[asia-apec 898] Jenny Shipley speech on APEC

[Gatt Watchdog]

 Speech: PM to Malaysia-NZ Business Council
 Thursday, 19 November 1998, 11:11 am
 Press Release: New Zealand Government

    RT HON JENNY SHIPLEY
    PRIME MINISTER OF NEW ZEALAND

    Address to

    MALAYSIA NEW ZEALAND BUSINESS COUNCIL DINNER

    Kuala Lumpur, Malaysia

    It's good to be here among friends this evening after a busy
    day at the Leaders' meeting.

    We appreciate your hosting this function this evening.

    Malaysia and New Zealand are good friends. My time in Kuala
    Lumpur has made this abundantly clear.

    Your Council plays a valued role in promoting trade and
    investment between Malaysia and New Zealand.

    The links between our economies go back a long way and they
    are truly global in scope - from Antarctica, to the United
    Nations, from regional security and defence, to the
    Commonwealth and the World Trade Organisation.

    Just next week some Malaysian and New Zealand academics are
    meeting here in KL to discuss the connections between the
    Malay peoples and the peoples of the Pacific. This is a
    fascinating theme for scholars.

    Our friendship has endured through times of peace and of
    crisis.

    The personal ties between us give life, durability and
    vitality to our relations. Over the years, many thousands of
    Malay students have come to New Zealand to study.

    Today, by far the largest number of foreign students in New
    Zealand are from Malaysia.

    I have a large university in my own electorate, at Lincoln,
    which welcomes many overseas students each year, including
    those from Malaysia. It is wonderful to see a number of
    Lincoln alumni here this evening. Your presence is very
    special.

    Malaysian students in New Zealand have a well-earned
    reputation for hard work, assiduous study, and an ability to
    enjoy life as well.

    The legacy of these direct contacts is a series of
    friendships, networks, experiences and impressions that are
    a bedrock for the relationship between our countries.

    Our relations are also underpinned by solid economic links.

    Malaysia is New Zealand's largest export market in ASEAN and
    our 11th largest in global terms.

    Two-way trade has reached almost $NZ900 million in the year
    to June, with the balance slightly in your favour. And this
    was when we were both facing tough times.

    I would note, in passing, that your exports to us increased
    last year by 27 percent - a sign that as a Council you are
    clearly succeeding in your work!

    Our open economy is a win-win solution. New Zealand
    consumers and manufacturers can buy at world best prices and
    Malaysia's exporters have the opportunity to compete in our
    market.

    In addition to two-way trade, investment in both directions
    has enabled you, the business community, to work together to
    our mutual advantage.

    New Zealand welcomes foreign investment. And I am assured
    that Malaysia does also.

    Burton, my husband, was impressed by his visit yesterday to
    a joint venture investment project in Pahang which has New
    Zealand, Malaysian and other external investors engaged in a
    major pulp and paper operation.

    Such partnerships between New Zealand and Malaysia involve
    long term commitment. I know that many Council members here
    tonight are equally committed in different ways to business
    partnerships between our economies.

    In manufacturing, food processing, fishing, forestry,
    tourism and technology, to name a few, an extensive range of
    two-way investments now help bind our economies together.

    New Zealand and Malaysia both are global trading nations. We
    each have a vital interest in the stability and growth of
    the global economy, and within it the Asia Pacific region.

    New Zealand did not expect, when we accepted the Chair of
    APEC for 1999, that the coming year would be one of economic
    downturn. APEC, after all, grew out of a period of rapid
    growth and sustained optimism.

    But we should not forget that the swings of economic cycles
    are nothing new.

    I was interested to read comments by Dr Mahathir that
    "Lagging international demand and weak commodity prices will
    affect our export earnings considerably. The period will be
    most challenging."

    Prime Minister Mahathir, ladies and gentlemen, was writing
    in the foreword to the Fifth Malaysia Plan, in March 1986.

    We have all faced difficult times before, and no doubt we
    shall do so again in the future.

    But it was entirely right that this year's Leaders' meeting
    of APEC focused squarely on the downturn that started in
    Asia last year, and has since spread to affect the global
    economy.

    We agreed on steps to set a course out of the turmoil.
    Malaysia, as Chair, deserves credit for steering our
    discussions in sensible directions.

    To my mind this year's APEC Leaders' meeting has seen the
    organisation come of age. Up until now it has been
    easy-going.

    The vision of Bogor, of an Asia Pacific region bound
    together by free trade and investment and cooperation, was
    forged in optimism and shaped by expectations of continued
    growth.

    It would have been easy at this Leader's meeting to have
    stepped backwards, and to have retreated into protectionism.

    We did not step backwards.

    Under Malaysia's Chair we instead took a further step
    towards achieving the goals of APEC.

    The outcomes achieved on trade liberalisation were not easy.

    Nor are they perfect. But Governments chose not to let
    perfection stand in the way of progress.

    The pace of trade liberalisation will be accelerated through
    the early voluntary sectoral liberalisation programme.

    We are going to cut the costs of business, increase export
    returns, and give greater choice to consumers.

    Most APEC economies agreed on the immediate commencement of
    reduction of tariffs across nine important sectors of
    economic activity. All APEC economies have undertaken to
    take the EVSL package into the World Trade Organisation and
    thereby seek to broaden coverage to include the balance of
    the WTO membership.

    Asia Pacific economies, representing over half of world
    trade, have signalled their commitment to reducing and
    removing import tariffs across billions of dollars of trade.

    If that's not progress then I'm not sure what is. APEC has
    shown its ability, in difficult times, to forge a
    liberalisation package that is all the more credible because
    of the difficulty we had in reaching it.

    Helpful as the trade outcome was, the key focus of this
    year's meeting was undoubtedly on the current economic
    downturn. Here again, APEC's worth was tested and here
    again, to my mind, was strengthened.

    Our focus was not to dwell, with nostalgia or dismay, on why
    our decades of growth have suddenly stopped.

    We know the underlying reasons for the economic shocks and
    loss of confidence.

    We know that the causes lie both in the architecture of the
    international financial system and the character of domestic
    economic plans and institutions.

    In Kuala Lumpur this week our focus has been, as it should
    be, on remedies rather than rhetoric.

    We agreed that the major challenge is to find policies that
    will support early recovery and sustainable growth in the
    region.

    APEC has a major role to play in this area.

    Through APEC, we can explore ideas on what policies have
    worked, and have not worked, in pursuing growth and
    confidence, and learn some lessons on what policies may
    reduce vulnerability to capital and exchange rate shocks.

    No one has a monopoly on wisdom. But we can all contribute
    to a "toolbox" of policy ideas that can help others in
    building strong transparent domestic financial systems that
    inspire investor confidence.

    And we can contribute to reviewing the architecture of the
    international financial system where this is warranted. To
    my mind, we do not need to rebuild the Bretton Woods system.
    But there is a case for closer surveillance of the nature of
    capital flows so that we can understand them better, harness
    the gains, and manage the risks inherent in a globalised
    economy.

    APEC Finance Ministers and Leaders have agreed to do just
    that.

    We will not be rebuilding the structures of Bretton Woods.
    But we will have a better wiring diagram to help avoid and
    manage shocks in the future.

    Trade and investment facilitation received a strong boost
    from Kuala Lumpur.

    This is all about cutting through the red tape and reducing
    the costs of trade between our economies.

    For every dollar added to the region's economy through
    APEC's liberalisation plans, a further two dollars will come
    from reductions in business costs through achieving APEC's
    facilitation objectives.

    This year useful progress has been made towards reforming
    customs procedures, increasing mutual recognition of
    standards and simplifying travel by business people.

    Such work is of particular benefit to small and medium
    enterprises which provide the bulk of the jobs in our
    economies.

    Dialogue with business will be a key theme of New Zealand's
    chairing of APEC in 1999. A number of business events are in
    prospect.

    These include business sessions around the Small and Medium
    Enterprises Ministerial Meeting in April; a Women's Leaders'
    Network Meeting and a Business Symposium in June, and a
    private sector CEO Summit in Auckland in September at the
    time of the APEC Leaders' Meeting.

    We'll also be pleased to engage you in new trade and
    investment opportunities in New Zealand. We hope, at the
    same time, you can catch the excitement of our defence of
    the America's Cup in yachting, and preparations for the new
    Millennium.

    I hope many of you will take the opportunity to visit us.

    We want to see next year:

    - further substantive progress towards trade and investment
    liberalisation and facilitation;

    - a credible APEC response to the economic crisis;

    - reinforcement of the capacity of institutions and human
    resources in the region to deal with the economic challenges
    we all face, and

    - the building of broader support for APEC among the wider
    communities of which we are part.

    I look forward to working with you as we undertake these
    tasks, successfully, in the coming year.

    I also look forward to welcoming you to our country, where
    the New Zealand people are keen to share with you our
    enthusiasm about the future and where you will have the
    opportunity to discover New Zealand for yourselves.