Graham Kennedy: Tariff (Malaysia Free Trade Agreement) Amendment Bill — Second Reading In Committee Third Reading 
Graham Kennedy: Tariff (Malaysia Free Trade Agreement) Amendment Bill — Second Reading In Committee Third Reading 
[Volume:664;Page:12131] 
Dr KENNEDY GRAHAM (Green) 
: 
 This debate on the Tariff (Malaysia Free Trade Agreement) Amendment Bill is proving to be arguably the most interesting free-trade debate that we have had in my time here. We have had debates on the free-trade agreements with the ASEAN countries and yesterday Hong Kong although the debates on the Hong Kong and Malaysian agreements have merged into one debate in a way. We are joined in a genuine dialogue and I thank my colleague Tim Macindoe and others even Chris Tremain for responding to my comments and for responding to members on the Labour benches as well. I may have a bit more to say about that to continue the dialogue in the third reading. This is not the place to do that here. 
I would now like to address the Minister in the chair and to take the opportunity to pay my personal respect to Tim Groser for his skill and devotion to the task. I hope he understands that the critique that the Green Party advances on trade policy in no way reflects any diminution of the high regard that we have for him or for that matter for his colleagues. I take the opportunity to ask the Minister a number of factual questions on which I may perhaps stand to benefit from his answers. They are advanced in a positive spirit. There are five or six of them and I hope I do not get too confused in my own thoughts. 
Question No. 1 has to do with the description in the national interest analysis of the benefits of the free-trade agreement to New Zealand. It is divided into basically two dimensions: one is the static benefit and the other is the second-order net benefit. It was explained to us in the Foreign Affairs Defence and Trade Committee and this is in the committee’s report that the term “static benefits” means the initial shock—the immediate competitive shock—to an economy through trade liberalisation. My question is whether as we are told that “The removal of a tariff encourages exporters to improve their competitiveness by allocating their resources more efficiently and increasing their market share.” we can have evidence of the greater efficient allocation of resources. I ask whether we can have evidence in a specific sense obviously not in terms of the Malaysian agreement because we are discussing that but let us say in terms of the China agreement and perhaps the ASEAN agreement so that we can understand the effect in practical terms. I am often criticised and I enjoy the criticism for being excessively theoretical. What we want is a practical example of the static benefits. 
The second-order benefits we are told include innovation and technology. The definition I was given in the select committee stated that second-order benefits meant the dynamic productive gains over the longer term through investment competition and adjustments of scale. The committee’s report states that the agreement’s second-order benefits “include innovation and technology transfer which lead to increased exports and access to new markets. These effects should lead to an improvement in New Zealand’s economic performance including the creation of new jobs.” My question relates to the fact that those second-order benefits through innovation and technology presumably apply to Malaysia as well as New Zealand. I think it is an example of the inherent bias and slant that we bring to bear on our so-called objective analysis in the national interest analysis when we trumpet the benefits to New Zealand exporters through all this but remain silent or mumble when it comes to New Zealand imports and the effect of an agreement on our own domestic manufacturing sector. So my question is initially theoretical but I assure members it will quickly become practical. If the second-order benefits were equally distributed then presumably there is no net economic benefit to New Zealand. Is that correct or is it wrong? 
I come to my second question. I note the lament in the so-called disadvantages section of the national interest analysis that the agreement’s principal disadvantage is that it did not go far enough. There is the 0.5 percent that Mr Robertson was lamenting although he was gracious broad-minded and globally-minded enough to issue a caveat and say we should be flexible and not 100 percent absolutist about this. I could phrase that differently. We are told there that “New Zealand would have preferred an even more ambitious goods market access outcome.” notably so that it could export—wait for this—alcohol tobacco and firearms. 
Well New Zealand wine is very nice and probably not very many of us are teetotallers. However I advance the suggestion that it is cultural insensitivity of the highest degree to lament in our national interest analysis that another country with another religion and a different culture from ours and with which we have cordial relationships and a degree of mutual understanding is to be criticised by implication for not importing New Zealand firearms and tobacco. Never mind the alcohol although that is an issue! What are we doing here? It is hubris and it has slid into our national interest analysis in the name of so-called objectivity. These analyses are not objective documents; they are creeds. What manner of cultural insensitivity drives us to insist that those people accept those exports from us? Have we no shame in this respect? I am sorry; I meant that to be a factual question so I will look to the Minister to answer it in a very low-key deadpan rational way. 
I turn to question No. 3. The national interest analysis talks about the negative adjustment effects and it goes as far as to identify a few sensitive sectors: “margarine clothing footwear carpets … steel plasterboard and most wooden furniture.” Yet when I asked in the select committee whether any study had been done in New Zealand by the Government or by academia about the effects on those sectors of previous agreements the answer was no New Zealand had not done any studies. New Zealand we are told looks to the study done by the Asian Development Bank about the effects of free trade on Europe and the United States. My suggestion is to ask whether we are 100 percent convinced given the different scale of those economies from that of New Zealand’s economy that that study applies ipso facto to our economy or might we just stretch our 4.2 million population capacity to undertake a study of our own? If we have not done such a study—and I am told we have not—then we should do so. That is another question to the Minister: should we take that on? 
I will now ask question No. 4. We are constantly told that the Green Party can start morris dancing again on the grounds that because there are environmental protocols in the agreements we can be happy and go home. I have a question for the Minister to answer factually. I have asked about this and the answer as far as I can understand it is that there have been no meetings yet in relation to any free-trade agreement under the environmental protocols. I will be happy to stand corrected on that but could I please have details of any meetings held under the environmental protocols of any free-trade agreement: details of when and where the parties have met and a transcript of the meetings. 
Finally question No. 5 derives from the earlier comments: has a review of the effects of free-trade agreements on New Zealand’s domestic manufacturers ever been done? If not should we take that on in this country? Never mind the Asian Development Bank—there should be a New Zealand Government study or a commissioned academic study of the effect on New Zealand’s companies. Which companies have suffered economically? Which domestic manufacturers in this country have suffered economically in terms of both revenue and employment—jobs lost within their own companies? If we do not have the courage and the integrity to take on that kind of study then we should. Thank you.