Goff Phil: ASEAN-Australia-New Zealand Free Trade Area Bill — First Reading 
Goff Phil: ASEAN-Australia-New Zealand Free Trade Area Bill — First Reading 
[Volume:653;Page:2634] 
Hon PHIL GOFF (Leader of the Opposition) 
: 
 The Labour Opposition in the usual pattern of bipartisanship on developing market access to new economies for our businesses very much supports the ASEAN-Australia-New Zealand Free Trade Area Bill. This bill will bring into effect a free-trade agreement with Australia and the countries of ASEAN. It was my privilege in May of last year to conclude those negotiations and I congratulate Tim Groser on having the privilege of being able to sign it. 
I think we had an incredibly good year for trade last year. We concluded the free-trade agreement with China the first free-trade agreement that China has had with any developed country and then we developed worked through and concluded the negotiations with ASEAN. China is our fourth-largest trading partner but ASEAN collectively is our third-largest. It is a critically important market. ASEAN has 575 million people as part of it. It has become more and more important over time as a destination for our merchandise goods our services and our investments. 
I think Tim Groser mentioned that over the last 3 years this market has grown on average by 24 percent a year. That rate of growth is higher than that of China. It is a market that is expanding and it is a market that is at the core of the most economically progressive part of the world—the fastest growing and the fastest developing area of the world. We send something like $4.6 billion of exports into that market—those are the figures to June 2008—and therefore it is critical for our exporters to gain the advantages of a free-trade agreement and ultimately free-market access for 99 percent of our current exporters into that market by 2020. That is a huge step forward. 
It was not a straightforward process to negotiate. The negotiation took 3 years. In Singapore last year I attended the 15th round of those trade negotiations. That indicates that it was a tough agreement to achieve. There were big obstacles to overcome but we got there. That is a real achievement and there is a sense of satisfaction for all of us as New Zealanders. 
As Tim Groser knows we have to acknowledge our professionals in the Ministry of Foreign Affairs and Trade for doing the nuts and bolts work—the critical hard work of a negotiation. I want to make reference to two of our very best trade negotiators—Martin Harvey who started the process and Vangelis Vitalis who completed the round. I have huge respect for both of those people and I pay tribute to them and to their teams for their skill their hard work their commitment and their sheer perseverance. We went to Singapore uncertain that we would complete the round. We knew that it was vital to do so. There was a series of problems that we had to overcome but I will not go into the details of those in this House. They worked at the official levels and they did a superb job. I worked at the political level. I tried to reach an agreement which in the end has to be a political agreement. In the end we got there and I think that that is an enormously important achievement for New Zealand. 
The agreement was actually the first time that the ASEAN countries had negotiated a comprehensive agreement as part of a single undertaking. That means that the agreement simultaneously covered goods services and investment as well as other areas that one would expect in a modern free-trade agreement such as intellectual property. New Zealand exporters are currently paying around $50 million a year in tariffs in order to trade with those economies. At a simple level that means that the saving for New Zealand businesses will be $50 million a year when we finally implement this agreement. But actually it is much more important than that because a free-trade agreement does a lot more to provide the foundation to expand exports into that market. Not only does it eliminate the tariffs on all of our key exporters by 2020 but also it means that our businesses have protected access into those markets and they have competitive advantage over the other countries that are also working to sell their goods and services into those markets. 
But we took another factor into consideration which was the regionalisation process in the Asian area. There was real concern at one point that with free-trade agreements being negotiated within the region that were not necessarily outward looking we could have found ourselves locked out of a very vital market. It was critical for New Zealand to engage in that regionalisation process. It was also critical to become part of a free-trade agreement with the ASEAN countries part of the closer economic partnership for east Asia through the East Asia Summit and also to look at what we could negotiate in terms of a regional free-trade agreement through APEC. 
Those goals are important but they are not immediately achievable. This agreement was achievable and we have got into the markets through that free-trade agreement. That will prove vital for us at a time when trade this year is likely to diminish for the first time since World War II. Pascal Lamy said trade internationally will diminish by 9 to 10 percent this year. At a time of recession there is a mood regrettably of protectionism. Protectionism is very good if it works just one way; that is if a country protects its borders against imports coming in but the other countries it trades with welcome its exports with open arms. Clearly that does not happen. The problem with protectionism is that it does not protect jobs; it destroys jobs because protectionism invites retaliatory action. For us as a trading nation it is critically important that we protect our jobs in the export area by ensuring that we have access to our markets. It is also a fact in favour of free-trade agreements that when a country increases its trade by about 10 percent the latest figures from the OECD suggest that that will increase its per capita income by around 4 percent. So trade is a way in which we build up our wealth and our employment opportunities for New Zealanders. 
I think this agreement is critically important but by itself it is not sufficient. The free-trade agreement that we are separately negotiating with Malaysia will be very important. That is a big market for us. My sense is that good progress was and is being made in that area. In Korea which is not part of ASEAN but part of North Asia we are seeing good progress and we will see a free-trade agreement delivered in that area. I hope also that we will be able to make progress when the American administration has settled its trade policy with the Trans-Pacific Strategic Economic Partnership Agreement. That encompasses the P4 countries—New Zealand Chile Brunei and Singapore—with the United States Australia Peru and Viet Nam coming in as well. That is critically important because the United States is our second-biggest trading market. It is also critically important because if we succeed in that then we will get a forward momentum that will see other countries in the Asia-Pacific region wanting to become part of that free-market agreement. 
I will conclude on the other area that I know that Tim Groser is very familiar with and will be working hard on and that is the area of concluding the Doha round. Free-trade agreements are good but the thing that bilateral free-trade agreements do not achieve is dealing with the problems of export incentives agricultural subsidies and overall tariff levels. We need to conclude the Doha round of World Trade Organization talks in order to achieve those objectives. At a time when there is recession the Europeans have brought back export incentives. Under the Doha round they would be eliminated by 2013. There is a huge difference between the applied rate of tariffs in the world at the moment and the bound rates. Doha will bring down the bound rates and stop countries lifting their tariff levels. This agreement is good but it is part of a wider whole.