Alasdair Thompson: Asia united on need for free trade

Alasdair Thompson

A week after attending the Apec CEOs summit in Busan, Korea, my lasting impression is that every Asian leader who addressed us began their presentations with unequivocal support for business and free trade as the way to lift the living standards of their citizens.

Never in my life have I heard any of our prime ministers - the first I remember was Sir Sidney Holland - speak with such conviction and clarity in endorsing the importance of private-sector business.

Take the last six years in New Zealand. The most memorable thing the Government has done for business is to expand the bureaucracy of the Ministry of Economic Development to provide modest handouts to some qualifying businesses for developing a product or service. Research and development was also made 100 per cent expensible.

In the same period, business compliance costs have rocketed up as the Government re-regulated areas such as employment, OSH and holiday law. One could be forgiven for believing our Government's focus was upon social policy.

In contrast, Singapore's Prime Minister Lee Hsien Loong said his Government's priority was to ensure its population was equipped for business, especially in ICT and the knowledge-based economy, as they move beyond gathering and managing knowledge to creating it.

He said his Government's number one priority was to create an ethos that supported and nourished the private sector.

Its second priority was to bring out the best in their people by making knowledge available to its citizens. In Singapore, every student must be provided with skills suited to their aspirations and talents.

The third priority was to cut down on regulation - already 67 per cent of tax returns are filed online.

China's President Hu Jintao started his speech by saying it was all those engaged in business and trade who created the wealth that raised living standards.

Hu endorsed building a harmonious world, liberalising trade, removing trade barriers and supporting business; he was talking about private-sector business which now accounts for 60 per cent of China's business GDP.

Australia's Prime Minister John Howard praised the United States for its tremendous response in respect of agriculture for the WTO meeting in Hong Kong. He criticised, although not by name, the likes of France and Japan for clinging to their agricultural protectionism.

Peru's President Alejandro Toledo was adamant government should never be in business. He said business was the role of the private sector from which the state took its taxes for the sole purpose of reducing poverty through the provision of public education and health.

Chile's President Ricardo Lagos implored his colleagues to strengthen Doha for multilateral trade - 70 per cent of Chile's GNP comes from trade (imports/exports) and more than 70 per cent of that comes under the aegis of bilateral trade agreements.

President Roh Moo-Hyun of South Korea emphasised the need for an Apec free trade area too and a Busan roadmap to realise the WTO multilateral free trade objective, saying it was the main objective of the leaders' meeting. He said business was the basis of his country's success and his Government's focus was on ensuring its citizens skills to enhance innovation, science and technology. The second main focus of his Government was to make Korea the most business-friendly nation in Asia.

Can you imagine Helen Clark or even Don Brash saying: "My focus is to make New Zealand the most business-friendly place in the Pacific or the world?"

At the WTO meeting in Hong Kong this month, negotiators will come up with something they will hail as a successful outcome for world trade. But this time it will be a hollow victory because, despite the progress made in earlier years, the hard areas - agricultural and food products - hold the greatest benefit for New Zealand and many other countries.

Despite the commitment by the 21 Apec leaders at Busan to complete the Doha round of world trade negotiations next year, the statement was weaker and more vague than wanted by the US, Australia, Canada and New Zealand. President Vincente Fox of Mexico, and other leaders were even tougher.

Pointing the finger at Spain and France in particular, Fox said: "Now it is the turn for Europe to move."

On the same day, Christine Lagarde, France's Trade Minister, said blindly slashing agricultural tariffs was not the solution. The global agriculture market was dominated by a handful of large, mainly developed exporting countries such as New Zealand, Australia and the US and large emerging countries such as Brazil. Reducing tariffs would only serve to help those countries. The answer lay in granting concessions only to the poorest economies.

That is what we are up against.

* Alasdair Thompson is chief executive of the Employers & Manufacturers Association (Northern)