Reti Shane: Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill — Second ReadingText is incorporated into the Bound VolumeReti Shane: Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill — Second Reading[Sitting date: 10 September 2015. Volume:708;Page:6570. Text is incorporated into the Bound Volume.]Dr SHANE RETI (National—Whangarei): It is a pleasure to stand and talk to the Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill. I would like to start by acknowledging the Foreign Affairs Defence and Trade Committee and the chairmanship of Mark Mitchell and other colleagues. I would also especially like to commend Labour members for their support of this bill. I think this bill is better with the additions and the support that has come from clearly very strong trade people: the member David Shearer the member Phil Goff and we had the observer the member David Parker as well. I would like to commend them and thank them for their contributions to this. Indeed there was a sort of bipartisan murmur of “the sooner we do this the sooner our exporters will benefit”. I think that was a rule of thumb that was well applied.I will crystallise some of the key points of this bill. New Zealand receives import tariff revenue of around $4.2 million and that is from Korea from where we import refined oil cars electronic equipment and machinery. Officials tell us that lower import costs on these factors of production will actually lower many New Zealand firms’ costs and improve their international competitiveness. Consumers may also benefit directly from cheaper products. On the other side of the equation we actually pay export tariffs of $229 million to Korea. We export industrial goods forestry products dairy beef lamb kiwifruit and squash. On entry into force we get immediate benefit. On entry into force nearly 50 percent of New Zealand export tariffs will be eliminated immediately. Those are export tariffs on $793.7 million which will become duty-free. If we look at 5-yearly increments—this roughly changes every 5 years—immediately there is a 50 percent reduction in export tariffs. By year 5 that reduction is approximately two-thirds by year 10 it moves to three-quarters and by year 15 there is nearly a 100 percent reduction in export tariffs which become duty-free.The obvious immediate benefactors from this agreement includes the kiwifruit industry. We had Zespri people present to us and they told us that they have $1.4 billion of sales worldwide and that they are projecting to double the volume particularly of gold kiwifruit in the next few years. The South Korean market is well-suited to New Zealand gold kiwifruit because they appreciate quality and they are actually prepared to pay for quality. As has been mentioned we have an incumbent competitor in Chile kiwifruit. They actually have a tariff of close to zero percent and we are paying close to 45 percent. So here is our immediate benefit to the kiwifruit industry.I think we are paying a lot of attention as we must to the fiscal and economic benefits of the free-trade agreement but I would like to focus on some of the indirect benefits that come to us as well. These are the strategic benefits of having good relationships with a significant regional country which will also carry through to all our international dealings with South Korea. If we have a look at some of those indirect benefits a large part of them are relationship benefits. Let me talk about some of them.The indirect benefits from enhanced trade with Korea—as well as offering direct economic benefits the free-trade agreement advances a number of New Zealand’s broader strategic interests. New Zealand and Korea are both members of the World Trade Organization. Trade reform and liberalisation through negotiations at the World Trade Organization remains New Zealand’s primary trade policy objective. Entering into a comprehensive free-trade agreement with Korea which has relatively high tariff barriers particularly in agriculture contributes towards New Zealand’s wider goal of multilateral trade liberalisation. New Zealand and Korea also work together on trade and economic issues—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! [Interruption] Order! When I stand up the member sits down. Thank you. The member is now reading something very directly. Is he quoting to the House? I did not hear at the beginning whether he gave the source of the quote. I think if he is going to read out a report like that he had better give the source of the quote. Otherwise it will look like it is just part of his speech and then he would be reading it.Dr SHANE RETI: I would like to quote from the national interest analysis that was presented—The ASSISTANT SPEAKER (Hon Trevor Mallard): Well can I say that reading out the national interest analysis which is available to all members of the House I think does not actually—having an odd quote from it would be all right but reading out paragraphs of it is not an appropriate use of a member’s time. Otherwise members could just totally waste the time of the House and read the whole thing out and pretend it was their own words.Dr SHANE RETI: Thank you. I was anticipating three sentences and I am coming to the last line if I may. The last sentence here is: “A government-to-government agreement of this nature has further value beyond the rights and obligations negotiated under the FTA.” This is the point I was making—that there is a strategic benefit here that is hard to give tangible dollar value to on top of all the economic benefits that we are talking about. So I just wanted to comment on those indirect benefits.We received a few submissions on the amendment bill having previously received 3582 submissions on the free-trade agreement itself. Most of the submissions on this amendment were positive and supportive. One made the case that it was not a good bill because it would lower New Zealand’s standard of living to that of Korea’s. We challenged that quite vigorously and department officials reported back to us saying that that was not correct—that roughly we have the same standard of living as South Korea—so we could put that to rest.I think there are many protections in this free-trade agreement—protections around sovereign authorities—so I take some issue with what the member Mr Parker is saying. There is a disputes resolution to tribunals of three people—one whom we select one whom the others select and one whom we agree on. There would seem to be some intrinsic fairness in that. Let us remember that we also through an agreement like this get reciprocal protection for our investors in South Korea. So against this background is New Zealand’s strong history of fairness and success in any World Trade Organization disputes process that we have been involved with.I would like to congratulate our negotiators on this body of work and I would like to commend this bill to the House.