December 02,2004

Baucus Explores U.S. –New Zealand Free Trade Agreement with Prime Minister

(AUCKLAND, NEW ZEALAND) Today, Senator Max Baucus, the Ranking Democrat on theSenate Finance Committee, which has jurisdiction over international trade, met with NewZealand Prime Minister Helen Clark to discuss strengthening trade ties between the UnitedStates and New Zealand through a possible free trade agreement. Senator Baucus is in NewZealand with a trade delegation representing a range of Montana businesses, as well as nationalcompanies.

“Prime Minister Clark and I agreed that our trade relatio nship is strong and flourishing,”said Baucus. “We also agree that we must work to strengthen this vigorous relationship, perhapsthrough a free trade agreement between our two countries. The Asia Pacific region is home tothe world’s fastest growing economies and it is critical Montana businesses participate in thisgrowth.”

Baucus continued, “Exports of Montana products to New Zealand increased more thansevenfold over the last 5 years. I will continue to work to ensure Montana businesses benefitfrom trade with New Zealand, and this trade mission is a critical part of that work. My Montanafriends and I are here to build relationships, find opportunities, and discuss solutions to commonchallenges. It’s very exciting.”

New Zealand is an important economic partner for the United States and for Montana.Last year, merchandise trade between the United States and New Zealand exceeded $4 billionU.S. dollars and services trade reached $2 billion. New Zealand is one of Montana’s top 25export markets.

While in New Zealand, Baucus also met with the Foreign Minister, the Trade Minister,and addressed the New Zealand-U.S. Council. He travels on to Australia today where he and thedelegation will meet with Prime Minister John Howard. Remarks to the New Zealand-U.S.Council are below.

REMARKS TO THE NEW ZEALAND-UNITED STATES COUNCILSENATOR MAX BAUCUSAuckland, New ZealandDecember 2, 2004

“It is a pleasure to be here this evening in this beautiful city. This is my first visit to NewZealand. I am grateful for your welcome and your hospitality.

I also want to thank all of you for the work you do every day. Groups like the NewZealand-United States Council play a critical role in building the case for trade. Your successstories prove again and again why lowering barriers and leveling the playing field make trade awin-win proposition.

I am especially pleased to be able to introduce you to the impressive group of Montananswho have accompanied me on this trade mission. They represent the full diversity of Montana’seconomy -- farming, ranching, manufacturing, tourism, and the service sector. Their presencehere is a testament to the potential that we all see for a growing and mutually beneficial tradingrelationship between the United States and New Zealand.

That relationship is already flourishing. Last year, merchandise trade between ourcountries exceeded $4 billion U.S. dollars. There was an additional $2 billion in trade in theservice sector. Exports of Montana products to New Zealand increased more than sevenfoldover the last 5 years. Equally important to Montana, New Zealand kept a cool head and did notoverreact to the recent BSE scare with a ban on U.S. beef – a major product in our state andcritical to our economy.

As good as this trading relationship already is – it could be even better. That is why Ihave long been an advocate for closer economic ties between our countries. In fact, back in2001, I introduced legislation to authorize fast-track consideration of a free trade agreement withNew Zealand. I continue to believe a free trade agreement makes sense – so long as it is theright agreement. And the U.S.-Australia free trade agreement is a good model to follow.

Frankly, it would have made sense to include New Zealand in the Australia negotiationsin the first place. Like Australia, New Zealand is a strong market for American manufacturedgoods and services. Like Australia, New Zealand can serve as a launching pad for reachingAsian markets. And New Zealand is a developed country with a strong legal system, which setsthe stage for a high-standards agreement.

The right free trade agreement with New Zealand makes sense for Montana. You mightnot guess this, but – relatively speaking – New Zealand is a more important market for Montanathan it is for the United States as a whole. While New Zealand is the United States’ 49th largesttrading partner, it is one of Montana’s top 25 export markets – not far behind Malaysia and moreimportant than Thailand or the Philippines.

That doesn’t mean it would be easy. I know that negotiating a free trade agreement withNew Zealand would raise sensitive issues for Montana’s farmers and ranchers, some of whomare here with me today. But I also know that facing difficult trade issues head-on pays off in theend.

That is why I am so proud of my role in securing strong protections for Montanaproducts, including beef and sugar, in the free trade agreement with Australia. Because Iengaged constructively in those negotiations, negotiators on both sides met me half way. Thosestrong protections for agriculture would not have been in the agreement had I just said “no” tonegotiating with Australia from the start.

Using our agreement with Australia as a starting point, I am optimistic that, ifnegotiations were launched, we could reach an agreement that is good for New Zealand, good forthe United States, and good for Montana. But economic cooperation should not focus solelyon a bilateral deal. Instead, we should also be looking for way the United States and NewZealand can work together on multilateral and regional trade issues.

First, of course, is the WTO Doha Round. We need to keep pressing for progress towarda global deal. Trade liberalization at the global level gives all countries the broadest possiblebenefits. This is especially critical for agr iculture. In the end, the greatest prospects for bothMontana’s and New Zealand’s farmers and ranchers are in third markets. And that future awaitsa breakthrough that is best pursued in the WTO. So I certainly hope we can continue to worktogether toward that result.

I also think the United States needs to increase its focus on regional trade integrationwithin the Asia-Pacific region. Ask any global business, and you will hear that the key growthmarkets for the next decade are in this region. Five of the top ten U.S. trading partners are inAsia. So are seven of the last decade’s eleven fastest growing economies. More than half theworld’s population lives in the Asia-Pacific region. But we in the Government must pursuetrade in this region with the same zeal as our business leaders do. We seem to forget sometimesthat the United States is a Pacific country, too.

The momentum toward Asia-Pacific economic integration is growing. In earlySeptember, ministers from the ten ASEAN countries met in Jakarta to discuss accelerating thepace of their economic integration, both internally and with other countries in Asia. They settimetables for free trade agreements with Japan, South Korea, Australia, and – as you know –with New Zealand as well. They also made progress on free trade agreements with China andIndia.

Economic integration in the Asia-Pacific region can help create a larger market for U.S.goods and improve U.S. competitiveness – but only if we claim a seat at the table. And manycountrie s in the region would like us to be more engaged, if only to check the rising power ofChina – a partner to many countries in the region, but also a major competitor.

The United States and New Zealand should work together to make sure that Asianeconomic integration is pursued in a way that benefits the broader Asia-Pacific region, of whichwe are both a part. One step in that direction is to revitalize the Asia-Pacific Economic Forum.Allowing APEC to fall into a secondary role in regional trade discussions has created a void thathas encouraged Asian countries to look inward and define their region more narrowly. APEC isone place to start broadening the regional economic vision again.

But whether advancing APEC, the WTO, or a free trade agreement with New Zealand,the opportunities will be enormous. As will be the challenges. I often compare these challengesto the Soviet launch of the Sputnik satellite. The enormity of the task inspired the energy andcreativity to launch a satellite of our own and ultimately win the space race. As you know, thatsuccess would not have been possible without the great New Zealand engineer WilliamPickering, who helped design the American Explorer 1 satellite.

Similarly, our future successes will also not be achieved unaided, but require thecooperation and inspiration of others. That is why the work of the New Zealand-United StatesCouncil is so essential. It is why my friends from Montana undertook this trade mission.My time here in New Zealand has been productive – if all too brief. I hope that theconnections made and the ideas exchanged during these two days will lead to new commercialand professional relationships as we move forward. Thank you again for your hospitality.