US embassy cable - 05WELLINGTON418

C O N F I D E N T I A L SECTION 01 OF 02 WELLINGTON 000418 
 
SIPDIS 
 
NOFORN 
 
STATE FOR E, EB/FO, EB/TPP/MTA, EAP/FO, EAP/ANZ 
STATE PASS USTR FOR WEISEL AND KATZ 
NSC FOR VICTOR CHA 
GENEVA FOR USTR 
 
E.O. 12958: DECL: 05/27/2015 
TAGS: ETRD, PGOV, PREL, NZ, USTR 
SUBJECT: WTO: NEW ZEALAND GOVERNMENT PLAYS DOWN CRISIS OVER 
WTO AMBASSADOR RESIGNATION 
 
REF: WELLINGTON 409 
 
Classified By: DEPUTY CHIEF OF MISSION DAVID R. BURNETT, 
FOR REASONS 1.4 (B) AND (D). 
 
1.  (C) SUMMARY:  Although New Zealand's WTO Ambassador Tim 
Groser has resigned to run as an opposition party candidate 
in general elections later this year, the Government will 
finance his stay in Geneva as WTO Agriculture Committee Chair 
until the summer break.  This will allow Groser to 
participate in the July modalities meeting.  Despite early 
press reports that the Prime Minister wanted Groser to leave 
Geneva immediately, Government officials insist their 
intention was always to manage as long a transition as 
possible for Groser in a way that would be best for the WTO. 
But it appears the Prime Minister and others were largely 
motivated by National Party claims that the Government was 
putting Labour Party interests ahead of New Zealand's 
economic well being.  The country stands to gain mightily 
from a successful WTO agriculture agreement, and Groser's 
constructive role as Agriculture Chair has been a point of 
pride for New Zealand.  END SUMMARY. 
 
2.  (C/NOFORN) The announcement earlier this week that New 
Zealand's WTO Ambassador, Tim Groser, would resign to run as 
an opposition party candidate in general elections (reftel) 
threw the Government into a frenzy, at least behind closed 
doors.  A number of contacts have confirmed to us that 
neither Trade Minister Sutton nor Foreign Minister Goff had 
any idea either that Groser would resign or that he would 
become a National Party candidate.  Sutton in particular 
reportedly feels betrayed by the move.  (In a May 22 press 
release, Sutton called National's move to "lure" Groser a 
"kick in the teeth for all New Zealanders.") 
 
3.  (C/NOFORN) Ministry of Foreign Affairs and Trade (MFAT) 
senior officials, led by Chief Executive Simon Murdoch, have 
held daily confidential meetings about the crisis with the 
Prime Minister's advisors. Our contacts tell us that Murdoch 
has had to walk a fine line between handling bruised egos or 
high level officials and maintaining a supportive role for 
New Zealand at the WTO.  Meanwhile, the Beehive is engaged in 
major damage control: the Prime Minister is now insisting 
that she never said New Zealand would oppose Groser's 
continued role as WTO Agriculture Chairman.  Groser has 
offered to stay on as Chair at his own expense until the 
December Hong Kong Ministerial, but press reports had 
indicated that PM Clark and Minister Sutton were adamant that 
he should leave immediately. 
 
4.  (C/NOFORN) On May 24, it was reported that MFAT had 
written to the WTO General Council with an offer to 
financially support Groser as Agriculture Chair through the 
July modalities meeting.  The press cited this as a backing 
down, but Clark insists that her position has always been 
that the Government would not support Groser's stay beyond a 
transition period.  We believe, however, that Clark's and 
Sutton's initial position was modified -- certainly in tone 
and probably in substance -- by  National Party claims that 
the Government was putting partisan concerns above New 
Zealand's national and economic interests.  As evidenced by 
Sutton's press release, the Labour Government apparently 
thought that New Zealander's would put the blame on National 
for poaching a prized bureaucrat at a key time in WTO talks. 
But in a country where agricultural goods still comprise some 
53% of exports by value, National's argument that it was 
Labour that was at fault seemed to resonate with the public. 
Accusations of self-serving indifference are the last thing 
the Government needs after weeks of dealing with assorted 
scandals (most recently accusations that Associate Education 
Minister David Benson-Pope physically bullied pupils as a 
teacher). 
 
5.  (C/NOFORN) At an unrelated meeting with Ambassador 
Swindells on May 27, MFAT Executive Director Murdoch took the 
initiative to explain the Government's current plans vis a 
vis Groser, who  had resigned his position as Ambassador the 
previous day.  As of now, Groser still resides in the 
Ambassador's residence, and the New Zealand Government will 
support his stay in Geneva until the summer break if the WTO 
Council wants this.  Murdoch said that since Groser's 
announcement the Government's goal has been to fashion as 
long a transition path as required, while at the same time 
taking care not to damage the WTO.  He added that the 
Government would soon recommend an extremely experienced 
international trade diplomat who was now heavily involved in 
New Zealand's FTA negotiations with China as New Zealand's 
new WTO Ambassador.  As a further signal of New Zealand's 
commitment to the Doha process, said Murdoch, the Government 
will send the new Ambassador to Geneva as soon as possible, 
to be available to chair WTO meetings as needed.  Murdoch 
stressed that especially since the resignation of another 
senior trade negotiator who was to have worked on China 
(Charles Finny) the choice of the new Ambassador will have 
costs for the Government. 
 
6.  (C/NOFORN) When asked whether Groser would be allowed to 
stay on as Chair until December at his own expense if he 
insists on doing so, Murdoch said that the WTO works by 
consensus, but that the Government could not support his stay 
in Geneva beyond the summer break.  Hinting that general 
elections will be called in late August or September, Murdoch 
said that New Zealand will be moving to an election campaign 
at around the time of the break, and Groser's status in 
domestic politics would then change.  It would be up to the 
WTO to decide whether they wanted Groser to stay on beyond 
the summer; New Zealand will not state its view if this 
discussion takes place.  There is no Government plan for 
dealing with the situation beyond the WTO summer break, said 
Murdoch.  He added that the Prime Minister and the Government 
were fully supportive of the steps that he had taken to 
extend Groser's stay in Geneva, and that he hoped the United 
States and other WTO members would appreciate the effort. 
 
6.  (C/NOFORN) Comment:  Murdoch would not indicate who New 
Zealand's next WTO Ambassador would be, but the most likely 
candidate is MFAT Deputy Secretary Derek Leask, an 
experienced trade negotiator who most recently was head of 
the Ministry's economic division.  Another possibility is WTO 
negotiator Crawford Falconer.  A dark horse candidate is 
Rachel Fry, who led New Zealand's Thailand FTA negotiations. 
Fry has not been active on China FTA talks, however. 
 
 
Swindells