McClay Todd: ASEAN-Australia-New Zealand Free Trade Area Bill — Second Reading 
McClay Todd: ASEAN-Australia-New Zealand Free Trade Area Bill — Second Reading 
[Volume:655;Page:4619] 
TODD McCLAY (National—Rotorua) 
: 
 It gives me great pleasure to rise to speak on the ASEAN-Australia-New Zealand Free Trade Area Bill and it seems like members opposite are looking forward to hearing my speech as much as I am looking forward to delivering it. I will start by saying that I support this free-trade agreement because I believe free trade has been important for New Zealand in the past. It has allowed our businesses and industries to grow and prosper to the size that they are today and it will offer great opportunities to us in the future. I believe that this free-trade agreement will offer those opportunities to many businesses and industries throughout New Zealand. A number of those businesses and industries are present in my electorate of Rotorua and I will talk about a few of those in greater detail in a moment. 
I have said that this is an important agreement and I think it is one that others in the world are taking notice of. Of course it is one of the first agreements if not the first that the bloc of Asian countries that is collectively known as ASEAN has signed with any other country. Others are taking notice and particularly I mention the United States administration. Our Government has great ambition to establish a free-trade agreement with the United States market—as did the previous Government—because I think it will do important things for much of the primary sector in New Zealand as well as other sectors. But we know that discussions in this area are not always as straightforward as we sitting here in New Zealand might hope. Why is America perhaps taking greater notice of us now? It is because of the growth and the potential for growth in many of the consumer markets in the ASEAN countries. Of course collectively with these countries through freer trade New Zealand is becoming more appealing to the Americans. It would be great if we were a larger country; perhaps we would more easily negotiate a trade agreement with America by ourselves. But the fact is that the world’s economy is coming closer together and through this trade agreement and other free-trade agreements that have been negotiated or signed including the one with China I believe that America is starting to take a bit more notice. Indeed the new administration has suggested that it would be happy to move forward and have discussions with New Zealand in partnership with a number of other Asian countries. That is very much what we must focus on—how as a Government we can support more manufacturers farmers those involved with horticulture and other producers in New Zealand so that they have better fairer and freer access to important and more lucrative markets overseas. 
I will give a little bit of background about why I think that this is an important agreement. The ASEAN countries are our third-largest trading partner and they are also our third-largest export market for merchandise goods. I have said that this is the first comprehensive agreement the ASEAN countries have negotiated for goods and services. That includes investment policy intellectual policy and some competition policy around the agreement so that in future as trade grows we do not have disagreements over what is competitive trade and what is anti-competitive. I think that provides a broader approach to regional trade integration—something that those countries in ASEAN have themselves promoted. We know there is a lot of trade—and growing trade—amongst them—[ 
Interruption 
] Yes very good; I am very happy to keep going until my dinner is ready. But as I was saying— 
Hon Clayton Cosgrove 
: You’re not meant to repeat the words on the note though; you’re meant to carry on with your speech. 
TODD McCLAY 
: No no—listen to the man others in this House call their friend. Of course I put that down in my debate notes because I knew that it would be a message to those who are making my dinner at the moment. They are listening intently and the dinner will be ready. 
Hon Trevor Mallard 
: Hey I’d be worried. Gerry has just left the House; he’s probably going to eat it. 
TODD McCLAY 
: Ha ha! The note that was passed to me said: “Don’t take any notice of the member opposite. He hardly ever says anything of interest.” I agree with that. 
Where I was before I was thinking of my dinner—and I apologise if the member took any offence to that; it was meant in jest as many things in this House are—was to say that our New Zealand exports to ASEAN countries have increased by 121 percent since the year 2000—a 121 percent increase of our exports to that group of countries since the year 2000. Imports have increased dramatically by 244 percent in that same time period. There are 566 million people in those countries in the ASEAN markets. They are responsible for about NZ$2.2 billion of global trade. What have we achieved with this negotiation and this agreement? In effect there will be no tariffs on 99 percent of New Zealand exports to Indonesia Malaysia the Philippines and Viet Nam by 2020 at the latest. That means that in relation to that increase of 121 percent of exports to these countries over the last 9 years 99 percent of the products we export will face no tariff barriers over the next 12 years between now and 2020. That will be a saving of $50 million on duty at today’s rates and based on today’s trade for our exports to these countries. That is a direct saving for the New Zealand producer and that makes our goods more competitive when they reach these markets. By 2010 tariffs will be eliminated on $429 million worth of New Zealand exports at current levels. 
I mentioned earlier a number of the areas that will be covered by this agreement and I want to focus on the area of dairy for a moment. The select committee received a submission from Fonterra on behalf of the dairy industry and it is interesting to look at what it had to say. Of course it will be no surprise to those who are involved in dairying in New Zealand that Fonterra strongly supported this free-trade agreement and supported it being implemented as quickly as possible. Fonterra recognises that dairy tariffs in key ASEAN markets typically range up to 10 percent and that our exports incur about $50 million in tariffs per annum. Over that period of time in respect of those countries with a reduction of tariff rates and the removal of barriers those in the dairy industry—and the farmers in my electorate of Rotorua—stand to gain. In 2010 there will be an elimination of dairy products from tariffs as I said. That will include milk powder casein butter ice cream and cheese. In Reporoa in my electorate there is the Fonterra dairy factory which employs many people and supports many many farmers indirectly through the processing of their milk. This agreement will mean a greater resource there. I think there will be more employment in my region because of this agreement. 
Meat and wool are also very important in many parts of my electorate. We received a submission from Meat and Wool New Zealand that also covered the Meat Industry Association. That too supports the agreement strongly. Those entities said that the red meat and wool industries are export-focused sectors of the economy and that they accounted for about 17 percent of New Zealand’s total merchandise export receipts to the year ended September 2008. The industries employed about 40000 people either directly or indirectly and they have said that during the same period their sectors exported $330 million worth of their goods to the 10 ASEAN countries concerned. Again the agreement means that tariff barriers will be reduced. The tariffs on beef exports will be reduced for beef to enter these markets between 2012 and 2020 with sheep meats and wool by 2010 to 2016. Those amongst us who have meat and wool producers in our electorates know that the last few years have been difficult times for them. The prices they have been receiving particularly for sheep meat have been down. The good news is that prices have increased this year and a number of farmers tell me they believe that the future is brighter. However this agreement will go a long way towards helping them and making sure that in the future their access to those markets is sustainable. 
Let us get to forestry. Members opposite like talking about forestry; I know that. Forestry is very important in Rotorua the forestry capital of New Zealand. We are proud of that. Tariffs will be eliminated on key forestry products again between 2010 and 2020. Again that is not just about logs—and in my electorate we do export a lot of logs—because this agreement reduces tariffs on processed products in many cases like paper. The mills in Kawerau produce a lot of paper; they employ a lot of people there to produce fibre plyboard. One of the problems we have in this country which we certainly have found over the last 9 years is that there is not enough focus on the forestry sector. There is absolutely not enough focus on the forestry sector or support for the many people who are employed or gain income from forestry in my electorate which is one of the reasons probably that the people of the Rotorua electorate decided they would like a change along with the rest of New Zealand last year. We should be investing more in forestry in our country to add value to forestry in our country and to add value for jobs so that we can export goods to other countries where we will get a greater return. Through that the forestry industry will be supported and will gain much much more. 
In respect of horticulture kiwifruit and apples will have the same conditions. Between 2010 and 2011 their tariffs will be reduced. I am glad that tariffs are coming off onions. I do not like onions so I tell the person making my dinner not to put onions in it. I am about to finish here— 
Mr DEPUTY SPEAKER 
: I am sorry the member’s time has expired.