Brash Don: Urgent Debates — Collapse of World Trade Talks in Cancun Mexico 
Brash Don: Urgent Debates — Collapse of World Trade Talks in Cancun Mexico 
[Volume:611;Page:8686] 
Dr DON BRASH (NZ National) 
: 
 It would be impossible to overstate the importance of trade to this country as it is important to any small country. But it is particularly important for New Zealand with a population of only 4 million people and its heavy dependence on imports for a range of goods and services. We have a huge stake in a successful trading environment. Over the last 10 or 15 years the ratio of exports to gross domestic product (GDP) in New Zealand has increased markedly. That has to be a major reason that the growth in our standard of living measured by GDP per capita has roughly quadrupled over the last three or four decades. In the 1970s and 1980s growth in per capita incomes was only about a half of 1 percent. In the last decade growth in per capita incomes was more than 2 percent and the increase in the ratio of exports to GDP was a very important part of that. 
We are crucially dependent on the success of the multilateral trading system. There is no question at all that we therefore had more at stake with regard to the success of the World Trade Organization Doha round than arguably any other country in the world. I agree with Mr Dunne’s comments that Mr Donald is in that respect absolutely incorrect. There is no future in the kind of trading environment that the Greens espouse. We need to be part of a multilateral trading environment and if we are not New Zealand is in serious trouble. I agree with Mr Prebble’s comments that we cannot blame this Government for the failure of the Cancun meetings. That was clearly a problem that we did not contribute to. It would have been better if Mr Mike Moore had been there; I agree with other speakers about that. The current head of the World Trade Organization does not have the contribution to make that Mr Moore had. Again I do not blame the present Government for the fact that he is no longer there. 
The question is this: what is plan B? As far as I can see there is no plan B. The multilateral talks look as though they will fail. They are certainly not likely to succeed in the time framework envisaged at Doha and there is no plan B. The Government might have had in place a regional trading strategy—the APEC strategy perhaps—but there is no sign of that being likely to be successful either. 
We move back from multilateral to regional and now to bilateral trade agreements. What has happened there? Absolutely nothing. Reference has been made to the agreement with Singapore. I was present when the Singapore trade deal began. It was at a lunch hosted by my colleague Dr the Hon Lockwood Smith in the Beehive when National was in Government in 1999. George Yeo the Minister for Trade and Industry from Singapore was present for lunch and Lockwood Smith asked why New Zealand did not do a bilateral free-trade agreement with Singapore. Mr Yeo expressed surprise at that suggestion. He said there were not very many barriers to trade even then between New Zealand and Singapore. Lockwood Smith agreed. He said that we ought to be able to make an agreement work. Most of the work that led to that agreement was done while the previous National Government was still in office in 1999. So we have a bilateral deal between New Zealand and Singapore that is clearly of huge benefit to both countries. 
What else do we have? As far as I can tell there is absolutely nothing else at all. The Government began an agreement with Hong Kong but that has been in abeyance since it began and there is no sign at the moment of it coming to a satisfactory conclusion. The Government has begun an agreement that is to lead to a free-trade deal with Chile. As far as I can tell there is little prospect of that reaching a successful conclusion either. I turn to the United States. We were on the brink of doing a deal with the United States when the previous National Government was in office—the so-called P5 agreement involving Australia New Zealand Singapore Chile and the United States. The then Ambassador to the United States the Rt Hon Sir James Bolger advised when I was in the United States in 1999 that we were very very close to having a deal with the United States and the other countries of the P5 at that time. Alas 4 years later there is no sign at all of that agreement being feasible. 
As my colleague David Carter pointed out worse than that we have damaged our relationship with the United States so irrevocably that the prospect of a free-trade agreement between New Zealand and the United States while this Government is in office is almost exactly zero. I have in front of me a record of the Prime Minister’s comments on 24 March this year when she said: “It is probably true that at the leadership level the personality interests and inclinations of leaders play as big a part if not bigger than they ever have before. It is a bit hard for example to see an Al Gore presidency having delivered this” with reference to the United States’ attack on Iraq. Then just a week later in the  
Sunday Star-Times  
of 30 March 2003 she commented: “I don’t think that September 11 under a Gore presidency would have had this consequence for Iraq. But I think in this [Bush] administration there were forces that always wanted to go after Iraq and September 11 tipped the balance.” Do we wonder that our relationship with the United States has been severely damaged by this Government and the comments of this Prime Minister? The prospect of getting a trading relationship with the United States under this Government has been irrevocably damaged. We will depend upon the return to office of a National Government to have any prospect at all of doing a free-trade agreement with the United States. All of us in this House must seriously regret that fact. 
The bleak prospect for a free-trade agreement with the United States worries me for two different reasons. One reason is the loss of the direct trading benefits that would arise from having a free-trade agreement with the United States—the additional trade opportunities for our dairy exporters and other exporters. At the moment our cheese exports face a quota in the United States that limits them to less than 1 percent of the US cheese market. If we had a decent free-trade agreement with the United States we would have a huge boost to our economy and to our dairy industry in particular. As my colleague Mr Prebble pointed out we might well have cows grazing on Parliament grounds. The second reason I worry is that the dynamism of a closer link with the United States would extend far beyond the direct trade benefits. We could not continue down the track of the dopey policies we are currently following in terms of labour legislation the Resource Management Act the Land Transport Management Bill the Holidays Bill increased taxes and so on if we were linked in a close dynamic relationship with the US economy. 
We are losing those benefits by not having a close relationship with the US and that is a tragedy of enormous proportions. If we want to crank up our growth rate and improve our living standards we simply cannot afford to throw away the benefits that a closer relationship with the United States would give us. But sadly this Government has done so.