Speech to New Zealand US Business Summit
Ringitia mai, waetia mai
Tuhi tuhia mai e
Kei te manawa tonu
te aroha me te whakapono
Can I please acknowledge our co-chairs today Fran O’Sullivan and Michael Barnett.
The Minister for Trade and Export Growth Damien O’Connor.
And the really excellent speakers and panellists who you will hear from today such as RocketLab’s Peter Beck and Air New Zealand’s Greg Foran.
Can I add my thanks to the Auckland Business Chamber, who made today possible, and to all of you as participants who have given us all the pleasure of being able to share some positive news and insights after what has been a pretty hard couple of years.
Today I come to you amid a six month exercise of accelerating New Zealand’s re-entry onto the world stage.
And I’m proud to do so. The role of “lead” ambassador as it were is one that’s easy to underestimate and yet it’s an enormous part of the job, especially in these complex times. As my recent trip demonstrated, it’s a role that takes many forms, from political engagements to trade promotion. Even when that entails an enthusiastic sales pitch to a room with two oversized kiwifruit gently swaying to traditional Japanese music.
But as Fran herself put it: getting international cut-through is what prime ministers must do.
Because what more important job is there, on the back of a proud national effort to successfully manage the Covid-19 pandemic, than to go to the world and remind people that
New Zealand is open for business.
Our pandemic strategy is now a matter of record. First elimination, then vaccination, then reconnection. It was a careful plan that always erred on the side of caution, which put lives and livelihoods first and delivered us the lowest deaths and hospitalisations in the OECD for two years, a larger economy than before Covid-19, and the lowest unemployment on record.
A demonstration that what’s good for the health of our people, is good for the health of our economy too.
And now, we shift gears.
Our border has reopened, in fact visa waiver countries including the United States re-enter from today, the movement of people is scaling up, and the exports that are the deep and solid roots of our economy, even throughout the pandemic which shut so many other doors, are growing further still, with many opportunities possible within this period of economic recovery from Covid-19.
So yes selling New Zealand to the world is a key part of my role as PM but that has been the case for successive Prime Ministers, albeit in different international environments. Some more complex than others.
It is now more than 80 years since the first New Zealand Labour government took office.
Michael Joseph Savage and his Cabinet immediately confronted a global emergency – not a pandemic but the Great Depression, a crisis affecting people across New Zealand and around the globe.
Another crisis erupted again a few years later with the rise of fascism and world war.
Those were times that forced New Zealanders – and political leaders of the day – to be clear about where they stood and, in doing so, who they stood with.
By 1945, looking ahead to a future beyond war, the same Labour government, now led by Peter Fraser, worked in the UN San Francisco conference and other forums to shape a new system of global governance, building on the hard lessons of the 1930s and 1940s, to allow nations to rebuild shattered economies under the shelter of an enduring peace.
The legacy of the Savage, Fraser and Nash governments has been on my mind. Because now is another of those times when we as leaders, and as a nation, are reminded of what we stand for and not just to take a stand but to act on those values.
And it is that that helps explain New Zealand’s bond with the United States, over many decades. We have held firmly to our independent foreign policy but also to our values. When we see a threat to the rules based order we rely on, we act. Distance is not our deciding factor, and nor it the size of our contribution.
In fact, looking back at where we have deployed our Defence Force over the years I think we can say that New Zealand has been one of a smallish number of countries that has not only taken a global view of our security interests – but also a global view of our responsibilities.
And acted accordingly. And that includes today.
It must be clear to all just what is at stake. Russia’s actions are a threat not just to the lives and freedoms of the people of Ukraine but also to the larger principles of sovereignty and self-determination that underpin nationhood.
We worked round the clock to set up a legal framework to enact sanctions against Russia.
We focused on direct support. New Zealand has so far committed assistance worth $30 million toward humanitarian, military, legal, and logistical needs. This includes a contribution to weapons and ammunition through funding direct to the UK. We have deployed 67 defence personnel to Europe to support these efforts.
And we will continue to stand by the people of Ukraine. After all, as the Ukranian Prime Minister said to me at the beginning of the invasion, there is no ‘big or small countries’ when it comes to this war – just those countries who react.
This is of course not the first occasion we have responded to a security crisis.
We have been prepared to incur costs and risks because to stand aside bears its own cost and risks, and because we have already taken a broad view of our interests and our responsibilities.
And because acting on your values, in good company, really matters.
On Ukraine we have been proud to work alongside democratic governments from Europe and our own region. The unity of response and collective determination to resist aggression could not be clearer. Here today let me specifically acknowledge the leadership shown by the Biden administration.
But we know that keeping the peace is not just a task for soldiers. And leadership is not just the prerogative of the great powers.
New Zealand’s first Labour Government knew that the post-war framework was not just about security. It was also about averting the conditions that drove the rise of fascism: the Great Depression, mass unemployment, and beggar-thy-neighbour policies that drove a collapse in world trade.
Post-war frameworks like the General Agreement on Tariffs and Trade, better known as the GATT, and the Bretton Woods system were, for those who conceived them, as much about keeping the peace as they were about rebuilding shattered economies.
When Walter Nash signed the Havana Charter – the document from which the GATT was drawn – he will have been aware what a bold departure from past trade policy it signalled.
Thanks to the vision and insight of President Roosevelt’s Secretary of State, Cordell Hull, the GATT embodied those esoteric principles of non-discrimination – notably “most favoured nation”– that have allowed global trade to flourish.
At moments when we have to deal with the political impulses driving new trade barriers we must remember that the core GATT and World Trade Organisation principles began as a practical response to the brutal experience of the 1930s and 1940s – and are as relevant as ever today.
I said before that leadership in world affairs is not just the prerogative of big countries. I believe New Zealand can take pride in the leadership it has shown over decades not only in the WTO but also in shaping the trade architecture of our own region.
As you know better than most, this has transformed the ability of New Zealand companies to trade in markets and sectors previously closed to us.
We can take pride in our record of leadership in a series of strategic trade initiatives: The New Zealand-Singapore Closer Economic Partnership. An unprecedented free trade agreement with China. Working with regional partners to conclude ASEAN’s highest standard FTA – the ASEAN Australia New Zealand agreement or AANZFTA. The visionary P4 agreement with Chile, Singapore, and Brunei, which became the foundation for an ambitious regional initiative, the trans-Pacific partnership, or TPP, which Phil Goff and his team conceived and launched with the United States. The successor agreement, CPTPP, is now setting new standards for trade and economic governance across the region – and attracting strong interest from other capitals.
And we are now breaking new ground with the next-generation trade agenda through open plurilateralism initiatives such as the Agreement on Climate Change, Trade, and Sustainability, and the Digital Economy Partnership Agreement.
I note that last year President Biden ended federal funding of subsidies for the fossil fuel industry. We would welcome US engagement on the objectives underpinning Agreement on Climate Change, Trade, and Sustainability. Trade is part of the solution for slashing greenhouse gas emissions.
When it comes to markets there is more to it than trade rules. One reason we put such an effort into APEC last year was the value businesses attach to good regulatory practice at and behind the border in the places of trade. I take great satisfaction from the success of our effort to ensure APEC got back on track after several hard years. It is now clearly, once again, one of the pillars of regional architecture. We have high hopes of the United States’ year in the chair in 2023.
In the meantime you will know that in terms of future trade opportunities it would be our preference to see the Unites States enter the CPTTP. It remains my hope that in time we will be able to resume that conversation.
We have our own commercial reasons for wanting that.
But the stakes are much higher. It remains really important for the United States to be present and engaged in the economic architecture of our region. Because resilience and stability in our region is not solely defined by defence or military arrangements, but relationships in many forms.
We have been having conversations on this with American counterparts. I think the basic point – the need for engagement – is fully registered. The real question is what form that engagement might take. And how it responds to the changes under way in the geopolitical and commercial environment.
You will be aware of one big development. In the period ahead I expect we will be in a position, along with a number of others, to confirm our participation in President Biden’s Indo-Pacific Economic Framework initiative.
IPEF is not a traditional trade negotiation but it does have a trade element. Digital trade is proposed as part of the agenda. It is important for New Zealand to be part of any conversation where future rules for digital trade are on the table. We have always been challenged by our distance from major markets and our small scale. Digital offers opportunities to shrink those disadvantages.
But it is also vital that we get the digital rules right, balancing openness and innovation with social values and security in a way that works for all New Zealanders. This means being inclusive as well as drawing on te ao Māori views on data and digital issues and maintaining a human-centric approach as we enter the era of artificial intelligence.
Another reason for our interest is the IPEF pillar covering clean energy, decarbonisation and infrastructure. The Indo-Pacific region accounts for over 50 percent of global carbon dioxide emissions. An initiative that brings together big emitters and has an explicit climate focus has real appeal to governments like ours that want to see collective action at scale and with a sense of urgency.
The IPEF initiative also has a dedicated pillar covering supply chain resilience. I don’t need to remind this audience how much this matters for business.
I want to reassure you that we have not lost sight of the multilateral trade agenda. We have welcomed the Biden administration’s renewed commitment to the WTO. US leadership will be indispensable as we work to revitalise the WTO and shape the Geneva process to respond to new realities and challenges. As we emerge from the pandemic trade needs to be one of the drivers of recovery. The WTO’s Ministerial Conference next month is an opportunity for collective action and our strong view is that the membership needs to grasp it.
Just as we had to act at different times in response to world war, to the pandemic, to the Great Depression – we must act now in our response to climate change, with urgency and decisiveness against a crisis that is impacting lives and economies now, and which will only escalate further, unless strong and joined up action is taken.
And in that effort the United States represents an incredibly important partner.
The prosperity, security and well-being of New Zealand and our Pacific neighbours depend on an effective response to climate change – limiting the temperature increase to 1.5 degrees and transitioning our economy. The science shows the need for deep and urgent cuts to emissions.
New Zealand is acting and we have high ambition.
We updated our Nationally Determined Contribution in 2021, requiring us to halve our emissions by 2030. This will not be easy, but inaction would cost us more dearly.
We will shortly release our Emission Reductions Plan and emissions reduction budgets out till 2035, which will spell out the steps every sector of our economy will need to take.
We will do our bit to meet the global commitment to deliver $100 billion a year in climate finance. We have committed $1.3 billion in climate finance over four years. At least 50 percent of this will go to the Pacific, where the impacts of climate change are felt acutely for coastal communities and low-lying islands. At least 50 percent of our funds will go to adaptation action.
We cooperate in a range of environmental and sustainability forums. And we are both focused on developing trade rules that support our climate change objectives.
Globally, carbon pricing and carbon markets will play a key role in our collective response.
Pricing emissions, removing environmentally harmful subsidies, requiring financial disclosure of climate risks – these moves will ensure climate is present in all investment decisions, not just those of climate champions. Developing and connecting high integrity carbon markets will increase our ability to connect capital with opportunities to reduce emissions on the ground. Ultimately these measures help finance to get where it needs to go (and away from where it must not) if we are to limit warming to 1.5 degrees. We have an interest in working with the US on carbon markets.
But equally important is taking practical steps to eliminate fossil fuel subsidies. We have been outspoken on this issue because continued fossil fuel subsidisation risks eroding any good work on carbon pricing by giving money back to the emitters.
Encouragingly, APEC agreed during New Zealand’s host year to develop a plan to pump the brakes on further fossil fuel subsidisation above the current level of $500 billion. But further urgent action is required, including at the WTO, to bring an end to these and other environmentally harmful subsidies once and for all. I’m incredibly pleased to have the Biden administration on side on this cause.
So to close I want to look quickly to the near term.
New Zealand is in demand. We have a strong brand. And we want to leverage those assets to support New Zealand Inc – including entrepreneurs and firms you will be hearing from today – to do great things in the United States and other markets.
I will be leading a business delegation to the US later in the month. In shaping a programme several themes have been top of mind.
One is to leverage the new ‘work from anywhere’ culture that has taken off over the past couple of years – one of the few good things to come from the pandemic. In practical terms it means distance is no longer the barrier it once was.
Another is our sustainability credentials. Having an electricity supply that is already over 84 percent renewable and really matters for some players in the market – as we are seeing with the big data centre investments now being announced for the Auckland region. We need to strengthen these credentials and the relationships they bring.
Then there is talent. The efforts of our movie makers and games developers have put us on the map. New Zealand’s creative sector has huge strength.
We have an equally compelling story to tell on tech and innovation – whether we are talking software or space. Now we need to keep telling it.
For reasons I have gone into today, over many decades we have built a reputation as a good citizen of the world. This matters in a future where commercial success is increasingly about attracting the best international talent.
We continue to offer a great environment for doing business. And a great place to work, live and play.
Most fundamentally, as we work to catch the eye of US firms and entrepreneurs who might want to partner or invest here, we offer a story built on values – the values that among other things drove our successful response to the pandemic.
So New Zealand is open for business. And I stand ready to do whatever I can to support
Thank you again for the opportunity to participate in this event at such an important moment.