Walters VanushiREGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP (RCEP) LEGISLATION BILLFirst ReadingINTERNATIONAL TREATY EXAMINATION OF THE REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENTDebate resumed from 13 May.VANUSHI WALTERS (Labour—Upper Harbour): Tēnā koe Madam Speaker and thank you for the opportunity to take a call in relation to the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill as well as the report of the Foreign Affairs Defence and Trade Committee on the international treaty examination of the Regional Comprehensive Economic Partnership agreement. I'll start my call today with a quote from the Secretary-General of the UN Antonio Guterres who said I am a multilateralist. I am deeply convinced that there is no other way to deal with global challenges than with global responses and organised in a multilateral way." Now I'm not a member of the Foreign Affairs Defence and Trade Committee but I am delighted to be able to speak to what I consider is a significant moment in our COVID economic recovery by way of progressing our trade recovery strategy which will broaden and deepen our trade connections in the region. Ultimately this is about having a single rule book for all 15 signatories which should significantly reduce complexity and therefore compliance costs for exporters. I just want to take a moment to think about the impact that COVID has had on trade across the region. In April the International Labour Organization issued a brief titled COVID-19 and multinational enterprises: Impacts on FDI trade and decent work in Asia and the Pacific. They acknowledged in that report the impact of COVID on small medium but also large businesses in the regions as well as in terms of cross regional trade and they noted that COVID had required some businesses to put in place stringent measures to prevent the spread of COVID others had temporarily closed and some others had had to really shift or repurpose their production processes. There were significant disruptions to supply chains all of which of course had a really significant impact on trade. But the brief also makes the point that against this backdrop Governments are faced with a dual duty both to keep COVID out but also to sow the seeds of sustainable recovery and that's really what this agreement is about. So what does the bill do? Well the bill is really an omnibus bill that makes the required legislative amendments to give effect to New Zealand's signing of the Regional Comprehensive Economic Partnership. It's a free-trade agreement signed by 15 countries which are home to almost a third of the world's population including seven of our 10 trading partners who take over half of New Zealand's total exports and provide more than half of our direct foreign investment. It is significant. The difference RCEP will make is shown through some modelling work that's been done which shows that once RCEP is fully in effect New Zealand's annual GDP will be between 0.3 percent and 0.6 percent larger than if RCEP had not existed at all which is in dollar terms equal to a range of $1.5 billion to $3.2 billion. It is extremely significant for New Zealand. What it means for New Zealand is that we'll have a seat at the governance table of this globally significant regional economic agreement. Essentially this keeps the goods flowing and services moving across Asia Pacific. It builds our relationship with as I said seven of our top 10 trading partners including Australia China Japan Singapore South Korea Thailand and Malaysia. And here I just note that New Zealand exported over $36 billion worth of goods to RCEP countries and nearly $12 billion of services in the year ending December 2019. This sends a strong message that the region is open for business and will make such a practical difference to our exporter industry in the coming years as we recover from COVID.Just in terms of the numbers RCEP will cover around 61 percent of New Zealand's goods exports and 45 percent of our service exports. But of course it's not just about us it's not just about New Zealand so I do want to reflect on some of the words of our partners as we continue on with our obligations towards this agreement. Mohamed Azmin Ali the Minister of International Trade and Industry of Malaysia said that RCEP would encourage local businesses to enter global markets and would increase Malaysia's exports. He stated that RCEP signatories would enjoy preferential treatment due to the removal of tariff and non-tariff barriers. Joko Widodo the President of Indonesia talked about the signing of RCEP as a historic day that signalled Indonesia's strong commitment to multilateralism. And Moon Jae-in the President of South Korea has praised RCEP as an unprecedented mega regional trading agreement and expressed confidence that it will contribute to the recovery multilateralism and the development of free trade around the world and actually beyond the region as well. In terms of the report of the select committee on the international treaty examination while this is a first reading of the bill it's also in effect the debate on the report of the committee on the RCEP agreement so I do also want to reflect briefly on some of the comments noted in the March report. Specifically the committee noted that actually most of the obligations in RCEP are already met through current legal frameworks and policy regimes. But there are a small number of legislative changes that do need to be made which I'll mention here. The first is amending the Tariff Act 1988 to enable the identification of RCEP countries and changes to the definition of tariff through Order in Council. The second is an amendment to the Act to provide for eight years of transitional safeguard mechanisms. These really aim to provide temporary relief to domestic industry from unfair competition or an unexpected surge in imports. And the third is changing the Customs and Excise Regulations 1996 to implement the agreed rules of origin and product-specific rules for goods imported from RCEP countries. At this stage I might just pause and speak briefly to the exceptions clause in RCEP. As in New Zealand's other international agreements RCEP contains an exceptions clause that aims to preserve the pre-eminence of Te Tiriti o Waitangi in New Zealand. Now essentially this means that nothing in RCEP will prevent the Crown from implementing domestic policies to meet its obligations to Māori under Te Tiriti. What it means is the Government's interpretation of the Treaty of Waitangi cannot be subject to disputes settlements. While I understand that some members of the committee expressed concern about this clause in particular this is a clause that's present in all of New Zealand's trade agreements. And I understand that the advice from the ministry is that the clause is effective not to mention in my view consistent with the State's obligations under Te Tiriti. The committee also made inquiries into the effect of RCEP on intellectual property rights. I understand the advice was that RCEP reinforces the standards that already exist as set out in the World Trade Organization's Trade-Related Aspects of Intellectual Property Rights. Those standards essentially cover copyrights trademarks geographical indications industrial designs and patents amongst other things as well. So just in conclusion I'd like to thank the committee for its report in relation to the treaty examination and I do commend this bill to the House."