Smith Lockwood: Tariff (New Zealand - Thailand Closer Economic Partnership) Bill — Second Reading Instruction to Committee In Committee Third Reading 
Smith Lockwood: Tariff (New Zealand - Thailand Closer Economic Partnership) Bill — Second Reading Instruction to Committee In Committee Third Reading 
[Volume:626;Page:21422] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 In speaking to the third reading of the Tariff (New Zealand - Thailand Closer Economic Partnership) Bill I want to reflect on what took place in the Committee stage. The Committee did canvass a number of issues in relation to this legislation which I make clear from the outset National supports—not because we think it is a great piece of legislation or because we think the Thai trade agreement is a great agreement but because we believe that any trade liberalisation is positive for New Zealand and is worthy of support. I congratulate the Government on making some progress in trade negotiations and I congratulate the Minister for Trade Negotiations on having made some progress on trade negotiations. 
But having said that I am troubled by the quality of the agreement which this legislation implements here in New Zealand. I think any reasonably objective examination of it would show that on balance it is worth doing but there are quality issues. New Zealand up until now has set very high standards in our bilateral work. During the second reading debate I mentioned that CER was a very high-standard agreement. Our Singapore agreement is a high-standard agreement. I accept that the Singapore agreement was probably easier to negotiate although services with Singapore were not easy to deal with I think it is fair to say—but they are included. 
Of course one of the troubles with this agreement is that services are not included and services make up over two-thirds of our economy. It is a serious concern that they are not included. OK the Minister says that negotiations on that are to commence within 3 years. At least that is something and services are not left out altogether but it sets a poor precedent when agreements go ahead with bits having been left behind for a period of time. I guess the Government was getting a bit desperate. It had failed with the Hong Kong free-trade agreement. That one had been initiated a long time ago and the Government had failed on it. The Government had no runs on the board in respect of bilateral trade agreements at all so I guess it wanted to get this one in the bag regardless of the quality. 
There is a second concern about quality and that is the extension of New Zealand’s undertakings beyond our APEC goals. OK I accept that the Minister could not necessarily have negotiated with Thailand to phase out its tariffs earlier than the date it has agreed to do that—2025 from memory. But that is no reason for New Zealand not to agree to phase out our tariffs sooner. People are starting to learn a lot about trade. I have heard speeches this afternoon from members pointing out how important trade is to maintaining and enhancing peace and security in the world. I think I heard a member talking about trade lifting the tide and raising the living standards of all people in the nations that are trading. What I have not heard members of this Parliament begin to understand is that for us to remove barriers to trade with us for us not necessarily to have as long a phase-out time as other countries is to our advantage. It actually would have made sense to phase out New Zealand’s tariffs by 2010—our APEC goal commitment—because that would be good for New Zealand and the New Zealand economy. Why did the Government agree to phase out our tariffs on goods from Thailand by 2015? That hurts our economy. All the research is so clear: the countries that open up their economies first will be in the strongest position in this globalising world. Here this Government has chosen to maintain a long phase-out of our own tariffs and that is a reflection of poor quality and confused thinking. 
Hon David Cunliffe 
: Why does nobody do that in the real world? 
Dr the Hon LOCKWOOD SMITH 
: In fact quite a few successful economies have—Hong Kong for one. Singapore did not maintain tariffs around its goods. New Zealand of course legislated to phase out tariffs and Labour actually repealed that legislation and New Zealand’s economy will suffer because of that. The economies that are the first to open their markets are the economies that become the strongest in a globalising world. That is clear if the member would only open his eyes to see. 
We raised a number of questions and in fairness I must say that the Minister did start to answer those questions. But then I guess the questions got a wee bit harder and the Minister the Hon Jim Sutton got a bit petulant started to throw his toys out of the cot and refused to answer any more questions. Jim Sutton is not a bad bloke I guess. He used to be a good guy till Labour wrecked him. He certainly stopped answering questions. He became a bit more petulant and threw his toys out of the cot. These are the serious issues that we asked questions about and never got answers to. 
The first question was about the transitional safeguard measures. For the first time New Zealand is implementing specific transitional safeguard measures in our law. Sure we are party to the transitional safeguard measures involved in our World Trade Organization agreements but good questions were asked. Why legislate for this when we are already covered by the transitional safeguard measures of the World Trade Organization? It makes more sense for Thailand to want to put crazy restrictions into its law but why do we follow suit? Why do we not stick to the World Trade Organization provisions? Why are we putting into our law the set of measures in Part 2 of this bill? I think it was Dail Jones from New Zealand First who said that they will be a lawyer’s dream. 
One does not need to be much of a lawyer to realise that once one reads that the bill talks about a threat of injury and an increase in the volume of imports. I think the Minister in his third reading contribution talked about a rush of imports or a huge increase in imports. The legislation does not state that. It refers just to an increase either in real terms or in relative terms. Once we have those kinds of words in our law once we have words such as “like goods” lawyers will have a field day. It does not have to be an increase in imports of one’s own product; it just has to be an increase in imports of like products—and this legislation tries to define what like products are. 
Why put this sort of stuff in our law when there already are safeguard provisions in the World Trade Organization agreements which have some precedents around them? These provisions are a bit different a bit new in our law and I predict we will see a new industry emerge that challenges imports under these transitional safeguard provisions. If this agreement works—and we hope it will—imports from Thailand will increase. That is what we want. We want an increase in our exports to Thailand. So I think it was short-sighted of the Government to put those transitional safeguard measures into our law and it is sad that the Minister did not have the heart to respond to the very good questions from my colleague Richard Worth in relation to why we should do that when the World Trade Organization already has similar provisions that would be quite adequate for New Zealand. 
The last question on a serious issue that we raised with the Minister was why have in this agreement an article that states: “… nothing in this Agreement shall preclude the adoption by New Zealand of measures it deems necessary to accord more favourable treatment to Maori in respect of matters covered by this Agreement including in fulfilment of its obligations under the Treaty of Waitangi.” We asked the Minister—which I think was perfectly fair as this is now to be part of our law—what that meant. The Minister refused to answer. He got up and raved on but clearly did not answer. In fact he misquoted the article and sought to downplay it through misquoting it. The article clearly states that the Government intends to be able to accord more favourable treatment to Maori. 
New Zealanders find that objectionable. That was very clear following Don Brash’s Orewa speech last year. Trevor Mallard promised after that speech that Labour’s policy had changed that in future it would not accord more favourable treatment to Maori. Clearly Labour will say anything it if thinks it will help it in the polls. That is quite clear. The polls were running against Labour last year on these treaty issues so Helen Clark appointed Trevor Mallard as the Coordinating Minister Race Relations to quieten everything down. He made a public statement at Victoria University that Maori have no extra rights or privileges under the treaty or in the policy of the New Zealand Government and within weeks—in fact at the very same time—he knew or should have known that the Government was incorporating into a treaty with Thailand a provision that does exactly that; a provision that does accord more favourable treatment to Maori. 
National members object to that although we do support the bill in its overall impact.