Luxon plays down Cook Islands funding pause
Prime Minister Christopher Luxon has down-played a pause of nearly $20 million in funding to the Cook Islands during his second day of his trip to China.
Luxon spoke to media in Shanghai hours after it became public that New Zealand paused $18.2 million in development assistance to the island nation after its government signed a Comprehensive Strategic Partnership agreement with China earlier this year.
The Cook Islands operates in free association with New Zealand, and while it governs its own affairs, a 2001 Joint Centenary Declaration signed between the two nations requires them to consult each other on defence and security.
Speaking to reporters on Thursday morning Foreign Affairs minister Winston Peters said the Cook Islands had failed to give satisfactory answers to New Zealand's questions about the agreement.
However Luxon said the dispute lies squarely with the Cook Island government - not China.
He said the Cook Islands has obligations to disclose partnership agreements with New Zealand, irrespective of who they're signed with.
"Part of our constitutional arrangements as a realm country and free association is that we actually have responsibility for matters around defence and security, and as a result, what we've said from the beginning of the year, we were unhappy and dissatisfied with the fact that the Cook Islands government wasn't open and transparent about its international agreements."
Luxon is currently in China on his first official visit and is due to meet with President Xi Jinping shortly.
Asked if he expected the topic to be raised in his meeting with the Chinese President, Luxon said the issue was between New Zealand and the Cook Islands.
"The Cook Islands people [have] made a massive contribution to New Zealand. They are New Zealand citizens, there's not a Cook Islands citizenship... they get the huge benefit of being part of New Zealand and being citizens of New Zealand with respect to accessing our public services.
The Foreign Affairs minister informed the Cook Islands government of the funding pause decision in early June.
However, it only became public on Thursday after media reports in the Cook Islands.
"We're really proud of them, our issue is not with Cook Islanders, our issue is with the Cook Islands government and Prime Minister Brown not being sufficiently transparent enough," Luxon said.
Luxon tore through a blitz of promotional events on his first day in Shanghai, spruiking New Zealand's wares before the serious diplomacy began.
When visiting "New Zealand Central" - an event facility run by NZ Trade & Enterprise - the PM announced a new government certification scheme clearing the way for Kiwi-made cosmetics to be sold on Chinese shelves.
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Otago Daily Times
5 hours ago
- Otago Daily Times
Luxon plays down Cook Islands funding pause
Prime Minister Christopher Luxon has down-played a pause of nearly $20 million in funding to the Cook Islands during his second day of his trip to China. Luxon spoke to media in Shanghai hours after it became public that New Zealand paused $18.2 million in development assistance to the island nation after its government signed a Comprehensive Strategic Partnership agreement with China earlier this year. The Cook Islands operates in free association with New Zealand, and while it governs its own affairs, a 2001 Joint Centenary Declaration signed between the two nations requires them to consult each other on defence and security. Speaking to reporters on Thursday morning Foreign Affairs minister Winston Peters said the Cook Islands had failed to give satisfactory answers to New Zealand's questions about the agreement. However Luxon said the dispute lies squarely with the Cook Island government - not China. He said the Cook Islands has obligations to disclose partnership agreements with New Zealand, irrespective of who they're signed with. "Part of our constitutional arrangements as a realm country and free association is that we actually have responsibility for matters around defence and security, and as a result, what we've said from the beginning of the year, we were unhappy and dissatisfied with the fact that the Cook Islands government wasn't open and transparent about its international agreements." Luxon is currently in China on his first official visit and is due to meet with President Xi Jinping shortly. Asked if he expected the topic to be raised in his meeting with the Chinese President, Luxon said the issue was between New Zealand and the Cook Islands. "The Cook Islands people [have] made a massive contribution to New Zealand. They are New Zealand citizens, there's not a Cook Islands citizenship... they get the huge benefit of being part of New Zealand and being citizens of New Zealand with respect to accessing our public services. The Foreign Affairs minister informed the Cook Islands government of the funding pause decision in early June. However, it only became public on Thursday after media reports in the Cook Islands. "We're really proud of them, our issue is not with Cook Islanders, our issue is with the Cook Islands government and Prime Minister Brown not being sufficiently transparent enough," Luxon said. Luxon tore through a blitz of promotional events on his first day in Shanghai, spruiking New Zealand's wares before the serious diplomacy began. When visiting "New Zealand Central" - an event facility run by NZ Trade & Enterprise - the PM announced a new government certification scheme clearing the way for Kiwi-made cosmetics to be sold on Chinese shelves.
Scoop
6 hours ago
- Scoop
Explainer: Why Has New Zealand Paused Funding To The Cook Islands Over China Deal?
Article – RNZ New Zealand has halted more than $18 million in development assistance to its realm country. But the island's prime minister said his government was 'aware' it was coming. Christina Persico, RNZ Pacific Caleb Fotheringham, RNZ Pacific , RNZ Pacific New Zealand has paused $18.2 million in development assistance funding to the Cook Islands after its government signed partnership agreements with China earlier this year. This move is causing consternation in the realm country, with one local political leader calling it 'a significant escalation' between Avarua and Wellington. A spokesperson for Peters said the Cook Islands did not consult with Aotearoa over the China deals and failed to ensure shared interests were not put at risk. On Thursday (Wednesday local time), Cook Islands Prime Minister Mark Brown told parliament that his government knew the funding cut was coming. 'We have been aware that this core sector support would not be forthcoming in this budget because this had not been signed off by the New Zealand government in previous months, so it has not been included in the budget that we are debating this week,' he said. How the diplomatic stoush started A diplomatic row first kicked off in February between the two nations. Cook Islands Prime Minister Mark Brown went on an official visit to China, where he signed a 'comprehensive strategic partnership' agreement. The agreements focus in areas of economy, infrastructure and maritime cooperation and seabed mineral development, among others. They do not include security or defence. However, to New Zealand's annoyance, Brown did not discuss the details with it first. Prior to signing, Brown said he was aware of the strong interest in the outcomes of his visit to China. Afterwards, a spokesperson for Peters released a statement saying New Zealand would consider the agreements closely, in light of the countries' mutual constitutional responsibilities. The Cook Islands-New Zealand relationship Cook Islands is in free association with New Zealand. The country governs its own affairs, but New Zealand provides assistance with foreign affairs (upon request), disaster relief and defence. Cook Islanders also hold New Zealand passports entitling them to live and work there. In 2001, New Zealand and the Cook Islands signed a joint centenary declaration, which required the two to 'consult regularly on defence and security issues'. The Cook Islands did not think it needed to consult with New Zealand on the China agreement. Peters said there is an expectation that the government of the Cook Islands would not pursue policies that were 'significantly at variance with New Zealand's interests'. Later in February, the Cooks confirmed it had struck a five-year agreement with China to cooperate in exploring and researching seabed mineral riches. A spokesperson for Peters said at the time said the New Zealand government noted the mining agreements and would analyse them. How New Zealand reacted On Thursday morning, Peters said the Cook Islands hadn't lived up to the 2001 declaration. Peters said the Cook Islands had failed to give satisfactory answers to New Zealand's questions about the arrangement. 'We have made it very clear in our response to statements that were being made – which we do not think laid out the facts and truth behind this matter – of what New Zealand's position is,' he said. 'We've got responsibilities ourselves here. And we wanted to make sure that we didn't put a step wrong in our commitment and our special arrangement which goes back decades.' Officials would be working through what the Cook Islands had to do so New Zealand was satisfied the funding could resume. He said New Zealand's message was conveyed to the Cook Islands government 'in its finality' on 4 June. 'When we made this decision, we said to them our senior officials need to work on clearing up this misunderstanding and confusion about our arrangements and about our relationship.' Prime Minister Christopher Luxon is in China this week. Asked about the timing of Luxon's visit to China, and what he thought the response from China might be, Peters said the decision to pause the funding was not connected to China. He said he had raised the matter with his China counterpart Wang Yi, when he last visited China in February, and Wang understood New Zealand's relationship with the Cook Islands. Concerns in the Cook Islands Over the past three years, New Zealand has provided nearly $194.6 million (approximately US$117m) to the Cook Islands through the development programme. Cook Islands opposition leader Tina Browne said she was deeply concerned about the pause. Browne said she was informed of the funding pause on Wednesday night, and she was worried about the indication from Peters that it might affect future funding. She issued a 'please explain' to Mark Brown: 'The prime minister has been leading the country to think that everything with New Zealand has been repaired, hunky dory, etcetera – trust is still there,' she said. 'Wham-bam, we get this in the Cook Islands News this morning. What does that tell you?' Will NZ's action 'be a very good news story' for Beijing? Massey University's defence and security expert Anna Powles told RNZ Pacific that aid should not be on the table in debate between New Zealand and the Cook Islands. 'That spirit of the [2001] declaration is really in question here,' she said. 'The negotiation between the two countries needs to take aid as a bargaining chip off the table for it to be able to continue – for it to be successful.' Powles said New Zealand's moves might help China strengthen its hand in the Pacific. She said China could contrast its position on using aid as a bargaining chip. 'By Beijing being able to tell its partners in the region, 'we would never do that, and certainly we would never seek to leverage our relationships in this way'. This could be a very good news story for China, and it certainly puts New Zealand in a weaker position, as a consequence.' However, a prominent Cook Islands lawyer said it was fair that New Zealand is pressing pause. Norman George said Brown should implore New Zealand for forgiveness. 'It is absolutely a fair thing to do because our prime minister betrayed New Zealand and let the government and people of New Zealand down.'
Newsroom
7 hours ago
- Newsroom
Primary sector firmly on China agenda despite education and tourism focus
Despite China's economic slowdown, primary producers are holding onto value by offering premium products that appeal to a Chinese middle class focused on health and wellness. Prime Minister Christopher Luxon has touched down in Shanghai as China's booming economic growth is slowing. China is New Zealand's largest trading partner and took $21.5 billion of New Zealand exports in the year to March. Two-way trade totalled $39.1b during that same period. Luxon says there's still a lot of economic opportunity in the market. But some have described New Zealand as reaching 'peak China' and should look elsewhere amid a softening Chinese market, while others continue to warn of overexposure in some areas of primary exports. Ahead of this trip, which kicks off with two business-focused days in Shanghai, followed by the politics and foreign diplomacy in Beijing, Luxon told Newsroom his main objective was to help boost the lagging tourism and education markets. Though China is New Zealand's largest source of international tourists and third-largest tourism market, those numbers were still lagging behind pre-Covid levels. If Luxon were able to help New Zealand get 'share of mind' in those areas and help remove any policy barriers, then it'd be a success. Among the 28-strong business delegation were a strong contingent of tertiary education leaders, including Victoria University of Wellington and Te Pūkenga, as well as Tourism NZ, Māori Tourism and other organisations with tourism wings, such as Ngāi Tahu Holdings. And though the three-day programme would no doubt include visits to universities and tourism-focused events, the primary sector would also be a core part of the Prime Minister's agenda for the week with dairy, meat and produce-focused events. According to the latest MPI annual report, food and fibre sector exports were expected to increase 12 percent to $59.9b for the year to June 30, and a further 2 percent in the coming financial year. 'Food and fibre sector export revenue is performing well despite geopolitical turbulence, shifting trade policies, and elevated uncertainty,' MPI said, 'While some industries remain more vulnerable to external pressures, others are well-positioned to withstand volatility, ensuring overall sector stability.' Among those primary producer categories, dairy exports were expected to hit a record high and horticulture revenue was forecast to grow 19 percent, reaching $8.5b. This growth was primarily driven by the kiwifruit industry, with exports expected to reach $3.9b, after a record 2024 crop and forecasts for an even larger crop in 2025. Among those traveling to China with the Prime Minister is global kiwifruit marketing company Zespri. Zespri – the umbrella brand selling New Zealand kiwifruit around the world – has been exporting to China for 26 years, and in earnest for the last two decades. The last 10 years has seen a rapid rise, thanks in large part to the expansion of China's middle class. Now, Zespri is selling about 22 percent of its kiwifruit into China, accounting for 27 percent of the brand's global value. Chair Nathan Flowerday told Newsroom that although Zespri was a global brand, China was an important market. But that didn't mean there weren't challenges facing primary producers as they faced the country's economic slowdown. The primary sector food and fibre exports accounted for $17.9b of New Zealand's goods shipped to China, but a slowdown in economic growth meant prices were softening and middle-class consumers were needing to be more selective with how they spent their money. Beyond the slowing economic growth, the Chinese Government had also proven it was not above using economic coercion to hit back at countries making diplomatic statements or actions it didn't like. Though Australia had been hit hard by this in the past, New Zealand had only suffered isolated suspected cases of shots across the bow, including limited shipments of goods sitting at China's ports and a government safety notice to tourists travelling to New Zealand. Both came in the wake of the Huawei saga during the Jacinda Ardern administration, and in both instances the government denied they were in retaliation for New Zealand's refusal of Huawei 5G infrastructure. But the possibility China could pull that lever in the future underscored an added need for the export sector to diversify away from China, as well as maintaining a strong diplomatic and leader-to-leader relationship. In 2016 Zespri was caught up in a short-lived diplomatic spat over an investigation into the dumping of Chinese steel. Media reported that Zespri's China representative was warned by Chinese officials that New Zealand could face economic retaliation if New Zealand went ahead with the investigation. Trade Minister Todd McClay was trade minister then too, and apologised to the Prime Minister for not being better briefed about China's threat of trade retaliation. Flowerday said Zespri was well insulated against these possibilities. In regard to the potential for a diplomatic blowback, he said it was up to the Government to make its decisions. But Zespri's focus was on building strong relationships within China. 'China is no different to any other market that we treat with transparency and respect … to make sure that we've got really clear, open communication channels with our partners in the market. I mean, that's the best that we can do.' In terms of the wider story of a softening Chinese market, Zespri – like other food producers – was looking to offer a high-end, niche product that played to consumers' focus on health and wellness. 'We spend a lot of time and money to educate … our Chinese consumers of just the health benefits that Zespri kiwifruit provides to them.' So, although fruit prices in China had softened, Zespri products had managed to hold their value. Everyone wanted to live a healthy life, Flowerday said. 'They are choosing that over and above something else that they could choose in the supermarket, which they know is not quite as healthy for them.' The fact the brand was synonymous with New Zealand, which was a trusted producer of safe, high-quality food, also helped. NZ Inc would be looking to leverage that niche, high-quality, well-trusted brand while in China this week, using announcements and events in Shanghai to market innovations in the primary sector. Last week, during Fieldays, the Government announced a grass-fed certification scheme in a bid to take on global competitors. Though previous standards applied, the new certification sought to clarify how many days a year and what percentage of an organisation's stock needed to be freely grazing on grass to achieve certification. Then, that certification could be used as a point of difference – and quality – when competing with overseas producers that primarily grain-fed their animals indoors. 'This is about more than a label—it's a commercial tool to push into premium segments and stay ahead of competitors. We're relentlessly focused on improving the value of our exports and backing farmers,' McClay said. So far, Fonterra and Westland Milk Products had gained certification among the dairy sector. Both businesses – and a2 milk along with the likes of Silver Fern Farms, and industry bodies representing the red meat and deer sectors – joined Luxon on this week's trip to China. Another food producer looking to find innovative ways to set itself apart was Rockit – a company that produced 'snack-sized' apples. Rockit Global chief executive Grant McBeath said China was a key market, with growth in China reaching more than 50 percent per year. This trip represented a significant opportunity to grow brand recognition, build trust and accelerate growth, he said. While on the ground, Rockit would sign a partnership deal with Chinese fruit store chain Xian Feng, which had 2000 stores across the country. But having a coveted brand didn't come without challenges. Zespri has been involved in a legal stoush in recent years, after clippings of its Sun Gold kiwifruit were stolen and taken to China. The company that took the clippings was ordered to pay $12m in reparations, but didn't have the money to do so. Since then, Sun Gold – or 'G3' – kiwi have been grown locally. And in some cases, the local growers have slapped counterfeit Zespri labels on the fruit. Earlier this year, a counterfeiter of the Zespri kiwifruit labels was sentenced to jail for more than three years for their part in the brand fraud scheme. Flowerday said it was monitoring the growing of the G3 kiwifruit in China, because there was a risk some of this fruit could make its way into Zespri's distribution channel. There could be an opportunity in the future to partner with local growers, he said, but they'd first have to ensure the fruit was up to Zespri's safety and quality standards. The brand employs about 100 people in-country, which allows them to keep their finger on the pulse, properly understand systems and ensure connections are forged with the right people. Building relationships on the ground was key to success in any market, Flowerday said, but especially in China. 'It's all about respect.' And showing up. Last year, during his first 12 months as chair, Flowerday travelled to China four times. In the last decade, he's been there more than a dozen times. Though trips like this were an opportunity for well-established and new businesses to get a better feel for the local market, travelling together as a group on the Air Force Boeing-757 also allowed New Zealand businesses to connect and learn from each other – what's working, what's not, what trends are being established. It also allowed them coveted photo opportunities at deal signings and announcements with the Prime Minister. 'Being part of the New Zealand team, going up there, it's always just a great privilege,' Flowerday said.
