Trade (Safeguard Measures) Bill — In CommitteeText is incorporated into the Bound VolumeTrade (Safeguard Measures) Bill — In Committee[Sitting date: 11 March 2014. Volume:697;Page:16535. Text is incorporated into the Bound Volume.]Trade (Safeguard Measures) BillIn CommitteeDebate resumed from 18 February.Part 2 Miscellaneous matters (continued)Dr DAVID CLARK (Labour—Dunedin North):This part addresses really the miscellaneous matters so I shall keep my comments necessarily short. But it is a pleasure to rise and support the Trade (Safeguard Measures) Bill. Labour of course supports trade safeguard measures.Hon Phil Goff: It originated under a Labour Government.Dr DAVID CLARK: As my colleague the Hon Phil Goff points out the bill originated under a Labour Government. We want to build a future for all. We want the kind of economy that works for all New Zealanders we want to have a fair and just society where all can live in dignity an environment that we can protect is something that we all want and we want a nation that we can be proud of. All of those things align with having these safeguards in place. There is nothing too controversial in that respect. We think that the temporary safeguard authorities being abolished with no compensation for loss of office as put forward in clause 26 and following is therefore not something that particularly warrants a great depth of debate.The transitional provision on the other hand is noteworthy I guess for the fact that this legislation has taken a while to get through the House. The existing Act the Temporary Safeguard Authorities Act goes back to 1987 I believe. It was subject to review under the Labour-led Government and the wide consultation that went with that. Of course the bill as we know is the result of that work—for those who have just joined the debate. It produces compliance with the World Trade Organization obligations and it streamlines the process of responding to allegations of dumped subsidised goods on the New Zealand market which is something that I guess will be welcomed by New Zealand manufacturers across the board. I mean it is pretty hard to disagree with that stuff. The transitional measures provision will be enacted to try to make sure that the necessary powers are in place that the temporary safeguard authorities have all the powers that they would have if this Act had not been passed and that that all works into making I guess an orderly transition—the kind that we need as we shift from one set of rules to the other.The bill is timely because it is important that it comes at a time when domestic spending is constrained. New Zealand needs to have the right tools to protect its businesses from globalisation and increasing competition where appropriate. We heard yesterday the fact that non-primary exports are down. The Government produced figures showing that the domestic market is booming and part of that of course is to do with the rebuild after the earthquake. There are some positive news stories there for the Government but all the while our exports in the non-primary sector—you know outside the dairy sector—dropped 6.5 percent in real terms last year and that will be a worry for the Government whether it is up front about that or not. It is a concern for any Government to see manufactured exports dropping.The measures here in so far as they protect against businesses losing out in the trade arrangements have got to be a good thing. New Zealand businesses do need a fillip. They need all the support that they can get particularly in a system and a regime right now where we know that those multinational companies that deal in New Zealand get away with so much. We know for example that Google declares less than 5 percent of its revenues out of New Zealand for tax purposes. Those multinational companies have at their disposal the tools that enable them to leverage their advantage their existing scale and so forth. New Zealand businesses need to have the kinds of provisions that make for a level playing field and that ensure that trade is undertaken in a way that is beneficial to New Zealand. Trade safeguard measures are something Labour will support so it is my pleasure to have had the opportunity to take a call on this bill.Labour wants to build an economy that works for all New Zealanders and a fair and just society where all can live in dignity. This is a small step towards that and that is why I am happy to support this bill.DAVID SHEARER (Labour—Mt Albert):I began speaking on this bill the Trade (Safeguard Measures) Bill some time ago. It is a very uncontroversial bill and certainly the second part is uncontroversial. It is largely technical in its nature. It is really to replace New Zealand’s current safeguards regime with a new regime that is consistent with the World Trade Organization (WTO). That is something that we have been a vanguard on as a country in terms of our policies on free trade. In fact we have eliminated pretty much all of the various tariffs and restrictions in order to enable people to trade into New Zealand. It stands us in good stead with regard to future free-trade arrangements that we might be making with other countries in that we in many ways have already taken the tough decisions that have gone on in the past. So in the future it will be other countries that will have to be making those tough decisions rather than ourselves.However as this bill quite rightly points out there are some issues even within a free-trade environment that we want to be able to protect ourselves from and make sure that we are properly safeguarded from. The existing Act the Temporary Safeguard Authorities Act 1987 has served us well. It has not needed to be implemented or enacted very frequently. That Act was subject to a review under the Labour-led Government. I think it was Lianne Dalziel from memory who enacted that and it included quite a large amount of public consultation. This bill is really a result of the work that went on in that consultation.Not only does this bill produce compliance with the WTO rules but it streamlines the process of responding to allegations of dumped or subsidised goods that might hit our shores. This is really the guts of this bill—in the first part but also of course in the second part which we are talking about here. It ensures that we are well protected against that happening. Of course we have a relatively open border that enables trade to occur. We would like to see free trade occur right across the world. If we had free trade across the world we would not have many of the Third World poverty problems that we have at the moment—if those Third World countries were able to get their goods into developed markets. But we also want to make sure that we safeguard New Zealand our manufacturers and our producers against the dumping that could occur by a less-scrupulous importer that might want to bring in goods that would undermine our market. That was not what we intended our free-trade agreement to stand up to.The purpose of this bill is to make sure that this precaution is put into place. It is more cost-effective. It removes the requirement to establish a temporary safeguard authority. Instead it rolls that in as part of the Ministry of Business Innovation and Employment—“MoBIE” the long acronym—which is headed by the “Minister for Everything” Steven Joyce so that the ministry now takes that role instead of the quaintly coined temporary safeguard authorities. Instead we use that expertise inside the ministry so it enables it to be more cost-effective.The bill is timely. It is important at a time when domestic spending is constrained that New Zealand has the right tools to enable our ability to expand into markets and ensure that we are well protected from less-scrupulous players that might want to come in here and dump their goods inside our relatively open borders.This is a good piece of legislation. It is something as I said before that was initiated under a Labour Government. It was picked up by Simon Power many many moons ago. Simon Power has left this place and gone on to other things. It has now been picked up finally in the sixth year of this Government—I do not know what else it has been doing—and we welcome its introduction and the need for this piece of legislation.CLARE CURRAN (Labour—Dunedin South):I must commend my colleague David Shearer over there for his politeness on this bill the Trade (Safeguard Measures) Bill because 6 years is exactly right—that is when this bill first came before Parliament. I guess what the passage of this bill through the House shows us is how long a piece of legislation can get stuck in the Parliament. I think this is the third Minister who has had charge of it. It started off with Simon Power it went through John Banks and now we are up to Craig Foss. I would challenge Minister Foss to get up and give us an exposition on what the bill is about and whether he has actually read it. Nothing personal Mr Foss but the fact is that this bill has taken so long to get through the House through all its stages.In fact I was just looking back through the speeches in the Committee stage when this bill was interrupted which was in 2012. I was reading the speech by our former colleague the Hon Lianne Dalziel. The bill was actually introduced by her in the former Labour Government back whenever it was—2008. The bill was actually introduced by her.It is quite a simple bill—it is quite a simple bill. You have got to ask yourself why and what does it take to actually move a bill like this through the House quickly and get it off the Order Paper. We support it. We all support it—well actually I am not sure whether everyone in the House supports it. But it is no real drama. The question really that has to be asked is how this happened. The other question that has to be asked is how much it has cost. What has the cost been not just through the processes of getting the bill through the House—The CHAIRPERSON (Lindsay Tisch): We are on Part 2.CLARE CURRAN: We are on Part 2 but I think it is a pretty important question given that we are now in 2014. The last Committee stage reading was in 2012. The bill was introduced in 2009—well its first reading was in 2009. It was actually introduced in 2008. I mean seriously. It is a bit of a joke. It is a historical bill. It is a historical bill and actually you have got to wonder whether it is out of date and whether anyone has actually bothered to read it tonight to work out whether it is still relevant.Let us look at what the bill does in Part 2 because that is what we are discussing. It removes the requirement to establish temporary safeguard authorities. They are not very temporary are they if the Government has taken 6 years to remove that. It also enables the existing expertise of get this the Ministry of Economic Development—well that ministry does not even exist any more.I think you have got to ask yourself whether or not this bill is still relevant. In all seriousness I do ask the Minister to comment on that on whether or not the bill has been looked at for relevance tonight and also whether or not anybody has looked at the cost—whether it is in monetary terms or otherwise—of not enacting this bill in a timely manner. Surely if you are putting a bill through the House that actually removes temporary safeguards then you would be thinking that you would have to do that reasonably quickly and that if you do not there would be some impact. So I would be interested to know just what the impact has been of not moving this bill through all of its stages in the House.We are still in the Committee stage on Part 2 of this bill. I have to ask whether we are really going to get to the third reading this year or whether it is going to be another year or two before we actually get through all the phases of this bill. I think it is a good example of just how long it can take for a piece of legislation to get through the House under this Government.JAMI-LEE ROSS (Junior Whip—National):I move That the question be now put.The CHAIRPERSON (Lindsay Tisch): The question is that the question be now put. Those of that opinion will say Aye to the contrary No. The Ayes have it.ANDREW WILLIAMS (NZ First):I raise a point of order Mr Chairperson. New Zealand First has not had the right to speak on this bill at all yet.The CHAIRPERSON (Lindsay Tisch): That is not so because this bill has been before the Committee before. We have already done Part 1. We are on Part 2. I have been presiding the whole time that we have been on this debate. The member has not taken a call. The Committee will decide whether a closure motion is accepted or not. We had a closure motion and I have put it to the Committee. I will put it again.A party votewas called for on the questionThat the question be now put.Ayes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes56New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1.Motion agreed to.Part 2 agreed to.ANDREW WILLIAMS (NZ First):I raise a point of order Mr Chairperson. I just want it on the record that for the second time today New Zealand First the fourth-biggest party in this House has been declined the right to speak on a bill—The CHAIRPERSON (Lindsay Tisch): That is not a point of order. The member will sit. [Interruption] The member will sit. That is not a point of order. The Committee decided that a closure motion would be accepted. It was voted on and it was passed. The Committee decides not the Chair. The Committee decides whether a closure motion is accepted. That is the process of this Committee. That is the process we have just gone through. That is why I have just put it and it has been passed. We are now moving to the clauses.ANDREW WILLIAMS (NZ First):I raise a point of order Mr Chairperson. I stood as the Labour member was sitting—as she was sitting—The CHAIRPERSON (Lindsay Tisch): The member will sit. That is irrelevant. The next speaker who got to have the call was a Government member. A Labour member was speaking; the next call went to the Government member. I accepted the Government member. He moved a closure motion. I put it to the Committee. The Committee decided that the closure motion would be accepted. We have moved on. That is the process. We are now on the clauses.Clauses 1 and 2Hon PHIL GOFF (Labour—Mt Roskill):Labour supports this bill the Trade (Safeguard Measures) Bill although it does raise the question of why we are still debating this bill 6 years after it was first introduced by Lianne Dalziel. If the measures in this bill are truly significant and important one would have expected that the Government would facilitate the passage of this bill well before a 6-year intervening period has passed. That intervening period creates additional difficulties when we come to look at the commencement clause and what this bill is about.The title suggests quite accurately that this is a bill that enables New Zealand to apply safeguard measures and provisional safeguard duties at the border. I am a free-trader. This measure actually is consistent with the World Trade Organization but it is consistent with the measure that was passed by the organisation in 1994 at the end of the Uruguay round which made safeguards permissible. What do we mean by “safeguards”? You put safeguards in place to provide temporary protection to a domestic industry from serious injury that is being caused by imports and you put them in place to facilitate adjustment in a domestic industry to increased competition from imports from outside.But I have some questions to ask of the Minister in the chair the Minister of Commerce about why we need these. When was the last time that we employed a safeguards measure Minister? Has the Minister got that information? Yes this bill is about safeguard measures but when did we last apply them? Which industries might they still protect? As we have done away with most of our import protections apart from residual tariffs and have entered into a range of free-trade agreements where this will not apply are these measures 6 years after the bill was introduced still relevant? If they are relevant to which industries are they relevant? If they are relevant when was the trade safeguard measure as set out here actually utilised?There are some aspects about trade safeguard measures that are important. There are legitimate trade remedies that we have against certain imports that cause injury to New Zealand industries but they are actually applied in other areas. The Dumping and Countervailing Duties Act 1988 for example allows us to stop people dumping their goods in New Zealand where they are selling their goods in New Zealand for less than they would be selling them at home. That is a legitimate trade safeguard measure.That same Act—an Act that is interestingly 20 years older than the trade safeguard measures legislation that this bill is amending—also means that you can put countervailing duties on where a Government is actually subsidising the product and therefore that product is competing unfairly against New Zealand producers. So there are limits to free trade and that is why the trade safeguard measures that title is about are necessary but I would like the Minister to address the particular point about the normal run-of-the-mill protection against imports that are neither being dumped nor being subsidised. Is there still a need 6 years after this bill was introduced for those sorts of protections; if so in what areas are they needed?The commencement clause clause 2 states that this bill comes into force on the day after it receives the Royal assent. My real question is this: what is the Government’s intention in terms of putting this bill to the Governor-General for the Royal assent because if it has mucked around for 6 years to get the bill even to the Committee stage is it really intending to put this before the Governor-General for him to sign? If this bill was really significant—Dr David Clark: Or her.Hon PHIL GOFF: —would it not have moved much more quickly? Yes—or her because there may be a new Governor-General by the time the Government takes it to Government House. It is a fair question. Why has there been this delay? Once we know the reasons for the delay we might have some inkling as to whether the Government intends to put this bill to the Governor-General for the Royal assent or whether we are just going through the motions here in the Chamber.Why was this bill delayed for 6 years? When clause 2 was put into the bill nobody imagined it would take 6 years to get the bill through the House. So it is a fair question—why has there been a delay? Is it incompetence? Was it a lack of confidence in the previous Minister? Or is there some other reason that led the Government to delay the progressing of this piece of legislation? I would argue that the Government should move quickly to put this bill to the Governor-General for the Royal assent. I said at the start that I am supporting the bill. I cannot understand why the Government has delayed it for so long. Is it still relevant? Those are particular questions that the Minister should address.The reason I support this bill is the reason why Labour introduced it into the House. I support it because it streamlines the process of responding to allegations that goods are being dumped or subsidised. If there is a genuine breach of fair and free trade then obviously you want to deal with that as quickly as possible. The bill removes the temporary safeguard authorities. I think that is actually quite a good thing because I think that the Ministry of Business Innovation and Employment can now deal with this directly. It does not need to go to a temporary safeguard authority. I do not know whether the temporary safeguard authorities are actually costing us any money but if they are that is another reason why the Government should move with all haste to seek the Royal assent to this bill.I think the bill does something else that is important and that is it creates a more realistic time frame for the investigation of the need for a trade safeguard. At the moment it is something like 35 working days and I think anybody who has worked in this area appreciates that what is proposed in the bill—a 75-working-day period and on some occasions an 85-working-day period—can be justified.I think the other reason why this bill should be put forward for the Royal assent is that it does clearly set out the criteria for ministerial decision-making. In an area like this where you are alleging that there has been dumping or that there has been subsidisation of the product or that the competition is unfair because of a sudden surge of imports you do need to have clear criteria that the Minister acts to. Those criteria include that there is a serious injury to the industry; that the importing of the goods against which safeguards are being sought was an unseen development; that the safeguards are in fact appropriate in their extent in their duration and in their nature; and that the safeguards are in the public interest. It is also important that these safeguards are compatible with the other free-trade agreements that we are in the process of negotiating.I do not know whether anybody can remember when the bill went before the Foreign Affairs Defence and Trade Committee. It was many years ago. But the committee made some important changes narrowing ministerial discretion—making it clear but narrowing it—to increase certainty on the part of those who are appearing before the Ministry of Business Innovation and Employment seeking a safeguard or opposing a safeguard. I think it is important that where a provisional safeguard is put in place but no final duty is levied there be a refund of the duty paid and the select committee made that adjustment. And I think the most obvious and most important thing is that countries may be exempted from provisional safeguards where the World Trade Organization and trade treaties require that.But now that I have got the Minister’s attention again—he was distracted when I raised the questions with him before—in terms of the safeguards applying in instances other than where the product has been subsidised or the product is being dumped when was the last time Minister that a trade safeguard was used? If we are going to pass this legislation we need to know that there is still a need for it. When was the last time that the trade safeguard was used? And what industries today given our low level of protection does he think might need trade safeguards simply because imported goods are causing injury to that industry? Yes if it is dumped and yes if it is subsidised by a foreign Government there is no problem with the safeguard being applied. But in those other instances where those factors do not exist which industries does he think we might need to protect?I think those are important considerations before the Committee in passing this legislation. We need to know that the 6 years that the Government has dawdled over this bill have not made at least some of the provisions in this bill redundant. Why did the delay take place over such a long period of time? Will the Government when this bill receives its third reading actually put it before the Governor-General for the Royal assent? Those are significant questions. I think the Minister should not just sit there silently. He should make an endeavour to answer those questions which are genuine questions.Debate interrupted.