Keynote address to Korea-New Zealand Business Roundtable - Seoul

I am delighted to be
here at the second Korea-New Zealand Business Roundtable.

And it's great to be
in Korea at the invitation of President Lee, following his own visit to New
Zealand last year.

I'd like to
congratulate the organisers of this event - the New Zealand International
Business Forum and the Korea International Trade Association - for building on
the success of last year's inaugural event with a second, equally promising
occasion.

I understand that
this event originated from a belief that by bringing together political,
business and academic leaders from both countries, the Roundtable could
highlight opportunities for deeper Korea-New Zealand business
engagement.

The size and quality
of today's turn-out shows us that this belief is being
realised.

I fully support the
theme of this Roundtable - "Innovation, Growth,
Opportunity".

And the topics you
have chosen to address under this theme are particularly relevant ones -
responses to changes in the global economy and innovative business partnerships
between Korea and New Zealand.

When we met last
year, President Lee and I committed ourselves to take an already strong
bilateral relationship to the next level.

This visit is a
chance to give further effect to that commitment.

Korea is a remarkable
country and an economic powerhouse in Asia.

It is also a
long-standing friend of New Zealand.

The relationship
between our two countries is underpinned by a shared bond forged in the Korean
War 60 years ago.

It is also
underpinned by the similar values that we hold - in democracy, human rights and
rule of law. And our common interest in a peaceful and prosperous Asia-Pacific
region.

Today, Korea is an
important partner for New Zealand in trade, investment, agriculture, forestry,
science and technology.

Korea has risen to
become our seventh-largest trading partner overall.

It is also our
seventh-largest source of visitors and second-largest source of international
students.

Beyond trade, the
relationship between our two countries has matured to the point where we have
deep engagement across a wide range of areas - including education and
people-to-people links.

We are immensely
proud of the more than 30,000 Koreans who, like my colleague Melissa Lee, have
made New Zealand their home and contribute a lot to our culture and
society.

So what we see now
are two globally-facing export-oriented economies, and an already strong
relationship with great potential to advance even further.

Today you will be
discussing the position of Korea and New Zealand in the new economic
landscape.

As you are aware, the
recent global economic and financial crisis significantly altered the
international economic environment in which our two countries
operate.

New Zealand was
already in recession when the world crisis hit.

But I'm pleased that
following the severe economic downturn over the past two years, the present
global outlook is much improved.

For example,
according to the IMF, world trade is expected to grow by 7 percent this year and
6.1 percent in 2011.

This is after a 10.7
percent contraction in 2009.

Asian economies are a
big force behind the economic recovery - led by China, where growth is expected
to be 10 percent in 2010, based on infrastructure investment and stronger
domestic consumption.

Of course, Korea
continues to perform well.

You posted GDP growth
of 0.2 percent in 2009, the third-highest in the OECD.

GDP forecasts for
2010 and 2011 continue to be revised upwards across the board, ranging from
4.3 percent to a high of almost 8 percent.

I very much welcome
these strong economic indicators in Korea and the region - they will have
significant flow-on effects for economic growth coming out of the
recession.

At the Government
level, as the global economic situation improves, it is important for countries
to be aware of the downside risks that threaten the
recovery.

These include high
unemployment rates in advanced countries, high sovereign debt in some economies,
and continuing fragility of financial markets.

Governments need to
be ready to act to ensure a sustainable recovery takes
hold.

For New Zealand, this
means continuing with a heavy domestic agenda focused on measures to increase
our long-term competitiveness and standards of living.

My Government is
showing strong economic leadership and we are firmly focused on looking
forward.

We are focused on
building on the recovery so we come out of the downturn in a better position to
create jobs, build productive firms and attract
investment.

An example of this is
the tax reform we unveiled just over a month ago in the
Budget.

We lowered the
headline company tax rate, cut personal taxes and re-balanced the tax system
away from consumption and toward savings and investment.

We are also investing
billions of dollars in infrastructure, including broadband, to help lift the
long-term performance of the New Zealand economy.

At the international
level, the risks require an unprecedented level of international
cooperation.

We want to contribute
constructively to international debates in this regard and encourage
coordination.

At the moment, the
G20 is the big game in town.

New Zealand has been
supportive of the emergence of the G20 as the pre-eminent forum for providing
direction to the international response to the global economic
crisis.

The outcomes of the
G20 Summits to date have been consistent with New Zealand's policy objectives
and important in maintaining confidence in the world's financial
markets.

My visit to Korea is
well timed.

I was able to speak
yesterday with President Lee soon after his attendance at the G20 Summit in
Toronto, and I've just had a very useful conversation with Chairman Sakong about
the G20.

I appreciated
President's Lee's perspectives on the Summit.  I especially welcome the fact
that despite pressures to expand its agenda, the G20 remains focused on dealing
with the aftermath of the global economic crisis.

Korea will host the
next G20 Summit in November.

This is a truly
remarkable achievement for President Lee and for the
country.

It acknowledges that
Korea is now a powerful voice on the international stage.

It acknowledges, too,
that Korea has added credibility based on the fact that you have transformed
yourself from being a recipient of aid to a donor nation.

I am pleased that
Korea will be emphasising development issues at the next Leaders'
Summit.

Speaking of Korea's
encouraging economic performance in recent years and stature on the
international stage leads me back to a point I made earlier -  about the
potential to grow the bilateral relationship.

The second topic you
will address today has to do with innovative partnerships between Korea and New
Zealand.

Our economies are
highly complementary.

New Zealand exports
meet Korea's industrial processing and food needs, and Korea supplies important
capital and consumer goods for New Zealand.

From my discussions
in these last two days with government leaders and business representatives, it
has also become clear that synergies in the relationship create many
opportunities for New Zealand and Korea:

In the manufacturing
and high tech areas - Korea is a manufacturing giant. New Zealand has innovative
companies developing smart technologies and looking for ways to commercialise
and market those products.

In agriculture -
Korean consumers place high priority on food safety and security. New Zealand
has a well-earned reputation as a reliable, safe supplier of high quality
food.

In investment -
Korean companies are looking to invest offshore. New Zealand has opportunities
for partners to help develop its infrastructure and to share
technologies.

In the environment -
Korea has an admirable focus on increasing the contribution of renewable energy.
New Zealand's clean, green reputation is supported by our use of substantial
amounts of hydro, geothermal and wind power.

President Lee and I
have discussed the many rich prospects for business and investment growth
between Korea and New Zealand.

He and I agreed last
year to launch Free Trade Agreement negotiations because we could see this
potential.

We believe an FTA is
the vehicle to take our relationship to the next level.

That has been New
Zealand's experience of the FTAs we have concluded to
date.

For example, in the
two years since we signed our ground-breaking, comprehensive FTA with China, we
have seen remarkable growth in commercial contact across the economic and trade
spectrum.

China has moved from
being New Zealand's 4^th largest trading partner to our 2^nd
largest in that time.

This is the kind of
boost that a Korea-New Zealand FTA could deliver for this
relationship.

And there are other
economic benefits as well.

President Lee and I
know the FTA will help increase the resilience of our economies and position us
well within an Asia region that is pursuing closer economic
integration.

FTA negotiations are
never easy, but our negotiators are making progress.

My visit here is a
good opportunity to see where we have got to and to give high-level support to
getting the deal done.

President Lee and I
agree that we want this agreement concluded as soon as possible, and with an
outcome that delivers real commercial and business wins to both our
countries.

There are sticking
points.

Agriculture is the
main one.

Let me address this
directly.

Concerns about the
impact of an FTA with New Zealand are overstated in relation to
agriculture.

They are based on
perceptions of New Zealand rather than the reality of our trade with
Korea.

New Zealand provides
less than 3% of Korea's total agricultural imports.

We do not compete
with Korean production. We don't produce rice.

We are
counter-seasonal. We don't export fresh milk to Korea.

Our grass-fed beef
competes with imported product, not Korean grown beef.

Concluding an FTA is
about removing barriers.

It is about unlocking
potential.

It is about enabling
companies to conduct their business in the most efficient way
possible.

And it is about
creating the chance for consumers - so often forgotten in these discussions - to
get the things they need cheaper than before.

Korea and New Zealand
have both come a long way in the 60 years since the beginning of our
relationship on the battlefields of the Korean War.

Few would have
imagined back then that we would have the kind of close bilateral relationship
that we have today.

It is important that
we continue to work hard together to develop the
relationship.

I am confident that
those in this room are playing their part.

I thank you for that
and look forward to celebrating future successes with you.