Tabuteau Fletcher: Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill — First ReadingText is incorporated into the Bound VolumeTabuteau Fletcher: Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill — First Reading[Sitting date: 16 June 2015. Volume:706;Page:4415. Text is incorporated into the Bound Volume.]FLETCHER TABUTEAU (NZ First): This is an amendment bill that essentially recognises that the Republic of Korea exists in our trade legislation. Previous speakers have in the main actually ignored the majority of the submitters who spoke at the select committee. We need to have very real concerns about the core provisions within this trade agreement. But let us actually just look at the agreements around goods and services themselves in the trade agreement. We are amending the law for what has been an agreement that has been on the back step from the very start. In fact the Government itself describes this trade agreement as a catch-up agreement. We have actually entered into free-trade negotiations without any cards to hold. This was spoken about previously. In fact the Minister of Trade kept using words like “could” and “should” when he described what he would like to see result from this trade agreement. He kept using those words.New Zealand First understands that this country is dependent on trade. There are no two ways about it. We rely on being an export nation that exports our goods and services around the world. So trade agreements like this—and when you actually look at the contractual budget which does not support this trade agreement—need to be looked at again and need to be looked at as a whole. It is one thing to claim a free-trade agreement but I believe and New Zealand First believes that this is a free-trade agreement in name only. What good is it to Northland for example or to our regions which are the places that are so dependent on good trade negotiations and good macroeconomic settings? Let me get into that now.The Minister has signed an agreement that means that less than half of our exports to Korea will actually have their tariffs eliminated on the signing of this—less than half. But here we are today now amending legislation to allow better and more preferential treatment to a trading nation that already has essentially unfettered access to the New Zealand economy. This Government has said that we are facing tariff rates of up to 178 percent for example. In the same breath the Minister assures us that we should celebrate this trade agreement because it will remove that 178 percent tariff rate—but would that we could. The Minister cannot seriously believe that the Korean free-trade agreement will actually be of any benefit to the dairying economy in Northland. For example it will take 10 years to reduce those tariffs down to zero. OK that is a big deal—it is going to take a decade for that to come in—but it is actually more insidious than that and no one has mentioned it. The fact is that once that 10-year time period comes about and we get that zero tariff it is only on milk powder to the quantity of approximately 2000 kilos. That is less than 0.13 percent of our milk powder exports around the world. Everything above that level—every kilo of milk powder sold to Korea—will still attract 176 percent tariff in perpetuity and for the foreseeable future. That is not a successful trade agreement.The trade negotiators have themselves admitted that for many of our core export commodities it will be at least a decade before New Zealand exporters are able to compete on a level playing field. It was positive to hear the Minister speak earlier today of the quicker phase-out of kiwifruit tariffs. He said that they were at 45 percent. What he failed to mention is that the phase-out will be over 6 years and he kind of made it sound like a good thing that our kiwifruit competition in South America has no trade tariffs with South Korea at the moment. This is what is being handed to our New Zealand exporters as a good trade negotiation. Zespri itself mentioned how positive this trade agreement was but in the same breath it mentioned that it would take what it could get. Mr Joyce assured Northland farmers earlier this year that this free-trade agreement would eliminate tariffs on beef. What he admitted at the time was that it would take 15 years for these tariffs to be removed. Further our seafood industry was spoken of several times today. What did not come out in those conversations was that one-third of our seafood exports to Korea are and will continue to be subject to the 22 percent tariff. So there is no provision for one-third of our seafood exports to enjoy the benefits of this supposedly great free-trade agreement. I put it to you that it is not much of a free-trade agreement.Then we come to the question of what New Zealand has had to give up in order to gain common ground in this trade agreement. We could not negotiate or compromise anything in the way of tariffs or quotas because we are already one of the most open economies in the world. We are holding no cards in this trade game. Actually we have been handed one card and we have been forced to play that card. We are now forced to play it every time. I am advised that our compromise—the only thing asked for by the Koreans in this agreement—was the inclusion of the investor-State dispute settlement provision in this agreement. The investor-State dispute settlement clause was pretty much what we were asked to give in return for what I would call a manipulation of tariffs. We are being asked to give up our sovereignty a little bit at a time.We were advised at the select committee by experts that our two countries have the best legal systems in the world. Korea acknowledges our legal system. We acknowledge how robust and great theirs is. And yet we are being forced into an agreement that has a clause that asks us to incorporate investor-State dispute settlement. For some reason we agreed to this—or the Government agreed to this. We agreed to a tribunal system that operates as a black box and that operates outside of and independently of New Zealand laws and South Korean laws. So we are agreeing to deal with trade issues outside of our laws. That is what we have done. It is illogical and I will say again it undermines New Zealand’s right to create and enforce our own laws which makes a debacle of the debate around the Magna Carta today brought to the House by the leader of ACT. The leader of ACT will not support a member’s bill debating this very point in the House hopefully in the not too distant future.Labour has spoken of the benefits of this trade agreement. Labour and this Government have chosen to ignore the reality that the majority of the submitters to the select committee spoke out with passion and actually sound argument which has been conveniently ignored today. New Zealand First believes that this free-trade agreement did not achieve what was promised. What has been negotiated on our dairy farmers’ behalf for example achieves literally nothing. The inclusion of the investor-State dispute settlement provision—a provision that legal and trade experts not only from New Zealand but from around the world have said is inconsistent arbitrary and lacking in transparency. New Zealand First cannot support an agreement that has achieved so little today. New Zealand First acknowledges that the urgency for good trade agreements is paramount but we say that this is not one and these amendments are unnecessary.