Hayes John: Tariff (Malaysia Free Trade Agreement) Amendment Bill — Second Reading 
Text is incorporated into the Bound Volume 
Hayes John: Tariff (Malaysia Free Trade Agreement) Amendment Bill — Second Reading 
[Sitting date: 22 June 2010. Volume:664;Page:12107. Text is incorporated into the Bound Volume.] 
JOHN HAYES (National—Wairarapa) 
: 
 I am pleased to have the opportunity to speak in the second reading debate on the Tariff (Malaysia Free Trade Agreement) Amendment Bill. I will begin by thanking colleagues on the Foreign Affairs Defence and Trade Committee for the good work they do in a very collegial way. I refer particularly to Maryan Street Pete Hodgson and Keith Locke and to my National colleagues some of whom are in the House tonight. I also congratulate our Ministers Phil Goff and Tim Groser on leading the work that has been done and while I am in a thank-you mode I also thank Vangelis Vitalis from the Ministry of Foreign Affairs and Trade who was the lead negotiator and who did an excellent job. 
When I listened to the last speaker Maryan Street and my Green colleague speaking on the previous China free-trade agreement I think the one thing that really demonstrates above all else that these agreements are worthwhile is the fact that in the year ended April 2010—that is 2 or 3 months ago—the value of our export trade with China has increased by $860 million over that 12-month period. That is about the value of our total exports to Indonesia. So the free-trade agreement with China gave us effectively another market the size of Indonesia in 12 months. 
We will not get that with this Malaysian agreement but that is because we are operating on a different scale. Malaysia has a slightly bigger land area than we do. We have similarities as we were both British colonies. Malaysia has a population of about 28 million whereas our population of about 4.2 million is probably smaller than that of greater Kuala Lumpur. Eighty-seven percent of the people in New Zealand live in urban communities and the drift from rural areas to urban areas is growing at a rate of about 1 percent a year. In Malaysia about 70 percent of people live in towns and that rate of drift is about 3 percent a year. Important for the business community is the fact that both of us have legal systems based on English common law. There is quite a big difference in GDP per capita. New Zealand is sitting on around $28000 per capita growing at around 2 percent; Malaysia is sitting on $15400 per capita growing at about 4.6 percent. 
There is another very interesting statistic which is in relation to Internet users. Of Malaysia’s population of 26 million people 17 million are using the Internet. We have a rather smaller proportion of our population using the Internet—3 million people are using it. So the Malaysians are ranked for Internet usage at 22nd in the world; we are at 58th. 
I think that this legislation puts both economies in much more balance but still we have one-sixth of Malaysia’s population. When we considered this bill at the Foreign Affairs Defence and Trade Committee we came to the conclusion collectively that one of the reasons for signing this agreement was that all of us in this Parliament wanted to see a boosting of innovation and improved export access to world markets. It is those two things that will give us a step change in our own economic performance and everybody will benefit from that. This agreement with Malaysia is a very important part of National’s focus on free trade and improvement in access for our exporters to world markets. It was a priority included in the Prime Minister’s statement to Parliament in February this year. Only by lifting economic performance can we create jobs boost incomes improve living standards and provide world-class public services that our New Zealand families need. 
We heard about our trade figures from the previous speaker and I reiterate that over the past 4 years the quantity of New Zealand goods exported to Malaysia has grown by more than 50 percent making Malaysia New Zealand’s tenth-largest trading partner. I think that those things will bode well for the future but the real driver will hit the pockets of kiwifruit farmers. At the moment we are paying a 15 percent tariff on every kiwifruit exported into Malaysia; in 2012 that trade will become duty-free. Based on the most recent trade figures our kiwifruit exports to Malaysia have grown by 173 percent since 2007. As my colleague Maryan Street said meat wool dairy—excluding liquid milk—fish and forestry products are bound in so Malaysia cannot reapply tariffs on New Zealand’s agricultural exports; that is very important to my electorate. Liquid milk has a significant improvement on in-quota duties which will be eliminated and in-quota volumes which will increase by up to 5 percent a year. 
The Malaysian free-trade agreement includes an agreement to establish mechanisms that allow for the recognition of the equivalency of each other’s qualifications. That will improve New Zealand’s professional service suppliers’ ability to deliver services in Malaysia—that is people like architects and insurance companies. New Zealand provides access duty-free for about 72 percent of imports from Malaysia and under the free-trade agreement this will increase to 90.8 percent this year graduating to 100 percent by 2016. 
Only one area of the agreement I felt could have been more rigorously negotiated and that was the area of company ownership. Any Malaysian company is allowed to buy 100 percent of a New Zealand company—and Opus construction would be a very good example of that—but the Malaysians have given us the capacity to buy only 70 percent of a Malaysian company. I think that as we look into the future and at other free-trade agreements we could think about a greater principle of reciprocity and that was something acknowledged by the committee. 
With those few words I tell members that it is very pleasing to bring this legislation back to the House without any amendment; I commend it to the House for passing. Thank you.