Hayes John: New Zealand-China Free Trade Agreement Bill — Second Reading 
Hayes John: New Zealand-China Free Trade Agreement Bill — Second Reading 
[Volume:648;Page:17278] 
JOHN HAYES (National—Wairarapa) 
: 
 I say to my colleague in the Maori Party that there is no fairer trade than free trade simply because nobody has their fingers in the pie or the till and I would like the member to think about that as we go through the rest of this debate. 
This legislation is the most important legislation introduced during the life of this Parliament over the last 3 years. I think it is one of the most important bilateral and commercial agreements ever negotiated by a New Zealand Government—certainly since the Closer Economic Relations agreement with Australia was signed 25 years ago. 
I would like to go back to comments made in this House by my colleague Mr Woolerton of the New Zealand First Party who challenged the National Party and other parties in this House to explain why this agreement was so important and to outline the benefits that it would bring to the people of this country—be they Maori be they Pakeha or be they any other ethnicity. Well let me say this. In the work completed by the joint study group within the Government that focused on the returns that would come from this agreement it was measured that over a 20-year period from about 2007 to 2027 New Zealand exports to China were expected to grow between $180 million to $280 million a year. Chinese exports to New Zealand were also expected to grow by an annual average of between $40 million to $70 million a year over that same period. If we think of that in percentage terms this equates to New Zealand exports to China increasing by between 20 percent and 39 percent above the baseline and Chinese exports to New Zealand increasing by between 5 percent and 11 percent. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
JOHN HAYES 
: For the benefit of listeners I say that before our tea break I responded to my colleague Hone Harawira who said that the Maori Party supported fair trade not free trade. I said to him that there was no fairer trade than free trade. 
Metiria Turei 
: But that’s rubbish John and you know it. 
JOHN HAYES 
: For the benefit of the Maori Party and the member of the Green Party who is squawking from the sidelines I say that I think they both need a crash course in economics. The point to understand about a free market I say to the Green Party the Maori Party and also New Zealand First is that buyer and seller can opt out of a transaction. There is no compulsion. A transaction will not go ahead in a free market unless the thing someone is buying is worth more to that person than the asking price. So in a free market no one is forcing a transaction. That means that a free market improves efficiency because the transaction makes both parties better off. 
Doug Woolerton from New Zealand First challenged the House just prior to the tea break to prove that Fonterra and the dairy farmers would be better off with this agreement. For New Zealand First’s benefit I rattled into my papers during the tea break. I will quote from the Fonterra submission to our select committee and I will table it at the end of this speech. Essentially it stated: “Within weeks of the signature of the agreement we have already seen a concrete and commercially very valuable example of these benefits. Since it was announced that tariffs on nutritional milk powders … will be eliminated by 2012 and despite strong competition from other countries Fonterra has been able to secure an agreement to supply these products to a large multinational customer directly from New Zealand. We expect this business to generate revenue in excess of $300m over the next four years. These value-added dairy products will be manufactured in NZ factories using NZ milk capital labour and technology. Without the FTA with China lower priced product from New Zealand would almost certainly have had to have been processed offshore in Asia.” However I have digressed. 
The National Party supports this legislation because it knows that New Zealand interests are global interests. If we are to improve the prosperity of our communities if we are to stop the outward flow reported in this morning’s  
Dominion Post 
 which was recorded as being 80000 people turning their backs on this country and its Government each year—its overbearing Government I suspect—we must look outward with clear priorities. New Zealand must secure access to the markets of growing economies. Trade access for producers and manufacturers will do most to improve wealth for our people. To maximise our effectiveness as a country with limited resources but global interests we must continually and carefully prioritise our foreign affairs effort. 
Asia is a very vitally important part of our region. It is crucial to our longer-run security and prosperity. As China and India continue to grow we can expect geopolitical weight to shift towards Asia. China’s economic growth for three decades has been exceptional. Millions of people have been lifted out of poverty because of pragmatic reforms made by the Chinese Government. This free-trade agreement which this House will pass this week will deepen the relationship between our countries and improve market access for businesses trading in both directions. As China grows it will need resources to fuel its economy. This drive for resources—timber food and particularly energy—will underpin China’s growing presence in our region and it highlights why this relationship is of such vital importance to New Zealand. 
The free-trade agreement with China will give us access on reasonable terms but this is no guarantee of success. We still need to get our tax levels competitive we need our infrastructure to be up to scratch and we need our education system—including Makoura College in Masterton—delivering acceptable results if we are to turn trade access into economic access. We also have to be pursuing other trade agreements particularly with Japan with Korea and with America. I think that we have to put huge effort into doing this because freeing up international trade over the last 40 years since we signed the CER agreement has been a key driver for New Zealand’s economic growth. 
Global negotiations for the World Trade Organization (WTO) round are at a crucial stage but I do not think that they will deliver commercially meaningful outcomes. But trade—trade liberalisation particularly—involves more than the WTO. The last 20 years has seen a plethora of free-trade agreements signed between countries on a bilateral basis and also by groups of countries. Their very nature is that they are exclusive. I have said previously in this House that the greatest risk to our future is that we are excluded from bilateral free-trade agreements signed up between other countries—for example America and Australia’s bilateral agreement. If we are excluded then we are in a very difficult position; we are cut right out. So our trade policy effort must be designed to mitigate that risk. 
At a bilateral level the major gap in our free-trade policy architecture as I have said is a lack of free-trade agreements with our major partners: the US Japan and Korea. We have to pursue those with all the vigour resources political bureaucracy and research institutes—including universities and businesses—that we can muster. It will be a long and daunting task which can be achieved only by a coordinated “New Zealand Inc.” approach—a cooperative partnership—which is why we are working in a cross-party manner tonight on this bill. We are doing that because our future absolutely depends on it. Viewed against this background it is obvious why the National Party actively and unambiguously supports the ratification of the China - New Zealand free-trade agreement. 
I will make just one other point in commenting again on earlier speakers who have said that there is a lot of opposition to this trade agreement. I can tell members that I have gone around the Wairarapa electorate and I have knocked on doors. I can tell the House that there is huge support for this agreement particularly from farmers but also from people like John Whitehead of Whitehead Productions in Masterton— 
Ron Mark 
: Ha ha! 
JOHN HAYES 
: —which manufacturers a lot of stuff for the military I say to Mr Mark. It makes a lot of clothing for the military. That industry has adjusted because it has already been exposed to tariff reductions. The only industries that I could find that will potentially suffer from this agreement are those like the Stihl dealers which have their very good products having to compete with the $10 gardening-type equipment that comes from China. Thank you very much Mr Assistant Speaker for giving me the opportunity to support this bill.