Faafoi Kris; Dean JacquiREGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP (RCEP) LEGISLATION BILLThird ReadingHon KRIS FAAFOI (Minister of Justice) on behalf of the Minister of State for Trade and Export Growth: I present a legislative statement on the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill.DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon KRIS FAAFOI: Thank you very much Mr Speaker. I move That the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill be now read a third time.It is a pleasure to speak on behalf of our trade Minister in support of the RCEP Legislation Bill. The bill has undergone the scrutiny of the parliamentary process. Its first reading was in May of this year followed by its extensive examination by the Foreign Affairs Defence and Trade Committee. At the second reading last month the select committee recommended that the bill proceed without any amendments and earlier this week the committee of the whole House made one minor technical amendment. The Government would like to thank everyone who has contributed to the development of this bill since its inception—from members of Parliament select committee members members of the public civil society and business representatives. The wide participation in the development of any bill is important and even more so with this bill given the Trade for All agenda of the Government.This bill is required for New Zealand to meet its commitments under the RCEP agreement and most of our obligations are met through existing legal frameworks and policies with only a small number of legislative amendments required. Therefore this bill is an omnibus bill that amends three areas: the Tariff Act of 1988 and the tariff and Customs and Excise Acts of 2018.Being part of RCEP is important to New Zealand for a number of reasons but first we consider the broader environment in which RCEP and this bill sit. Across the world before the pandemic we were already experiencing an unsettled and unpredictable international environment. There was great pressure on the trading system with growing protectionism increases in non-trade tariff barriers to trade and more overt geopolitical rivalries at play. Now COVID-19 has impacted us all and for our businesses it has created great uncertainty disrupting supply chains and creating difficulties for exporters. The pandemic has brought home to us the importance of being a champion for international trade and seeking economic cooperation. Against this backdrop RCEP is important as it will bring real direct commercial benefits to New Zealanders and companies.The 15 RCEP parties when looked at collectively represent almost a third of the world's population and for New Zealand RCEP includes seven of our top trading partners. RCEP parties already take over half of New Zealand's total exports and provide more than half of our direct foreign investment. Pre - COVID-19 trade had been flourishing with New Zealand exporting more than $36 billion worth of goods to RCEP economies and nearly $12 billion worth of services. The RCEP region will continue to grow in importance for the prosperity and security of New Zealanders. While India's withdrawal from RCEP negotiations in late 2019 was disappointing a fast-track accession process remains. Should it wish to re-join in the future it can and India continues to be of great importance to New Zealand and we greatly value the relationship with it. New Zealand will continue to broaden and deepen the political cultural and economic links that we enjoy with India.RCEP is expected to increase trade flows in the Indo-Pacific. Some of RCEP's tangible benefits will come from providing tariff reductions and removals new investment opportunities and new export markets. There are many notable gains in services and investment. China and the largest Association of Southeast Asian Nations (ASEAN) countries have made investment market access commitments to New Zealand for the very first time. And RCEP sees the strong benefits for our goods and exports by including provisions to address non-tariff barriers such as expectations for customs administrators to the release of perishable goods within six hours. But RCEP's benefits primarily come from the single set of trade rules that streamline export requirements provide greater certainty and enable higher business confidence. All of these contribute to an improved environment to facilitate trade. These common frameworks will help ensure that New Zealand business becomes part of the wider supply-chain networks within the Indo-Pacific region.Against the commercial and strategic benefits of RCEP it is also important to consider the implications of New Zealand not joining the agreement. In this case New Zealand exporters may be excluded from regional supply chains representing lost opportunities for New Zealand. Modelling indicates that New Zealand's GDP would be about 0.2 percent lower or $900 million if RCEP proceeded without New Zealand as a part of it. Conversely once RCEP is fully in effect New Zealand's annual GDP will be between 0.3 and 0.6 percent larger as a result of the agreement and that amounts to between $1.5 billion to $3.2 billion in annual GDP. As we can see the trade effects of RCEP will be material and these economic benefits are not just concentrated on a few exporters but half of New Zealand jobs come from the tradable sector. And over that time the economic benefit to New Zealand from these changes will be considerable.A second major benefit of RCEP is its strategic significance for New Zealand and the region. The Indo-Pacific is of critical importance to New Zealand and we have strong people links across the region visible in the make-up of our multicultural society. It is also the location of all of our current free-trade agreements from bilateral agreements and arrangements with individual economies to larger ones like this one before us today. At RCEP's core is the Association of Southeast Asian Nations. The agreement has been ASEAN-led and demonstrates that ASEAN is committed to ongoing regional economic integration and New Zealand is committed to the objective. Joining RCEP ensures that we will be at the table where decisions affecting our interests will be taken. It reinforces our place in the region and sends an important signal of New Zealand's openness to trade and commitment to the rules-based international trading system. As is in the name RCEP is a regional comprehensive economic partnership. It provides the framework for increasing economic integration at a time when trends of protectionism are rising. It demonstrates that Governments even in challenging times are able to compromise engage for cooperation and provide commitments to each other. And these commitments in the trade and economic sector space also bolster New Zealand's ability to engage on the political and security issues that matter to our region.This leads to the third major benefit from RCEP and its contribution to the recovery of New Zealand and the region from the COVID-19 pandemic. When implemented fully RCEP will become the largest trade agreement in the world. Given the difficulties of COVID-19 and the challenges for the international trading system this achievement cannot be underestimated. Right from the beginning of the pandemic New Zealand moved quickly to keep supply chains open for essential imports reduce trade barriers maintain connectivity and keep air links open while shipping constraints continued. And as the pandemic continues New Zealand's response has adapted. We know that trade is a key driver for prosperity and that is why enabling trade is a key part of our recovery strategy.The trade-focused support has three main pillars: retooling support for exporters refreshing the international trade architecture and reenergising and refocusing our key trade relationships. New Zealand businesses and exporters in particular have been facing challenging times but we've also seen how resilient they can be when the situation is up against them. The Government recognises this and our commitment to RCEP is part of our response. RCEP will create more security and certainty for New Zealand exporters forming a relatively more predictable trading environment for our companies. It is in this context of the challenging trade environment that diverse and robust trade relationships are more important than ever. They're important for the resilience of our supply chains and for the economic prosperity of New Zealand and our region.Lastly RCEP is an important trade agreement for New Zealand as it protects our right to regulate for legitimate public policy purposes. New Zealand's standard exception for the Treaty of Waitangi has been included and RCEP does not include provisions for investor-State dispute settlements. We retain the ability for example to screen investment in sensitive land and assets and regulate for legitimate reasons such as in the interests of health the environment labour and for security. And RCEP preserves rights that New Zealand holds close. New Zealand's participation in RCEP shows that when New Zealand pursues trade it does it not just for our own sake; it is a means to an end because done well we know that trade can lift the living standards of New Zealanders and secure the future prosperity of our country. In such turbulent times it is important that New Zealand continues to lead the way as a responsible proactive and engaged global participant. This bill will enable New Zealand to ratify RCEP and be part of the agreement and to see the benefits from it. I commend this bill to the House.ASSISTANT SPEAKER (Hon Jacqui Dean): The question is that the motion be agreed to.