Parker David; Williams PotoTRANS-PACIFIC PARTNERSHIP AGREEMENT (CPTPP) AMENDMENT BILLSecond ReadingHon DAVID PARKER (Minister for Trade and Export Growth): I move That the Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill be now read a second time.I'd like to start by thanking members of the Foreign Affairs Defence and Trade Committee for their work on this important piece of legislation. The committee's recommendation is that the bill be passed with a small number of technical amendments. Completion of consideration by the Foreign Affairs Defence and Trade Committee is a further important step in our consultation with the public on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and on trade matters more generally.The committee process follows on from numerous outreach meetings that it had up and down the country. I've been to many of them. Trade officials have been to a lot lot more. They haven't just been on CPTPP. We've been engaging on some related legislation which includes the ban on foreign buyers of existing homes and more recently officials have been involved in the Trade for All outreach meetings as we endeavour to rebuild the social contract for trade.This Government is committed to ensuring that trade delivers sustainable and inclusive economic growth for all New Zealanders no matter who they are or where they are in the country. We've already shown that we're open to finding better ways to do things including through the changes that were made to the previous Trans-Pacific Partnership agreement (TPP) under difficult circumstances in our first weeks in office. As a result of these changes we were able to conclude the CPTPP. For me the most significant change was finding a route through on controlling overseas foreign buyers of existing New Zealand homes. We support CPTPP. It will bring commercial sustainable and strategic benefits to New Zealand as the national interest analysis—which was released some weeks prior to signature—highlights.On the commercial level the CPTPP matters to New Zealand. I've made the point that trade agreements aren't the be all and end all of economic and trade policy. There are other very important settings in the economy like those affecting research and development and tax policy that encourages investment in productive enterprises rather than speculative investment. The productive investment of course helps grow new areas of comparative advantage. But I think everyone in New Zealand knows that we're a small country that needs trade so that we can afford the things that we can't produce efficiently—the cars the computers the mobile phones and the medicines that we import and that to pay for them we need to sell products and services that we produce competitively so that we can provide the means for all New Zealanders to enjoy a decent standard of living.This is a very significant agreement. Of our exports we expect a third of our goods and services—about $15 billion in goods and $6.8 billion in services—to go CPTPP partners. Economic modelling has shown in the national interest analysis that once this is fully into effect the agreement is expected to increase real GDP by between $1.2 billion and $4 billion per annum. That's additional sales every year effectively of exports to the rest of the world of those amounts. On the other hand if CPTPP goes ahead without New Zealand the modelling estimates that our GDP will decline—we'd go backwards—by a more modest $183 million but none the less the relativity of those figures shows that there are clear economic benefits. Tariff reductions alone could deliver an estimated $222 million of savings annually—$95 million of this accrues as soon as the CPTPP comes into force. These are large numbers.Early ratification also means an immediate levelling of the playing field for many New Zealand exporters in some crucial markets. I'll give you some practical examples. For kiwifruit New Zealand exporters incur a tariff of 6.4 percent in Japan. Chile a key competitor in this high-value market pays a zero tariff because of its existing free trade agreement with Japan. On entry into force of the CPTPP New Zealand will be on an equal footing with Chile and this will represent tariff savings of more than $26 million to that industry. That will flow through to—amongst other things—higher wages in that sector and profits for the owners.CPTPP will also immediately remove Australian beef exporters' current tariff advantage over New Zealand in Japan. This has resulted in a very steep decline in New Zealand exports of beef to Japan. It's one of if not our premium value markets in the world and there's been a loss of $53 million to the industry per annum because of the disadvantage we currently suffer relative to Australia. On entry into force we immediately gain duty free access to our fourth-largest wine market Canada. Further New Zealand wine has tariff reductions in Japan—where we currently pay 15 percent tariff whereas Chile and Australia only pay 4.6 and 9.5 percent respectively. All of these things affect not just the amount that we sell things for but the volume of what we sell.Importantly it's not just major exporters who will benefit. Many of New Zealand's small and medium enterprises will benefit too. For example the cost of the quite low 3 percent tariff to the buttercup squash producers—you might think 3 percent well it's not that much. Actually it's worth $50000 each to the 30 or so producers of buttercup squash in New Zealand who sell to Japan. That's quite a bit of money and it will save around $19500 in tariffs for each of the commercial growers of onions who sell into Japan. So these things make a real difference for real people.While crucial market outcomes have been retained—and I thank the prior Minister Todd McClay for his negotiation of those—they are effectively a carryover from TPP that were kept alive by the prior Minister's good efforts. What were suspended were various other provisions that were problematic for New Zealand. Of the five points that we took into the election that we wanted to see adequately dealt with the first I'll mention is the Treaty clause. We've got a fantastic Treaty clause in New Zealand. It's been to the Waitangi Tribunal. They gave it a very good pass. They said Look you could tweak it here tweak it there to make it even better." But the advice that we accepted from officials was that in practice you can't do that because if you reopen it you'll go backwards. Most other countries—in fact no other country has a clause like that.On Pharmac the Pharmac model had already been protected by the prior Government. We wanted to avoid some of the increased costs though caused by longer patent terms for medicines—particularly biological drugs—and to avoid some transparency costs. Those are fixed by CPTPP and don't apply.The right to regulate whether it's environment public health tax education system State-owned enterprises or appropriate environmental or safety regulation—this is all protected. Whether it's for plain packaging cigarettes or for climate change we're protected. In respect of land as you know we've protected the sovereign right of this Government and future Governments to protect New Zealand against—or to control—foreign buyers.We think that we've protected the sovereignty risk. The one are we didn't completely succeed in was investor-State dispute settlement clauses. We've narrowed them. We've got various side agreements with a number of countries that we won't apply them bilaterally within the agreement as between those countries. So we got effectively letters covering 80 percent of current investment flows under CPTPP countries.On sustainable development it's a fantastic agreement. It's why it's called "Comprehensive and Progressive". We have the most comprehensive outcomes on sustainability of any trade agreement we've ever been able to get on both labour and environment. Vietnam is required to bring its labour standards up to international norms albeit over a period of time and it is enforceable through trade remedies after a period if they didn't—they're given time to adjust.In respect of fisheries New Zealand's carried this torch for 20 years and we've never been able to get enforceable rules in our trade agreements where countries promise that they will not subsidise illegal or unreported fishing in other people's waters which is what happens around the world at the moment. We have trade disciplines around that and the countries agreed not to do it.Finally we've got some various side agreements to pursue with our partners Canada and Chile—a progressive and inclusive trade agenda including issues relating to gender Māori and small to medium enterprises.Finally I want to mention the strategic importance of CPTPP post the global financial crisis. There have been over 3200 new trade restrictive measures introduced and only 850 dismantled. We've seen trade escalation in recent months—ASSISTANT SPEAKER (Poto Williams): I apologise to the Minister. Your time has expired."