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Thank you for welcoming me here today.
This is my first visit to Colombia, and the first visit of a New Zealand Prime Minister to this country.
Today also happens to be an anniversary for Colombia and New Zealand. On March 6th, 1979, New Zealand accredited its first ambassador to Colombia, formally establishing diplomatic relations between our two countries.
So it’s fitting to be here, 34 years ago to the day that we officially began building our relationship.
This is a time when we both want to seize opportunities to do more together – regionally and internationally, and across issues from education to trade.
It’s an exciting time to be here.
Colombia has been through many changes in the past decade, and your country is prospering. Growth has averaged almost 5 per cent a year, notwithstanding the Global Financial Crisis.
Your economic transformation over the past 10 years has made many Colombians better off.
I welcome Colombia’s desire to work more closely within the Asia-Pacific region, our shared home.
But I think it’s fair to say Colombians and New Zealanders don’t know much about each other.
Our relationship is growing, but it is relatively new, and each country has a great deal to learn about the other.
However, I would add that most New Zealanders would be familiar with your excellent coffee. Our capital city, Wellington, is reputedly home to more cafes per head of population than New York City.
So I’m eager to see New Zealanders and Colombians learn more about each other, and I would like to see our countries build stronger ties as we work more closely together on issues important to the Asia-Pacific region, and to the world.
You are forging ahead with trade liberalisation. I was impressed to learn you have already negotiated free trade agreements with the United States, Chile and with Canada, and have other negotiations underway.
The Pacific Alliance trade grouping – comprising Colombia, Peru, Mexico and Chile – has embarked on bold reforms already, including removing tariffs on 90 per cent of goods.
I am pleased New Zealand has been granted observer status to the Pacific Alliance, and will be represented at the next meeting in May.
There is real potential for our two countries to do more together – in the trading of services, investment, and by working together in forums like the World Trade Organisation.
Structures like the WTO are important to New Zealand.
We are a small, outward-facing nation, reliant on exports. We make up just a quarter of one per cent of the world economy. But we are a significant agricultural exporter.
The vast majority of what we produce on the land is shipped overseas.
So we have a strong interest in the rules and the regulations governing international trade.
As a small country of just over four million people, and far away from most major markets, New Zealanders can’t get rich by selling things to ourselves.
We have to grow an export-focused economy, which is selling more of what the world wants, at a competitive price, and is built on a solid base of innovation.
We need to be competitive on the global stage and take advantage of international opportunities if New Zealand is to lift its economic performance.
Domestically, my Government is focused on building a more competitive and productive economy – it is one of the four priorities we have for this term in office.
Another priority is to responsibly manage the Government’s finances, and return to an operating surplus in the 2014/15 financial year. After that, we will start reducing debt as a proportion of GDP.
We have also set ambitious targets to improve the public sector. One of those targets is to make life easier for companies interacting with government agencies, so doing business in New Zealand becomes even more seamless and efficient.
That means giving businesses all the advice and support they need to operate and grow, and the ability to do more transactions online.
Our fourth priority is rebuilding Christchurch and the city’s surrounding areas which, as you may know, experienced destructive earthquakes in 2010 and 2011.
A lot of economic activity will be centred on the city, which is the second-largest in New Zealand. Christchurch is open for business and, as the gateway to the South Island, is welcoming back tourists as it recovers and regenerates.
We will continue driving the momentum in the city’s rebuild – which is now estimated to have a cost of US$25 billion dollars.
To put that cost into perspective, it is around 15 per cent of New Zealand’s GDP.
The Global Financial Crisis has had a profound effect on New Zealand’s economy, just as it has on economies around the world. Developed countries have not had such a difficult recovery from a downturn since the Great Depression of the 1930s.
Growth forecasts for the world’s largest economies have been progressively revised downwards.
These global factors have affected New Zealand, yet our economy has held up, and is performing better than many others around the world.
Since the lowest point of the recession, in the June 2009 quarter, our economy has grown at an average of just under 2 per cent a year in real terms. Latest forecasts are for growth to improve around 2.5 per cent a year.
With that expansion, New Zealand is expected to grow more strongly than the Euro area, the United Kingdom, Japan and Canada.
New Zealand has a number of positive opportunities over the next decade.
Our trade and investment links with Asia are strong. Since we signed a free trade agreement with China in 2008, our exports to that country have trebled.
It is now our second-largest export market, behind Australia but above the US.
Our terms of trade remain high, despite coming off near-record levels.
And demand for our commodities has held up, especially from emerging markets.
These markets are important to us and there are tremendous opportunities in them.
That’s why I have brought with me a sizeable business delegation to Colombia, comprising representatives from some of our key export areas – including agri-business, education, technology and renewable energy.
I believe our two countries can do a lot more business together.
Our trade in goods is relatively modest. New Zealand exported just under US$11 million dollars’ worth of goods – mainly medical instruments and machinery – to Colombia, and we imported nearly $15 million dollars’ worth; mostly tea, coffee and animal products.
However, while I would like to see trade grow, a large part of the value we offer each other is strategic.
New Zealand is fully connected to Asia, with daily flights to a number of cities in the region. We have regular shipping connections to Asian ports. We also have a network of free trade agreements with Asian economies to facilitate trade and investment throughout the region.
This is part of what New Zealand offers Colombia – we are a safe, business-friendly base for your businesses wanting to expand into the Asia-Pacific.
And Colombia is a launch pad for New Zealand companies into Latin America.
New Zealand businesses have been increasingly focused on this region.
We have growing investments in dairy production in Colombia, for example.
Fonterra, New Zealand’s largest company and a member of the business delegation travelling with me, has a joint venture with Nestle here, called Dairy Partners Americas. This partnership has a plant in Colombia, which manufactures various milk products for distribution across Latin America.
It’s the fifth-largest purchaser of milk in this country, and also focuses on training farmers through the Fénix Project to make dairy production in rural areas more competitive and sustainable.
So New Zealand companies don’t just want to export their good here. They want to be involved in the country for the long-term, and make substantial investments in Colombia.
New Zealand also wants to welcome Colombians to our shores.
We are becoming an increasingly popular destination for educating the next generation of Latin American leaders who want to earn high-quality, world-recognised qualifications cost-effectively compared to other English-speaking destinations.
Nearly 600 Colombian students came to study in New Zealand in 2011, and there is certainly potential for more young Colombians to come, whether it be at secondary school level, English language training or university.
Promoting links between the young people of our countries lays the foundation for the kind of closer understanding we need to build business connections in the future.
Our countries’ most obvious points of similarity, however, are in the agriculture sector.
Colombia is focusing on developing its dairying industry in particular, and this is where New Zealand can offer the collective knowledge of years of experience in developing one of the world’s most efficient and competitive industries.
As Colombia increases domestic agricultural production, New Zealand can contribute its world-class agri-technology, intellectual property and process know-how to your development.
Many of the companies I have brought with me are experts in these fields.
I see this as a win-win for Colombia and New Zealand. The rest of the world’s population wants more food, especially protein like dairy products and beef. The challenge for countries like ours is making sure we can supply enough safe, clean food for a growing and more discerning global population.
New Zealand’s agriculture sector didn’t become competitive overnight.
In the 1980s, New Zealand’s economy was heavily micro-managed. Various industries were propped up by a web of subsidies.
For example, whole cars were not able to be imported – only car parts were allowed, so the full car could be assembled in New Zealand, thus protecting our manufacturing industry.
The sheep, beef and fishing industries had government-guaranteed minimum prices for their products.
The economy was heavily regulated and the government itself owned a great number of businesses.
All that was unwound over a period from the mid-1980s to the mid-1990s.
The government deregulated and liberalised the economy, got rid of its large asset holdings, and forced industries to go head-to-head with their competitors from other parts of the world.
Unwinding subsidies is not easy.
Farmers, for example, went through a painful adjustment as subsidies were wound back.
But they quickly responded to market signals by reducing input costs, improving productivity and responding to market demand.
Our farmers are among the most efficient in the world in large part because, independent of financial support, they have been able to respond to market forces.
A much smaller sheep industry produces the same amount of sheepmeat as it did in 1984 – about 600,000 tonnes from about 70 million sheep in 1984 and the same amount from about 35 million sheep today.
And production per hectare from dairying has increased by 50 per cent since 1984.
New Zealand is now the world’s largest exporter of dairy goods.
This is no mean achievement – as I said before, we are a small nation of just 4.4 million people.
We are far away from the world’s biggest markets.
Our nearest neighbour, and largest trading partner, is Australia – and it takes about three hours to fly between our biggest city, Auckland, and Australia’s largest, Sydney.
But what New Zealand’s agricultural industries have achieved shows what can be done in a competitive environment.
Ladies and Gentlemen, Colombia and New Zealand are both engaged in trade liberalisation.
We both support the reduction in trade barriers around the world.
Being able to supply to a bigger market creates an incentive for domestic firms to invest more in modern technologies, scale of production and worker training.
Our common interests in agriculture mean we can work together to liberalise agricultural trade, in forums such as the World Trade Organisation.
And it is in our interests to work together – to exchange ideas and technical knowledge, and to encourage a two-way flow of investment and people.
Open markets should play a key role in any country’s growth and development.
So I encourage you to make the most of today’s event, as members of countries with similar outlooks.
Both New Zealand and Colombia are open for business.
For New Zealand businesses, there is great potential to form productive and enduring partnerships with Colombian industries.
For Colombian businesses, I would urge you to look at what New Zealand can offer – as a partner, as a supplier, as a source of investment and niche technology, and as a place to do business.
Thank you.