Mapp Wayne: New Zealand-China Free Trade Agreement Bill — In Committee 
Mapp Wayne: New Zealand-China Free Trade Agreement Bill — In Committee 
[Volume:648;Page:17347] 
Dr WAYNE MAPP (National—North Shore) 
: 
 Madam Chairperson you have directed us to concentrate strictly on Part 1 and indeed on all the subsequent parts. There was no issue of a vote. Leave was sought and denied and we simply said we would follow the rules. No vote was taken on the issue at all. There was never a question of a vote and I remind you Madam Chairperson that it is not an issue of taking a vote; simply any one member can seek leave. 
Part 1 deals directly with the reduction in tariffs. That is how the free-trade agreement works. What is the purpose of a free-trade agreement? It is to introduce free trade. What stops free trade? Tariffs stop free trade. In the trade between New Zealand and China many goods—in particular goods in the agricultural sector—suffer high tariffs. In addition to that there are typically quotas as well. A free-trade agreement by definition—and under World Trade Organization (WTO) rules—is designed to eliminate tariffs between the parties to that free-trade agreement at a faster rate than would otherwise be the case. Otherwise the parties would be going just by their bound commitments under the World Trade Organization and that would not be dealt with until the Doha round itself was dealt with. In this instance China and New Zealand for strategic reasons as much as trade reasons have decided to go for no tariffs and no tariff quotas on all trade between our nations. That will be achieved by 2019. That is the point of Part 1. That is the very particular legislation being introduced by Part 1—an amendment to the Tariff Act and the tariff codes thereof. 
The remarkable thing about this is that New Zealand First is going to vote against Part 1 because it is not fast enough. One of the things I would like to know from the speakers of New Zealand First is how fast they think it should have been. Do they think there should have been full free trade between our two countries by let us say 2010 or 2012? I guess most New Zealand businesses would say that that would be a jolly good thing. But was it actually achievable? Was it ever likely that China would agree to eliminate all tariffs in 2 or 3 years? No that would be an idle pretence. More particularly New Zealand First knows the truth of that. Those members know that this is actually an excellent free-trade agreement. 
If we look at the history of free-trade agreements we will see that seldom if ever—particularly where agricultural products are involved—are tariffs and tariff quotas eliminated completely within a 10-year period. That is an extraordinary precedent and I congratulate the officials led by Dr David Walker on the extraordinary achievement they made on that. A major country like China with major agricultural potential but vulnerable with its small farmers to trade from New Zealand has nevertheless decided to allow full free trade in all temperate agricultural products or in any agricultural products that New Zealand happens to produce—and we are an efficient producer of agricultural products. That is unlike other Asian nations that are always concerned to protect their small farmers. So China a major agricultural producer is willing to accept full free trade of our agricultural products which will be started from 1 October this year. So the first changes will occur very quickly. 
The committee heard from Fonterra New Zealand’s single largest exporter that it has already concluded arrangements worth $300 million. I also say that one of the things I have always found extraordinary in respect of ministry officials and official ministry documents is that they say there might be an increase as a result of this agreement over the 10-year period of maybe $300 million in trade. I have always wondered how that sum could possibly be so small.