McClay Todd: Estimates Debate — In CommitteeText is incorporated into the Bound VolumeMcClay Todd: Estimates Debate — In Committee[Sitting date: 28 July 2015. Volume:707;Page:5388. Text is incorporated into the Bound Volume.]Hon TODD McCLAY (Associate Minister of Trade): I almost did not want to interrupt the member David Bennett. That was one of the most insightful and thought-provoking speeches I have heard in this Chamber for some time. I congratulate him on that. As he is the chair of our most significant committee in this Parliament we are in very good hands.I want to talk now about trade and the importance of trade. Not everybody in this Parliament understands the importance of trade to New Zealand. We do not become richer from selling to ourselves. Of all the things we produce so well be it from dairy wood and wood processing—all of these areas—we produce more than we can consume in New Zealand. We are a trading nation. To be able to make sure that our producers can trade successfully to make sure that New Zealanders can retain their jobs we need high-quality broad trade agreements that at the very least give us the same advantage that some of our competitors have into some of the most competitive markets in the world. But in many cases a free-trade agreement gives us an advantage a preference.Over the last year New Zealand has achieved a significant amount in trade negotiations but also when it comes to trade. Last year New Zealand exported $55 billion worth of goods and services a significant increase on the previous year. That is the first thing. The second thing is that when one looks at the top 10 countries of importance that we trade with—Australia being No. 1 China being No. 2 the United States being No. 3 and Japan being No. 4—we see that we have a free-trade agreement with them or we have launched a free-trade agreement with them or we have a negotiation under way to launch a free-trade agreement.When I look at that list at the next 10 most important countries that we trade with I can see that we have a free-trade agreement with every single one or we are negotiating or we are having discussions with them about the launch of a free-trade agreement. I repeat: we do not become richer as a nation by selling only to ourselves.Tim Groser at the moment is overseas negotiating a high-quality agreement of exceptional importance to New Zealand.Hon Clayton Cosgrove: Are they coping?Hon TODD McCLAY: I know that Mr Cosgrove although he may well have been muzzled—and good luck to those on his side who try to muzzle him—understands trade and is supportive of trade. I know that he has described himself as a rabid free-trader. I accept what that means. That means he is extremely supportive of free trade. He knows the benefits it delivers. Mr Nash is another one. He is a little less rabid when it comes to free trade but he is a free-trader none the less.I think there are starting to be great divisions within the Labour Party when it comes to the trade issue. So are they going to support a high-quality agreement—the Trans-Pacific Partnership—or are they not? I would suggest that a number of the members on the opposite side of the Chamber—the members who know about trade and the importance of trade to New Zealand and are actually in touch with the electorate and know what mums and dads workers and businesses want when it comes to trade agreements—want to support this.But their leader is not so sure you see. I do not know but if you are angry about lots of things why not just get angry about a trade agreement? Why not put aside the collegiality that has often been in this House between the two largest parties when it comes to trade agreements? We will not agree on all aspects of them but actually there has been a bipartisan approach to trade and free trade. We can have the debates about how much further you would go but it is extremely worrying when it comes to New Zealand’s place in the world and the view that the world will have of New Zealand with the second-largest party signalling that it may well vote against an important agreement that would deliver for New Zealanders.So the question is: do we want a free-trade agreement with Japan? Do we want one with America? Do we want to back our businesses to do well in trade with them? Well of course we do—a high-quality agreement. I know that there are members on that side of the House who when they were in Government advocated for and argued in favour of a negotiation with those two countries and others. I know that deep down that they support this.So why is this important? Well think about the New Zealand - Korea Free Trade Agreement that has been delivered and is about to go through this House. I will give you an example from the Bay of Plenty of how exceptionally important this is to individuals and mums and dads. We export a lot of kiwifruit. We are the best kiwifruit producers in the world and the best exporters of kiwifruit. But others produce good kiwifruit as well and others are competitive and others have lower costs of production. So when Chilean kiwifruit go into Korea they have a lower tariff rate than we do.