Secretary of Commerce to APEC Business Conference

Secretary of Commerce speaks to APEC Business Conference

Paul Carpinter, Secretary of Commerce, gave a speech today to the APEC Business Conference in Rotorua, on how New Zealand’s experience with CER (Closer Economic Relations) could provide a model framework for the operation of APEC.

Mr Carpinter used recent research from Trade NZ to outline New Zealand’s progress under CER. This research revealed that New Zealand is becoming more competitive and that we rank equal or above Australia on rankings of price and quality. The perspective of Australian consumers’ has also changed. They now see us as “another state of Australia”, rather than a competitor.

Although New Zealand has made progress under CER, Mr Carpinter’s speech highlights that we need to begin to focus on design and innovation. However, the Trade NZ research shows that New Zealand is now in a much better shape to meet this challenge.

New Zealand’s challenge is to strengthen markets within APEC by:
 lowering barriers to entry in all markets – more than simply a case of removing tariffs;
 reducing compliance costs on business particularly SMEs;
 maximising opportunities for innovation;
 maximising opportunities for business to build new strategic alliances and networks;
 offering more choice and lower costs for consumers;
 building institutions and skills to serve these ends.

Attached is the full text of Paul Carpinter, Secretary of Commerce’s, speech.

Apec Business Conference; Countdown To The New Millennium

Royal Lakeside Novotel, Rotorua 11am 10 August 1999

Paul Carpinter
Secretary of Commerce

I am here today wearing two hats – as Secretary of Commerce and as a Board Member of Trade New Zealand. For most of what I want to say, I’m wearing my Trade New Zealand hat.

As Mr Bradford pointed out in his opening speech, this is a forward looking event, trying to give practical information, advice and experience to small and medium enterprises in this part of New Zealand.

The first thing I propose to do this morning is to outline some recent and very interesting research from Trade NZ. This research tracks how we have done in Australia under CER this decade. I think that there are some very important lessons from this research, many of them very positive.

Why look backwards? Because one very easy way to characterise APEC is as CER, expanded to cover 70% of our trade.

Back in 1990, Trade NZ surveyed Australian business and consumers about their perceptions of New Zealand as a supplier and producer. They repeated the exercise in 1998.

On the raw numbers, we slightly increased our share of Australia’s imports, from around 4.2% to 4.6%. But the raw numbers hide a very important story.
Over that period, New Zealand lost a substantial part of the preferences we previously held, as both countries reduced their tariffs. The important point is gaining market share in that environment means that we increased our own competitiveness, in an increasingly competitive market.

The story gets even more interesting when the more subjective measures are examined.

What does Australian business think of New Zealand?

Over the period from 1990 to 1998, New Zealand has been transformed from a “mediocre” supplier to a highly respected player. The survey asked for rankings of fast delivery, price, product quality, product range and supply reliability. On three of those, we actually outrank Australian business, and on the other two, we rank the same as Australia. Our rankings improved more than those from any other area, and we have very substantially narrowed the gap on Europe and North America.

Breaking that down a little, we now rank only just behind Europe on product quality. We were last on price competitiveness in 1990, but by 1998, we ranked ahead of Australia and North America, losing out only to Asia.

So we’ve improved on both price and quality – something of a winning combination.

That’s business views. How about consumers?

The story there is just as interesting. Product awareness has jumped sharply, with Australians linking New Zealand with such obvious areas as food, but also now with newer areas like home appliances.

Australian consumers’ perception of New Zealand is now that we are much like “another state of Australia”. The more negative view earlier had been that we were seen as direct competitors with Australia. We have also managed to shift the perception of New Zealand with consumers in different age groups. In 1990, we were more popular with older Australians; by 1998 New Zealand products were more popular with younger Australians.

The story is not all positive. The areas we need to focus on now are in design and innovation. We are still perceived as not being thoroughly up-to-date, nor particularly innovative. But I would have to say that we are now in a much better position to deal with those issues than we were ten years ago. The evidence suggests that we have got the basics into very good shape. I think New Zealand business can be, and should be, proud of what they have achieved. We now need to go to the next step.

What does all this mean for APEC? Simply this; we have shown through our experience with CER that we can compete in an increasingly competitive market. APEC provides for us to build on that base.

In the case of CER it was relatively easy. We were two countries with very similar legal, economic and government institutions. Our businesses also shared similar cultural outlooks and ways of doing things.

A key part of our effort in APEC is about building the same common understandings and approaches among a very diverse set of economies whose economic futures are inextricably now linked.

We are attempting to build the frameworks that underpinned the CER experience, within APEC. Economies are working together on improving economic governance, competition policy, building frameworks that underpin good regulatory reform and building institutional and human capability.

New Zealand’s “strengthening markets” initiative this year is about building broader vision – beyond trade alone. It is focussed on building competency to strengthen and improve the efficiency of all markets in the region. Like CER it’s about:

 lowering barriers to entry in all markets – more than simply a case of removing tariffs;
 reducing compliance costs on business particularly SMEs;
 maximising opportunities for innovation;
 maximising opportunities for business to build new strategic alliances and networks;
 offering more choice and lower costs for consumers;
 building institutions and skills to serve these ends.

The role of my Ministry is very much in the engine room, trying to make progress on areas as diverse as government procurement and standards and conformance.

Building capability and advancing the reform programmes across APEC will take time. I am confident that APEC is committed to the task. Given the size and diversity of APEC’s membership we need to be patient.

New Zealand, for its part, will continue to give APEC priority. We cannot afford not to.

ENDS

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