Speech to Auckland Trade and Economic Policy School
Kia ora koutou – and thank you for the introduction. It’s fantastic to be participating in the third Auckland Trade and Economic Policy School, albeit virtually from MIQ following a whirlwind trip reconnecting with some of our key partners overseas.
New Zealand’s position on international trade continues to be informed by events like the Auckland Trade and Economic Policy School and the entire trade eco-system of academics, business people and trade professionals who have all been fundamental to the evolution of New Zealand’s Trade Agenda.
With that in mind I would like to thank the University of Auckland Public Policy Institute – and in particular, Professor Jennifer Curtin and Dr Suzanne Woodward – for organising today’s conference. The relationship between our trade officials and the Institute continues to go from strength to strength, with the Institute’s students this year having contributed to officials’ thinking in how to remove barriers to trade for women and increase Small and Medium Enterprise exports. Many of the next generation of trade experts will begin their careers here and I know a number of the institute’s graduates now work for MFAT or other government agencies, and I am sure they will serve New Zealand well.
We are working hard to progress important issues internationally, in an increasingly challenging global environment. Geopolitical competition and trade are becoming more and more intertwined and is threatening the rules-based trading order we value. Increasing protectionism and the weakening of important international organisations is a concerning trend we need to address. We should not be content with simply preserving the status quo, instead we should continue to prioritise progress on issues like the environment, labour rights, gender equality and indigenous economies.
Trade policy must benefit all New Zealanders and our Trade for All agenda seeks to do so. We will be best served by trade policy that is consultative, inclusive and recognises the role, voice and views of Māori as Treaty partners. We need trade policy that ensures it supports all New Zealanders and is deliberate in supporting SMEs, Māori and women-led business to succeed. I have been talking to my colleagues around the world about the importance of these initiatives, and we are making great progress, but we should be realistic that it will take some time to secure all these outcomes.
Last December at this conference, I explained this Government’s priorities in what was then, and still is now, an unparalleled international crisis. The priorities were:
- Keep New Zealanders safe from COVID-19
- Accelerate our economic recovery; and
- Lay the foundations for a better future.
One year on these priorities remain relevant, but just as the virus has evolved, so has our response.
Government agencies have rolled out significant programmes of work in the past 12 months to help businesses stay connected to offshore markets and accelerate our economic recovery. We have:
- Worked to ensure critical global supply chains remain open and resilient, including through our Managed International Air Connectivity scheme;
- Continued to increase access to markets through agreements like our UK FTA;
- Doubled the number of companies receiving intensive support through NZTE’s high-engagement Focus portfolio from 700 to 1,437.
- Increased NZTE's team of in-market experts – our ‘boots on the ground’ in key growth markets overseas; and
- Increased co-investment funding for companies growing overseas through the International Growth Fund, doubling the size of the fund from $30 million to $60 million per year. Just last month, I visited the Dairy Collective in London which has used IGF money to expand its business in Europe.
Many challenges remain for New Zealand exporters. Labour and talent shortages, border restrictions, supply chain disruptions all remain significant obstacles, but we continue our work to deliberately and carefully, re-connect New Zealand to the world while ensuring we keep New Zealander’s safe from COVID-19.
We are laying the foundations of a better future by working hard to ensure we remain connected with other markets, and we are committed to fostering the multi-lateral organisations that are central to New Zealand’s economic prosperity including APEC and the WTO.
New Zealand has just concluded our successful hosting of APEC. This year, at the APEC Ministers Responsible for Trade meeting that I chaired, all APEC economies agreed to work to reduce the barriers for vaccines to move across borders – critical as we all work to address to challenges of Covid-19. We also achieved great gains on the digitisation of trade processes. Significantly, we were also able to secure commitment to halt the increase in subsidies to fossil fuels, and brought indigenous economies to the forefront of APEC for the first time ever. I know you’ll be hearing more about our APEC successes tomorrow from this year’s APEC Senior Official, Vangelis Vitalis.
In addition to APEC, the WTO is crucial for New Zealand’s long term trade and economic interests, and its continued effective functioning remains one of our core trade policy priorities. The international system of trade rules, with the WTO at its centre, has allowed New Zealand to economically compete with the biggest and mightiest nations in the world. It has evened the playing field and allowed us to thrive as a small export-orientated economy.
That is why I was planning to travel to Geneva to represent New Zealand at the WTO Ministerial Conference, where ministers from around the world would have come together for the first time since 2017. Unfortunately I got as far as London when I heard the meeting was postponed due to the discovery of the Omicron variant which was a significant disappointment.
The emergence of the Omicron variant further underlines the need for a trade response to the pandemic, and to improve global vaccine access.
No one is safe from the virus until everyone is safe from it, so it is in all our interest to remove any blocks to access and distribution of the vaccine. We support the waiver of IP protections on vaccines, and an overall trade and health package at the WTO that meaningfully responds to the pandemic.
As we work towards rescheduled dates for MC12 next year, New Zealand will continue to seek the meaningful conclusion of long-standing WTO fisheries subsidies negotiations. Global reform of these subsidies is essential because of their harmful effect on resources, the environment, trade and livelihoods. Establishing effective disciplines will also improve the competitiveness of New Zealand’s already unsubsidised fishing industry.
We will also push for an outcome that sets the foundation for negotiations to limit trade and production distorting agricultural domestic subsidies. Such reform is key to achieving global food systems that are economically, socially and environmentally sustainable, as well as meeting the goals of the Paris Agreement.
Achieving this will also pave the way for an even playing field for New Zealand’s agriculture exports so our unsubsidised agricultural exporters have improved access to markets globally, and also for many of the world’s developing countries who are excluded from markets due to these subsidies.
Finally, we will work to find a credible pathway for the reform of the appellate body which is so critical to the WTO.
Uncertainty about MC12 dates will not keep us from working on these issues, and other priorities such as fossil fuel subsidy reform. In fact, I am delighted that we have been able to announce conclusion of negotiations on Domestic Regulation in Services alongside 66 other WTO Members. These negotiations were aimed at reducing administrative costs and creating a more transparent operating environment for service providers hoping to do business in foreign markets. Once implemented, this will provide certainty for our service exporters as part of our trade-led recovery.
While multilateral fora like APEC and the WTO provide a foundation for New Zealand’s economic engagement globally, they are not our only focus. High quality, commercially meaningful free trade agreements open up new markets for our exporters, and have also been a key focus for me this year, and will continue to be so as we move into 2022.
I have travelled to Europe several times this year to advance our free-trade agreement negotiations with the UK and the EU. I am pleased that we have reached an Agreement in Principle with the United Kingdom. This agreement will boost New Zealand GDP by almost $1 billion and provide unpredecented access for New Zealand exporters to the UK. I look forward to moving towards signing of the agreement in the new year.
Negotiators continue to work towards an agreement with the European Union, and as I’m sure you’ll agree, a comprehensive EU-New Zealand free trade agreement is well overdue. But I have been open that issues such as geographical indicators and goods market access still need work before a deal can be done. I am hopeful we will see progress next year.
When the UK and EU FTAs are implemented, the proportion of our goods and services trade that are covered by an FTA will increase from 62% to around 75%.
The CPTPP grouping is also welcoming Peru, which has become New Zealand’s newest FTA partner, and just our third Latin American FTA partner. Work continues on our other suite of agreements, including:
- the Digital Economy Partnership Agreement - which I am delighted Korea is now seeking to join,
- the Agreement for Climate Change, Trade and Sustainability, (where round 7 of negotiations has just concluded, and
- RCEP, which will come into force on the first of January next year.
And of course, we continue to work with our major trading partners including:
- Our closest partner, Australia, as we continue to enhance the Australia-New Zealand Closer Economic Relations Trade Agreement – the most successful bilateral trade agreement in the world. I recently met with Australian Trade Minister Tehan in Melbourne to discuss CER, which will see its 40th anniversary in 2023.
- Our biggest trading partner China, as we work towards entry into force of our FTA Upgrade which we signed earlier this year.
- And of course, the US. We welcome the US’ recent proposal to develop an Indo-Pacific Economic Framework and I appreciated the chance to discuss it with US Secretary of Commerce Gina Raimondo in Singapore recently, alongside Australia and Singapore. Increased US economic and trade engagement in our region is important for our recovery and will help advance the rules-based and open trading system that our businesses rely upon.
The government is actively working on a number of other areas to support exporters.
These include internationalisation efforts in the industry transformation plans – including MBIE’s advanced manufacturing industry transformation plan. I’ve made it a priority of mine this year to get out and meet some of these advanced manufacturing exporters where Covid allowed, and I was pleased to be able to visit Buckley Systems, Quantifi Photonics and Fisher & Paykel Healthcare, to better understand how the Government can further support New Zealand’s move from volume to values.
MFAT has also enhanced its exporter tools, expanding its market reporting from our offshore network of embassies, while also continuing to support businesses in resolving non-tariff barriers to accessing offshore markets.
The final thing I want to touch on is how hugely important consultation is to get the most effective policymaking. This is why we launched new engagement mechanisms this year, and it was great to be able to meet exporters at the all-of-government trade policy roadshows which are bringing together exporters with those NZ Inc agencies which support trade. Officials have also held regular Zoom briefings to support trade for non-agricultural and manufacturing exporters.
The government also reaffirmed its partnerships this year with key bodies like ExportNZ and the Europe NZ and ASEAN NZ Business Councils. I thoroughly enjoyed connecting with several international business councils this year, including the Africa NZ Business Council a few months ago, even though the engagement came to a dramatic end with a fire alarm and building evacuation!
And of course, we have made it clear that there needs to be greater engagement with Māori, which has seen an uptake in cooperation and consultation with a range of Treaty partners, including Te Taumata, the Federation of Māori Authorities, the National Iwi Chairs Forum, and the emerging Ngā Tōki Whakarururanga, to incorporate Māori interests and priorities in our trade agenda. I was particularly pleased that we were able to secure UK agreement to include an Indigenous Chapter in our FTA with them.
We’ve come a long way and had significant achievements this year, but there is still mahi to do. I am looking forward to hearing how this year’s ATEPS goes, and all the ideas that the conference will generate to help strengthen New Zealand trade policy to become even more inclusive, sustainable and fitting for an Aotearoa at the forefront of inclusive trade policy. There is so much opportunity out there, from which New Zealand can continue to benefit. As I have said a number of times over recent months – trade is the solution.
Thank you all very much for your time today, and a special thanks again to the Auckland University Public Policy Institute, including Professor Jennifer Curtin and Dr Suzanne Woodward, and to all of you tuning in online.
Noho ora mai.