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  • 06 Oct 2015 9:38 AM | Mike Hearn (Administrator)

    Prime Minister John Key has welcomed the successful conclusion of negotiations over the Trans-Pacific Partnership Agreement – New Zealand’s biggest free trade agreement.

    “This agreement will give our exporters much better access to a market of more than 800 million customers in 11 countries across Asia and the Pacific, and help Kiwi firms do business overseas,” Mr Key says.

    “In particular, TPP represents New Zealand’s first FTA relationship with the largest and third-largest economies in the world – the United States and Japan. Successive New Zealand governments have been working to achieve this for 25 years.”

    TPP has been a significant focus for the National-led Government, as part of its wider plan to diversify the economy by building strong trade, investment and economic ties around the world.

    “As a country, we won’t get rich selling things to ourselves. Instead, we need to sell more of our products and services to customers around the world, and TPP helps makes that happen,” Mr Key says.

    TPP will eliminate tariffs on 93 per cent of New Zealand’s exports to our new FTA partners, the United States, Japan, Canada, Mexico, and Peru.

    Dairy exporters will have access to these markets through newly created quotas, in addition to tariff elimination on a number of products.

    Tariffs on all other New Zealand exports to TPP countries will be eliminated, with the exception of beef exports to Japan, where tariffs will reduce significantly.

    TPP also reduces non-tariff barriers to trade, ensures fair access for New Zealand firms doing business in TPP countries and provides greater opportunities to bid for government procurement contracts overseas.

    “We’re disappointed there wasn’t agreement to eliminate all dairy tariffs but overall it’s a very good deal for New Zealand,” Mr Key says.

    “We’ve seen with China how a free trade agreement can boost exports of goods and services and deepen trade and investment links.

    “The overall benefit of TPP to New Zealand is estimated to be at least $2.7 billion a year by 2030.

    “That’s more jobs, higher incomes and a better standard of living for New Zealanders,” Mr Key says.

    “Many concerns raised previously about TPP are not reflected in the final agreement. For example, consumers will not pay more for subsidised medicines as a result of TPP and the PHARMAC model will not change.

    “Now the negotiations have concluded, people will see that TPP is, overall, very positive for New Zealand,” Mr Key says.

    The conclusion of TPP follows recent trade agreements with Korea, Chinese Taipei, Hong Kong, ASEAN/Australia and Malaysia. The Government is continuing negotiations with a number of other countries and is actively pursuing the launch of an FTA with the European Union.

  • 06 Oct 2015 9:35 AM | Mike Hearn (Administrator)

    The Trans-Pacific Partnership Agreement will deliver significant benefits to New Zealand and build on the hard-won gains from previous free trade agreements, Trade Minister Tim Groser says.

    “This comprehensive agreement offers much better access for New Zealand goods and services in 11 important markets across Asia and the Pacific.

    “TPP breaks new ground for us. It is our first FTA relationship with the United States – the world’s biggest consumer market – as well as with Japan, Canada, Mexico and Peru.

    “As a result, New Zealand will now have FTAs covering our top five trading partners – Australia, China, the United States, Japan and Korea.

    “We’ve seen from previous FTAs, including the China FTA, how positive they have been for New Zealand trade and investment, and therefore in supporting jobs and growth for New Zealanders.

    “Not being in TPP, on the other hand, would put New Zealand at a competitive disadvantage compared to other countries,” Mr Groser says.

    Tariffs will be eliminated on 93 per cent of New Zealand’s trade with its new FTA partners, once TPP is fully phased in. This will ultimately represent $259 million of tariff savings a year – around twice the savings initially forecast for the China FTA.

    As a result of TPP:

    • Tariffs on beef exports to TPP countries will be eliminated, with the exception of Japan where tariffs reduce from 38.5 per cent to 9 per cent.
    • New Zealand dairy exporters will have preferential access to new quotas into the United States, Japan, Canada and Mexico, in addition to tariff elimination on a number of products.
    • Tariffs on all other New Zealand exports to TPP countries – including fruit and vegetables, sheep meat, forestry products, seafood, wine and industrial products – will be eliminated.

    TPP also reduces non-tariff barriers to trade and ensures fair access for New Zealand firms doing business in TPP countries.

    “TPP sets high standards in many areas,” Mr Groser says. “New Zealand is already an open, transparent and trade-friendly country, which means only a fraction of TPP’s obligations will require changes to our current practices.”

    The most significant change is an extension of New Zealand’s copyright period from 50 years to 70 years. The cost of this to consumers and businesses will be small to begin with and increases gradually over a 20-year period.

    “Other potentially far-reaching or costly proposals raised earlier in the negotiations were not included in the final agreement,” Mr Groser says.

    “Consumers will not pay more for subsidised medicines as a result of TPP and few additional costs are expected for the Government in the area of pharmaceuticals. There will also be no change to the PHARMAC model.

    “Regarding data protection for biologic medicines, New Zealand’s existing policy settings and practices will be adequate to meet the provisions we have finally agreed on," Mr Groser says.

    Investor-state dispute settlement provisions have been included in TPP, as they have in previous FTAs.

    “This will give New Zealand investors more confidence and certainty when doing business overseas and does not prevent the Government regulating for legitimate public policy reasons.

    “TPP also contains a provision that allows the Government to rule out ISDS challenges over tobacco control measures,” Mr Groser says.

    “Overall, TPP is a very positive agreement for New Zealand, further improving access to international markets, which supports our exporters to grow and create new jobs.

    “New Zealand supports the release of the text before it is signed by TPP governments but arrangements are yet to be finalised.

    “TPP, like any free trade agreement, will go through New Zealand’s Parliamentary processes. We expect it to come into force within two years.”

    The attached document contains details of TPP. More information on specific outcomes for industry sectors can be found at http://www.tpp.mfat.govt.nz/

  • 21 Aug 2015 4:56 PM | Mike Hearn (Administrator)

    Fisher & Paykel Healthcare wins Supreme Award at 2015 American Chamber of Commerce DHL Express Success & Innovation Awards

    AmCham celebrates 50 years

    Auckland, 21th August 2015 The 16th annual AmCham DHL Express Success & Innovation Awards and AmCham’s 50th Anniversary dinner were held at the Pullman Auckland Hotel last night, with Fisher & Paykel Healthcare winning the Supreme Award for trade with the United States.

    AmCham was delighted to welcome Prime Minister the Rt Hon John Key, who attended the AmCham Awards dinner and presented the three exporter awards, as well as the Supreme Award.

    Fisher & Paykel Healthcare has been developing innovative medical devices and systems for use in the field of sleep apnoea and respiratory acute care, adding value to patients, clinicians and healthcare organisations in New Zealand, North America and around the world.  While the company employs 3,150 people in 36 countries, North America represents 43% of all products sold.

    Chair of the Judging panel Stephen Titter said Fisher & Paykel Healthcare had consistently shown success and innovation in their products, which has seen their US business grow by 10% in the last year to US$235m. “The company is investing $10 to $15 million in the current year and employing an additional 40 people as it moves to a direct US hospital distribution model. They focus on continually improving their products, serving more patient groups, extending their range of products and growing their international presence to deliver robust revenue growth,” said Titter.

    Tim Baxter, country manager DHL Express New Zealand, who announced the supreme winner, said “Fisher & Paykel Healthcare has established itself as one of New Zealand’s most successful companies both in our local market and abroad. It is indicative of the opportunities that exist in the US market that Fisher & Paykel Healthcare has identified it as a key export area, and continues to work to develop this crucial trade lane. This is behaviour that DHL Express has also seen from other entrepreneurial and innovative exporters."

    “This year was one of the toughest ever for the Awards’ judges. Any one of the finalists could have been their category winner and all finalists should be recognized as winners for their outstanding achievements,” said Stephen Titter.

    The Supreme Award is chosen from the winners of each of the categories presented on the night. The complete list of winners is as follows:

    • Importer of the Year from the USA: Protempo Ltd
    • Investor of the Year to or from the USA: Bessemer Venture Partners for investment in Rocket Lab
    • Exporter of the Year – under NZ$500,000: Fuel50
    • Exporter of the Year – NZ$500,001 – $5 million:  Aranz Medical Ltd
    • Exporter of the Year – over NZ$5 million: Fisher & Paykel Healthcare Ltd
    • Trevor Eagle Memorial Award – AmCham Supporter of the Year: Eric Mahoney
    • Eric & Kathy Hertz Award for Citizen Diplomacy: New Zealand Robotics Charitable Trust/Kiwibots
    • Supreme Award Winner:  Fisher & Paykel Healthcare Ltd

    The AmCham DHL Express Success & Innovation Awards celebrate success and innovation in the export, import and investment sectors between New Zealand and its third-largest trading partner, the USA.  Winners of the importer and exporter categories receive $1,000 of free shipping from DHL Express, $2,000 for the over $5m category winner and 100,000 airline miles from Hawaiian Airlines.  The winner of the Eric & Kathy Hertz award has the choice between 100,000 airline miles from Hawaiian Airlines or $2,500.

    In addition to AmCham, DHL-Express and Hawaiian Airlines, the Awards are also supported by ASB Bank, Baldwins, Fonterra, Prescient Marketing & Communications, The Pullman Auckland Hotel, media partner The Business, and wine sponsors Fine Wine Delivery Company and Foley Family Wines.

    Pevious winners of the Supreme Award include Zespri International, Specialist Marine Interiors, Peace Software, Airways Corporation, HumanWare, Tenon, Zeacom, Pratt & Whitney Air New Zealand Services t/a Christchurch Engine Centre, Fonterra Co-operative Group, Buckley Systems, Vista Entertainment, Greenshell New Zealand and Orion Health.

  • 16 Jul 2015 7:28 PM | Mike Hearn (Administrator)

    AUCKLAND, 16 July, 2015– The American Chamber of Commerce in New Zealand has today announced the finalists for the 2015 AmCham-DHL Express Success and Innovation Awards, held in conjunction with Hawaiian Airlines. The awards, now into their 16th year, celebrate the success and innovation of those New Zealand companies doing business with the USA.

     Mike Hearn, Executive Director for AmCham, says “2015 has seen another very strong group of entrants, covering a diverse range of products and services. While technology companies are again to the forefront, there are also strong entries from healthcare/medical equipment, fruit grading equipment, wine, building products, film, cars and engineered products.   

     “Despite the high dollar, we continue to see many New Zealand businesses engaging with the US market in both depth and breadth. In the last year, two-way trade between New Zealand and the USA hit a new high of $11.22 billion, an increase of 29.8%, and accounted for 11.2% per cent of New Zealand’s total earnings from overseas trade.” says Mr Hearn.

     DHL Express Country Manager and lead sponsor, Tim Baxter says "The NZ/US trade lane is highly valuable for both importers and exporters operating in New Zealand. It’s exciting to see organisations from a wide range of industries, both large and small, recognising this value. No doubt the competition will be tough this year, but ultimately all these organisations have achieved success in the US market through the right business strategies and focus."  

     The Awards & 50th Anniversary gala dinner are being held on Thursday 20th August in Auckland at the Pullman Hotel. AmCham is delighted to have the Prime Minister, the Rt Hon John Key, again attend the dinner to present the exporter awards, along with US Ambassador Mark Gilbert. As part of our celebrations we are inviting all Past Prime Ministers; US Ambassadors to NZ; NZ Ambassadors to the USA, AmCham Past Presidents and others who have played a significant role in our success over the last 50 years.      

     The finalists are:

    Importer of the Year

    • BMW New Zealand
    • Roads & Concrete t/a Top ½
    • Protempo Ltd

     

    Exporter of the Year to the USA $1 to $500,000

    • Career Engagement Group t/a Fuel 50
    • Stqry
    • Stretchsence
    • VMob

     

    Exporter of the Year to the USA $500,001 to $5m

    ·        Straker Translations

    ·        Volpara Solutions

    ·        Abel Software

    ·        BFM Global Ltd

    ·        Pukeko Pictures

    ·        Aranz Medical Ltd

    ·        McKay Ltd

     

    Exporter of the Year to the USA over $5m

    • Scott Technology
    • Compac Sorting
    • Vista Entertainment
    • JMP Engineering Ltd
    • Constellation Brands
    • Fisher & Paykel Healthcare

     

    Each of the above winners receive $1,000 of free shipping with DHL Express ($2,000 for the over $5m category) and 100,000 Hawaiian Airlines Miles

     Investor of the Year to or from the USA  

    • Bessemer Ventures for investment in Rocket Lab
    • Blue Elephant for investment in Harmoney
    • CRG for investment in AFT Pharmaceuticals
    • Ric Kayne

     

    The Eric & Kathy Hertz Award for Citizen Diplomacy

    • NZ Robotics Charitable Trust
    • Achilles International NZ
    • High Tech Youth Network
    • Piha Surf Life Saving Club

     One of the above will be chosen as the Supreme winner.  One other award will be presented on the night:  The AmCham Supporter of the Year

    In addition to AmCham, DHL Express and Hawaiian Airlines, the awards are supported by ASB Bank, Baldwins, Fonterra Co-operative, Prescient Marketing & Communications, The Pullman Hotel and media sponsor The Business.

     The awards will be presented at a black tie gala dinner at the Pullman Hotel Auckland on Thursday 20th August. For details and tickets see www.amcham.co.nz

     In addition to AmCham, DHL Express and Hawaiian Airlines, the awards are supported by ASB Bank, Baldwins, Fonterra Co-operative, Prescient Marketing & Communications, The Pullman Hotel and media sponsor The Business.

     Previous winners of the Supreme Award have included Zespri International, Peace Software, Airways Corporation, HumanWare, Tenon, Orion Health, Zeacom, SMI Group, Fonterra and Pratt & Whitney Air New Zealand Services t/a Christchurch Engine Centre, Buckley Systems, Greenshell New Zealand and Vista Entertainment.

     
  • 15 Jul 2015 10:28 AM | Mike Hearn (Administrator)

    Economic Development Minister Steven Joyce and Trade Minister Tim Groser today announced that New Zealand has finalised its accession to the World Trade Organisation’s Agreement on Government Procurement (GPA), and it will come into effect next month.

    New Zealand businesses will have guaranteed access to bid for an estimated US$1.7 trillion in annual overseas government contracts through joining the GPA, which creates new opportunities for Kiwi businesses to export more products and services to more destinations, Mr Joyce says.

    “Formal procedures in Geneva have now been completed which means that from mid-August, New Zealand companies will be able to do business freely across 43 WTO member countries, including the US, Canada, Japan and 28 countries of the EU.”

    The GPA covers the purchase of a broad range of goods and services that government agencies buy from the private sector, including construction, and will help achieve the Business Growth Agenda goal of increasing exports to 40% of GDP by 2025, Mr Joyce says.

    “Selling to international governments without having to set up offshore branches or other ‘work arounds’ is a key area of opportunity for New Zealand exporters. Governments worldwide are looking for the types of products and services that New Zealand offers.”

    New Zealand’s accession follows two years of negotiations. From next month, New Zealand exporters seeking to access the government procurement markets of the other GPA member countries will be able to compete on equal terms with their international counterparts, Mr Groser says.

    Member countries are not allowed to discriminate against businesses from another GPA member country in respect of government procurement opportunities covered by the agreement. They must also follow rules relating to competition and openness.

    “Joining will not have a big impact on New Zealand government agencies because they already conduct their procurement in line with the agreement’s fundamental principles.

    “We already follow the rules, but until now have not had the same opportunity for our New Zealand exporters. Joining up to the GPA will improve all access and reduce costs for exporters.

    “This is a significant step in opening up large overseas markets to our Kiwi suppliers.”

  • 02 Jul 2015 3:36 PM | Mike Hearn (Administrator)

    I would like to thank our two co-chairs, the Hon Simon Power, Chair of the NZ-US Council and Stu Van Soyoc, President of the US-based counterpart organisation for assuming joint responsibility for the Partnership Forum. I think it is a great idea for us to get together once a year with Government, media, business and other stakeholders to take a helicopter view of the relationship.

    The United States is still the indispensable global power – indeed, the United States defines the essence of hard power. And from our side of the Partnership, I think it is fair to say that from time to time New Zealand has also shown in international social, political and economic affairs, a capacity to be an ideas factory. Taken too far, as it regrettably sometimes is, this claim becomes gross self-deception. It appears this has been a problem for some time. One hundred years ago, a French political commentator, Andre Siegfried, wrote –

    “Many New Zealanders are honestly convinced that the attention of the whole world is concentrated upon them, waiting with curiosity and even with anxiety to see what they will say and do next.”

    But when the ideas are professionally, rather than breathlessly, articulated and have a wider currency than just ‘made-to-measure’ for New Zealand interests or views, yes, we have been able to marshal soft power effectively. And if ever there were a project in the economic sphere that exemplifies an effective partnership between US hard power and NZ soft power it is TPP, the Trans-Pacific Partnership. It is not by chance that New Zealand is the official Repository, or Administrator, of TPP.

    The first block was laid down by New Zealand proposing in 1998 to Singapore an FTA as a possible bridge to what we called P5, or Pacific Five. However, the central idea was not to create a bilateral deal just between two small and already open economies, but as a first step towards a wider, regional FTA that we called P5, or Pacific Five. Crucially, we identified the United States as its engine room representing North America with the other Members being from the Pacific, Asia and Latin America – in other words, the four geographical corners of the APEC footprint. If we could pull that off, we figured at the time, we would simply see where it went from there in the wider APEC context.

    There was no timetable or ‘road-map’ of the type beloved by generations of Geneva negotiators who invest such unwarranted faith in the false precision of such procedural devices. As the great 19th Century Prussian General Von Moltke famously said – ‘no battle plan survives the first encounter with the enemy’. A more effective strategy, I think, is to maintain a core idea and then improvise around it as the political facts on the ground, and therefore opportunities, change. Frankly, I don’t know any other way to negotiate in the real world.

    Like so many strategic trade initiatives, we had a few false starts and twists and turns – but the original strategic vision always remained intact. As always, this had to be sustained through shifts in the electoral cycle. Over the years in New Zealand, three Prime Ministers, several Ministers from different sides of the political fence and many NZ officials have contributed to this project and I do want to acknowledge the huge collective contribution of them all. Countries whose major political parties are incapable of forging a core shared idea on certain issues in Foreign Policy theatres like this are condemned to be marginalised.

    The project became supercharged only when President Obama decided in 2010 on his way to the APEC Leaders Meeting in Singapore to use P4, or Pacific Four, as the base of his and his then Secretary of State Hillary Clinton’s ‘Pivot to Asia’. P4 became P7 – Australia and others immediately wanted a seat around the table when the US sat down and put some chips on the table for the first time. It then became P9, got renamed TPP, or Trans-Pacific Partnership, and at Los Cabos in Mexico at the G20 Summit became a 12 country negotiation when Canada, Mexico and Japan entered TPP. We are now ready, ladies and gentlemen, to complete it.

    The US Cavalry Arrives

    But to complete TPP, we first had to wait, continuing briefly with 19th Century military metaphors, for the US cavalry to arrive in the form of TPA – or Trade Promotions Authority. And what a tense few weeks it has been, as we watched the most important of all Parliaments – the US Congress – do its business.

    I know it is an old US political joke, but as I watched the extraordinary ebb and flow of the process both in the Senate and the House I could not help but recall the saying that

    Making laws and making sausages are very similar. The public will generally consume the final result, but you wouldn’t want them to watch exactly how they are made’.

    Alternatively stated, democracy is a very messy process.

    I know many US political leaders, including leading Republican Congressional leaders, played a vital and extremely responsible role in getting this through. But I do want to put on the record our thanks to the indefatigable efforts of US Trade Representative Mike Froman, and the team he leads.

    We were never going to start the endgame of the TPP Negotiation without the US Congress providing the requisite authority to the Administration in the form of Trade Promotions Authority. The stakes of a successful outcome were high, not just for those of us who know that a liberal, well regulated trade and investment regime serves the interests of small countries like ours. The strategic stakes were also very high for the United States.

    I do not think it is an exaggeration to say that if the representatives of the United States people, namely, the Members of the 114th US Congress, had not backed the President’s Trade Strategy, not only would the US ‘pivot to Asia’ have been effectively shelved at least in the economic area for some years to come, but it would have meant the near certain failure of the other arm of US strategic trade policy across the Atlantic – TTIP, or the Trans-Atlantic Trade and Investment Partnership between the United States and Europe. Further, with the WTO teetering towards the WTO Ministerial Meeting in a few months’ time either with a very small result after thirteen years of negotiations or literally nothing to show for the effort, I am not sure what options the United States would have had to advance its agenda.

    Under that scenario, New Zealand, Australia and other close friends and collaborators of the United States would not have sat on their hands watching what was then going to happen inside the Beltway. No, we have had only too recent an illustration of what would have happened in the field of international development finance to know that would never have happened.

    Without going into the political entrails of the extraordinary developments around the Chinese led Asian Infrastructure Investment Bank, or AIIB, we would have gone ahead with our trade and investment agendas without the participation of the United States, at least for some years. Clearly, that would not have been our wish, but that is exactly what has happened in the case of the AIIB and it would have happened here. We have our own interests to protect and enhance and we take the world as it is, not as we would wish it to be.

    US and China Economic Leadership – Some Reflections on Trade and Climate Change

    It is perhaps appropriate to state our position on the very sensitive matter of US and Chinese leadership in the early 21st Century in international economic matters because it has become part of the TPP debate, including in China and the United States.

    First of all, and specifically with respect to TPP, we reject completely the proposition that TPP is some type of ‘China containment’ strategy. At least one Australian Trade Minister and I have said in public, neither Australia nor New Zealand would be part of TPP if it became a ‘China containment’ strategy. For years our model has been open regionalism.

    Indeed, we absolutely do not exclude the longer-term possibility of China becoming party to TPP in some later iteration of TPP or some later evolution of TPP into something we cannot quite envisage today. I have had many discussions of an informal nature with senior Chinese officials on TPP that lead me to the conclusion that while this is not a current possibility, it cannot be excluded.

    Further, New Zealand, Australia, Singapore and others are also involved in another mega-regional Trade Negotiation called RCEP, or Regional Comprehensive Economic Partnership Agreement. This is a negotiation involving 16 countries that currently includes China and not the United States. I leave for an RCEP Trade Ministers’ meeting in Kuala Lumpur in a couple of weeks’ time. It is not as mature as TPP but is making some progress.

    Finally, we see all these efforts as ever-increasing and broadly consistent concentric rings of trade and investment integration that point towards the ultimate vision that all APEC economies and their Leaders have accepted – an APEC-wide FTA. Whether we will ever quite get there or when, I have no idea. But this is the strategic vision unifying these various negotiations and bilateral FTAs of the type that all TPP partners have with non-TPP economies.

    I will not comment on broader political, military or strategic matters involving Beijing and Washington because it is not my responsibility to do so. But sticking within the theme of US-China leadership in the international economic arena, there is a very interesting counterpoint model in the field of Climate Change.

    First, while I have no time today to elaborate on this, members of this Forum would, I am sure, be interested to know that the partnership New Zealand has with the United States is at least as close on climate change as it has been on trade for decades. The NZ proposal on one of the most sensitive issues in the negotiations - the legal form of the proposed new Comprehensive Climate Change Agreement - is clearly the most realistic solution available for the United States, given certain political realities US negotiators have to take into account This has been acknowledged in so many words by my colleague, Todd Stern, the US Special Envoy on Climate Change. I should add quickly that it is also clearly consistent with Chinese political interests and I have had excellent discussions with Chinese Ministers and officials on exactly this point.

    But my reason for mentioning climate change is a broader political point and it is about US-China leadership on international economic issues. It is, in my view, very difficult to over-estimate the strategic significance of the bilateral US/China Agreement on Climate Change, announced jointly in Beijing last November by President Obama and President Xi.

    This will help enormously in a diplomatic and negotiating sense towards getting an international consensus – to put it bluntly, China is now politically invested in the success of Paris. It obviously also matters enormously in a material sense. After all, the United States and China are together responsible for more than one third of global emissions.

    In the ongoing debate over 21st Century global governance, where multilateralism seems so difficult to advance without the United States any longer playing the role of a single hegemonic power as it did so effectively after World War II, we have looked to forums such as the G7 for more collective political leadership. Then there was briefly the G8, which fell apart after the annexation of Crimea and consequential and ongoing repercussions in the Eastern Ukraine. For about a decade, we have looked to the G20 to provide leadership, since clearly the day has long since passed when developed countries alone can point the way forward. The essential problem is that the habits of shared responsibility for ‘the system’ are not ingrained.

    These groupings all no doubt have their place and will of course evolve, but for those of us outside the central corridors of power, we need operationally effective results, not just communiques, to point the way forward for the broader international community. And we see that in climate change, this is the world of the G2 – convergence on crucial matters between Washington and Beijing. We welcome it and in the early 21st Century I would say we need more of it.

    Before I conclude with some reflections on how we are going to close the deal on TPP, I want to go back to fundamentals: the case for open economic markets.

    The Benefits of Trade and Investment Integration

    At one level, I consider it is disturbing that the case even needs re-stating. But clearly it does. Consider the sound and fury surrounding TPP in various countries as carefully stage-managed leaks of supposed current TPP texts take place. Consider the torturous process of getting Trade Promotions Authority (TPA) and the difficulties the President had marshalling sufficient support within the US Democratic Party – not a new problem of course, as those of us who remember what happened to Fast Track Authority in the House of Representatives during the first term of President Clinton’s Presidency.

    First, the case for open trade policies starts with economic theory. Please don’t switch off – I do recall Keynes’ famous observation that:

    “Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back”

    To avoid unnecessary speculation, and since I am catching a plane this afternoon to go to Peru for the Pacific Alliance Summit, let me assure you that I cannot off-hand think of any ‘madmen in authority’, let alone ‘academic scribblers’ in either of our two countries working on the politics of trade. Thank heavens.

    The core intellectual idea underpinning trade liberalisation is the theory of comparative advantage, formulated almost 200 years ago. There have always been outlier economists who question it, or posit special conditions, under which it might not work; there always will be a few sceptics, as in any field or academic discipline. Similarly, one recent survey in the United States estimated that there are about 3% of highly trained and reputable climate change scientists who do not believe anthropogenic greenhouse gases are a leading cause of climate change, compared with 97% of climate change scientists who do.

    Back in the world of economics, certain sceptics of trade liberalisation, like the Cambridge University mid-20th Century Marxist economist, Joan Robinson, are formidable minds, not ‘academic scribblers’. But such thinkers are marginalised.

    All in all, the underlying theory of comparative advantage is generally considered the most widely shared foundation theory in economics. In one recent survey I read, it was described as “an unassailable intellectual cornerstone”. For those like me who were educated in economics in the 1960s and 1970s, the man who wrote the basic undergraduate text we all started with right around the world, Paul Samuelson, called the theory underlying liberal international trade -  “the only proposition in social science that is both true and non-trivial”.

    OK – you don’t like, or choose to reference, economic theory? You feel it would embarrass you in the pub to acknowledge any interest in theory? You would not pass the Tui Ad test? You are one of Keynes’ practical men or women? Have I got an empirical study for you!

    Well, actually I have a compilation of over 150 empirical studies analysed by experts from the OECD, WTO, UNCTAD, the World Bank and the ILO – in fact 10 international organisation in total produced the most comprehensive and collaborative study of the empirical evidence that I am aware of - and I have been following this issue for 40 years. It was published in 2012 and called - Policy Priorities for International Trade and Jobs’. Here are the key findings.

    ·         First, consider the evidence for developed countries. Of the 14 main OECD multi-country econometric studies undertaken since 2000, all 14 have concluded that trade plays an independent and positive role in raising incomes.

    ·         Second, the evidence for developing countries leads to exactly the same conclusion. Case studies reviewing the experience of the 12 most rapidly growing emerging economies over the past 60 years concluded that harnessing the power of the global economy was a central feature common to all and that there was what they called ‘overwhelming’ evidence that trade played an essential role in raising incomes. Sorry guys, the North Koreans got it wrong. The South Koreans got it right.

    The final concluding comment of these international experts is dripping with irony. Normally, international officials don’t do irony; it takes extreme frustration to drive experts to use ironic humour. Listen to their words:

    “Despite all the debate about whether openness [on trade] contributes to growth, if the issue were truly one warranting nothing but agnosticism, we should expect at least some of the estimates to be negative…The uniformly positive estimates suggest that the relevant terms of the debate by now should be about the size of the positive influence of openness on growth….rather than about whether increased levels of trade relative to GDP have a positive effect on productivity and growth”.

    I can of course understand vested interests who oppose trade agreements. If, say, your family owns an inefficient sugar processing plant in the wrong part of the United States and which survives only because of sugar subsidies and high protection, I get it. What you need is a long time to adjust to competition, sweetened by a good dose of adjustment assistance. You may even surprise yourself by what you can do to improve your competitive position over a long period of time – I could take you to dozens of examples in this country of industries and companies which vigorously contest our first liberalisation moves in the1980s, staring with the NZ wined industry which used to be deeply protectionist and for understandable reasons. But I am zeroing-in here on the anti-trade, anti-globalisation ideologues who are present around the globe. Even in Germany, a post-war bastion of the open trading system, they have become quite recently a growing element of the political debate on trade. This will complicate the TTIP negotiation.

    Here in New Zealand we have anti-trade activists who are relentlessly consistent: they have never supported a single Trade Agreement and they never will. They are politically irrelevant to my political party. However, they get an enormous amount of airplay and are not politically irrelevant to other important elements in our democracy. For reasons I explained earlier, I believe broad bipartisan support for open trade strategies is vital to avoid your country being marginalised.

    There is no point in asking them to explain how on earth New Zealand could have survived, let alone prospered, without CER, without the Uruguay Round, the China FTA, the network of FTAs that New Zealand has with ASEAN countries – they opposed even the Singapore/NZ FTA, the first building block of the DNA of TPP. To paraphrase a well-known quote of our Prime Minister, are we meant to earn our living just be selling to ourselves?

    There is no point in asking them to explain this, because this is not an evidence-based fight. This is about ideology and the role of markets. On a purely personal note, and going back to my political past in the late 1960s and on which I will not elaborate, I understand exactly how and why these people think like this. I recall wistfully an old political doctrinal statement ‘The final battle will be between the socialists and the ex-socialists’.

    If it were just these anti-trade activists, they could be safely ignored by everyone. But their modus operandi is to give currency to concerns about policies that middle New Zealand, which is anything but ideological, cares about – and then to exaggerate those concerns out of the park.

    Happily, those concerns of middle New Zealand are widely shared starting with me, my colleagues in Cabinet and Caucus and the Kiwi voters who elected us. And as I survey the likely landing zone for these issues, I am extremely confident that our negotiators, who are world class, have done an excellent job. We shall be able to defend our position.

    So, to put it bluntly, we are not going to sign up to poorly constructed ISDS provisions that ‘transfer control of the country’s sovereignty’ to foreign corporations. We are not going to sign up to agreements that undermine a central pillar of our Public Health system – the pharmaceutical purchasing agency called Pharmac, which is used to keep the cost of medicines very affordable for middle New Zealand. We are not going to sign up to agreements that stop this or future Governments putting well-designed environmental protections in place. We are not going to sign up to provisions on ISPs that make every mother in Lower Hutt worry that the TPP electronic police are going to fly in from Houston to cart their 16 year old son off to jail for file-sharing with his girlfriend.

    If and when we get TPP in place, extreme claims that the sky is going to fall in will be made, irrespective of a balanced and sober reading of the final agreed TPP texts. It will be ground hog day for Chicken Licken. I recall, for example, at the end of the Uruguay Round where I was our chief negotiator, absurd claims that the Uruguay Round TRIPs agreement would ‘destroy the Maori economy’, in spite of the fact that the vast bulk of Maori assets, today valued at $40 billion, are in the export sector with much to gain from the Uruguay Round.

    That exciting new dairy export company near Taupo called Miraka, the Maori name for milk, that combines significant Maori business assets, locally available renewable geothermal energy and overseas capital invested in it, simply would not exist without the Uruguay Round export subsidy disciplines that allowed our dairy industry to grow against grossly unfair competition, along with the more recent FTAs that created markets and created the interest of Asian investors in investing in New Zealand’s future alongside our own people.

    Closing the Deal

    Now that Congress has spoken, it is show time. I have learned never to be dogmatic about time-tables, but the scenario that I and my negotiators are working to is that we have to get the basic political deal done by the end of July, including finalising all the chapter texts, leaving only legal rectification by experts to be done thereafter.

    The deal is ripe for the picking politically, which does not mean it will be easy to reach up and pick nice ripe fruit without damage. I have been deeply involved in the endgame of some pretty significant international negotiations over the last few decades and sometimes it isn’t very pretty. If I told true stories of what I have seen – right up to and including fist fights and negotiators sobbing over the phone, I really don’t think people would believe me.

    So please remember this: nothing is ‘too big to fail’. Nor can I be 100% sure that all twelve countries will arrive on the right page at the same time. The one thing I can say with near certainty is that in the course of the endgame, something will come out of left field that we knew about but which no-one had seen before as a deal-breaker. Anyone involved in settling the last major political fight in the Uruguay Round, which was over audio-visuals, would have anticipated that that issue would be last deal-breaker that needed to be resolved. Even then, technical negotiators in services were still arguing with each other when the bell rang to stop.

    But I think we will get there – metaphorically, I have called it in some interviews a 7/10 probability. It is not going to be a perfect deal – there never will be a perfect deal because compromises are now required. From a New Zealand point of view, the assessment my team of negotiators, led by Dr David Walker, and I have made and conveyed to other Ministers including the Prime Minister is that there is potentially a landing zone for a good deal that will indeed shape the future of trade and investment integration in the Asia Pacific region and quite decisively.

    I would be much more positive in public than this, but for the current lack of clarity on a possible landing zone for our most important export – dairy. It is not that there is nothing on the table on dairy. Nor, let me assure the deep pessimists, do I believe there is any possibility of dairy simply being ‘excluded’ simply because it is too sensitive. That of course would take New Zealand right out of TPP. The issue for us is the quality of the deal on dairy and it is nowhere near there yet.

    That will change because it has to change. People have not been putting their real cards on the table until they knew they had to. And until we heard from the US Congress, they were never going to do that. It is going to be an interesting few weeks.

    Ladies and gentlemen, if the negotiators representing the 12 countries involved in TPP – almost 40% of global GDP – can pull this together, it will indeed be a big deal. Andrew Robb, my Australian counterpart, calls this ‘the biggest trade deal since the Uruguay Round’. I think he is right. And if we can do it, the TPP bus will not stop finally at the Tokyo station – Japan being among the last TPP entrants. TPP will indeed shape the future integration of the region and possibly strategic thinking elsewhere.

    The future for New Zealand is not to shut up shop, to be fearful of foreigners, foreign investment, even targeted migration and suspicious of all Trade Agreements – my word, it must be so depressing to be part of the anti-trade movement. We need to engage with the world. We should back ourselves. We have every reason to be optimistic about our place in the world in the first quarter of the 21st Century. Concluding a high quality TPP Agreement is part of that future.

  • 25 Jun 2015 3:32 PM | Mike Hearn (Administrator)

    WASHINGTON, D.C.-U.S. Chamber of Commerce President and CEO Thomas J. Donohue issued the following statement today regarding final passage of Trade Promotion Authority (TPA):

    "With the bipartisan approval of Trade Promotion Authority, the U.S. Congress has prioritized economic growth and job creation here at home. In doing so, our leaders in Washington proved they could tune out the populists and demagogues of the left and the right and take action on an important measure to put our economy back on track. 

    "The Obama administration and Republican and Democratic leaders in Congress deserve great credit for setting aside partisanship and working together to pass this bill. It should serve as a model for how important things can get done going forward. 

    "The business and agriculture community's near universal support played an important role in the passage of TPA. Members of Congress heard from thousands of small businesses, major exporters with operations across the nation, and firms from every sector-including manufacturers, services providers, and agriculture.? On behalf of these millions of workers, farmers, and entrepreneurs, we're pleased our voice was heard."

    The U.S. Chamber of Commerce is the world's largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

  • 24 Jun 2015 3:14 PM | Mike Hearn (Administrator)
    By Caitlin Sykes Small Business editor of the NZ Herald

    This week, a look at Kiwi small business owners making inroads into the US.

    Adam Bennett is NZTE's trade commissioner for the US West Coast.

    http://www.nzherald.co.nz/small-business-sme/news/article.cfm?c_id=85&objectid=11467963

  • 09 May 2015 9:22 AM | Mike Hearn (Administrator)

    To address the ongoing debate over international investment and investor-state dispute settlement (ISDS), the U.S. Chamber of Commerce has published a primer on the subject as well as a two-page version of the “13 Myths about ISDS” section that appears toward the close of the broader document.

    Cross-Border Investment - International Agreements and Dispute Settlement.pdf

    13 Myths about Investment Agreements and ISDS.pdf