Prime Minister Jacinda Ardern has hinted at progress in the Government’s longstanding efforts to negotiate a free trade agreement with the Pacific Alliance, a group comprising Mexico, Colombia, Peru and Chile, in a speech to businesses tonight.

Negotiations began in 2017 and, once completed, New Zealand will become an associate member. New Zealand has been an observer country since 2012.

"While work is still underway and advice to be taken – I can share with you that as a Government we will be looking closely into making free trade progress with Latin America," Ardern said.

She added that next year, she would focus on deepening existing trading relationships.

"Of note at the moment, the CPTPP provides significant strategic depth, with two-way trade with CPTPP partners exceeding trade with China and Hong Kong," Ardern said, citing the Comprehensive and Progressive Trans-Pacific Partnership, a trade agreement between countries on the Pacific Rim.

The speech, delivered to CEOs of BusinessNZ's Major Companies Group, urged optimism on the business community, and began by drawing on the wisdom of Lord of the Rings actor Elijah Wood.

"Elijah Wood who is returning to New Zealand to star in another film, and who I'm sure is often quoted at such events… put it this way: "There's the approach to the process that is extremely New Zealand.

"For lack of a better word, a can-do attitude, getting your hands dirty. It doesn't matter what my job title is, I'll help you do what you need to do,'" Ardern said.

The quote, Ardern said, was a reflection on the question of New Zealand's competitive role in the world right now, as companies pondered "how do we compete, how do we make ourselves indispensable, how do we make sure our people come first, and that our interests, and our values, come first?"

Ardern said New Zealanders needed to tell a story about the country "that people around the world want to subscribe to", and not get "bogged down in internal politics as other countries are succumbing to".

She urged executives to put some of the less optimistic parts of New Zealand's economic story into context, saying that "much of the world is going through an energy price shock, is screaming out for labour, has supply chain disruption, and is facing surging commodity prices since Russia's invasion of Ukraine".

Ardern noted that consumers in the US and Europe were beginning to spend more on services, alleviating inflationary pressures in goods.

"The cost of shipping containers is coming down – speaking to the easing of demand and delays. Yes some of this points to the impending general slowdown of the global economy but all we can do is to read the updates, brace for a certain level of forecasting, projection, speculation and uncertainty, and then come to the things that we do know for sure," Ardern said.

Ardern said tourism was showing signs of recovery. In August, for the first time in 30 months, "holiday" was the most popular reason cited by visitors to New Zealand, replacing "visiting friends and family".

Elijah Wood in the Lord of the Rings. Photo / New Line Cinema

Next month, the Government will release its Budget Policy Statement, a document that sets out how much new money it plans to spend in the next Budget.

Ardern stuck to the theme of her Finance Minister, Grant Robertson, who has said the next Budget will not be a large one, and that the Government will cut its cloth.

Ardern cited the IMF, which has said that countries where Covid is receding should “rebuild fiscal buffers”, meaning returning to surplus and reducing debt.