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Clarky's Comment - March 2013, Opening Export Markets

If the popular media was your only source of information as to the importance of opening up export markets for New Zealand goods and services then you could be forgiven for thinking that such efforts had no impact on the living standards of ordinary New Zealanders, or were even damaging.

Even if you do understand the significance of ready access to foreign markets, you may not appreciate the amount of hard work and energy that politicians of all flavours and government officials put into opening up those markets, and with considerable success in some instances such as China. Work is currently in progress in pursuit of quality bilateral Free Trade Agreements with Korea, India, and Russia. Trans Pacific Partnership (TPP) is an evolving agreement between eleven member economies, aimed at bringing down barriers to trade and investment. New Zealand should be very proud about its involvement in TPP. Along with Brunei, Chile and Singapore we started the TPP movement, which has gained momentum to become the biggest game in town as far as world free trade deals go. Australia, Canada, Mexico, Peru, the United States, Vietnam and Malaysia have all subsequently joined. Japan, Thailand, the Philippines, South Korea and other members of APEC are all potential members.

The Regional Comprehensive Economic Partnership (RCEP) is just getting underway and is more modest in scope but potentially even bigger in impact than TPP because it includes all ASEAN countries, China, Japan, Korea as well as India, Australia and New Zealand and represents a pan-Asian vision of economic integration.

Asian economies, especially China, will become much more important to both New Zealand and Australian business and our living standards. To make the most of the opportunities that the growing middle class wealth in Asia will provide will take a mindset of partnerships, relationship building and cultural understanding. Our children would be well advised to learn Mandarin.

For forest products the opportunity is huge and trade agreements that remove tariffs and non-tariff barriers for sawn timber, panels and finished or semi-processed wood products, and facilitate Foreign Direct Investment into wood processing, can only help realise that opportunity.

For an interesting commentary on the importance of trade and investment refer to Stephen Jacobi's recent talk to the Hawke's Bay branch of the New Zealand Institute for International Affairs: www.nzibf.co.nz/index.asp?Pageid=2145900688

Detailed information of Trade and current agreements can be found at: www.tradeworks.org.nz