Trade (Safeguard Measures) Bill — Third ReadingText is incorporated into the Bound VolumeTrade (Safeguard Measures) Bill — Third Reading[Sitting date: 04 November 2014. Volume:701;Page:536. Text is incorporated into the Bound Volume.]Trade (Safeguard Measures) BillThird ReadingDebate resumed from 15 April.FLETCHER TABUTEAU (NZ First):I stand on behalf of New Zealand First to support this bill this evening. This bill gives a certain level of protection to our industries to our manufacturers and to our local producers. This bill seeks to stop dumping from international competitors and as New Zealand First is a party that proudly stands in support of local business and our local business people we will stand in support of this bill. However it is very disappointing to note the length of time this bill has taken to get to this stage in the House.This bill was originally introduced to the House in 2008 by the Hon Lianne Dalziel. It is I hope not a reflection of the value the Government currently places on our local businessmen and women. It was pleasing to note last week that the Government has finally levelled the playing field for our New Zealand businesses with regard to their ability to bid on international Government contracts. But this would appear to have been more about the process of the World Trade Organization rather than any proactive action on our Government’s part. It would appear to be more about an international compliance rather than any true concern for the close to 440000 small businesses in New Zealand employing well over half a million New Zealanders.Here is a bill and a piece of news that is great for our local businesses but where is the urgency? Where is this Government’s commitment to our local businesses? It would seem that it is OK to prioritise the selling-off of key assets to international interests but ask this Government to be efficient or effective in providing a level playing field for our small businesses and this seems to be too much of an ask.New Zealand First has always been vocally adamant that the Government should do all that it can to protect our locally owned organisations. Our businesses owned and operated by hard-working New Zealanders are only now being afforded some level of protection with this bill and have only recently been afforded a level playing field when competing for Government contracts around the world. This has taken many many years to achieve.New Zealand First and the public of New Zealand have seen year after year locally owned businesses losing out to international firms while at the same time this Government prioritises free-trade agreements that mean that New Zealand businesses have to fight off overseas firms for business in their own country. New Zealand has always had a wide open-door policy for international firms and now hopefully some of our own businesses can leverage on this new-found international Government market and take on some of the large players from around the world in providing to that Government sector because you can be sure that they are given no quarter by their own Government when it comes to contracts—Novopay being a perfect example of that.But we are concerned about the current standing of the new Minister of Commerce and Consumer Affairs. We give the Minister his dues. He has taken the bill a relatively good bill introduced by a member of the then Labour Government—another good idea gained from an Opposition party that this Government will seek to claim as its own but at least the Minister has been able to recognise its merits. However it does seem that New Zealand First will have to continue to struggle to advocate to push this Government to truly take small business seriously.Specifically to the bill New Zealand First is pleased to note the inclusion of the following major points. The bill itself sets out four legislative changes to the Temporary Safeguard Authorities Act 1987 which are changes relating to the body responsible for undertaking safeguard investigations the time frame for completing investigations the imposition of provisional and final safeguard duty and the introduction of guidelines to establish whether safeguard action is in the public interest.As intimated earlier this work is in accordance with the World Trade Organization rules and meets World Trade Organization recommendations and standards. It is still commonplace around the world for large internationals in particular to dump goods on foreign markets. It would be interesting—and I am sure the results would be disappointing—to investigate the actual and real costs to local manufacturers and other small to medium sized enterprises of the sense of apathy of the lax timetable around the implementation of this the Trade (Safeguard Measures) Bill. This Government has had 6 years in which to bring this issue to the fore; 6 years and this bill now finally makes it to its third reading.As I was saying it is still commonplace for large internationals to dump goods on to foreign markets. Dumping is the practice of firms selling products abroad at below cost or significantly below prices as compared with their home market. The former implies predatory pricing or pricing that by its nature is seeking to undermine the foreign markets into which it is entering. The latter implies that the procedure has disadvantaged the firm’s home market and that they perhaps overpriced their goods for their own home consumers. Dumping in New Zealand is certainly a practice that is invasive and compromises the fair and reasonable operation of our own industries whatever they may be. But I suggest that this affects our manufacturing industry in the main.This has been true with regard to many pieces of legislation. The New Zealand economy is one of the most open markets in the world. As an economist I commend the theory behind this open market practice. However it is very harsh and a severe way of creating efficiencies especially when many of our industries look to their foreign counterparts that are still being afforded some measure of protection by even our biggest competitors’ Governments—those that are or would be our trading partners and convincingly argue the need for open market regulation but fail to come through themselves.I suggest that the role of Government is to flatten out the peaks and troughs of this country’s economic cycle. Backing our manufacturers and saving tens of thousands of jobs is not a nasty or inefficient Government intervention. It is good practice which is evidenced I am sure by the upturn in manufacturing in response to the decline in the New Zealand dollar recently. We would have been in a much better position as a country as employers and as employees if the Government had done more to protect our manufacturing industries over the recent economic downturn.As I stated earlier New Zealand First will always stand in support of legislation that supports the businesses of New Zealand. This bill goes a small way towards doing this. I commend this bill to the House. Thank you.Dr SHANE RETI (National—Whangarei):Tenā koe Mr Deputy Speaker. I am standing in support of the Trade (Safeguards Measures) Bill the purpose of which is twofold: to protect New Zealand businesses and to ensure our compliance with the World Trade Organization (WTO). I would like to acknowledge the many Foreign Affairs Defence and Trade Committee members who have got the bill to this stage. I do accept that there has been some time frame. We are a look-forward Government but I take your point. There are several trade remedies that we can bring to foreign imports that may cause harm to New Zealand businesses. We have legislation already for countervailing measures and we have legislation for anti-dumping. This is another tool in the tool kit. This is a tool that talks about safeguard measures. The bill quite clearly talks about how a safeguard measure comes to be. There is a safeguard application. There is a safeguard investigation. During that investigation in fact you may have a provisional safeguard duty apply while it is being investigated. Then a determination is made.I think there are many things to like in this bill and I want to talk about four of them. The first is that I think this bill is business supportive. I say so for several reasons. First of all anyone can make an application. Secondly the criterion for determination is well spelt out. It is very clear. And thirdly if an eventual determination a safeguard duty is made and that determination is higher than the provisional duty that was allocated during the investigation then the applicant gets a refund. If it is lower then there is nothing more to pay and I think that is a good indication of business support. The second point is that it is administratively real. What I mean by that is this legislation pushes out the investigation period to 75 days; it was 30 days. The purpose for that is you get a more diligent and a more thorough investigation when you give it more time. This is likely to decrease the risk that we have of facing disputes resolution at the World Trade Organization which would likely be expensive and time-consuming. So it is administratively real.I think the third thing that it does is it capacity builds the Public Service. By that I mean the safeguard investigations will now be undertaken by the Ministry of Business Innovation and Employment where previously they were undertaken by the temporary safeguard authorities. While we are talking of the temporary safeguard authorities I would like to acknowledge the two people who have worked with that Messrs Plimmer and Gilbert. They have been the temporary safeguard authorities and they have done good work. This bill brings that capacity building that investigation inside the ministry which is efficient as well and that is what we want to do with public services. The fourth and last point I want to make is that it makes us World Trade Organization - compliant. As already mentioned by my colleague over here it is no coincidence that last week Minister Groser progressed the accession to the World Trade Organization Agreement on Government Procurement which gives us access to $1.7 trillion of Government contracts around the world. It is no small feat at all. I think really that this bill further supports New Zealand’s compliance with World Trade Organization regulations which in turn supports the Government’s Business Growth Agenda so I stand to support this bill. Tēnā koe Mr Deputy Speaker.STUART NASH (Labour—Napier):As mentioned we support this bill. It is interesting when we talk about this bill being introduced in 2008. It was an interrupted reading and the last two National MPs to speak on this were actually Tau Henare and—who was that other bloke who was in trade? I cannot even remember his name. It is shocking is it not? It was a National MP who is not here anymore. It has taken a long time for this bill to get here but not only that this bill actually ratifies a World Trade Organization (WTO) agreement that was established in 1994. It has taken a long time for New Zealand to recognise its WTO obligations and I actually think that both parties are probably to blame for not getting it to the third reading a lot earlier. In fact there have been three Governments. There has been a National Government there has been a Labour Government and there has been another National Government since the time that this was actually ratified in Marrakesh by the WTO in 1994.As has been mentioned this bill is about anti-dumping. It is a temporary protection that talks about temporary protection from serious injury. “Serious injury” is not particularly well defined but it basically says in the bill that “serious injury” is an injury that is imminent. As mentioned by the last speaker there are 75 days for an investigation period. This may be drawn out if the chief executive or the applicant provides further information but I would hope from a business perspective and a trade perspective that it would all be done and dusted within 75 days.Some things that the chief executive must investigate when a safeguard application has been brought forward are things about whether the increased imports—this is about increased imports—have actually caused serious injury or a threat of serious injury. So there must be a very real threat of injury. So for example we cannot have just a dumping of material that does not cause serious injury even if it is dumped but there is no injury that has been caused. It is also about whether the increased imports were due to unforeseen developments and whether the safeguard measures were necessary to prevent or remedy serious injury and to facilitate adjustment by the domestic injury of the increased imports.We are a very open economy and that has served us well over the last 20 years but because of that it has brought risks. We have seen our local manufacturing industry become decimated over the last 6 to 9 years and in fact the number of excuses that have been used are things like the high exchange rate. But every now and then we do get a dumping issue here and I think I remember one—Fisher and Paykel Appliances actually. I think there was Haier a Chinese company that dumped washing machines or whiteware into the country and so an anti-dumping action was brought against us. But you know when we talk about this Labour has always been the party that has supported free trade. We signed the free-trade agreement with China. One of our own Prime Ministers Mike Moore was Director-General of the WTO. He is now our Ambassador to the United States working very hard on the Trans-Pacific Partnership. So Labour has had a very very active role.We had Phil Goff who I think ended up signing more free-trade agreements than any previous trade Minister for and against. But the thing about free trade—you know I am not skiting or anything like that—is that we have basically taken a bipartisan approach. In fact I think if I am right the only party in this Parliament that really has not supported free-trade agreements certainly in my time has been the Greens. They may have their reasons but I think that in the 21st century free trade is just an economic necessity. In this day and age as countries become more and more specialised it is not just companies but countries that are seeking global competitive advantages. But also with an opening economy what we are finding is that we do need to ensure that the industries we do have in this country are protected because they are open to abuse. You know around the world there are instances where either feast or famine in one area—and I am not talking just about foodstuffs—creates an opportunity for dumping. We were one of the most liberalised economies very early on and we have seen this so we do need to protect these.The existing Act which is the Temporary Safeguard Authorities Act 1987 was subject to review under the Labour-led Government and that did include wide public consultation because it has pretty serious consequences. The last thing we wanted to see and the last thing we need to see in this country are companies and industries closing down simply because of dumped goods by a large major global competitor from another country.So we do support this bill. We think it adds just further strength to our already enviable reputation but as mentioned it brings us into line with WTO regulations which in the end is most important. Thank you.JAMES SHAW (Green):I rise in support of this bill. It is a trade bill that the Greens can vote for. I thought that I would just start by referencing some of the comments from Mr Stuart Nash about the Greens’ position on trade. We are not opposed to all trade. Our emphasis has always been on fair trade over free trade and a lot of people of course would say that free trade is fair trade. But we have to recognise that there are huge power imbalances between nations both politically and economically and so the idea that two parties can be in a free-trade agreement it will be mutually beneficial and one of those will not be harmed by that is a fallacy. We are still learning about what it takes to survive and to thrive in an increasingly globally connected and interdependent world economy. Globalisation obviously is not a static state either. It is a moving feast. It is an ongoing process. As we respond to one set of developments another set of developments is already on the horizon. Moving closer together to our trading partners has brought great benefits to New Zealand and it has also come at some cost. New Zealand is not the egalitarian nation that it once was. Our environment is no longer in the near-pristine condition that it once was in. Our economy has undergone enormous and in some sectors catastrophic adjustments over the last three decades.The Greens are in favour of the kinds of safeguard measures that are laid out in this bill—and we would suggest that these kinds of measures are late—to soften the blows and to defend against dumping practices or unfair subsidies by our trading partners. It does start to even the playing field. We support the objective of ensuring that New Zealand is consistent with the World Trade Organization’s rules and the objective of reducing the risk of a successful World Trade Organization dispute settlement or a judicial review should such a safeguard measure be applied and we support the overall aim of ensuring that New Zealand is able to use measures consistent with the World Trade Organization framework of being able to defend against the unfair practices of other nations. But for the record we would like to note once more that the Green Party would like to see more of an emphasis on fair trade and on green trade as opposed to the single-minded drive for free trade and on the inclusion of measures to safeguard the environment alongside our domestic industry. We will be voting for this bill.DAVID BENNETT (National—Hamilton East):Well it is good to hear from that new member that the Greens are voting for this bill. I guess that when you hear the Greens talking of fair trade and free trade really what that member was saying is that they would prefer equal trade—that is there is no inequality in trade imbalance between countries. Well that is just not realistic in a modern world that is based on trading. Is it OK for us to trade with countries like China where we trade more or is it better that we trade with countries that we trade less with? That is something that the Greens will have to come and search their consciences about.Chris Hipkins: How does this guy get elected?DAVID BENNETT: Very easily mate; a lot more easily than you will ever get elected by. So that is the first thing. The Labour Party talked about Labour always having supported free trade and that is just simply not the case. Mr Nash over there said that. I would like to see the Labour Party support the Trans-Pacific Partnership agreement if that is the true intent of the Labour Party but it simply is not.Today is a day when the horse that won the Melbourne Cup was named after the New Zealand First Party. Protectionist was the name of the horse that won and we are debating a trade bill. It is important to note that this is a country that is built on trade and—Sue Moroney: It won the race David. What do you take from that?DAVID BENNETT: Oh not much—not much at all Sue. We are a country that is based on trade and we are a trading people. We live in the Pacific the greatest trading region in the world and the people who have lived in this part of the world for many many years throughout our history have always been traders. So bills like this are important for our country going forward—important so that we have the base to enable us to be that strong trading country that we need to be.The bill makes five main changes which some of our previous speakers have gone through and dictated to the House so I will not repeat them. But I just wanted to thank those parties that are supporting it and I wish this bill all the best through the House. Thank you.DAVID SHEARER (Labour—Mt Albert):That member David Bennett was obviously a little bit nervous because when you look back at the people who helped shepherd this bill through the House it started with Lianne Dalziel back in 2008. It has taken 6 long years—Hon Todd McClay: Who?DAVID SHEARER: Exactly—exactly. Lianne Dalziel is now the Mayor of Christchurch. She has gone on to bigger and better things. Then there was Tau Henare. I do not know what happened to him.Hon Todd McClay: Who?DAVID SHEARER: Exactly—who? I do not know what he is doing either. John Banks—remember him? He was here as well. He was involved with this bill. And then there was John Hayes also an extinct MP as well. So when David Bennett talks about the time it has taken to get this bill through the House he must be sitting there kind of worried that he is going to be the next on the list of the Trade (Safeguard Measures) Bill speakers to hit the dust down there in the Waikato.We have waited 6 long years for this bill to come through. This bill was put forward by the Labour Government back in 2008 and it has taken this long to be pushed through by this Government even though it is a pretty simple piece of legislation and it is agreed upon by just about everybody in this House. It promotes fairness and we are all into fairness—well this side of the House is into fairness; the other side I certainly cannot speak for—and it does bring us as some speakers have said into line with the World Trade Organization. It means that after nearly 20 years we are fulfilling our obligations there and of course it removes some of the problems with the temporary safeguard authority that has been set up—a big piece of bureaucracy within the Ministry of Business Innovation and Employment which has had to deal with that.Really what this bill deals with is the possibility that there could be serious injury caused to some of our businesses by unscrupulous countries dumping their produce in New Zealand and obviously we do not want to see that. We have entered into a number of free-trade agreements with a number of countries and although we put down as part of those agreements that we should not have dumping unfortunately that is a risk. This bill will protect our companies that might be vulnerable to that dumping.We are as many speakers have pointed out this evening a free-trade country. If we do not trade we will certainly die as a country. We have done very well in terms of the free-trade agreements we have been able to sign. The unfortunate way that the World Trade Organization and the free-trade agreements have gone on a global basis has not transpired here and what we have instead is a number of regional and bilateral free-trade agreements.For New Zealand the most important of those to date is the one with China—China’s only free-trade agreement and the first free-trade agreement that was signed with that country. In the time since we signed that in 2008 until today our exports have increased from about $3 billion to nearly $10 billion and $3 billion of that $10 billion is actually not in the agricultural sector; it is actually in many of the higher-value commodities that we have been able to trade with China.It is important to take some lessons from what happened when we went into that China free-trade agreement negotiation. First of all there was not unanimous agreement across Parliament that we should have an agreement with China. Certainly the Green Party and the New Zealand First Party did not agree with that. But what we also did—and I want to raise this point because it is something that this Government has blatantly not been able to do—was engage with many of the stakeholders around the country. We had discussions with Greenpeace with Business New Zealand with the Council of Trade Unions. That was part of what we did in order to give people some comfort that what we were doing was in the best interests of the country.But this Government has blatantly been unable to do that with the Trans-Pacific Partnership. So what we have is a level of fear and uncertainty about the unknown around the free-trade agreements that might be signed off. We simply do not know what the Government’s bottom line really is. We have got worries about Pharmac. We have got worries about whether we will sign away our environmental issues our public health issues. All of those questions have not been answered satisfactorily for the public of New Zealand. We understand what the benefits will be and they could be considerable. But we do not know what we are giving up as a result.I just want to make the point that exports are extraordinarily important to us and today in question time it was absolutely and categorically shown that exports as a percentage of GDP have actually gone down under this Government. There is a goal that has been set by this Government—it is laughable when you think about what is actually happening at the moment—of 40 percent; that exports as a percentage of GDP will be 40 percent. In 2009 they were 32 percent. Today they are just a little over 29 percent.There is a little bit of a disagreement here amongst some of the Government Ministers. Steven Joyce came out and said just a couple of weeks ago that that percentage was actually around 30 percent. Well it is a little bit under 30 percent but of course Steven Joyce likes to round it up as he does. But Bill English today was talking about it being 33 percent which is quite blatantly incorrect and clearly out of step with his counterpart Mr Joyce.So what do we see? What we are seeing at the moment is exports as a percentage of GDP going down and Mr English talking not about value which we all want to see—we want to see the value of these exports going up—but quantity. For heaven’s sake! Have we not left this behind? Quantity was what we did in the 1960s.We want to be looking at value added and value when we look at these exports because value is what creates the jobs helps those businesses profit and enriches New Zealand. That is what we want to see not some waffle about quantity and not value or whatever the excuse was that Mr English decided to dream up when he was answering questions today. He probably needs to have a bit of a conversation with Steven Joyce so that they can at least get their numbers correct. It is embarrassing sitting on this side of the House and knowing that they are both talking about completely different things.We are an exporting country. We need to export. We need to make sure that those exports are able to get out there and into those markets but we want to see clarity around what we are getting into in the form of the Trans-Pacific Partnership. We want to see a Government that really is committed to exports and not trying to fudge it and talk about the construction industry as Mr English did in question time today which depends so heavily on an earthquake. That is some great planning by the National Government where economic development is based on an earthquake!What we want to see is value-added exports being shipped out of New Zealand which can create jobs profit our businesses give people higher incomes and drive up the value of our education system.So in the spirit of that and giving our businesses and our industries a fair go we support this bill as we supported it in 2008—through every permutation and the comings and goings of party members as they came and went especially in the National Party the ACT Party and wherever as they trundled through as this legislation passed through history. It is great to be sitting here and saying: “Thank God we have actually been able to put a line under this rule it off and put it into law before Christmas 6 years after the date it was first introduced.” Thank you.JAMI-LEE ROSS (National—Botany):I commend the bill to the House.Bill read a third time.