[asia-apec 1525] Jim Sutton on NZ and trade (speech of 8/8/00)

[APEC Monitoring Group]

New Zealand has abiding national interests in sustaining progress towards an
open trading system and fair rules governing the conduct of international
trade.

It is clear that some of our key objectives - such as removing barriers to
primary sector trade and trade-distorting export subsidies which depress our
market returns - can best be achieved through multilateral negotiation.

As the Prime Minister said recently, given that over 60 percent of New
Zealand’s exports come from the farm, forests, fisheries and from
horticulture, this is an issue of the highest national priority.

We are working hard in government to get another comprehensive round of
international trade talks off the ground – and it is essential that these
talks include agriculture.

Meantime the WTO can benefit us - and is doing so - by encouraging adherence
to the agreed rules of trade. This has been a sore point in the past for
smaller, less powerful exporting countries. One example is the case New
Zealand took against a dairy export subsidy programme in Canada which was
affecting our markets on a daily basis – the WTO ruled last year that that
subsidy was inconsistent with the rules and Canada has since committed to
remove the subsidy. Prior to the WTO there was no mechanism for enforcing
such decisions.

We have also been giving close attention to another important trade
relationship in the Asia-pacific region. That with Singapore.

We have had six rounds of negotiations with the Singaporeans on a Closer
Economic Partnership. The negotiation is now close to conclusion. There are
only a few remaining outstanding issues.

The CEP Agreement with Singapore will deliver reciprocal benefits, encourage
trade and investment and significantly enhance our economic partnership with
a key Asian economy. All tariffs on bilateral goods trade will be eliminated
on entry into force of the CEP.

New Zealand exporters will benefit from this Agreement. The CEP aims to
provide New Zealand with improved market access opportunities in the
Singapore services market and reduce compliance costs to New Zealand goods
exporters through the proposed disciplines on technical regulations and
standards.

Singapore has improved access for New Zealand suppliers in a number of key
services sectors, including education, telecommunications, environmental
services, medical services, architecture and engineering services. There
will be a mechanism to address recognition of professional qualifications.
We have negotiated a mutual recognition agreement on the
electrical/electronic goods sector, and a commitment to look at a number of
other sectors to reduce TBTs. This includes food - an important sector for
New Zealand.

For transparency and certainty, each side will bind its existing investment
regimes. For New Zealand this means the OIC thresholds will be bound (to
Singapore only) but not the Overseas Investment Regime’s procedures.

Ministers will meet every two years to review the CEP agreement and to
expand on commitments, such as those in services. A full review of the CEP
will be undertaken after five years.

I’ll comment on our more traditional markets for agricultural products in
Europe following a visit I made there recently.

While in Paris for the OECD Ministerial Council, I had the chance to meet
with EU Trade Commissioner Pascal Lamy and with my French trade and
agriculture counterparts, Francois Huwart and Jean Glavany. The meetings
with French Ministers were particularly timely given France's assumption of
the EU Presidency in July.

These meetings underscored the value of an open dialogue with the EU
Commission and with Member States on trade issues. The future course of
issues like reform of the Common Agricultural Policy - which is probably the
biggest government influence on world agricultural trade and prices -
eastward enlargement of the Union and WTO negotiations are crucial to New
Zealand's interests.

It was clear from my meetings that the EU faces some difficult issues in
coming years. The CAP is already too expensive, and the accession of the
countries to the east would make it doubly so. Reform is inevitable and the
direction seems clear - greater reliance on market prices and fewer
production and trade distorting subsidies. I think the policy argument has
already been won on that score. The battle will be over the pace and the
extent of these changes.

I need not remind this audience of the interests opposing change. The French
Minister of Agriculture reminded me, however. Despite the outcome of the
Uruguay Round which legally binds our current access rights; despite the
fact that the EU can no longer reduce our access, especially the growth of
NZ chilled lamb exports; despite the fact that NZ has been supplying Europe
for a very long time and that we, too, can justifiably regard it as our
market ; despite this, local interests are still pressuring their leaders to
do something about NZ exports.

My message is: there's no room for complacency about our sheepmeat access
(or dairy access for that matter). We need to be very watchful and very
careful. We have to make sure that we remain the ones making the commercial
choices - not letting these be made for us by EU officials.

In closing, New Zealand has a remarkable export story and we have the
potential for an even more remarkable export future.

Our fortunes are dependent on export.

But we are not Ireland, with the European market on our doorstep, the
largesse of the EU at our disposal, or the US just across the sea.

Nor do we have the critical mass, domestic market and mineral wealth of our
neighbour, Australia.

We are a small country in the southern Pacific ocean.

Nevertheless, we have successfully charted our own course toward carving out
a place in the international economy.

The Government is committed to working with you to ensure we do even better
in the future. Where we can help, and where it makes good sense to do so, we
will.

Thank you