Third Readings — 
Text is incorporated into the Bound Volume 
Third Readings — 
[Sitting date: 24 July 2008. Volume:648;Page:17413. Text is incorporated into the Bound Volume.] 
Third Readings 
Hon ANNETTE KING (Acting Minister of Trade) 
: 
 I move  
That the Tariff Amendment Bill the Customs and Excise Amendment Bill (No 4) the Radiocommunications Amendment Bill (No 5) the Fair Trading Amendment Bill (No 2) and the Electricity Amendment Bill (No 3) be now read a third time. 
 The bills amend New Zealand’s domestic legislation so that the free-trade agreement between the Government of New Zealand and the Government of the People’s Republic of China can come into force on 1 October 2008. Securing this comprehensive free-trade agreement was a major achievement for New Zealand and this Labour-led Government. It took more than 3 years and 15 rounds of negotiations to reach the deal. The agreement liberalises and facilitates trade in goods and services and in investment removes barriers to trade and promotes cooperation in a broad range of economic areas between New Zealand and China our third-largest individual trading partner.  
Initial tariff cuts will take place when the agreement comes into force. This will result in the immediate elimination of tariffs on over $200 million worth of current New Zealand exports to China. Tariffs on 96 percent of our exports to China will be phased out by 2017. The removal of tariffs and other obstacles to trade will give our businesses a competitive head start in the fastest-growing economy in the world. New Zealand exports to China will now total $2 billion a year and will continue to grow. That will create opportunities for a better standard of living and more jobs for New Zealanders. The agreement contains measures to make it easier to do business by improving customs procedures and by enhancing the cooperation between officials in technical areas. It also has rules to counter unfair trade. It aims to reduce barriers to trade and services between the two countries and to provide additional protection for investors. 
The bill enables the agreement to be brought into force. The Tariff Act 1988 will be amended so that tariff cuts can be applied. Amendments to the Customs and Excise Act 1996 will create a system for issuing certificates of origin for goods exported from New Zealand to China to ensure our exports benefits from preferential tariffs. Amendments to the Fair Trading Act 1986 the Electricity Act 1992 and the Radiocommunications Act 1989 will mean that conformity of agreement on electrical and electronic equipment can be put into place. 
New Zealand is the first developed country to seize the opportunity of negotiating and concluding an agreement with China. Being first will give New Zealand for a time a unique competitive advantage. This will better enable us to strengthen existing commercial relationships and to create new ones. New Zealand businesses are already leveraging off the deal.  
As the Foreign Affairs Defence and Trade Committee noted in its report back to the House on the treaties and the bill the agreement is important because it contributes to New Zealand’s strategic trade objectives including the objective of broadening and deepening relationships in Asia. The agreement is also significant in the wider international trade context. It goes towards New Zealand’s goal to strengthen economic integration in the Asia-Pacific region and is being seen internationally as a pointer to enhance cooperation in our region. New opportunities for free-trade agreements are being explored with Korea Japan and India and they have gained some momentum from the success of completing the China free-trade agreement. The Government’s confidence in the agreement is shared by a wide range of New Zealand businesses and industry groups which have publicly welcomed the successful negotiations of the agreement and are looking forward to its enforcement. 
I acknowledge the hard work and skill of the negotiating team led by David Walker of the Ministry of Foreign Affairs and Trade. I acknowledge the role played by the Prime Minister Helen Clark and Minister of Trade Phil Goff in intervening to support the negotiations when required. I thank members of the Opposition for their support with this agreement. The New Zealand - China free-trade agreement has huge economic and strategic significance for New Zealand. The enactment of these bills will allow New Zealand businesses to begin benefiting from tariff cuts and from the trade facilitating measures contained in the agreement from 1 October 2008. I commend these bills to the House. 
TIM GROSER (National) 
: 
 This is the final legislative stage of a process to mark what I think a number of people have rightly called a very historic moment in terms of New Zealand’s chequered trading history and because I think it is appropriate to use this occasion to go back to first principles I want not to dive into the detail of this agreement but just to rehearse the broad argument that underlies this whole initiative. Before doing so I will comment on the fact that although we now accept there is a large measure of consensus in New Zealand politics on international trade issues this agreement marks a remarkable change from when I first became involved in such politics well over a quarter of a century ago. At that time international trade issues were one of the most divisive issues in New Zealand politics and any move to open up New Zealand to import competition raised issues of the greatest sensitivity. For reasons we all understood at the time because New Zealand had developed an industrial model that was highly dependent on very high levels of protection I think it meant that no New Zealand negotiators of the past could likely enter into any international trade agreements with their front foot forward because of the sensitivities of a political nature at home. So we have travelled quite a way; I happen to hold the view that this is the path we will eventually have to take on climate change but we are well removed from that point at this stage. 
But the basic infrastructure of the argument although very important I think is very simple. It is this: at the moment New Zealand’s trajectory in my opinion and the opinion of my party is not sustainable. We are losing—leaching—people. The most worrying statistic that I have in my head when I think of the 80000 people who left the country last year is that 80 percent of them—four out of five—were under the age of 40. And they are moving abroad in their legions. I regret to say that I see still the likelihood of that accelerating until we can actually address the root of the problem because the opportunities for highly skilled and semi-skilled New Zealanders now outstrip those opportunities available to them in our own country. So the key to this is to improve the functioning of the economy; to increase the productivity growth rate which is the key to higher real wages; and to make New Zealand once again a dynamic place so that our young people can see a future for themselves in New Zealand. 
Central to that process is the promotion of a greater export orientation of New Zealand. A trade agreement is simply an agreement about opportunity. We will not intrinsically earn a dollar from the Chinese free-trade agreement unless the opportunities are translated into specific action by individual New Zealand companies and entrepreneurs and backed by all the agencies that the Government has to bring to bear to help New Zealanders take advantage of these opportunities. Nevertheless the agreement is absolutely a central part of that equation and I think that is the reason why we are—I would use the argument—celebrating today the final passage of this bill. 
This agreement is fundamentally important for New Zealand simply because of the scale of the issue; it is about gaining access literally to a quarter of mankind. And as I and others have commented in recent days for a country that has historically had a massive political problem in finding markets for its exports this is absolutely a paradigm shift. It is absolutely a change of major significance for this country and its implications will come through over the next 20 years just as they did over the long term in respect of the other landmark trade agreement that New Zealand has in its own free-trade area with Australia—the CER agreement. 
So that is the broad economic picture. It is not just about agriculture; it is also about the new economy that is emerging in New Zealand. It is very important we do not see here a false dichotomy set up between the traditionally great strengths of New Zealand and the emerging companies that I think so many members are so proud of such as the examples given yesterday by my colleague Mr Tremain of the Bay around the Napier-Hastings area.  
But let me take a couple of examples to illustrate the point and instead of using general arguments I will use some highly specific arguments. I will talk about a leading industry of exported goods—dairy—and then I will take the clothing industry as an example. The dairy industry story I think is well known to members. We are seeing a situation where the average compound rate of growth—the average annual rate of growth—of dairy consumption in China is an astonishing 30 percent. Any number that increases by a compound rate of 30 percent is doubling in less than 3 years obviously. But this is not all about imports because Chinese dairy production is also growing at a stellar rate. I forget the figure since I am speaking here without notes but from memory the expansion in the last 5 years has been equal to the entire New Zealand dairy production. We must never forget this central fact about dairy: although we are a huge player internationally with something over 40 percent of total world trade—and it is astonishing for a country of our size to have 40 percent of world trade in anything—we are still only around 2 to 2.5 percent of world production. So the paradox here is that New Zealand is not very large in world dairy terms in respect of production but it is massive in respect of world trade. 
So this incredible stellar rate of growth of dairy consumption in China is stimulating not only domestic growth but also a very rapid increase in imports of which New Zealand being the leading exporter of dairy products in the world is the principal beneficiary. That is underwriting wealth creation jobs and export income for our future. By the way this does not mean there is any particular reason to believe that the end of adjustment difficulties for the dairy industry has been seen in New Zealand. I think it means—and most people who deeply understand the dairy regime understand this—that we are moving to a higher equilibrium price in world dairy but there will still be New Zealanders in the future who will lose their shirts over it. There will still be marked fluctuations around that higher equilibrium world dairy price and unfortunately since it is immediately capitalised into land values some people will go in at the wrong time with far too high a gearing and still suffer. 
But looking at it from an overall national New Zealand perspective this agreement underwrites an incredibly bright future for New Zealand. The debate that agriculture is a sunset industry is dead in this country. Agriculture will play just as vital a part in New Zealand’s future as it has done in our past and this signal agreement will underwrite that future to a very considerable extent. For those members who think that we have seen the last of dairy expansion I say they should just reflect on this: even given these high growth rates dairy consumption in China is of the order of 12 kilograms per head. Well in Europe it is 250 kilograms per head and in Japan it is around 80 kilograms per head so we will still see a remarkable growth for the future. We are well positioned; we are better positioned than any other country to take this up in terms of both our intrinsic strengths and the competitive edge that we now have into this giant emerging consumer market. Yesterday we talked about the fact that Fonterra has already cashed up on this by announcing a $300 million expansion with Chinese companies to take advantage of the agreement even before it has come into effect. So that is a very positive example. That is my dairy example. 
The other example I will give the House is less well known and it is the Icebreaker example. I had the privilege of being briefed by its managing director Jeremy Moon in Beijing when I went there with the very large delegation for the signing of the agreement. Here we have a company that is in a sector that I believe every New Zealander bar the most optimistic few thought a liberalisation of our import regime would mean the end of—and understandably so because the clothing and textile industry was deeply reliant on the highest levels of protection. In 1980 prior to the signing of the CER agreement essentially its exports were zero and it has made an adjustment that at times has obviously been quite painful for a number of the companies that were positioned in the wrong area of the market. New Zealand was never going to get rich by trying to compete on a pure labour-wage cost basis with countries like China. 
So an adjustment has taken place and now we can see companies emerging out of that adjustment process with an entirely different business model. I recall very clearly the managing director telling me that it had taken him I think from memory 6 years to reach the very modest figure of $1 million in sales and another 5 years to reach $100 million. That is all done by this globalisation model. The design is done here and it is as everyone knows outstanding design. The product is a very expensive high-quality product that uses New Zealand merino wool. The company then uses factories in Shanghai which the managing director described to me as having an atmosphere more akin to that of a university campus. Anyone who read the  
Listener 
 article on its visit to Shanghai will know that this production model is a million miles removed from a sweated labour arrangement. So those are two practical examples and I think that they should give New Zealand a great deal of confidence in our exporting future. 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 As I have done previously I certainly commend the contribution of the previous speaker and not only his work on the free-trade agreement itself but also his contribution to the Foreign Affairs Defence and Trade Committee. As I have done on previous occasions I also acknowledge the contributions of all the members of the select committee. Obviously I particularly want to acknowledge the excellent role of the Hon Phil Goff that of our Prime Minister the Rt Hon Helen Clark and also that of the team of negotiators and advisers some of whom were represented in this Parliament yesterday and last night during the Committee stage of this legislation.  
As the Acting Minister of Trade the Hon Annette King said securing this comprehensive free-trade agreement is indeed a major achievement for our country. It took more than 3 years and 15 rounds of negotiations to reach the deal. As we are aware the agreement liberalises and facilitates trade in goods and services and facilitates investment. It removes barriers to trade and promotes cooperation in a broad range of economic areas between New Zealand and China which is our third-largest individual trading partner. 
I want to quote if I may from the report of the Foreign Affairs Defence and Trade Committee which of course I chair. We said in our report to the Parliament: “We believe that this agreement is a major event in New Zealand’s history and fundamental to the future economic wellbeing of this country. The main values for New Zealand in entering into the FTA and associated instruments are as follows … increased access for New Zealand trade and investment which will contribute to growth jobs and higher living standards … the framework the FTA establishes for resolving trade and investment issues that may arise in the future … the framework established by the Memorandum of Understanding and the Environment Cooperation Agreement for discussing and cooperating on labour and environment issues”. I think that is a particularly important point and I acknowledge the contribution of the Council of Trade Unions other unions and other organisations in terms of that very important specific issue. The report goes on to say the value for New Zealand is also in “the support the treaties give to New Zealand’s objective of broadening and deepening relations in Asia and with China in particular … the support the FTA gives to New Zealand’s wider trade policy interests in strengthening economic integration in the Asia-Pacific and multilaterally …[and] the FTA’s assistance in raising the commercial profile of New Zealand companies in China.” Our report obviously emphasises and illustrates those particular points.  
I do not want to spend much longer on my contribution to this particular reading of the legislation but I just make the point and emphasise yet again that before this free-trade agreement with China was signed our exporters faced extra costs when trying to sell their products and services. They faced tariffs of up to 20 percent making it harder for them to make money and of course to feed that money into our economy. Chinese tariffs on New Zealand products cost exporters almost $120 million a year. On the other hand conversely Chinese exporters faced very few tariffs when they sold their products to New Zealand. The free-trade agreement will help to address that imbalance by reducing and in many cases eliminating tariffs so that New Zealand goods will be able to enter China on a more even playing field.  
I make the point that when it is easy for our Kiwi companies to do business we all benefit. Companies can expand hire more staff develop new products and grow our economy. And of course I make the point that the support for this free-trade agreement has come from a wide cross-section of groups including the Council of Trade Unions the Dairy Companies Association of New Zealand Federated Farmers Air New Zealand Fonterra the Hospitality Standards Institute Ngai Tahu Meat and Wool New Zealand the National Distribution Union Zespri Business New Zealand the Seafood Industry Council and the Wellington Chamber of Commerce.  
Having said that I acknowledge—and I have acknowledged in previous contributions on this issue to this House—there is a counter point of view and I acknowledge it was reflected also in the submissions to the select committee. Hopefully the select committee report has tried to comprehensively acknowledge if you like some of the cross-section of concerns that were raised.  
I quoted from the Prime Minister in my contribution to the debate on this legislation in the Committee of the whole House and I will just repeat that quote in conclusion. I think it is a very apt and appropriate quote which sums up the issue very well: “The agreement sets a high standard. It is a model for how two trading partners disparate in size but complementary in the products and services they offer can take a trading relationship to a new level.” There are certainly challenges. No one doubts that there are challenges in taking that relationship to a new level but I think that with the skill and innovation of our whole country and the major players in our economy across the board there are huge opportunities under this agreement in terms of our relationship with China. I certainly believe that history will record that this is one of the major achievements of the current Government. But I also acknowledge the very broad multiparty support we have in terms of the legislation and the agreement. I congratulate all those who were involved and I hope we will now seize the opportunity that this free-trade agreement gives to our country. 
Dr WAYNE MAPP (National—North Shore) 
: 
 Today we are passing into law legislation relating to the China free-trade agreement. I predict the legislation will be passed into law today by literally an overwhelming majority. There is a very very good reason why this is the case and it is fundamentally that—and I say this in fact to the three smaller parties that are opposing this bill—fair trade is free trade. I know this will come as a bit of a shock to those parties but the reason is simple actually—nations should concentrate on what they do best. New Zealand has a world advantage in agricultural products. Obviously we want to develop our economy but at this point in time and for some years to come that is our fundamental advantage—and I say that to the Maori Party. One has only to work out where our economy grows best to know that it is in agriculture. Indeed for the last 50 years it has been quite remarkable just how agriculture has sustained and retained its share of exports. We gain when other countries lower their export barriers. That could hardly be contradicted by anyone in this House I would have thought. Even those with a modicum of economic understanding and even those who will worry about the position of lower-paid people would see surely the advantage in that. 
Conversely looking at it from the other point of view every New Zealand consumer benefits when the cost of the things that he or she can buy reduces and that will be the case in a wide range of goods particularly clothing and other items. That has been one of the great gains of the reforms of the last two decades. China clearly has a comparative advantage in the production of all sorts of electronic goods clothing and so forth. It is not called “the factory of the world” for no reason; it is called that because it is the best at that production. New Zealand gains from that when we can buy goods from China at the lowest possible price. 
I know the argument put up by other parties is that we have to be careful about this there have to be transition arrangements and so forth. I have to ask those parties whether they really believe that a 10 percent tariff actually saves any jobs at all in New Zealand. Ten percent is the maximum tariff in New Zealand. If a company can survive only on the basis of a 10 percent tariff then I would suggest to members that it is a company that is quickly going to go out of business in any event. But in truth the lesson we are supposed to draw is to concentrate where we have skills and expertise. That is exactly the point about Icebreaker. You know China can produce a billion T-shirts for $1 but it cannot produce high-fashion Italian wear that people are willing to pay thousands of dollars a suit for—or for that matter $1200 for a yellow jacket. That is where areas of expertise are built in countries that go for their comparative advantage. Surely Italy is the object lesson for us in terms of clothing not China’s billion T-shirts? 
I have to say to those parties that are resistant to the idea of free trade that there is a vast body of research—not just opinion; actual proven research—that demonstrates the fundamental importance of the proposition that fair trade is free trade as was very carefully pointed out by my colleague John Hayes yesterday. That is why virtually every country has signed up to the World Trade Organization. That is why the European Union has been so successful. The European Union has gained immensely by the elimination—not just the reduction—of all tariffs between its parties. That is why European nations are clamouring to get in; that is why Turkey is clamouring to get in. I can tell members many nations in the Middle East also ultimately want to join the European Union. They want to do so because they want to join a successful trading area where there are no barriers. And closer to home who could possibly doubt that the New Zealand - Australia free-trade agreement has not been a great success? It has been and much of our contemporary prosperity is built on it. 
This agreement is profoundly important because the third-largest economy in the world has made a strategic decision—not obviously just about New Zealand but about how it sees the trading environment globally—to enter into a free-trade agreement with New Zealand. It is a full and total agreement. It is a strange irony that New Zealand First comes along to say: “Oh well we would quite like to support the agreement. If only it had been faster.” I would have to say to— 
Peter Brown 
: Who said that? 
Dr WAYNE MAPP 
: I say to Mr Brown that his leader said that. That is exactly what he said and the remarkable thing is he might be right—if it was faster it would be better. But in truth 10 years is a short period of time and I think we know that New Zealand First is not supporting the agreement for reasons other than the speed in which it is being implemented. It has its own little constituency which frankly does not understand the proposition put forward by John Hayes yesterday—that fair trade is free trade. Sometimes political parties should take the time and trouble to explain why that is so; not just say that if public opinion or a section of it is resistant to free trade then we should simply go with that opinion. It is always easy to identify the one company that might suffer; it is much harder to identify that every single consumer in New Zealand benefits by the reduced cost of clothing products or whiteware. We only have to look at the growth rates in New Zealand from the 1960s and 1970s and the step change that occurred in the opening up of the economy from the 1980s onwards to see that benefit to consumers. 
I take this point in time to congratulate the Government on this legislation. I have to say that when the history of the 9-year Labour Government from 1999 to 2008 is written up by the historians they will say this agreement was the Government’s most significant economic venture. There were other things they could have done but of the things they did this was the most significant. To that extent both the Government and the officials—who worked exceptionally hard—need to be congratulated on the agreement. That is why National is supporting the legislation. Of course we say to ACT it is the only thing the Government has done that has boosted the economy. There were many other things it could have done as well but it failed to do them. 
As New Zealand looks forward over the next decade I predict it is going to gain huge benefits—far far greater than the $300 million projected by the Ministry of Foreign Affairs and Trade. Within 5 years—as indeed Mr Groser who has a deeper understanding on these issues than anyone in this Parliament has said—China will become the leading export market for New Zealand. One of the reasons—not the only reason—for that will be this agreement. New Zealand’s prosperity across the board will benefit. I say to the smaller parties that no New Zealand company will be disadvantaged by this agreement because a 10 percent tariff does not actually protect industry at all. This is an agreement where fundamentally and absolutely there are gains right across the board for New Zealand and we should be applauding this day when New Zealand has taken a strategic decision and allowed China to pave the way for opening free trade in the Asia-Pacific region. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 New Zealand First has taken a particular interest in this issue although we were not on the Foreign Affairs Defence and Trade Committee that addressed the agreement. We sat here yesterday— 
Hon Harry Duynhoven 
: I raise a point of order Mr Speaker. I am sorry to interrupt the honourable member but there has been a long-held convention in the House that members do not interject from benches directly opposite a member when he or she is speaking. I think Mr Hide is being rather impolite to Mr Brown. He should let him get on with his speech without barracking him. 
Rodney Hide 
: I am afraid that my colleague the Hon Harry Duynhoven is quite wrong. Members are entitled to interject as long as the interjections are rare reasonable and witty. I think we would agree that I covered all three requirements. I am certainly allowed to interject from the seat that I have been allocated. Unlike Mr Harry Duynhoven I do not sit way up the back of the Chamber and have to move forward to interject. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Thank you Mr Hide. I refer Mr Hide to Speaker’s ruling 59/3. When the cross benches are in close proximity to each other it is not in order to interject because it muffles the microphone of the other speaker. Mr Duynhoven is correct. 
Rodney Hide 
: I raise a point of order Mr Speaker. Would it be acceptable then if I moved some distance away from Mr Peter Brown and heckled rare—[ 
Interruption 
]  
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! 
Rodney Hide 
: Now a member is interjecting on a point of order. I make my point. You are trying to shut me down for doing it by the rules and you let this guy just because you depend on his vote interject on a point of order. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Mr Hide you know better than that. You nearly got a yellow card; I know you have a yellow jacket. The member cannot interject from that seat because he is too close to Mr Brown. If he wants to move somewhere else out of the cross benches then I will permit it provided that the interjections are rare reasonable and relevant. The member can consider himself lucky. 
John Hayes 
: I raise a point of order Mr Speaker. I listened very carefully to your explanation as to why the interjection was not appropriate. The ruling is that we do not interject from the cross benches because of their close proximity which causes muffling of the microphones. I would like respectfully to point out that the system has been completely revised in the last couple of weeks—the whole microphone system has changed—so the basis of that ruling seems to be removed. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I advise the member that although the system might look impressive it is not yet operating. 
Hon Member 
: I thought they were heaters. 
PETER BROWN 
: And that member thinks he will be fit to govern this country? Goodness me! I do not mind interjections from Mr Hide in the least provided they stick to the rules that he outlined: rare reasonable and witty. His interjections thus far have been disqualified on all three counts. They were not rare reasonable or witty.  
New Zealand First sat here for some hours yesterday listening totally to Opposition members thinking that they would put forward a worthwhile case for this free-trade agreement to be accepted. But we heard rather naive and contradictory statements. We heard from Mr Groser who is meant to be an expert on these things. At one point he told us it took years to negotiate; the Minister told us it took 3 years and 15 rounds. On his very next call Mr Groser said that the Chinese knocked on New Zealand’s door and said “Would you like to sell your goods in the largest market in the world?”. Those were pretty much the exact words he used. Are those the utterances of a top-notch negotiator? Or are they the utterances of a rather confused backbench MP? That is putting it as politely as I can.  
Mr Groser told us about harmonising electrical equipment noting that the standards are different in China. He said that when one harmonises such equipment usually one nation adopts the standards of another. The implication was that the Chinese from a country with a population of 1.3 billion would change their electrical standards to those of New Zealand. That is arrant nonsense. We can at this point in time get the Chinese to manufacture to our standards any electrical equipment we would like. They would do it willingly for any piece of equipment. In fact I suggest that if our manufacturers wanted to move offshore and into China employing Chinese labour to manufacture equipment for us and for anywhere else that would be allowed.  
One of the concerns New Zealand First has is the working conditions of the Chinese people who manufacture these goods—the humanitarian concerns if you like. I heard Mr Groser touch on it yesterday but he did not go into any depth. Many people in China work for very very low wages—exceedingly low wages. 
John Hayes 
: So what? 
PETER BROWN 
: Mr Hayes says “So what?”. They work long hours. They start working at a young age and work into old age. They have very poor working conditions and little or no commitment from their employers. Some employers might be a little more committed to their staff but in many cases there is little or no commitment from the Chinese employer in China. And we want to sign an agreement with people who allow that sort of thing in their country? We would not allow it here yet we are prepared to sign a free-trade agreement and say “Bring it in. We will remove the tariffs.” As Wayne Mapp has just outlined there are minimal tariffs on Chinese imports into this country. We want to remove that and say “Flood it in here; we will buy whatever we can.” on the basis of the one single reason I have heard from the National Party people which is that it will make it cheaper for us to buy Chinese goods. 
Wayne Mapp said that this sort of agreement is similar to the European Union type of agreement. But the European Union started off as the European Economic Community. It might have escaped Mr Mapp’s attention but those countries largely—there are some exceptions now—share the same land mass. When they formed the European Economic Community they realised that they could take away all the border controls between countries that are situated on the same land mass and let the road traffic and freight move freely from one country to another. Some of those countries have ever-changing borders. Hungary is one country that has had an ever-changing border for hundreds of years. If one looks at the border of Hungary one sees that it has changed on a very regular basis. Sometimes the country increases in size and sometimes it shrinks.  
There was good reason for the European Economic Community to remove tariffs and to free up trade. It is sound common sense. We would not dream—maybe some members on that side of the House would—of dividing this country in half and saying that we will have border controls between this half of the country and the other half. The European Union is a much bigger area than New Zealand. It made plenty of sense to take away all the border controls and put the border controls around the outside of the European Economic Community. Of course the countries have now become the European Union and they share a common currency. Is that where Mr Mapp wants to go with this free-trade agreement?  
I hope the National members are correct and that this agreement will lead to more jobs more exports and whatever. I hope they are right in their assertion but I doubt it. I think that we have settled for second best and this is backed up by some of the comments in the 
 Exporter 
 magazine. Let me read the opening comments. 
John Hayes 
: You did it yesterday. Don’t do it again. 
PETER BROWN 
: Nothing seems to sink in to Mr Hayes. The member has a one-track mind. He did not even know that the speakers above were not working.  
The article states: “For some exporters New Zealand’s free trade agreement (FTA) with China is a decisive triumph laying a clear pipeline for future revenues. For other China old hands the FTA’s future benefits remain illusory considering the sheer cultural divide and business complexity China poses. Anecdotal evidence suggests Kiwi business owners are not rushing to the Middle Kingdom. Those already steeped in the Chinese market say the FTA with China should not be seen as a panacea for Kiwi exporters’ aspirations to crack the Chinese market.” There are also some comments by individual exporters. One said: “I might be old-fashioned but I want some of our country left for our children/grandchildren. If they are going to eventually earn 50 cents an hour then I guess I could also go to China and make my fortune now and stuff the rest. But NO.” That exporter has the interests of this country and these people in sight.  
We have concerns about the segment in this legislation that allows Chinese people to come here on a working visa for a year. There is no reciprocal arrangement at all. They can come here on a working visa with no reciprocal arrangement—we do not agree with that. Further it is a means of providing temporary entry for Chinese business visitors installers and servicers for up to 3 months in a calendar year. 
And so it goes on. None of it is reciprocal. Mr Groser in his opening address yesterday said not to worry that this will open the door for the New Zealand winegrower. He said we will sell more wine there. I have to tell the National members that the Chinese do not drink grape wine.  
Hon Member. 
: Absolute nonsense! 
PETER BROWN 
: They do not—not in any quantities. They will sell it to their tourists and they will buy it for that reason alone. This legislation will not solve the winegrower’s problem.  
New Zealand First opposes this legislation but we do hope it is finally successful. 
RODNEY HIDE (Leader—ACT) 
: 
 The ACT party rises to support this legislation because we favour free trade. We favour free trade in goods we favour free trade in services and we favour free trade in that most valuable commodity of all—a person’s labour and ideas. Therefore we favour this legislation.  
The ACT party is totally perplexed by Mr Peter Brown’s speech. On the one hand the Minister of Foreign Affairs says that New Zealand First opposes this legislation this free-trade deal with China because it is not quick enough—it will take 10 years. Then Mr Brown the deputy leader of New Zealand First comes to the House and says that New Zealand First opposes this legislation full stop because it is free trade. Well where does New Zealand First stand on this? Maybe its members need to check with some of their funders about what Winston Peters is saying and square it with what Peter Brown is saying because it is very very clear that New Zealand First MPs do not know who their funders are they do not know what has happened to the money they do not know what the interests are— 
Dail Jones 
: I raise a point of order Mr Speaker. There was an inference of corruption in that comment—a comment that that member makes about me in the House because his courage matches the colour of his jacket. I suggest that he make it outside the House and feel the consequences. What he has said is totally out of order and when you ask him to get back to the debate I suggest that you also ask him to withdraw and apologise. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I thank Mr Jones. There was an instance there. I ask the member to come back to the debate and I ask the member to be careful. I ask Mr Jones to be careful too because he has challenged a man’s courage. So it has gone both ways. Would the member please come to order and debate the issue. 
RODNEY HIDE 
: I am happy to debate the issue. I am not worried about Mr Dail Jones questioning my courage. I would be happy if he had the courage to ask Mr Peters a few basic questions— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! 
RODNEY HIDE 
:—like what happened to the $100000. That is what we would ask if we were talking about courage. 
Dail Jones 
: I raise a point of order Mr Speaker. You are now being challenged. You asked Mr Hide to get back to the point. You have the right to terminate the member’s speech at this very moment because he is challenging your ruling. I ask you to exercise your authority. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I thank the member. I will take that into consideration. The member has been warned once and the next time I will have no option. 
RODNEY HIDE 
: Thank you Mr Assistant Speaker. My issue with this legislation is New Zealand First’s position on it and that was what I was actually debating before I was so rudely and unforgivably challenged intellectually by Mr Dail Jones. My point was that there is an inconsistency between what the New Zealand First leader is saying and what Peter Brown is saying. That was my point.  
There is another irony in all of this in respect of New Zealand First: it is voting against this legislation. If we think about it for a second we see that it is odd having a Minister of Foreign Affairs of New Zealand who is opposed to trade. Imagine being a Minister of Foreign Affairs and opposing trade! Well Mr Peters got around this by saying that he did not oppose trade but that he opposed the legislation because it did not go fast enough. But here we have Mr Brown coming into the House and saying that he opposes this legislation because he opposes trade with China. Well which is it? Why is New Zealand First voting against this legislation?  
I wish to draw another irony to members’ attention and I will do so in a most careful way—in a very very careful way—because I would not want to stray and I hope that I will be picked up if I do. The ACT party agrees with free trade in everything bar one thing: political favours. We do not believe that political favours should be up for grabs. We think that men and women should be able to sell their ideas their labour their goods and their services. But no politicians no Governments and no Ministers should be able to sell their policies a Government favour or a perk. That is where the trade stops.  
The way we deal with that is that yes we have free trade and we will watch for any whiff of a problem with trade of that nature like an overseas person saying that he or she will do some trade with New Zealand and that he or she will put $100000 in a lawyer’s account. What did he put it in? It was not an account and it was not a trust; he just gave $100000 to square a bill. That is trade. That is absolutely on the money. It was trade from an overseas person with New Zealand because New Zealand was $100000 better off. 
What the overseas billionaire was buying was legal services. I agree that he should be able to do that. The problem was with the nature of the legal services being bought. Those legal services were being bought to try to dislodge an MP in this House and to overturn the will of the people of Tauranga. That is what the trade of legal fees being paid from overseas was for for which the trade internationally is perfectly legal. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. I listened with interest to the two previous points of order and your two previous responses and most notably to your final response that if it happened again you would have no option but to terminate the speech. I believe the time for that has arrived. 
RODNEY HIDE 
: Speaking to the point of order I say that it might be the Labour Government’s view that the time to terminate my speech in this House has come. But one would hope that a Minister in trying to terminate an Opposition member’s speech would point to the Standing Order that I have breached that states that I have to stop talking in this House because I am actually elected to speak on this legislation. 
Hon David Cunliffe 
: I thought that the member was speaking to the point of order rather than continuing with his speech. The particular point I was referring to Mr Assistant Speaker was the fact that you had previously warned the member not to stray from the substance of the legislation and in particular not to transfer into matters to do with party funding issues. In your last ruling on that matter Mr Assistant Speaker you said that if it happened again you would invoke the Standing Order that the member referred to earlier. Quite clearly the member has gone back to the same material. Previously you have ruled that that was inappropriate and I seek your advice as to what action you wish to take. 
RODNEY HIDE 
: Speaking to the point of order I say that I was not discussing party funding. If I were discussing party funding then I would be out of order. But we have no lesser authority than Mr Peters and the Prime Minister Helen Clark saying that the $100000 trade that the overseas billionaire paid to— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I point the member to Speaker’s ruling 25/5: “It is not only the right but the duty of a member who can show that there has been anything in the nature of bribery or corruption on the part of other members to bring that matter before the House in the proper constitutional way but a member must not make veiled suggestions during the course of debate.” The member has been warned and his speech is terminated. 
RODNEY HIDE (Leader—ACT) 
: 
 I raise a point of order Mr Speaker. Are you saying that the one speech the ACT party has on the China free-trade agreement legislation is terminated because this Labour Government does not like any references to be made to bribery or corruption whether or not it is within the rules? I never made a reference to bribery or corruption; it was you who did so Mr Assistant Speaker. But the speech gets terminated. Is that the message you are giving in this Parliament to the people of New Zealand—that anyone who makes any reference to Winston Peters and $100000 going to a lawyer will have his or her speech terminated? That is all I did. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: No I also— 
Dail Jones 
: Speaking to— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: No Mr Jones I want— 
Dail Jones 
: Briefly. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Briefly Mr Jones. 
DAIL JONES (NZ First) 
: 
 Mr Assistant Speaker no one would have had any problem if the member had been speaking to the China - New Zealand free-trade agreement legislation. Clearly he was not. That is why ultimately you had to make the decision on the third warning. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I would also like to point out to the member Speakers’ ruling 44/4: “Members must confine their remarks to the bill before the House and cannot make irrelevant matters relevant by suggesting they ought to be included in the bill.” 
Dr WAYNE MAPP (National—North Shore) 
: 
 I raise a point of order Mr Speaker. Frankly I think your ruling has been a bit harsh in this instance. Although Mr Hide’s comments transgressed a number of things he did connect those comments to the free-trade agreement. I note also that the comments were not objected to by the New Zealand First Party and that it took a Minister of the Government to object. I think that the Minister of the Government should think very carefully when he seeks to have speeches by Opposition members terminated essentially at his pleasure. I ask you Mr Assistant Speaker to review your ruling. I appreciate that it would obviously be in the nature of a final warning at this point but I think the penalty was excessive in the circumstances. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I thank you very much for your consideration Dr Mapp. I had considered the matter carefully. Mr Hide had been warned a number of times. To me—and I have made the decision—there were veiled suggestions during the course of the debate that there was something other than what there was. So I am going to stick with my decision; the member’s speech is terminated. 
RODNEY HIDE (Leader—ACT) 
: 
 I raise a point of order Mr Speaker. I consider this to be very serious in our Parliament Mr Assistant Speaker—very serious. I would like you to tell the House what I said that caused you to terminate my speech—the exact words—because the Minister who complained never said or implied what those words were. I do not believe that I have breached any Standing Order in what I was saying and you Mr Assistant Speaker cannot point to the words of the Standing Order that I breached. 
DAIL JONES (NZ First) 
: 
 Mr Assistant Speaker it is well known on the part of those who have actually sat in your Chair—and there was a time when I did as well—that the member is now trifling with the Chair. At this point it would be quite customary for the member to be named and if he persisted to be expelled from the House. That is the proper way of dealing with disorder in this House; otherwise the matter becomes totally unsatisfactory and everything falls out of order. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I have made my decision based on Speaker’s ruling 25/5. I will read it again for the benefit of members: “It is not only the right but the duty of a member who can show that there has been anything in the nature of bribery or corruption on the part of other members to bring that matter before the House in the proper constitutional way”—the member is perfectly entitled to do that in the proper constitutional way—“but a member must not make veiled suggestions during the course of debate.” As far as I am concerned veiled suggestions were made during the course of the debate. I have been very tolerant on this. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 This trade agreement between New Zealand and China fails to protect the sovereignty of the democratically elected Government of New Zealand and it places significant restrictions on the future ability of the New Zealand Government and Parliament to pass regulations to protect the people and environment of Aotearoa New Zealand.  
There are many reasons why the New Zealand Government should not have signed this preferential trade agreement with China not least of which is the fact that New Zealand signed this agreement while China was involved in the murderous oppression of the people of Tibet. It is also of grave concern that this agreement has no binding labour or environmental standards. The lower wages and standards in China will effectively be a non-tariff barrier to fair trade giving corporations that pollute or pay inhumane wages a competitive advantage over those that do not.  
However here I wish to focus on the investment provisions and expose the risks to our people our environment and our sovereignty. The investment chapter of the agreement chapter 11 taken together with the annex defining expropriation annex 13 effectively forms a bilateral investment treaty between our two countries. This bilateral investment treaty inhibits the ability of the two Governments to regulate the businesses of foreign investors without compensating those investors for the cost of those regulations.  
The investment treaty means that a Chinese corporation operating in New Zealand can sue the New Zealand Government if the Government changes regulations resulting in a loss of value for that corporation. And if there is a dispute between a Chinese investor and the New Zealand Government as to whether the Government should compensate the investor and to what extent then the dispute is to be resolved in an international forum established under the auspices of the World Bank or the United Nations.  
The effect of this investment treaty will be to place a chill over the ability or willingness of the New Zealand Government and Parliament to regulate the business activities of Chinese corporations operating in New Zealand for fear of facing binding claims for compensation in international tribunals. This will make it much harder for our Government to carry out its duty to protect and advance the well-being of the people and environment of Aotearoa New Zealand.  
Bilateral investment treaties have received an increasing amount of attention in the international law literature. This is for the simple reason that more and more bilateral investment treaties are being signed and more and more cases are ending up in international courts or tribunals of one description or another. Corporations are suing Governments in international judicial hearings on a regular basis. In Canada the University of Victoria’s Faculty of Law has an investment treaty arbitration website that provides access to all publicly available investment treaty awards and lists over 200 cases since 1996. 
It was long standard fare for treaties to protect corporations from expropriation; from the direct acquisition of a company by a Government without compensation. What is new is that now corporations are successfully suing Governments for what they call “indirect expropriation”. Indirect expropriation is where a Government changes laws or regulations or acts in some way that impacts on a corporation’s activities resulting in loss of profits and hence value for that corporation. In these cases the owner’s title to an asset is protected but the value of that asset declines.  
The New Zealand - China preferential trade deal contains two components that together constitute a bilateral investment treaty between New Zealand and China. Those are chapter 11 and annex 13. The core of chapter 11 is article 145 which I imagine almost none of the members of this House have read except me. It says that the New Zealand Government cannot expropriate Chinese investors unless the expropriation is fully compensated and vice versa. If there are any disputes between a Chinese investor and the New Zealand Government the investor can seek redress at the International Centre for Settlement of Investment Disputes or through the United Nations Commission on International Trade Law.  
Central to such disputes is the definition of “expropriation”. This definition has been of critical importance to bilateral investment disputes overseas. There have been several cases where arbitrators have deemed that measures taken to protect the environment have expropriated investors and that is extremely and directly applicable to this treaty. For example in the case of  
Metalclad v Mexico 
 an international trade tribunal ruled that Mexico had violated the North American free-trade agreement in preventing Metalclad Corporation from opening a hazardous waste treatment and disposal site in Mexico. The tribunal found that local government opposition to the project amounted to expropriation of the company’s profits.  
Public protest against Metalclad’s approval for the waste treatment led to local authorities investigating the potential environmental impacts of the treatment site. An environmental impact assessment revealed that the site was on top of an ecologically sensitive underground alluvial stream. As a result the governor refused to allow Metalclad to operate the facility and later declared it part of an ecological zone.  
Metalclad claimed that this action effectively expropriated its future expected profits and although it was awarded less than the $90 million in damages it sought its claim was successful. There are more cases like this in international tribunals and it is clear that measures taken by States to protect human health or the environment can be found by international arbitrators to be expropriation resulting in large financial penalties. The key question is whether State action to regulate is considered a form of indirect expropriation. The definition of expropriation is addressed in annex 13 which I cannot imagine many other people here have read. This is really at the core of the agreement and what it might mean for the ability of the New Zealand Government to regulate without compensation.  
I will assess annex 13 from the perspective of its relationship to the ability of a State to regulate when such regulation results in the partial loss of value to a Chinese investor’s asset. Annex 13 has five paragraphs. Paragraph 1 states: “An action or a series of actions by a Party cannot constitute an expropriation unless . . . it interferes with a property right”. This is a simple test to meet. Most State actions would interfere with property investment when the State is trying to regulate and it costs something. Paragraph 2(b) states that indirect expropriation occurs “when a state takes an investor’s property in a manner equivalent to direct expropriation in that it deprives the investor in substance of the use of the investor’s property”. The kind of State action where State regulation costs money to a corporation protecting the environment is exactly the kind that would be caught by paragraph 2.  
Paragraph 3 states: “In order to constitute indirect expropriation the state’s deprivation of the investor’s property must be: (a) either severe or for an indefinite period; and (b) disproportionate to the public purpose.” Clearly if the State was trying to regulate to protect the environment it would be permanent and the question of whether it would be disproportionate would be decided by an international panel. Whether the Government’s judgment was allowed would be determined by an international disputes panel. Paragraph 4 states that if one targets a particular class of investor one is very likely to get caught up in expropriating. That is an easy provision to meet if for example one targets a bunch of agricultural producers or dairy farmers and tries to clean them up.  
Paragraph 5 states—and this is probably what the Government is hoping will protect it—“such measures taken in the exercise of a state’s regulatory powers as may be reasonably justified in the protection of the public welfare including public health safety and the environment shall not constitute indirect expropriation.” Paragraph 5 gives the appearance of protecting State action. It says that State actions to protect public welfare do not constitute indirect expropriation. But there is an important exemption and an important qualifier. The exemption is that it does not cover the kinds of actions where any particular industry or class of investors is targeted. The qualifier is the term “reasonably justified”. Even if the State action does not meet the terms of paragraph 4 in that it does not target a class of investors it must still be reasonably justified and an international panel will decide whether the actions of the Government are reasonably justified. There is not even any guidance.  
Once the exemption and the qualifier in paragraph 5 are included the protection to State action looks weak. This is why Professor Matthew Porterfield from Georgetown University an international expert in trade law said that in our agreement with China we are actually exposing ourselves to greater risk of legal action than the US Government faces under its investment clauses. So a close reading of chapter 11 and annex 13 makes it clear that any kind of New Zealand Government regulatory action that negatively affects the value of Chinese investors’ assets is wide open to action being taken against the New Zealand Government by the Chinese investors.  
Where the New Zealand Government action particularly affects a class of investors then the Government’s only defence is to show that its actions were proportionate to the public purpose intended. It will be up to an international panel to decide whether the action was proportionate regardless of the view of the people or Government of New Zealand. Where a State action does not affect a particular class of investors or is not in breach of a contract then the Government has a better opportunity to win its case but only if the tribunal agrees that the Government’s action was reasonably justified to protect public welfare. Thus the New Zealand Government will have two lines of defence but both of them involve convincing a non-elected international panel that the actions of the Government were proportionate or reasonable to achieve the public purpose desired. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe Mr Assistant Speaker tena tatou katoa e te Whare. I tera wiki i whakanuitia a Rererangi Aotearoa e te Minita Tapoi a Damien O’Connor te whakatuwheratanga o te rere-kotahi mai i a Beijing ki Tamaki-makau-rau. E mea ana te Minita “he marea hokohoko tino nui ki a Haina mo ake tonu”. E toru ra ki muri he tirohanga rere ke mo tenei “marea hokohoko tino nui ki Haina mo ake tonu” na te Tatauranga o Aotearoa. I te marama o Pipiri ko heke nga manuhiri no Haina i te 24 pai heneti i te marama o Pipiri i tera tau e 1600 nga tangata. E rua marama atu i te hainatanga o te kawenata hokohoko noa kua kite tatou kahore pea nga huamoni e rite ana ki nga tumanako.  
Ka matakite te pukapuka a  
Tu Mai 
 a nga tau tekau e tu mai nei e 61 miriona nga turuhi no Haina ka haere ki whenua ke. Ko te marea hokohoko whai rawa o Haina tenei e whakaarohia ana e te Minita Tapoi. Engari ko te patai nui ki a tatou me pehea te marea hokohoko nei e patari ai ki tenei whenua? He hinaki ranei e mau ai tatou? Ko nga kaimahi utu-iti hei maunu ma nga pakihi o Aotearoa e raruraru ana i te kainga. Kia penei rawa a Aotearoa nei? Hei kura pae mo Haina?  
Kua tohutohu mai te Ropu Rongomau me te Tika o te Ao ko te utu ki a tatou ko nga turanga mahi rua tekau mano ka ngaro ko te nuinga he mahi wheketere i te mutunga o nga taake hoko mai. E maumahara tonu ana tatou ki nga tau waru tekau he parekura te whakawateatanga kia hokohoko noa i pa kino nei ki nga kaimahi ara nga kaimahi Maori i nga wheketere. E maumahara tonu ana tatou ki te Multilateral Agreement on Investment me tona tahuhu kia taetae noa mai nga kamupene nunui o te ao ki te hoko haere i wa tatou rawa. A e mohio ano hoki tatou he aitua ki nga kaimahi o konei i te wa e whiwhi nui ana nga kamupene nui o Haina me nga taniwha penei i a Fonterra.  
Ko nga hua e kore e eke ki te utu engari ehara te utu i te moni anake. I te wa e ngaro ana te waihanga taputapu ki a Haina ka heke to tatou mana i wetahi atu ahuatanga o tenei pirangi ki to tatou hoa hokohoko hou. I te timatanga o te whakatata haere ki Beijing e titiro ana te ao ki a Haina kia kitea mena e hiahia ana te kawanatanga ki te whakatika i ana takahanga mana tangata penei i te whakapai i te paru ki te one. Engari aue taukuri e e ai ki nga korero a Amnesty International ka whakawhiu tonu atu te kawanatanga i nga kaiwawao mana tangata. Kino atu i tera kei te mauhere tonu nga kaiwawao ratou e tohu ana i nga hara a te kawanatanga kia tika katoa ai i mua o te timatanga o te tauwhainga Olympia. E maumahara ana au ki tetahi kauhau a te Pirimia i te Akoranga Rongomau o te Whare Wananga o Tamaki-makau-rau ka penei ia: “Kei te tino maharahara au ina whakawaireka te kawanatanga Nahinara ki a ratou o Ahia e kore e taea ta ratou whakamaru mana tangata te kite 
.” 
Kia marama ai tatou na te tino kino te takahi mana tangata o Haina ka tuhi atu a Amnesty International i tetahi reta i runga i nga aue a te tini mano huri noa te ao e karanga ana ki a Haina kia whakatikangia nga mana tangata kua roa ke e tamia ana.  
Tera ka mate ano te matauranga tuku iho a nga tupuna i nga mahi whakawaireka a te kawanatanga. Kua tohu mai tera pukenga pakihi a Aroha Mead ka totohu nga toi Maori i te waipuke mai o nga taputapu noa. Nana ano te whakatupato kei waimeha te tohu mana o Toi Iho i te nui o nga taputapu tinihanga e hokona ana.  
I te wa o te komiti tirohanga ka penei tonu nga karanga a te Ropu Tapoi Maori o Aotearoa a Toi Maori Aotearoa o Nga Aho Whakaari ratou ko kakahu Kia Kaha ko Huia Kaita e tautoko ana. Ehara enei i te ihu hupe. He umanga ta pukapuka a Huia kua whiwhi tohu otira nana ano to matou mana o Aotearoa i whakapumau na te whakamatau na te whiriwhiri na te whakaputa i taua mana motuhake ki te ao. Kei a Kia Kaha te tikanga o nga kakahu mo to tatou toa hauporo a Cambo mo nga kakahu hoki mo o tatou kapa ki nga tauwhainga o te ao otira kua hokona atu wa ratou kakahu ki Poihakena ki Amerika ki Uropi hoki. 
Ko Nga Aho Whakaari te ropu o nga kaimahi Maori whakaata nga kaiwhakatu whakaari nga ringa tohu nga kaimahi hangarau nga kaituhi hoki puta noa te ao. Tena i te hui tahi nga ropu nei ki te tiaki i te rangatiratanga me mataara te ao me ki to tatou ao Maori. I mea atu ratou ki te komiti me whakau nga ture i te tikanga kia tautoko te Karauna i te rangatiratanga Maori o nga taonga katoa tae atu ki te matauranga. E whakaae ana matou ki te take i kokiritia e te Uru Kahikatea me tupu te ohanga whanui kia ora ai nga pakihi Maori.  
Engari e kore matou e whakaae ki te whakaaro kuware o te komiti ma te whai rawa haere o Haina ma te whakawhanaunga haere ki te ao whanui e kaha ake ai ta ratou arai i nga mana tangata. E kore matou e whakapono ma te kawenata hokohoko pokanoa me to tatou whenua iti nei ka kitea e Haina te maramatanga kia huri ai ratou ki te ara tika. 
Hei whakakapinga korero; i a tatou e whakatata ana ki te waru o nga ra o Here-turi-koka e mohio ana tatou ki te whakaaro nga rangatira nunui o te ao tera me huri tuara ratou ki te ra whakatuwheratanga o te tauwhainga Olympia hei tohu whakahe i te takahanga o Haina i nga mana tangata i te mana motuhake o Tibet. Ka pera ano to tatou whakahe? Ka huri ranei tatou ki te whakawaireka i a Hori Puihi i a ia e whakawaireka ana ki a Haina?  
E kore matou o te Pati Maori e piupiu i te haki whakapono ki te Kawenata Hokohoko Pokanoa. Tuturu e tautoko ana matou i te ohanga Maori e kite ana matou i nga painga ki nga iwi e puta mai ana i te hokohoko kai moana mahi tapoi ki a Haina. Engari me pehea matou e huri ke i te tamitanga taikaha o nga reo motuhake o Tibet he takahanga tera i te tangata whenua? E mataara ana matou ki nga tara koi i roto i te hokohoko pokanoa pai ke atu ki a matou te hokohoko tika. E rapu ana matou i nga huarahi tiaki i te taiao nga mana tangata me nga tikanga mahi. I te tonga o te ra he taumaha rawa te utu o nga turanga mahi nga utu mahi nga matauranga mahi te mana motuhake e ngaro katoa ai. E kore matou e tautoko i te Ture mo te kawenata hokohoko pokanoa me Haina.  
[An interpretation in English was given to the House.] 
[ 
Greetings to you Mr Assistant Speaker and to us all the House. Last week tourism Minister Damien O’Connor was heaping praises upon Air New Zealand as it launched the first non-stop service between Auckland and Beijing. “This very important long-term Chinese market” was how the Minister put it. Three days later Statistics New Zealand gave another view about this very important long-term Chinese market. Short-term visitor arrivals from China in June 2008 were a massive 24 percent down—some 1600 people fewer than recorded in June 2007.  
Just 2 months after the free-trade agreement had been signed it appears the economic benefits of the agreement may not be as secure as first envisaged.  
Tu Mai magazine estimated that in the next 10 years there will be a possible 61 million Chinese outbound tourists heading off to distant places. That is the lucrative Chinese market the tourism Minister is thinking about. But the big question that hangs over all of our heads is: what will it take to lure this market to our shores? Or will it all be a one-way street? The lure of labour at cheap rates will be an irresistible pull factor for many New Zealand businesses that are struggling to hold it together at home. Is that the type of Aotearoa we want? Just another link in the “Made in China” brand?  
Global Peace and Justice Auckland has pointed out that the costs at home may extend up to more than 20000 jobs being lost—mostly in manufacturing—as tariffs are phased out and removed. We all remember the reforms of the 1980s; the savage impact that trade liberalisation had for workers particularly Maori in manufacturing jobs. We remember the Multilateral Agreement on Investment which aimed to allow multibillion-dollar corporates open season on assets in Aotearoa. And we know that New Zealand workers will become collateral damage while Chinese companies and international corporations such as Fonterra will score big time. 
The stated return is simply not worth the risk—and the costs are not only in monetary terms. While our manufacturing needs will be outsourced to China our international reputation will inevitably be tarnished by the other impacts of our relationship with our new trading partner. As the build-up to Beijing starts cranking up the international community is looking to China to see evidence of any political will to clean up its human rights violations as comprehensively as it has got rid of the algae on its beaches. But sadly the reports from Amnesty International indicate that far from it the official persecution of human rights activists continues. Worse yet human rights defenders who are speaking out about violations are being detained imprisoned as part of the pre-Olympics clean-up. I am reminded of a speech the Prime Minister once made to the Auckland University Centre for Peace Studies in which she said: “I am very concerned that the National Government has chosen a path of ingratiation with those in Asia whose human rights record is poor.” 
Just to make it quite clear: the human rights record in the People’s Republic of China is so poor that Amnesty International has sent a letter inspired by what it describes as hundreds of thousands of voices from around the world echoing the call to address the longstanding human rights concerns.  
Another likely victim of this political path of ingratiation is apparent in the inherent risks to intellectual and cultural heritage. Maori business senior lecturer Aroha Mead has warned about the likely threat that Maori art will become swamped by mass production. She has also suggested that the Toi Iho Maori Made trademark which protects quality Maori arts and crafts may well be devalued as the market becomes flooded with cheap gaudy products.  
During the select committee process these same concerns came through loud and clear from the New Zealand Maori Tourism Society Toi Maori Aotearoa and Nga Aho Whakaari supported by Kia Kaha Clothing and Huia Publishing. These are not lightweights by any means.  
Huia Publishing 
 is not only an award-winning publisher but its works have made a significant contribution our identity as a nation—defining creating and expressing our distinctive edge on the world stage. Kia Kaha not only has the clothing contract for our top golfer Cambo and previous Commonwealth Games uniforms but boasts wholesale and retail customers in Australia the UK US and Europe.  
Nga Aho Whakaari 
 is the national representative body for Maori working in film video and television in New Zealand so includes internationally acclaimed actors directors producers technicians and writers across its reach. So when these groups get together out of concern for the protection of rangatiratanga the world needs to sit up and listen—well at least our world anyway. They told the select committee that the legislation needs to reflect the Crown’s active duty to protect Maori authority and control over treasures and intellectual property. Although we acknowledge the points made by the Federation of Maori Authorities that economic growth is essential for Maori businesses to succeed we cannot turn a blind eye to the risks and responsibilities we hold to argue for ethical investment.  
We simply cannot accept the rather naive excuse put up by the select committee that growing prosperity and engagement with the outside world is likely to be linked with better human rights in China. It simply does not wash with us that the free-trade agreement that China has signed up to with our little country will make the mighty superpower see the light and change its ways.  
Finally as we count down to 8 August we know that international leaders from across the globe are considering whether they might boycott the Olympic opening ceremony as a powerful criticism over China’s human rights record and security crackdown in Tibet. Will we also be prepared to show our concern or will we instead be sidling up to President Bush as he in turn sidles up to China?  
We in the Maori Party will not be waving the flag of faith for the free-trade agreement. Of course we want every opportunity to support Maori economic advancement and we recognise the opportunities that people see in China particularly in the area of seafood exports and tourism. But how can we with any conscience overlook the brutal repression of dissent in Tibet which represents a callous disregard for the rights of indigenous peoples? We remain concerned about the fish-hooks in free trade rather than the justice of fair trade. We seek strategies that are about protection of the environment human rights and worker rights. And in the long run we calculate the costs of lost employment lost wages lost expertise and lost independence as a cost too big to bear. We do not support the New Zealand - China free-trade agreement legislation 
.] 
JOHN HAYES (National—Wairarapa) 
: 
 I need to make it very clear to the previous contributor to this debate Hone Harawira that there is no fairer trade than free trade. There is no fairer trade than free trade and for any politician in this House to turn his or her back on that statement of fact is to undermine the interests of the people he or she purports to represent. I say to the earlier speaker from the Green Party Dr Norman that in China we are operating in a communist country—a country with a record of appropriating possessions belonging to members of its community—and the member expects very naively that New Zealand investors will go to that country with no form of protection at all and will put their capital at risk. I say to the member he should get real and find an electorate that will put him into Parliament to represent it because he is letting down every one of my constituents with everything he has said.  
I say to the Maori Party that many Maori constituents are running businesses in my Wairarapa electorate—dairy businesses fishing businesses sheep and beef businesses—and they are doing very well. Those Maori-owned businesses will benefit unreservedly from this agreement and it astonishes me that we have people who are prepared to get up in this House and let their supporters down. That is what has been going on here this afternoon.  
This is the most important legislation that will be passed in this Parliament in its life. In fact it is probably the most significant legislation in the trade and export area to be passed in this country for 25 years since we signed up to the Closer Economic Relations agreement with Australia.  
We have acknowledged the work of Dr David Walker and that of officials from the Ministry of Foreign Affairs and 20 or 30 other Government agencies. I commend their work. But I would also like to reflect for a second or two on the contribution that underpins this agreement made by people like Ted Woodfield—arguably the father of trade policy work in this country—and also made by the first New Zealand head of the World Trade Organization Mike Moore who for a long period in this Parliament advocated for free trade. It was the work of those people built on by successive generations of politicians and officials that has led us to this point today.  
The benefits from this legislation will flow on longer than the lives of anyone currently sitting in this Chamber and living in our country because we are writing legislation that will provide benefits ad infinitum—for as far as we can see into the future. I would ask the Green Party and the Maori Party to please get real. Our wealth our well-being our ability to buy Herceptin our ability to pay our schools a decent amount of money to educate our children and our ability to keep school bus services going in the northern part of my electorate depend on our ability to generate income. If this country does not export anything it will have no income. Exporting is how our country survives. When we think about this legislation I want us to think about it as a mechanism to improve the ability of those people who produce things and sell them—and there are a few people around here who have never produced anything in their lives—to do their business better. I have seen difficult regimes make trade very difficult for New Zealand exporters; I have seen that firsthand when I have lived in countries like India Bahrain Saudi Arabia and Iran. The National Party supports this legislation for the very reason that it will make work much easier for the people in our community who are out doing the hard graft of raising our national income.  
I want to thank the submitters who came to the Foreign Affairs Defence and Trade Committee regardless of whichever perspective they came with—in a democracy they are entitled to their view.  
However it remains incomprehensible to me that people in this Parliament—particularly the New Zealand First Party members—can oppose this legislation because they have not provided one piece of evidence to substantiate their opposition to it. Mr Brown talked about Chinese people not liking wine. I can only suggest to him that he has never been to a vendor of wine in this country and asked for a bottle of Great Wall wine. It is available in most Chinese restaurants in my electorate. Has Mr Brown heard of Tsingtao beer? Yes the Chinese drink beer. I tell Mr Brown that some years ago longer ago than I prefer to remember I was working in Singapore in our high commission there. A Chinese contact in the national drug bureau when we were chasing Mr Asia said there were four things I needed to understand about Chinese communities: wherever there was a Chinese population there would be gambling drugs prostitution and brandy. 
Hon Member 
: Also hard work. 
JOHN HAYES 
: Yes also hard work. 
Hon Member 
: Does that apply to Europeans too? 
JOHN HAYES 
: No no that man was looking at life from the point of view of criminal activity in communities. Now brandy is based on what? The grape. Mr Brown is absolutely off track; Chinese people drink alcohol. 
A couple of days ago I mentioned that an economist called Ricardo had developed a thesis and tried to educate people like the New Zealand First Party members that free trade trade without barriers was the best way to allocate factors of production efficiently across the economy. It is also long established that individual countries are best to do what they do best. That means that in our country we are a food producer we have ideas we have technology like Bill Gallagher’s electric fences and we need to export them.  
What does this bill mean for my electorate? First of all for the dairy farmers—and I am thinking of Don Stephenson up in Te Rehunga or Graeme Tulloch in Masterton or even the dairy support people like Bob Tosswill in Greytown—it will increase their on-farm income really significantly. They will pay more taxes. They will be able to go into the communities and buy goods and services and support our businesses. That is not happening for our sheep and beef farmers some of whom have often lost $300 every day they have worked in the last 12 months. National is supporting this bill because our farm businesses and our community businesses will be significantly improved by it. Only one company in my electorate Norsewear has gone offshore but that did not happen because of this agreement. It happened because the shareholding in Norsewear was taken over by a bunch of Wellingtonians who sold the brand and the buyer has gone to China to manufacture clothing items and bring them back here into our community. There is no other negative that I have been able to find in my electorate.  
I would now like to refer for a minute or two to the comments from the Green Party on investment. We have in place an agreement with China called the Investment Promotion and Protection Agreement but it applies only to New Zealand nationals not to New Zealand residents. Many of the people who work in our country are residents not nationals and those people are often working in businesses. The point of the investment part of the free-trade agreement is that it now brings the benefits of an investment agreement to all New Zealanders who are living here. Under the provisions of this agreement as well no other country that may sign a trade agreement with China will end up with better conditions than we have. Members of the Green Party may not think that is important but New Zealand investors have $333 million at stake in China—at least they did as at 31 March 2006—and China has $1.66 billion invested in this country.  
I tell members that the National Party unreservedly supports this bill and any electorate MP put into this House by his or her people should do the same because electorate MPs would know that this step will serve the strongest interest of the people who bring them here. 
A party vote was called for on the question  
That the Tariff Amendment Bill the Customs and Excise Amendment Bill (No 4) the Radiocommunications Amendment Bill (No 5) the Fair Trading Amendment Bill (No 2) and the Electricity Amendment Bill (No 3) be now read a third time.  
Ayes 104 
New Zealand Labour 49; New Zealand National 48; ACT New Zealand 2; United Future 2; Progressive 1; Independents: Copeland Field. 
Noes 17 
New Zealand First 7; Green Party 6; Maori Party 4. 
Bills read a third time.