Apec 1999 : An Update

  • Dr Lockwood Smith
International Trade

Thank you for the opportunity to speak to you today about New Zealand's objectives for APEC 1999.

I was last in Kuala Lumpur for the APEC Joint Ministers and Leaders' meeting in 1998, and it's always a pleasure to be back in your great city.

New Zealand is now fully into the swing of Chairing APEC, and we've inherited a challenging agenda.

Recently, our region was hit by severe economic shocks. At the time, the IMF described the resulting situation as "one of the worst financial crises in the post-war period".

APEC's credibility rested on its response to this crisis and in Kuala Lumpur last year, Leaders and Ministers sent a positive message to international markets.

APEC restated its commitment to trade liberalisation, and to implementing policies required to achieve recovery from the economic crisis.

The challenge for New Zealand now is to ensure that we promote initiatives that mirror the statements made in Kuala Lumpur - to deliver results.

New Zealand's policy initiatives for 1999 can be grouped around three themes:

expanding opportunities for business throughout the region;
strengthening the functioning of markets; and
broadening support for APEC.
We'll need to focus on expanding business throughout the region, and developing strong, well-functioning markets.

Business will be the 'driver' of the region's return to economic growth, and there is much we can do to reduce the costs and barriers to doing business across the region.

One area where we can easily reduce barriers for business between Malaysia and New Zealand is the movement of people and investment.

Two-way investment between Malaysia and New Zealand has grown over recent years.

Approximately fifty New Zealand companies have investments in Malaysia across a broad range of sectors, including dairy products, newsprint production, fisheries, building products, electrical components and various food products.

Malaysian companies have also invested in New Zealand, notably in the hotel and property sectors, our forestry and fishing industries, and a major consultancy group.

This afternoon, I'm participating in the opening ceremony of a new venture between Malaysia's Pine Masters, and a New Zealand pine company.

This is in its formative stages, and may appear modest.

But as this venture develops, it will make a positive contribution to our business sectors by assisting us to improve business competitiveness, and national prosperity.

It offers the opportunity to strengthen international marketing networks.

It will encourage the exchange of ideas, technology and expertise, bring new capital, and create new jobs.

Reducing the barriers to new ventures of this nature will be an important part of this region's return to sustainable economic growth.

APEC's work is vital in reducing these barriers, and reducing the cost of doing business across the region.

The APEC process encourages member economies to take initiatives to facilitate trade and investment.

New Zealand for example, recently announced changes to its Business Migration policies to promote the free flow of investment within the region.

We've revised existing categories and introduced new categories to attract investors who will bring new skills, expertise and strong international linkages to New Zealand.

We've introduced an "Entrepreneur Category" for those who have already established a successful business in New Zealand, and can demonstrate that the business benefits New Zealand in some way.

We have created a new multiple entry visa for those who are interested in establishing a business in New Zealand, but do not want to live there permanently. The visa is issued for up to three years, and may be renewable after that.

The "Business Investor" category has been replaced by a new "Investor" Category. With a streamlined application process, points are awarded on the basis of applicants' age, experience, and investment capital.

Our new policy may also provide entry for employees of relocated businesses who do not qualify under other categories.

We no longer require an English language bond, opting instead for pre-purchased English training.

We're investigating the value of establishing a Business Liaison Unit to coordinate the activities of our business support agencies, and provide a link to business migrants.

We're also considering a proposal for retirement visas, allowing older people of independent means to spend a significant proportion of their year in New Zealand.

Other economies within APEC, including Malaysia, are also taking steps to reduce the obstacles to doing business throughout the region.

I was delighted to read in yesterday's New Straits Times that your Immigration Department has introduced an initiative to reduce the red tape associated with applying for travel documents.

We could look at similar steps to reduce the cost of international business transactions. The region's customs procedures could be simplified.

APEC is investigating mutual recognition arrangements that will make Malaysia's product testing standards acceptable in Auckland, Hanoi, or anywhere else in the region.

The temptation, particularly for the media, is to overlook the importance of this trade and investment facilitation work.

But we must be clear.

Trade and investment facilitation is as important as APEC's trade liberalisation work.

The gains of making markets work more effectively and reducing the costs of doing business within APEC's member economies are enormous.

In fact, they may outweigh the gains of trade liberalisation, and will contribute toward sustainable economic growth in our region.

APEC faces the parallel challenge of sustaining renewed growth through the development of robust, well functioning markets.

The first Senior Officials' Meeting in Wellington considered a number of useful measures to strengthen the region's financial markets.

New Zealand hopes to support this work by bringing the role of Finance Ministers into greater sync with the rest of APEC.

During my visit to Malaysia, I've been exploring how we can achieve this.

APEC's work will be challenging, and economies will each choose its own path to reform.

But there's no questioning our commitment to the process, or our common resolve to generate new sustainable growth.

Finally, New Zealand believes that broadening support for APEC will be important to ensure its continuing effectiveness.

I want to commend the members of the Malaysia New Zealand Business Council for your ongoing support for the APEC process.

We recognise that APEC has much to benefit from input from the business sector.

The challenge for New Zealand, as Chair, is to develop a process that allows the business sector to engage with the APEC process in a meaningful way.

We've already got a few ideas.

I understand that some of you are interested in learning more about the SME Ministerial in Christchurch in April 1999, and I encourage you to continue exploring this possibility.

You should expect the opportunity for direct interaction with Ministers.

I'm also keen to involve business in the upcoming Trade Ministers' meeting in Auckland in June.

The benefits of APEC's work to our region's business people and consumers are significant.

However, we have not always done a good job of emphasising the benefits of APEC, and its key role in the region's economic growth.

New Zealand is fully committed, during our year as Chair, to build broader support for APEC among the wider community.

It is incumbent upon us, as community and business leaders, to ensure that our constituencies identify the link between APEC, and positive economic developments.

I want to encourage you today, as members of the Business Council, to join New Zealand in finding new ways to broaden support for APEC within Malaysia, and across the region.