Groser Tim: New Zealand-China Free Trade Agreement Bill — Second Reading 
Groser Tim: New Zealand-China Free Trade Agreement Bill — Second Reading 
[Volume:648;Page:17265] 
TIM GROSER (National) 
: 
 The National Party strongly supports the New Zealand-China Free Trade Agreement Bill. As members of the Foreign Affairs Defence and Trade Committee my colleagues and I listened very carefully to the submitters during the select committee process. There is an understandable tendency on any of these trade issues in a numerical sense for a majority of submitters to have concerns about these agreements. Often these concerns are based on longstanding objections to trade agreements per se or on a view of the political relationship—and I will try to come to that presently. But the major thrust of the submissions from major New Zealand institutions that took the time and trouble to make submissions was overwhelmingly supportive of this agreement and very much consistent with the views of the two major parties. I want to use my brief time here to focus on what I think is the reason for that. It is the bigger picture rather than the minutiae that I think New Zealanders should have in their heads as they consider the passage of this bill. 
One of the interesting factoids about globalisation for me is that around the world we have already achieved an extraordinary degree of political unity. Roughly half the people in the world are governed by two capitals New Delhi and China and the other half are governed by 190 different Governments including our own of course. The implication of this is very important for New Zealand. It means that if we can to use the vernacular tie up access into just two capitals—if we can come to an accommodation with Beijing and New Delhi—New Zealand this tiny country of 4 million people will essentially have access to half the consumers in the world. That is an amazing factoid to contemplate. With the passage of this bill we in New Zealand will be in a position to put in place the first piece in that jigsaw puzzle. 
As members will be aware the very preliminary steps have been taken in respect of the other great developing capital New Delhi to try to get a similar agreement—it will take a number of years and it will be extremely difficult—with India. Even now with this Chinese free-trade agreement we have already achieved a historic result for this country. I am not suggesting by any means that I am the only New Zealander who has been involved in this; in the last 35 years generations of New Zealanders have been involved in this fight for access. No developed country in the world has had its economic prospects so tightly constrained by a lack of access for its principal exports than New Zealand. It has been one enormous struggle for generations of New Zealanders—farming leaders trade Ministers Prime Ministers trade negotiators like myself—to try to find a way to open opportunities for New Zealand. 
This has been the story of New Zealand in terms of our external trading regime since 1973 when we lost access to the United Kingdom. Historically the United Kingdom had set up a great deal of its farming systems 15000 kilometres away in New Zealand to furnish the food needs of its consumers. It then entered into what was then a viciously protective system known as the common agricultural policy a system that has been enormously transformed for the better may I say in the last 15 years. That system was a dagger pointed at the heart of our economy and it has taken 30 years of enormous struggle to deal with the implications of this. 
When we think about that and then put this bill alongside we see that this is a watershed event for New Zealand in terms of our long-term economic prospects. In 30 years we have gone from a situation where we have had to fight for every kilogram of access for our highly competitive and wonderful food and beverages to a situation where we are essentially getting within a decade free access to the world’s second emerging economic superpower. That is the big picture. That is the picture that I hope New Zealanders keep in their minds as they listen to the criticism some of which has some legitimacy here and there but the big picture is that picture. 
Access to markets has been the fundamental problem and this free-trade agreement provides a huge qualitative shift for the better for New Zealand. It is not the whole answer and I would like to take this opportunity to wish the New Zealand team in Geneva well in the next crucial 4 or 5 days. Obviously I know them extremely well having chaired the agriculture negotiations prior to entering politics and I know how difficult it will be. They have the skills I have no doubt about that but they will need luck as well to pull this together. 
The World Trade Organization system is about the international glue that surrounds these free-trade areas. It is the only way we can accomplish disciplines on either export subsidies or production subsidies and on certain other trade issues of considerable importance to New Zealand. But these free-trade agreements of which this is really the jewel in the crown now for New Zealand are about one aspect of this the market aspect which does not require forward progress in Geneva to celebrate today. 
When we look at China I think we have to bear in mind that this is a market that will probably become New Zealand’s largest single export market—I would say for it to happen within 5 years is quite possible. For those who think that that is far-fetched I say they should reflect on the fact that China according to preliminary estimates of the Australian Bureau of Statistics has already—incredibly—passed Japan as Australia’s largest market. Sure Australia has giant mineral exports that have fuelled that but I believe that New Zealand’s agricultural future will also fuel the future growth of our exports. I see no reason why the current average growth rate of 11 percent—that is the compound average growth rate of New Zealand exports to China over the last 3 years—should not be maintained at or near those levels for some time to come. And the reason is the very success of the Chinese in lifting hundreds of millions of people out of poverty. As they have moved out of poverty 34 percent of the Chinese population is now in that crucial $1 to $2-a-day bracket. Broadly speaking agricultural economists would argue that at $1 to $2 a day people are struggling to put two very basic meals on the table. Maybe they can afford some primary school fees for their kids; probably not. 
It is in the next income bracket of above $2 a day that we will see in the next 20 years further massive growth in the number of these people as hundreds of millions of Chinese move out from that $1 to $2-a-day bracket into the $2 to $10-a-day bracket. It is precisely in those income brackets that we will then see significant increases in the consumption of meats of all types dairy products fruits vegetables and edible oils. They are products that are really off limits for people in the $1 to $2-a-day bracket. So quite apart from celebrating as we would the transformation of people’s lives in terms of their being pulled out of poverty this is fundamentally positive news for New Zealand and I think it will underwrite this country’s export growth over the next 20 years. 
So that if you like is the bigger picture. In my remaining minute or two I just want to concentrate on the legitimate concerns that people have raised on human rights and give my own perspective which I think is the predominant view of the committee although I will use my own words. It is probably unwise when we talk about human rights to try to categorise things in relative terms. It is a bit like theologians arguing whether there is such a thing as relative sin. It is better to stay off that ground. One could make a case that when 26 million people were estimated to have died during the Cultural Revolution there has been a very considerable improvement in human rights. But of course individual events still occur. I think that by opening up to China we can make a very limited but necessarily positive contribution.