Urgent Debates — Collapse of World Trade Talks in Cancun, Mexico

I have received a letter from the Hon Richard Prebble seeking to debate under Standing Order 376 the collapse of the world trade talks in Cancun, Mexico. This is a particular case of recent occurrence involving ministerial responsibility, and given that the Government was a participant in the talks I consider that it requires the immediate attention of the House. I therefore accept the application, and call on the member to move that the House take note of a matter of urgent public importance.

I move, That the House take note of a matter of urgent public importance. This is a matter that we as a Parliament need to consider carefully. It has been suggested by the Government that there are few countries in the world that stood to gain more from a successful Doha round than New Zealand. The converse, of course, must also apply: there can be few countries in the world more affected by the fact that the Doha round has collapsed. The reason that I say that is that if members care to examine this Government’s trade policy—[Interruption]

💬 Mr SPEAKER: I am sorry to interrupt the honourable member. This is a serious debate, and it is to be heard in relative silence. If members have to go to a select committee, would they please do so quietly.

New Zealand’s trade policies effectively collapsed in Mexico, as well. The Prime Minister told us earlier this year, in a statement on 11 February, that the Government was seeking to achieve a number of things in trade policy this year. Every one of them has now failed. The Government said it would get a free-trade agreement with Chile, and was seeking one with Hong Kong. Those talks are going nowhere. We know that.

The Government then told us on 11 February—and it now seems amazing that the Government was thinking that—that it had stepped up our promotion of free-trade negotiations with the United States, following the positive reference to New Zealand in the US trade representative’s letter to Congress on his intentions to negotiate with Australia. In February, it was the Government’s No. 1 trade policy to get a free-trade agreement with the United States, but now, thanks to the extraordinary lack of diplomacy by our Prime Minister—and I remind members that she decided to issue a statement saying that if Vice-President Gore had won the last presidential election, then matters in Iraq would be very different—and as a result of her statements and others made by this Government, we find that New Zealand does not even appear in the 2003 trade policy agenda and the 2002 annual report of the President of the United States on the trade agreements programme, which I have in my hand. When we look through that list, we see that over 20 nations will get bilateral talks with the United States, and New Zealand is not on the list. It is my understanding—and I would like to hear from members on this—that the Government does not now believe that it will be able to get a free-trade agreement with the United States, so the second leg of the Government’s trade policies has collapsed.

We were then told by the Minister for Trade Negotiations that what the Government really wanted was the Doha round, and that that was where it would get better trading access for our agricultural exporters, in particular. Then we were hearing stories about how Mr Sutton was going to be in the “green room”—how he was going to be pushing hard for extra trade concessions for our forestry industry, and how confident he was. Well, now we find that the Doha round has collapsed. If one reads the statements in the media, it would appear that this round of the World Trade Organization talks might never succeed. I would like to hear from Ministers about that, but it is my understanding that the differences between the Third World nations and the United States put them as far apart as ever.

The question that New Zealand wants answered is what is the Government’s plan now? One of the most important tasks a New Zealand Government should be carrying out is promoting our trade interests. My charge is that this Labour Government has been the most unsuccessful Government in promoting our trade interests of any that I can ever remember. This Government has failed in every single thing it has put up. Surely it is time, as the New Zealand Herald states today in its editorial, for the New Zealand Government to decide to repair our relationships with Washington. I make these remarks, not just to the Government, but to both old parties. It is time we repaired those relationships, and the initiative must come from New Zealand. To the United States, New Zealand does not count as a trading nation. From that country’s point of view, the benefits it would get from a free-trade agreement with New Zealand are minor, but from New Zealand’s point of view, of course, they would be enormous.

I can still remember my geography teacher, Mr Mayhill, saying: “Boys, if we ever get a free-trade agreement with the United States, they’ll have cows in the grounds of Parliament.” That is the sort of degree of difference it would make—[Interruption] Well, we have them now, I suppose, with the “fart tax”—[Interruption]

💬 Madam DEPUTY SPEAKER: There is too much cross-talk.

I realise that what I am saying is a challenge to both parties. I believe that New Zealand ought to recognise that the breaches we have had with the United States have come from this country. We ought to realise that we could rejoin ANZUS, and that the advantages to us on defence grounds alone are reasons for rejoining ANZUS. We ought to acknowledge publicly as a Parliament that the United States has taken nuclear weapons off its ships, and then a free-trade agreement would be possible. But the Government should also be frank with this House. A free-trade agreement between Australia and the United States that excludes New Zealand has always been the ultimate nightmare, and that is the situation we now find ourselves in through failures of diplomacy, failures in statesmanship, and failures in leadership by this Labour Government.

I say to the House that we have no coherent trade policies at all. This Government that prides itself on its foreign affairs is prepared to send peacekeepers anywhere in the world, but where is it promoting the interests of this nation? The failure of our trade talks will affect the standard of living of every New Zealander. Does any member of the House doubt that? It appears not, and I do not think that even the Greens doubt that.

Where is the coherent policy of this Government? Where was its plan B for the failure of these Doha talks? The fact that those talks have failed in Mexico has not come as a great surprise. I will not blame the Government for the fact that the Doha talks have failed; I blame the Government for the fact that it does not have a plan B. If we look at the Cairns group of countries, what has happened—as the Minister says quite correctly—is that the developing nations who are part of the Cairns group have gone off and joined the G22 group. Apparently, we could join that group, but it is not really credible for New Zealand to claim that it is a developing country. It could claim that it is a “de-developing country”, but not a developing one, so we are left, with Australia, amongst the other six or seven Cairns trading nations.

What members should appreciate is that every one of the countries left in the Cairns group, apart from New Zealand, now has an agreement with the United States—either a bilateral free-trade agreement, or an agreement to negotiate one. There is only one nation in the Cairns group without such an agreement, and that is New Zealand. What sort of diplomacy did it take for New Zealand to be the only country that is not getting a free-trade agreement? If one looks at this list, one can see that all sorts of extraordinary countries, like Morocco, have managed to get an agreement with the United States. Our Prime Minister’s desire to get a one-liner on the 6 o’clock news has done that at the expense of the standard of living of every single New Zealander.

I just say this to the Government: I know that the Government was a bit surprised when the President of China announced that he was coming to New Zealand. The reason he is coming is because people from China think, as people often do, that New Zealand and Australia are close together—he is actually going to visit Australia, but he is coming here at Labour weekend.

💬 Darren Hughes: Does the member ever get sick of talking New Zealand down?

The member says I am talking New Zealand down. Here is a member of Parliament, elected at age 8, who is not prepared to do anything about the trade interests of New Zealand. He is prepared to go on campaigning on Cold War slogans at the expense of every one of his constituents’ standard of living. That member does not like the fact that he is supporting a Government that has done more to sabotage our trade interests than any other Government in the history of New Zealand. If he does not agree with that, I ask him which Government in New Zealand has been as unsuccessful as this one? Government members are shouting because they do not like that.

What proposal will the Government put to the Chinese when they come to New Zealand, or has it not been able to get agreement from the Green Party or the United Future party on a coherent trade policy? The duty of a New Zealand Government representing a trading nation in a global economy is to put forward coherent, successful trade policies. We are entitled to ask the Government what those coherent and successful policies are. When will we see a free-trade agreement with Chile? What date will that be? Why does the Government believe it will be able to do anything in APEC? It has not managed to promote those talks one iota in the last 4 years.

I tell the House that New Zealand has never been more isolated, and has never had fewer real friends. We have never been in a more perilous position with regard to our trade than the one we are in now, thanks to the Minister of Customs and Helen Clark. Helen Clark should be giving some real leadership to this nation. She should say that it is about time that New Zealand settled its differences with the United States, and that we will put New Zealand’s interests first, rather than her deciding to get some sort of support at cocktail parties with her socialist friends in Europe.

What we want from this Government is coherent, sensible trade policies, so that the interests of our farmers and forestry-owners can be promoted and the standard of living of every New Zealander lifted. That is what this House demands. I will sit down now, but I invite the Prime Minister to put forward a coherent plan as to how this country will promote its trade interests.

I am happy to accept the member’s invitation. Hope springs eternal. When I saw that the member had put out a press statement stating that he wished to have an urgent debate to decide what stance the Government should take after the collapse of the world trade talks in Cancun, firstly, I thought that undoubtedly he had beaten the National Party to the post with the letter, and that proved to be true, but, secondly, hope sprang eternal because I thought that the member might have some serious reflections to offer on the issues at Cancun, which he has not offered to date. I hope the leader of United Future will come back to the House, because he was actually there and I think might have some quite interesting things to say about what did happen at Cancun.

In respect of Richard Prebble, all I will say is that it is amazing that 146 countries were participating in the World Trade Organization meeting at Cancun, 30 were in the green room, yet it all seems to be Jim Sutton’s fault! I do not quite follow the logic. However, I can say that I did speak at great length with Jim Sutton yesterday, at about lunchtime, after he had come out of the failed meeting—and it was a failed meeting, and we should all speak very frankly about that and the implications for the trade round—and after he had observed the press conferences and spoken to the media himself. I congratulate the Minister, Peter Dunne, and all the members of the New Zealand delegation on the effort they put in. That delegation included representatives of Federated Farmers, the business community, and the Council of Trade Unions; the Hon Peter Dunne, as I have mentioned; and New Zealand officials. They worked long and hard and are disappointed with the results, as, I would think, is just about everybody who was at Cancun, except for the wreckers—unfortunately, at least one went from our country—the ones who have refused to see any benefit in a successful trade round. They do not appear to be interested in the fact that the Uruguay round probably delivered benefits of about a billion dollars a year to the New Zealand economy. “What’s a billion between friends?” seems to be the attitude of Miss Kelsey and co.

The Minister told me that there were a lot of positives at Cancun. First, there did appear to be genuine progress on agriculture. We have not yet heard a lot of the detail of what went on the table in the green room, but I recall, when I was in Europe earlier this year, getting the clear impression that the European Union was going to be able to move its position. The European Union Trade Commissioner and the Agriculture Commissioner eventually did deliver significant progress on change to the Common Agricultural Policy. That enabled them then to go to Cancun to make some real offers. My understanding is that the real offers they made still lie on the table to be picked up at what I hope will be future meetings in this World Trade Organization round. So that is a positive.

The second positive from New Zealand’s point of view was that significant progress was made on issues around fishing. We have been crusading against subsidised fishing, because subsidised fishing has led to the predation of the world’s precious fish stocks. The European Union indicated considerable movement on that. That is positive. That still lies on the table.

So it was not over key issues of interest to us that the talks failed; the talks failed over what have been called the Singapore issues—issues, I understand, first raised by the European Union at a Singapore meeting some years ago, then also picked up and supported by countries like Japan and Korea. That basket of issues covers investment, competition, trade facilitation, and procurement. It appears to have been put up for the negotiations on the basis that if the wealthy countries are to give something in terms of access to their agricultural markets, then they should get something in return. In return they want liberalised investment rules and other progress, from their point of view, in the areas I have mentioned. That was where the talks came unstuck this week. I am told that, eventually, the European Union pulled investment and competition off the table. At that point, in the view of our Minister, officials, and delegation, it should have been possible to move to a deal. But there did not seem to be the negotiating flexibility from some in the developing world to talk around the two remaining issues of trade facilitation and trade procurement.

I would say that from New Zealand’s point of view those are worthwhile issues. For example, one of them gets to the heart of open and transparent procurement policies for Governments. It gets at the heart of corruption and good governance issues, and those are things that should be on the table for discussion if we are talking fair-trade rules. It is the way of the world that if the wealthy countries are to open up their agriculture markets, then they are going to want some quid pro quo, and the least they could ask for is something in those areas. However, I understand that there was not the flexibility among the smaller and lesser-developed countries to move on that, and that is very, very unfortunate.

Our Minister also reports that he thinks the emergence of the G22 group was a positive. The major developing countries got together to put a coherent case. I think that if it had been left to them, they probably could have concluded some sort of deal with the more affluent countries. I might say, for the United States, that it was not pushing hard on the investment and competition issues; those were not its core issues, and it had already gone a considerable way to creating a good context for these talks by the movement it had made on the HIV Trade-related Aspects of Intellectual Property Rights issue some weeks ago, in Geneva. So I think the United States did its best to contribute to a positive meeting in Cancun.

It is unfortunate that the talks concluded when they did. The crunch issues came at a point where the meeting was due to end. The chairman closed it down. One then has to ask where it all goes from there, because the next formal ministerial meeting of the World Trade Organization is not scheduled until December next year, in Hong Kong. This round was due to finish on 1 January 2005, so a meeting in December next year cannot deliver unless there is a lot of other meetings before that. It may well be that it is simply inevitable now that the round will be extended. It should be remembered that the Uruguay round took many years to be concluded. I am told that the key officials will have a significant meeting again in December, and that it is possible there may be a mid-year ministerial meeting next year. There is also bound to be a series of mini - ministerial meetings.

But I think, after what has happened, everyone needs to go back to his or her capital and reflect on why the talks fell over. I think that, from the World Trade Organization’s point of view, there needs to be much more proactive diplomacy, out bridging and brokering the issues. I can say of our former colleague Mike Moore that no one was better than him at bringing people together to crunch through key issues. I think that made an enormous difference at the Doha meeting. I think the message now from all interested and concerned countries to Dr Supachai is for him to get out on the road, endeavour to bridge the gap, and see where the flexibility is. It really is not good enough for some countries to go to the meeting at Cancun, then say at the final analysis that they cannot move from their view that trade procurement and facilitation cannot be discussed. It is just too inflexible a position. We will never get a multilateral round if that is the way it is going to be.

As I have said, the Uruguay round delivered significant benefits for New Zealand, but it did not come easily. I think that round ran over about 9 years. It had a critical ministerial meeting in Brussels in 1990, which everyone had high hopes for, and that one fell over just like this one fell over. But that does not mean the end of a round.

I think that from the point of view of a small country—which New Zealand is—the most gains we can make are always through multilateral trade negotiations. That is why, under any Government in New Zealand, the multilateral round will always be the highest trade priority. I should say that this is an area where there has been considerable bipartisanship across both sides of the House. I would be concerned if the ACT leader’s speech today signals that that kind of bipartisanship is off the agenda, because I think one of the strengths of the New Zealand position has been that, whether it is a Labour-led or National-led Government, there is a very strong commitment to the multilateral round.

💬 Hon Richard Prebble: What a silly speech! Why not answer the question? Where is the Government’s trade policy?

The member wants to know about the Government’s trade policy. It starts with stressing the importance of multilateralism and trade. I know that the leader of ACT does not seem to like multilateralism, but I thought even he might have made an exception for trade. Multilateralism at the level of the World Trade Organization has been the paramount objective for us, and continues to be. We will work to make this round a success, because that is in the interests of the whole world community.

We will also continue to work within APEC on the regional trade goals. I think the failure of the Cancun talks actually makes the APEC meeting a pretty critical one, because countries will now go back to meet in their regional economic groupings—whether the European Union, APEC, the African Union, or whatever—and we need to think regionally about what messages and pressures we can send to the World Trade Organization from the APEC leaders’ summit coming up in October, in Bangkok.

We have also, at the regional level, continued to pursue the work that the previous Government began on the AFTA/CER link. Mr Sutton has been at a meeting about that only recently. Bill Birch did good work on that, and continued to do it under our Government. We continue to work. We did conclude a far-reaching closer economic partnership with Singapore, and we are now endeavouring to link that up with Chile because of the strategic advantages of having a trans-Pacific trade agreement. We have launched a study on negotiations with Mexico and also with Thailand. New Zealand is showing, in many ways, that it is interested in opening up trade at all three levels—the multilateral, the regional, and the bilateral.

I come to the issues that the member raised about the United States. I want to say to him just this. He referred to the two old parties. The reality is that for 19 years Governments from both sides of the House have supported a nuclear-free New Zealand. One of the great ironies of this House is that some of us remember when a nuclear-free bill, promoted by the then member for Auckland Central, now the leader of ACT, brought the Muldoon Government to its knees because Marilyn Waring wanted to cross the floor and vote for it. For 19 years that policy has held sway in New Zealand. It has become a central feature of New Zealand foreign policy and, many would say, a central part of the New Zealand identity—that we are proud to be nuclear-free. Our friends in the United States understand the importance of that to us. I believe that we also understand that they consider it to be unfinished business, but for 19 years we have been able to put that issue aside, and I say we should continue to put it aside.

Our Government will look for opportunities—and there are many—to work with the United States. No country could have been stronger in its support than what this small country has done on terrorism: members of the SAS putting their lives on the line; frigates in the Gulf of Oman, and Orions there now; a Hercules in Kyrgyzstan; a provincial reconstruction team going to a province of Afghanistan; and engineers now going to Iraq. These are substantial contributions for a small country, and they are valued by the United Sates. We know that as a result of policies previously advocated by the then member for Auckland Central, this country took a path on the nuclear-free issue that led to the ANZUS alliance being non-operational for us. What I say, without fear of contradiction, is that the fact that we are not operational in ANZUS has not stopped us from doing the right thing to help our friends, and we will keep doing that.

I say that we do have a friend in Ambassador Zoellick, who has looked to make room for this country at some point to come into a list for negotiation. This Government—this country—has always wished the Australians well in their negotiations, because we believe that they do open up a path for New Zealand. I point out that when Ambassador Zoellick sent the letter to Congress about Australia going on the list, he specifically noted the links between the economies of Australia and New Zealand, and hence the importance that New Zealand paid to those negotiations. We will keep working at that.

I invite the Opposition to be supportive of the New Zealand national stance and not to undermine it. In my view, there is nothing more treacherous than poor-mouthing one’s country off shore to its material disadvantage. We know that we have gone the extra mile to be a friend to the US at a time of need. We know that is appreciated, and we will keep working for a trade relationship that reflects two things: first, the overall very strong, historic friendship between this country and the United States of America; and, secondly, the fact that we are strong allies on trade. No one has worked more closely with Trade Representative Zoellick than our Minister, or with that administration than our Government, and I am proud of that.

That speech exemplified the problem. The ACT leader asked the question “What is the Government’s trade policy?”, and the question was not answered. For all the bipartisan support for trade, the end result of all the learned multilateralism, all the head-spinning, refined foreign policy, is a big fat zero. Nothing has actually happened.

Bipartisan support is always there because trade is so important to New Zealand. I stand today not just as the leader of the National Party but representing one of New Zealand’s most trade-oriented electorates—the fishermen, the farmers, the foresters, and the support industries that all go with that export trade. We know how important it is for New Zealand. If we are ever going to close the economic gap with Australia, which is my ambition, strong growth is needed in exports, year on year, of something like 9 or 10 percent. So it is incumbent on every New Zealand Government to work as hard as it can for trade.

But I cannot help feeling that we have been somewhat misled domestically about the Government’s progress on trade. One free-trade agreement has been signed since the 2002 election. That was the Singapore free-trade agreement, which was negotiated by Lockwood Smith and Jenny Shipley, and signed by the new Government.

💬 Rod Donald: What a disaster.

The Greens say it was a disaster. That is it. Nothing else has happened. Is there anything in the drawer? That is what comes out of the events of today. There is nothing in the drawer, either. There is no trade agreement that has made any progress, there is no little revelation around the corner from the US, and now there is no hope of a quick resolution of the Doha round.

I just want to talk briefly about those events. I know that the Minister for Trade Negotiations has spent an enormous amount of time trying to bring this Doha round forward. I believe that if Mike Moore were still in the chair, much more progress would have been made because he was an active lobbyist. He did know how to work with the developing countries. He could create an argument that a whole range of interests could sign up to. Unfortunately, that has not happened.

I remain relentlessly optimistic. Whatever happened in Cancun, the Doha round needs to get back on its feet, because it is in our interests that it does so. The Uruguay round did get back on its feet. I do not think resolving this round is going to be anything like as simple, because so many developing countries are exerting a much more assertive influence in the World Trade Organization.

It is exactly that complexity that we should be wary of. The Prime Minister loves it. She is in her element, understanding all the nuances and subtleties of what went on and why. But the fact is it is going to take an enormous effort to get the World Trade Organization round up and going again, because the politics of it are now so enormously complicated. That is the limit of being totally wedded to multilateralism. If we listen to the Prime Minister, we find New Zealand’s economic fortunes are now bound to the World Trade Organization and getting 149 countries to agree, when, by any measure, that is getting a whole lot harder. We are, according to the Government’s policy, virtually helpless. If we believe that that is the top priority, there is almost nothing we can do about it except carry on, as Helen Clark does, and function as a well-informed and articulate commentator. We can watch it all go past, while the prospects for our primary and export industries fade away.

What is the alternative to multilateralism? Well, there is not any. Let us not be fooled. Through the 4 years of this Government we have had an endless number of syrupy statements that are meant to leave the public with the impression that our relationship with Australia is very good, that our relationship with the US is terrific, and that that means we are going to get a free-trade agreement some time. Well, I can say to the member what I did not say when I was out of the country. I spent a week going around Washington. While I was there I was asked what I thought the prospects of a free-trade agreement were. I was very measured in my response because I do not believe we should bag our country when we are out of the country. But I can tell members that there is no show of a free-trade agreement. There will not be a free-trade agreement with the US. It does not matter whether Mr Zoellick is a nice man. They are all nice people. They are all very interested in, and friendly with, New Zealand. It is just that we are completely irrelevant to their strategic considerations, and they are not going to waste 5 minutes on negotiating a free-trade agreement with us.

Let us move to Australia. The single-biggest foreign policy failure of this Government was to let Australia go to the table to negotiate with the US without New Zealand. We could have had a CER/NAFTA agreement, but the relationship between New Zealand and Australia did not allow that to happen. New Zealand, for all the attention it has paid to that relationship over the years, let it slip from its grasp. For all the Prime Minister’s alleged brilliance in this area, in fact it has turned to ashes. We are not a part of that negotiation, it is not a path for New Zealand to a free-trade agreement, and the US is not interested. Actually, nor is anyone else. China? I heard that when, surprisingly, the Government did find that the Premier of China was coming, there was mention of a free-trade agreement. Maybe we should start doing that with China. Well, that is about—

💬 Simon Power: The Chinese-Franco-German axis.

Yes, that is right; what about the rest of them? There is nothing on the trade horizon. That is the awful message I have to take back to the exporters and primary producers of New Zealand. The failure of the Doha round at this point has exposed the Government’s failure in every other respect. I do not blame it for the problems at Cancun. Why would we? I am sure Jim Sutton has put in every effort that he could; so have the trade officials. I am sure the Prime Minister has put in every effort that she could. But when we do not have success in the multilateral forum, we have nothing else, and that is where Labour has gone wrong. It must cover the strong possibility that the Doha round takes a very long time, and does not come out with the result that suits our interests.

I say to the Prime Minister that bipartisan support for the New Zealand Government’s effort on trade is contingent on her sticking with our national interests. That is the top priority, not multilateralism. That is not what we are here for. We are not here to support multilateral institutions first and foremost; we are here to secure trade advantages for our exporters and producers. That is what serves our national interests. If the multilateral institution does not serve our national interests, the Government has an obligation to pursue the bilateral opportunities that other countries are pursuing, such as Australia, which has done so quite vigorously. That is not to say there should be less effort on multilateralism; it is simply to acknowledge that it may well fail, and the result may not serve our interests.

I invite the next Government speaker to reassure us in that respect. New Zealand’s trade negotiations are not one long job application for Helen Clark to the United Nations. That is why she says multilateralism is the top priority—because for her it is. But for New Zealand the top priority is our national interests. So I am looking for that reassurance—[Interruption] I tell Helen Clark not to talk here about the polling on behalf of the Labour Party. I am looking for reassurance from this Government that it is pursuing our national interests and will do so without fear or favour. [Interruption] That reassurance has not been given. I never heard it in the Prime Minister’s speech. All I heard was dedication to the multilateral institutions, which have merit but are dreadfully complicated for us to negotiate. Given that New Zealand as a small, open economy, one of the most open in the world, achieving trade gains must be a top priority for the Government, and it has achieved none. What could have been a worse result, after 4 years in Government, than what we have? We have nothing—no trade agreements, and none of the relationships we need to bring about critical trade agreements.

We have heard a speech from the Prime Minister today that was full of excuses and nothing else. The leader of the ACT party, Richard Prebble, asked the Prime Minister to give us some indication of the Labour Party’s trade policy. I still do not know what the Labour Party’s trade policy is. I am sure no one in this House knows what the Labour Party’s trade policy is. I would be interested to hear from any Labour member, even by way of interjection, just what the Labour Party’s trade policy is. What did the Prime Minister say during her speech that gave us any indication that she knew either what trade was or what policy was, and that she had the ability to put them both together and tell us about them? As has been said already in this debate, this Labour Party has no idea on trade. The only thing we can say about the Prime Minister’s speech is that she is just carrying on from where everybody carried on before. She has added nothing new at all. Now it has all ground to a halt.

New Zealand First is delighted to be taking part in this debate and we thank the Hon Richard Prebble for his letter to the Speaker. The letter makes it clear that the Government’s whole trade policy has now collapsed, and makes the point that New Zealand alone amongst the Cairns group is either not a member of the G22 group of developing countries or does not have a prospective bilateral deal with the USA. I would have expected the Prime Minister to give us something more certain about just what was happening.

Maybe the answer about the G22 group is in the press release put out by Catherine Bell on behalf of the Minister for Trade Negotiations. May I say, from the point of view of the New Zealand First spokesperson on trade, that I do appreciate all the information I get from the office of the Minister for Trade Negotiations. His office is very diligent in making sure that I am on its mailing list. But from the statement from Catherine Bell of Monday, 15 September, and in the context of the G22 group, it seems that there is now a G21, not a G22, and that that is because New Zealand is no longer a member of it. The Minister’s own press statement says that New Zealand worked extensively with all participants of the World Trade Organization meeting, especially with the United States, the European Union, the Cairns group, and the G21. So I take it there is no longer a G22; there is a G21—New Zealand is not part of it anymore. The Cairns group excludes us. So is there some admission now of the abject failure of this Labour Government when it comes to trade?

💬 Hon Richard Prebble: More and more isolated.

Yes, we are more and more isolated. Even the Minister says, in the press statement he has put out, that we are no longer part of the G22.

The Prime Minister may not even have read the Hon Richard Prebble’s letter, but it is an interesting letter that deserved a reply. One can only assume that, as the Prime Minister has no idea on the subject whatsoever, she failed and was totally unable to answer it. Her speech was just excuse after excuse. As the previous speaker said, it was a nice commentary, the sort of thing that one might read in a column in the Independent or perhaps the National Business Review, but not the sort of thing that the people of New Zealand want.

We are probably the greatest trading nation in the world per capita. We depend almost entirely on overseas trade, and have done since the first export, in 1882, of refrigerated meat on the Dunedin, as I recall it. We are totally dependent on trade and on continuing the development of trade for New Zealand. Mr Sutton, the Minister of overseas trade, in this last year or so has spent 100 days overseas. He has spent about $230,000 of taxpayers’ money on his trips overseas, and he has absolutely nothing to show for it. This Labour Government is an absolute failure in the area of trade. It is not as though it has not been given every opportunity by New Zealand to try to achieve a result, but, no, it is an absolute failure.

Of course, what this minority Labour Government likes is “la terza via”—the third way. It is interesting that the third way was the creation of the leader of the Italian Communist Party; in trying to make Italian communism more acceptable, he dreamt up the phrase “la terza via”. It was then taken up by Blair and the like to describe their left-wing socialism. If the Labour Party is very keen, as we have read recently, to go the third way, maybe that explains why Labour has no policies whatsoever, because “la terza via” and the ways of a failed Italian communist party hold nothing for the future of New Zealand.

The New Zealand Labour Party should have another think about the way in which it is operating its overseas alliances. One of the major issues facing New Zealand must be our links with our traditional allies— Australia, the United States, and the like. When it comes to trade, when it comes to our relationships with those countries, they must be satisfied that New Zealand is making a proper contribution to the South Pacific, and as much of a contribution internationally as we can. I refer, of course, to defence areas. We recently had a visit from Australian members of Parliament. Their first view of New Zealand was of the New Zealand First sign just by Mangere Airport. They all knew what New Zealand First was, because they had seen our sign depicting Winston Peters and our three policies. They said that New Zealand First had made an impression on them as soon as they got off the plane.

💬 Hon Annette King: All paid for with taxpayers’ money.

We know how to use the money. We know how to use money, and we have shown how efficient we can be in our use of it. The Australian members of Parliament and their officials talked to us about New Zealand’s contribution, and they mentioned defence. Really, our contribution to defence is so little that I believe that, internationally, in the South Pacific, we must be regarded by Australia and the like as bludgers, especially under this Government with no air support system, with a minor army, and with inconsequential support for the navy. How can we expect Australia, the United States, and other countries to take us seriously and to have proper and meaningful trade links with us, if we are not willing to play our part in the area of defence? New Zealand First has made quite clear in our defence policy the funds that we will contribute to defence.

As I said, the Prime Minister gave no idea of what Labour’s trade policy is. New Zealand First has set out its trade policy in our Keeping New Zealand First (2002) election manifesto. We have made it quite clear that we will develop, in conjunction with the export sector, an export credit guarantee scheme that works. We have announced a tax abatement and concession policy to ensure that viable exporting opportunities and innovation are not lost. We are prepared to set up a 20 percent tax rate on new export net income. New Zealand First will ensure that the New Zealand Trade Development Board, or any alternative, “maintains and expands our present markets whilst developing emerging markets, and on the promotion of industries where we have a clear comparative advantage”. New Zealand First will further promote innovation by tax-incentivised research and development comparable with that of other First World nations, and will ensure that technology transfer occurs within both the public and the private sectors.

Those are a few examples of a trade policy—New Zealand First’s trade policy. I did not have even one example from the Prime Minister of this Labour Government’s trade policy. It just does not have a trade policy at all. It is non-existent. I am sure that if she had a trade policy, she would have told us about it, but this Labour Government is bereft of any policy whatsoever. I sat here, and I listened, and I waited and I waited, as did all the other members in this House. This Labour Government is going down in the polls. It is not surprising that the public is finding it out in all areas. One area that we should be looking forward to is the exporting of products that are GE free. There is nothing about that from Labour. There is no consideration of it. All these matters must be given careful consideration. New Zealand First is giving consideration to them, and it looks forward to implementing them when it is the Government.

The Labour Government must accept its share of responsibility for the collapse of the Cancun World Trade Organization meeting yesterday. Labour could have rediscovered its internationalist roots, Labour could have acted on its claimed commitment to social justice and democracy, but it did not. Instead, Jim Sutton was seduced into playing with the high rollers in the green room. The Government said it was a great thing that we had one of the 26 trade Ministers who were allowed on the inside—never mind the 100 countries that were shut out from the green room process. The Minister who was answering on behalf of Jim Sutton today could not even tell us what had happened in the green room, and, of course, he is not alone; most of the World Trade Organization countries do not know what happened in the green room. That is because the process is anti-democratic, and that is because there is no transparency in the World Trade Organization.

But Mr Sutton wanted to be on the inside, did he not? Instead of standing with the world’s developing countries, instead of standing with the G21, instead of even being a member of the G21 and backing its calls for an end to the rich-world production subsidies, and for the removal of investment and other so-called new issues that came out of the Singapore meeting, he went on the inside. He sided with the rich countries by supporting the final text, which not only gave the Europeans, the Americans, and the Japanese the soft option on subsidies but also tried to extend unfair trade rules into investment and new issues. Labour was at the crossroads at Cancun, and it took the low road. And for what? We have to ask that. Surely it was not just so that Jim Sutton got a ticket to the green room, to be with the inner circle of Ministers. There has to be more to it than that. How much of Labour’s trade strategy is influenced by it wanting to be friends with the United States of America?

Certainly, Labour chose not to listen to the developing countries—and they have been shouting for a long time. Mr Jim Sutton claimed to be deaf to their calls. Those countries are not wreckers, as Helen Clark claims. They have put their collective feet down because they can see the reality. They have suffered the reality of the World Trade Organization working for the rich against the poor. That is the truth of the World Trade Organization. Jane Kelsey, a very eminent commentator who has been at the meetings, describes them as a turning point because “the perception that economic globalisation is inevitable and irresistible” is now no longer a perception. It certainly never was a reality. That perception has been shattered. There is no inevitability about globalisation, because we have just witnessed a historic moment; we have just witnessed least-developed countries and developing countries—from Africa, from the Caribbean, from the Pacific, and Malaysia—all refusing to give way to the bullying and the threats that have marred every meeting since the World Trade Organization was established in 1995. They have said enough is enough. They have said they are not prepared to succumb to the pressure from the big countries that want everyone else to do as they say and not do as they do.

The Labour Government could have been on the right side. It could have said that it wants to support the developing countries in their calls for greater fairness, for greater transparency, and for more democracy. What did the Labour Government do? What did Jim Sutton do? He went along with the big boys. He accepted their whole approach of bullying, of coercion, and of demanding that the smaller nations of this world do as they are told or else. There were quite a few “or elses” at this World Trade Organization meeting; at least one country left the new bloc because it was threatened by the United States.

Ultimately, the countries that walked away had no choice. The draft ministerial text was so provocative that it strengthened their resolve. I quote from the impassioned speech of one Minister, Sir Ronald Sanders from Antigua and Barbuda: “My Government has a duty to care for its people. Were we to accept this document we would deserve our people’s condemnation, for we would not only have gained no relief for them; we would have condemned them to a life of perpetual underdevelopment, and that my delegation will not do. I have to advise that this draft does not enjoy the support of my Government.” That is not the statement of a wrecker; that is the statement of a man who has expressed with considerable sadness that an international body could not do the right thing, despite it having plenty of opportunity to do exactly that.

But the problems of the World Trade Organization go way beyond this particular meeting; they go back to a whole string of failures. This year World Trade Organization members failed to meet the deadline for the General Agreement on Trade in Services round, failed to meet the deadline for the industrials round, and failed to meet the deadline for the non-industrials round. If ever the writing were on the wall, it has been on the wall since March, when only a few zealous Governments like the Labour Government in New Zealand were prepared to buy into the World Trade Organization agenda, and everyone else was holding back.

On top of the outcome problems, there is the whole issue of process. This Labour Government could have earned some credibility, if it had sided with the developing world and the major international organisations that are concerned about the need to improve internal transparency and participation in the World Trade Organization. Did the Government sign up to that call? To be honest, I do not know, because of the lack of transparency and the lack of democracy, but I would suspect, by the statements that the Minister has been making, that New Zealand did not. Therefore we, as in the Government—because I do not accept responsibility for its behaviour—has to accept some responsibility for the basic challenges that were not addressed at this meeting in relation to the need to tackle the lack of internal transparency, the lack of participation, and the lack of democracy at the World Trade Organization. Those calls were not coming from fringe groups or from protesters on the outside; they were coming from recognised international organisations on the inside of the meeting—Oxfam International, Public Service International, World Wide Fund for Nature International, and a number of other very credible organisations—which, clearly, were not listened to by the likes of the New Zealand Government, and that is why this round has failed. If anyone has wrecked the round, it is New Zealand and the countries it associates with, because New Zealand was happy to go along with a process that effectively perpetuates a democracy deficit.

To bring that deficit home to this Parliament, might I share with the House how a World Trade Organization - style, rules-based decision-making process would operate in this Parliament. The Speaker of the House and the chairs of the committees—and any friends whom they might choose—would draft all the bills. Then the Speaker and the committee chairs would chair the discussions on their own proposals, but the documents to be discussed would not be provided in sufficient time for adequate prior consideration. So many meetings would be scheduled at once that not everyone could get to them, and, in any case, they would all be in Queenstown, so very few MPs could afford to go anyway. And on it goes. Is that a decent process for making rules that govern the way the world works? It is not.

I do want to say before I finish, in case anyone in this House has any doubts, that the Green Party is not anti-trade. I used to be an importer; I was a New Zealand manager of Trade Aid for 6 years. So I support imports—appropriate imports, imports that have been made in conditions where the workers are well paid, where they work under decent labour standards, and where the environment is looked after. That is why we respect fair, safe, and sustainable trade. That is why we are opposed to what the World Trade Organization is doing. It is undemocratic. It is dominated by corporations. It forces countries to trade when they do not want to. It undermines national sovereignty. It puts trade ahead of human rights, ahead of labour standards and fair wages, and ahead of environmental protection. It stops countries from protecting their own people—both workers and business people—from unfair trade.

I have to say that, even within the rules that exist, this Labour Government always has to go one further. I understand that it wants to get rid of the last of the tariffs that exist to protect the clothing sector—and I am glad Darren Hughes is in the House to hear me say this. I wish MPs like him would do more to protect the jobs of workers in his own electorate, people who have lost their jobs because the Government wants to axe the last tariffs that are keeping going 18,000 jobs in New Zealand in the clothing sector. I say to this Government it should not be so callous, and it should not destroy those jobs.

I was at Cancun as the chair of the Foreign Affairs, Defence and Trade Committee. I want to do something rather unusual at the start and compliment the previous speaker on his speech. In its neo-socialist rhetoric and relevance it was equivalent only to the speech given to the plenary session by the Foreign Minister of Cuba, who spent most of his time regaling the meeting with the history of American imperialism against his State for the last 50 years. At the end of his contribution, which came during a rather sleepy session, the entire plenary session erupted in applause, chanting and cheering at that good old dose of socialist rhetoric, then slumped back into the irrelevance of the rest of the occasion.

That, I think, sums up the contribution of the co-leader of the Greens. The world that he described is not the world that most of us reside in—or would want to reside in. The reality that he promoted to us as having occurred at Cancun is reliant on the reports of Professor Jane Kelsey—who was there as the correspondent for iwi radio, believe it or not—which bear a most extraordinary sense of irrelevance. She was not sighted even once during the proceedings. Perhaps that is hardly surprising, because the Mexican security barrier did not let the protesters within 10 kilometres of the actual event, so they spent most of the time talking among themselves, making up the story, and feeding it back to willing stooges like Mr Donald in New Zealand, for him to report to this House.

I want to make a couple of comments about where things stand at the moment. This meeting was an intermediate meeting, following on the Doha development initiative that had been adopted at Doha a couple of years ago. So expectations that, arising out of Cancun, we would see some permanent solutions were never going to be fulfilled—

💬 Rod Donald: I raise a point of order, Madam Speaker. The honourable member who was speaking often leaps to his feet and takes offence at any suggestion that he acts as a stooge or puppet for any particular industry. In kind, I ask him to withdraw and apologise because I do not like his claiming that I am a stooge of anyone else.

💬 Madam DEPUTY SPEAKER: The member is quite correct. The member will stand, withdraw, and apologise.

I am more than happy to do so. The context in which my comment was made was not one of suggesting external influence, but something else altogether.

💬 Hon Richard Prebble: I raise a point of order, Madam Speaker. I apologise to the member for interrupting, but the Standing Orders of this House are quite clear. If one is to raise a point of order, it must be raised at the appropriate time. One cannot wander out of the Chamber, then decide to come back 3 minutes later and complain about a passing remark made in a speech. I say that the Green member was completely disorderly in breaking up what was quite a good speech from the United Future member—one that those of us in the House were quite enjoying listening to.

💬 Rod Donald: Three minutes had certainly not elapsed. I had left the Chamber, but came straight back through the door as soon as I heard those words. It is not for the member to comment on whether I am in the Chamber, but I would like listeners to know that I was on the way to a Business Committee meeting.

💬 Madam DEPUTY SPEAKER: The point of order has been ruled on.

I will resume where I left off. I am reminded, as I do so, of Eamon De Valera, who was arrested in 1913 during an Irish civil rights meeting. He was thrown in jail for a year, and on the date of his release sent a message to his supporters to gather at the same hall he had been in when arrested. He came to the meeting, got to his feet, and said: “Now, as I was saying when I was interrupted …”. It has not been quite a year, but it felt a little like that.

The point that I wanted to make, and was making at the time of that interruption, was that this meeting was always going to be an intermediate step along the process. The Doha round still has another 18 months or so scheduled before it is due for completion. What Cancun has been, in effect, is not the end but, certainly, a stall. It would be wrong to go to the point of saying that the multilateral structure has collapsed, that world trade is in chaos, and that this country’s relationship to it is in chaos. What has happened is that the process has stalled, and it now needs to be restarted. Some issues arise from that, to which this House ought to pay some consideration.

First, the emergence of the G21, or, as it briefly was, the G22 before Turkey had a change of heart, is, in my view, not a temporary phenomenon. When we look at the World Trade Organization of 146 nations, and see that more and more developing countries are joining—I think Cambodia and Nepal acceded to the protocol during the meeting—we know that the power of those countries and their willingness to become involved in the debate will increase in the future, not diminish. So I am not one of those who say that the G21 is a passing fad. It may well reorganise itself and become something a little bit more cohesive, but I believe that, as a group, it is there to stay.

That imposes a couple of immediate issues. Firstly, there will be a tension between the Europe-America-Japan bloc, and that G21 group—or whatever number it eventually ends up with. That will be the traditional rich/poor divide. But, secondly, and I think of more relevance to New Zealand, is the question of where the Cairns group—where New Zealand, Australia, and other agricultural producers have had their influence over the years—now will lie in relation to the G21 and the Europe-America bloc. New Zealand and Australia, in particular, over the years have made, since the time of the initiation of the Uruguay round, a lot of progress in terms of promoting agricultural issues. There is still a long way to go. European protectionism is still as heavy as ever, despite claims by the Europeans that the Common Agricultural Policy is no longer that, but is now a rural redevelopment policy, and will not shift, in terms of its total value, for 10 years—“And, in any case, if you do think it will shift, we can’t make that decision; it is for our sovereign member Governments to make.”

In spite of that intransigence, over the years we have been able to advance our issues progressively. The difficulty we will now face, if the debate shifts away from that issue about agricultural protectionism, removal of export subsidies, etc., into a wider debate about development relationships between the rich and the poor countries, is that the issues that we as a nation have been advancing over the last 15 years run the risk of being, to some extent, sidelined. There is an irony within this, as well. Given the state of world dairy production and its export level, of which New Zealand contributes about 40 percent, to some extent there is a perception—and I am not actually arguing this—that we could be the victims of our own success. The Europeans in particular are very good at saying: “Look, you people come here and talk to us about freeing up agriculture and about giving greater access for dairy products, but you’ve got a virtual monopoly, anyway. You can’t have it both ways.” So we need to be mindful of that pressure, alongside the intransigence that I referred to earlier, creating a potential obstacle that the advent of the G21, in my view, only increases the risk of.

The question that arises, not just for New Zealand but for nations of our type, regardless of our bilateral relationships, is what ought to be our future strategy with regard to the World Trade Organization. Clearly, withdrawal in the way that Mr Donald advocated is not an option. We cannot go back to an environment where a series of bilateral relationships—in the absence of any multilateral structure—prevail. The tariff walls, the protectionist boundaries that have been in place for so long, will simply rise again. There does need to be a coherent World Trade Organization.

I think that the organization itself needs to take more decisive leadership. In my view, it was noticeable during this meeting that the secretary-general was very much a passenger in the proceedings taking place. The driving forces were the European Trade Commissioner, Mr Lamy, and the Mexican Foreign Minister, Mr Derbez, who was in the chair for that meeting. The first issue that needs to be resolved is the need for more steel within the World Trade Organization, to try to drive forces to conclusions, and not simply to leave it to everyone to try to make up his or her own mind. In a setting of that nature, that will never be possible. The second issue that has to be addressed, starting from now, is that officials need to resume negotiations in Geneva, to start to put together a framework that can be the basis of a ministerial meeting to be convened sometime in the next year or so—probably in Hong Kong, I believe, from the suggested dates, so it is not quite Mr Donald’s Queenstown—to bring some fruition to this round prior to its expiry date.

The difficulty that emerged at Cancun, in my perception, was that Mr Derbez, the Mexican Foreign Minister, and his European counterpart, Mr Lamy, held to themselves, by and large, the development of the draft text. It was released only at 11 o’clock on Saturday morning, Mexican time, to all the participants. So it had a degree of secrecy about it, and I think that within it it contained the seeds of its own failing. There needs to be a more transparent process in terms of working together.

The issues between the rich and the developing countries do need to be addressed, but New Zealand’s challenge is to ensure that the issues of concern to us, and to similar nations through the Cairns group, remain on that agenda. There is goodwill amongst elements of the Europeans—the British in particular—and amongst elements of the Americans, but a concerted approach needs to be brought together to try to make progress in that regard. Otherwise, what happened at Cancun will not be the temporary roadblock that it is being perceived as at the moment, but could well become the start of a permanent derailment of that system. If we got to that point, then we would have some very severe problems. But the reality that Mr Donald tries to paint is not a path any nation in its right mind would want to go down. There does need to be a rules-based approach to international trade relations. In the absence of a World Trade Organization, a similar body would have to be reinvented to try to get that structure that is there.

So I think it is right that this House expresses some concern about the state of affairs in the wake of the Cancun meeting, but it is an over-exaggeration to say that all is doom and gloom and there is no future. I do think that, as a nation, we collectively need to redouble our efforts, both at the official level and at the political level, to ensure that when these talks resume, as they inevitably will, we can start to see some concerted move towards progress that will lead to a resolution of these issues in a way that is favourable to New Zealand. But it would be a mistake to ignore the mounting power and influence—and, I guess, assertiveness—of the developing countries. They have now reached the point where they are taking a role within the World Trade Organization; they do not expect to be passengers. They expect their issues to be listened to, and we have to figure out where we stand in relation to that.

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.

The previous speaker began well enough, by spelling out the importance of trade to this country and to all small countries, and went on to suggest that the ratio of exports to gross domestic product (GDP) had improved over recent times. I felt that those early comments were most interesting and useful. Then the member reached for the National Party research unit notes and dropped in behind the safety of them, repeating, as his leader had done earlier in the debate, that he wanted to know where plan B was. He wanted to know what was in the cupboard after the World Trade Organization. Away he went. He ranted and raved, and gave the same lines again and again.

Then the member went a little further, and said that only under a National Government could a free-trade agreement with the US be secured, in response to which I would gently ask him where he was in the 1990s. After 9 long years there was no free-trade agreement, just one that was close. Then the member went still further, and got into pure drivel. He said that only if we had a free-trade agreement with the US could we keep our compliance costs low, and could we get our tax rates down. By that stage the member had moved from reasoned debate and the National Party research unit’s speech notes through to pure, unreconstructed ideology.

Now is a good time to thank those New Zealanders, headed by the Hon. Jim Sutton, who have just spent the last week or so in Cancun. The Hon. Peter Dunne was there; so were a lot of officials representing New Zealand’s diplomatic and trade skills. And we do have a lot of them. It is useful to put on the parliamentary record my appreciation, anyway, for the work they do. I add to that my appreciation for the attendance, and I am sure the hard work, of members of the business sector—Business New Zealand—of a couple of representatives from Federated Farmers who I know were there, and of the fishing industry, and so on.

The fishing industry was a really interesting case in point, because around the back a group of countries got together on fishing. Admittedly, they were mainly seller countries—like Iceland, Norway, Canada, and so on. New Zealand, of course, was there. It is clear that some progress can be made on fishing. Indeed, progress is being made on fishing just by the formation of that group, because it is quite sector-specific. I think that is interesting. I do not know how far that group will go, but the fact that it has been formed is very encouraging, and I congratulate those New Zealanders who were involved in that, as well. Fishing, I would imagine, would be worth something in the order of $100 million to $140 million or 150 million per annum to us, if we could remove the tariffs on that. It is a shame, I am sorry to say, that Japan, as I understand it, was not part of that group.

However, I think the issue is whether the Doha round is fatally damaged or not. I thought the Prime Minister made some interesting remarks when she spoke about the earlier Uruguay round. It went on for about 8 or 9 years, and had its time extended because it failed and failed, as it went through—until it succeeded. The success of the Uruguay round is still being felt in New Zealand, because the implementation phase is still running. I do not think it finishes for another year or so. But in any case, it is worth a very substantial amount of money to our economy—certainly in the order of a billion dollars or more. The fact that we now have the Doha round, which takes things further, is encouraging, and the fact that the Cancun meeting failed to reach agreement is discouraging. It was interesting to hear the comments of Peter Dunne that maybe there will be a ministerial meeting, preceded by a bunch of diplomatic and officials’ meetings—

💬 Hon Richard Prebble: What’s plan B?

Maybe there will be a meeting in Hong Kong in the middle of next year.

I offer up to the House my experience with regard to the climate change negotiations, which are the largest multilateral negotiations on the environment ever held. What happened in December 2000 in The Hague was that 17,000 people went to a meeting to seek to reach an agreement, and, after about 12 days, failed. It was quite a spectacular failure. The Europeans, I felt, had taken far too hard a line there, and came back 6 months later to Bonn. Instead of 17,000 people, there were more like 1,700 people there. The world agreed on the rules for Kyoto there, and pushed those rules through in Marrakesh 6 months later. So one can have failure, followed by success.

Richard Prebble asked what plan B is. What do we do now? That was from the National research unit notes. I will just reiterate the Government’s position. This Government’s position is very similar to the position taken by all Governments in New Zealand, and it is that multilateral negotiations—for example, the Uruguay round—are at the top of our list, and always will be. We will always put the most effort—

💬 Hon Richard Prebble: What’s plan B? That’s plan A.

That is plan A. Then, inevitably, to the extent that plan A fails or to the extent that plan B or C may help plan A to succeed, we drop down to regionalism and to bilateralism, or, in the case of Singapore and Chile, to trilateralism. That is what plans B and C are. Then we have plan D—actually plans D through to Z, as well—which are to do with getting rid of non-tariff trade barriers. For example, the acceptance in the Chinese building code of New Zealand Pinus radiata is no small deal. So on all those fronts—plans B to Z—this Government, previous Governments, and future Governments are operating, have operated, and will operate across a multitude of areas. That is the way of the world, and we will continue to do it.

Not only is that the case, but it is also the case that our officials, though perhaps small in number, are quite skilled. The little that I have seen of our officials in action fills me with some confidence and pride in their work. It was good to see the work of Jim Sutton acknowledged. It was good to see people say that Mike Moore might have made a difference. It was good to have Bill English being relentlessly optimistic. That is the way forward for New Zealand and for New Zealanders. It was sad that the Hon Richard Prebble began his remarks by setting out to poor-mouth New Zealand, New Zealand’s efforts, and New Zealand’s success. I thought that was sad, and I thought the member could have done a little better.

I think the key issue for New Zealand is that while the Cancun meeting was clearly a failure, the process is not a failure—or, at least, not yet a failure. If the Doha round has to be extended beyond January 2005, so be it. The Uruguay round was extended, and no doubt some other trade round in the future will be. The talks seemed to fail because the less developed nations, in particular, did not seem to be well enough prepared—and that is understandable; that happens at a lot of the international forums I have attended, and I am sure other members have found that, as well—and did not come with enough flexibility. In other words, they came to make a point. Well, they have made a point. The fact that they were not able to agree on an open and a transparent procurement policy, for example—itself a corruption-buster—is quite a sad thing, but none the less that is what happened. It seems to me that what we must do in this country is to work with those less developed countries with which we have the greatest contact, to see whether they can come better prepared and with a more flexible position to the next round, wherever it may be.

I think the G22 group was a positive step forward, with Brazil, China, and India leading it. New Zealand was invited to join. We declined. The reason that we declined is that we are part of the Cairns group, and if we had pulled out, Australia would not have been able to pull out. We could not have made it a G23 group because Australia could not make it a G24 group, and the reason Australia could not make it a G24 group is that it is in the Cairns group, which it chairs. So that is where New Zealand’s position is for the moment on the G22 group. I personally hope that the G22 group will go from strength to strength, and will itself be a positive force for the lesser developed countries, but at the moment, anyway, it is not clear whether it will have a long life. The long and short of it is that the G22 group made a big difference, and the fact that the EU made so much movement in its Common Agricultural Policy—not that it can afford to keep it as it is—was really useful, and, as I understand it, the gains that were secured in Cancun are still on the table.

So I say to the ACT party that it ought to think very carefully if it wants to break away from a multilateral approach to international negotiations in this country. That would be a very, very serious thing to do. I say to the National Party there is a plan B, C, D, E, and so on, as there was when that party was in Government. I congratulate Jim Sutton and all those who went to Cancun with him, and hope they will have better luck next time.

The debate having concluded, the motion lapsed.