Groser Tim: New Zealand-China Free Trade Agreement Bill — In Committee 
Groser Tim: New Zealand-China Free Trade Agreement Bill — In Committee 
[Volume:648;Page:17356] 
TIM GROSER (National) 
: 
 I want to address the issue in Part 2 of import certificates of origin and to give a view about the ultimate purpose of this issue. In doing so I might say I apologise to you Madam Chair if this appears to be another lecture but when one has a situation where the Opposition is actually supporting the Government it is very difficult. One might want a vicious disputation but that is not going to happen in the passage of this bill. 
A couple of points are very important to the question of certification. The first relates to the rules of origin and the other relates to the use of the devices of contingency protection—in particular anti-dumping and safeguard actions. Without certificates of origin these mechanisms simply cannot operate. 
In respect of rules of origin there has been a lot of criticism of the free-trade agreement strategy centred on the metaphor of the spaghetti bowl. This criticism essentially says that the proliferation of free-trade agreements is creating impossible administrative obstacles for traders. It is an argument made against free-trade agreements of this type. Personally I have for years believed this to be grossly overstated. I do not think that New Zealand exporters will now be confused in their trading relationships with China as a consequence of the rules of origin that will prevail. In many cases this illustrates a lack of understanding about how administratively in practice rules of origin are actually handled. I do not think this is as fundamental a problem as the critics would have it. We can establish ex post facto through certificates of origin that are provided for in Part 2 what are truly Chinese goods in the case of imports into our customs territory or truly New Zealand goods in terms of the substantive provisions relating to rules of origin. 
The second point which I think is probably more real from the point of view of domestic concerns about this trade agreement relates to anti-dumping measures. Certificates of origin are crucial to safeguard all devices of contingency protection. If there is agreement to apply measures or in some cases not to apply measures to goods of one’s free-trade partner then one needs certificates of origin to establish what the goods are. In the course of the submissions we were told—and it was an echo of the debate one hears internationally—that this agreement will not work because of the provisions relating to unfair trade. It is very important I think to define the concept of fair and unfair trade in traditional terms. In this 5-minute call on Part 2 I will not get involved in a broader discussion of the swampland territory we would get into if we expanded beyond the traditional definitions but I will focus on anti-dumping. 
Certainly it is fair that our companies need protection from dumped imports. We have a longstanding procedure in this country to deal with this and I just want to address the criticism that the free-trade agreement will not work. That criticism is entirely misplaced and in the course of this inquiry we asked for some very simple but very powerful analysis to be produced on the application of anti-dumping orders to goods of Chinese origin not just in our customs territory but around the world since China joined the World Trade Organization in 1995. 
Far from substantiating the critique: “Nobody can apply anti-dumping orders to China.” we found that 27 countries—a mix of developed and developing countries including our own—have applied anti-dumping orders or anti-dumping measures to goods of Chinese origin and in each case they would have been required to apply certificates of origin of the type provided for in Part 2 of this bill. Even more important in only one case did the Chinese authorities choose to contest this and as at the time of drafting the select committee report back that was still in the process of going through the World Trade Organization dispute settlement procedures which as members would be aware are highly complex. In other words all but one of these 327 measures have been applied successfully. I think we should have every confidence in the provisions.