Smith Lockwood: Tariff (New Zealand - Thailand Closer Economic Partnership) Bill — First Reading 
Smith Lockwood: Tariff (New Zealand - Thailand Closer Economic Partnership) Bill — First Reading 
[Volume:625;Page:20606] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 Let me make it clear that National will be supporting this Tariff (New Zealand - Thailand Closer Economic Partnership) Bill. National is supporting it despite a number of concerns because we believe passionately in the importance of trade liberalisation. This legislation and this trade agreement will make some very real improvements for New Zealand. 
For example at the moment only 4 percent of New Zealand’s exports to Thailand are duty-free. Once this agreement is in place 52 percent of New Zealand’s exports to Thailand will immediately become duty-free—an increase from 4 percent at the moment to 52 percent. That is worth supporting. Also in the horticultural product area products such as avocados cherries persimmons and kiwifruit have a tariff at the moment of 30 to 40 percent payable on them. Once this agreement is in place that tariff will be eliminated. 
Although National supports this legislation and this trade agreement for important reasons such as that we have real concerns. First let us take those horticultural products. As this agreement comes into being Thailand is already implementing tightened phytosanitary barriers which means that New Zealand horticultural exporters will have to test for up to three chemicals on fruit and vegetable products being exported to Thailand. The problem is that the reduction in the tariff that those New Zealand exporters might pay once this agreement is in place is less than the increase in costs they will face from the testing and certification required to meet Thailand’s new tighter phytosanitary requirement for the importation of horticultural products. So we will go backwards. New Zealand horticultural exporters to Thailand will be worse off once this agreement is in place. 
The Minister for Trade Negotiations the Hon Jim Sutton promised on 19 April when the Government was signing this agreement with a big flourish that the Government was going to fix that problem. I think the House deserves to know where that issue is at. Our horticultural exporters deserve to know where that issue is at. If there is to be another Government speaker on this bill I believe that he or she should tell us where that issue—the quarantine barrier that Thailand is placing in the way of our horticultural products at the very moment that this trade agreement is being implemented—is at. It is no good to supposedly liberalise trade on the one hand and actually make it more impossible on the other. The Government should tell us where it is getting to on that one. 
Our other concerns include issues such as this. The Labour Government’s Coordinating Minister Race Relations the Hon Trevor Mallard claimed last year I believe when he made a speech at Victoria University: “Maori have no extra rights or privileges under the Treaty”—of Waitangi that is—“or in the policy of the New Zealand government.” That is what the Hon Trevor Mallard said last year. Yet this trade agreement states that the Government of New Zealand reserves the right under article 15.8 to put in place: “measures it deems necessary to accord more favourable treatment to Maori … including in fulfilment of its obligations under the Treaty of Waitangi.” 
What on earth is that doing in the trade agreement? On the one hand the Coordinating Minister Race Relations says that it is not Government policy at all to accord more favourable treatment to Maori yet on the other hand this trade agreement has exactly those words. The agreement states that the Labour Government reserves the right to implement measures that it deems necessary to accord more favourable treatment to Maori. That is in the agreement. All I can say is that it is hypocritical in the extreme to say on the one hand as Trevor Mallard has said that the Labour Government does not have a policy of more favourable treatment for Maori yet on the other hand to include in a trade agreement such as this the policy in black and white. That is our first big concern. 
Our second concern is that this trade agreement and the schedule for removing New Zealand tariffs on Thai products coming into New Zealand exceeds New Zealand’s commitments under APEC to eliminate all tariffs by 2010. This trade agreement allows the phase-out of tariffs on Thai imports into New Zealand through to 2015. That is a direct breach of our commitments to the Bogor goals of APEC whereby a developed economy like New Zealand is meant to eliminate all tariffs by 2010 and developing economies are meant to eliminate tariffs by 2020. With this agreement the Labour Government is damaging New Zealand’s international reputation. New Zealand chaired APEC in 1999. This country is one of the leaders in APEC—it was at least under a National Government. But this Labour Government has sullied New Zealand’s international reputation by putting out the transition to 2015 for no purpose. 
The New Zealand Chambers of Commerce and Industry made a submission to the Foreign Affairs Defence and Trade Committee on this trade agreement stating that it was not even in New Zealand’s economic interest to have a long phase-out of our own tariffs. So why has the Government done it? It is not in our economic interests according to the New Zealand Chambers of Commerce and Industry and it breaches New Zealand’s commitments to the Bogor goals of APEC. I think that a Labour member should get up and explain to the House why this trade agreement has that phase-out going through to 2015. It is totally destroying. New Zealand cannot stand up at APEC now and say that developed member economies should phase out tariffs by 2010 because we are not doing it. New Zealand is not doing it; it is not leading by example. 
Finally our general concern with this trade agreement is that services are not included. Sixty-eight percent—over two-thirds—of New Zealand’s economy is not included in this trade agreement. It is not included at all. It is simply stupid not to include services in this trade agreement. All the agreement has is a commitment to initiate negotiations within 3 years. That is not good enough. This is actually a low-quality trade agreement. As I said National will support this legislation because I think the benefits outweigh the negatives but it is a low-quality trade agreement. 
Specifically in respect of the legislation the Minister the Hon Damien O’Connor mentioned the two parts the first part being the provision to put into our tariff schedule the preferential tariff provisions for Thailand that were negotiated in the agreement. But it is Part 2 that the select committee must look at very carefully. Part 2 implements in New Zealand legislation really for the first time this whole concept of transitional safeguard measures. We know that this is difficult legislation. It is difficult international law; it is complex international law. We should not forget that the United States imposed safeguard measures—tariffs—against the imports of New Zealand lamb. We had to take the United States to the World Trade Organization and we won. There are complex issues in World Trade Organization agreements and in the original GATT agreement around those transitional safeguard measures. 
I shall give an example. Article 24 of GATT—the General Agreement on Tariffs and Trade—which is still in place has certain provisions that follow the negotiation of bilateral free-trade agreements. Transitional—I should say safeguard—measures are not among the provisions in article 24. In paragraph 8(a)(1) I think it is of article 24 safeguard measures are not included. We risk complex international law arguments with Part 2 of this bill. The select committee will have to look at Part 2 very very carefully. I really stress that. Complex international trade law issues are involved here. 
Finally I make this point in respect of this trade agreement. The Government has not talked about annex 3 of the agreement which provides for special safeguards for Thailand to implement against New Zealand exports—special agricultural safeguards. Labour does not talk much about that. Annex 3 spells out constraints on our exports to Thailand of beef pork offal—that kind of thing—all milk products cheese butter and anhydrous milkfat whey products. This is a low-quality agreement. It should not be a precedent for further trade agreements. The Singapore agreement that National negotiated was a good agreement; this agreement I am afraid is a low-quality one. National will support it reluctantly for its benefits.