Prime Minister John Key is hopeful he can make progress on a free trade agreement (FTA) with his recently-elected Japanese counterpart Yukio Hatoyama when they hold their first official talks in Tokyo tonight.
Mr Key said steps toward an FTA with Japan -- New Zealand's third largest export market and fourth largest trading partner overall -- were high on his priority list.
"It's a relationship that needs re-energising. It's a big market for us, $7.5 billion worth of two-way trade," he told reporters early today (NZT)."Given this is the second-largest economy in the world, if we could secure some kind of free trade agreement with Japan, the implications for the New Zealand economy are very substantial."
Mr Key said he was hopeful rather than optimistic, although Mr Hatoyama's early impact in the job offered some encouragement.Mr Hatoyama's Democratic Party of Japan won a landslide election in August, which ended nearly 50 years of Liberal Democratic Party rule.
"We'll be trying to make progress, and he has said as an incoming prime minister he wants to lead things through political decisions and not through the bureaucracy which has been holding up an FTA for, frankly, decades with New Zealand.The recent FTA with China proved New Zealand was a good test case, Mr Key said, and had been a big success for both countries.
He said New Zealand and Japan were a good fit for a trade deal, with New Zealand not offering competition in "sensitive areas" such as rice or grain fed beef.Mr Key this week signed a free trade deal with Malaysia and had discussions on an East Asia free trade deal encompassing the 10 Asean (Association of South East Asia Nations) members plus China, Korea, Japan, India, Australia and New Zealand.
Mr Key expected Mr Hatoyama would be keen to discuss the East Asia community, regional security and aid and donor programmes in the Pacific.Yesterday Mr Key met with the Japanese Emperor at the Imperial Palace, and delivered the formal opening speech at the giant rugby ball, a Tourism New Zealand promotion for the 2011 rugby World Cup.
Launched under the shadow of the Tokyo Tower, the 25m long, 17m wide and 13m high inflatable ball is on show in a third major city in as many years, after Paris in 2007 and London last year.All Blacks legends Jonah Lomu and John Kirwan, now national rugby coach of Japan, were among the guests of honour as Mr Key donned his tourism minister's hat.
"There's about 8 million tourists a year coming out of Japan, we're picking up less than 100,000 of them in New Zealand so that gives you a sense of the potential."On a per-person basis, Japanese are highest spending visitors with average holiday spending at $4698 per trip, compared with Australia ($2372), the USA ($3552) and the UK ($4006).
He said rugby was an effective marketing tool for New Zealand, with as many as 70,000 tourists predicted to arrive for the 2011 World Cup.Mr Key will also visit Osaka today to further promote links between the two countries before returning to Tokyo for talks with Mr Hatoyama.
