McClay ToddEUROPEAN UNION FREE TRADE AGREEMENT LEGISLATION AMENDMENT BILLFirst ReadingINTERNATIONAL TREATY EXAMINATIONSAgreement between the Government of New Zealand and the European UnionHon TODD McCLAY (Minister for Trade): I present a legislative statement on the European Union Free Trade Agreement Legislation Amendment Bill.DEPUTY SPEAKER: The legislative statement is published under the authority of the House and can be found on the Parliament website.Hon TODD McCLAY: I move That the European Union Free Trade Agreement Legislation Amendment Bill be now read a first time. I nominate the Foreign Affairs Defence and Trade Committee to consider the bill. At the appropriate time I intend to move that the bill be reported to the House by 4 April 2024 and that the committee have authority to meet at any time while the House is sitting (except during oral questions) during any evening on a day on which there has been a sitting of the House on a Friday in a week in which there has been a sitting of the House and outside the Wellington area despite Standing Orders 193 195 and 196.In 2015 under the fifth National Government we embarked on a journey towards a free-trade agreement (FTA) with the European Union by launching the preparatory process for negotiations on an FTA. After almost a decade I am pleased to be standing here presenting on this important piece of legislation which will bring the now completed FTA into effect. This Government recognises that trade is crucial to our economic success. We know that one-in-four New Zealanders' jobs depends on trade and the New Zealand - EU free-trade agreement is the result of a longstanding and bipartisan effort by successive New Zealand Governments.The case for an agreement with the European Union is compelling. With a GDP of around $27 trillion and a population of 450 million consumers the EU represents an important and valuable market for New Zealand businesses looking to sell overseas. Until now many New Zealand products have been effectively locked out of EU markets as a consequence of high tariffs and restrictive quotas. This FTA will change that finally levelling the playing field with our competitors in the lucrative EU market and unlocking new opportunities for Kiwi businesses. As a result of the NZ-EU FTA New Zealand exporters will benefit from $100 million in additional tariff savings from day one of entry into force. Once fully implemented this FTA has the potential to boost our exports to the EU by up to $1.8 billion each year and our GDP by up to $1.4 billion per year.From the day of the agreement entering into force 91 percent of New Zealand's current trade with the EU will enter duty-free through a combination of tariff elimination and duty-free quotas. This includes a number of key products such as kiwifruit onions apples wine mānuka honey and fish and seafood. In the case of dairy and the red meat sector any gains in market access were always going to be hard fought reflecting the very high sensitivity of the EU's agricultural sector. Although access will not be fully liberalised for these products the quotas create new market access opportunities and represent an improvement on the status quo for New Zealand businesses exporting into the EU. While the deal has not met everybody's expectations particularly for dairy and meat where farmers' expectations have not been met when considered as a whole this FTA nevertheless represents a valuable opportunity for New Zealanders in other sectors.Beyond market access the FTA includes a range of other commitments to encourage increased trade and services facilitate investment flows increase access to Government procurement contracts across EU member States and facilitate the movement of business people across borders. The EU is the second-largest source of investment to New Zealand. This FTA will help to increase investment into New Zealand by raising the squeezing thresholds for investment from $100 million to $200 million comparable to that offered in the NZ-UK FTA and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Prior to the pandemic the EU was New Zealand's fourth-largest market for services exports. The impact of regulatory barriers faced by businesses and financial services exporters to the EU is eliminated to be equivalent to a 28 percent tariff reduction. Accordingly the FTA contains more liberal and predictable rules to support the growth of trade and services between New Zealand and the EU and bring down those unnecessary costs.There are a number of legislative and regulatory amendments that are required to align New Zealand's domestic law with our obligations in the FTA. The bill makes these changes required for New Zealand to implement its obligations under the FTA and to bring the FTA into force. The most significant changes being made are in relation to geographical indicators. The protection of geographical indications was a key interest for the EU in the negotiations. Under the FTA New Zealand has agreed to protect 1975 EU geographical indications (GIs) on day one with the potential for up to 30 additional GIs to be added every three years by mutual agreement. Most of the nearly 2000 EU geographical indications on the list are not used commercially in New Zealand; however protecting names like feta port and gruyere for the exclusive use of the EU will impact local producers that already use these terms. Transition periods and other flexibilities have been agreed to help local producers adjust to these new protections.The agreement also sets minimum standards of protection we need to provide for EU geographical indications as well as the role of Government in enforcing these protections. Part 3 of the bill amends the existing Geographical Indications (Wine and Spirits) Registration Act 2006 to give effect to these obligations. The EU is one of our closest and most like-minded partners internationally and our fourth-largest trading partner. Even without an FTA our two-way goods and services trade is worth over $20 billion but there is plenty of potential that remains untapped. An NZ-EU FTA will boost our trade and economic relationship with the EU and open up new opportunities for New Zealand businesses. We must pass the European Union Free Trade Agreement Legislation Amendment Bill without delay so that New Zealand exporters can start taking advantage of the agreement as soon as possible.I want to recognise the significant efforts of officials within the Ministry of Foreign Affairs and Trade and our skilled trade negotiators as well as former trade Minister Damien O'Connor for his work on this agreement. The New Zealand - EU FTA was commenced in the direction of an agreement under the National Government concluded under a Labour Government and now quickly enters into force under a National Government. That's bipartisan. I hope the vote will be unanimous and that the protestations against trade agreements that we've seen previously are a thing of the past. I thank all those who have been involved in this agreement and particularly Damien O'Connor. I commend the European Union Free Trade Agreement Legislation Amendment Bill to this House.DEPUTY SPEAKER: The question is that the motion be agreed to and that the House note the report of the Foreign Affairs Defence and Trade Committee.