Hayes John: ASEAN-Australia-New Zealand Free Trade Area Bill — Second Reading 
Hayes John: ASEAN-Australia-New Zealand Free Trade Area Bill — Second Reading 
[Volume:655;Page:4482] 
JOHN HAYES (National—Wairarapa) 
: 
 I am really intrigued by what my colleague has said and by the reflections on the fact that Myanmar—or Burma depending on which set of words one wants to use—is a member of ASEAN and that we should be concerned about this. I make the point because here is today’s  
Trans Tasman 
. The No. 1 headline is “NZ in the Economic Trough Export Sector Flat on its Back”. The second headline is “Dairy Sector’s Debt Bubble about to Burst?”. So we can wring our hands about the good people of Burma or we can focus on the purpose for which each of us was brought into this Parliament and that was to bat for our collective constituencies. 
I am here to support this bill because that is what we have to do if we are going to lift this economy up the OECD ladder. I reflect particularly on Burma because if I go back to our select committee’s report back I would draw attention in it to the minority view of the Green Party. The Green Party minority report says: “The Green Party is not supporting the legislation because of the objections noted in the party’s minority view on the ASEAN-Australia-New Zealand Free Trade Area Agreement. The Agreement and this legislation constrains New Zealand’s right to ban tobacco imports on legitimate health grounds.” I thought that that was a pretty selective issue on the part of the Green Party because in another context we see them out batting furiously for the people of Burma. I have no objection to them doing that but I would like to see a principled approach. If we are going to attack this legislation and not support it on grounds of tobacco it would have been nice if the Greens had also focused on the membership of Burma in the ASEAN group. 
Earlier this week I spent my luncheon with a number of ASEAN heads of mission. The reason was that we as members of this Parliament need to be focused on going into bat for the interests of our economic activists—people who actually deliver to our economy. This bill is hugely important to us because the ASEAN market is the third-largest export market in the world; it brings together 566 million people. I was sitting at lunch earlier this week in Wellington with the representatives of those 566 million people and together those people represent US$1.4 billion in trade. 
Let us revisit this issue of why this legislation is important. It is important and it has cross-party support—except from the Greens—because it will expand opportunities available to New Zealand exporters by removing barriers to trade. It will help us establish sound frameworks under which trade and investment can flourish. We need that to happen to get rid of the  
Trans Tasman 
 headlines that we have seen here today. 
We want to move this economy forward we do not want to stay in an economic trough and we do not want the dairy sector’s debt bubble to burst. We need to provide additional incentives in New Zealand to utilise New Zealand materials by way of incorporation of the cumulative principle in the rules of origin which allows originating goods to be cumulated between parties and used in the production of further goods. This sounds a bit academic but it is fundamentally important to increasing our productivity. I shall digress for just one minute to try to give a practical example of the importance of these trade agreements to us. At the moment Mr Groser is offshore. He has been actively engaged in trying to establish a free-trade arrangement with Korea. What is the consequence of that? Well if we can get New Zealand kiwifruit into the Korean market without a duty payment we will save $8000 per kiwifruit farmer in this country. In other words the simple stroke of a pen to sort out this problem with Korea will increase on average every kiwifruit farmer’s income by $8000. 
The ASEAN-Australia-New Zealand Free Trade Agreement will provide much greater certainty and transparency for New Zealand businesses operating in ASEAN markets. We will put in place a range of mechanisms that will allow individual New Zealand exporters to sit down with the Government officials in those 10 ASEAN countries and to have a formalised arrangement for addressing their problems when issues arise in export areas. That will hugely reduce transaction costs and the costs of doing business in those countries. That applies to the direct export of products and also to the goods and services trade. 
This agreement between the 10 ASEAN countries Australia and New Zealand will assist New Zealand investors operating in the ASEAN markets because it will allow State-to-State investors arbitration procedures to be brought into force. We will be giving investors exporters and traders a more certain market platform to operate from and that is important from the point of view of alleviating or reducing business risk. Many of our companies are quite small. Risk is very important to them; it is a very high-cost area. So the Government is moving forward to try to insulate our companies from that. 
The other really important area is around profile. When we engage in a free-trade agreement of this sort we inevitably raise the commercial profile of New Zealand and New Zealand companies. We get huge free advertising which can only benefit our exporters. That is another reason that will enhance New Zealand’s strategic engagement with the ASEAN region and more broadly. These things are absolutely central to lifting our economic well-being. 
The agreement will also provide a framework for more effective discussion and cooperation on issues around labour and the environment for example with the Philippines. These outcomes supplement existing instruments on labour and the environment with other ASEAN parties because we have those in place already with Thailand Brunei and Singapore. It is really important that we can engage with all the ASEAN countries and engagement with the Philippines is a particularly important issue. 
The expansion of trade in goods and services as a result of reductions in tariff barriers with duty savings and new exporters will really assist small New Zealand companies. It will be good to get greater regional integration including an expansion and a facilitation of improved investor business links which will further improve productivity gains with improvements in productivity as a result of dynamic effects including the potential for enhanced levels of investment and greater innovation and cooperation. 
One of the things that we have to watch for is that we do not lose our bright ideas to ASEAN countries. I know that some of those ASEAN countries actively look across to New Zealand for our No. 8 fencing-wire innovative solutions. They like to vacuum those up and take them off to places like Singapore repackage them and sell them. So having this free-trade agreement in place will enable us to assist those companies and in general to move this country forward towards far greater economic prosperity. Thank you.