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Q+A: Peter Watson interview transcript

Published: 8:20PM Sunday July 24, 2011 Source: Q+A

PAUL Dr Peter Watson is a New Zealander.  He's lived in the United States for the past 30 years, working hard to improve the relationship between our two countries.  He's been chair of the United States International Trade Commission.  He's had some big jobs.  He's worked in the White House as Director of Asian Affairs of the National Security Council under George Bush I.  And these days he's a business consultant in DC.  Guyon Espiner spoke with him on Capitol Hill and began by asking Peter Watson, after a generation at the heart of the US-New Zealand relationship, which country had moved further.

PETER WATSON - Trade Consultant
Actually, I'm really not sure I could say who's moved the furthest.  I think what's important is the two sides have moved actually quite significantly together, actually.  There's been a lot of push certainly from I think both sides at different times.  But I would say, actually, there's been sort of a joint effort, certainly in the last, I would say, two to three years.

GUYON Do you think the US was perhaps ready to move earlier than New Zealand perhaps believed?

PETER  I don't know about believed, because there was some very open and transparent communications going as far back as 1989 that the United States would like to see New Zealand go a different direction and support a more positive relationship.  But I think instead of looking backwards, the better thing to do now is to be pleased about the fact that the relationship has normalised and we're really moving forward.
GUYON Let's do that, but do you think New Zealand has paid a price in those interim years if you look, say, compared to Australia, which has had a very different relationship?

PETER  I think that's, in fact, exactly the right parallel because if you look back into 1984, 1985, when these broker took place, New Zealand is about 26 years behind the normal progress that Australia's been able to make - free-trade agreement, preferred immigration, business visitors.  New Zealand used to enjoy a disproportionate influence in Washington, and now it's starting to get that back again.

GUYON So that's quite a price, really, isn't it, in those interim years.  I guess the other way that some people would look at it is that New Zealand has been able to have a more independent, non-aligned stance.  And if you look at the progress New Zealand has made with a country like China, whether that perhaps would have been possible.  Do you think that there is merit in that argument at all?

PETER  Well, let's look at the relationship between the United States and China.  That reapproach took place back in the Nixon era, so the United States has enjoyed a very good relationship with China before, during and after the problems with New Zealand.  New Zealand has, of course, quite correctly is proud of our ability to speak freely, but that's always going to be the case.
GUYON So it's not an either or?

PETER  Absolutely not.

GUYON Obviously, one of the theatres and areas that we're working in quite closely is the defence and security relationship now.  Do you think that that is essentially a position now where we're allies in all but name?

PETER  You know, I'm not sure phonetics are really important.  I think you look at the substance of the relationship.  You've got the Pacific cooperation in Tonga, Vanuatu with the navies earlier this year.  We're looking forward to Pac Rim next year.  This is just a natural and organic resumption of a robust political, economic, diplomatic and security relationship.
GUYON Obviously, the trade relationship is at the top of the Prime Minister's agenda and the Trans-Pacific Partnership - wanting progress there.  Do you think that the American administration is actually ready for what they call a comprehensive trade agreement which would include agriculture and would include lowering tariffs over time?

PETER  I believe so.  I mean, obviously, there's a couple of earlier steps that have to be addressed.  We obviously have got to deal with a couple of the pre-existing trade agreements that are in place, but I think the administration here understands that a successful TPP would reignite the stagnant trade talks that have existed in the WTO.  I think they see this a little like the North America Free Trade Agreement earlier on as being an impetus to rebuilding broader trade negotiations.

GUYON Is it risky, though for them politically?  Because a lot of people, rightly or wrongly, equate these free-trade agreements with job losses and threats and more competition.  Is it politically risky for an administration to go into such a big deal like this?

PETER  I don't think risky is the word.  Obviously, they have to be sensitive to managing those issues, but this is a very comprehensive set of issues that the President's working with - President Obama.  I think he can manage his way through all this.  He can walk and chew gum at the same time.
GUYON Now, John Key has run into this unmistakable issue of the debt crisis.  There were a couple of senators that he was going to meet today which couldn't make it, because they were involved in these discussions.  I mean, to an outsider, seeing the two sides deadlocked over such an important issue is quite staggering, really.  I mean, is American politics a bit crippled at the moment?

PETER  It's been brittle and very very, I think, partisan for quite some time and very unhelpfully so, both for the United States economy and clearly, I think, for the international economy.  It's very regrettable to see the state of deterioration of bipartisanship in the United States presently.

GUYON Why has that happened?  Is it just pure politics, or has that got worse?  Have you seen that get worse?

PETER  I have seen it get worse, but to a certain extent I think there's blame enough to go on both sides.  We've seen, unfortunately, a rump group arise within the Republican Party - the so-called Tea Party.  These are folks who really don't want to play, I think, a very constructive role in American politics.  They want to spit the dummy and have it their own way.  Certainly on the centre left in the politics here, there's some that really prefer not to have a meaningful engagement on all of the economic issues. So it's been polarising for some time, but we're hopeful that the President and the leadership - sensible leadership - on the Republican side is going to be able to come to some understanding.
GUYON You talk about the Republicans and perhaps some division there.  What is the state of play in terms of the contenders?  I mean, Mitt Romney seems to be the favourite to get the nomination.  How do you see this playing out?

PETER  Well, you know, money is the milk of politics in the United States, if not a lot of places.  He has got a war chest that is extremely enviable, and everybody else has to make up for all of the, frankly, capital that he's brought on to the field.  There are a number of other contenders happy to chat about a couple of them.

GUYON Yeah, well, I mean, Sarah Palin - will she run?

PETER  I hope she runs.
GUYON Do you?  Why?

PETER  The reason I do is because I think it's important for America to have the opportunity of really seeing behind some of the fallacies that people like Sarah Palin stand for.

GUYON Like what?

PETER  Well, I mean, just close-to-home stuff.  You know, this protectionism, the lack of international focus and markets, and just a very narrow paroquial perspective.
GUYON Sort of an isolationist-?

PETER  I wouldn't go necessarily that far, but certainly not what I'd call a robust international perspective.

GUYON So you think her running would expose her to-?

PETER  I'd like to see it.
GUYON It'd be pretty entertaining.

PETER  I'd love to see it.

GUYON What about Bachmann?  Do you think that she will?

PETER  She's tried to calibrate herself slightly further away from Palin, but the fact of the matter is she's appealing to the same core constituency.  This is your, you know, again, your Tea Party, your close-to-home, you know, rather protectionist groups.
GUYON There's support out there, though, politically for that.  There's a constituency there, isn't there?

PETER  There always has been in American politics, and this is where one of the challenges always is to keep United States, you know, forward-looking and engaged internationally.  That constituency has always been there, and it's not going away.

GUYON Given the quite a bit of rivalry and division there to a degree in the Republicans, do you think that it's Obama- it's a one-horse race?

PETER  No, I don't necessarily think so.  I mean, the employment numbers are not very good right now.  His approval rating isn't necessarily as good as he'd want.  You know, if there's a strong candidate who might come through and might be appealing on the Republican side who could actually speak to the economic issues in a way that also appeals to more of a moderate perspective and, more importantly, captures the independents, that's the core group.  If you catch the independents in this race, you win the general election.
GUYON And you think the economy is key to that?

PETER  I think it's critical to it.  I really do.

GUYON And things aren't looking great.  You've got, what, 9.2% unemployment and obviously very high levels of indebtedness.  I mean, is there light at the end of the tunnel for the US economy?  It's been a couple of years now of pretty dire news.

PETER  It's going to continue to be tough, tough sailing, but the great thing about it is it's a large economy, it's still a very robust economy demographically. If you look at the projections economically going up the next 30, 50, the United States is going to continue to have a very robust international engagement.  It's going to remain an important international economy.
GUYON Just finally, what sort of significance is it for John Key, a New Zealand prime minister, to come here, come to Washington, have face time with the president of the United States, meet all the key players?

PETER  The Prime Minister is resuming the natural place that New Zealand had in its historical role in Washington, and there are some heroes in this.  Certainly, Secretary Clinton, for her part, has been important; Assistant Secretary of State Kurt Campbell has been critical.  On the New Zealand side, Prime Minister Key has had a very businesslike, professional relationship with the United States.  I think Minister of Foreign Affairs Murray McCully has done a fantastic job in quietly building the undergirding.  Ambassador Mike Moore has been fantastic.

GUYON And do you give credit too to the former administration under Helen Clark?

PETER  I think the former administration has to be given credit for quiet diplomacy.  I use the word quiet deliberately.
GUYON What do you mean by that?

PETER  Well, she very carefully nurtured the development between the United States, but without giving it too much prominence, whether it be in the Labour caucus or to the New Zealand public at large.  You can't understate it, though.

GUYON Quiet diplomacy under the former administration.  How would you describe the current tack?

PETER  I think really businesslike, open, transparent, robust. 

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