[asia-apec 922] More NZ Govt Hype on APEC
Gatt Watchdog
gattwd at corso.ch.planet.gen.nz
Fri Nov 27 09:35:42 JST 1998
Speech: Smith On Trade Liberalisation
Thursday, 26 November 1998, 12:36 pm
Press Release: New Zealand Government
An Address By The
Trade Minister
Dr The Hon Lockwood Smith
1999: The Year for Trade Liberalisation
Diplomatic Club Luncheon
Ambassador Suite
Plaza International Hotel
Wellington
12.15 pm Thursday 26 November 1998
New Zealand sees 1999 as potentially a great year for trade
liberalisation. As Trade Minister, I've spoken often about
what I see as a unique convergence of events to achieve
better market access for New Zealand exporters:
* the possibility of a free trade agreement with the United
States;
* APEC's trade liberalisation agenda;
* the World Trade Organisation's negotiations to liberalise
agricultural trade, and the prospect of a full,
comprehensive Round.
Nineteen ninety nine is the year for each. We trust 1999
will be the year President Clinton is granted fast-track
negotiating authority, allowing for progress towards an FTA.
New Zealand is in the chair of APEC in 1999, and we'll be
working to bind the EVSL package at the WTO. The WTO
agriculture negotiations are mandated to start before the
end of next year, and work is progressing well for them to
be launched late in the year in the United States. From New
Zealand's perspective, we don't see three such opportunities
converging in quite the same way ever again.
New Zealand chairing APEC is the biggest trade policy
challenge we've ever faced - which is appropriate given that
APEC has been described as the biggest trade policy
initiative in history. The Leaders' Meeting will be the most
important meeting ever held in this country. We relish the
challenge.
New Zealand is taking over the chair at a difficult time for
the APEC region. The IMF has described the Asian Economic
Crisis as "one of the worst financial crises in the post-war
period". Latest Consensus Forecasts for 1998 suggest that
South East Asia will contract by over 5% and for North Asia
to experience no growth. Most APEC economies have been hard
hit. The economic woes of one of APEC's newest members,
Russia, have been severely exacerbated. Here in New Zealand,
we have experienced a small recession. Globally, the IMF
forecasts growth to be down to 2% in 1998.
Some in the international media have criticised the extent
of progress made at last week's APEC meetings in Kuala
Lumpur. I can understand that criticism if one were to
compare the outcome with the agenda set in Vancouver, and
ignored the events in the region since. But were you to
compare the KL outcome with how developments appeared to be
heading only a few weeks before, I think you would reach a
different conclusion. I believe it was a very credible
outcome. I found it heartening. I believe economies with
severe economic difficulties showed great vision and
leadership in staying true to APEC's goals. I say that as
Trade Minister from an economy which likes to see itself as
being a major advocate for faster and more comprehensive
liberalisation.
The Bogor goals were reconfirmed: free and open trade and
investment by developed APEC economies by 2010, and the same
for developing APEC economies by 2020. In KL, a record six
economies, including the economic powerhouses the United
States and Japan, agreed to submit their Individual Action
Plans, outlining how they intend to achieve those goals, to
peer review in 1999. By the end of 1999, 12 of APEC's 21
economies will have been peer reviewed, including New
Zealand which has, of course, already decided to abolish all
our tariffs by 2006.
It is a process that is working. Chile, for example,
recorded in its IAP its intention to reduce its applied
tariffs across the board from 11% to 6% by 2003. Indonesia
has implemented its commitment to cut tariffs on all food
items to a maximum of 5%. China has announced its commitment
to cut tariffs on 5,700 industrial tariffs to an average of
10.8% by 2005. It will eliminate tariffs on 185 IT products
by the same year. These are just three examples, but they
show the APEC approach to trade liberalisation is working.
Early Voluntary Sectoral Liberalisation is also firmly on
track. Given the economic situation in the region, it would
have been all too easy for some economies to start to
unravel the package. They did not. They recognised that
unravelling the package would have further undermined
business confidence in the region. They recognised that by
maintaining the commitment to the package, APEC could send a
powerful signal which would help to restore business
confidence.
All sixteen participating economies, including the US and
Japan, remain part of the package. All nine initial sectors,
including the contentious forestry and fisheries sectors,
remain part of the package. The Kuching end-rates and
end-dates remain in place. And there is agreement that APEC
economies may begin implementing the package immediately.
Even more importantly, it goes to the WTO to become binding,
and to achieve wider participation. There is commitment by
all 16 participating APEC economies to endeavour to conclude
agreement next year.
In the context of the Asian Economic Crisis, that was a very
credible agreement. All 16 participating economies have
publicly committed themselves to the deal. We in New Zealand
trust that they will live up to that commitment.
At the same time, progress was made on the trade and
investment facilitation front. APEC agreed to work towards
aligning electrical and electronic equipment standards by
2004 for developed economies and 2008 for developing
economies. A menu of options for investment liberalisation
and facilitation was agreed to. We made progress on
principles for government procurement, for conclusion in
1999. We agreed to expand the availability of multiple entry
visas. The APEC Business Card offers accredited business
travellers visa-free travel and speedy processing when
visiting participating economies. New Zealand will join in
March.
In all these areas, the aim is to make doing business in the
region cheaper and faster. APEC's business people have
estimated that the average international transaction
involves between 27 and 30 different parties, 40 documents,
200 data elements and the retyping of 60 to 70% of all data
at least once. There is clearly a lot APEC can do to improve
upon that throughout our region.
In KL, APEC also endorsed an action programme on skills
development. It's part of APEC's ecotech work, and is
designed to contribute to a rapid improvements in four
areas: upgrading the industrial skills base, spawning new
entrepreneurs, improving technology skills, and
strengthening institutional infrastructure to facilitate
trade and investment liberalisation.
The aim of all of APEC's ecotech work is to ensure that
every APEC economy has the human, institutional and physical
infrastructure to be able to implement and benefit from
APEC's liberalisation agenda. The new action plan will
certainly help.
The economic crisis was also directly addressed by APEC
leaders, with their Cooperative Growth Strategy. It included
a renewed commitment to the 2010/2020 Bogor goals. It has a
strong focus on encouraging growth-orientated macroeconomic
policies. It will provide for additional financial
assistance to soften the social impact of the crisis. It
involves initiatives to encourage restructuring of the
finance and corporate sectors and to restore trade finance
and stable capital flows. And there are measures to
strengthen domestic and international financial systems. The
package will be supported by Japan's offer of a US$30
billion aid package as well as the joint Japan-US-ADB-World
Bank initiative to revitalise private sector growth. APEC,
the extended G-22, domestic economies, and multilateral and
regional development banks will share responsibility for its
implementation.
It is in this context that New Zealand will take over the
chair of APEC. We'll be developing initiatives around three
key themes:
1. trade and investment liberalisation and facilitation
2. strengthening markets, and
3. broadening support for APEC
One key priority for 1999 will be to develop the remaining
six sectors for EVSL, among them food. We are also
particularly interested in the APEC Business Advisory
Council's proposal for an APEC Food System, which leaders
have requested us to study. The goal of the proposed APEC
Food System is to achieve a more open, more robust food
system. It would be one which would better harness the
resources of the region, efficiently linking producers,
processors and consumers throughout the region. The idea is
to maximise the contribution the food sector makes to the
wealth of the region. ABAC's proposal calls for action in
three areas: rural infrastructure, dissemination of
technical advances and promotion of trade.
Making progress on food will not be easy. But New Zealand
sees progress on the issue as not just being about providing
better access for our exporters. Ensuring the efficient
production and distribution of food is critical to enhancing
the long-term stability of a region with a growing
population. It is a perfect APEC project involving all three
of APEC's pillars: trade liberalisation, trade facilitation,
and economic and technical cooperation.
New Zealand also has work planned to strengthen markets and
restore investment flows, as part of the ongoing response to
the economic crisis. Closely related are ecotech measures to
strengthen corporate and economic governance. In response to
the KL meeting, there will be work on examining how
competition and regulatory reforms can help facilitate trade
and investment. We'll also be working on implementing APEC's
Blueprint for Action on Electronic Commerce.
Our APEC agenda is ambitious. But we're confident that each
member economy is sufficiently committed to ensuring that
the APEC process works. I don't deny that New Zealand sees
the APEC process as leading to substantial gains for our
exporters and economy. Seventy percent of our two way trade
is with APEC economies. Eight of our top ten markets are
APEC economies, and 12 of our top 20 tourist sources. Eighty
percent of our investment comes from within APEC.
But we also recognise the historic importance of APEC to the
region. In the last 25 years, we've seen huge growth in
regional consultation, cooperation and trade through the
Asia Pacific region. It has meant that more people have
risen out of poverty in a shorter period and on a greater
scale than at any other place or time in human history.
What's more, New Zealand holds the view that greater
economic integration contributes to the maintenance of peace
and greater stability. We believe that the success of APEC's
trade and investment agenda will play a major part in
ensuring continued improvements in standards of living and
stability throughout the Pacific Rim. We see APEC as a
development of world historical importance.
We also see the World Trade Organisation as having the same
role, but globally. We believe that all economies should,
assuming obligations are met, be members of the WTO. We were
the first country in the world to complete our bilateral
negotiations with China on its accession to the WTO. We are
supportive of Russia's joining, should it meet WTO
obligations. Our ultimate goal - admittedly unrealistic in
anything other than the long term - is free trade covering
all economies and all goods and services. We believe that
were that goal to be achieved, it would play a major role in
promoting peace and enhancing living standards globally.
To New Zealand, agriculture is of primary importance because
it is our major export earner. But we also believe that free
trade in agricultural products is the best way of ensuring
food security in a peaceful world. We therefore look to the
mandated WTO agriculture negotiations as not just being of
benefit to the New Zealand economy. We see the negotiations
as taking us towards the goal of efficient production and
distribution of food globally, thereby contributing to
international stability.
At the negotiations next year, we will be seeking progress
far in excess of that achieved from the Uruguay Round. With
our friends in the Cairns Group, we will be seek trade in
agricultural products to be put on the same basis as trade
in other goods. Specifically, we will be seeking:
* open market access and deep cuts in tariffs
* the elimination and prohibition of export subsidies
* the decoupling of domestic support from production
Like New Zealand's APEC agenda, the Cairns Groups goals are
ambitious but realistic. We recognise that to achieve them,
a full, comprehensive Round may be required in order to
allow for the necessary trade-offs. New Zealand is therefore
a supporter of a Round, working with the Friends of the
Round group to achieve one.
The Friends of the Round is an open and informal collection
of 13 WTO members. In Hong Kong, China, last week we said we
believed that, with the financial crisis, economies needed
further opportunities to trade their way back to improved
prosperity and employment. We therefore concluded that a
full and comprehensive Round is needed with the goal of
securing a high quality outcome within a short duration. We
will be working to achieve the launch of a Round following
the Third WTO Ministerial in the United States next year. We
urge all other WTO members to support those goals.
I began by saying that New Zealand believes 1999 could
potentially be a great year for trade liberalisation. We
will be working hard for the liberalisation agenda to make
progress as far and as fast as possible. We believe that is
in the interests of the populations of all APEC economies
and all WTO members. We know it will not be easy. We know
there will have to be compromises along the way. But we urge
all our partners to work constructively towards a regional
and global trading environment which is as free and open as
possible. Because we believe that would do more than almost
anything else to help create more employment, prosperity and
stability throughout the region and the world.
Ends
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