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WTO liberalisation worth billions to New Zealand

The trade liberalization achieved in the World Trade Organisation’s Uruguay Round was worth about $9 billion to New Zealand, and had resulted in about 17,600 extra jobs, Trade Negotiations Minister Jim Sutton said today.

Mr Sutton told the Guild of Agricultural Journalists and Communicators in Hamilton this evening that a study by Foreign Affairs and Trade Ministry and Agriculture and Forestry Ministry officials showed that over the full implementation period of the Uruguay Round (1995-2004), New Zealand agricultural export receipts will be cumulatively worth an extra $6 billion, compared to what they would have been without the round. In addition, all New Zealand’s tradeable goods sectors have benefited from an increased ability to access world markets at lower tariff rates, which will result in tariff duty savings of $3 billion.

He said this provided a total estimate of Uruguay Round benefits as being in excess of $9 billion over the 10-year implementation period.

“Most of those gains came to the agriculture sector, still one of the most heavily protected sectors in the world.”

He said total gains to New Zealand from the Uruguay Round were underestimated.

“In addition to the $9 billion of gains from liberalisation measures, New Zealand exporters have also gained from firmer trade rules, a strengthened disputes settlement system, and the dynamic effects of a world economy stronger than it would have been without the Uruguay Round.”

Based on two disputes New Zealand has won, the strengthened system was worth more than $80 million a year to New Zealand.

Mr Sutton said that officials calculated that the direct employment effects from the Uruguay Round were an extra 2700 jobs last year.

“The ripple effect through the economy increased this to 17,600 more jobs for 2002, over and above what there would have been without the Uruguay Round. Trade liberalisation not only results in better living standards for our exporters, but it also results in more jobs.”

He said the Doha Development Round had even greater potential. “The results of the Uruguay Round are important.

“But they, and any results from the Doha Round, are just opportunities. Without the competitive, outward-looking domestic policies that have enabled our producers to become successful global traders across a range of sectors, those opportunities mean little.

“Opportunities will only be converted into new markets, growth, and employment if New Zealand enterprises continue to seize the new openings that have been secured.”

Mr Sutton said the Government was doing its part by putting $73 million over the next four years into a range of initiatives to enhance New Zealand’s trade performance. This included an allocation of $14.2 million over four years (and $3.2 million a year thereafter) in last month’s Budget to support World Trade Organisation and other negotiations.

“That means more people on the ground both here in New Zealand at the WTO’s headquarters in Geneva, and in other key capitals, arguing our case.

“WTO-consistent bilateral trade agreements are important, but the biggest game in town – and the most potentially lucrative to New Zealand – is the WTO’s own Doha Development Round. This latest round of multilateral negotiations has huge potential for New Zealand.”

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