Hayes John: Trade (Safeguard Measures) Bill — First Reading 
Hayes John: Trade (Safeguard Measures) Bill — First Reading 
[Volume:652;Page:1870] 
JOHN HAYES (National—Wairarapa) 
: 
 That was a very helpful speech from our colleague Lianne Dalziel the previous Minister of Commerce whom I know understands this legislation backwards. I would like to pick up on her comment that some people in this House and out in the community are opposed to free trade. It is worth reflecting on that comment because over the last few weeks in our local papers we have seen the Swazi Apparel industry in Levin calling for protection because of the threat it faces if its contract to supply clothing to the New Zealand Defence Force is shifted to China. The same situation applies in my electorate in respect of Whitehead Productions which supplied equipment for our military. 
I would like to look back about 300 years to Europe to a port called Bruges. This city is located on the Zwijn estuary. It was a real entrepôt. People became very wealthy because the port of Bruges was connected to the rest of the world. Over time the Zwijn estuary silted up and the entrepôt moved down the coast to a place called Antwerp which is located on the Schelde River. Antwerp is still connected to the rest of the world because that river is still running and when one goes there now one sees the signs of the great economic power that was Antwerp. Its wealth built long ago is still very very visible today. Antwerp is still the diamond capital of the world and its mighty port operates 24 hours a day 7 days a week. 
I bring to this House a message from that example—that is if we want to be rich it pays to stay connected and to forge strong links with other countries of the world. My colleague Tim Groser is not here today because he is out doing that. He has already signed a free-trade agreement with Thailand. He is undertaking a precursor study to a free-trade agreement with Korea. He has signed us up to an ASEAN regional trade agreement. He is actively engaged in keeping New Zealand locked into the global economy. 
If people want to do nothing and make no progress as some parties in this House would like then we should let our rivers silt up and our economy wither. That would be the outcome. If we think about our situation here in New Zealand we find that the most visible sign of our linkages with the rest of the world is the array of products we find from all sorts of places available in our shops. 
A while back an economist whose name was Ricardo developed a theory about comparative advantage and the importance of every country doing what it did best. If we go back to the example of Levin we hear that Chinese wages are so low that we cannot compete with them. Therefore it is argued that to protect our industry and the 30 workers in Masterton or the 50 workers in Levin we should impose taxes or even ban shirts and other clothes from being brought in from China. My feeling about that goes like this. In 1936 there was another economist called Lerner. His theorem tells us which he empirically proved that if we put a tax on an import then effectively we impose an identical tax on an export. So if we take his theory around the issue of bringing in manufactured clothing from China or even Fiji in order to protect industry in New Zealand we would be putting an equivalent tax on jobs in for example the dairy industry or the meat industry. 
We must as a country minimise taxes at our border. We must run as open an economy as we can. Sadly for workers in developing countries very few of them compete with our workers just on the issue of price because they are lower paid. They are also generally much lower in productivity. We have to increase productivity in this country if we are to lift our collective standard of living. There is a very close relationship between low productivity and low wages. We have signed a free-trade agreement with China; the economies of both countries will be better off. 
I think that we also need to acknowledge that free trade is not good for everybody. There are plenty of examples of that in New Zealand. My colleague Roger Douglas from the ACT Party will be only too well aware of the strife that occurred when we opened up our market to imported cars tyres clothing and many other things back in the mid-1980s. Those changes hurt a lot of people but is New Zealand today worse off as a result of that? Of course it is not. So there is a solution in a civilised and progressive society which is not to restrict trade. 
However what we also need to do is to not ignore the plight of people who are put out of work by low-cost imports. We need to allow progress and to move forward while at the same time helping to support and retrain those who are hurt in this process. We cannot be callous. When someone loses his or her job it is a personal tragedy. But in a healthy economy jobs are lost all the time just as new jobs are created all the time. That is why this bill is so important. 
The Trade (Safeguard Measures) Bill will allow us to repeal the Temporary Safeguard Authorities Act 1987 which embodies New Zealand’s current safeguards regime and to replace it with a new set of rules consistent with the World Trade Organization (WTO) rules. It will promote efficient transparent and investigative decision-making processes. I think that this bill is very very important to all the people of New Zealand. It will carry a lot of benefits and I am very glad that it is coming to the Foreign Affairs Defence and Trade Committee where my colleagues and I will have pleasure in processing it through the committee. 
The bill’s purpose is in particular to allow New Zealand to apply safeguard measures at the border in accordance with the WTO rules adopted in Marrakech back in April 1994. The bill states that such measures are intended to provide temporary protection to a domestic industry from serious injury caused by increased imports. Clearly the free-trade agreement between New Zealand and China or New Zealand and ASEAN will see new exporters in those countries able to send their produce to our market. We are dealing with the reality that some of those goods may affect some of our domestic industries. The bill will help to facilitate the adjustment by New Zealand domestic industries to increased competition from increased imports. As I have said two clear examples of this are the Swazi Apparel plant in Levin and Whitehead Productions in my own electorate. 
The bill as drafted provides that public servants will be able to investigate such things as whether increased imports are causing serious injury or pose a threat of serious injury; whether increased imports were due to unforeseen developments that we did not understand when the free-trade agreement was being signed; and whether a safeguard measurement is necessary to prevent or remedy serious injury. It will also facilitate adjustment by the New Zealand domestic industry to increased competition. It will investigate whether there is a particular public interest and it will consider for example things like the effectiveness of a safeguard measure.