Scott Alastair: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeScott Alastair: Oral Questions — Questions to Ministers[Sitting date: 24 March 2015. Volume:704;Page:2490. Text is incorporated into the Bound Volume.]4.ALASTAIR SCOTT (National—Wairarapa) to the Minister of Trade: What progress has the Government made in opening up export markets for our regional economies?Hon STEVEN JOYCE (Acting Minister of Trade): Good progress just like the Black Caps this afternoon. Yesterday the New Zealand - Korea free-trade agreement was signed in Seoul Korea by our Minister of Trade and his Korean counterpart. Upon ratification the free-trade agreement will ensure that nearly half of New Zealand’s exports to Korea will be immediately tariff-free and then will progressively remove tariffs on 98 percent of total exports. The impact of tariffs is twofold. New Zealand exporters pay a high cost in tariffs and tariffs also substantially reduce the volume of our exports into markets. Both of these problems combine to reduce the availability and competitiveness of New Zealand products. Tariff removal is therefore a key focus of the Business Growth Agenda target to grow our exports and comprehensive free-trade agreements like the Korean free-trade agreement and others are an important part of that.Alastair Scott: How do free-trade agreements like the one signed with Korea yesterday help grow regional economics like for example Northland?Hon STEVEN JOYCE: Most of our regional economies rely strongly on the performance of the primary sector and it is the primary sector that has most to gain by the removal or reduction of heavy tariffs. If you look specifically at Northland Northland is the second-largest supplier of avocados to Korea from New Zealand with the Northland region responsible for 37 percent of them. The Korean free-trade agreement will eliminate the 30 percent tariff on the import of avocados into Korea. Kiwifruit is another important industry in Northland. New Zealand exports a lot of kiwifruit to Korea. The tariff is 45 percent. Under the Korean free-trade agreement the tariff on kiwifruit exports will be reduced to zero over the next 5 years and so it goes on with forestry dairy and so on. Free-trade agreements like the one with Korea are critically important for improving growth in places like Northland as they provide more jobs higher wages and opportunities for young people.Richard Prosser: Does the Minister believe that the Korean free-trade agreement will actually be of any benefit to the dairying economy of the Northland region when it will take 10 years to reach a final tariff-free milk power quota of just 2000 tonnes—0.13 percent of our current exports—with anything over that amount permanently subject to a tariff of 176 percent?Hon STEVEN JOYCE: I do believe it will because in a number of key tariff lines great progress has been made. For example with cheddar cheese we have got an equivalent deal with that of the US and a better deal that Australia’s and that is very important for competition in Korea. If you look at infant formula and at butter for example all those higher-value products have got very good tariff elimination. If the member is suggesting that is not a good thing for Northland I would be very surprised indeed.Alastair Scott: What support has he seen for the Korea free-trade agreement and for reducing costs on New Zealand’s primary sector?Hon STEVEN JOYCE: Support for the free-trade agreement particularly from the primary sector has been very positive. As I said the Korean free-trade agreement eliminates the 40 percent tariff on beef the 22.5 percent tariff on sheepmeat the 45 percent tariff on kiwifruit the 30 percent tariff on avocados and the 89 percent tariff on butter. Despite this I have also seen a curious media report that the Korean free-trade agreement does “no favours to New Zealand farmers”. There is also in fact draft legislation—before this House shortly—that would have the effect of torpedoing the Korean free-trade agreement and a number of other trade agreements we are currently negotiating. The origin of that comment and that legislation and the person who wants to kill off jobs and growth in the Northland electorate is the same Winston Peters who is standing in the by-election.Richard Prosser: Is the Minister satisfied with the terms negotiated under the Korea free-trade agreement when the tariff on New Zealand beef under this agreement will be 40 percent but the tariff imposed by the Koreans on American beef is just 32 percent?Hon STEVEN JOYCE: The tariffs under this agreement are declining across a whole range of areas as I just detailed in my previous answer including in the areas of sheepmeat and beef. It eliminates the 40 percent tariff on beef and these are good things for the New Zealand primary sector. For the member and his colleagues to suggest that it is not beneficial suggests that they are literally not focused on what is important to New Zealand farmers and frankly Northland farmers.