Douglas Roger: Trade (Safeguard Measures) Bill — First Reading 
Douglas Roger: Trade (Safeguard Measures) Bill — First Reading 
[Volume:652;Page:1875] 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 Without doubt free trade is one of the seven factors in economic progress for any nation. I enjoyed the speech of the member for Wairarapa John Hayes. He gave me a level of comfort about the Trade (Safeguard Measures) Bill that I probably did not have until I listened to him. However ACT is very cautious about this bill. I guess we are instinctively suspicious and it could be that at some point in its progress we may well oppose it. 
The reason for our suspicion is the possibility that the bill might be used to hinder free trade in some way. Undoubtedly under the bill the powers of the Minister are extensive. We recognise the need to meet the World Trade Organization’s rules but we wonder whether the bill is the appropriate way of doing that. The problem with this type of legislation is that it can be used as an effective non-tariff barrier and undoubtedly New Zealand has suffered in this regard in many cases. It is because of this possibility that we are cautious. 
As the member for Wairarapa said New Zealand can only gain by selling goods that it can produce at relatively low cost and using the proceeds to buy things that others produce cheaper than we do or that we produce at high cost. The principles involved in international trade are basically the same as those involved in any voluntary exchange. Each partner produces and consumes more than it would otherwise have been able to achieve. There are three reasons why this is so. First with international trade the people of each nation will be able to use more resources to produce and sell things that they do well and use the proceeds to purchase goods they can produce only at high cost. I guess the question is whether this bill actually fosters or helps us achieve that objective or whether it hinders it. 
Secondly international trade allows both domestic producers and domestic consumers to gain from reductions in per unit costs that often accompany large-scale production marketing and distribution. I believe that this point is particularly important for small countries like New Zealand. We need to ask how this bill facilitates that principle or whether it is likely to be used as an excuse for those overseas who want to impose shall we say some barriers on New Zealand trade. 
Thirdly international trade promotes competition in domestic markets and allows consumers to purchase a wide variety of goods at reasonable prices. Competition from abroad helps keep domestic producers on their toes. It forces them to improve the quality of their products and to keep those products at low cost. 
I guess I would like the Minister to assure this House that this bill will not be used to restrict desirable trade and surely that issue has had its day here. Measures such as those proposed in this bill undoubtedly increase transaction costs. Whatever we say one of the impacts of this bill will be that it will increase transaction costs and thereby reduce the gains available from free trade. The question is whether this measure is actually worth the cost that it will undoubtedly impose or whether it is yet another example of bureaucratic red tape and controls.