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Hon Jim Sutton - Speech to Export Institute

Hon Jim Sutton

Minister of Agriculture, Minister for Trade Negotiations,
Minister for Rural Affairs
30 May 2000
Speech Notes

Speech to Export Institute

Ladies and Gentlemen: Thank you for inviting me to speak with you this morning.

This weekend, I fly to Australia to attend the Asia Pacific Economic Cooperation trade ministers' meeting in Darwin.

I want to talk with you a bit about APEC, the World Trade Organisation - whose chief Mike Moore will be in Darwin as well ? and the Labour-Alliance coalition government's rationale for international trade.

New Zealand is a trading nation.

That phrase has become almost a cliché, but it is worth saying again and again, in the hope that your role as exporters ? the power house of this economy ? will become apparent.

Because trade is so important to New Zealand, this government is working hard to bring down barriers to export growth.

We're taking part in multilateral groups such as the World Trade Organisation and the Asia Pacific Economic Co-operation forum in an effort to influence trading decisions into the direction that's good for us.

We in New Zealand will continue to promote the concept of a broadly based round in the WTO, and I'll be discussing that with Mike Moore at next week's APEC trade ministers meeting in Darwin.

As one of the first big trade ministers' meetings since the Seattle meeting, APEC next week will have the proposed "Millennium" trade talks as a special focus.

While in Darwin, I will also meet with my Singaporean counterpart to talk about the closer economic partnership agreement the government is negotiating at the moment.

Through a taskforce of eminent persons, we are also actively exploring a link between the CER agreement of Australia and New Zealand and the trade agreement of the Association of South East Asian nations.

If those two agreements were linked, that would form a grouping with a trillion dollar economy ? that's a trillion US dollars.

Talk about those linkups, with ASEAN and even with Singapore, might seem to many New Zealanders like they have little to do with them and their daily lives.

But they are first steps to getting our products into the huge markets of Asia, markets which at the moment have steep barriers.

During the past 10 years, New Zealand has been through a lot of pain lowering our trade barriers and cutting tariffs, which has made our domestic market more attractive and competitive and given greater choice to consumers.

Now, the Government has halted any further unilateral tariff reductions and we are working to encourage our trading partners to lower theirs.

We have said clearly that we are willing to do deals on the basis of reciprocity.

The global trading system works best when we all concentrate on doing what we individually do best and selling to others.

The way I've been telling it to Federated Farmers meetings is to think of trade in a smaller context ? imagine if everyone here in Wellington tried to make everything they needed for daily life themselves. So they made their own clothes and shoes, they grew their own vegetables and kept a few chickens and sheep in the backyard. They made their own soap, paper, and so on.

It wouldn't take long before neighbours started doing deals with each other? Mrs Brown made great bread, so the Browns swapped bread with the Smiths, who made good shoes, and so on.

Trade works at the village level and it is the same for nations. That's how the global trading system works. We all do best by concentrating on the things we do well.

The fewer distortions there are in that trade ? the fewer tariffs or quota barriers ? the better.

That is what the Labour-Alliance coalition government is working for when we say we believe in free and fair trade.

Amazingly, recent polling tells us that many New Zealanders do not see it that way. Mistakenly, they see globalisation not as the evolutionary development process it is, but as some sort of capitalist conspiracy to put people out of work, or to drive their wages down to Bangladeshi levels.

Sadly, I must conclude that this appalling level of ignorance is due to the failure of politicians ? but most seriously of the business community ? to keep explaining the advantages of international trade expansion to New Zealand.

The fact that the more we can trade, the more we can create jobs and opportunities in those sectors in which we are world-class, and therefore the more we as a nation earn and we all as individuals and communities can spend.

We have left the running to people who make a living out of demonising business, demonising government, demonising capitalism itself.

People, for instance, such as Professor Jane Kelsey know what they oppose - it is people like you and I, our businesses, and our way of earning a living.

They seldom say what they support, but by a process of elimination, it is presumably something closer to the model of the self-sufficient family that produces everything it consumes.

Those few things these activists regard as essential, but utterly inaccessible without considerable specialisation in trade ? such as the internet ? we will presumably pay for by making handwoven ethnic umbrellas for sale to tourists.

But to the Labour-Alliance Government, the most mainstream of our political parties, free and fair trade is not about putting New Zealanders out of work. I

t is about making sure your products get the best possible price and that you can sell as much of it as consumers want to buy without governments getting involved to stop you.

Governments can also help you, and that's what the Labour-Alliance coalition government want to do.

There's a lot of talk about the Government's involvement in business at the moment ? most of it negative. But I'm here to tell you we do want to be involved in your business, involved to help you to do better in export markets.

As trade negotiations minister, there are a few things I've managed to achieve in next month's Budget that I hope will improve our country's foreign exchange earnings.

In the Budget, I've got $3.8 million earmarked for Trade NZ to increase earnings from export education.

I've got another $10 million earmarked for Trade NZ to implement an e-commerce strategy for small and medium-sized businesses.

This Government is to continue the Special Investor Programme, targeting businesses that will add value by setting up here. We're working on a few exciting projects here, the details of which are commercially confidential at this stage.

Prime Minister Helen Clark talked about proposals for export credit guarantee schemes and other incentives during her visit to Chile earlier this year.

Since then, government officials have been working hard with input from the business and finance community to progress those issues. We have identified some areas of apparent market failure, where careful intervention similar to that enjoyed by our competitors from most other developed economies should pay dividends in terms of growth and jobs.

Unfortunately, this year's Budget has come up too soon to be able to present any concrete scheme, but don't give up hope yet. There will be results after the work is completed.

I am sure there are many areas where the Government can help you and your business to do better. While there is not a lot in the Government funding pot, there are other ways we can help other than just hand out money.

Sometimes, I can raise issues with my counterparts during missions to other countries. For example, in China I raised the issue of Tower Insurance getting a licence to open a representative office, as has my colleague, Foreign Affairs Minister Phil Goff.

That status was finally awarded to Tower early this month. Now that's only a first step to actually being able to operate in China, but it's an essential one and the Government was happy to help.

I would also welcome ideas from you on how the Government can do better in its work helping you, and ideas on how we can both do better, working together.

You are the people in the frontline of this battle to get New Zealand's products out into the world. We want to work with you to make that battle easier to fight.

Thank you for listening this morning and I look forward to answering any questions you have.


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