Mapp Wayne: Third Readings — 
Text is incorporated into the Bound Volume 
Mapp Wayne: Third Readings — 
[Sitting date: 24 July 2008. Volume:648;Page:17418. Text is incorporated into the Bound Volume.] 
Dr WAYNE MAPP (National—North Shore) 
: 
 Today we are passing into law legislation relating to the China free-trade agreement. I predict the legislation will be passed into law today by literally an overwhelming majority. There is a very very good reason why this is the case and it is fundamentally that—and I say this in fact to the three smaller parties that are opposing this bill—fair trade is free trade. I know this will come as a bit of a shock to those parties but the reason is simple actually—nations should concentrate on what they do best. New Zealand has a world advantage in agricultural products. Obviously we want to develop our economy but at this point in time and for some years to come that is our fundamental advantage—and I say that to the Maori Party. One has only to work out where our economy grows best to know that it is in agriculture. Indeed for the last 50 years it has been quite remarkable just how agriculture has sustained and retained its share of exports. We gain when other countries lower their export barriers. That could hardly be contradicted by anyone in this House I would have thought. Even those with a modicum of economic understanding and even those who will worry about the position of lower-paid people would see surely the advantage in that. 
Conversely looking at it from the other point of view every New Zealand consumer benefits when the cost of the things that he or she can buy reduces and that will be the case in a wide range of goods particularly clothing and other items. That has been one of the great gains of the reforms of the last two decades. China clearly has a comparative advantage in the production of all sorts of electronic goods clothing and so forth. It is not called “the factory of the world” for no reason; it is called that because it is the best at that production. New Zealand gains from that when we can buy goods from China at the lowest possible price. 
I know the argument put up by other parties is that we have to be careful about this there have to be transition arrangements and so forth. I have to ask those parties whether they really believe that a 10 percent tariff actually saves any jobs at all in New Zealand. Ten percent is the maximum tariff in New Zealand. If a company can survive only on the basis of a 10 percent tariff then I would suggest to members that it is a company that is quickly going to go out of business in any event. But in truth the lesson we are supposed to draw is to concentrate where we have skills and expertise. That is exactly the point about Icebreaker. You know China can produce a billion T-shirts for $1 but it cannot produce high-fashion Italian wear that people are willing to pay thousands of dollars a suit for—or for that matter $1200 for a yellow jacket. That is where areas of expertise are built in countries that go for their comparative advantage. Surely Italy is the object lesson for us in terms of clothing not China’s billion T-shirts? 
I have to say to those parties that are resistant to the idea of free trade that there is a vast body of research—not just opinion; actual proven research—that demonstrates the fundamental importance of the proposition that fair trade is free trade as was very carefully pointed out by my colleague John Hayes yesterday. That is why virtually every country has signed up to the World Trade Organization. That is why the European Union has been so successful. The European Union has gained immensely by the elimination—not just the reduction—of all tariffs between its parties. That is why European nations are clamouring to get in; that is why Turkey is clamouring to get in. I can tell members many nations in the Middle East also ultimately want to join the European Union. They want to do so because they want to join a successful trading area where there are no barriers. And closer to home who could possibly doubt that the New Zealand - Australia free-trade agreement has not been a great success? It has been and much of our contemporary prosperity is built on it. 
This agreement is profoundly important because the third-largest economy in the world has made a strategic decision—not obviously just about New Zealand but about how it sees the trading environment globally—to enter into a free-trade agreement with New Zealand. It is a full and total agreement. It is a strange irony that New Zealand First comes along to say: “Oh well we would quite like to support the agreement. If only it had been faster.” I would have to say to— 
Peter Brown 
: Who said that? 
Dr WAYNE MAPP 
: I say to Mr Brown that his leader said that. That is exactly what he said and the remarkable thing is he might be right—if it was faster it would be better. But in truth 10 years is a short period of time and I think we know that New Zealand First is not supporting the agreement for reasons other than the speed in which it is being implemented. It has its own little constituency which frankly does not understand the proposition put forward by John Hayes yesterday—that fair trade is free trade. Sometimes political parties should take the time and trouble to explain why that is so; not just say that if public opinion or a section of it is resistant to free trade then we should simply go with that opinion. It is always easy to identify the one company that might suffer; it is much harder to identify that every single consumer in New Zealand benefits by the reduced cost of clothing products or whiteware. We only have to look at the growth rates in New Zealand from the 1960s and 1970s and the step change that occurred in the opening up of the economy from the 1980s onwards to see that benefit to consumers. 
I take this point in time to congratulate the Government on this legislation. I have to say that when the history of the 9-year Labour Government from 1999 to 2008 is written up by the historians they will say this agreement was the Government’s most significant economic venture. There were other things they could have done but of the things they did this was the most significant. To that extent both the Government and the officials—who worked exceptionally hard—need to be congratulated on the agreement. That is why National is supporting the legislation. Of course we say to ACT it is the only thing the Government has done that has boosted the economy. There were many other things it could have done as well but it failed to do them. 
As New Zealand looks forward over the next decade I predict it is going to gain huge benefits—far far greater than the $300 million projected by the Ministry of Foreign Affairs and Trade. Within 5 years—as indeed Mr Groser who has a deeper understanding on these issues than anyone in this Parliament has said—China will become the leading export market for New Zealand. One of the reasons—not the only reason—for that will be this agreement. New Zealand’s prosperity across the board will benefit. I say to the smaller parties that no New Zealand company will be disadvantaged by this agreement because a 10 percent tariff does not actually protect industry at all. This is an agreement where fundamentally and absolutely there are gains right across the board for New Zealand and we should be applauding this day when New Zealand has taken a strategic decision and allowed China to pave the way for opening free trade in the Asia-Pacific region.