Worth Richard: Tariff (New Zealand - Thailand Closer Economic Partnership) Bill — Second Reading Instruction to Committee In Committee Third Reading 
Worth Richard: Tariff (New Zealand - Thailand Closer Economic Partnership) Bill — Second Reading Instruction to Committee In Committee Third Reading 
[Volume:626;Page:21413] 
Dr RICHARD WORTH (National—Epsom) 
: 
 I would like to ask the Minister a question on something that is far from clear to me in Part 2 and express the hope that he will provide a response. We are of course talking about the Tariff (New Zealand - Thailand Closer Economic Partnership) Bill which National supports with reservations. Part 2 is concerned with the application of transitional safeguard measures and provisional safeguard measures. There is a brief explanation in the explanatory note of the bill as to what all this is about. The note states: “The Agreement provides for the use of bilateral transitional safeguards by both Thailand and New Zealand. These allow either party to address situations of serious injury to domestic industries caused by increased imports due to tariff reductions or removal under the Agreement by reverting to higher tariffs for a certain period.” 
The actual part inserts new sections into the principal Act. There are interpretation sections and a code that involves investigative procedures: matters to be taken into account by the investigator who is the chief executive; publication of investigation results; and provisions dealing with transitional safeguard measures and also provisional transitional safeguard measures. 
I question the Minister about why this particular part is necessary and why it is not possible simply to rely on the current provisions in the World Trade Organization agreements. Of course it is the essence of the World Trade Organization regime that binding tariffs are key to the smooth flow of trade in goods but there are exceptions as I am sure the Minister is aware. Three of those exceptions that are well-known would be actions taken against dumping or selling at an unfairly low price; subsidies and special countervailing duties to offset the subsidies; and—the third is what we are on about here—emergency measures to limit imports temporarily designed to safeguard domestic industries. 
The rules around safeguards in the World Trade Organization context are well known. A member may restrict imports of a product temporarily—take safeguard action—if its domestic industry is injured or threatened with an injury caused by a surge in imports. The injury has to be serious. Well that is what this part is all about also. The safeguard measures were always available under GATT’s article 19. They might not have been frequently used in those days; indeed I understand that some Governments preferred to protect their domestic industries through grey-area measures using bilateral negotiations outside GATT’s auspices. They would persuade exporting countries to restrain exports voluntarily or to agree to other means of sharing markets. 
It also seems to be the case that what Part 2 is seeking to catch is wholly consistent with the safeguards regime in the World Trade Organization because we are talking about import surges justifying safeguard action and that can be either a real increase in imports—an absolute increase as it is called in the trade—or an increase in the imports’ share of a shrinking market even if the import quantity has not increased. That is the so-called relative increase. 
As I look through the safeguard provisions in the World Trade Organization agreement I cannot see why the Government is getting itself involved—as it is in this bill—with Part 2 issues. I am not a member of the Foreign Affairs Defence and Trade Committee but I do not believe that that issue was fully considered by the committee. The only comment I can see about that issue in the recommendations of the committee when it reported to Parliament is this one line: “We are advised that the inclusion of these provisions is fully consistent with our GATT obligations.”