I have led five successful trade missions over the past 12 months, including to three of our top four markets — Australia, the United States and Japan — as well as to the Southeast Asian markets of Singapore and Vietnam. We have concluded two high-quality free trade agreements with the United Kingdom and the European Union that will deliver up to $4 billion in extra export revenue a year. Once both agreements are in place, 76 per cent of our trade will be to partners we now have a free trade agreement. Six years ago, this was less than 50 per cent.
The UK free trade agreement (FTA) was our fastest negotiation in over a decade, representing the sense of urgency we placed upon new, high-quality agreements. The EU agreement gives our exporters access to the consumers of 27 different countries.
Over the past 12 months, we have also strengthened our ties with the Indo-Pacific, a region of huge economic and strategic value to New Zealand. In November, I announced the substantive conclusion of negotiations for an upgrade to our FTA with ASEAN (Association of Southeast Asian Nations) and Australia. With over $7b of exports to Asean last year, we now trade more with the bloc in a week than we did in a year in the early 1970s.
It’s been a record year but it’s also been a record five years.
Since we took office, we have secured six new free trade agreements and upgrades — the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP), the China FTA upgrade, the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) upgrade, and the UK and EU FTAs.
That’s helped grow our primary sector exports by an enormous 39 per cent in the same period, with latest forecasts projecting food and fibre export revenue will grow to a record $55b in the year ahead.
These are the fruits of our free trade labour and we want to see even more — because it’s clear that greater export earnings provide resilience in a world that is going through difficult times.
The world’s “poly-crisis” of a global pandemic, Russia’s invasion of Ukraine, an energy crisis, climate change and a global recession presents new challenges. As a trading nation, when our trading partners go through tough times, that has an impact on us.
But our work on trade, our super-charged approach to reconnecting with markets, has given us the strongest possible footing to face those waves as they roll into our shores.
We have low unemployment, one of the strongest sets of books in the world, and the unique proposition of our exporters to ensure we continue fetching top dollar for what we sell to the world.
Underpinning this growth is our record on sustainability, which has made New Zealand’s exports more profitable than ever.
I will always proudly tell the world that New Zealand is home to some of the most sustainable food producers in the world — and I will also continue to support our exporters to back up that brand with environmental credibility to maintain their pole position.
My colleague Damien O’Connor spent countless hours helping to secure these free trade agreements. He has heard more than most the deafening market signal that consumers want products produced with care for the environment, and for our climate. Fonterra and Nestle’s world first net zero carbon emissions dairy farm launched at Fieldays provides the proof these consumers are looking for.
Customers are seeking not just the best products in the world, but those that are the best for the world — and that is exactly what our primary producers can offer. That is our competitive edge, and we will continue working hard to maintain it, to stay ahead of the pack.
Sustainability is a proposition that extends to all of our reconnecting work — our returning tourists are conscious of their travel footprints and we welcome them back with an offering to care for our environment the way we do; while at the same time welcoming the likes of big tech companies like Microsoft to set up cloud businesses here — based on our renewable energy market. Sustainability provides the resilience and security a country like ours needs to face impending global headwinds.
Reconnecting is of course about more than just transactional trade. New Zealand has also been an advocate of trade as a force for good.
Both the UK and EU FTAs promote labour rights, climate action, reform of environmentally harmful subsidies, and women’s economic empowerment. They support small and medium businesses and deliver meaningful outcomes for Māori exporters.
New Zealand also remains a staunch advocate for the rules-based multilateral trading system, with the World Trade Organisation Director General Dr Okonjo-Iweala saying during her visit last month that: “New Zealand is a small country, but it punches above its weight consistently and is listened to.”
Our trade missions this year have showcased sustainable, high-quality and innovative Kiwi exports, letting the world know that New Zealand is open for business, tourism, education and trade. They have provided us with greater economic resilience in the face of a turbulent world. This is why I hope to lead a business delegation back into our biggest market China to renew and refresh in-person connections when Covid provisions there make it possible.
I’m optimistic this will bring further opportunities for our exporters. I have also signalled our intention to continue to make progress in negotiating our free trade agreement with the Pacific Alliance — made up of Mexico, Colombia, Peru and Chile.
Amid the challenges of global economic headwinds, we have a plan that is working — as our number 1 placing in the 2022 Sustainable Trade Index has shown — and it’s a plan we will continue to pursue into 2023 for the benefit of every New Zealander.
