Luis Moreno who heads the Inter-America Bank and Emilson Alonso who is managing director of HSBC (Latin America).

Yeo and Hale, in particular, are influential in regional business forums and are likely to mark him up well if he makes a good impression.

The session is being chaired by Timothy Ong who is also extraordinarily influential in Asian power politics, championed the Clark Government's Seriously Asia initiative and will be a useful ally if appropriately handled.

The CEOs' summit is a particularly useful shop window for NZ political leaders as it contains a significant contingent of senior businesspeople and advisers from the 23 economies that make up Apec.

The Chinese PRC, for example, now sends a very highly ranked group of chief executives, as traditionally has the US which also uses the event for top-level lobbying on bilateral issues. The New Zealand business attendance at the Apec CEOs' summit has been irregular over the years largely due to the lack of organised lobbying efforts.

But there is a profound opportunity to make a change this year.

There are three areas where Key and his team - which will include new National Trade Minister Tim Groser and new National Foreign Minister Murray McCully - can make significant inroads to NZ's advantage.

The first initiative is to make progress on the Trans-Pacific Economic Partnership negotiations now under way with the United States. P4 is a regional trade agreement cementing New Zealand, Singapore, Chile and Brunei.

Irrespective of the fact that Barack Obama will be inaugurated as US President in January, Key should instruct officials to organise a five-way meeting between the P4 leaders and outgoing US President George W. Bush to ensure US officials stay focused meantime.

The NZ-US Council and the US Chamber of Commerce will be meeting separately to organise a lobbying effort in Washington next year to gather support for P4 with the new administration.

Other nations like South Korea and Vietnam have also expressed interest in joining the grouping which has the potential to be the model agreement for an ultimate Apec free trade area.

Key's second opportunity is to get down to the hard yards with the Chinese Government and argue Fonterra's case for an orderly settlement of the tainted milk scandal at its San Lu joint venture. Right now Fonterra is in a quandary as it combats rumours that the Chinese Government will order the sale of San Lu to its rivals and hit-up the NZ company for compensation to affected families.

The bilateral FTA does provide a mechanism for the leaderships of both countries to discuss thorny investment issues. Key should make sure that first, he gets a meeting with President Hu Jintao, and second, the issue is on the agenda for political resolution.

Key's third major opportunity is to get some focus on the implications of the financial crisis itself - for New Zealand. Traditionally, the New Zealand PM is accompanied to Apec by a bunch of officials led by the secretary of foreign affairs and trade reflecting the fact that Apec's original raison d'etre was free and open trade in the Asia Pacific by 2020. But in recent years economic integration has come to the fore.

With the international financial crisis being the topic du jour in Lima next week it would seem eminently sensible to make sure Treasury secretary John Whitehead is in Key's party.

I believe Key should go even further and co-opt a number of influential businesspeople - including former Reserve Bank governor Don Brash - to go up to Lima and not only act as "eyes and ears" for him but also produce reports on their take of what the crisis means for this country.

Treasury has been doing a lot of soul-searching on the NZ economy during the past year, reaching out not only to business groups but also to high-ranking officials from other nations.

Among them: Australian Treasury secretary Ken Henry and UK Treasury permanent secretary Nicholas Macpherson. But much of Treasury's strategic thinking was pulled together before the financial crisis deepened.

The detail of Treasury's post-election briefing will be disclosed to Bill English once he is sworn in as Finance Minister. It is expected to look through some of the more immediate issues to the necessity to get more focus on productivity.

But if Whitehead and team don't get a sufficient handle on the tactical responses to the current crisis, the ability to assist English to drive a strategic response will be hindered.

Apec is important to New Zealand's position on the world stage as it gets this country entrance to a top-club of nations ringing the Pacific.

Clark and Shipley have each addressed it and been recognised as "formidable" women leaders.

Key will have to earn his stripes before he joins the ranks of those political leaders making keynote addresses: Australia's Kevin Rudd, China's Hu Jintao, Korea's Lee Myung-Bak and outgoing US President George W. Bush.

- NZ Herald

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