Smith Lockwood: Tariff (New Zealand - Thailand Closer Economic Partnership) Bill — Second Reading Instruction to Committee In Committee Third Reading 
Smith Lockwood: Tariff (New Zealand - Thailand Closer Economic Partnership) Bill — Second Reading Instruction to Committee In Committee Third Reading 
[Volume:626;Page:21383] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 That was the Minister for Trade Negotiations who has just announced one of the most wimpish actions I have ever heard of as an election sop to apple growers in this country. After years of discussions with the Australians over access for apples that Minister has said—wow—that the Labour Government will have more discussions at the World Trade Organization. The Minister knows that those sorts of things never resolve intractable disputes like this and he should explain to the House why he is not taking dispute resolution action—something with a bit of guts in it—for our apple exporters. 
I come back to the bill. This is the third trade agreement that this country is passing legislation to implement. The first one was CER with Australia which was negotiated by a National Government. It remains—despite the fact that it was negotiated in 1982 more than 20 years ago—one of the world’s highest-quality trade agreements. The second one was the free-trade agreement—or closer economic partnership as this Government calls them—with Singapore. That was largely negotiated as well by the last National Government. In fact I signed the heads of agreement on that one prior to the election in 1999. That is also a very high-quality trade agreement. 
This is the first trade agreement New Zealand seeks to implement that has been negotiated by a Labour Government. It is a low-quality agreement. It is the first one negotiated by any Labour Government and it is a poor-quality agreement. We will support it because it is better than nothing. We made it clear in the debate on the first reading that we will support it because it is better than not having an agreement but it is a poor-quality agreement. Of this country’s GDP 68 percent comprises services businesses and this agreement does nothing to gain access for our services. This agreement does nothing to gain 68 percent of our economy—service industry providers—access to the Thai economy. All it does is say that in 3 years’ time a services negotiation will be initiated. That is not good enough. 
The second problem we have with the agreement is that despite the fact that the Government says its policy is not to have laws that give more favourable treatment to Maori the agreement has in it a reservation allowing it to provide “more favourable treatment to Maori” and National opposes that. I am not allowed to use the word “hypocrisy” but I do not know how a Government can claim a policy of not having more favourable treatment for Maori and then in an agreement like this have the exact words “more favourable treatment to Maori”. 
Our third concern is that under this legislation tariffs here in New Zealand will not be phased out in total for Thai imports into the country until 2015. The reason why that is a problem is that the Minister for Trade Negotiations the Hon Jim Sutton who is meant to be one of the leading trade Ministers in APEC has brought into this House legislation that in its effect will breach New Zealand’s commitments to APEC. The APEC Bogor goals that New Zealand has been signed up to for years require us to remove all impediments to free trade by 2010. That is what we signed up to. Labour has never officially resiled from that. If the member for Otaki—who is about to lose his seat because National has a far better candidate than the little feller the fifth-former from Otaki Darren Hughes—thinks Labour has officially resiled from the Bogor goals of APEC he should tell us when that was so that we know that the Government has done so. If the Government has not resiled from the Bogor goals why does this agreement extend beyond those goals? Why does it make a mockery of New Zealand’s commitment to APEC? That is the third reason why we consider this to be such a low-quality agreement. 
Specifically at the select committee—incidentally how long did the select committee have to consider this bill? 
Dail Jones 
: 13 working-days. 
Dr the Hon LOCKWOOD SMITH 
: The select committee had 13 working-days to consider the bill. One meeting was available and half an hour was set aside for the third trade agreement New Zealand has ever entered into. According to my notes it was on 2 June that the select committee very briefly looked at this legislation. It is too important for such brief examination. 
What National questioned extensively was Part 2. Part 2 puts into New Zealand law for the first time transitional safeguard measures in a free-trade agreement. The Minister for Trade Negotiations has already acknowledged that in his second reading debate contribution. It is a serious move for New Zealand for the first time to put into our law transitional safeguard measures. Those measures by their very nature are complex international trade law measures. I will come back to that. The bit that I wanted to make sure National clarified at the select committee was that some concerns were being expressed by people who are reasonably knowledgable about international trade issues as to whether the measures in this legislation were totally consistent with our obligations under the General Agreement on Tariffs and Trade particularly article 24 of that agreement. Clause 8 of article 24 caused the most concern to observers of New Zealand’s trade measures. But the officials at the select committee of whom a number are present in the House right now gave the committee an unequivocal assurance that the specific provisions in Part 2 of the bill that implement the transitional safeguard measures are totally consistent with the requirements of GATT particularly article 24. National members accepted the advice of officials but we make it very clear that we do have some lingering concerns and we are accepting that advice only because the officials were so unequivocal that the provisions were consistent with GATT. 
Let me come back to the fundamental problem with safeguard provisions. Clause 7 inserts new sections 15A to 15H into the principal Act. New section 15B states: “(1) The chief executive may undertake a transitional safeguard investigation to ascertain whether goods that have been subject to tariff reduction or removal after entry into force of the free trade agreement—(a) are being imported in increased quantities …”—and I thought trade agreements were meant to result in increased quantities of items being imported and exported—“and (b) are causing or threatening to cause serious injury”. Members of the House can understand why this is complex law. How does one establish whether something that is being imported in increased quantities is threatening to cause injury to an industry? 
New Zealand has been on the receiving end of punishment from this kind of safeguard provision. Members will have short memories if they do not remember the US lamb tariffs. The US argued that increased export of New Zealand lamb to the United States was injuring or threatening to injure its industry and it imposed tariffs on us. It is complex law. When it is used against New Zealand it can be very damaging. This House should think seriously about the provisions in Part 2. The worst feature is that Thailand reserves the right to impose transitional safeguard measures against our agricultural exports to Thailand. If this agreement is worth anything they should increase under this agreement and therefore we automatically risk safeguard measures being taken against us. 
I think the House should look very carefully at Part 2. During the Committee stage National will examine it in some detail because I can just see all the actions and investigations being taken to implement safeguard measures to the disadvantage of trade between our two countries.