Address to the joint meeting of the Korea New Zealand Business Council, Auckland, 3 September 2007 Graeme Harrison, Chairman, New Zealand International Business Forum “Korea and New Zealand – partners for business development in the 21st century”

It’s good to be with you today.

Thank you for the opportunity to talk to you about the business and economic relationship between New Zealand and Korea.

I extend congratulations to the Business Councils as organisers of this conference and to our visitors from Korea the warmest of welcomes to New Zealand.

During the 1980s I was a frequent visitor to Korea.  I was then resident in Japan, having established the first foreign owned company of scale to physically import and distribute meat in that market.

Critical to servicing our customer needs was the processing of product to tight specifications.  We were able to do this by contracting the services of five plants in Pusan and Masan.

During this time I saw huge changes in the Korean economy and marvelled at the industrious people.

I also ran in 1985 the Seoul International Marathon, three years before much of the course was used in the 1988 Olympics.

My own business interests continue in Korea but these days as an important export market.  Korea has liberalised market access for food products, including meat, dairy and fish, all items now exported by companies on which I serve as a Director.

I now also find myself as Chairman of the New Zealand International Business Forum.

The Forum is a new grouping of business leaders who have come together to define some priorities for New Zealand’s international business.

We come from a variety of sectors but we are all agreed that Korea needs to be high on the list of these priorities.

In our view Korea needs to be positioned alongside Australia, the United States, Japan, China and the European Union as key economic partners for New Zealand in the 21st century.

I am here today to offer the resources of the Forum and its member companies to work alongside the Business Council in developing the relationship even further.

Shared interests in free trade

The Forum is firmly of the view that New Zealand and Korea should commence negotiations towards a free trade agreement.

I know this is a goal endorsed by both Business Councils.

When talking about the free trade agreement which Korea has recently concluded with the United States (known as “KORUS”), the President of Korea, His Excellency Roh Moo-Hyun had this to say:

“The FTA represents openness and it means we will have to open our doors to have the world’s doors open to us. The socio-economic divide is inhumane and undemocratic. …Opening our doors is another word for globalization. Globalization, the resolution of the socio-economic divide and mutual growth will make us a more advanced Korea ¹“.

President Roh’s words remind us of what’s at stake when countries seek closer economic relations with each other.

They also point to fundamental human values, values which are shared by both Korea and New Zealand, which condition our approach to free trade agreements.

We pursue such agreements not because some economist tells us to but because they are important for growth and development and because they provide jobs and livelihoods for our citizens.

It is true that some sectors could face difficult adjustment as a result of increased competition.

Korean farmers are not generally known for their free trade credentials.

Even here in New Zealand there are sectors which are opposed to the removal of our small existing tariffs.

What is clear is that these concerns cannot simply be ignored.

Trade agreements can take account of such concerns by including transitional arrangements which expose protected domestic sectors to competition in a phased manner.

Governments also need to find ways of addressing those adjustment issues by providing assistance for displaced workers and encouraging the movement of resources into more profitable areas.

It is also important to recognize that open markets can bring unexpected benefits.  For example Korean farmers learning from exposure to New Zealand agricultural technologies, expertise and companies.

That is certainly how I would expect a Korea NZ FTA to deal with problems in sectors of concern to both countries.

In fact these concerns are likely to be small because New Zealand does not represent a threat to Korean farmers in sensitive items like rice, peppers, sesame or garlic.

What’s more our agricultural production is counter-seasonal and there are many opportunities for us to work together to develop secure markets for safe and sustainable food supplies.

I congratulate the Governments of Korea and the United States on the successful negotiation of KORUS.

I am aware of the debate that took place in Korea about the merits or otherwise of the FTA.

Such debate is important in any society provided it is rational and well intentioned.

I have no doubt that KORUS, once ratified will, as the President hopes, contribute to lessening the socio-economic divide.

I hope that the current political climate in the United States does not prevent the ratification of what will come to be seen as a landmark development in the history of trade relations in the Asia Pacific region.

KORUS has the potential to encourage an even faster pace of openness.

Even the Japanese are taking notice and are keen not to be left behind in the search for new agreements.

In the same way a free trade agreement between our two countries could lead to an expansion of trade and investment and provide a framework for our economic relations in the 21st century.

When President Roh and Prime Minister Helen Clark met in Wellington last December they agreed a new “Partnership for the 21st century”.

That Partnership includes a range of initiatives in political and economic co-operation as well as a commitment to complete a study on the parameters of a possible FTA.

We very much welcome this study and look forward to its completion at the end of this year.

NZ Korea relationship

Even the strongest of relations need to be constantly updated to take account of changes in the global and regional economy.

Our relationship is no different.

New Zealand and Korea are old friends in a rapidly changing world.

Today our relationship is characterised by shared interests in the peace and security in the Asia Pacific region, by expanding trade and investment ties, positive scientific co-operation and strong people to people links, especially through education and tourism.

Our relationship goes back to the liberation of Korea in 1948 and grew during the difficult Korean War conflict which left such scars on Korea’s history.

Neither of us can forget the sacrifices made by soldiers from both our countries in defence of democracy and freedom.

New Zealand continues to take a close interest in developments on the peninsula and we applaud the efforts of the Korean Government to reach out to the North while doing all that is necessary to preserve security and sovereignty.

But while the situation in the North remains precarious, how things have changed in the South since the sad days of the war.

We have seen in fifty years the complete transformation of an economy to the point that today Korea is one of the world’s most advanced technological nations.  Indeed what I have seen with my own eyes in the 24 years since I first went to Korea has my utmost admiration.

The pace of development in transport, communications and information technology in Korea is truly remarkable and a great testament to the skill and achievements of the Korean people.

Korean companies like Hyundai, Samsung and LG are now household names here in New Zealand.

The growth of the Korean economy has given rise to new consumer wealth and tastes unthinkable fifty years ago.

In that same time there have been changes in New Zealand too.

We have moved from being a fortress economy, protected by subsidies and import controls, to one of the most open in the world.

Our agriculture, forestry, fishing and horticulture industries have thrived but so have other industries like tourism, wine, film and information technology.

Where once we relied almost entirely on the British market, New Zealand has also become a global trader and our companies are increasing the range and depth of their operations.

My own company, Anzco Foods, exports over 90 percent of our production from eleven sites here in New Zealand, mainly through our network of seven marketing and sales offices around the world.  In Korea one of important recent customers is the Homever chain, to which we sell high quality natural beef.

New Zealand has also become much more diverse as a nation as we have welcomed increasing migration from the countries of Asia.

Korean is now a language that is heard on the streets and seen in signage around Auckland.

Our country is much the richer for the talent and cultural diversity that migrants bring.

But, for all this, the International Business Forum believes that more needs to be done to develop New Zealand’s international business engagement.

Today that engagement is as likely to take the form of offshore investment or strategic joint ventures to tackle global markets as it is import/export.

That’s why our new organisation focuses on international business rather than just trade.

International Business Forum

We know that engagement with the rest of the world is critical for New Zealand’s future.

As President Roh’s remarks I quoted earlier remind us, expanding international business is vital for increasing productivity, raising living standards and lifting overall economic performance.

The Government has a clear role to play in putting in place the right external relationships as well as positive economic policies and negotiating improved market access.

But ultimately business is done by business: it is we who have the commercial interest, the market knowledge and the contacts and networks that will ensure these efforts are focused on the main priorities for business growth.

The Forum’s Board members are from some of New Zealand’s leading internationally oriented companies and from the country’s high-level business organisations.

The companies cover the dairy, meat, seafood, kiwifruit, technology and services sectors and the business organisations represent New Zealand’s export, manufacturing and services industries.

As we develop our strategy we intend to focus on a small number of projects.

I am pleased to be joined here today by Gabrielle Rush, our Associate Director based here in Auckland.

I said earlier that Korea was one of our top priorities.

I hope we can move towards initiating a project with Korea within the next year.

What we do is work in partnership with the Business Council and our respective governments to:

• increase the awareness of the strategic significance of the Korean market here in New Zealand and develop further our constituency in Korea.
• increase the level of support of the Business Council’s activities, bringing people together to explore new opportunities.
• initiate some high level strategic dialogue between government and business leaders such as we have currently with Australia and the United States and as we are planning for Japan.

Conclusion

Let me remind you again of the words of President Roh:

“The FTA represents openness and it means we will have to open our doors to have the world’s doors open to us”.

That is certainly as true for New Zealand as it is for Korea.

I hope these forward looking sentiments will lead our two countries to negotiate a free trade agreement so the relationship can reach its full potential.

In the meantime there is much that can be done to expand trade and investment.

Your meeting today provides an opportunity to do just that and to reaffirm the strong partnership that already exists.

As you consider ways to take this partnership forward in the 21st century, the International Business Forum is ready to work with you to ensure the relationship continues to deliver value for the people of both our countries.

[1] On line conversation with the people – “Korea-US FTA – we must trust our leaders”, 23 March 2006