Groser Tim: General Debate 
Groser Tim: General Debate 
[Volume:665;Page:12754] 
Hon TIM GROSER (Minister of Trade) 
: 
 I move  
That the House take note of miscellaneous business 
. I will use this call as an opportunity to take a general look at the trade debate in New Zealand to see where we stand. If we look at this debate from the perspective of what the Prime Minister has just said in relation to productivity we see that it is absolutely clear that the only way through this is to increase our trade performance. Trade performance is linked intimately to productivity performance. It is a complicated issue about which comes first—higher productivity or exporting. 
We know from our long experience of excellence in agriculture that once we get locked into a situation where not the New Zealand domestic market but the world market is the market of great concern we are locked into a virtual circle of higher productivity increases constant innovation and world-class marketing. That means frankly a better future for New Zealand with better paid jobs which is why we have to move more and more space into that area in the years ahead. 
The Prime Minister has put this very simply in explaining the situation to New Zealanders: we will not get richer by selling to ourselves. We have taken then a whole suite of policy measures many of them going well beyond what people traditionally conceive of as the trade debate to try to move New Zealand over a period of the next 5 to 10 years into a better space. They are issues about regulatory reform and improving our infrastructure and they even involve cleaning up the tail end of our education system. In the knowledge economy we are all living in nowadays we cannot tolerate a situation where some 20 percent of New Zealanders are having 10 years of compulsory education and coming out functionally illiterate and innumerate. 
There is a whole suite of policies but given my responsibilities let me focus on the trade negotiations side. We have a situation that if we look at it at the biggest level of aggregation is truly fascinating. Basically as others have put it what is happening historically is that the world’s wealth is moving back fundamentally to where the most people in the world live. We are moving into a situation where I think that New Zealand is getting a real return from three decades of intensive attempts to try to integrate ourselves more into the Asian region and this is fundamentally an Asian story. There are the two giant superpowers emerging. China obviously is well ahead of the other India and it is very important that we are able to position ourselves with these two great countries in the most appropriate way. I acknowledge the contribution the previous Government has made to this debate. 
The basic reality is that about 70 percent of our exports are now in the Asia-Pacific region and Mr Speaker himself made a contribution to that earlier in his own career. I see now that the Australian market is part of that same triangle. Australia takes 23 percent of our exports which is about double the percentage of exports going to our second-largest export market China. I think the reason why Australia escaped the recession is fundamentally that that country too has been able to link into the Asian growth story perhaps in an even more effective way than us. But the fact is that we are able to exploit these opportunities now and we have an excellent framework for doing that. I think the chances are that we will make even more progress in the future than in the past. 
We now have an excellent trade relationship with South-east Asia and our exports to the ASEAN region are increasing at about the compound average rate of 11 percent per annum. The explosive growth in China is really exciting and a huge fillip for us. I think about some of the debates we might have had about domestic policy settings 15 to 20 years ago—for example the water debate in this country. A lot of people are quite rightly focusing on the need for us to use more efficiently the enormous amount of water that lands on New Zealand without actually contributing anything because it just runs straight off the land. If we asked anyone involved in New Zealand trade a decade ago whether it would make sense economically to invest a lot in better water infrastructure I think the answer would have been “Well probably not. We have enough trouble finding markets for our existing agriculture exports.” But the situation we face now is good it is getting better and it will involve many new opportunities and better paid jobs for all New Zealanders.