Trade (Safeguard Measures) Bill — In CommitteeText is incorporated into the Bound VolumeTrade (Safeguard Measures) Bill — In Committee[Sitting date: 18 February 2014. Volume:696;Page:16049. Text is incorporated into the Bound Volume.]Trade (Safeguard Measures) BillIn CommitteeDebate resumed from 29 January.Part 1 Safeguard investigations provisional safeguard duty and safeguard measures(continued)Hon PHIL GOFF (Labour—Mt Roskill): It is unfortunate that a bill dealing with trade which is the lifeblood of our country each time it is debated is relegated to the latest hours of the evening. One might ask whether that is a deliberate strategy of the Government because of its embarrassment regarding the circumstances in which this bill the Trade (Safeguard Measures) Bill has been debated and has been delayed.Dr David Clark: All of the bills are embarrassing.Hon PHIL GOFF: It is just another embarrassment as the member says. Actually Labour supports this bill. It supports the new safeguard measures which are designed to ensure that the trade is fair. It is consistent with the World Trade Organization rules and it promotes a more efficient decision-making process.This bill was introduced in 2008 by Lianne Dalziel when she was Minister of Commerce. Labour supported it then of course—it was in Government—and Labour supported it at the Foreign Affairs Defence and Trade Committee. The real question we have to ask is why it took 5 years—5 years—for this bill to come back to reach this stage of progress in the House. I cannot think of almost any other bill on this Order Paper that has taken 5 years to progress. There were just five submissions. There was support for this bill. It had been well consulted on. Why did the Government hold up this bill? That is the question I would expect the Minister of Commerce to direct himself to.Well I have a couple of theories on why it has taken 5 years. My first theory is this: that the bill for a period of years was in the hands of the Hon John Banks. Now the Hon John Banks had some problems and they were memory problems. You know he could not remember the helicopter ride. He could not remember visiting one of the biggest mansions in the country. He had forgotten all about the oversized German entrepreneur whom he met there—The CHAIRPERSON (Lindsay Tisch): Order! [Interruption] Sorry the member’s time has expired. The member must confine the comments in the Committee stage to the content of the bill. Other things are erroneous. [Interruption] Is this a point of order? [Interruption] No I have called Jami-Lee Ross.JAMI-LEE ROSS (Junior Whip—National): I moveThat the question be now put.Hon PHIL GOFF (Labour—Mt Roskill): I raise a point of order Mr Chairperson. This has just reached the Committee stage. We had less than 4 minutes on it at the last session.The CHAIRPERSON (Lindsay Tisch): No no. There have been 19 calls on this part. You have already had three calls yourself.SUE MORONEY (Labour): I raise a point of order Mr Chairperson. I understood that Mr Goff was still partaking in his call when the other member sought the call—The CHAIRPERSON (Lindsay Tisch): No he had finished. [Interruption] Order! I stood because the member’s time had expired because he had 1 minute and 30-odd seconds to speak. The Hon Phil Goff has had three calls on this. The next call went to the Government member. The Government member moved a closure motion. I am putting the closure motion.Motion agreed to.The question was put that the amendments set out on Supplementary Order Paper 17 in the name of the Hon John Banks and Supplementary Order Paper 409 in the name of the Hon Craig Foss to Part 1 be agreed to.Amendments agreed to.Part 1 as amended agreed to.Part 2 Miscellaneous mattersHon PHIL GOFF (Labour—Mt Roskill): Part 2 of the Trade (Safeguard Measures) Bill deals with miscellaneous matters. It deals with the temporary safeguard authority which is of course abolished under this bill. It is abolished because the responsibilities of the temporary safeguard authorities have been taken over by the Ministry of Business Innovation and Employment. Labour put this in the original bill and it does not object to that because it is a more efficient way of dealing with it. Of course the purpose of this bill was to promote “efficient transparent and objective investigative and decision-making processes.”But I have got to ask the question again. If the purpose of this bill is about transparency and objective investigative processing can we rely on the Government to actually carry out the purpose of this bill? It has been anything but objective and transparent with the investigation of the Minister who was formerly in charge of this bill the Hon John Banks. This was a Minister who was known to have taken two donations of $25000 each—$50000—and omitted to declare those donations—The CHAIRPERSON (Lindsay Tisch): Order!Hon PHIL GOFF: Well it is about whether the Government can be relied upon to be transparent in this way. I have got to say that there has been no transparency in the manner in which this bill has been dealt with and why this bill has been delayed for such a long time.I come back to the point that if there was a general agreement across the floor of the House on this bill can I get the Minister in the chair the Minister of Commerce to stand up and say why it has taken 5 years for this bill to go through. Was it because at least 2 of those wasted years were because John Banks was in charge of the bill and theGovernment did not have confidence in what John Banks did in his oversight of the bill? Or alternatively was it because the Government felt embarrassed by what John Banks represented and did not want him sitting where Mr Foss is sitting because there would be questions about—if this bill was about objective investigation and transparency—whether he could be relied upon to ensure that or whether he would simply be an embarrassment to the Government? He was after all—as clause 4 of the bill sets out—appointed under the authority of the Prime Minister. But why did the Prime Minister leave that Minister in the chair when he was known to have made a donation and not—The CHAIRPERSON (Lindsay Tisch): Order! [Interruption] No. Order! I have cautioned the member before. This is a very narrow debate. Part 2 is a very narrow debate and we are dealing with clauses 26 through to 31. It is a very narrow debate and I will ask the member to come back to the provisions of the bill and speak on nothing that is outside the scope of that.Hon PHIL GOFF: Thank you Mr Chairman. The temporary safeguard authorities of course had the right to enforce safeguard measures. Although New Zealand is a country that believes in free trade and believes in not having excessive protectionism there are circumstances where you need to safeguard the trading interests of your country. We need to safeguard that when for example there is a surge in imports those imports could damage our domestic industries and there is a need for a period of time to allow domestic industries to adjust to that. There are circumstances where there may be dumping by another country. Dumping is a process whereby the country of origin of the exports is actually selling the goods in the New Zealand market at a lower cost than what the normal value is of those goods in their own country. That is undesirable. There is another case for having safeguards and that is the need for countervailing duties. In some instances we find that the competition from imported goods is not fair competition at all; it is a lack of competition created by the fact that the Government in the country that is exporting to New Zealand is actually heavily subsidising those goods.So that is why we set up the temporary safeguard authorities. They were set up way back in I think 1987 under a Labour Government. The purpose of those safeguard authorities continued to be relevant. We needed protection where goods were subsidised or where goods were being dumped. Therefore we needed to have a continuation of those functions but the ministry is now in a position where it is able to carry out those functions. I think it is also fair to say that the temporary safeguard authorities were hindered in their work by the fact that they were given only 35 days to consider whether there was a need for safeguards. Frankly 35 days was not a sufficient period of time. This bill allows the ministry that replaces the temporary safeguard authorities to have a period of time of 75 days or in some instances up to 85 days. So I think the provisions that are set out in Part 2 are relevant provisions.I think it is worthwhile mentioning too that a number of the amendments made by the Foreign Affairs Defence and Trade Committee are sensible amendments. They were accepted by both sides of the committee. That is although allowing ministerial discretion in terms of imposing safeguards they narrow the breadth of that discretion in order to increase certainty and to allow where a provisional safeguard was set in place and a final duty was not imposed for that duty to be refunded to the exporter concerned. There were also provisions for countries to be exempted from the provisional safeguards. That is where for example the countries are developing countries and we have obligations under the World Trade Organization that we should not impose safeguards against them. And clearly where we have negotiated specific trade treaties there is a need sometimes to exempt countries from the imposition of safeguard measures. I think that the bill is sensible.We have got a provision here for transition from the old Act and maybe the question has to be raised that we are allowing for transitional provisions but in fact there has already been a 5-year period when this bill has been held in abeyance. People knew that it was there and people knew that it had wide support but they could not understand why the Government had held up the passage of this bill for so long. It is relevant to ask—and the Minister has steadfastly refused to take a call on this—why this bill has been delayed for 5 years. This House is meant to expedite legislation. It is meant to be efficient in the way it passes legislation. Why is it that if this measure is important for the protection of New Zealand industry and for ensuring fair trade we have waited for 5 years? This bill was on the books when the Government was elected in 2008. Why is it Minister that the Government has been embarrassed about bringing this bill back before the House and progressing it?I think the Committee deserves an explanation on that point. I think the country deserves an explanation and most particularly New Zealand industry needs an explanation as to why the Government has delayed this measure. Why was it that his predecessor and the Minister before him for that matter have taken so long? I have heard of transitional provisions and this section deals with transitional provisions; I have never heard of a transition of 5 years when a Government is meant to have passed a piece of legislation but has failed to do so. It is not that it was controversial; I think it is supported by all parties in the Committee.Dr Paul Hutchison: I raise a point of order Mr Chairperson. I understood that the debate on this part of the bill was narrow and I fear that the member is veering away from—The CHAIRPERSON (Lindsay Tisch): I thank the member. I am listening very carefully and I am taking note of what is being said. The member has 53 seconds remaining if he wishes.Hon PHIL GOFF: Thank you. Fifty-three seconds is such a small period of time when you consider that this Government has delayed for 5 years the passage of legislation that it now tells this Committee is important to pass. If the Minister will not take a call on this bill the Committee is entitled to ask why he is not prepared to do so. Does he not know the answer to why the Government has been hopelessly inefficient about passing this bill? Or does he know the answer—and I suspect that the whole Committee knows the answer—as to why this bill has been delayed but is shamed and embarrassed that it has taken so long because of the inadequacies of the previous Minister?Hon MARYAN STREET (Labour): I rise yet again to speak to the Trade (Safeguard Measures) Bill. It has been such a long time between speeches that I have had to haul out myHansards to know what I have said before so that I do not repeat myself. But following on from my colleague the Hon Phil Goff it really is very testing for those of us on this side of the Chamber who support the bill and who have wanted it to go through in a timely way to now find ourselves again at the fag end as T. S. Eliot would say of the evening trying to get this thing through.We are dealing with Part 2 “Miscellaneous matters”. I would like to raise a couple of miscellaneous matters of my own. We dealt with just a few moments ago the Minister of Commerce’s Supplementary Order Paper 409 which amends a number of the existing clauses. I would just like to draw to the Committee’s attention that those of us who never throw anything away can also lay our hands on a Supplementary Order Paper in the name of the Hon John Banks that was dated Thursday 29 March 2012—Thursday 29 March 2012—Supplementary Order Paper 17. It is No. 17 so that is the 17th Supplementary Order Paper in the term of the Parliament post the 2011 election. We dealt with the one I have in front of me currently the Supplementary Order Paper inthe name of the Minister sitting in the chair at the moment the Minister of Commerce which is dated Wednesday 29 January 2014. Its number is No. 409. So somewhere between No. 17 put up by John Banks and No. 409 put up by the Hon Craig Foss the original Minister in charge of the bill forgot to promote this piece of legislation.At the end of the bill as it is before us—Part 2 is barely 2 pages long—right at the end there is a little codicil about the legislative history of the bill. As the Hon Phil Goff said a moment ago this bill was ready to go on 9 September 2008. It was introduced to the House on 9 September 2008. A month or two after that there was a general election which saw the National Party assume the Treasury benches. The point of assuming the Treasury benches—one of the points—is to pick up the legislation that has been left over previously particularly if it is legislation on which there is no disagreement or for which there is at least majority support in the House between Labour and National and to just pump it through. There is no reason why we should be debating Part 2 “Miscellaneous matters” on 18 February 2014. John Banks as I said did have some amendments put up on 29 March 2012 but even then one has to ask oneself why it took from 9 September 2008 to 29 March 2012 for the Minister to realise that there might be some finessing of the bill that needed to happen by way of a Supplementary Order Paper.The other point that is made in the legislative history codicil on page 23 the last page of this bill under Part 2 is that the first reading and the referral of this bill to the Foreign Affairs Defence and Trade Committee happened on 11 March 2009. So the first reading got off the mark fairly promptly given that there was an election in between and the referral to the select committee got off to a reasonable rip and a tear but thereafter the bill began to disappear into the recesses of John Banks’ mind which is a place I would not wish to go to very often for fear of being forgotten and never being able to find my way out.The “Miscellaneous matters” at the end simply refer to the abolition of the temporary safeguard authority and that there is no compensation for those people that there are transitional provisions that there are consequential amendments to the Customs and Excise Act and that there are consequential amendments to the Official Information Act and the Trans-Tasman Mutual Recognition Act. These things are miscellaneous provisions. They are the tidy-up bits that happen in a piece of legislation that is impacted by and in turn impacts on other pieces of legislation. So these are the things that are the mop-up.But I could not let this moment go without referring to the last bit on the last page of the bill which itemises for everybody to see the fact that this Government has dragged its heels since 11 March 2009 when the bill was introduced since 29 March 2012—so 3 years later John Banks decided to put up some amendments by way of Supplementary Order Paper 17—and then we have gone on after that to 29 January 2014 when the current Minister in charge put up additional amendments in Supplementary Order Paper 409. So that would lead me to believe that even the amendments put up by John Banks in 2012—so 2 years ago—were not sufficient and needed tidying up by the Minister. That goes to the competence of the member who was in charge of this bill. It goes to whether or not he is able to remember anything. I am not even going to bother talking about the unmistakable German entrepreneur or the lavish place he lives in or even the helicopter ride.The CHAIRPERSON (Lindsay Tisch): No that is irrelevant.Hon MARYAN STREET: But it does make one wonder what it was that caused the member to lose 2 years in the process. I do not know what he did with those 2 years.In the meantime New Zealand has languished behind the World Trade Organization (WTO) requirements. It has languished behind in terms of having the necessarysafeguards and a modern kind of approach to our trade measures and our trade agreements so that they are in fact consistent with WTO practice as that has moved and changed. So in the 5 years that this Government has had to deal with this piece of legislation the world has moved on. One might apply that particular observation to a number of things that this Government does but I know that the Chairman will bring me to order because I am meant to be talking about Part 2 of this bill.The CHAIRPERSON (Lindsay Tisch): That is right—Part 2.Hon MARYAN STREET: So can I just say that the tardiness of this Government in its approach to this bill has probably left us still behind the requirements of the WTO in terms of the streamlining of the congruence between our legislation and WTO measures. I presume that the Hon Craig Foss has made sure that the amendments that we have just passed which the Minister introduced on 29 January this year—at least it was this year so one must be grateful for small mercies—do in fact cause us to align adequately with WTO conventions and practice.This has been a chapter of errors. This should have been simple. It should have been swift. It should have been a no-brainer. This Government has dragged it out for 5 years—5 long years—for no good purpose. Thank you.DAVID SHEARER (Labour—Mt Albert): I would like to take a brief call on the Trade (Safeguard Measures) Bill. I just want to pick up where the Hon Maryan Street just finished off which is to do with the time it has taken for this bill to come before the House and to be considered here at the Committee stage. We are talking about the transitional measures in this part of the bill Part 2 and the transition that it has taken since 2009.I was looking back overHansardand reflecting on the progress of this bill and saw the name of Simon Power who obviously belonged to a different era of this Parliament. He was a very fine Minister of Justice and gave an outstanding closing speech when he left this Parliament—one of the best that I have ever heard. But it just goes to show how long it has taken for this bill to in fact come to the House and be considered.This bill has got the support of the Labour Party. Of course it has got the support of the Labour Party—we actually devised it. The Hon Lianne Dalziel did that well back in 2008. I will not go on about who has been trying to shepherd this bill through and the unfortunate circumstances in which Mr Banks has delayed this bill being brought forward. But the idea of this bill as it is set out in both clause 1 and clause 2 is to promote efficient transparent and objective investigative and decision-making processes around our imports. It upgrades or updates legislation that dates right back to 1987 during a Labour Government. It has not been updated since then and it is obviously well overdue. It helps us to be compliant with the World Trade Organization’s regulations as well.The current regime as we know is subject to the Temporary Safeguard Authorities Act 1987. That is the Act that I was just talking about. It needed that comprehensive review. I have to say that I acknowledge the good work of the Foreign Affairs Defence and Trade Committee in being able to consider this and for the way that it has been able to come to some consensus around it particularly with the temporary safeguard measures contained in Part 2.There has been a very small number of investigations over that period of time. Remember the whole purpose of this bill and these safeguards is to ensure that we do not see dumping and undermining of our industries. We are a free-trading nation—everybody knows that. We support free trade. It is my honour to be sitting beside Phil Goff who signed the most important free-trade agreement in New Zealand’s history which is the China free-trade agreement. If this Government is able to follow that template we will be well served by free-trade agreements into the future.That free-trade agreement has meant that a $5 billion value of imports into this country from China and a $3 billion value of exports to China just in 2008 have now led to $7 billion each way—$7 billion each way. That is a 100 percent increase and China has become the most important trading nation to New Zealand. So we need to be able to move and ensure that we not only have a free-trade environment but also put in place the protections that enable our industries here to have protection from that uncontrolled dumping and the type of activity that might undermine our industries keeping in mind that we are obviously a free-trading nation as well.So the Temporary Safeguard Authorities Act 1987 needed to be replaced with a modern regime to avoid harm being caused to New Zealand industries from rapid increases in imports in this sort of dumping. The ability to impose separate provisional and final safeguard duties will allow us to do this efficiently and effectively through one Government department which was going to be the Ministry of Economic Development but is contained now within the great “gigantosaurus” of the Ministry of Business Innovation and Employment under Steven Joyce.The current legislation does not contain at the moment any guidance on what constitutes public interest and what sort of impact might constitute a need for action to be taken. The one purpose of this bill contained in Part 1 but which obviously transfers into the second part as well does do that. It gives us a much more clear understanding of the process that we need to follow so that what is contained in the bill is in the public interest. As I said it also shifts the responsibility for undertaking these safeguard investigations from the Ministry of Economic Development and obviously puts them within the context of the Ministry of Business Innovation and Employment. The bill will therefore create a single Government point of contact for all the trade remedy inquiries and I think it will be a plus an advantage for our many commercial concerns and businesses to know that they have one single point of expertise and oversight that will govern this.The bill also extends the time frame for the completion of the safeguard investigation from 30 days to 75 working days or even out to 85 working days. That is a positive step. It means that it falls in line with the World Trade Organization dispute settlement body and it helps to clarify the obligations that must be dealt with before safeguard measures can be imposed. It gives us the time to do a thorough and a good job rather than try to hurry it through and not be able to come to that conclusion properly. I believe that this bill is something that will be of great advantage—The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to report progress.House resumed.The Chairperson reported the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill with amendment the Student Loan Scheme Amendment Bill (No 3) without amendment progress on the Trade (Safeguard Measures) Bill and no progress on the Electoral Amendment Bill.Report adopted.