Huo Raymond: Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill — Second Reading In Committee Third Reading 
Huo Raymond: Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill — Second Reading In Committee Third Reading 
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RAYMOND HUO (Labour) 
: 
 I rise to speak in the second reading of the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill. Labour supports this bill as it will lead to increased opportunities for New Zealand exporters in the Hong Kong market as well as strengthening our relationship with the Greater China and Asian regions. There are three issues that I wish to talk about as part of my contribution. 
First of all as the Labour spokesperson on trade the Hon Maryan Street said earlier in her first reading speech this initiative is really interesting and quite exciting because it will help to herald a significant move in the export of both goods and services to the Hong Kong market. Secondly for a small economy like New Zealand’s growing a sustainable and export-led economy is vital. This bill is however a timely reminder that an export-led recovery has not eventuated and it is a missed opportunity to address one of the critical economic issues that face New Zealand which is our monetary policy setting. Labour believes that that policy is in need of reform and that it has been one of the underlining limits on economic reforms versus other OECD or wealthier developed countries. Thirdly labour rights and environmental sustainability are core New Zealand values that should not be sacrificed for the sake of increased trade. When undertaking negotiations they need to be held high on the agenda. Reading the speech notes of the Council of Trade Unions president Helen Kelly in July this year on the relevant issues has reinforced my position on that. 
I have recently posted an article on the Labour MPs’ blog Red Alert. I said that on our regular weekly radio show the Minister for Ethnic Affairs and I receive questions and messages from the Chinese constituency. In answer to some of the questions the Hon Pansy Wong stated that exports had decreased under Labour and have increased since National came into office. She neglected to mention that it was the then Minister of Trade Phil Goff who signed the free-trade agreement with China. This opened up the floodgates to trade with China making China our second-largest trading partner. In the first year of the free-trade agreement trade with China increased by 62 percent and National was in office for less than 4 months of that period. On the issue of the spiralling Asian unemployment rate which has just hit a record high of 10.5 percent Minister Wong said “although unemployment is increasing so is the rate of employment although the speed of job creation is slower than that of the number of people who are losing their jobs.” I am not sure whether that statement even makes sense but it shows that the Minister has no answer to the now more than 23000 Asian New Zealanders who are unemployed. 
Minister Wong’s answer also ignored the fact that bilateral or multilateral agreements on trade are often the product of joint efforts and collaboration. For instance the origins of the New Zealand - Hong Kong China closer economic partnership go back to as early as 2001. The idea was first mooted by the Hon Jim Sutton who was the Minister for Trade Negotiations at that time. In 2002 the talks were suspended when New Zealand and Hong Kong became bogged down in discussions around rules of origin and problems with labelling regulations. The talks were subsequently revitalised under the Hon Phil Goff as Minister of Trade and were pursued by the current Minister the Hon Tim Groser. 
Hong Kong is our ninth-largest export destination accounting for $823 million last year. Just as important it is our eighth-largest source of foreign direct investment. New Zealand imported $199 million of merchandise goods from Hong Kong last year making it the 31st-largest source of imported goods. Hong Kong accounts for 1.9 percent of New Zealand’s total exported goods and 0.4 percent of total imported goods. This market is already rapidly expanding with last year’s total exports increasing by 33.6 percent compared with 2008. However total imported goods declined by 2.5 percent last year compared with 2008. 
To summarise closer economic partnership agreements are a vital part of New Zealand’s economic development policy. Closer economic partnerships break down tariffs quotas and customs duties which restrict access and profitability for New Zealand exporters and importers. Closer economic partnerships lead to increased exports and imports and have the potential to add to the wealth of both markets. I acknowledge that New Zealand signed a closer economic partnership with Hong Kong in March 2010 and this bill implements that agreement. 
The latest release from the New Zealand Manufacturers and Exporters Association shows that an export-led economic recovery has not eventuated. While domestic sales increased by 19 percent in April 2010 export sales decreased by 5 percent. The signing of free-trade agreements and closer economic partnerships is important and this particular closer economic partnership will boost the economy but that is only part of the solution. The Government needs to support New Zealand businesses to best exploit the opportunities that free-trade agreements present. Sadly the National Government has failed to assist New Zealand exporters. Its refusal to even consider examining monetary policy highlights that. 
In 2009 the Labour Party withdrew from the cross-party consensus on monetary policy. Labour believes that the policy is in need of reform. Back in March 2004 Labour introduced an important change to enable the banks to pursue a more active role in the foreign exchange markets. This assisted the economy by tempering exchange rate volatility and by moving New Zealand’s monetary management closer to Australian practices. Another important change would be the idea of amending the Reserve Bank of New Zealand Act in order to broaden the Reserve Bank’s objectives. The objectives of the Reserve Bank of Australia are not only to maintain the stability of the currency of Australia but also the maintenance of full employment in Australia and of the economic prosperity and welfare of the people of Australia. In contrast our Reserve Bank is tasked solely with maintaining stability in the general level of prices and that is not helpful to our tradable economy. 
Although free-trade agreements and closer economic partnerships come with undoubted benefits we must not ignore the reality that for some businesses and sectors they can cause harm. This closer economic partnership has been evaluated as having a low negative impact on New Zealand business largely because Hong Kong specialises in services rather than in cheap manufactured goods that could undercut local businesses. New Zealand manufacturers of footwear textiles etc. are most at risk from free-trade agreements and closer economic partnerships and I am very glad that this closer economic partnership has given those sectors the longest phase-out period for tariffs in order to allow them time to adjust. 
I reiterate that labour rights and environmental sustainability are core New Zealand values that should not be sacrificed for the sake of increased trade. When undertaking negotiations they need to be held high on the agenda. Thank you very much.