Speech By George Cunningham, Charge d'Affaires a.i. of The European Commission Delegation To The NZ-European Business Council

5th May 2009

Good evening. Thank you for inviting me. I am honoured to have been asked to give a short address at your AGM this evening. 

First of all, I'd like to give my thanks to Peter Kiely for all the outstanding work that he has done. What a President of the Business Council he has really been!

And my congratulations to Monique Surges who will no doubt maintain the high standards and build still further the excellent profile of this organisation. Similarly to Patrica Thake on having become Vice-President of the Business Council.  

And I'd also like to thank John Waugh, the British Consul General, whose premises we are using tonight.

If I had to choose just a word to sum up the work of the Business Council, I would choose the word "collaboration". Perhaps the most identifiable aspect of the Business Council is that it represents so many different Member States, Trade Commissions and other organizations working in harmony together. By pooling your resources in the way you have, the Council has become a body that is truly greater than the sum of its parts.

I like to think that this type of engagement is not just because we who represent Europe are relatively few in number here on the "other side of the world", but more a reflection of today's Europe – an awareness and commitment to community and solidarity.

Collaboration bears fruit, too. Let me highlight some of the successes of the Business Council from the last 12 months, particularly the ones we have worked on together.

The "Gateway to the EU in NZ" webportal – http://www.eu.org.nz has been a great success. I am delighted with the quick pick-up shown by organizations using the web portal. Each of us on our own cannot show a continuous series of activities easily - but together we can show something happening about Europe in NZ around the country almost every week. It is an excellent means by which we can broadcast our presence and stimulate additional attendance of our events.  

Aside from the usual important high-level meetings that occupy our time, there have been inventive, creative outreach activities featured on the web portal, including cultural events like film festivals and even the Oktoberfest! A special thank to Monique Surges, whose team manages the inflow of reports and photos, quickly putting them onto the web for us to see.

The second big initiative that we started last year is the EU Market Access Team, made up of trade representatives from the EU Missions in Wellington, the European Commission Delegation and of course a representative from the NZ-Europe Business Council. We met four or five times in Wellington last year and tackled issues on behalf of EU exporters and business associations ranging from Geographical Indications to SPS issues.

This should bear results later this year when we expect (fingers crossed of course!) that EU-produced raw milk products – especially cheeses - and pork meat products - like saucission and other salamis - will be allowed into the NZ market. Not just words but solid achievements that we can be proud of.

The next subject the Market Access Team expects to investigate is the rules and conditions for direct foreign investment into NZ. The NZ Government is currently conducting a review of overseas investment rules with the aim to make foreign investment simpler and more attractive. It is an opportunity for us to put our stamp on FDI here.

We hope EU Member State Trade Commissions here in Auckland are all informed about the work of the Market Access Team. We are always keen to hear more cases where European exporters face difficulties accessing the NZ market – let us know, we're certainly open for business!

Looking ahead, I would like to put a plug in for three events drawing nearer. The first is Europe Day in Wellington, an occasion to celebrate the success of our collaborative project – the European Union. It will be held this year at the NZ Portrait Gallery on 12th May. We hope to see some of you there. I know that Peter Kiely is has been planning for a very special Europe Day in Auckland a little bit later as well.

The second is to celebrate 5 years since the "big bang" enlargement when the EU grew from 15 to 25 Member States. Now of course, we are 27 strong. It is also the 20th Anniversary of the Fall of the Berlin Wall, when Europe broke down divisive, painful barriers and finally become one. I am pleased to announce that Lord Chris Patten, former British cabinet member and EU External Relations Commissioner, is coming to NZ later this year, to participate in a series of conferences organized by the EU Centres Network to celebrate these two anniversaries.

Finally, as you know, under the EU-NZ Joint Declaration, trade talks take place between the EC and NZ every year. It is the turn of NZ to be the location of the 2009 talks. We hope to take advantage of the presence of EC trade expertise to hold a major conference with the NZ-Europe Business Council and the Auckland Chamber of Commerce at the end of the year. Any thoughts about how to make this conference a big success are welcome. We are very much at the formative stage presently and want to listen to your needs on such an occasion.

All these kinds of events are not just done for pleasure. The work that we do together is all the more valuable during these economically difficult times. This leads me to say a few words about the financial crisis facing the world, how it has spread and a bit about the immediate future.

You all know the severity of the crisis. It is most dramatically shown in terms of human cost. In 2009, the EU alone is likely to shed around 3.5 million jobs. Figures released on Thursday show EU unemployment is already up to 8.3%.

The economic crisis is certainly bringing strong challenges in the European Union. The sense of solidarity within Europe, between East and West, rich and poor, new and old is under strain. The achievements of the last thirty years - from the single market and enlargement to the euro - are being tested as never before.

Nevertheless, it is the solidarity between Member States within the EU - and especially within the euro zone – that have cushioned some of the worst effects of the economic downturn. Otherwise surely more individual countries would have defaulted had not the EU held everybody together.

The EU and its Member States have pursued a coordinated approach to contain the impacts of the crisis and stimulate a rebound.

We are focusing on job creation schemes, increasing investments in infrastructure and key sectors such as cars, construction and smart green technologies. Existing funds to help the unemployed and those at risk of losing their jobs are being mobilised.

We recognise that the key to success is creating solutions that are tailored to the specific situation in each country. But at the same time, we also need to be sure that the actions of one Member State contribute to – and are coherent with – the effectiveness of action in other Member States.

An important part of the European Commission's response to the financial crisis is the impetus to create a comprehensive framework for the direct regulation and supervision in the alternative fund industry.

In line with EU recommendations, the G20 plan also gives international financial institutions a bigger role in monitoring economic risks. And it gives emerging and developing economies more voice in these institutions.

Of course, the current turmoil is not limited to Europe alone but it permeates the entire world. We live in a global age and global solutions are required.

The highly successful G20 meeting at the beginning of April underlined how important it is for world leaders to take coordinated action on a common response. Ambitious decisions emerged from the summit and the EU played a driving role in the process.

Our fiscal effort of over €400 billion will generate new investments, boost demand, create jobs and help move us to a low-carbon economy. This fiscal stimulus is substantial for Europe itself and provides a key contribution to the G20’s short term macroeconomic response to the crisis.

Trade protectionism is a potential threat in any global recession. It was thus important that the G20 confirmed the commitment to keep trade and investment open and to avoid any kind of protectionism.

We in the European Union believe that resisting protectionism is the best way to foster economic development, get over the economic crisis and create an environment where both developed and emerging economies may prosper.

That's why our desire to conclude the Doha Development Round has been maintained at a high level. It is our best insurance policy against protectionism. Both NZ and the EU have been foremost in trying to ensure momentum is not lost in reaching an ambitious conclusion to Doha.

However it seems possible that the text which has already been agreed by last July's WTO Ministerial may be reopened by the new US Administration. Indications are that this may lead to a renegotiation of significant parts of the current Doha text, leading to further delays. The delays in reaching a Doha agreement have fuelled moves towards reaching regional and bilateral Free Trade Agreements in the world, including by the EU and by NZ.

Over the past few weeks there has been some discussion about whether we are now reaching the bottom of this crisis and whether the recovery can be expected in the coming months. Unfortunately, that does not appear likely yet.

As the IMF's World Economic Outlook of 22 April clearly warns, the current outlook is "exceptionally uncertain, with risks still weighting on the downside". A substantial part of the uncertainty is due to lingering weakness in the financial system and the continuing fragility of credit markets.

The IMF's latest forecasts, released last week, indicate that the advanced economies will suffer the sharpest GDP contractions during 2009 and the prospects for these economies will not be much brighter in 2010, as GDP is set to stagnate. According to the IMF, the GDP of the euro area as a whole is due to fall in 2009 by -4.2%, while the forecast for the US is a fall of -2.8%. Neither the EU, nor US economies are expected to start recovering in 2010.

Yesterday, the European Commission confirmed this analysis of the situation facing eurozone economies.

WTO Director-General Pascal Lamy was over here in Auckland a couple of months ago. He said that trade flows – one of the engines of economic growth - had fallen for the first time since World War II. Most recent figures show a dramatic decline of trade flows of -9%.

This reinforces the point made at the beginning of my talk. Undoubtedly the pressure is on from Europe and elsewhere to do all things to ensure that trade flows go on as smoothly as possible; that businesses continue to look actively for new market openings; and that trade barriers – both old and new - are monitored, identified and tackled.

I could not think for a finer moment for the NZ-Europe Business Council, EU Member States and the European Commission to stand up to the mark and be counted. Thank you.