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Pushing for a Pacific free trade area at Quito

David
CLARK
Economic Development Spokesperson
14 January 2014 MEDIA STATEMENT

Pushing for a Pacific free trade area at Quito


Labour’s Economic Development Spokesperson David Clark has helped push for greater efforts to establish a Pacific free trade area at the 23rd Asia Pacific Parliamentary Forum (APPF) in Ecuador.

“Free trade across the Pacific is an important goal but the gains must be shared fairly. There must be security for countries to know that international support is available to vulnerable economies.

“New Zealand will continue to push for greater regional cooperation to promote free and fair trade,” David Clark says.

Speech attached

Dr David Clark, New Zealand

23rd APPF Forum (Quito, Ecuador) – Speech draft Trade and the Economy – check against delivery

Madam Chair, honourable delegates and observers of the 23rd Asia Pacific Parliamentary Forum…

May I first thank our hosts – Ecuador – for their warm welcome.

It is a privilege and a pleasure to have this opportunity to address you on the matter of the economy in the Asia Pacific Region.

I have always believed that markets are powerful. They make excellent servants, and terrifying masters. I believe our challenge as parliamentarians building relationships between countries – is to create stronger domestic and international institutions – that support appropriately-regulated international markets.

In a globalised world, our futures are intertwined. We are dependent upon one another for our future security, liberty, peace and prosperity.

To create the conditions in which we all can enhance the well-being of our respective populations, we must first create the conditions for strengthening and maintaining the rule of law, to ensure societies free from corruption. This is a pre-condition for happy and healthy populations engaging in profitable commerce.

Another key plank in ensuring the conditions for prosperity - within and between nations - is a path to reducing disparities in wealth.

Where disparities in wealth become too great, social mobility is reduced; distinct and irreversible socio-economic groupings emerge. From this follows suspicion that the rule of law acts in the interests only of those who can ‘afford’ its services. And with no prospect of accessing ‘fair treatment’ civil unrest often follows.

The thesis that inequality harms population outcomes - for developed countries at least – is supported by a growing body of academic literature.

And there is a close link between income - and population health, criminality, education, life expectancy, and other outcomes.

Part of the riddle lies in the shared interest - of socio-economically homogenous populations.

The prosperity of nations is in part dependent upon access to infrastructure that everyone needs but few can afford on their own. Shared investment in shared infrastructure is not begrudged by anyone when it benefits all citizens. Communal funding of hospitals, schools, clean running water, roads, police forces and courts is happily and willingly supported - when these services produce fair and equitable outcomes for the entire population. Not all nations will choose to fund these things via the state, but the principal of fair and equitable access to these services remains paramount - if prosperity is to ensue.

A state with improving rule of law and a population reasonably able to believe in a growing and shared prosperity becomes a self-fulfilling prophecy – where international trade opportunities and institutions support this goal.

Participants in international fora such as this one must look to protect their own nation’s interests, but equally, they should be strongly incentivised to concern themselves with creating the institutions that provide reasonable financial security to all nations.

Free capital flows provide opportunities for growth, but also carry risks too infrequently acknowledged. The Asian financial crisis and the struggles of Argentina in recent decades illustrate well the maxim that foreign investment is like an umbrella willingly loaned to any country – until it begins to rain.

If development is to be sustainable, countries must have insurance that mitigates the most damaging effects of market surges and mood swings. Our current global financing institutions are weak in this regard.

Confidence to open economies to trade grows - where the upsides are demonstrable and the downsides mitigated.

____

And so – we all come to the table to discuss trade – and it is encouraging that so many proposals for co-operation across our region are on the table.

____

New Zealand’s draft resolution promoting economic partnership and free trade calls upon member countries and concerned regions to continue to make efforts toward realisation of a Free Trade Area of the Asia Pacific (FTAAP), as a means not only to further promote regional economic integration in the Asia Pacific region, but also to complement and strengthen the multilateral trading system centred on the WTO in a transparent and globally beneficial way.

Other regional integration initiatives like the Trans Pacific Partnership may offer similar prosperity benefits if agreements are signed by nation states that share the benefits of trade fairly amongst their citizenry, have strong institutions to protect the rule of law – and are accompanied and supported by democratic global institutions that serve and protect the interests of all member countries.

We are all connected. When China’s economy sneezes, United States stock markets catch a cold.

In sumary, we must - each nation – take responsibility for ensuring the conditions for growing well-being and prosperity in our own country are created (greater equality, strong rule of law). We must of course – each nation – ensure our own national interest is protected as we negotiate steps toward truly free and open trade in our region. And we must collectively – every nation - look to ensure the international institutions that support confidence in trade are strengthened.

Thank you - delegates.

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