Shearer David: Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill — First ReadingText is incorporated into the Bound VolumeShearer David: Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill — First Reading[Sitting date: 16 June 2015. Volume:706;Page:4424. Text is incorporated into the Bound Volume.]DAVID SHEARER (Labour—Mt Albert):Can I acknowledge the officials who are in the House today to witness the first reading of this free-trade agreement with Korea. I think 5 long years of pretty tough negotiations—and I will go into some of the details of why they were so tough in a minute—have resulted in what I would consider and what we consider a pretty good agreement. For that reason Labour is supporting this bill which aims to reduce the remaining few tariffs that could be imposed on Korea to enable us to get this free-trade agreement into effect and to start reaping the benefits from it. This party the Labour Party is a party that supports free-trade agreements. We implemented more free-trade agreements in our term in office thanthe other side has certainly but we were supported by the other side and I think that was the point of the last speaker Jami-Lee Ross.Thirty-one percent of our GDP is dependent on exports. Unfortunately that figure is dropping. It was 31 percent; actually it is now down to 29 percent despite the Government’s target of increasing it to 40 percent. One of the most important issues and one of the factors in keeping that figure up was our free-trade agreement with China. I ask you to think of what the situation would have been like going into 2008 with the financial crisis in front of us if we did not have that free-trade agreement with China. We were exporting $2.2 billion to China in 2008. By 2014 it had gone up to $10 billion—$10 billion—and China had become our largest trading partner. You can aim whatever criticism you like at that free-trade agreement but without it we would be lacking the growth and the jobs that sustained us through that period of the financial crisis and if we had not had that free-trade agreement we would have been in a much worse state than we are at the moment.So is a bit a rich for the Greens and New Zealand First who both opposed that free-trade agreement to stand up here and talk about the woes and ills of free-trade agreements. It is a bit rich. And to oppose this free-trade agreement when there are so many benefits coming to New Zealandis a bit rich as well I think. It makes me ask whether if their vote was the deciding vote of whether this agreement came into being or not they would actually do it or whether they are just in a sense luxuriating in the fact that they are in Opposition and that they are an Opposition party where their vote does not actually matter because they have got the Labour Party here to support the agreement. My feeling is that if they did not they would be doing New Zealanders out of jobs and New Zealand out of growth that it could have otherwise had.The free-trade agreement with Korea as I said is the result of 5 years of negotiations that came about and they were tough negotiations as we were told by the officials because basically New Zealand is really pretty open. We will be taking off and going without $4.2 million of tariffs that we might have otherwise collected from Korea but we will get $220 million worth of tariffs removed from our exports. So we will immediately start benefiting from having those gone. It will put us on a level playing field with the EU with Australia with the US with Canada and with Chile. All of these countries have negotiated free-trade agreements with South Korea before us. So it is not just about the tariffs that happen right now but it means that we will be able to compete with those countries into the future. That is the important point. Korea which is currently our sixth-largest trading partner has the potential to grow much much more.The example of Chile is an important one. Chile which entered into a free-trade agreement with South Korea much earlier now has zero tariffs on its kiwifruit. We currently have a tariff of around about 45 percent on our kiwifruit exports to Korea. We are now going to be able to compete much more effectively with countries like Chile so the benefits are huge. I want to just go through it: 45 percent in kiwifruit 40 percent in the meat industry Fonterra fisheries and forestry. Yet we heard from many of the submitters who came before the select committee that somehow—and I quote two or three of them—this free-trade agreement would benefit the few at the expense of the many. Well look those industries which are our core industries in New Zealand employ hundreds of thousands of people. No this is an agreement that will benefit the many at the expense of the few. This is about us growing jobs growing our economy and benefiting all New Zealanders.This bill that we are looking at today as I said means that we will reduce our tariffs that apply to Korea at the moment. It will be a cost to us of about $4.2 million but at the benefit of more than $200 million in reduced tariffs to our exports overseas.Many of the people who came before us—as has been spoken about before—had a number of issues around the entering of free-trade agreements. I will mention one thing that I think the Government has been very remiss on and that is that it has not been an advocate of what really constitutes a free-trade agreement and not only in Korea particularly but more broadly with the issue of the Trans-Pacific Partnership agreement. When we were negotiating with China—if you go back and take a look at the records and Phil Goff can I am sure support this—the Labour Government went to extraordinary lengths to make sure that we had a wide cross-section of society on board.When we were in the select committee the other day we were asking the Ministry of Foreign Affairs and Trade how much outreach had actually been going on other than to business groups. Over the course of a year there would have been maybe five or six civil society groups that had actually been talked to about the Trans-Pacific Partnership and free-trade agreements. That means thatthere is out there I believe a wrong impression of the value of free-trade agreements versus the costs or risks to New Zealand. It is time that the Government woke up to this fact and actually went out there that it got down and actually talked with the people rather than being arrogant and high-handed as unfortunately it has been and that it started talking about free-trade agreements.The investor-State dispute settlement procedures have been talked about and they were talked about mainly with regard to the Trans-Pacific Partnership. We have to look very carefully at these. They are not perfect by any means and I think some of the submitters made some very good submissions on this. But on the other hand they are not kangaroo courts as was often referred to. In the case of the Korea free-trade agreement it was Korea that insisted that we go into an investor-State dispute settlement procedure and include that in the free-trade agreement. We insisted that we include it as part of the Chinese free-trade agreement because it gave us a certainty that we could go at least somewhere when we did not necessarily have confidence in that particular country’s judicial procedures.If we take a look at what has come about through the investor-State dispute settlements there have been 356 concluded cases—37 percent of those have been in favour of the State 25 percent have been in favour of the investor and 28 percent have been settled. In 44 claims against the OECD countries the State won 86 percent of the time. So New Zealand is not about to be taken to the cleaners here. This is the second obvious point: we have never been taken to an investor-State dispute settlement tribunal before. There has never been a case that was seen to be able to stack up. We have never been taken through the World Health Organization procedures either. So we have got to get this into perspective a little bit. We are not saying that what we are seeing here is perfect but what we do need to know is that there is a settlement procedure out there that is not in any way as broken as many people would like to profess.I will mention one thing that I believe that the Government has not been able to answer properly—and David Parker spoke of it before—and that is the area of residential houses and overseas investment into our residential market. Like all New Zealanders I do not want to see our residences—our homes our houses—treated like pork bellies on the New York Stock Exchange. I do not believe and according to Professor Kāwharu who gave evidence in front of us—