Good morning.

Today I would like to focus on two of my key areas of responsibility:  trade and international climate change negotiations, and to touch on the critical interface between those two areas. 

First, let's set the scene. 

Businesses and governments are operating in the middle of a major international shock that has spread from origins within financial institutions to a widespread economic recession affecting the real economy.  

Worryingly, we are also beginning to witness the creeping advance of protectionist measures as countries look to ‘defend' their own industries. Witness, for example, the recent re-imposition of EU agricultural export subsidies on dairy products.

Such measures are deeply problematic, given the interconnectedness of economies in this globalised world and the importance of trade for so many countries' economies. As Pascal Lamy, Director General of the WTO, commented recently during his visit to New Zealand, "Protectionism does not protect."  Instead, such measures risk setting off a downward spiral of retaliatory behaviour which ends up hurting everyone.

For New Zealand, trade is a key driver of economic growth. New Zealand is an export-dependent economy by virtue of our geographic isolation and comparatively small population.  Our businesses need to operate in a globally competitive environment.    

By maintaining and, more particularly, significantly improving market access for New Zealand firms through a progressive trade agenda, we can look to stimulate the economy and in doing so help safeguard the jobs of the many thousands of New Zealanders who work in, or support, export-oriented industries. 

So where do New Zealand's best trading and export growth hopes lie?

Despite the challenges of negotiating with 152 other individual members, the WTO offers the greatest potential reward for a given negotiating effort.  So achieving an outcome from the Doha Round remains New Zealand's top trade priority.

A Doha Round outcome would reform world agriculture, including setting new ceilings for domestic subsidies, eliminating export subsidies and reducing tariffs. All of those elements are important to New Zealand and would improve market conditions, particularly for our agricultural exports over time. The Doha Round is the biggest lever we have within our grasp to help restore confidence in our trading community.

But recent history shows that we cannot place all our hopes there. In recent years countries have become much more active in negotiating free trade agreements to supplement their efforts in the WTO.

New Zealand is no different. New Zealand's policy of pursuing its trade objectives not just at the multilateral level but also at regional and bilateral levels reflects firstly our assessment that a Doha outcome will not deliver all the market access gains we would like and, secondly, our defensive concern that competitors might gain an advantage by beating us to such FTA deals.

New Zealand now has trade agreements in force with Australia (CER), Singapore, Thailand, the countries of the "P4 Agreement" (Chile, Singapore and Brunei), and China. 

2009 has seen significant advances in our forward trade negotiations agenda.

At the end of February I was in Thailand to officially sign the FTA between New Zealand, Australia and the 10 countries of the South East Asia, ASEAN block. This agreement is a significant outcome for New Zealand businesses.

Within 12 years, 99 per cent of New Zealand's current trade with the key markets of Indonesia, Malaysia, the Philippines and Vietnam will be duty-free. On full implementation, this will equate to an annual duty saving of approximately $50 million based on current trade.

Two weeks ago during the visit to New Zealand of the Korean President Lee Myung-bak, we were very pleased to be able to jointly announce the launch of negotiations with our sixth largest export market, South Korea - a long term goal of New Zealand's that we have been working towards since 1999.

A comprehensive deal will achieve some tangible results.  New Zealand exporters currently face substantial trade barriers in Korea.  Figures produced by the New Zealand horticulture sector show for example that New Zealand's fruit and vegetable growers pay more than NZ$34 million in tariffs to Korea - for kiwifruit the tariff costs each New Zealand grower approximately $8,000 per year.  Tariffs on other important products such as meat and dairy can often be as high as 89 percent.

With highly complementary trade between New Zealand and Korea, this FTA offers real opportunities for New Zealand businesses.

Then there's India.

Late last month my friend Kamal Nath and I announced the conclusion of the joint study to investigate prospects for a free trade agreement between New Zealand and India.

The study demonstrates the potential that exists to substantially develop New Zealand's trade and economic relationship with India.  I'm confident we will be entering into the first round of formal negotiations before the end of 2009.

India is already our second fastest growing market even despite the prohibitive barriers that are levied on the core items of New Zealand's traditional primary sector trade.  With a population of over 1.1 billion and the 12^th largest economy in the world (and much larger in terms of purchasing power parity), India rightly claims our attention as one of the most significant economic partners we will have in coming decades.

This will by no means be an easy negotiation, but it is one that we must pursue. India's emergence as a significant global player - perhaps second only to China in terms of its potential future influence in the global economy - makes an FTA of considerable strategic importance to New Zealand. 

To add to this full plate of negotiations, we also continue to work towards conclusion this year in our negotiations with Malaysia, and the six member states of the Gulf Co-operation Council, and with Hong Kong - a negotiation temporarily stalled while the China FTA was concluded.

And last but certainly not least, I am looking forward to the commencement of the Trans-Pacific negotiations that will extend the P4 Agreement beyond the current four Parties.

The Trans-Pacific negotiation gives New Zealand an opportunity to help shape future trade liberalisation in the wider Asia-Pacific region, in line with the high-quality benchmarks set by the original P4 agreement.

All of these agreements look to provide certainty for New Zealand businesses and reinforce our commitment to reducing trade barriers, promoting liberalisation and helping New Zealand businesses compete in the international environment.

Turning now to my other portfolio area of international climate change negotiations, it is no understatement to say that 2009 will also be a busy year.  The implications of what's negotiated in the UN will be felt by all of us, directly or indirectly - in our pockets, in our markets, and in our business and trade opportunities. 

The New Zealand Government fully understands and accepts its long-standing international obligations under the Kyoto Protocol for the first commitment period.  And we will meet those obligations. 

But the current international framework, including the Kyoto Protocol, doesn't deliver what it needs to.  Not environmentally, and not economically. 

There are negotiations underway in the UN to improve on this.  Those negotiations are steering a course for a meeting in Copenhagen in December this year. 

There has been much talk of all that Copenhagen might deliver.  On this I'd sound a note of warning.  If there's one thing I've learnt from my trade negotiations experience, you shouldn't set meetings up to fail before they start by having unrealistic expectations. 

Instead, we need to keep our sights on the long game: getting control of global emissions. 

What I hope Copenhagen can deliver as a minimum is a political breakthrough.  With all developed countries, including the US, and the major developing countries at the table, Copenhagen has the potential to give us the size and the shape of a new international climate deal.  With the US back in the game, and signalling that climate change is in the top tier of US foreign and domestic policy concerns, there is a chance we might just get there.  Much will depend on how other countries, in particular China, respond to this. 

So what, ideally, would the new climate deal look like? 

For a start, the new climate deal needs to be environmentally effective.  That means more countries taking more action than we have with the Kyoto Protocol.  The current Protocol covers only about 30 percent of the world's emissions.  And this is a rapidly declining share, given that much of the growth in emissions is taking place in the developing world.  So even if all Kyoto countries reduced their emissions to zero it still wouldn't solve the problem. 

Of course there will be differences in what we can expect from countries, depending on their level of economic development and a host of other factors.  And the international community will need to give some countries a leg up to reduce their emissions and to help them adapt to climate change impacts. 

The sheer size of the task before us means we need to base final decisions on solid, well-informed scientific and economic analysis.  We need to know what it's going to cost us and what others are going to do before we sign up.  New Zealand will do its fair share.  But we need to know that others are doing their share too. 

The new climate deal also needs to get real.  We need an international framework that will survive the transition from negotiated words on paper to implementation in the real world.  We need a framework that acknowledges and takes into account the national circumstances and abilities of countries to reduce emissions.  Here in New Zealand, where half of our emissions come from agriculture, there is precious little the sector can do right now without affecting production. 

Trade issues do not have a prominent place in the current negotiations, but the links between the two areas are coming into sharper relief as countries start to think through the implications of climate change policies on trade flows and on trade rules. 

New Zealand has been a vigorous supporter of negotiations in the WTO and in APEC aimed at fast tracking removal of trade barriers for environmental goods and services.  This is likely to include reducing barriers - and therefore costs - to trade in "climate friendly" or low emission technologies, such as wind turbines. 

We also argue that maintenance of some subsidies can contribute to inefficient environmental outcomes; and more specifically can increase the emissions intensity of products, as subsidised producers are protected from the price signals on carbon. 

A key concern - not least in the current economic climate - is to address competitiveness risks that may arise where different countries have placed different constraints on carbon in their economies.   If this results in industry shifting away from countries that are pricing carbon to those that are not, it could lead to negative economic consequences for no environmental benefit.

One way of overcoming this concern is to look at allocation mechanisms for industries that are likely to face competitive risks vis-à-vis their international competitors.  This is one of the elements we are grappling with in the Emissions Trading Scheme.

We are watching global developments closely and I myself will be participating in international discussions during the year looking at these complex questions surrounding the intersection of trade and climate change.

Another interesting component to the trade and climate change debate is the rise of market-driven responses.  In recent years there has been growth in development of private standards - that is standards which are not set by governments - initially to provide consumers with greater product safety and quality assurances, but increasingly now being developed for environmental, ethical and social reasons.  Carbon labelling is one such example.

These trends are reflective of real or perceived consumer desires to know more about the products they buy. They are also reflective of corporate desires to differentiate their brand and distinguish their credentials from those of their competitors.

In the future we may find ourselves in a situation where New Zealand's access to markets is not only at risk from government regulation but also from these potentially discriminatory market-driven standards that may favour locally produced products over imports.

For a country like New Zealand - heavily dependent on exports - it is critical that action internationally to encourage more environmentally-responsible production or consumption is done in a way that is transparent and minimises impacts on trade flows.

This Government is committed to ensuring that industry is well positioned to meet the ever-increasing demands of our overseas customers for information on the environmental impacts of production, processing and distribution. A great deal of activity is already underway.

The Ministry of Agriculture and Forestry, for example, is leading a comprehensive carbon footprinting programme in partnership with the primary sector and research community. This initiative has been set up to help producers measure, manage and reduce greenhouse gas emissions through a product's entire life cycle.

Zespri was one of the early partners in the scheme.  Other products covered include dairy, wine, onions, various fruits, red meat and forestry. 

The Sustainable Food Exports Group is another good example of how the government is working together with industry to understand and respond to trends and developments in export markets. Convened by the Ministry of Foreign Affairs and Trade, it was originally set up to deal with the food miles debate but now continues to act as a forum for information exchange and discussion and best practice sharing.

It is critical for future economic growth that New Zealand businesses are able to react positively in this complex environment. As a Government we are committed to a path that will enable this to happen.

This government is committed to increasing the ratio of our exports of goods and services as a percentage of GDP from around 30% to 40% by 2020. This is linked directly to the growth agenda. There is an unmistakable linkage between higher productivity, higher real wages and higher participation in the export effort.

It is a complex road ahead and we have a number of interrelated challenges before us.  On the trade side, we need to minimise the damage to New Zealand jobs and businesses of the global financial crisis, and ensure that we build and maintain open and fair access to important markets. 

On the climate side, we need a new international climate deal that is effective and efficient and durable and real.  It must set up the world to do better in the fight against climate change.  The deal will involve some changes to how we do business.  But it won't be at the expense of New Zealand prosperity. 

To achieve this we must continue to work together, as government and industry, to stay on top of these challenges and to capitalise where possible on the opportunities that arise.  Because we will see a lot of both, in the coming years.

Good luck with the remainder of the symposium.