McClay ToddHon TODD McCLAY (Minister for Trade): Madam Chair thank you. It gives me pleasure to take a call on the debate on this agreement. And I agree with other members about its importance not only to New Zealand but actually the huge opportunity it provides New Zealand exporters particularly the primary sector to do much more in a very large and wealthy market—the European Union.Can I recognise the work of the committee and how quickly they went about their work. I'm mindful that everybody who submitted and wanted to come before the committee was afforded the opportunity to do so and the committee took time to listen to all those who submitted and I commend them for that. But can I also recognise that they worked when Parliament was in session they worked on Mondays and Fridays and in recesses to go as hard as they could to do their job properly to scrutinise the legislation and suggest any changes that are needed as they are meant to but to do so also so it could return to the House in an extremely timely fashion.Indeed I think from first reading which was 31 January until this Thursday where third reading will take place is a matter of some seven weeks and I'm not sure that we have seen such commitment from this House on a free-trade agreement (FTA) particularly one of the magnitude of this one previously. So I'd like to recognise all the members of the House for the work that they have done. In particular Damien O'Connor who was the Minister at the time the agreement was negotiated and was signed to recognise his commitment over a very long period of time and to reach agreement. He said as others have said in some areas it hasn't met the expectation—I know particularly for dairy or beef farmers within New Zealand. Overall it is a good result for New Zealand. It will help grow the economy and increase the wealth of New Zealand and give Governments more opportunity.I'd also like to recognise the ACT Party and New Zealand First for agreeing for this process to go faster than it might overwise. In particular for us to be able to do second reading today without debate and then a wider ranging debate here in the committee stage and then to have third reading in the same week. To the Green Party also who I reached out to and who agreed to work as fast as they could scrutinising the document properly but also so that it could follow through to the House and enter into force. And to recognise the Māori Party and whilst they may have a different view to me in first reading when it comes to trade I do commit to them that actually this agreement will be good for all New Zealanders: Pākehā Māori Indian Chinese everybody that commits themselves to work hard in New Zealand and to export and therefore I would hope that in their debates they will work with us to find ways to make agreements in the future better to deliver for all New Zealand.Damien O'Connor and others have recognised the officials. They worked very very hard. Ministers get to go meetings and occasionally stay up late at night talking about these things but the officials are the ones that put the effort in day in and day out day in and day out. To recognise the very large group of them that worked over this from the conception of the idea of having a free-trade agreement with the European Union to when it was launched the negotiations and the conclusion. Much of the thanks is owed to them. In fact without their work we wouldn't be here working as dutifully as we are.I want to touch on a couple of parts of the agreement that have been raised and I'll do my best to answer the mischievous question from the Hon Phil Twyford. But at the same time I don't want to stand in the way of progress. The reason that I asked members of the committee of the whole House and the Business Committee to allow us to go faster than we would otherwise is because this agreement enters into force on the first day of the second month after New Zealand ratifies and that's because the European Union ratified last year through their processes.The reason that's important is because on entry into force there's $100 million worth of tariff savings for New Zealand exporters on day one for the first year. That's one of the highest levels of tariff saving on entering into force of any agreement we've ever concluded. But more importantly than that there are at least two industries—the kiwifruit industry and the onion industry—who are seasonal and about to export or have already exported their products to the European market. In the case of kiwifruit if we can get this work done this week then the agreement will enter into force on 1 May not 1 June or July or even 1 August which was what some people thought it may take the time for the House to get through.There's a $43 million saving for New Zealand kiwifruit growers as a result of this because 90 percent of their crop going to the European Union will be covered under this agreement and the tariff rate will fall to zero. In as far as the onion growers of New Zealand are concerned about a third of their crop—a saving of $3 million for onion growers that will go directly into their pocket. So that's the reason that I think it's worth recognising the committee is coming together because of the direct benefit on day one and over the coming months for so many New Zealanders.So 91 percent of New Zealand's current goods trade with the EU will enter duty free increasing to 97 percent over seven years; and $1.3 billion of GDP will be boosted annually increasing our exports to the EU by up to $1.8 million per year. That's just jobs for New Zealanders and a better return for the hard work that they put in.A number of issues have been raised particularly around geographical indications (GIs). It's not something that New Zealand often has been in favour of—indeed this was an ask of the European Union not something New Zealand went to the negotiating table with. However it's important to recognise that the EU has not concluded an agreement without GI recognition in it. But I want to recognise the work officials did to minimise the effect upon New Zealand producers when it comes to a number of products that could have been covered by the geographical indicator mechanism in the European Union and that where there will have to be changes to the names of some products the lead-in is a period of time where they'll be able to adjust it won't be thrust upon them and they'll be able to come to terms with that.Damien O'Connor mentioned that there wasn't great interest from New Zealand exporters around GI protection here. I think we should continue to listen to them but I support them in that because there are a number of ways that New Zealand gets to protect its reputation and that's through continuing to have a very high-quality reputation. And that outside of the EU's desire to enforce GIs with others around the world I don't know whether it's in New Zealand's best interest to try and go and enforce this type of protection elsewhere for New Zealand products but where exporters have concerns of course we'll be open to listening to that.Phil Twyford asked a little bit about some of the other parts of the agreement and there are many areas that is different than some of the traditional trade agreements; although even the original Trans-Pacific Partnership that flowed on from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership had labour and environmental conditions and so on in it. Indeed the agreement hasn't entered into force and therefore any change this Government's made are not captured by it because it hasn't entered into force. However one of the most important principles of all free-trade agreements including the European Union free-trade agreement is the right of Governments on both sides to pass rules and regulations through their Parliament to affect the standards that they think are important.When it comes to labour standards in the European Union and New Zealand they're similar. In some cases I think New Zealand's labour standards are higher. So I don't see that there is likely to be any dispute between New Zealand and the European Union in these areas and either way. As far as environmental standards of New Zealand committed to meeting its climate change reduction obligations we do have the ability here as Europe does to find a way that is best for New Zealand to do that just as the European Union have very different to New Zealand it's the best intentions that are important here and the Government is committed to meeting those.There are two amendments that I will have introduced to this legislation in the committee stage and they are minor by design technical amendments that officials have found. The first is the clause 84 new section 59 of the Geographical Indications (Wine and Spirits) Registration Act 2006. This relates to the date of protection of amended GIs. In effect it means that as the EU may change a GI there is not additional costs or implication for New Zealand and that we are mirroring some of the effects of those.The second amendment is a consequential amendment to section 20(1) of the Trade Marks Act 2002 and this relates to the prohibition on registering conflicting trade marks. The FTA prohibits the registration of trade marks that incorporates an EU GI subject to certain conditions. To meet the requirement the bill amends the Trade Marks Act to prevent the registration of trade marks that incorporates an EU GI including any new GIs. However in relation to a proposed EU GI rather than only impacting those trade marks that incorporate a proposed EU GI the current drafting of the bill prevents the registration of any trade marks from the time that any new EU GI proposals are published until those proposals are dealt with. To enact that draft would potentially impact many thousands of legitimate trade mark applications therefore officials have suggested and I have tabled recommended Schedule 2 of the bill changes which set out the amendments to section 20(1) of the Trade Marks Act that amends to ensure that only relevant trade mark applications are impacted and not those that are meant to be excluded. With that in mind I thank the House for its work and I commend it in committee stage to the House.