McClay Todd: Tariff (Malaysia Free Trade Agreement) Amendment Bill — First Reading 
McClay Todd: Tariff (Malaysia Free Trade Agreement) Amendment Bill — First Reading 
[Volume:662;Page:10287] 
TODD McCLAY (National—Rotorua) 
: 
 It gives me pleasure to rise to speak on the Tariff (Malaysia Free Trade Agreement) Amendment Bill. This bill amends the Tariff Act of 1988 and implements the New Zealand - Malaysia Free Trade Agreement which was signed in Kuala Lumpur Malaysia on 26 October 2009. It speeds up tariff reductions between our two countries in nearly half the time agreed in the agreement established by the ASEAN-Australia-New Zealand Free Trade Agreement. 
Over the last 4 years the amount of New Zealand goods exported to Malaysia grew by more than 50 percent. That means Malaysia is New Zealand’s 10th largest trading partner. This bill and the agreement when it enters into force will mean that 99.5 percent of New Zealand exports to Malaysia will be exported duty-free within 7 years. That will be a saving in duty of some $10 million to New Zealand and that saving will be of direct benefit to New Zealand producers. 
I will speak about some of the products that will be covered by the bill and in my electorate in particular there will be great advantage to producers. The first product is kiwifruit. At present the kiwifruit industry faces a 15 percent tariff barrier when it enters the Malaysian market. By 2012 under this agreement that duty rate will be reduced to zero. That is very good news for kiwifruit farmers all over New Zealand but it is of particular benefit to my electorate. Exports of kiwifruit to Malaysia grew by a staggering 173 percent over the last 3 years. I will repeat that figure—a staggering 173 percent over the last 3 years. Last year we exported one million trays of kiwifruit to Malaysia. That is of great significance. 
The Minister of Agriculture the Hon David Carter was in my electorate not so long ago and we had an opportunity to meet with Zespri and talk with a number of other producers. I have visited a number of kiwifruit farms and have talked to those exporters. They raised a concern and an issue that kiwifruit exports to Korea face an extremely high tariff barrier. In fact that barrier makes our kiwifruit less competitive when it is exported to Korea. In some cases other countries that export kiwifruit already have trade agreements with Korea and some of the rates of tariffs that are imposed against those other countries particularly Chile are close to reaching zero. That means that our kiwifruit producers—the best kiwifruit producers in the world—are at a disadvantage. The great news is that this free-trade agreement with Malaysia which is a market of growing importance to New Zealand producers means that by 2012—which I think from memory will be only 1 year after our Government has been returned to power for a second term—the 15 percent tariff will be reduced. That will mean extra money in the pockets of kiwifruit producers in my electorate and in other electorates. 
A lot of meat wool and dairy products are also produced in my electorate and forestry is very important to us. Those commodities already have duty-free access to the Malaysian market but this agreement will bind those rates. There will be a binding commitment on the part of Malaysia which means that in the future when this free-trade agreement can be renegotiated those preferential rates of duty-free access cannot be changed. That has to be good news for our producers. It gives them a certain amount of certainty. Indeed it means that they can build those markets and export more products to the Malaysian market and there can be no fear that duty will be placed upon them. That is a very important issue. 
I want to touch on just two additional parts of the bill and the first is education. Between 2003 and 2008 the number of fee-paying Malaysian students coming into New Zealand increased by more than 70 percent and that made Malaysian students New Zealand’s third-largest source of fee-paying university students. Indeed it was worth $2 billion to our economy last year. In Rotorua and in Tauranga we have two technical institutes—the Bay of Plenty Polytechnic and the Waiariki Institute of Technology in Rotorua. This agreement will be very good news to them. The reason for that is both technical institutes have a number of foreign fee-paying students who have come to New Zealand and love to live in the Bay of Plenty. This agreement means that those two very fine institutions in the Bay of Plenty will be able to go out and promote their services more to the Malaysian market. I can see a direct impact upon our local economy—certainly as far as employment is concerned—when more students come here. 
The final point I will make is about goods from Malaysia that will be imported into New Zealand. New Zealand provides duty-free access for about 72 percent of imports from Malaysia at this time. Under this free-trade agreement that will move to 90 percent this year and graduate to 100 percent by 2016. There will be a number of sensitive products imported from Malaysia and some producers in New Zealand will have concern about a great influx of products coming in and how they might compete. There will be a longer transition period of up to 7 years for the import of sensitive products. Examples are clothing footwear carpets and some manufactured products including wooden furniture. That transition period will give industries in New Zealand time to adjust to the change and to become more competitive. I believe that they have a very very good opportunity to compete in our own markets but also to take up the challenge of furthering their production and exporting to Malaysia. 
In conclusion I recognise the importance of the environment and say that Malaysia and New Zealand signed an environment cooperation agreement negotiated in the context of our free-trade agreement and that establishes a set of shared trade and environment principles to promote sound environmental practices and sustainable development. This agreement is Malaysia’s first bilateral treaty on environment cooperation negotiated under the free-trade agreement and is something New Zealand should be very proud of. I believe it will be something that other countries will look to include in their agreements particularly in any negotiations with Malaysia or any other Asian country. 
It is a pleasure to support this bill. I look forward to receiving it in the Foreign Affairs Defence and Trade Committee so that we can talk more about the very positive impact it will have. It is worth repeating the last figure of a 15 percent tariff rate against kiwifruit farmers in my electorate will be reduced over the next 2 years. That can be nothing but good news. It will make them more competitive it will add to their productivity and it means there will be more money in their pockets in the Rotorua electorate. That is a good thing and I support this bill. Thank you.