King Annette: Tariff (Trans-Pacific Strategic Economic Partnership) Amendment Bill — Second Reading 
King Annette: Tariff (Trans-Pacific Strategic Economic Partnership) Amendment Bill — Second Reading 
[Volume:630;Page:1993] 
Hon ANNETTE KING (Acting Minister of Trade) 
: 
 I move  
That the Tariff (Trans-Pacific Strategic Economic Partnership) Amendment Bill be now read a second time 
. 
Dr the Hon Lockwood Smith 
: Jim did most of the work on this. 
Hon ANNETTE KING 
: Dr Smith is quite right. I thank the Foreign Affairs Defence and Trade Committee for its consideration of this bill and for reporting the bill back to the House in the short space of time the House requested of it. The committee’s majority recommendation is that the bill be passed with no amendments. Although the time available for the select committee consideration was short the committee was able to consider the bill in light of submissions made during the committee’s earlier consideration of the national-interest analysis of the Trans-Pacific Strategic Economic Partnership Agreement. 
This bill amends New Zealand’s domestic legislation to enable New Zealand to become a party to that agreement: a four-way economic partnership between New Zealand Chile Singapore and Brunei. The Trans-Pacific Strategic Economic Partnership Agreement is a treaty that liberalises and facilitates trade in goods and services improves the business environment and promotes cooperation on a broad range of economic areas of mutual interest in all four countries. The agreement offers real gains to New Zealand exporters through the establishment of a free-trade area that spans the Pacific and joins Latin America South-east Asia and New Zealand. The agreement serves the objective of wider trade liberalisation within the APEC region as a whole. 
The bill amends the Tariff Act 1988 in order to bring it into line with the Trans-Pacific Strategic Economic Partnership Agreement. The passage of the bill will allow New Zealand to ratify the agreement which will enter into force 30 days after ratification by at least two of the four signatories. The bill contains an amendment to the Tariff Act to enable preferential tariffs conferred by the agreement to be applied to the parties to the agreement. The tariffs conferred by the agreement are 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 subsequent Orders in Council. 
Initial tariff cuts will take place when the Trans-Pacific Strategic Economic Partnership Agreement comes into force for each party. In the case of Chile that will result in the immediate elimination of tariffs on 89 percent of current New Zealand exports to Chile while all remaining tariffs on exports to Chile will be phased out by 2017. Brunei will bind at zero tariffs covering 92 percent of New Zealand exports to that country with remaining tariffs to be eliminated by 2015. Tariffs between New Zealand and Singapore are already zero under the existing New Zealand - Singapore closer economic partnership agreement. 
In order to help secure those gains on trade and goods the Trans-Pacific agreement contains rules that govern the free-trade area. Those include rules to determine which goods qualify for tariff preferences as well as rules to counter unfair trade. The agreement also includes broad coverage of services which will make it easier for New Zealand service providers to operate and compete in the markets of Chile Singapore and Brunei. In this and in other ways the agreement will assist in improving the business environment and will open up opportunities for New Zealand businesses. 
The Foreign Affairs Defence and Trade Committee considered the agreement under the international treaty examination process. Its report to the House notes that the agreement serves New Zealand’s objective of broadening relationships with Latin America and Asia as well as promoting New Zealand’s wider trade policy interests in APEC and multilaterally. Issues relating to the agreement were raised at the select committee. It was acknowledged that the Government’s aim in entering negotiations for closer economic partnerships is to provide new opportunities for exporters and to guard against the erosion of benefits for New Zealand exporters from preferences afforded third parties. The report also recognised that the framing of the service commitments in the agreement provides legal certainty and transparency for New Zealand’s service exporters while it retains New Zealand’s ability to protect sensitive sectors such as social services water and marine resources. 
A minority view presented in the select committee report raised concerns about the economic benefit to New Zealand of the agreement. Those concerns were based in part on a perceived failure of the bilateral closer economic partnership agreement with Singapore to advance New Zealand’s economic interests. Contrary to that belief since the Singapore closer economic partnership agreement entered into force in 2001 and despite the downturn in the Singapore economy between 2001 and 2003 there has been a large increase in investment and service activity between New Zealand and Singapore. Between 2003 and 2004 New Zealand exports to Singapore increased by 21 percent. The Singapore closer economic partnership agreement like this agreement has a strategic focus that is intended to foster partnerships between the private sectors of its parties and it has been very effective in doing so. 
We have every confidence that the Trans-Pacific Strategic Economic Partnership Agreement will produce even better results for New Zealand. That confidence is shared by a wide range of New Zealand businesses and industry groups and by educational and scientific institutions which have publicly welcomed the successful negotiation of this agreement and which are looking forward to its entry into force. Ratification of this agreement will reinforce New Zealand’s credentials as a forward-looking open economy and a progressive free-trade agreement partner. It represents significant economic and strategic opportunities for New Zealand. I commend the bill to the House.