Rt Hon Bill English

Prime Minister

24 March 2017
Speech to International Business Forum and Auckland Chamber of Commerce

Good morning.

Can I start by thanking the International Business Forum and the Auckland Chamber of Commerce for hosting this event.

And can I acknowledge your guests and my ministerial colleagues.

In particular I want to acknowledge Trade Minister Todd McClay, who along with Foreign Minister Murray McCully is doing an excellent job of promoting our interests overseas.

I think Todd and Murray would admit that some parts of that job are not too difficult.

After all, we have an enviable reputation around the world.

New Zealand is renowned for its great lifestyle, safe and friendly communities, good public services and a clean and green environment - all underpinned by a stable government and a growing economy.

It's no wonder that we've changed from being a place many wanted to leave, to one Kiwis want to return to.

I’m proud of what New Zealanders are achieving, supported by this Government.

Wages are rising and more jobs are being created every day.

We’ve supported the country through difficult times while continuing to invest in better public services, and in particular helping those most in need.

We’re building more infrastructure like schools, hospitals, housing and roads.
And we’re doing all that at the same time as getting our books back in order.
There’s no doubt we’ve made some very significant strides forward as a country.

But the job is far from done.

We’re now in a position to achieve things we hadn’t even thought possible 10 years ago.

We have a rare opportunity to prepare for the long-term and solve some of the more difficult social and environmental issues that governments have grappled with for decades.

I am determined to do that.

We’ve learnt over the last few years that first and foremost the government must promote and encourage a strong economy.

Everything else flows from that.

The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth.

A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world.

I cannot over-state how important trade is to New Zealand, and how closely it is linked to our prosperity.

Successive New Zealand governments have built a broad network of high quality free trade agreements.

Our first FTA - CER with Australia - created one of the most seamless cross-border marketplaces in the world.

We have secured high-quality agreements across greater China, including the mainland, Hong Kong and Taiwan, as well as with Thailand, Singapore, Malaysia and Korea.

These agreements have delivered real results that have always far exceeded our expectations.

Our goods exports to mainland China are now four times what they were before the FTA.

And just six months into our agreement with South Korea, our wine exports there have increased by 30 per cent.

Together with Australia we have negotiated a trade agreement with the 10 ASEAN nations.

We now trade more with these countries in a week than we did a year in the early 1970s.

New Zealand is at the heart of the ongoing regional integration process in Asia, and we are one of the 16 nations involved in the Regional Comprehensive Economic Partnership negotiations.

Those 16 countries represent more than three billion people and a total GDP of around $US23 trillion.

A more open, integrated Asia Pacific is an increasingly important part of New Zealand’s economic future.

It is the world’s fastest growing region, and it is shifting from investment driven growth to consumption that better fits our profile of soft-commodity exports.

ASEAN nations are expected to consume three times more dairy in 2050 than they did in 2007.

Their meat and fruit intake will double.

And beef consumption in China is expected to more than triple in that time.
Those are hugely significant opportunities for New Zealand producers and we need to be ready to help meet those needs.

Fortunately, we are well placed to take on the world.

We know how to produce high quality products that other countries want.

We have fewer than five million people but produce enough food to feed nearly ten times that.

We have an educated, ambitious and highly skilled workforce.

And we are one of the least corrupt countries in the world.

People like doing business with us, and that’s an excellent starting point.

Free trade agreements have allowed our exporters to diversify into new products and new markets – meaning we are more resilient to international shocks.

Although it remains a hugely important part of the economy, dairy no longer dominates our exports as it once did.

We’re seeing solid growth in tourism, wine, ICT, education and many other sectors.

Between 2014 and 2016, global dairy prices fell markedly, and as a result annual dairy exports fell by $3.3 billion.

But because of our diversified export portfolio, non-dairy exports grew by $5.9 billion over the same period.

I am often bemused by opposition to free trade.

It makes me think that governments have done a poor job of explaining the benefits.

They are indisputable.

Our exports are now worth $70 billion and they continue to grow, supporting hundreds of thousands of Kiwi jobs and households.

The dairy sector alone employs over 40,000 people, and supports the jobs of many more.

The tourism sector employs around 190,000.

And exporting firms employ an average of 20 people compared with just three staff in non-exporting businesses.

Trade is part of the reason why New Zealand is growing more strongly than most developed countries.

It’s part of the reason why the average wage is up 26 per cent since National was elected in 2008.

It’s part of the reason why over 370,000 jobs have been created since the height of the GFC.

And it’s a lot of the reason why the cost of living remains historically low, with things like cars, appliances and cell phones becoming more affordable.

Our lives would be poorer without free trade.

I acknowledge we have seen in the past that free trade can lead to significant change for some industries.

That change can be painful for some people working in those sectors.

But New Zealanders, with support from the Government, have shown an impressive ability to adapt and to thrive.

Ultimately, free trade is why New Zealanders are getting ahead and they now see a country confident in itself, more prosperous - more certain of sustained success.

It’s because we have one of the most open and competitive economies in the world that our farmers are today among the world’s most efficient, our wines among the most sought after, our reputation for ingenuity is respected internationally and why Kiwis are known for their work ethic and can-do attitude.

As Prime Minister, every week I have the honour of meeting these kinds of people.

I see many of you here today.

Leaders, entrepreneurs and risk takers.

I see people who are backing themselves and their businesses on the world stage and succeeding.

New Zealanders who are taking other Kiwis with them and providing jobs and incomes to Kiwi families.

New Zealanders who are creating international connections, growing our global reputation and adding value to our country.

We all recognise you and your success.

And we recognise those who have helped your businesses conquer the world, because as you all know, you haven’t done it alone.

There are many thousands of New Zealanders who can look at businesses like Air New Zealand, Xero, Orion Health, Zespri, Fonterra and Icebreaker, and take pride in the knowledge they played a part in their success.

The challenge now is to sustain that growth and to share it.

We know that when your products are in markets overseas they can compete on quality and cost of production.

As a Government, our job is to help you get your goods on those shelves and compete on price by removing tariffs and other barriers.

So I want to assure you, the National-led Government will continue to forge new trade opportunities and help our businesses take advantage of those opportunities.

While our existing agreements have raised our standard of living, our ability to create new and better ones will determine whether our success is sustainable.
We have our work cut out for us.

While many countries continue to push for open borders and greater integration, the voices of protectionism have grown both internationally and even within our own Parliament.

You may have noticed our political opponents have become increasingly fearful of the world and more inward looking.

We in the National-led Government are outward looking.

Where they lack a belief in the ability of New Zealanders to succeed on the world stage, we look to our horizons and see a platform to greater prosperity.
And where they seek to impose constraints, we choose to stand behind those people willing to put themselves forward.

We know that if we open doors New Zealanders will walk through them, creating opportunities for themselves and others.

But we mustn’t take this for granted.

The biggest threat to our economic success at the moment is disruption of international trade.

New barriers and less integration would do exactly the opposite of what their champions claim.

They would mean consumers pay more, have less choice and the world would be less efficient.

There would be fewer jobs, incomes would grow more slowly, and we would make slower progress on the challenges we face as an international community.

That means less confidence and greater instability.

It is a depressingly backward scenario and there would be no winners.
Free trade has helped spur the strong growth we have seen in our region, made it more stable and lifted millions of people out of poverty.

That is part of the reason we were disappointed with the decision of the US to withdraw from the TPP.

TPP would have improved regional trade and it would have ensured the US maintained its influence and leadership in the Asia Pacific.

Instead it has left a vacuum for others to fill – and it is up to the remaining signatories to provide the leadership needed to get some sort of agreement over the line.

Because make no mistake, while the US withdrawal is a set-back, it is not the end of the road.

We will continue to work with our TPP partners to investigate a way forward.
The potential rewards are too great not to try and we have been heartened by the positive response to our efforts so far.

Trade negotiations have never been easy.

The US has said it will focus on bilateral trade deals and Brexit has created some uncertainty around access to two of our largest export markets – the UK and Europe.

But there are many more reasons to be optimistic.

Many of the world’s largest economies remain committed to open trade.
That was made very clear to me on my visit to Brussels, London and Berlin earlier this year and in my recent meeting with Australian Prime Minister Malcolm Turnbull.

I am meeting with Chinese Premier Li Keqiang on Sunday and the Chinese have strongly advocated for the benefits of globalisation and increasingly open trade, as have Mexico and Japan.

We must remain ambitious and continue to make the case for free trade in a world where opposition has become louder.

So today I am pleased to launch the Government’s updated trade strategy.
Trade Agenda 2030 underlines our ambition to remain a champion of free trade.

It will see us work towards more secure and predictable market access, with a focus on eliminating tariffs and addressing non-tariff barriers to trade.

The latter are estimated to cost our exporters nearly $6 billion a year in the APEC region alone.

We’ve set an ambitious target of achieving FTA coverage for 90 per cent of our goods exports by 2030 – up from 53 per cent today.

Those of you experienced in trade will realise just how challenging that target will be.

But I’m sure you also realise the massive potential benefits.

If we have broader coverage of free trade agreements, our exporters will have more flexibility to take advantage of opportunities as they arise and to better adjust to a downturn in any one market.

Trade Agenda 2030 sets out the reasons why further investment is needed to make this happen.

The Government will commit an extra $91.3 million over the next four years through Budget 2017.

We will establish two new diplomatic posts.

A new Dublin Embassy will support an intensified relationship with Ireland and the EU.

This will be especially important following the UK’s departure from the EU, and as we continue our EU FTA process.

And a new High Commission in Sri Lanka will advance New Zealand as a trusted partner in South Asia.

We will also strengthen the public service’s capacity to negotiate new free trade agreements, build on existing ones and to tackle non-tariff barriers.

We will make it easier for exporters to alert the Government to any trade barriers and ensure MFAT and MPI respond quickly and effectively.

We will also provide more intensive support to businesses to help them negotiate access issues, which can be complex.

New Zealand’s trade profile is also changing, with overseas investment, trade in services, and the digital economy all growing parts of our trading future.

So Trade Agenda 2030 will support the development of new businesses so our exporters can make the most of globalisation and technological advances, and NZTE will provide improved support for digital services exporters.

Finally, we want to do a better job of providing more information to the public about trade deals.

So Trade Agenda 2030 comes with a commitment from the Government to engage New Zealanders more on trade and do that job better.

This will be done in part through the establishment of a Ministerial Advisory Group made up of different stakeholders including unions, business leaders, iwi and NGOs.

We will lead on trade – just like we did in instigating the TPP, and just as we are in keeping it going.

The Government will progress existing negotiations and start new ones.

We are on track for a formal launch of negotiations with the EU later this year and we are ready to negotiate with the UK when it is in a position to do so.

We are nearing an agreement with the Gulf States and negotiations with our Pacific neighbours on Pacer Plus are well advanced.

The RCEP negotiation I mentioned earlier has also been making steady progress, and we will continue to push for a commercially meaningful outcome.

We are also exploring new opportunities, including in Latin America and with India, where our trade ties are currently limited.

We will engage with the new US Administration on opportunities for deepening trade and economic ties with the United States.

And as we expand our network of FTAs, we will look to extract maximum value from the agreements we already have, and to build on them.

The most tangible example of that is the agreement last year to upgrade the China FTA.

And I look forward to discussing this process further with Premier Li during his upcoming visit.

Ladies and gentleman, the evidence in favour of free trade is irrefutable.

It creates jobs, boosts incomes and prosperity, and it puts us on the world stage.

As a Government, we are working hard to help create a level playing field for our exporters.

And we are incredibly proud seeing New Zealanders succeed.

There is so much to gain from advances in free trade.

I am committed to seeing those gains, and on behalf of all New Zealanders this Government will not stop working to achieve them.

Thank you.

ends

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