Making a difference in international affairs: John Key outlines some of the international issues facing New Zealand.

• Author: Key, John

The founding members of the NZIIA first met against the backdrop of a world economy shattered by the Great Depression. In fact among the first issues the institute canvassed 75 years ago was the impact of the 'Slump' on the lives of New Zealanders. The focus of that work was on putting New Zealand's localised economic pain into a global context.

Last year the NZIIA again addressed the implications of a global economic crisis for New Zealand's prospects in the international context. OECD Secretary-General Angel Gurria delivered a lecture in July 2008 on the global financial crisis and its implications for OECD countries. He concluded that the economic crisis was a worldwide problem, which needed a global solution to build mutual trust and keep our markets open and growing.

It is this reality--the need to work for a global solution to the economic crisis, and in particular to position New Zealand so it survives and then thrives--that is my government's immediate focus.

Our bilateral, regional and multilateral relationships with the rest of the world are an important part of the solution. The importance the government places on these relationships is underscored by the fact that I spent my first week in office in a foreign country. Within a day of being sworn in as Prime Minister I was on a plane travelling to the APEC Leaders' meeting in Peru.

At that meeting I took the opportunity to address the APEC CEO's summit about New Zealand's views on the economic crisis, what it meant for a small country like ours and our desired response. I stressed then, as I continue to stress, the importance of strengthening, not weakening, our trading relationships. And, vitally, I met and built relationships with leaders from across our region. It was a great opportunity and a great start to my time as Prime Minister.

Major impacts

Six months later we are continuing to experience major impacts on the world economy. Firms with household names have fallen over. World trade flows have shrunk for the first time since the Second World War. In OECD member countries there are 25 million more unemployed than there were in 2007.

In addressing these challenges, New Zealand must position itself both for the short and long terra. Quite what the future opportunities will look like is not yet clear. But compared with 75 years ago the international landscape is vastly different, and in many ways more conducive to achieving the global solution the OECD Secretary-General called for.

New Zealand in particular has much to gain from its international relationships. As I said at this forum last year, China and the Asia-Pacific region more generally look set to be the powerhouse for the world economy for as far ahead as we can reasonably see. More recently, with its massive (US$580 billion) domestic stimulus, China looks like it may recover from the crisis--perhaps slowly by its standards--in a timeframe that would help the regional and global economy.

Good start

I am keen to see New Zealand make the most of the opportunities presented by China's economic strength. Our free trade agreement is off to a good start, and in the year since its signing trade in both directions has grown, despite the state of the global economy. Two-way trade between China and New Zealand grew by 19 per cent to more than NZ$9 billion in the year to February 2009. I believe there is considerable room for future growth.

When we signed the free trade agreement we opened an important door, and now our task is boldly to walk through it. That is why I chose to visit China as a matter of priority this year. I believe there is much more our two countries can achieve together for the benefit of both our peoples.

My meetings with both President Hu and Premier Wen were very positive, with Premier Wen describing the relationship between China and New Zealand as the strongest it has ever been. I was accompanied by representatives of several of our major exporters who wished to learn more about...