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Sutton Speech: Deer NZ annual conference Taupo

Jim Sutton Speech: Deer NZ annual conference Taupo

Chairman Clive Jermy, chief executive MJ Loza, Ladies and Gentlemen: We are standing on the brink of what appears to be a major shift in the international trading system.

It is a seismic shift equivalent to that of 10 years ago, when for the first time agriculture was included as an integral part of the multilateral negotiations known as the Uruguay Round.

This time, in the Doha Development Round, the economic superpowers of the World Trade Organisation have recognised that agriculture is a vital part of this round and as a consequence, have registered a readiness to see an end-date for export subsidies as an integral part of the outcome.

The significance of this is huge: for more than 50 years, they have been defending the use of export subsidies. Their recognition that export subsidies will have to go in this negotiation is an enormous step.

At about the same time, it seems a WTO disputes panel has ruled that the United States' subsidy regime for its cotton producers is illegal under the international trade rules system. This ruling has flow-on effects for other products, which is why New Zealand joined Brazil's case as a third party.

It's early days in seeing how that one plays out ? the decision has yet to be translated into the three languages needed to make the disputes panel decision official, and once that happens ? probably about September ? it's expected that the United States will appeal the decision. It will take about a year to hear that appeal, so finality on this issue is a way off.

Nevertheless, I expect it will have some ramifications for the Doha Round negotiations, especially as ministers and officials meet again in Geneva in about five weeks' time.

I will be attending that meeting, and I can assure you that the New Zealand team will be putting forward our desires for the future of our international trading system forcefully.

Ladies and Gentlemen: this meeting is a useful opportunity for people working in the deer industry to get together, share experiences, and learn new things. It is a good event and I applaud the organisers.

As minister of agriculture, of forestry, for biosecurity, for rural affairs, and for trade negotiations, I have a broad overview of a lot of the issues affecting primary production in New Zealand.

The Government understands very well the importance of primary industry to the economy and rural communities to the country.

The latest Budget is an example of this: as a Government, we are only able to work in partnership with our citizens to provide measures to enhance the lives of New Zealanders.

What was delivered in Budget 2004 could not happen without economic success ? in large part, that of rural New Zealand. Our primary producers ? people like you, together with those who supply you with inputs and prepare your outputs for sale ? provide about 60 per cent of all our country's export earnings.

This Budget included measures directly targeted at primary production such as the continued increase in biosecurity funding, up another $46 million over the next four years. That makes a funding increase in biosecurity baseline funding of 57 per cent since the Labour-led Government was elected in November 1999.

Funding also increased for trade negotiations with China and Thailand and for scientific research and development.

More broadly, this Budget was one of growth and opportunity, balancing economic and social investments. This budget will take New Zealand ahead ? it is good for families, and good for the economy.

It's a budget for getting New Zealanders into work and making work pay. It is about providing fairness and security for low to middle come New Zealand families

We are making significant extra investments in education and health.

The budget provides for close to half a billion dollars over the next four years for strengthening economic performance. The investments range from spending on skills, to developing our export markets, increasing our R & D spend, and attracting quality offshore investment.

Since we were elected in December 1999, the Labour-led Government has worked to return services to rural and provincial areas. This has seen the Heartland Services centres set up, extra funding for rural nurses and GP retention, mobile surgical buses, and the extension of paid parental leave to seasonal workers who have been in work for at least 6 months. I am hopeful that we can ultimately extend that to the self-employed, so that farming families will be able to get assistance as well.

On the business side, we're helping extend broadband internet access to people wherever they live, something that will improve rural young people's education, but also the efficiency of farm businesses. ACC is developing programmes specifically for rural customers, and is promoting the Farmsafe education scheme in order to reduce the number of farm bike accidents in particular, and farm hazards in general.

Ladies and Gentlemen: these are important things, and the changes they bring could benefit our industry hugely.

But the changes possible in the domestic arena are small compared to those in the international arena ? our global marketplace.

Since being elected, this Government has made it clear that its main international trade priority is the World Trade Organisation's multilateral round of negotiations. We worked hard to ensure the Doha Round was started three years ago, and we worked hard, albeit unrewarded, for a result at the Cancun meeting last year.

We have maintained that effort this year.

Trade negotiations may seem quite remote to real life back here in New Zealand. Change seems to happen at a glacial rate, and it's not obvious the effect it has on people here, in Taupo, in South Canterbury, and other parts of our country.

But I can assure you that nothing else has quite the same impact on your livelihoods as progress in international trade.

Combined MAF and MFAT research assessed the overall benefits from the last big round of multilateral negotiations, the Uruguay Round, as at least $9 billion over the 10-year implementation period of Uruguay Round changes, and about 17,600 jobs throughout our economy, including 2000 in agriculture in particular.

In addition to the $9 billion of gains from those measures, New Zealand exporters have also gained from firmer trade rules, a strengthened disputes settlement system, and the dynamic effects of a world economy stronger than it would have been without the Uruguay Round.

But the Uruguay Round was only a toe in the door, for agriculture, which is still one of the most heavily protected sectors in the world.

The Doha Development Round has even greater potential.

So that's our main priority. However, it's not our only priority.

The Government is also putting significant effort into bilateral trade negotiations.

Last month, I was delighted to be able to join the Prime Minister in announcing that that New Zealand and China have agreed on a formal Trade and Economic Cooperation Framework, a key feature of which is agreement to negotiate a free trade agreement next year.

This is the first time China has agreed to negotiate such a trade agreement with a developed country.

A trade agreement with China will benefit businesses already exporting there and would create opportunities for other New Zealand companies. This would apply across the primary, secondary and service sectors.

The government believes that an FTA with China would unlock significant trade and investment potential for both countries. China is the world's fastest growing major economy and New Zealand's fourth largest trading partner. New Zealand exports to China have more than doubled in the past six years.

New Zealand was the first country to support China's accession to the WTO, which brought China fully into the world trading system.

China has already developed a strong and vibrant private sector. Since China decided to move away from central planning a decade ago, its economy has grown by around 10 per cent each year. Around 60 per cent of it is now in the private sector.

New Zealand has also agreed that it would not apply provisions in China's WTO Accession Protocol relating to anti-dumping.

The key point is that New Zealand manufacturers will lose none of the trade remedy protections which they presently have under New Zealand legislation. In effect we are agreeing not to use protections for domestic producers which were sought by other countries and which we have not used in any case.

To my mind, there is no more important trade and economic relationship for New Zealand across the scope of this century than that with China. That doesn't mean our relationships with other countries, especially those of Australia and the United States, aren't important ? they are.

But Australia and the United States are themselves major exporters of the very products that are our stock in trade, which limits the potential growth in those markets.

The potential for growth with China on the other hand is enormous, and not just for our agricultural producers.

A widespread public consultation process throughout the country has now begun, and I encourage anyone interested in this negotiation to approach either the Ministry of Foreign Affairs and Trade or my office in Wellington to make sure your views are heard.

We are also making good progress with Thailand, with the feasibility study published last month showing good benefits for both countries from the proposed trade agreement. Negotiations are now underway and I hope they will be completed by the end of the year. Remember that Australia, our main competitor in key product areas and a much larger and more attractive market, is ahead of us in Thailand. If we cannot keep up, we stand to lose significant market share.

We are continuing to work with Mexico on a bilateral agreement, and with Singapore and Chile for a "Pacific 3" trade agreement.

We are continuing to lobby for a trade agreement with the United States, and talks are still pending with Hong Kong. Other partners are still in the wings.

Ladies and Gentlemen: it's an exciting time to be the minister responsible for trade and agriculture. And it's an exciting time to be a deer farmer. I wish you every success in the future.

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