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Sutton speech: Taranaki Federated Farmers meeting

Jim Sutton speech: Taranaki Federated Farmers meeting, New Plymouth

Ladies and Gentlemen: At 5am this morning, I arrived in Auckland International Airport after three weeks away from New Zealand.

During those three weeks away, I attended the Organisation for Economic Co-operation and Development meeting in Paris, hosted an informal meeting of selected World Trade Organisation trade members at a function in Paris, and travelled to Hungary, the Czech Republic, Poland, and Germany touting New Zealand businesses' goods and services as part of a trade mission.

It was the third trade mission I have led this year, and just one of the many, many overseas trips I will be making this year.

Why does New Zealand's trade minister spend so much time overseas?

Because that is where our markets are. New Zealand is a trading nation. We are reliant on our export earnings to maintain and enhance our living standards.

Why does this matter to you?

Well, 90 per cent of all dairy products produced here in New Zealand are exported. 90 per cent of all lamb, and 80 per cent of all beef, is exported. Market access matters to you ? if New Zealand loses access to key markets, we all suffer.

The Government has provided in yesterday's Budget more than $73 million over four years to fund a range of initiatives to enhance New Zealand's trade performance.

These measures included government-level efforts to open up market access and to get more firms into exporting. Our economic growth depends on policies and actions that improve our capacity to be innovative. Trade is a major priority in the Government's growth and innovation framework.

Budget 2003 allocates $14.2 million over four years (and $3.2 million a year thereafter) to support World Trade Organisation negotiations and bilateral closer economic partnerships and trade agreements. That means more people on the ground both here in New Zealand and at the WTO's headquarters in Geneva, arguing our case.

The Doha Development Round and bilateral trade agreements hold the key for sustained export growth. Gains from the Uruguay Round are conservatively estimated at $500 million to $600 million a year, and even greater gains are forecast if the current Doha Development Round is successful.

A further $1 million a year is provided to establish beachhead offices in selected offshore markets. New Zealand exporters can use these facilities as a base to develop their markets.

Two of these "offshore incubators" were established in 2002 in Singapore and the United States (Fort Laudadale), with a further two to be set up this year in the United States (Silicon Valley) and Britain (London). The new funding will allow two further beachheads to be established in 2004-05 and beyond.

To grow our economy, we need to provide support offshore for existing exporting companies and create more exporting companies. We will accelerate development of export networks, where exporters can help and learn from each other.

We will increase exporter education programmes, and strengthen and promote Trade New Zealand's e-business website to exporters and potential buyers of New Zealand products.

More support will be provided to firms participating in Ministerial-led trade missions. We know from experience that these can provide excellent door-opening opportunities.

An annual $1.2 million will fund the "Rainmakers" programme. Rainmakers are individuals with a high profile in key sectors or markets whose access to unique and new networks can help secure significant offshore deals.

I welcome the growing emphasis on trade in economic development policies. Increased trade through reducing government-level barriers among our trading partners and making it easier for firms to get into exporting and export more, will give the New Zealand economy a significant boost.

This latest round of WTO negotiations has huge potential for New Zealand. Research carried out by MAF on the quantitative benefits of the last big round of international trade negotiations, the Uruguay Round, showed in the single year of 2000 (the year that many of the gains of the Uruguay Round kicked in) the beef, sheepmeat, and dairy sectors gained about $590 million from product price and volume increases in the major markets of the United States and European Union.

That works out to an average increase in earnings for each sheep, beef, and dairy farmer of $11,500 a year. That's likely to be significantly increased if we can get the gains we are after in the Doha Development Round.

Multilateral organisations are extremely important to New Zealand ? and not just in trade.

Climate change, for example.

Climate change resulting from human activities is not a hypothesis, it is a matter of overwhelming scientific consensus. To be honest, I think we can all see the results just by looking out the window. Weather patterns in New Zealand have changed.

Climate change, and the overall health of the atmosphere, is now the biggest global environmental issue. If this generation does not act, our descendants will have to bear the consequences.

Climate change is not only an environmental issue, it is also an issue of economic security. Climate change can lead to more frequent extreme climatic events such as floods and droughts, and biosecurity threats from subtropical pests and diseases.

The major single source of New Zealand's greenhouse gas emissions is methane and nitrous oxide from pastoral agriculture. The Government's policy package to respond to the Kyoto Protocol exempts the agricultural sector from charges or other penalties which would arise from these emissions. This will shield agriculture for the first commitment period.

However, this shielding of pastoral agriculture is conditional on the sector being willing to invest in research aimed at reducing agricultural emissions. Such research is also likely to generate other spin-offs such as improving animal productivity and feed conversion rates, and perhaps lead to more precise and efficient fertiliser application.

New Zealand stands to be a net economic beneficiary from the Kyoto Protocol. This is because of the credit we potentially gain for carbon sinks, and because it will create new business opportunities by raising international demand for new technologies and encouraging energy efficiency.

It's not an issue we can tackle on our own though. We have to do it in concert with other nations if there is to be real impact. And that's what we're doing, through the Kyoto Protocol. Only by working with other nations will we achieve this goal.

That's why the Government ratified the Kyoto Protocol and has moved ahead with implementation. It's in the benefit of our citizens. That reasoning governs our trade policy as well, in addition to other measures we have to carry out ? such as the painted apple moth aeriel spraying programme in West Auckland.

Biosecurity is another key issue for me and this Government.

Yesterday's Budget Biosecurity boosted biosecurity funding for the fourth year in a row.

Budget 2003 allocates $2.457 million over four years for aircraft, passenger, and mail clearance. Another $2.3 million next financial year, rising to $2.5 million for the two following financial years, has been allocated for exotic disease response capability, specifically for foot and mouth disease. Extra ongoing funding of $117,000 has been allocated for reference laboratories, and $1.2 million has been allocated next financial year for surveillance for gypsy moth, wood-boring and bark beetles, and fire ants.

In addition, Government has allocated through the cross-departmental research pool administered by MORST $170,000 in 2003-04 and $365,000 in 2004-05 to produce a national wildlife disease surveillance framework to enable the future development of strategic and prioritized wildlife surveillance systems.

This Government takes biosecurity extremely seriously.

Since we became Government in 1999, we have worked to fill the holes and close the gaps previous governments left in our biosecurity and border controls.

Extra Ministry of Agriculture and Forestry staff have been employed, more soft-tissue x-ray machines and detector dogs have been installed in airports around the country. Instant fines for breaches have been implemented. We are still the only country in the world to screen mail, air crew and passengers and their baggage for biosecurity breaches.

According to an Auditor-General's report, this Government is now spending $50 million extra a year on baseline biosecurity funding than previous governments.

Primary production is the cornerstone of the New Zealand economy, and the Government is working hard to ensure our country is kept free from pests and diseases that could devastate trees, crops, and animals.

The threat to New Zealand posed by new pests and diseases grows, in proportion to traveler numbers and freight volume, compounded by the increased speed of travel and exacerbated by climate change.

Our response has been a process of continual improvement in biosecurity.

A key part of that continual improvement is getting across the message that biosecurity is not something just Government officials or politicians do. It's something all New Zealanders are responsible for and should be involved in. That's not just in making sure risk materials aren't brought into the country, but also in working together to do whatever necessary to eradicate pests and diseases if they do make it here.

There is a very important process going on in New Zealand at the moment, one that is going to have significant ramifications for your sector and other parts of the primary production industry.

This process is the formation of New Zealand's first biosecurity strategy.

All too often, governments lack planning and instead resort to series of ad hoc measures that may or may not be the right way to go in the long-term. Biosecurity is too important for New Zealand to be treated in that way.

Almost 150 submissions were made on the draft strategy document, published in December. Those submissions are being worked on now, and I hope to have the final strategy document out later next month.

Currently, our biosecurity measures are under the microscope again as we have had a flurry of incursions by moths, ants, and mosquitos during the past month.

These latest incursions indicate there are still areas for improvement. That's not a surprise.

We have already identified sea containers as a significant risk area. A $1 million research study into sea freight risks has recently been completed and its report published, along with a discussion document proposing options for tighter controls. This work will be folded into the Biosecurity Strategy project. The research on this area came in too late to have measures to tighten border control and biosecurity as part of this Budget Round.

I can give you a personal commitment that the Government is not complacent in this area, and that we intend to have tightened up biosecurity measures for sea containers by the end of this year.

With the combination of all my portfolios ? biosecurity, agriculture, rural affairs, forestry, and trade ? I realize clearly how important it is for the primary production sector not to be constantly battling new pests and diseases.

Ladies and Gentlemen: this speech has covered a fair area. The message I'd like to leave you with is that this Government has a concern for rural people. We are working hard to ensure that you have markets for your products, and that you have fair access to those markets. We have a range of initiatives, including the Sustainable Farming Fund and the Heartland Services centres, to ensure that rural communities can access resources for development.

Yesterday's Budget was important for you and your communities.

Thank you for inviting me to be here today. I'm delighted to have finally made it up your way. I hope to be able to answer any questions you may have.

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