Hayes John: New Zealand-China Free Trade Agreement Bill — First Reading 
Text is incorporated into the Bound Volume 
Hayes John: New Zealand-China Free Trade Agreement Bill — First Reading 
[Sitting date: 15 May 2008. Volume:647;Page:16023. Text is incorporated into the Bound Volume.] 
JOHN HAYES (National—Wairarapa) 
: 
 On 7 April this year the Governments of China and New Zealand signed a free-trade agreement that I believe is of absolutely historic proportions because it demonstrates to the rest of the world that China is willing to drop its trade barriers if other countries will do so as well. New Zealand is the first country to do this with China and I say to Mr Shane Jones that that is why this is of such historic proportions. I hope that he will pass that on to his friends in New Zealand First. This is an excellent agreement that gives an extraordinary amount to New Zealand in the context of the size of our economy. 
I particularly thank the Secretary of Foreign Affairs and Trade Simon Murdoch for doing an outstanding job in leading the overall team that has led to this agreement. I acknowledge David Walker and his team for doing the job day by day in many many long tedious negotiations. 
I think it is worth noting that China is a country 36 times larger than our own—36 times larger. It has a population 300 times the size of ours and it has growth rates that see its economy double nearly every 7 years. Boy if only we could have those growth rates in the economy of the Wairarapa which I represent! By some calculations China is on track to become the world’s largest economy by 2020. But it is still a developing country; China’s economic growth over the last 25 years is probably the largest and most sustained period of wealth creation in the history of the world. In the year 1800—and I want Mr Woolerton to listen to this because this is why we are signing up to the agreement—China generated 25 percent of the world’s industrial output but by 1975 with the “head in the sand” policies that the member would have us follow output dropped to 1.5 percent. Although China is growing rapidly it is still an immature market. The real prize is 30 40 or 50 years out from now and beyond. 
I would like just to comment on the question of foreign policy in the context of those people who oppose this legislation today. Foreign policy does not belong to any individual political party. It does not belong to any Prime Minister or would-be Prime Minister or to any Government. Foreign policy belongs to the public of New Zealand and should as far as possible be driven by a considered evaluation of the community’s evolving interests and not by narrow perceptions of domestic political advantage. 
In this context we face an immediate challenge in this country of improving our economic performance to retain a greater share of our brightest and best in this country and they are departing our shores in ever-increasing numbers. We have to stop the relative decline in living standards between New Zealand and our OECD counterparts. To do this—because the Government’s provincial development policies and many other policies are failing—we have to take advantage of our single biggest asset which is our location on the Asia-Pacific rim the powerhouse of the world economy. If we are sitting on the rim of the fastest growing part of the planet and we cannot turn that geographic position into a significant advantage then there is no one else to blame but ourselves. 
The freeing up of international trade over the past 40 years has been a key driver of New Zealand’s economic growth. Global negotiations on a new round of trade liberalisation have been a significant focus and we have been expecting the World Trade Organization Doha round to deliver commercially meaningful outcomes. I personally do not believe that that will happen. Therefore I think we will watch New Zealand move away from global multilateral arrangements and we will see countries moving into individual free-trade agreements. I say to Mr Woolerton and his colleagues that if they are engaged in an agreement with me everybody else in this House is excluded; when everybody in this House is excluded they get no benefit. I tell that member that the single biggest threat to this country is that we are excluded from other free-trade agreements between other countries. This means that at a regional grouping level New Zealand must contribute to the creation of a free-trade area of Asia-Pacific which is the 21 members of APEC and to a comprehensive partnership in East Asia which is the 10 ASEAN countries plus Australia China India Japan and Korea. With Australia we must pursue a free-trade agreement between CER and ASEAN. That leaves a major gap in our trade policy architecture at a bilateral level which is the lack of free-trade agreements with our major trading partners. So this arrangement with China is great and National supports it but New Zealand needs to establish similar agreements with the USA Japan and Korea. 
We have to pursue these possibilities with all the energy and resources we can muster including drawing on the efforts of our research institutes universities and businesses. I tell Mr Woolerton that the task will be long and daunting and will be achieved only by a coordinated “New Zealand Inc.” approach or partnership. Our future well-being depends on it and that means the future well-being of that member’s and our grandchildren. I hope he will start to support this arrangement. Viewed against this background it should be obvious why the National Party has unambiguously supported the negotiation of this free-trade agreement and supported its signature. 
China’s economic growth for three decades has been exceptional. Millions of people have been lifted out of poverty—and boy I have a few to lift out of poverty in the Wairarapa—because China’s pragmatic reforms have unleashed the entrepreneurial drive of the Chinese people. How can we get drive in this country when 75 percent of our families are on family support? What happens when the boss says: “Let’s go and do some work on Saturday and Sunday because we’ve got an export order to fulfil.”? The workers say “No no—we cannot go on and work on Saturday Sunday or any other such time.” Why? Because they will lose the money they get from family support. This Government’s policy is killing entrepreneurship killing drive and killing initiative. 
Let me come back to China. As China grows it will need resources to fuel its economy. It will need timber food and energy. My colleague talked earlier about Stockton coal. This free-trade agreement underpins China’s growing presence in our region and I think there is something there to be cautious about and to be aware of. Members will find it in today’s  
Trans Tasman 
 which I will seek leave to table at the end of my speech. Let me quote some comments concerning China and its diplomatic trade activity in Fiji: “China is pouring development money into Fiji on a scale which dwarfs New Zealand and Australia. Significantly the aid is accompanied by assurances of understanding of Fiji’s political situation.” I think we have to embrace China and to work with it in the Pacific and we have to work with it in our own backyard. 
Let me conclude. We have to look at how the Irish interacted in Europe; we can see how they benefited. This free-trade agreement with China will give us access on reasonable terms. But that is no guarantee of success; like the Irish we still need to get our tax levels competitive our infrastructure up to scratch and our education system delivering graduates. We want to turn trade access into economic success and that is why my colleagues in this party are supporting this bill with every fibre of their soul. Thank you.