Yang Jian: Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill — First ReadingText is incorporated into the Bound VolumeYang Jian: Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill — First Reading[Sitting date: 16 June 2015. Volume:706;Page:4426. Text is incorporated into the Bound Volume.]Dr JIAN YANG (National): I am delighted to take a call in support of the free-trade agreement between New Zealand and the Republic of Korea. Before I speak about the Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill itself I would like to talk about the World Trade Organization (WTO) and why it is important for us to have free-trade agreements. We all understand that the World Trade Organization played a very important role in developing the world economy. It now has 153 members. It is important for New Zealand to be involved in the World Trade Organization because we are a small trading country. We need a multilateral organisation to support us in negotiations with larger trading partners simply because under the World Trade Organization rules beneficial terms agreed bilaterally with one trading partner will also apply to the rest of the WTO members. Also there is a very good dispute settlement mechanism in the World Trade Organization which is helpful to small trading countries like New Zealand.However we are now facing many challenges because the World Trade Organization has not been very effective in the past decade or so. For many years the World Trade Organization and its predecessor GATT or the General Agreement on Tariffs and Trade—played a very important role from 1948 to 1995 when the World Trade Organization officially commenced. Since 2001 when the Doha development round was launched we have not been able to make major progress simply because there are too many disagreements or different views or interests among the members. Look at this: from 1948 to 1994 GATT—the predecessor of the WTO—received 124 notifications of trade agreements while since 1995 over 300 trade agreements have been enacted. That highlights the importance of regional trade agreements or bilateral trade agreements in the wake of the ineffectiveness of the World Trade Organization. So that is why we need to focus on free-trade agreements.Another example to highlight the importance of free-trade agreements is our free-trade agreement with China. Many members have mentioned the free-trade agreement with China. New Zealand has a few firsts with China. It was the first developed country to recognise China’s market economy status. It was the first developed or OECD country to conclude negotiations with China regarding China’s entry into the World Trade Organization. New Zealand was the first to start free-trade agreement negotiations with China and was also the first developed country to conclude free-trade agreement negotiations with China. They were concluded in 2008. Since then our exports to China have risen from $2.3 billion in 2008 to over $10 billion in 2014. Our imports also increased from $5.8 billion to $7.7 billion in 2012. Our exports increased more than our imports so the free-trade agreement with China certainly has been in our favour. It is important for us to expand our market overseas particularly in north-east Asia. Korea is also a part of north-east Asia—I will talk about this later. Because our trade with China has grown so fast and so well we have now set a new target for bilateral trade between New Zealand and China. In 2010 Prime Minister John Key had an agreement with Chinese Premier Wen Jiabao that was to increase our trade from $10 billion to $20 billion from 2010 to 2015. Then last year when the Prime Minister was talking to Chinese President Xi Jinping in Beijing the two sides agreed to increase our trade from $20 billion to $30 billion by 2020. So that is another target.North-east Asia has become particularly important. China is part of north-east Asia; Korea is part of north-east Asia. In the 1970s north-east Asia accounted for just 10 percent of our exports but now north-east Asia accounts for over 40 percent of our exports. So China Japan Korea—then you have Hong Kong Taiwan—these economies are particularly important. That is why we do need to pay attention to this region and that is why this free-trade agreement with South Korea is particularly important. We all know that South Korea is our sixth-largest trading partner—actually according to some people earlier this year South Korea actually became the fifth-largest trading partner for New Zealand. South Korea is our natural trading partner like many other countries because we export mainly our agricultural products while South Korea exports mainly manufactured products. So we have this mutual benefit to expand our trade and of course when we trade we also need to recognise the importance of other dimensions of our relationships. For example when we do trade it also means that we have more contact with other countries and therefore we have better understanding which will help our tourism our education industry—all these things.To come back to the New Zealand - Korea Free Trade Agreement one particular reason why we need to have a free-trade agreement with South Korea is that South Korea has already had free-trade agreements with some major trading partners which means that our products in South Korea are basically discriminated against. For example South Korea has negotiated free-trade agreements with the United States Chile the European Union Australia and Canada. So these countries have advantages in the Korean market and that means more challenges to New Zealand. This free-trade agreement will make New Zealand products more competitive and will secure the long-term future of New Zealand exports in the Korean market. We received many submissions of course at the hearing stage. I could quote a few. For example here is the Korea New Zealand Business Council. It said: “the agreement overall is a huge advance for New Zealand in the Korean market and is to be absolutely welcomed. It will in due course eliminate the disadvantages our exporters have been suffering from through Korea’s previously agreed FTAs. It will assist over time most of our exporters to increase their exports to that country.” I commend this bill to the House. Thank you.