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Role of Governments in trade liberalisation

Media Statement
10 February 2005

Role of Governments in trade liberalisation

It is important for Government to have an active role in facilitating export growth and managing the economy to ensure that all citizens benefit, Trade Negotiations Minister Jim Sutton said today.

Mr Sutton said the Labour-Progressive Government was committed to ensuring New Zealand was a high-value, high-wage economy.

Ways of achieving that include partnership arrangements with industry, targeted assistance, and a drive to conclude trade agreements with other countries that ensured good access for New Zealand products.

Earlier this week, a $1.125 million grant was made to the textile, clothing, and footwear industry over the next two years to fund research projects to help it adapt to competition. This is in addition to $2.3 million they received in last year's budget.

Mr Sutton said that New Zealanders would never have a first-world standard of living if we only concentrated on our domestic market.

"We have to trade internationally to achieve the scale and specialization required to support the living standards to which we aspire. But that doesn't mean we are reckless about it."

Mr Sutton said concerns that globalization and further trade agreements would damage the country were unfounded.

"There will always be people able to produce some things more cheaply than us. But we have a competitive advantage in a number of areas, and we need to work to enhance those."

He said manufacturing was an important part of the New Zealand economy.

"The needs and potential of manufacturers are taken into account in the negotiation of trade agreements. In the recently completed trade agreement with Thailand, for example, tariffs on whiteware are maintained for an extended period. This was negotiated after discussions with a major NZ manufacturer."

But he said that manufacturers ? like other producers ? can't stand still. They have to innovate.

"What recent experience shows us is that it is characteristic of many successful manufacturers that they invest in research and development and constantly produce new products and new ways of doing things. This tends to keep them in that part of the market where price is not so important.

"The Government is working to encourage companies to become exporters, and facilitate further market access for those companies that are exporting now. We want New Zealand to be a high-value, high-wage economy. To do that, we need to concentrate on doing what we do best, not try to do everything."

Mr Sutton said New Zealand had numerous top class firms who successfully compete at home and abroad with the best in the world.

"This most definitely includes many of our brilliant manufacturers."


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