Ministry Statements & Speeches:
E ngā mana, e ngā reo
Tēnā koutou katoa
Kia ora
I bring warm greetings from Aotearoa New Zealand.
It is a privilege to speak to you all this evening. Many years ago, in fact what now feels like a lifetime ago, I packed my bags and moved to the UK for what we here in New Zealand call our ‘OE’ or overseas experience (it’s fair to say we’re a fairly literal people!).
My OE took me to a fantastic role. I was a policy advisor in the Better Regulation Executive in the Cabinet Office of the UK Civil Service. Part of my job included interfacing with the CBI, IOD and FSB. It was a fantastic experience that taught me a huge amount and further reinforced my view that our most difficult long-term challenges are best faced together. So once again – thanks for having me.
Now I know that we have all been incredibly focused on the global pandemic that is Covid-19 for the past 20 months.
Doing all we can to protect our people and our industries amid enormous challenges and a great deal of uncertainty.
Zoom and Teams have firmly entered our collective lexicons as we all became little more than floating heads on screens. Like me now.
But we have united, we have adapted. COVID has forced us to do things differently. To carve our own paths and with that adaptation does come opportunity. The opportunity to not only do things differently – but better, as we all continue our recoveries.
I know we are still amid a pandemic, but it’s hard not to already see that we have learned some lessons from Covid.
Like how connected we all are. How interactive we all are. How no country in the world is immune to a challenge at a global scale, one that affects us all.
And there has been one challenge that unites us all, one we were facing before Covid and one which we will continue to face after Covid.
And that’s climate change.
Let me take this opportunity to acknowledge you, the leaders of business. Not just for how you have adapted throughout the pandemic, but for the way many you have seized on the opportunity to contribute to a greener and more sustainable recovery.
I know that striving to be cleaner and greener requires time and significant investment, and a long-term commitment to innovation, education and training.
And I know that, in many cases, New Zealand businesses have been working right alongside you in this endeavour – for instance supplying accounting software in the case of Xero – a company proudly founded in Wellington, our vibrant capital city.
As we look forward, the huge challenge – but also the great opportunity – ahead of all of us is to be stronger than when we entered the pandemic (to “Build Back Better” some might say), by moving towards a more prosperous, inclusive and sustainable future.
I want to thank Prime Minister Boris Johnson not only for hosting this important summit in Glasgow, but also for the UK government’s tireless work in driving forward an ambitious agenda.
Because the threat of climate change demands ambition – from each of us.
For this reason, here in New Zealand, we continue to take action.
As a Government, we are increasing our climate finance commitment to 1.3 billion New Zealand dollars as a contribution towards collective efforts.
This represents a quadrupling of the climate aid we provide to the countries most affected by the climate crisis. This includes in our own region – the Pacific – where the majority of the support will go.
At least half of this support will go towards adaptation, helping countries to protect lives, livelihoods and infrastructure from the ever-increasing effects of climate change.
We are also accelerating our efforts to reduce emissions. Limiting temperature rise to 1.5 degrees is both at the heart of our international efforts and our domestic legislation.
We are now delivering our detailed plan for how we will meet our emissions reduction targets, transition our economy, and ensure this transition is fair and equitable.
And just a few days ago, we were proud to become the first country in the world to pass a law that introduces mandatory climate-related reporting for the financial sector.
These requirements are aligned with the internationally recognised Task Force on Climate-related Financial Disclosures recommendations.
What gets measured gets managed, and there are trillions of dollars of undisclosed, unmeasured, and unmanaged climate-related financial risks around the world. We cannot address the climate crisis if investment is flowing in the opposite direction to where the world needs to go.
We commend the UK, Switzerland, Brazil, and others in making similar steps towards mandatory climate-related disclosure and encourage others to join us.
Because we are at our strongest when we act together.
New Zealand, as a champion of the World Trade Organisation, as Chair of APEC this year, and through our bilateral and plurilateral free trade agreements, is leading the charge to “trade back better” through the establishment of new rules and norms that support sustainable development.
UK-New Zealand FTA
And there is no better place to start than with New Zealand’s free trade agreement with the United Kingdom, one of our closest friends and partners.
Agreed in principle last month, it will significantly drive our economic recovery from Covid, and it has some very modern features.
It will include the most far reaching commitments New Zealand has ever made on trade and the environment, and is New Zealand’s first bilateral trade agreement to include specific articles on climate change and sustainable agriculture.
The deal includes agreement to take steps to eliminate harmful fossil fuel subsidies where they exist, and to support the transition to clean energy.
Beyond climate change, prohibitions have been agreed on subsidies that contribute to overfishing as well as on subsidies for those engaged in illegal, unreported and unregulated fishing.
And over 260 environmentally beneficial products, such as solar power panels and bicycles, will have tariffs eliminated – the largest list of environment goods ever agreed in a bilateral free trade agreement.
What is striking about this is that it wasn’t so long ago that trade, and the world trading system, were seen by many as bad for the environment.
But trade and sustainability are not mutually exclusive. More and more governments are realising that trade rules can support sustainability. And, as you know of course, businesses are seeing sustainability as an increasingly important part of not only profitability, but social licence and consumer choice.
Governments can’t achieve major change of this nature without the leadership and support of business. I know that many of you in this room are world leaders in driving sustainable change that results in greater prosperity.
And I am proud that innovative New Zealand businesses are working with UK businesses to reduce their environmental impact.
For example, Autex is a manufacturing company based in Auckland that uses recycled bottles to make interior acoustic insulation products. They have an impressive 99 per cent circular process. Autex supplies major blue chip companies in the UK and has a factory in Huddersfield with 24 British employees working for them.
Another Wellington-based tech company CoGo has expanded its partnership with NatWest and will integrate carbon footprint services directly into the UK bank’s mobile app.
Our FTA will support more of this important work.
But a key part of enabling business to “Build Back Better” is expanding market opportunities, particularly for those who have not traditionally benefited from free trade agreements.
The New Zealand – UK deal will open up better opportunities across the board. Better opportunities for small- and medium-sized businesses, better opportunities for enterprises led by women, and better opportunities for Māori businesses in New Zealand, a substantial growth sector in our economy.
For those in the United Kingdom, the FTA will create better opportunities to engage with a country that is highly networked into the most dynamic region in the world.
New Zealand, in per capita GDP terms, is in the top 10 percent of countries world-wide.
In absolute GDP terms, New Zealand is in the top 30 percent of countries despite our small population. There is wealth and purchasing power in the New Zealand economy.
We are number one in the world for our business operating environment and we rate highly for the quality of our public service, low level of corruption and transparency.
Strategic value, CPTPP and links to the Indo-Pacific
But the benefits of the free trade agreement between New Zealand and the UK lie not only in its trade and commercial dimensions, but also in its strategic value.
New Zealand warmly welcomes the United Kingdom’s focus on expanding links with the Indo-Pacific, where New Zealand plays a proactive and important role.
New Zealand was instrumental in the very first free trade agreement that linked Asia, the Pacific and the Americas coming into force back in 2006.
This so-called “P4” agreement paved the way for a much more ambitious agreement – that ultimately developed into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (the CPTPP).
The CPTPP sits at the heart of the fastest-growing region in the world.
New Zealand has always been clear that we see the CPTPP as a potential pathway towards the goal of a free trade area of the Asia-Pacific, and we have consistently been supportive of growing CPTPP to include those economies who are willing to meet the high standards of the Agreement.
Right now we – alongside the UK and other CPTPP members – are working through the process to consider the UK’s accession to this agreement. CPTPP would provide the UK with a gold-standard pathway into our dynamic region and an ongoing link to the expansion of free trade within the Indo-Pacific.
Broader commitment to trade and sustainability
I should add that our commitment to trade and sustainability, and our high ambition on climate and environmental goals, extends beyond our agreement with the UK – it is part of New Zealand’s contemporary trade agenda across the board.
In 2019, alongside other world leaders, I announced the launch of the ‘Agreement on Climate Change, Trade and Sustainability’ (ACCTS), an innovative trade agreement involving New Zealand, Costa Rica, Fiji, Iceland, Norway and Switzerland.
This New Zealand-led initiative demonstrates how trade policy and trade rules can drive climate action and advance sustainable development. Negotiations are now well advanced to liberalise environmental goods and services, develop best practice guidelines for eco-labelling, and disciplines to eliminate harmful fossil fuel subsidies.
The agreement will be open to other WTO Members who can meet the established standard.
As I mentioned earlier, New Zealand has also had the privilege of chairing APEC this year – a group of 21 economies in the Asia-Pacific that represent some 60 percent of global GDP.
In that role, New Zealand has worked hard this year with partners across our region (often at some fairly unusual hours of the day and night given the delights of virtual diplomacy!) to ensure that our region’s recovery from the COVID-19 pandemic is more sustainable. This includes of course in the area of climate change.
And in the WTO we are long-standing advocates for meaningful disciplines on fisheries subsidies, action on agricultural domestic support, and reform of fossil fuel subsidies. In a few short weeks we hope to celebrate progress in all these areas at the WTO Twelfth Ministerial Conference.
We are doing much of this crucial work in partnership with the UK. Through our joint efforts at the WTO, through the UK’s work as President of the G7 and COP26, and through New Zealand’s role as chair of APEC.
Conclusion
So to conclude, I do not for a moment underestimate the challenges we face. Nor the opportunities within our grasp.
I firmly believe that if governments and businesses across the globe work hand in hand, then we have the opportunity to ensure our recovery from the pandemic is a better one. A more sustainable one. A more inclusive one and, ultimately, a more prosperous one.
I wish you all the best for the next two weeks. Thank you for the opportunity to speak with you tonight, and I look forward to joining you in the United Kingdom in person hopefully in the near future.
Tēnā koutou, tēnā koutou, tēnā tātou katoa.