NZ-Mexico Business Networking Event

Secretary Ferrari

Members of the New Zealand business delegation

Distinguished Mexican guests

Muy buenas tardes amigas y amigos. (Good afternoon friends)

Greetings to you all.

I am delighted to be here in Mexico City, making my first visit as a Minister of the New Zealand government.  I am particularly pleased to be accompanied by a delegation of New Zealand business and to preside today, together with Secretary Ferrari, over this matchmaking event with Mexican companies.

It is a good time to be here.  For many countries in Latin America, including Mexico, 2010 marks 200 years of independence.  This gives us a context to look at potential, as well as offer congratulations.  And as The Economist commented recently, Latin America is undergoing a renaissance.  We have prioritised our economic relationships with Asia over recent decades, with outstandingly successful results for New Zealand. However, there is an unmistakeable awakening of interest among certain New Zealand companies in Latin and Central America. The Government, for its part, is underpinning this interest with a comprehensive strategy for the region.

In Mexico's case, this means working on themes of supporting business, competitivity and good governance, and multilateral partnership with a particular focus on the environment.

Mexico offers significant opportunities.  It is the 14th largest economy in the world with a young working population (a third under 30), a growing middle class, and privileged access through free trade agreements (FTAs) to the United States and other significant economies.  Mexico's foreign direct investment stocks are, at USD309.5 billion in 2009, the second highest in Latin America, and the IMF is predicting increases of 2.3% for 2010 and 2.1% for 2011.  I note that after passing through a difficult period with the global financial crisis, Mexico is on track for growth of 4.5% in 2010.

Mexico is New Zealand's largest trading partner in Latin America and a destination of increasing interest for New Zealand investment.  New Zealand investment in Latin America generally is growing.  But whereas in the southern cone our focus is on developing the food production chain, in Mexico, our companies are taking advantage of competitive opportunities for investment in the manufacturing sector.

This interest is confirmed by the New Zealand business delegation here today.  I would like to present:

• 4RF Communications, which design and manufacture radio equipment used in critical infrastructure deployments for rural communications, utilities, oil and gas, transport, military and public safety organisations for customers in 118 countries.
• AsureQuality, which provide services in traceability and quality assurance across the food and beverage and agritech industries. AsureQuality operates in 46 countries, including Mexico where it has a strategic alliance with Mexican company CIATEJ
• BCS Group, which supply baggage and parcel handling systems, operations and maintenance of material handling systems, and specialised products and solutions for the aviation and logistics industries world-wide
• Criterion Furniture, which design and manufacture furniture for the home and office for sale internationally, including here in Mexico
• Fisher and Paykel Healthcare, a world leading designer, manufacturer and marketer of products and systems for use in respiratory care, acute care and the treatment of obstructive sleep apnoea for over seven million patients a year in over 120 countries.
• Pacific Aerospace, the second largest aircraft manufacturer in the southern hemisphere with global operations. Its ten-seater P-750 XSTOL, certified for use here in Mexico, is the only aircraft in the world that can take off and land in less than 800 feet while carrying a load greater than its own empty weight, even in hot and high conditions.
• Pumpkin Patch Originals, a designer range of children's wear offered at affordable prices in 22 markets around the world, 80% of whose business comes from international sales
• Tait Radio Communications, which manufactures and deploys professional analogue and digital radio solutions for public safety, transport and utilities customers around the world, including here in Mexico

• Wellington Drive Technologies, which designs, manufacture and distribute electronic motors for commercial refrigeration, and which has a strategic alliance in Mexico

The visit I am leading today returns the investment in relations made by Secretary Ferrari in taking a Mexican business delegation to New Zealand in 2008 when head of ProMéxico.  A number of the companies Dr Ferrari saw then have gone on to invest in Mexico, to form strategic alliances, or to explore these possibilities.  This 2008 visit by Dr Ferrari followed another he had made in 2007, accompanying President Felipe Calderón Hinojosa on the first bilateral visit by a Mexican president to New Zealand.

I'm pleased to build on these bilateral firsts by the government of President Calderón through leading the first New Zealand business delegation to scope investment and trade opportunities in Mexico.

New Zealand has a well deserved reputation for excellence in agriculture.  This comes not only from a favourable climate, but also considerable investment in research and development - it's a high tech industry for us.  And one developed without subsidies.

But beyond agriculture, we have some world leading specialised manufacturers who showcase innovation, pragmatism and niche technology.  A number of you may have seen the Lord of the Rings trilogy.  Not only are these films produced with the benefit of magnificent New Zealand scenery, but also with ground breaking technology.

Our delegation features a number of these leading companies.  To give you but two examples, Fisher and Paykel Healthcare is a good example of what's possible - a New Zealand company which has embraced the global production chain, with design in New Zealand and now manufacturing in Tijuana with exports to over 120 countries.

Wellington Drive Technologies is in partnership with Mexican company Imbera, promoting energy efficiency technology which reduces demands on Mexico's electricity network, helps reduce greenhouse gas emissions and produces savings for business.

Our relationship is relatively young, but it is full of potential.

New Zealand and Mexico have complementary economies, as confirmed by the Joint Experts Group report of 2006.  Existing trade and economic ties are good but could be even better.

The Joint Experts Group report talked about the potential of a Free Trade Agreement Plus between us - one that did the usual things that an FTA does, such as reducing tariffs and quotas, but that also established "strategic economic cooperation".

These closer economic relationship agreements are what New Zealand likes to establish with key partners to capture more fully the benefits of cooperation.  We look for win-win in our relationships - we're too small to take any other approach to our trading partners.

We have, for example, a closer economic partnership with Chile, in the context of P4.  With New Zealand investment, Chile has become an exporter of dairy for the first time.

We are now working with Chile, Peru, Vietnam, Brunei, Australia, Singapore and the United States on the TPP or Trans-Pacific Partnership.  This is the only new trade initiative the Obama administration has taken on.  It presents a strategic opportunity, a 21st century agreement that should serve as an eventual platform in coming years for other APEC countries - including, I hope, Mexico.

The Asia-Pacific region will be the epicentre of economic growth in the world in coming decades and while Mexico has a privileged relationship with the United States, this doesn't conflict with seeking trade diversification.

New Zealand is well placed to serve as a platform for Mexican companies interested in Asia.  We have an extensive network of Free Trade Agreements throughout the region, including with China, with whom we were the first developed country to conclude a FTA.  It's worth noting that in the 22 months since signing that FTA, we have seen a 77% increase in our exports to China.  Our companies know the markets and the culture in Asia and can help Mexican firms expand there.

Our closer economic partnerships go beyond trade, giving impetus to relations overall.  We would like to share with Mexico lessons we have learned that have helped us become the country ranked second globally by the World Bank for the ease of doing business, the first in the world according to Transparency International for perceptions of low corruption, the most peaceful country in the world according to the Global Peace Index, and highly rated by the OECD for our education standards.

I can't leave the subject of trade and economic issues without saying a few words about the World Trade Organisation.  I appreciate the immense sense of frustration in Mexico and around the world at the collective failure to conclude the Doha Round. I recall only too well the effort the Mexican Government put into the WTO Ministerial Meeting in Cancun several years ago. I was that stage chairing the Rules Group - the negotiating group responsible for anti-dumping and subsidies disciplines.

However frustrating it may be, I see no alternative but to persevere with the process. The four benefits for Mexico from the WTO listed on Economía's website are benefits for us all: opening markets; creating clear and transparent rules and disciplines for the external trade operations of our companies; having access to dispute mechanisms when our rights have been violated; and ensuring that regional agreements don't become closed blocks.  We need to continue to work hard in the WTO to promote the success of the Round.

New Zealand and Mexico have a strong history of cooperation on multilateral disarmament and arms control initiatives, particularly in the nuclear area, but more recently on cluster munitions.  We are working together on environment - particularly climate change, which is what brings me to Mexico on this visit, participating in the pre-COP16 meeting Mexico is hosting.  And I should acknowledge Mexico's leadership on climate change, not just for being host of COP16, but also for your leadership as a developing country with a high degree of commitment  to reducing its own emissions.

I'm pleased to have Mexico in the Global Alliance on Agricultural Greenhouse Gases, working with us on finding ways to reduce emissions in this area while maintaining the imperative of producing food for the world's growing population.   Cooperation on green technologies is an increasing facet of our relationship, particularly following the signature of an arrangement on cooperation in new and renewable energies by New Zealand's Minister of Energy and Mexico's Energy Secretary in March of this year.

Dr Ferrari talked on his 2008 visit to New Zealand about the need for a "courtship" between New Zealand and Mexican business, to get to know each other better.  I'm happy to be in Mexico to take this courtship further. 

Thank you for coming today.