Groser Tim: Tariff (Trans-Pacific Strategic Economic Partnership) Amendment Bill — Second Reading 
Groser Tim: Tariff (Trans-Pacific Strategic Economic Partnership) Amendment Bill — Second Reading 
[Volume:630;Page:2001] 
TIM GROSER (National) 
: 
 I am also rising to support this bill. My two colleagues earlier explained our general political position on it. From Keith Locke we have just heard what I would describe as an entirely consistent view from the Green Party. It is basically a view that sees the restraints on sovereignty through international trade treaties as an encroachment upon the rights—as I would put it—of Governments to mess up our own economy. So I think that that is the only fundamental difference in this House. Yes we have a couple of small points to make; we would have liked to have seen some slight changes to this agreement. But they have been touched on by other speakers so I will not go into them now. 
What I want to do on this occasion—the second time I have spoken on the agreement—is to explore a little more deeply the broader strategy behind the agreement. The title is quite a mouthful: the Trans-Pacific Strategic Economic Partnership Agreement. But although it is rather a mouthful and one might also say slightly pompous the title is correct. The agreement is not fundamentally about advancing our economy by any appreciable amount. We all know that the net benefit is trivial. It really requires a deeper understanding of the strategy behind this agreement to understand why it has been worth negotiating. So from that perspective I will go back in history a little. 
I would describe New Zealand about 25 years ago as being up the creek without a trade policy paddle. We had no way multilaterally through the GATT because agriculture—our chief interest—was outside it. We had only one very poor-quality bilateral agreement—the so-called New Zealand - Australia Free Trade Agreement—and nothing else. It was a very difficult environment made more difficult—as all members in the House will know—by the decision of the United Kingdom to join what was then a completely unreformed common agricultural policy going mad. As a very small country with very little leverage—friends but no leverage—the situation in the early 1980s was extremely bleak for this country. 
We then saw through the 1980s a slow shift in that fundamentally bleak position as a result of a number of factors. One was internal economic reform which changed the economic prospects of this country from very poor to average or to a little better than average OECD levels—although it took 5 or 6 years to have any effect starting from 1991. Internationally also the cynicism that was felt in this country about the multilateral option—the GATT as it was then called—began to be addressed as people began to incorporate agriculture for the first time in the Uruguay round. So that very bleak situation multilaterally started to shift to our country’s favour in the 1980s. 
Around about the early 1990s after several failed attempts by New Zealand to try as I have put it in the past to find dancing partners—that is some countries that we could negotiate with beyond CER-type deals—the National Party formulated a trade policy strategy called New Zealand’s multilateral trade policy which was launched by Jim Bolger and the then trade Minister Phillip Burdon. That basically put down three propositions for us none of which were mutually exclusive. The first was that we would proceed on the multilateral track. Second we would continue unilateral reform of trade policy because it was in this country’s own interest to accelerate that at a faster pace than negotiations would allow and thirdly we would negotiate this type of agreement the bilateral track. 
That strategy I believe is still valid today and this decision that we are debating tonight is absolutely an outcrop of that strategy. With regard to the multilateral track which is under way in the Doha round we must remember that that is far more important than any of those agreements—including a free-trade agreement with the United States and including a free-trade agreement with China by whatever name because some of the instruments of trade policy that New Zealand desperately needs to reform can only be done multilaterally. Export subsidies are the most important and the most obvious example of that. 
The second track the unilateral track has run its course. We have cleaned out the mess that was New Zealand’s frontier policy. There are a few small tariffs in textiles and clothing but frankly the recent shifts in the last few weeks and the exchange rate show us how relatively unimportant those are. Where that policy used to be a huge issue it no longer is. 
So the real issue here is the third track the bilateral track and this is where this deal assumes some strategic significance. Now it has always been central to the bipartisan position of successive National Party caucuses and Labour Party caucuses that certain basic principles should be followed in the construction of those agreements. The most important principle is comprehensive commodity coverage in the area of goods. Members will understand that there is a basic divide between services and goods. I have never argued for comprehensive coverage in services for a number of reasons but there has been absolutely an article of faith that we do not agree to exclude our key sectors of export interest. We can live with the second principle—progressive liberalisation after comprehensiveness—in order to deal with the political realities involved because often our main exports are extremely sensitive. The reason why after several stillborn attempts with Chile it has taken so long to get the Chileans to the table here is the huge concern in Chile over what is really a very very small tariff on dairy products. Chileans see us as the competitive threat. 
So the first and key principle is comprehensive coverage—that is we should never go into an agreement that excludes our main export interests—and secondly to make that realistic we must agree to progressive liberalisation. We do not have to insist on too ambitious a timing formula to deliver very real benefits to New Zealand in those highly sensitive agriculture areas. There are some other principles underlying the agreement but they are the two key ones. 
When we look at this agreement we note that it is of trivial—it is of possible but it is of trivial—trade significance. Dr Lockwood Smith earlier sketched some of the political background to it but I think we should also see that as New Zealand’s plan B if the multilateral option were to fail. Personally I think it is less likely to fail than to succeed and I have already given the House the dubious benefit of my views on that but of course failure is possible and cannot be completely excluded. 
What we have put before the House today is our plan B and it is absolutely vital that New Zealand which has so little leverage in the Asia-Pacific region aggressively promotes every opportunity it can find. It was quite a coup to get those four countries together across the Pacific to have this agreement. It was not obvious and it is exactly the sort of agreement that opens up policy space for us in the future. I personally do not think that we as a country need to be obsessed with the Asia-Pacific region. I think the old slogan “Asia first but not Asia first and last.” applies to New Zealand. I would not even exclude some type of more structured relationship with the European Union if its own reform of its agricultural policy progressed to the point where that became a more realistic option from the union’s point of view. But the key focus is in the Asia-Pacific region and this agreement brings in some of the APEC members. It has synergies there into the APEC formula. It also continues to breach into the ASEAN area that is of fundamental importance to New Zealand. Other negotiations are taking place there. I think that that is entirely complementary. 
Once again I want to go over the basic strategy behind this agreement. It is a long-standing strategy. It is a strategy that the two major parties have bought into and it avoids what I call “trophy agreements” which have given away the shop—as it were—just for something to hang on the wall and enable us to say that we have an agreement with this or that country. So it is a substantive approach. I think that it is in New Zealand’s interests that we support this bill and I am very pleased that we are able once again to expedite its passage and come together in this House on a near consensus.