Groser Tim: New Zealand-China Free Trade Agreement Bill — In Committee 
Groser Tim: New Zealand-China Free Trade Agreement Bill — In Committee 
[Volume:648;Page:17369] 
TIM GROSER (National) 
: 
 I will make just a few concluding remarks about Part 5 in terms of the underlying mutual recognition agreement concept since it is a very difficult concept for people to get their heads around as I was saying before. It is essentially an alternative to what used to be flavour of the month 20 years ago: business harmonisation. We discovered in our first real attempt to do this—with Australia in the context of CER—just how difficult it is to advance harmonised policies because at the end of the day what we are really trying to do when we say “harmonise your policy” is to say “You adopt my policy or I will adopt yours.” In practice there is massive resistance from both sides to adopting an entirely new policy. It is so much more sensible to go down the track of mutual recognition which in common language would be to say that there are more ways to skin a cat than one or that there are different ways—if I use the refrigerator example again—to wire a refrigerator so that it is safe for kids to open and get a glass of milk or whatever it is they want. There are different ways of doing that to achieve the equivalent results. So it is about coming out of that whole concept of equivalence without trying to say there is only one particular wiring diagram we can use to achieve the effect. 
I do not know intellectually what the origin of mutual recognition is but in a practical political sense in the trading arena we sort of learnt this from the Australians. In Australia I found to my surprise that the actual concept of mutual recognition of different Australian states’ standards is actually of relatively recent origin and there are still many areas and services where mutual recognition is yet to be achieved if I am not mistaken. I became familiar with it when I was the lead negotiator for New Zealand on the Singapore free-trade agreement and we introduced into the Singaporean mindset the concept of mutual recognition agreement. It was I have to say a revolutionary concept for the Singaporeans deeply sophisticated though they are in electronic and other matters and generally as a country. We had to arrange to sell them the underlying idea that we are talking about in Part 5. We had to take New Zealand experts to Singapore to educate Singaporean regulators on what the underlying conceptual approach was. It took a bit of time to sell but it was incorporated into the agreement. 
I think it is an excellent advance now to have taken this into a far far more important trade agreement the China free-trade agreement. Essentially it reduces compliance costs and facilitates trade and it is very much my hope that the Chinese in particular will see the point in extending this into other areas. In every case there has to be a high degree of trust amongst the regulators; it does not work if there is distrust between regulators. The problem in this area is that regulators are often specific to sectors so quite a lot of people-to-people exchanges are needed to make this work and a lot of information flow is needed. But I think that potentially the economic returns long-term are very very considerable. 
I hope that the Chinese as well as our own Government will use this entire trade agreement including its mutual recognition elements in a proactive sense. I have no doubt that New Zealand will be seeking to do that. I strongly believe that from a Chinese perspective this agreement makes sense frankly only if the Chinese can use this as a template for their own internal purposes and their own negotiations with countries—countries let us face it that are rather more important to them than their 45th or 48th largest export market or whatever New Zealand is—and I hope that we will come back into a future Parliament and see introduced into it similar legislation that builds on this agreement.