Mapp Wayne: Tariff (Malaysia Free Trade Agreement) Amendment Bill — First Reading 
Mapp Wayne: Tariff (Malaysia Free Trade Agreement) Amendment Bill — First Reading 
[Volume:662;Page:10270] 
Hon Dr WAYNE MAPP (Minister of Defence)  
on behalf of the Minister of Trade 
: 
 I move  
That the Tariff (Malaysia Free Trade Agreement) Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the Tariff (Malaysia Free Trade Agreement) Amendment Bill be considered by the Foreign Affairs Defence and Trade Committee that the committee report to the House on or before 15 June 2010 and that the committee have the authority to meet at any time while the House is sitting except during questions for oral answer during an evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 187 and 190(1)(b) and (c). 
A report presented by the committee on or before that date 15 June will enable New Zealand to remain on course to complete its domestic procedures for the purpose of the free-trade agreement’s entry into force on 1 August 2010—hence the shortness of time. For this to occur both Malaysia and New Zealand have to notify each other that they have completed their domestic procedures and in our case that involves passing this bill through all its stages. 
The business relationship between New Zealand and Malaysia is characterised by growth and potential. The relationship is underpinned by close and friendly relations between our respective Governments and populations. That stems from a multifarious selection of things including our Commonwealth ties the Colombo Plan and our shared defence concerns particularly through the Five Power Defence Arrangement. Malaysia is one of the countries in South-East Asia best known to all New Zealanders. We note that its rapid growth in recent years coupled with our understanding of Malaysian people developed through trade and commerce has enabled trade to grow very substantially. 
It is worth noting that Malaysia is already our 10th largest trading partner. Two-way trade between our nations is approaching $2 billion a year. New Zealand exports $750 million worth of goods to Malaysia and over the last 4 years our exports have grown by 50 percent. A proportion of that time was during the recession. Services are also flourishing in a range of sectors including private education engineering and information and computer technology services. Of course there has been a substantial increase in the number of Malaysian international students in New Zealand over the last decade. Investment links have also grown and total New Zealand investment into Malaysia has grown from $26 million to $450 million in the year ending March 2008 over a 5-year period. That was a growth rate of 77 percent per annum. In contrast overall investment growth collectively is 8.5 percent. Members can see the impact that Malaysia and indeed South-east Asia generally have had on New Zealand’s growth prospects. 
Entering into this agreement will do a great deal to enhance and expand that position. It is worth noting for instance that last year Parliament gave effect to the free-trade agreement negotiated by New Zealand and Australia with the 10 South-east Asian nations the ASEAN nations which include Malaysia. We are doing a bilateral free-trade agreement to secure further benefits with a Commonwealth country that go above and beyond the general ASEAN deal. As members would expect this is a high-quality and comprehensive agreement. It is a standpoint for all New Zealand free-trade agreements and it will deliver three benefits: first it will enhance access to the Malaysian market for New Zealand goods and service exporters by reducing direct and indirect trade barriers; second it will provide greater certainty for New Zealand businesses about future trading and the investment environment; and third it will provide potential long-term gains from enhanced regional integration and further outcomes within the ASEAN region generally. 
In practical terms on day 1 of the agreement entering into force 95 percent of our exports will become duty-free and within 7 years 99.5 percent of our exports to Malaysia will become duty-free. This time frame is an excellent and a very high-quality outcome and is 5 years shorter than that for the ASEAN deal or the China free-trade agreement. That speaks a great deal about the depth of the relationship between our two countries. New Zealanders in short will be the only ones in Malaysia who will be able to guarantee to their clients that New Zealand goods will clear Malaysian customs within 48 hours. In commercial terms that means that Malaysian importers will be able to have a legal assurance that New Zealand products will clear Malaysian customs within that period. No other competitor of ours will have that particular advantage. Of course advantages of that nature are reciprocal. 
New provisions in the agreement will make it easier for New Zealand companies to establish a business in Malaysia to work more closely with Malaysian partners and to deliver services across the Internet as one would expect in these modern times. Those commitments made by Malaysia are new and are concentrated in those sectors where New Zealand is most competitive such as in engineering education environmental services and software services. The free-trade agreement future-proofs New Zealand’s investment and service interests in key areas. We have a first-mover advantage we have an edge on our competitors and we stand to benefit automatically from concessions that Malaysia negotiates with future free-trade agreement partners. For instance Malaysia is negotiating agreements with the United States and Australia amongst others. We are ahead of those countries and we will have any protections that those two parties negotiate. 
It is worth noting to members of the House—and this will be of interest to the Green Party—that the free-trade agreement will be binding and given treaty status. Environment and labour agreements have also been concluded built on existing agreements. I say at this point deviating slightly from the provisions of this bill that the Green Party needs to take those aspects of the agreement on board when its members perhaps consider this treaty during the select committee process. Those outcomes build on existing instruments in those areas with other ASEAN parties so they enhance communication and cooperation on labour and environmental issues. 
The timing of this agreement is particularly important as global economies emerge from the financial crisis. In strategic terms the free-trade agreement with Malaysia strengthens key relationships that we have with a vibrant partner that many of us are very familiar with. It is a further building block towards the goal of securing a free-trade agreement for the entire region. That is a tremendously important goal for the APEC group of nations. It underlies our strategic positioning as a nation within the Asia-Pacific region and provides an incentive for other countries to follow suit. 
I conclude by saying the free-trade agreement is expected to contribute to New Zealand’s performance by promoting the volume and velocity of trade in goods services capital people and knowledge and is intended to be part of a wider framework in due course. It is the Government’s intention to see this bill enacted by 30 June 2010 in order to meet the target date which is very important of 1 August for entry into force of the free-trade agreement. I commend the bill to the House.