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Launch Of Trade Liberalisation Network

Speech Notes
22 April 2002
Auckland launch of Trade Liberalisation Network,

Chairman Brian Lynch, executive director Stephen Jacobi, ladies and gentlemen: thank you for the invitation to help launch the Trade Liberalisation Network in Auckland.

Trade is good for New Zealand and its citizens. Trade is good for the world and all its citizens.

Why is it good? Because we all work better and more productively when we can concentrate on what we do best, and when we can trade that good or service with others for their goods and services.

Often when I speak with businesspeople, with industry organisations, or with farmers, people think that is self-evident. Of course, trade is good. Business is good, the sky is blue, democracy is wonderful.

All these things are obvious, right? Wrong.

They all need stating, explaining, and re-stating. The importance of trade is not something people are born with. They have to learn about it, and this is where we all come in.

I believe it is important for the Government ? particularly the trade negotiations minister ? to explain trade policy, to let people know why we do things and how they benefit them.

That's why last month the Ministry of Foreign Affairs and Trade published a report showing that $525 million less was being paid as tariffs on our exports now than before the GATT Uruguay Round.

MAF figures, also looking at the benefits from the Uruguay Round, indicate that every sheep, beef, and dairy farmer in New Zealand earned $11,500 more in 2000 than they did before the Uruguay Round because of better access to the big markets of Europe and the United States.

These are tangible benefits, and I hope we will gain more from the impending Doha Development Round. But business has a role to play too. It is important that you explain to people in our country how trade benefits you as well, and why it is important that we continue to trade.

This is why I am delighted to welcome the launch of the Trade Liberalisation Network in Auckland. Already in its short life, chairman Brian Lynch and executive director Stephen Jacobi have been stalwart advocates of trade liberalisation. I can barely read anything these days, without there being a letter to the editor from Stephen about trade ? whether it's National Business Review or Cuisine magazine!

There is a need for more businesspeople ? especially those whose businesses depend on imports, exports, or a mixture of both to talk about how trade affects them.

Till now, all we tend to hear is from those who see trade as wholly negative. I would like to think the tide is turning.

Last week, prominent international non-governmental organisation OXFAM published a report: Rigged Rules and Double Standards: trade, globalisation, and the fight against poverty.

On that report, OXFAM rails against the rigged rules and double standards that lock poor people out of the benefits of trade, closing the door to an escape route from poverty.

For example: Rich countries spend US$1 billion every day on agricultural subsidies. The resulting surpluses are dumped on world markets, undermining the livelihoods of millions of smallholder farmers in poor countries ? and damaging the prices our farmers in New Zealand receive as well.

When developing countries export to rich-country markets, they face tariff barriers that are four times higher than those encountered by rich countries. Those barriers cost them US$100 billion a year - twice as much as they receive in aid. New Zealand is affected in a similar way because our major exports are primary production exports ? the most sector with the most barriers.

New Zealand is recognised by OXFAM as one of the countries doing the most to help developing nations.

We are working hard to ensure that developing nations can take their full place at the WTO and participate strongly.

We in New Zealand agree with many of the points raised by OXFAM: the rules are often rigged and there are often double standards. As an agricultural trading nation, we know all about that, and we've been complaining about it for a long time.

But the system is not all bad, and I believe it can be reformed. The World Trade Organisation is the only set of international instruments already in place to control trade in the global economy, with binding rules to settle disputes. Those rules have already worked to our advantage. Without the WTO, the international trading system would be entirely a might-makes-right, law of the jungle place where small countries such as New Zealand would routinely get walked all over.

Ladies and Gentlemen: As WTO director-general Mike Moore points out in this booklet, concluding a new trade round is vitally important.

He quotes the World Bank as estimating that the complete liberalisation of merchandise trade and elimination of subsidies could add US$1.5 trillion to developing country incomes. And reshaping the world's trading system and reducing barriers to trade in goods could reduce the number of poor people in developing countries by 300 million by 2015 and boost global income by as much as $2.8 trillion over the next decade.

Such results will not be easily achieved. Greedy and selfish vested interests are mobilising around the world in shortsighted but nevertheless determined efforts to protect their existing privileges. We have many battles ahead.

Our future prospects depend on the economic wellbeing of the rest of the world: they need to be able to buy our products at the best possble prices.

Our future prospects also depend on our companies and agencies being in the best possible position to take advantage of global markets. That means all of you working towards that. I encourage you all.

I also congratulate the Trade Liberalisation Network on its debut.

Thank you.

Office of Hon Jim Sutton

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