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Goff Moscow Business Breakfast Speech

Hon Phil Goff
Minister of Foreign Affairs and Trade
Media Statement

23rd April 2001



Ladies and Gentlemen, distinguished guests

- It is a pleasure for me to kick-off the formal part of my visit to Russia with a business occasion. It symbolises the priority we put on developing New Zealand's commercial and trading relationship with Russia and boosting our profile in this part of the world.

- There is good reason for New Zealand business to look anew at the Russian market - most notably the turnaround in Russia's economic prospects, indicated by last years 7% growth. While it's not all plain sailing ahead, and Russia's economic future remains very dependent on international energy prices, it is reasonable to anticipate sustained economic growth. And for a trading country like New Zealand in a market the size of Russia's presents real opportunities. It has always been important for dairy. In the last 18 months increasing opportunities have emerged for a whole range of New Zealand products and services particularly meat, vegetables, wool, education and tourism.
„h The legislative and regulatory changes going on in Russia are likely, assuming they continue, to make this a more settled and predictable market, particularly once Russia joins the WTO.

- It is with an eye to the future, that we had been taking some steps to help structure the overall environment in which our business people can work.

- First we have signed a double taxation agreement. We look forward to its early ratification so that it can come into effect from January 2002.

- Secondly, I want to foreshadow today the appointment of New Zealand's Honorary Consul in Vladivostok and the region of Primorye Krai - Mr Martin Tate. I am delighted that Martin is able to be with us today. He is a long-term resident and trader in Vladivostok and will be a useful source of advice and assistance to New Zealand in operating in the part of Russia that gives our Asia-Pacific connection - the Russian Far East. With our Ambassador Geoff Ward and his Embassy - and New Zealand Trade Commissioners John Waugh and Charles Barkla who are here today - there is a wealth of experience and expertise to assist your business interests.

- Thirdly, most countries have another nation against which they judge their achievements. In the case of New Zealand the country that judges itself against us is, of course, Australia. (Seriously there is no country in the world to which we feel closer - especially as we commemorate our losses in battle this week.) It is particularly pleasing therefore to learn about the establishment here in Moscow of the group called Australia-New Zealand Business in Russia, to provide a forum and contact point for the Australian and New Zealand business community in Russia, as well as those Russian business people and others interested in trade and commerce with our part of the world. That is a useful initiative to give a boost to Australia-New Zealand business ties in Russia, and I encourage all here this morning to sign up and get behind it.

- It was good to see a delegation organised by the union of industrialists and entrepreneurs travel to New Zealand late last year. That was a great new start to building familiarity and understanding of their respective markets. And as the delegation found, there is an active New Zealand Russian business council and a growing Russian community in New Zealand.

- I want to welcome this morning the group of marketers representing our education institutions. They are from our secondary schools, English language institutions and Auckland University. I am pleased to see that there are opportunities for our education sector in Russia because education is one of our key sunrise industries. The Government is investing in an international marketing strategy for the education sector to build a unique brand for New Zealand education and underpin our international competitiveness both in quality and price.

- Exports are the lifeblood of the New Zealand economy, always have been and always will be. After nearly two decades of reform we have a liberal and open market-based economy with trading networks through more than 160 countries.

- We see ourselves as very much a part of the Asia-Pacific region. In the Pacific there are cultural and ethnic links with our indigenous Maori people. In Asia, there are links with an increasing percentage of our population. The Asia-Pacific region is currently the fastest growing in the world hence our desire to draw in our interests in the Russian Far East by the establishment of our new Consulate.

- As a country whose survival depends on trade, we attach considerable importance to membership of the WTO - why?

- Because ability to negotiate market access on the basis of rules and logic rather than political size is critical to success. That is why we support the desire of our APEC partner Russia becoming a member of the WTO and assuming on valid commercial criteria its place in this global trading environment.

- More than half of New Zealand¡¦s goods exports are agricultural products and the quality and reputation of the New Zealand brand is first class. We are fortunate to be completely free of animal diseases like foot and mouth, BSE and scrapie. But scientifically based high standards - not protectionism - are what have got us to this point.

- Those same high standards have been applied to diversification into new growth industries where we have a comparative advantage to offer; and investment in building our technological capacity to enable our exporters to compete at the highest levels. We are determined to ensure that New Zealand has the infrastructure so that it can continue to produce high-value, knowledge-based products and services.

- And what of the New Zealand economy? Like most other countries in the world, New Zealand was affected by the very high prices for oil and the high value of the US dollar. This created inflationary problems for us and put pressure on our dollar. But strong world prices, particularly in New Zealand dollar terms, had a positive effect on exporting activity.

- As a result the New Zealand economy grew by 3.4% in the year to December 2000. In the same period merchandise exports increased by 24% and imports by 13%. Services exports have also performed well, especially tourism where visitor numbers and spending continues to trend upwards. Agriculture exports are up as generally favourable weather conditions for most of the 2000 growing season led to a good supply of primary commodities coinciding with high international prices, especially in dairy. Although the yield is down in some areas, this year¡¦s wonderful summer guarantees a vintage harvest. When I was in St Petersburg I found New Zealand wine is now available in Russia. Ask the Embassy for details if you want to order!

- To all of you from Australia and New Zealand or interested in doing business with us, let me confirm that you have behind you two nations that have learnt the lesson of liberal trade policies. Provided we argue forcefully for similar measures by others, our economies and our consumers can only benefit from greater openness and competition. To our Russian friends here today: it is a great privilege to be in Moscow: don¡¦t stop de-regulation and trade liberalisation - we want to see Russia as the great economic power we know it can be.


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