Goff Phil: Trade (Safeguard Measures) Bill — In CommitteeText is incorporated into the Bound VolumeGoff Phil: Trade (Safeguard Measures) Bill — In Committee[Sitting date: 08 April 2014. Volume:697;Page:16951. Text is incorporated into the Bound Volume.]Hon PHIL GOFF (Labour—Mt Roskill):It is a bit of a shame to have to take the call when we have a Minister in the chair the Minister for Food Safety who does not even know what the Trade (Safeguard Measures) Bill is. She did not even know she was meant to be in the chair. That really degrades the importance of passing legislation through this House because what I wanted to do in the debate on the title and commencement clauses was to ask the Minister in the chair questions about the bill that earlier Ministers in the chair who were equally ignorant about the bill have failed to answer. If we are going to take up the time of the taxpayer and the time of the Committee to have a proper debate on the bill we need to have a Minister in the chair who knows what the bill is. It makes a farce of this place—Hon Nikki Kaye: You have no idea.Hon PHIL GOFF: —if the Minister does not. Oh the Minister says she does. Well look I have got some questions for the Minister. The first question is this: if we look at the title clause we see that “This Act is the Trade (Safeguard Measures) Act 2008.” That is 2008. Well my question to you Minister is first of all why are we still debating this bill 6 years after it was introduced—6 years after it was introduced? I think that the Minister in the chair owes it to the Committee and owes it to the country to explain why it has taken 6 years to get a relatively straightforward piece of legislation to the point where it still has not even got through its Committee stage. This bill was sent to the Foreign Affairs Defence and Trade Committee in the very first weeks of the first term of the National Government. We are now in the last weeks of the last term of the National Government and we have not passed this legislation.So Minister we on this side of the Chamber expect you to take a call and explain to us whether it was just poor management of the House that the Government has just never got its act together to manage its legislative agenda or was it sheer incompetence? Were there problems with the bill that the Government could not come to terms with? Was its incompetence in managing the bill—oh! The Minister has left the chair. Maybe the Minister of Commerce who has just assumed the chair who is meant to know something about this bill—even if he is late in arriving to hear the discussion on it—will answer these questions. Why Minister Foss has it taken 6 years to get this bill to the point where it is now? Is it incompetence? Is it poor management? Is it partly because the Minister who was in charge of this bill is a guy called John Banks? The last thing that the National Government wanted to do was have John Banks in the chair and subject to scrutiny. Whichever way you look at it it is hard to imagine why a Government takes more than 6 years to get through a piece of legislation that is supposedly necessary. If it is necessary why was it not put through the House much earlier Minister Foss? Why has it taken this long?I want to raise some other questions about it. Actually the Labour Government is supporting this bill. The Labour Party is supporting this bill. The Labour Government introduced it and the Labour Party is supporting it. I do not want to have to wait until the next Labour Government albeit in only a few months’ time to actually get the bill through. You know this is about trade safeguards. I am a person who believes in freeing up trade so why would we have trade safeguards? Well there are some very good reasons for having trade safeguards. You need trade safeguards when other countries decide to dump their products in your country at below the value of the product. That is not fair trade. It is not a level playing field. It can damage your local industry There is a clear argument for having anti-dumping trade safeguards. That is touched on in this legislation but it is covered in another piece of legislation.There is an argument too for having countervailing duties. You put countervailing duties on when the exporter is from a country where the Government of that country is subsidising the exports and again it is not fair competition. We do not mind here in New Zealand competing with anybody on a level playing field but if another Government is subsidising the product so that it can out-compete our industries that are standing on their own feet that would also be unfair trade. Again that is touched on in the bill but it is not the central purpose of the bill.The central purpose of this bill is to actually provide temporary protection for when a domestic industry might be faced with increased imports and it needs time for adjustment. But the question I have got for Minister Foss on this is which industries are we talking about that actually require this sort of protection? Because actually our tariff levels are generally either non-existent or below 5 percent and I cannot think of the last time Minister when these sorts of temporary safeguards were actually used. So can the Minister—this is a genuine question—explain to the Committee when the last time was that temporary safeguards were used for the purpose that is set out in this bill and which of the industries potentially need protecting and against what countries. That is a basic piece of information that Parliament and the country are entitled to know.I think that the bill can be justified but my experience is also that trade safeguards can sometimes be utilised in a way that are not productive for fair trading. A number of members of this House have just came back to New Zealand from a trip to China where we were asking questions there about the trade safeguard—the agricultural special safeguard measures—that is impacting on the dairy industry. I know that my colleague Damien O’Connor is particularly interested in this. I negotiated that trade agreement. We put in the special agricultural safeguards—the trade safeguard mechanisms—because frankly we would not have got the free-trade agreement without it. The Ministry of Agriculture in China is still fuming about the fact that we have negotiated the total phase-out of tariffs.But I have got to say that if you look at the Chinese example and relate it to what this bill is about those safeguards are not really justified by the reality. Yes our exports have gone up rapidly. When we set the trade safeguard levels they were set at a level well above the level of trade. Within 5 years there has been a fivefold increase in dairy exports so people are paying that trade safeguard mechanism—actually in the first month of the trading year—and it is costing us some tens of millions of dollars. The Chinese would be able to justify that if there was damage as this bill sets out to the local industry. But there is no evidence that what we are doing is damaging the local industry. Yes dairy production in China has dipped but not for the reason of competition. The reason we are sending the volume of trade into China that we are is the demand. The demand has gone up; we are simply meeting the demand. So we are faced with a situation where a trade safeguard mechanism is being employed but without justification for doing it. I do not think that that is what this bill provides for New Zealand.Of course we asked about whether we might renegotiate those trade safeguard measures with China and the answer was why would China give us something and get nothing in return? There would be a quid pro quo and since the trade safeguard measures are only transitional—they are phased out by the early 2020s—then we probably will not be able to do anything about it. That is an example of where a trade safeguard mechanism can be utilised as a revenue-grabbing mechanism but without being justified by an actual need to protect a local industry. In this bill we say that it is about protecting the local industries but the Minister who was asked earlier during the Committee stage which industries might need this sort of protection failed to answer that question. It is a valid question Minister and I would like you Minister to answer or to attempt to answer that question. That is what you are paid to do. That is why you are sitting in the chair. We do not expect you to do sit there like a dummy and ignore the questions and not do what you as a Minister have a responsibility to do.I said before that notwithstanding the fact that this Government has taken 6 years over this measure I think that the measure is worthwhile. I think that it does a number of things. It streamlines the process of responding to allegations against imported products and the need for the trade safeguards. It removes the temporary safeguard authorities. I do not think we need those now; the investigative work can be done by the Ministry of Business Innovation and Employment. It enables a more realistic time frame to work through the trade safeguards. Currently it is 35 days; I do not think that is sufficient. It increases the period to 75 days and actually 85 days where provisional safeguards are being requested. And it also sets out clear criteria. Those criteria are set out in clause 12 of this bill. I think they are sensible measures. The chief executive must look at whether the increased imports are actually causing serious injury. He or she needs to look at whether the increased imports are due to unforeseen developments; whether they are necessary to prevent serious injury; and if they are necessary which goods should be subject to it which measure is appropriate and what is the extent and duration of time—