O'Connor Damien: Tariff (New Zealand - Thailand Closer Economic Partnership) Bill — First Reading 
O'Connor Damien: Tariff (New Zealand - Thailand Closer Economic Partnership) Bill — First Reading 
[Volume:625;Page:20604] 
Hon DAMIEN O'CONNOR (Associate Minister of Agriculture) 
 on behalf of the 
 Minister for Trade Negotiations 
: I move  
That the Tariff (New Zealand - Thailand Closer Economic Partnership) Bill be now read a first time. 
 I intend to move that the bill be referred to the Foreign Affairs Defence and Trade Committee with an instruction that the committee present its report to the House on or before 3 June 2005. I also intend to move that the committee have the authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House on a Friday in a week in which there has been a sitting of the House and outside the Wellington region on a day the House is sitting despite Standing Orders 191 193(a) and 194(1)(b) and (c). 
This bill not only paves the way for more trade between our two countries but also acts as another building block in our wider quest for an improved trading environment in our region and worldwide. The Tariff (New Zealand - Thailand Closer Economic Partnership) Bill amends New Zealand domestic regulations to make them conform to our rights and obligations arising from the New Zealand - Thailand Closer Economic Partnership Agreement. This legislation will allow the agreement to come into force. 
By way of background I point out that the agreement provides for all tariffs applying to goods of New Zealand or Thai origin traded between the two countries to be either eliminated immediately or phased out over a scheduled period. Most New Zealand imports from Thailand already enter duty-free under New Zealand’s existing tariff policy. The agreement provides for the remaining tariffs to reduce to zero variously on implementation of the agreement on 1 July 2005 or by 1 January 2008 1 January 2010 or 1 January 2015. 
Part 1 of the bill provides for the preferential tariffs conferred by the agreement to be included in the preferential tariff column of the New Zealand tariff. The actual rates of duty as spelt out in the agreement will be added to the tariff by a subsequent Order in Council. 
The agreement also provides for the use of bilateral transitional safeguards by both Thailand and New Zealand. These allow either party to address situations of serious injury to domestic industries caused by increased imports due to tariff reductions or removal under the agreement. If serious injury is found to exist the party concerned may revert to higher tariffs for a certain period. 
Part 2 of the bill provides for the application of such bilateral transitional safeguard measures. The bill does this by creating a new regime under the Tariff Act. This regime establishes the right for a New Zealand industry or company that considers that it is suffering serious injury as a result of a surge in competing imports from Thailand to ask the chief executive of the Ministry of Economic Development to initiate a safeguards investigation. 
I should emphasis however that the Government does not expect the agreement to have an adverse impact on New Zealand producers. The adjustment effects arising from removal of New Zealand tariffs on imports from Thailand under the agreement are expected to be very muted. There are several reasons for this assessment. First some 65 percent of imports from Thailand already enter duty-free. Thailand accounts for only a small proportion of textiles clothing footwear and carpet imports. 
Second the phase-out arrangements for New Zealand’s more sensitive sectors are very gradual. The higher tariffs on clothing footwear carpet and many textile products will be phased out over a 10-year period. For sensitive products with a lower tariff such as whiteware existing tariffs will effectively be maintained at current levels before being removed in 2010. 
Third adjustment assistance has been made available in the context of New Zealand’s unilateral tariff reductions to help the textile clothing and footwear sector build skills and global competitiveness. 
Looking at the other side of the reciprocal tariff removal commitments under the agreement this agreement offers the most far-reaching bilateral market opening for New Zealand since CER. Thailand is a heavily protected market. Tariffs are levied on virtually all imports from New Zealand; many are in the 20 to 40 percent range. Under the agreement Thailand will eliminate tariffs immediately on over half of New Zealand’s current exports and progressively phase out the remainder. Manufactured exports will virtually all enter Thailand duty-free from 2010. 
The agreement should act as a catalyst for generating new forms of collaboration and identifying synergies between Thailand’s dynamic and increasingly high-tech economy and our own. Service sectors will be brought into the agreement through a negotiation mandated to begin within 3 years. The Government will be working actively with businesses to help translate into concrete outcomes the opportunities opened up by the agreement. Following a successful high-level business mission to Thailand last month a series of seminars is to be conducted next week with the aim of ensuring that New Zealand companies have the information they need to take advantage of opportunities under the agreement. 
The arrangements on labour and the environment concluded in parallel with the New Zealand - Thailand Closer Economic Partnership Agreement will establish cooperation programmes that support the sustainable development objectives that both countries share. 
Finally our agreement with Thailand alongside that with Singapore positions us well in the rapidly evolving South-east Asian regional architecture and should serve as a building block in the ASEAN - New Zealand - Australia free-trade agreement negotiations that began in February. The Foreign Affairs Defence and Trade Committee has considered the agreement under the international treaty examination process. Its report to the House expresses majority support for the agreement. 
To conclude the New Zealand - Thailand Closer Economic Partnership Agreement represents a significant economic and strategic opportunity for New Zealand. It enjoys strong support from the business community and others including educational institutions with an interest in strengthening relationships between New Zealand and Thailand. The Government would wish to see the bill enacted by 23 June in order to allow adoption by Order in Council of relevant regulations and subsequent advice to Thailand of the completion of the New Zealand processes for implementing the agreement. This will allow the agreement to enter into force on 1 July 2005. I would expect all Opposition parties to wholeheartedly support this bill and I commend it to the House.