Norman Russel: Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill — Second ReadingText is incorporated into the Bound VolumeNorman Russel: Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill — Second Reading[Sitting date: 10 September 2015. Volume:708;Page:6575. Text is incorporated into the Bound Volume.]Dr RUSSEL NORMAN (Green): I rise on behalf of the Green Party to speak to this bill which implements a very small part of the New Zealand - Korea free-trade agreement. Of course these free-trade agreements have very large-reaching consequences but only very small elements of them actually require legislative change. This bill implements those small elements.What these trade agreements are really about is what kind of global governance we want to have. The Green Party supports global governance. We want global rules around climate change emissions for example. We want global rules around protecting people from cluster munitions for example. The question is when we implement these kinds of trade agreements—the New Zealand – Korea free-trade agreement in this case—we are implementing a series of global rules in this case bilateral but in some cases multilateral and in some cases plurilateral. These kinds of rules determine the way that the global order is to be rolled out.In these kinds of agreements and in this agreement in particular there are the investor-State dispute settlement elements. It is part of this trade agreement that this bill is implementing a part thereof. These trade agreements and these investor-State dispute settlement clauses what they do is that they restrict the ability of Governments to regulate and of parliaments to pass laws. They restrict the scope of action of democratically elected parliaments.If you were to think “Well what are the kinds of rules for global governance we’d like to have in place?”—should for example Governments be allowed to eliminate nuclear power if they decide it is unsafe? I think that is a legitimate question of global governance. Should Governments and parliaments be allowed to decide that they no longer want to have nuclear power? I think that is a legitimate question and in my view we should have a set of rules of global governance that enables and allows parliaments to decide to eliminate nuclear power. I just think that that is what the global rules should allow.The problem with investor-State dispute settlement clauses which are part of the New Zealand - Korea free trade agreement is that if you try to do that you will be sued literally for billions of dollars. The reason why I can state that so confidently is that right now at this very moment the German Government is being sued for billions of euros because it passed a law in its Parliament to phase out nuclear power. It is being sued under exactly these clauses the investor-State dispute settlement clauses that are in this trade agreement. The German Government is currently being sued by Vattenfall which is a nuclear power company because the German Parliament dared to pass a law to phase out nuclear power.So the question is this: should the global governance rules that we establish enable democratically elected parliaments to phase out nuclear power? My answer is yes. This bill’s answer is no. And that is what it comes down to. Let us have another question. Should Governments democratically elected parliaments be allowed to restrict tobacco advertising by legislating for for example the use of plain packaging for tobacco? Should you be allowed to do that? Should the rules of global governance allow parliaments to pass those rules? I say yes; this bill says no.This bill implements the New Zealand - Korea free trade agreement which includes investor-State dispute settlement clauses. What those clauses say is that if I remove the right of Philip Morris a tobacco company to use its intellectual property which is its brand it can sue me under the investor-State dispute settlement clauses. The reason we know this is because Australia is currently being sued by Philip Morris under one of these clauses in a Hong Kong - Australia bilateral investment treaty that has one of these clauses in it. So why would we support clauses that implement global governance rules that restrict our right to protect human health from tobacco companies? Why would we do that? I do not support that.Let us take another example. What about if you wanted to restrict the sale of land to offshore buyers? I would say that a democratically elected parliament should be allowed to pass a law to restrict the sale of land to people from offshore. It is not xenophobic; it is simply saying we want to control the price of land in our country so that the people who live here can afford to buy it. This bill before us right now is part of a trade deal that will prevent this Parliament from passing a law that restricts the sale of land to offshore buyers.That is what this bill does right now. That is exactly what this bill does not only in respect of Korea but China as well because unfortunately the previous Labour Government stupidly signed a free-trade agreement that had a most favoured nation clause in it which meant that any following Government like the one we have at the moment that implemented really stupid trade agreements like this one would have all of the impact of that pushed backwards on to the New Zealand - China free-trade agreement. And that is in fact what this bill does.I am shocked that the Labour Party is voting for this bill. I am shocked that the Labour Party is voting for a bill that it knows will mean that we cannot place restrictions on—Hon David Parker: The member should listen to the debate.Dr RUSSEL NORMAN: —the sale of land in New Zealand to offshore buyers. I listened to the debate Mr Parker very closely. It was because the Labour Government put a most favoured nation clause in the New Zealand - China free-trade agreement and then this Government introduced clauses that remove our right to stop offshore buyers of land—right? That right in this agreement the one right before us gets taken back into the New Zealand - China one because the Labour Government put a most favoured nation clause into that agreement.So anyone who votes for this bill in Labour and National is voting to prevent this Parliament from passing a law that says that New Zealand land has to stay in the ownership of New Zealand residents and citizens. That is what it means. In my opinion good global governance leaves the space for democratically elected parliaments to say that the land in this country will be sold only to New Zealand residents and New Zealand citizens. I believe that they are good rules. Good global governance rules say that if a parliament wants to do that it should be allowed to do that. What this treaty does and what this bill which implements it does is it removes that right. I think that is bad global governance. That is why we are not going to be voting for it.I want to address—there are so many elements to this thing. Let me just talk about that particular part of it. There is a lot more to it. But that is all about restricting the ability of Parliament to prevent sales of land to offshore owners. If you wanted to eliminate nuclear power if we had it we would be prevented from doing that. If we wanted to restrict tobacco advertising we would face big problems if we tried to do that—because of this agreement which those parties Labour and National are going to vote for tonight in this bill.Let us talk about the China deal because that has been brought up as an example of a great success. There is an old saying in statistics that correlation is not causation. It is true that after the passage of the New Zealand - China free-trade agreement the sale of dairy milk and logs to China increased very significantly. There is no question about that. The question is: was that caused by the New Zealand - China free-trade agreement? Is there a causal connection or is it just a correlation?One way to examine this would be to say: “Well let’s look at other countries who were also selling products particularly commodities into China over that period that did not have free-trade agreements.” What about Australia Brazil and South Africa—also big commodity exporters? What happened to the commodity exports from New Zealand Australia Brazil and South Africa after the passage of the New Zealand - China free-trade agreement? None of those other countries had free-trade agreements during that period. If you look at the exports from those other countries they also dramatically increased after 2007-08. They did not have free-trade agreements. So if the cause of the big increase in New Zealand’s exports to China was the free-trade agreement why is it that those other commodity exporters also had dramatically larger increases in exports? New Zealand had roughly a $4 billion increase. Australia had a $50 billion increase in terms of its exports into China. Brazil had a $10 billion increase. South Africa had a $30 billion increase.Hon David Parker: A lower percentage though.Dr RUSSEL NORMAN: However you measure it as a percentage or just in basic numbers all of those commodity exporters had a dramatic increase in their exports of simple commodities into China and it had nothing to do with the free-trade agreement.China needed commodities because it had a booming economy. It is really simple. That is why our exports of simple commodities into China increased. That is why all countries like us who exported simple commodities to China over that period had a huge growth. All of us had exactly the same experience. So yes free-trade agreements matter. Do not get me wrong. Tariffs are a problem right? I agree with that. But we should not have to sign up to removing all of our democratic rights to implement bad global governance in order to reduce tariff barriers. I do not agree with that.I think that that is a real problem because it restricts our democratic rights in the future and it creates real obstacles at a time when we need to take really coordinated action—to reduce greenhouse emissions clean up our waterways a whole bunch of environmental problems that we face not to mention what is going on with the Auckland house prices—and when we need Parliament and Government to have the tools in order to take that action. This Parliament if it votes for this is voting to take away those tools and that is why the Green Party is not going to support it.