Hayes John: ASEAN-Australia-New Zealand Free Trade Area Bill — First Reading 
Hayes John: ASEAN-Australia-New Zealand Free Trade Area Bill — First Reading 
[Volume:653;Page:2636] 
JOHN HAYES (National—Wairarapa) 
: 
 I will begin by setting a little context to this somewhat anodyne discussion. First of all I see this agreement as being fundamentally important because it will help to consolidate and underpin our world market democracies. The legislation that has been introduced by my colleague Tim Groser this afternoon the ASEAN-Australia-New Zealand Free Trade Area Bill is an example of history on the move. If we think about developments in the last 20 or 30 years we rapidly come to understand that there are about 137 countries on the planet that more or less practise free elections and 82 of those countries have executive power controlled by a Parliament like ours. What does that mean in the market place? It means that between 1980 and 2008 world GDP multiplied by three times. Trade in industrial products however grew 25 times. If we think about production across the planet we see that in that same period—from 1980 to 2008—there has been an increase in production valued at €40 trillion. Industrial production has grown by 4 percent per year which is a rate never previously achieved in the history of our world. If we look at what has been going on since about 1985 we can see that exports between countries on the planet amount to roughly 13 percent of global GDP a percentage never achieved since 1913. 
As this trade is going on we are also seeing power relationships changing in relative terms. Newspapers continue to report about American stagnation and many of us know that Europe is in decline. Counter to that Asia is climbing. Asia had an annual growth rate across all of Asia of 6 percent in 2008 but from 1980 to 2008 Asian GDP multiplied by four times China’s GDP multiplied by three times India’s GDP multiplied by three times and Europe’s GDP multiplied by only two. So Asia’s share of world trade has climbed from 16 to 28 percent over the period from 1980 to 2008. Over that same time frame America managed to keep only a 21 percent market share and Europe declined from 28 to 20 percent. 
So we see a global environment where America and Europe are losing ground. Those economies are experiencing declining productivity. They are encountering fading competitiveness and dynamism is on the wane. Their populations are ageing. In 1992 European nations adopted a common currency but they are still at a point where Europeans even today do not have an integrated market economy. In 2008 per capita GDP in Europe was 25 percent below that of the USA. Industry is leaving Europe. Where is it going? It is going to Asia. The Pacific Ocean—in our part of the world—is fast becoming the world’s most important body of water. In 1990 trans-Pacific trade outstripped trans-Atlantic trade by 50 percent. If we think about the countries around the rim of the Pacific we see that nine of the world’s 12 greatest ports are located on the Asian seaboard of the Pacific. 
It is against that background that I see this agreement as being incredibly important. It will link us to an ASEAN market across those 10 member States of 566 million people. It will link us into an economy of US$1400 billion of global trade. As my colleague Phil Goff pointed out ASEAN is New Zealand’s third-largest market for merchandised goods and it is our third-largest trading partner. So why is this agreement important? Well aside from plugging us into this dynamic part of the world the free-trade agreement will facilitate trade in goods and services by reducing and eliminating barriers by providing greater certainty to New Zealand manufacturers by providing transparency and by reducing associated transaction costs for New Zealand businesses wishing to operate in ASEAN markets. It also provides additional protection for New Zealand investors investing in that part of the world. 
The free-trade agreement is not about just economics. As well as the immediate commercial benefits that most companies in our electorates will be concerned with the free-trade agreement also represents a really important building block in the development of our relationships with South-east Asia. We have been seriously working on that—certainly since I was posted in Singapore back in the late 1970s. We really have to make a broad strategic commitment for greater regional integration amongst our Asian neighbours. They are the communities and the economies that are growing. This free-trade agreement is part of a broader process of regional integration being developed through a range of groupings in the Asia-Pacific region such as the East Asia Summit and other ASEAN-related processes in the APEC forum of which many New Zealanders are well aware. 
I think the conclusion of this free-trade agreement when it comes back to this House from the Foreign Affairs Defence and Trade Committee will help to ensure that New Zealand remains an integral part of this unfolding regionalism and that this process remains open and focused in an outward direction. 
A number of advantages will accrue to companies in New Zealand once this agreement comes into force on 1 July this year. Tariff elimination will generate the most immediate gains. In 2010 we can expect over $429 million worth of current exports to Indonesia Malaysia and the Philippines. These exports will include in some markets butter milk powder cheese wool kiwifruit apples—including apples from my home town of Greytown—and some manufactured products like those that come from the metal craft industry in Dannevirke. Those products covering 28 percent of the total current exports from New Zealand to Indonesia Malaysia the Philippines and Viet Nam will enter those markets duty-free. When that happens 70 percent of New Zealand’s total current exports will enter those markets duty-free in 2010. 
Between 2011 and 2015 we will save another $60 million on current exports to Malaysia Indonesia and the Philippines covering things like beef wine—which is again produced in my electorate—apples onions aluminium and iron and steel products. Then in 2016 we will gain more benefits from the export of $137 million worth of products to Viet Nam like milk powder paper and those sorts of products.