McClay Todd: Trade (Safeguard Measures) Bill — First Reading 
McClay Todd: Trade (Safeguard Measures) Bill — First Reading 
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TODD McCLAY (National—Rotorua) 
: 
 I rise to speak in support of the Trade (Safeguard Measures) Bill. I recognise the contribution to the debate earlier tonight by the Hon Lianne Dalziel. I also recognise the wide consultation that took place before this bill was introduced in September last year. 
Trade is vitally important to New Zealand and I am a firm supporter of free and freer trade. I congratulate the Minister of Trade Tim Groser on his excellent work since coming to office and on agreeing to and signing a great number of free-trade agreements—a significant number of which have been signed this year. These free-trade agreements will offer great opportunity to New Zealand businesses and to New Zealand industry. The agreements the Minister has been working on so diligently will open up billions of dollars of trade opportunities to New Zealanders and will offer New Zealand industry important access to the growing markets in Asia. They are markets in which consumers are reaching higher levels of disposable income and developing appetites for many of the goods we produce right here in New Zealand. 
Not everybody is as excited by trade negotiations as the members in the House tonight are. When I get home to Rotorua tomorrow I am not sure my family will be waiting to say to me “Can you please explain the Trade (Safeguard Measures) Bill 2008 and take your time. Don’t limit yourself to 10 minutes. Go and do it in full detail because it is exciting stuff.” But trade is important and trade negotiation is also important. The importance of this bill is that it will give certainty to New Zealand business and industry and provide protection to our industries where appropriate and where needed. 
This bill does a number of things. Safeguards are provided for under GATT and under other World Trade Organization (WTO) agreements. Why are safeguards in trade important? They are important because they protect local industries in exceptional and difficult times from unfair competition. 
The bill makes a number of changes. The Ministry of Economic Development will be responsible for safeguard investigations rather than a temporary safeguard authority. The ministry already has expertise in trade rules and resources so this bill is an important step in the evolution of our trade protection rules. 
The safeguard will also provide immediate protection. It makes sense to have a system that works straight away and it is important that Ministers are able to take fast and immediate action to protect New Zealand businesses. After all there is no point in providing protection when businesses have been harmed or have gone out of business. 
The time frames will also be looked at. The time frame for safeguard investigations will be increased from 30 to 75 working days and in some cases to 85 working days. Other speakers have recognised that this is more in line with the WTO standard. This extension brings New Zealand into line with WTO requirements for any investigation. 
It is not automatic that if a Minister has concerns about a particular matter at the end of the investigation the measures will remain in place. However investigation allows due diligence and an opportunity to look at the effects that imports and cheaper imports may have on New Zealand business and I think this is a fair and appropriate measure. As I said earlier the Minister of Commerce will have the authority to impose a provisional and then a final safeguard duty taking it through to a lengthier Cabinet process. 
This bill is also about public interest and it is only where there is public interest that it would be enacted. The likely effects in considering the public interest could be the effectiveness of the safeguard measure in assisting the domestic industry. There is a need to demonstrate that there was reason for the safeguard measure and that there would be good effects as a result and also to consider whether other provisions might be taken in its place; the likely effect of the safeguard measure on the market including on consumers; New Zealand’s international relations and trade goals; and the strategic importance of the domestic industry concerned. 
In line with that I will give an example to the House of where the measures might well be used. I am the member of Parliament for Rotorua and all members in the House will know—I do not need to remind them—that Rotorua is the mountain bike capital of New Zealand. Rotorua has some of the best mountain bike tracks in New Zealand. There are hundreds of kilometres of tracks and many thousands of people visit Rotorua every year to enjoy these tracks and to ride bikes. The local Rotorua economy gets more than $10 million a year from mountain biking and this amount is growing year upon year. We have bike manufacturing in Rotorua. These are small companies such as Kiwibikes which is in the centre of Rotorua and has been manufacturing its own bikes for some time. I know that my friend and colleague Steve Chadwick supports this company very well. The company’s position at 1128 Hinemoa Street puts it right in the centre of Rotorua. 
We are very proud of bike manufacturing in Rotorua and the thousands of people who come to Rotorua very much enjoy riding bikes that are manufactured and produced in Rotorua. I believe that our bike manufacturers which are growing businesses can compete with anybody based upon quality and certainly upon enthusiasm. But there could be times when they could be forced to compete unfairly with overseas manufacturers that for a number of reasons and in a number of ways could flood our market with cheaper products. This could be because of a downturn in the economy or because the New Zealand dollar has strengthened in relation to the currencies of the countries producing bikes and exporting them to New Zealand. It could also be because overseas manufacturers wish to flood our market with their bikes which would do harm to our market and to local manufacturing by forcing New Zealand businesses out of business and in so doing getting rid of local competition. Once local competition has gone those manufacturers can raise their prices and therefore their profits in our markets. 
This bill before us today will provide the means for Ministers to provide important protection to New Zealand industry and businesses so that companies such as Kiwibikes in Rotorua are not unfairly affected by the practices of others. This is fitting—and I believe it is right—and WTO law allows when and where such measures are warranted. I am sure that Kiwibikes and other large and small manufacturers throughout New Zealand would want us to support such an important measure and that Kiwibikes would want me to support this bill and in so doing support its business. 
This bill will give certainty to small and large businesses alike; it will give certainty to those that invest in manufacturing and production in New Zealand and in our local economies and where necessary it will give them protection. The bill prevents New Zealand from receiving a rapid influx of cheap imports. It allows time for New Zealand businesses to bring themselves up to the level of international competition required to stay afloat in the current economic climate. It provides for temporary measures whereby New Zealand consumers will continue to have the benefit of the free-trade principles that underpin New Zealand’s trading environment. The key components of an investigation into a temporary safeguard remain essentially unchanged so no significant increase in the cost to participate is expected. 
Earlier speakers in this debate spoke about their concern that the bill would harm free trade. This is a free-trade bill. It provides protections so that free trade can continue and provides rules and a rules-based approach to trade whereby the WTO is able to stop fighting amongst us. I note looking at its website that from 1 January to 30 June 2008 there was a 39 percent increase compared with the previous year in anti-dumping or safeguard measures referred to the WTO. These came from a number of countries both large and small and developed or otherwise. In fact the country that introduced the most measures in that time was Turkey. It is important to recognise this. Decisions taken in New Zealand are not taken in isolation and there will be WTO oversight. I think the WTO is telling us that the number of measures that were brought into place last year from different parts of the world means that others are watching us and I have great confidence both in the ministry and in the Minister to be aware of this. 
I proudly support this bill as introduced to the House today. It is an important measure. It brings us into line with other countries of the world and it is an important step towards a continuing trade environment that supports our manufacturers and our important businesses. Thank you. 
Bill read a first time.  
Bill referred to the Foreign Affairs Defence and Trade Committee.