Locke Keith: Tariff (Trans-Pacific Strategic Economic Partnership) Amendment Bill — In Committee 
Locke Keith: Tariff (Trans-Pacific Strategic Economic Partnership) Amendment Bill — In Committee 
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KEITH LOCKE (Green) 
: 
 The Green Party as members probably know already is critical of this bill. We are a bit like Lockwood Smith we do not look at the Trans-Pacific Agreement in isolation just in terms of what is happening to the four countries that are part of the agreement—New Zealand Singapore Chile and Brunei. As Lockwood Smith has rightfully said it is seen as a strategic partnership that other countries can be added to and that is what we are worried about. Lockwood Smith talked about free trade by 2010 for at least a number of players. As we know countries like China are part of APEC. One of the Green Party’s real concerns is that China will come into a free-trade agreement that includes New Zealand that will disadvantage so many New Zealand producers because it is not a level playing field. 
Eric Roy said that everybody wins. The realities in this world of trade and competition mean that not everyone does win particularly when one is up against countries with lower wages. Chile’s wages are a bit lower but of course China’s are a lot lower again. One of the arguments is that New Zealand will compete at the high end and we might have to give away some of the products that are produced by cheap labour in China. The implication is that those products are lower quality and our producers will keep markets at the high end in both domestic and overseas markets. The only problem there is the way countries—China in particular—are developing. They are putting in a greater technological infrastructure than we are at the high end. So if we rely on just high-end products we will not necessarily succeed. 
The other problem with the bill—particularly in the section on Chile—is that it implies that if we remove the tariffs in Chile then somehow the New Zealand producers will get more returns. But it does not necessarily work out that way. We know in New Zealand that when we have taken off tariffs prices have dropped and we have got cheaper products. If the prices in Chile drop equivalent to the drop in tariff then there is no extra money for the New Zealand exporter. It may mean that New Zealand can expand its volume of exports and gain that way but there are no guarantees that just dropping tariffs leads to a good result for New Zealand exporters. 
The other thing that comes through in the national interest analysis and other talk around the bill is that it is largely helping out our dairy companies—and Fonterra within that. But one should be careful about identifying the interests of New Zealand with the interests of Fonterra. Fonterra is becoming a big player and that is admittedly an advantage to New Zealand to shareholders in New Zealand and to dairy farmers but it is getting involved in a lot of strategic partnerships. For example it is involved with Nestlé particularly in Latin America. Those partnerships do not necessarily use New Zealand as the originating source for milk product. We just do not know how that will go. It will not necessarily be totally in the interests of New Zealand. It is not the equivalent to America when they used to say: “What’s good for Ford is good for America.” That was not necessarily true and it is certainly not the same with Fonterra here.  
The other problem when talking about competition—as Lockwood Smith rightly said—is that other countries will be added to the agreement. Looking at it in terms of those four countries one might say that we have a reasonably competitive advantage in certain sectors say with Chile and Singapore although Singapore is not so much a producing nation but rather a trading centre. As more countries are added—and I mentioned the case of China but even other countries in Latin America—it could be disadvantageous to us. It will not necessarily go our way. We must realise that at the moment we have got a record $7 billion trade deficit. We are not necessarily a winner in the way that trade has evolved with New Zealand moving to drop all our barriers.