Thank you for the invitation to participate in this APEC CEO forum. It is good to see so many of you here. Indeed it was critical that the APEC Summit and this CEO forum proceed. Our presence here signals our determination not to be intimidated by terrorists， but rather to get on with the work of economic development and international co-operation in all its many forms， including trade.
I hope that at the APEC Leaders' summit this weekend we will make a strong commitment to collective action against terrorism. The terrorist attacks struck not against one nation， but against humanity. We are all in this together.
Our security， including our economic security， is inter-linked. This year， in Shanghai， we must assert that trade and economic prosperity are also major forces for stability and confidence building. We know that the successful launch of a new WTO round will underpin confidence in the world economy and help stimulate growth.
This morning's session looked at the double edge of globalisation， at striking a balance between efficiency and equity. Let me tell you how we in New Zealand are seeking to achieve that balance.
For New Zealand， globalisation is a given. Our history， our culture， and our ongoing prosperity are about taking the opportunities globalisation offers us and applying them for our common good. We need markets offshore to sell our goods and services； we need capital from offshore to invest in our future； and we are involved continually in a dialogue of ideas at these and other forums in every walk of life with the rest of the world.
As a small and geographically isolated country with a well-educated population， New Zealand stands to benefit more than many from the new ideas and new technologies， especially in communications， which drive the globalisation process. Now， by riding the knowledge wave， we aim to speed up the transformation already under way in our economy， from what was largely a commodity-dominated export trade to a more sophisticated trade in goods and services. That transformation is critical as we aim to maintain and build on our first world living standards for all our people. Our government puts a high priority on social inclusion and participation， and on ensuring that the rising tide really does lift all boats.
Now， at the beginning of the 21st century， New Zealand is taking a new approach to economic development. It is an approach based on growing our levels of talent， innovation， and specialisation. It is an approach which has worked well in other countries， and it is being adapted to our circumstances and opportunities.
Our vision is to see New Zealand back in the top half of the OECD economic indicators， as we already are on most social indicators. Our aim is to lever off a talented population with many great ideas in order to build an economy driven by talent， innovation， and entrepreneurial skills.
We see the New Zealand of the future as an export-oriented economy with more globally-oriented companies operating from a New Zealand base and developing strong clusters around them. We see New Zealand developing as a top place in the world to do business because ：
· We have a highly educated and skilled workforce
· We have sophisticated infrastructure and are highly interconnected
· We have strong commitments to government， business and community partnerships
· We are a secure and stable place to live in and invest in， in every sense
· We have a fantastic physical environment for recreation and leisure
· We are culturally dynamic， and
· We are a socially inclusive and tolerant society
New Zealand is now in the process of creating conditions in which the highest levels of innovation can flourish and in which New Zealand has the capacity to create new knowledge and apply it to new and existing industries.
To achieve our goals， government is working closely with business and other stakeholders.
Our attention is on the longer term changes needed for New Zealand to maximise its opportunities. Our government's first twenty-two months in office have seen significant progress made in putting in place the building blocks for the innovative economy. We are co-ordinating policies relating to innovation， talent and skills， investment and business growth， excellence in education， and science， research， and development.
I would like to share with you some of the initiatives we are undertaking to transform our economy. They include：
· Placing huge emphasis on education. We have paid considerable attention to increasing participation in our early childhood education， which is already high by international standards. Our school sector is focusing on improving our rates of literacy and numeracy and fostering IT infrastructure and skills. Our fast IT roll-out is being made possible through strong partnerships between government， business， and schools. We are currently in the throes of a fundamental overhaul of the structure and funding of tertiary education to improve both its quality and its capacity for specialisation. We have put considerable emphasis on the emergence and fostering of centres of excellence for research at the tertiary level. There is significantly more investment in industry training.
· Taking a fresh approach to innovation with increased public funding for science and research， and providing more favourable tax treatment for research and development. We are emphasising the need to commercialise the new knowledge we generate. That has led to the development for the first time in New Zealand of business incubators， attached generally to research based institutions. The government has also established a fund to provide seed and start up capital， to be deployed in partnership with the private sector. Our new Science and Innovation Advisory Council has developed a draft New Zealand Innovation Strategy designed to position New Zealanders as innovators to the world.
· Taking a new approach to foreign direct investment so that we target sectors in which we can achieve global competitiveness. We aim to attract greenfield investment as magnets for cluster development around our areas of expertise and advantage.
· Emphasizing skills in our immigration programme. Immigration policy has been changed to give priority to recruiting the talent needed to drive our innovative economy. We are currently working on the development of a talent visa to enable our businesses to tap even faster into the global specialist talent they need to grow and develop.
· Developing world-leading e-commerce and e-government strategies. We are developing ambitious targets for rolling out our broadband capacity. The telecommunications platform must enable all our businesses and homes to be rapidly connected to broadband.
In the twenty-first century we see the government's role as being a catalyst for the innovative economy. We will provide strategic leadership. We will facilitate， co-ordinate， broker， and partner， and we will fund where appropriate. We are moving to identify areas of our economy in which world class competitiveness is a real possibility where it is not already a reality. We will also provide leadership to ensure the growth we encourage is sustainable.
Four sectors stand out as warranting strategic targeting. They are biotechnology， information and communications technology （ICT）， creative industries， and environmental technologies. They have high potential for growth and require further investment and capability building.
Other sectors have been identified for tactical targeting which builds on current capabilities and industry structures to achieve investment in chosen “sweet spots” or attractive niches. This approach relies on the deliberate application of marketing and/or deal brokering， and may include specific grants and incentives. Sectors identified for tactical targeting include education， tourism， food processing， wine， leisure marine， and professional services.
A central component of the innovative New Zealand strategy is to build a network nation. We are currently developing policies to tap into our networks of expatriate New Zealanders. The idea is to ensure that these networks are closely connected with our country to create a virtual New Zealand. We want to facilitate interaction between local talent and global talent centres， and articulate the value proposition of investing in， living in， working in， and associating with the new New Zealand.
Many of your companies have long-established linkages with New Zealand. Many of you have visited. For those who have not， let me spell out again some of our many attractive features：
· We are a stable investment location with a strong record going back many years. We are an attractive proposition for those who seek security， high quality， and a robust legal framework.
· We have world class clusters of companies and supporting infrastructure developing fast in biotechnology and IT， leisure marine， wood processing， and other areas
· We are an easy and competitive place in which to do business. We have an efficient， market-oriented economy， a stable and secure business environment， and we are determinedly corruption-free. By first-world standards， our taxes are low.
· We are well connected with the world because of our sophisticated communications access.
· Finally， we are a superb place in which to live and work. Our clean， and uncluttered environment makes our lifestyle proposition one of the best in the world.
Given this new course we are charting， it is not surprising that New Zealand is in the vanguard of APEC members which recognise the importance of international trade and facilitation. For a small economy like ours a key priority is increasing the size of the market for our goods. Comprehensive open trade agreements， like our recently negotiated economic partnership with Singapore， and that being discussed with Hong Kong， are important vehicles. We are keen to pursue other bilateral agreements.
A high priority for us is a bilateral trade agreement between New Zealand and the United States. We believe both sides would win. It would also make good sense for the United States to negotiate a high quality agreement with New Zealand and our CER partner Australia together. Our two combined markets would be of greater value to the United States. From a strategic trade point of view we would all benefit from an agreement which spanned the Pacific and showed the way for other APEC economies， as we have advocated by linking New Zealand， Australia， Chile and Singapore in one agreement with the United States.
A key political message which APEC must deliver this weekend is the importance of launching a new WTO Round. We can invigorate that process through our willingness to act at the bilateral， regional and sub-regional levels.
New Zealand itself is not interested in low-quality trade agreements. We advocate comprehensive， “WTO-plus” agreements. They need to advance， not impede， both multilateralism and APEC's progress towards its goal of free and open trade and investment throughout the region.
I value very much the contact which APEC makes possible in the region. Equally I value contact with business in New Zealand and internationally， including through this forum.
APEC offers excellent models for co-operation between government and business. All of us appreciate the value that has been added by APEC's Business Advisory Council （ABAC）， of which a number of you are members.
New Zealand sees value in a similarly inclusive approach by APEC towards organised labour. Through informed and constructive input by labour representatives into the APEC agenda our work on human resource development and capacity-building would surely be enhanced. Exclusion ignites the fear that globalisation is one-sided in its effects， and the sense of grievance which that creates has acted to harm international meetings from Seattle to Genoa. Our government in New Zealand practises inclusion at home and will advocate it internationally.
I would also like to see APEC raise the profile of its work on sustainable development. The organisation already does useful work through a number of its working groups. With the World Summit on Sustainable Development being held next year， APEC economies have the opportunity to make a major contribution by participating in the preparations and follow-up work.
The voice of business will be important too. In New Zealand I believe the Business Council on Sustainable Development will play a key role in the development of our national sustainable development strategy.
Many of you will be in the forefront of similar work in your own countries. I urge you all to give it priority so that when world leaders meet in Johannesburg next September we know that the corporate sector is engaged in the process. Making our economies both innovative and sustainable needs government， business， and community buy-in.
In conclusion， can I say that while terrorism has cast its shadow over us all in recent weeks， it has also seen us redouble our determination to work together as an international community. Our world faces challenges which no nation can meet on its own. Global prosperity and stability， and environmental sustainability， can only be achieved by working together. The message to the terrorists must be that their actions are leading us to work even more closely together rather than tearing us apart. This new impetus for multilateralism will drive a new WTO round， as it will drive many other global dialogues and initiatives. That makes me very positive about the future of APEC and of my own nation， and about the partnerships we can build at all levels to secure our common future.