Source: New Zealand Government
Tēnā koutou katoa. Da jia hao.
Australian Assistant Minister of Trade, Senator the Hon Tim Ayres, His Excellency Ambassador Wang, my parliamentary colleagues Naisi Chen, Shannan Halbert, the Honourable Gerry Brownlee, the Honourable Todd McClay, former parliamentary colleague the Honourable Simon Bridges, members of the diplomatic corps, members of the business community, and of course Fran O’Sullivan. Thank you all for joining us today.
As the Minister for Trade and Export Growth, it is my privilege to share with you New Zealand’s perspectives on the regional trade landscape, and some of the opportunities and challenges on the horizon.
The theme of this trade panel is navigating a pathway through regional trade tensions.
As you’ll be aware, the global economy and the international rules based system currently face major headwinds. There is increasing pressure on multilateralism, growing protectionism and geo-strategic pressures. Global economic growth is slowing, reflecting the impact of rising inflation and tighter monetary policy on household budgets, and spill-overs from Russia’s illegal invasion of Ukraine. Alongside this, climate change risks and impacts are affecting our economies, environments and ways of life in all countries.
So, it is timely that we discuss not only the challenges, but also the opportunities and tools, to help us navigate these complex times.
Indeed, trade should be a positive force. Through consistent rules, trade can and should be providing solutions to the challenges we face globally.
As a small, export-oriented economy, it is hard to overstate the importance to New Zealand of a trading system underpinned by rules rather than might. Regional trade architecture ensures New Zealand has a seat at the table on an even footing with the big players, and we all have the same consistent ‘rules of the road,’ and ways of settling disputes when we disagree.
It’s only natural that competition should exist and it is in everyone’s interests that such competition is managed in a way that reduces friction and enables cooperation on issues of global concern.
To begin – I’d like to first offer some observations regarding the trade and economic opportunities observed during my recent visit to China, led by Prime Minister Hipkins, as well as some remarks regarding the New Zealand-China trade relationship.
As Prime Minister Hipkins has noted, the visit was an opportunity to support our reconnection and trade recovery strategies, and help New Zealand businesses to refresh and renew connections with this important market.
We had one simple, yet important message – New Zealand is open for business and pleasure, as our tourism sector welcomes increasing numbers of visitors. And I can assure you that we worked tirelessly to advocate for New Zealand businesses, from opening doors, to fostering new relationships, which in turn grow New Zealand’s economy.
The visit highlighted that our trade links, underpinned by our recently upgraded Free Trade Agreement, have proven incredibly resilient during and post the COVID-19 pandemic. I note that since the signing of our Free Trade Agreement in 2008, our two-way trade has boomed, and now surpasses NZ$40 billion per year, up from a modest NZ$8 billion in 2008. This is due in large part to the hard work of New Zealand businesses to realise the opportunity the Government creates in opening up FTAs.
We were pleased to connect with New Zealand businesses in China, showcase our world-class products and services in one of the world’s largest consumer markets, and to welcome back Chinese students, tourists and businesspeople. Air connectivity is steadily improving – as evidenced by our announcement of additional air routes between China and New Zealand – and this extra capacity will help to further facilitate trade, tourism and people-to-people connections.
New Zealand continues to be well regarded in China; however maintaining access for New Zealand businesses requires a sustained, long term effort. Like any relationship we continue to invest to improve our understanding of Chinese consumers, and work with Chinese counterpart agencies in market to ensure that New Zealand meets their consumer preferences and evolving regulatory regimes.
We also had the opportunity to hear from businesses on the ground about some of the opportunities and challenges they’re facing in market. It’s a dynamic environment, and the New Zealand Government is working hard to ensure our businesses are well supported to seize these opportunities.
It was also clear that, in a market like China, the combination of Government and business is highly effective.
In this regard, I was pleased to meet with my counterpart, Commerce Minister Wang Wentao – adding to our regular Ministerial engagement on trade and economic matters. These engagements are key to ensuring that our strong trade ties are underpinned by open and constructive political relationships.
Many of the commercial signings witnessed during the mission will contribute to boosting sales of New Zealand products and services in China – together representing a combined forecast increase in annual sales to relevant New Zealand companies of more than NZ$510 million* by 2026. For example, the Kiwifruit Export Plan agreed between MPI and China Customs now provides for stable biosecurity trade conditions for the export of New Zealand kiwifruit into China, underpinning the $63.6 million trade of this iconic New Zealand product.
It is clear that China is an important market for us and will continue to be so.
However, our Government understands that our exporters need diverse options and opportunities when it comes to trade. In line with the Government’s Trade Recovery Strategy, we are therefore continuing to promote diversification and resilience, by pursuing new Free Trade Agreements and modernising existing ones that benefit New Zealand and New Zealand businesses.
Our Government has successfully concluded and modernised a number of significant Free Trade Agreements in recent years, including:
The Regional Comprehensive Economic Partnership;
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership;
A Bilateral Free Trade Agreement with the United Kingdom;
The recent signing of a bilateral Free Trade Agreement with the European Union;
And the ASEAN-Australia-New Zealand upgrade.
Taken together our FTAs now cover around 74% of our exports – a phenomenal achievement.
With some of these key FTA building blocks in place, we are also focusing on existing FTA mechanisms to ensure we fully leverage the benefits from our FTA network for all New Zealanders. For example, this year we are chairing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), including hosting the CPTPP Trade Ministers in Auckland over the last couple of days where we all formally welcomed the United Kingdom’s accession to CPTPP.
Our hosting year provides an opportunity to demonstrate leadership in areas of importance to New Zealand, by advancing the implementation and expansion of the Agreement, highlighting the importance of inclusive and sustainable trade, including Indigenous trade and economic empowerment, and ensuring that the Agreement remains the gold standard for our region and delivers for all our people.
The UK’s accession to CPTPP and the growing number of economies that want to join CPTPP, demonstrate the value and appeal of the Agreement. We continue to welcome applications from those economies that can meet the high standards of the Agreement and other requirements as outlined by CPTPP Ministers.
Other regional architecture has opened up pathways across the region, such as the recently upgraded ASEAN, Australia- New Zealand FTA. This agreement now includes more modern trade facilitative rules, including streamlined customs procedures and stronger-e-commerce rules.
We are also working on evolving regional architecture, for example
New Zealand is actively participating in the Indo-Pacific Economic Framework (IPEF), with the United States and 12 other countries. This is an important way to bring the United States into the regional trade and economic architecture, following its withdrawal from TPP.
Negotiations on a ‘first-of-its-kind’ Supply Chain Agreement, one of the four distinct pillars of IPEF, were concluded while I was in Detroit in late May. Intensive work continues on the other three pillars.
We are also looking ahead to how we can band together with other likeminded economies to tackle trade issues that have the potential to drive economic growth and innovation into our future.
In this context, New Zealand has been proud to establish the Digital Economy Partnership Agreement (DEPA) with Singapore and Chile. The DEPA aims to cover the breadth of the digital economy. It is designed to function as a pathfinder agreement that will help shape new norms in digital trade over time. As part of this vision, the DEPA is an ‘open plurilateral’ agreement, meaning it is open to other WTO members who can meet its high quality standards.
We are pleased to have recently concluded accession negotiations with Korea, and have ongoing discussions with other economies interested in joining, including China.
Looking out beyond the region, New Zealand is continuing to invest heavily in multilateral institutions, such as the WTO. And in norm building institutions like APEC and the OECD.
Robust rules based architecture remains the best way for New Zealand to maximise opportunities for our exporters across a range of markets, particularly in the face of protectionism, geopolitical tensions, and economic uncertainties.
I shared last year with you the meaningful outcomes reached at the 12th WTO Ministerial Conference, particularly the WTO Fisheries Subsidies Agreement – something New Zealand has been advocating for reform on for 20 years. We were pleased to see China formally accepted the Fisheries Subsidies Agreement at the end of June and New Zealand hopes to do so shortly.
Just a couple of weeks ago in Geneva, negotiations on the WTO Plurilateral Investment Facilitation for Development were substantially concluded. This Agreement, including both New Zealand and China, aims to make investment rules more transparent and efficient for investors. Equally important, it shows that there is still momentum and commitment in the WTO to build consensus around rules.
In this same spirit, New Zealand continues to work in the WTO to address other longstanding issues like agriculture, and the role of environmentally harmful subsidies. Ministers will convene again for the 13th Ministerial Conference in February 2024.
I now wish to introduce my esteemed colleague Senator the Hon Tim Ayres, Australia’s Assistant Minister for Trade, who is joining me to share perspectives on navigating a pathway through the regional trade landscape.
Together, our countries share common trade issues and priorities in the Indo-Pacific region. We recognise the significance of ensuring fair and open trade practices.
Minister Ayres’s extensive experience and expertise in trade policy makes him a valuable partner in our collective pursuit of economic growth and prosperity.
Without further ado, I wish to open the panel for further discussion.
Xie xie and thank you.
