Trade Network And Export Institute Work Together

7 May 2002

Trade Network And Export Institute Work Together To Build Public Support For Trade

The Trade Liberalisation Network (TLN) and the Export Institute of New Zealand have agreed to work together to build public support and understanding for trade.

Export Institute National Director Ainsley Brooks said that the Export Institute had become an affiliated member of the TLN. “The Export Institute has a clear mission - increasing the volume and value of New Zealand’s exports. Our members have a clear interest in open markets internationally. We want to join the TLN in encouraging the Government to continue to do all it can to bring down the barriers to trade”.

TLN Executive Director Stephen Jacobi said both organisations had complementary objectives. “The TLN is looking to identify champions for trade liberalisation - champions who are prepared and resourced to stand up, in public, and explain why trade is good for New Zealanders.”

The Export Institute was founded in 1971 and has 4,500 members in five branches around the country. The TLN was established in October 2001. It has 27 corporate members nationwide drawn from manufacturing, agriculture and services sectors. Between them they account for around 70 percent of New Zealand’s exports.

Speaking to the Wellington branch today, Mr Jacobi urged participants to engage actively in the debate about trade. “Trade libersalisation is a bottom-line issue for exporters. What is important - especially in election year - is that business presents a united front both to the public and to the Government and does not cede the ground to those opposed to trade reform” concluded Mr Jacobi.

Ends

Address To The Wellington Export Institute

Wellington, 7 May 2002

Stephen Jacobi

Executive Director

New Zealand Trade Liberalisation Network

“The Tln And The Export Institute - A Natural Partnership”

Thank you for the invitation to be with you this morning.

For six months now the Trade Liberalisation Network has been in the business of building broad public understanding and support for trade.

This morning I’d like to tell you what we’ve been up to since our launch in October last year and what there remains for us to do.

And what more appropriate audience for this than the Export Institute here in the nation’s capital.

For over thirty years the Institute with its five branches around the country has represented the interests of New Zealand’s exporters.

The Export Institute has a clear mission - increasing the volume and value of New Zealand’s exports.

That’s why the Export Institute is a natural partner for the Trade Liberalisation Network.

This morning I’m delighted to announce that the Institute and the Network have reached agreement on a strategic partnership to assist each other in fulfilling our respective goals and providing value to our members.

As part of this partnership the Export Institute has become an affiliated member of the TLN and I have become a member of the Wellington branch of the Institute.

Through the Institute’s Auckland-based National Director Ainsley Brooks and your own Nicky Steel here in Wellington the Institute will participate in the TLN’s programmes and policy development and have access to the resources which we are making available to business leaders.

In return the TLN will have access to the Institute’s membership base across the country.

The TLN is looking to identify champions for trade liberalisation - champions who are prepared and resourced to stand up, in public, and explain why trade is good for New Zealanders and why this country has a vital interest in bringing down the barriers to trade.

To some it may seem strange that this should be needed at all.

As Prime Minister Helen Clark has said, trade is our lifeblood.

Trade accounts for around 35 percent of GDP.

Our domestic market is small - too small to consume all we produce and too small to provide the sorts of economies of scale needed to develop competitiveness.

Both exports and imports create jobs, particularly for New Zealanders with lower skills.

New Zealand also has a vital interest in trade reform.

Our exports face a dizzying array of barriers in offshore markets.

Just last month research was released showing that exporters had gained over $525 million in tariff reductions as a result of the Uruguay Round of international trade negotiations.

That’s incredibly positive - but the same research showed that we continue to face over $800 million in tariffs worldwide.

To that we need to add the impact of non tariff barriers which Standards NZ and other government agencies have valued at over $1 billion in terms of lost revenue annually.

The effect of trade distorting export subsidies, particularly in agriculture, also needs to be factored in.

In no time at all we get a figure running into several billions when we consider just what all this is costing us.

None of this of course is news to you.

As exporters you know only too well the frustration of having your competitive edge wiped out by a tariff, of having to pay significant amounts to comply with standards and regulations or to see goods held up at port by bureaucratic procedures.

We need the Government to maintain New Zealand’s involvement in initiatives to bring down trade barriers and create more effective trade rules, whether through the World Trade Organisation, APEC or bilateral agreements.

But in New Zealand today that effort is under threat from groups both inside Parliament and outside who contest the very notion that trade brings benefits.

Two weeks ago we arranged a function in Auckland to introduce the Network to the Auckland business community.

Trade Minister Jim Sutton was present. He told us unequivocally:

“There is a need for more businesspeople, especially those whose businesses depend on imports, exports, or a mixture of both to talk about how trade affects them. Till now, all we tend to hear is from those who see trade as wholly negative”.

In a similar vein we heard from WTO Director General Mike Moore, in a video message from Geneva:

“Trade policy is not something you do at night or legislation you can pass when no-one is watching. The public are very interested and they should be. This is healthy. It is constructive so long as it is well informed. That’s why your organisation, your Network, should be a critical player in making the case. The case ought not to be left to the most deranged ex-university professor and the strongest headline. I know its difficult making this case and the headlines are harder to get but we have to shift public opinion.”

What Jim Sutton and Mike Moore are referring to is the gap between some New Zealanders’ perceptions of trade and the benefits that we know trade brings to our economy.

Take for example this letter to the Editor which appeared in the Otago Daily Times earlier this year. At issue was the decision of a local company to import apricots for canning:

“Your report on the canning of apricots at Roxburgh brings to light the shadow side of world trade. From where exactly are these other apricots being sourced? What are the conditions of workers and their wage structures ? Will the WTO and globalisation introduce such conditions into NZ ?”

This letter displays much of the misunderstanding about trade that is perpetuated by the global anti-globalisation movement and its little echo here in New Zealand.

Trade is portrayed as part of the “shadow side” - something forced on us by international bureaucrats who make use of unfair competition to deprive New Zealanders of jobs.

How far off this is from the real contribution of the WTO which is to make order out of chaos by setting the rules for international trade that protect countries like New Zealand from the unjustified and indiscriminate actions of larger trading partners.

The recent action of the United States in taking safeguard action against our steel exports is just the latest example of the sorts of risks that our exporters face in offshore markets every day.

And we don’t have to look further than the successful prosecution of our cases against the US on lamb or the EU on spreadable butter to see how the WTO can help a small country like New Zealand stand up to larger and more powerful nations.

Into all of this comes the TLN which was founded just prior to the WTO meeting in Doha last year to make a positive contribution to the trade debate in New Zealand.

The TLN is entirely funded and led by business.

We have a strong Board chaired by Brian Lynch of the Meat Industry Association. I’d like to acknowledge two of our Board members, Carol Stigley and Phil Lewin who are with us this morning.

I also want to pay tribute to the enormous contribution of the late Nigel Mitchell of the Fonterra Co-operative Group.

Nigel was also a Board member of TLN and will be known to many of you here. He died suddenly on Sunday and will be sadly missed.

In a short period we have built a corporate membership of 27 leading exporters and business organisations nationwide, drawn from manufacturing, agriculture and services industries. Between them account for around 70 percent of New Zealand’s exports.

We have built a strong media and community profile, commissioned some substantive research and developed an active website www.tln.org.nz.

And we have developed a useful platform for co-ordinating business input into trade policy.

But this is just the beginning.

My Board has adopted a business plan which calls for action in six key strategic areas:

- building the Network

- developing a public communication strategy

- taking the message to the heartland of New Zealand

- influencing trade policy

- developing a youth programme

- increasing the TLN funding base.

I’d like to talk just briefly about the public communication strategy.

I referred earlier to the public perception gap about trade.

What is clear to us is that current efforts to bridge that gap are not working.

Three elements seem necessary to us to turn this around.

In the face of a sceptical public fed with a diet of negative messages about the effects of trade, there is a need to communicate relevant and believable benefits - and it’s good to see that work starting with the research on the benefits of the Uruguay Round I mentioned earlier.

Second, the message must be made more human. Statistics are important but there is a need to get behind the numbers to tell the story about jobs and opportunities created by opening new markets.

Third, research of public attitudes towards trade is fundamental. In fact we know very little about what New Zealanders really think about trade liberalisation.

And so as the TLN work programme proceeds and funding becomes available we will focus our public communication strategy on developing a better understanding of New Zealanders’ views, personalising the key messages and communicating the benefits in ways that are meaningful.

A key priority will be to ffind a practical means of reaching out to young New Zealanders.

Their views about trade will be critical to developing the sort of entrepreneurial culture which New Zealand needs if we are to reverse the trends of recent years and grow new and innovative businesses.

To do all this we need partners from business.

That’s why our new strategic partnership with the Export Institute is so important.

You want to see more open markets internationally.

We want to see a wider number of business voices speaking out in public in support of trade liberalisation.

So, this morning I’d like to propose that you do two things.

First, I invite you to take a look at our website - www.tln.org.nz

There you’ll find a wealth of topical and relevant information about trade policy.

From next week you will be able to consult on line the Trade Liberalisation Resource Base - a comprehensive piece of research undertaken for us by the New Zealand Institute of Economic Research which profiles the arguments for and against trade liberalisation.

You might wish to sign up to our public mailing list and receive regular updates about latest postings on the site.

You might even wish to become an individual or corporate member of the TLN.

For a small fee you can show your support for our objectives, receive information about TLN programmes and events, contribute to our policy development and network with other members.

You might even want to offer sponsorship - if so, I’ll certainly be pleased to talk further with you afterwards !

The second thing I’d like to invite you to do this morning is to engage actively in the debate about trade.

There is a lot at stake.

Trade liberalisation is a bottom-line issue for exporters.

What is important - especially in election year - is that business presents a united front both to the public and to the Government and does not cede the ground to those opposed to trade reform.

I want to end this presentation on a philosophical note.

Bastiat was a French philosopher who a few hundred years ago wrote:

“the worst thing that can befall a good cause is not to be skillfully attacked but to be ineptly defended”..

I think this sums up in a nutshell much of why the TLN has come to exist and why we need the support of the Export Institute and of you all here this morning.

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