Prime Minister Jacinda Ardern. Photo / Zahn Trotter
2022 has been a big year for New Zealand’s free trade agenda. It’s also the year I rediscovered that the role of Prime Minister can sometimes be that of Cheerleader-in-Chief.
And that was the case earlier this year with Silver Fern Farms’ Net Carbon Zero Beef from the United States on The Late Show with Stephen Colbert, watched by over three million viewers. It seemed like a good opportunity to offer a cold bag of steak to the chat host. Little did I know that searches for the product would increase by 300 percent in the next day or so, highlighting the demand for our clean, green, safe, Kiwi product.
Our economy depends on trade, so as the world economy picked up after Covid, our intention was to take our exporters directly to market to continue the important work of maintaining pole position.
In the past 12 months I have led five successful trade missions, including to three of our top four markets – Australia, the United States and Japan – as well as the Southeast Asian markets of Singapore and Vietnam. We have signed two high-quality free trade agreements with the United Kingdom and the European Union, which will provide additional income of up to $4 billion a year. Once both agreements are in place, 76 percent of our trade will now be with our free trade agreement partners. Six years ago, that was less than 50 percent.
The UK’s Free Trade Agreement (FTA) was our fastest negotiation in over a decade, illustrating the sense of urgency we placed on new high-quality deals. The EU agreement gives our exporters access to consumers in 27 different countries.
Over the past 12 months, we have also strengthened our ties with the Indo-Pacific, a region of great economic and strategic value to New Zealand. In November, I announced the end of negotiations on the renewal of our FTA with ASEAN (Association of Southeast Asian Nations) and Australia. With more than $7 billion worth of exports to Asean last year, we now trade more in a week with the bloc than we did in a year in the early 1970s.
It was a record year, but it was also a five-year record.
Since taking office, we have achieved six new free trade agreements and renewals: Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Regional Comprehensive Economic Partnership (RCEP), China FTA Renewal, ASEAN-Australia-New. New Zealand Free Trade Area (AANZFTA) and UK-EU FTAs.
This has contributed to a 39 percent increase in our primary sector exports over the same period, and the latest forecast is for food and fiber export earnings to reach a record $55 million next year.
These are the fruits of our free trade work and we want to see even more of them, because it is clear that high export earnings provide resilience in a world that is going through difficult times.
The world “poly-crisis” of a global pandemic, Russia’s invasion of Ukraine, energy crises, climate change and the global recession present new challenges. As a trading nation, when our trading partners fall on hard times, it affects us.
But our work on trade, our super-charged approach to reconnecting with markets, has given us the strongest possible footing to weather these waves as they roll onto our shores.
We have low unemployment, one of the strongest books in the world and our unique exporter proposition to ensure we continue to get top dollar for what we sell to the world.
Underpinning this growth is our record of sustainability, which has made New Zealand’s exports more profitable than ever.
I will always be proud to tell the world that New Zealand is home to some of the world’s most sustainable food producers, and I will also continue to support our exporters to maintain their pole position of protecting that brand with environmental credibility.
My colleague Damien O’Connor spent countless hours helping to secure these free trade agreements. More than most, he has heard the deafening signal from the market that consumers want products produced with care for the environment and our climate. Fonterra and Nestle’s world’s first net zero carbon emissions dairy farm launched at Fieldays provides the proof these consumers are looking for.
Customers are looking for not only the best products in the world, but also the best for the world, which is what our leading producers can offer. That is our competitive advantage, and we will continue to work hard to maintain it, to stay ahead of the teams.
Sustainability is a proposition that extends to all our connecting work; returning tourists are aware of their travel footprint and we welcome them with an offer to care for our environment as we do; At the same time, we welcome big tech companies like Microsoft to set up their cloud businesses here, based on our renewable energy market. Sustainability provides the resilience and security a country like ours needs to face the coming global winds.
Reconnecting is of course more than transactional commerce. New Zealand has also been pro-trade as a force for good.
UK and EU FTAs promote labor rights, climate action, reform of environmentally damaging subsidies and women’s economic empowerment. They support small and medium-sized businesses and deliver meaningful results for Māori exporters.
New Zealand also remains a staunch supporter of the rules-based multilateral trading system, with World Trade Organization Director-General Okonjo-Iweala saying during a visit last month: “New Zealand is a small country, but it consistently punches above its weight. And it’s heard.” .
This year our trade missions showcased sustainable, high quality and innovative kiwifruit exports, letting the world know that New Zealand is open for business, tourism, education and trade. They have offered us greater economic resilience in the face of a turbulent world. That is why I hope that a business delegation will return to our largest market in China to personally renew and refresh connections, when the Covid provisions there make it possible.
I am optimistic that this will bring more opportunities to our exporters. I have also expressed my intention to continue negotiating with the Pacific Alliance – the free trade agreement made up of Mexico, Colombia, Peru and Chile.
Amid the challenges of a global economic headwind, we have a plan that is working – as demonstrated by our first place in the 2022 Sustainable Trade Index – and it’s a plan we will continue in 2023 for the benefit of all New Zealanders.
