An Open Letter to Trade Minister O’Connor

22 November 2021

Hon Damien O’Connor
Minister of Trade and Export Growth
WELLINGTON

Dear Minister

As you and your colleagues prepare to gather in Geneva, we write this open letter to express the strong support of the New Zealand business community for ambitious outcomes at the Twelfth World Trade Organization (WTO) Ministerial Conference (“MC12”).

The WTO has been the foundation for decades of dynamic economic growth in New Zealand’s Asia-Pacific neighbourhood and around the world.   For businesses, WTO rules, commitments and mechanisms have created new opportunities by reducing tariffs and non-tariff barriers; enhancing transparency and predictability; creating a more level playing field; and laying the foundation for innovative business models and more and better jobs and higher living standards for all our people and their communities.

The world currently faces an array of daunting challenges, including most immediately the health and economic impacts of the COVID-19 pandemic, along with divergent economic growth, rising protectionism and inequality, climate change, food insecurity and digital disruption.   We believe that the WTO can and should play a key role in addressing all of these challenges.  Trade should not be seen as part of the problem – but instead as key to finding smart solutions.

In addition, twenty years after the launch of the Doha Development Agenda, as a matter of basic credibility, the WTO membership must tackle the unfinished business from the Doha Round, in particular on fish subsidies and agriculture domestic support.  In both cases, substantive outcomes will be a win-win, serving to advance not only trade reform, but also food security, economic development and environmental sustainability.

Specifically on agriculture, New Zealand producers have benefited significantly from the liberalisation process that was begun in the Uruguay Round.   However, those outcomes were only a first step in reform.  Significant work remains to be done to achieve the “fair and market-oriented global agricultural trading system” that was envisaged in the Uruguay Round and affirmed as our collective vision at the launch of the Doha Round.  Analysis by the Cairns Group shows that, left unchecked, trade- and production-distorting domestic agricultural support entitlements will reach USD$2 trillion by 2030.   Such subsidies are inequitable, distort markets, discourage innovation, and lead to environmental harm.   There is a compelling case for meaningful disciplines, including a reduction by at least half of all such entitlements, to be agreed at MC12.

In order to make progress across these complex issues, we recognise that WTO members  themselves must engage constructively and collaboratively.  In particular we call on WTO members to agree: 

• a package of strong and effective responses to the pandemic: these could include measures to ensure that supply chains continue to function smoothly, to achieve the elimination of tariff and non-tariff barriers to trade in essential medical supplies, services and food, and to support the increased production and equitable distribution of vaccines, including through the removal of export restrictions on vaccines and their inputs.  In addition, pragmatic solutions need to be found to address the proposed TRIPs waiver for vaccines, while respecting core intellectual property disciplines
• to resolve urgently the current impasse over the appointment of Appellate Body members; and agree reforms to the dispute settlement system, such as those developed in the consultative process led by the New Zealand Ambassador in 2019
• to complete the unfinished business from the Doha Development Agenda including on fish subsidies and agriculture domestic support, as noted above
• to make permanent the moratorium on Customs duties on electronic transmissions in order to support the ongoing development of the digital economy
• to affirm the valuable work underway in smaller groupings, including the Joint Statement Initiatives on e-commerce, domestic regulation of services and investment facilitation; and
• to support other initiatives on both sustainability and inclusion, including liberalisation of environmental goods and services, fossil fuel subsidy elimination and the Trade and Environmental Sustainability Structured Discussion as well as seeking to create a more enabling environment for small businesses and women in trade.

We believe that, going forward, greater engagement by the international business community, including NZIBF, the APEC Business Advisory Council (ABAC) and other overseas partners, will contribute significantly to the transparency and the relevance of the WTO system.  

The international community must take this chance, at this critical time, to make the decisions that will reinforce the contribution of the multilateral trading system to global prosperity, sustainability and inclusion.  For too long, members have neglected the WTO: we must again find the energy to make it the vital organisation it needs to be. We stand ready and eager to support this process and wish you every success for the Ministerial Conference.

Yours sincerely,

Philip Gregan
Chair