Groser Tim: Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill — Third ReadingText is incorporated into the Bound VolumeGroser Tim: Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill — Third Reading[Sitting date: 24 September 2015. Volume:709;Page:7074. Text is incorporated into the Bound Volume.]Hon TIM GROSER (Minister of Trade): I move That the Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill be now read a third time. Before I start to make a few comments on the bill I would like to congratulate on behalf of I hope all the members who supported this bill the two chief negotiators of this agreement and through them their extensive inter-agency teams. I thank Alison Mann who led the negotiation from its inception in 2009 through to 2011 and Martin Harvey who took over her responsibilities. I know it was an extremely difficult negotiation and I want to commend them and through them their teams for their very professional and very consistent effort to bring this agreement home.This is obviously going to play a very important role in strengthening our relationship with the Republic of Korea. I suppose like many many people who have watched the development of Korea over the past 70 years I am enormously impressed by what they have been able to achieve for their people. If you reflect on the fact that culturally they are identical to North Korea and that as recently as 1970 North Korea had a higher per capita income than South Korea—because when the terrible war occurred in 1950 most of the industrial capacity of the country which was then one country was in the north not the south—the fact that they have been able to achieve what they have achieved has been I think one of the most remarkable stories of economic development.Of course what it has done for us and for many countries other than us is it has created huge opportunities for New Zealand exporters.David Seymour: Are you saying free trade is actually good for people?Hon TIM GROSER: It is a very disturbing notion—indeed it is—that trade is actually good for everybody. But there are a few oddballs like us who believe in this theory and clearly 46 million Koreans believe in it. About 18 million in North Korea do not and we can see quite clearly the consequence of that choice. In fact the member who has made this important—although I think rather ideological—point has probably like me seen those photographs taken from space at night that show a complete black space between the 53rd or the 51st parallel—I have forgotten the number of it—and the start of the Chinese border indicating what a wonderful result you get from insisting on your sovereignty and not doing anything with anyone else.Now back to the knitting. We are looking at this bill through the prism of general policy which is under strong debate in this country—quite legitimately of course. I want to acknowledge just how important trade policy has been to securing advantages for New Zealand exporters and no more so than in this very vibrant and exciting market of Korea. If we look back in our history basically in the 1950s we were not trading at all with Korea. So the opportunities we are seeing in the Asia-Pacific region are basically the conjunction of two things. One is a process of economic development to which we may in some cases have made a tiny contribution through our education system which links in with theirs and through our development assistance in earlier days. But fundamentally it is the result of these countries’ efforts and their adoption of pro-growth pro-market policies and then of course the negotiations with those emerging economies to give us access into their markets. The process of economic development while it is transforming the opportunities for our small economy completely for the better is an essential precondition to this shift in trading structures. We still need access to the middle-income consumers and you do not get that automatically.I have often argued in the past that the process of diversification for New Zealand—which started essentially in the 1970s—in a strict economic sense needed not to have happened had we had access to the middle-income consumers of Europe and North America. Therefore the role of trade policy is absolutely central to our own economic future and to maintaining a vibrant economy that can support a First World health system a First World education system and can create opportunities for young ambitious New Zealanders to base their lives and their families’ future in our country and not in a third country. This agreement will absolutely contribute to these broader objectives.On the subject of free-trade areas generally I have been using more recently a statistic that I think is extremely interesting. It is not a rigorous proof because we would need to factor in other considerations that produce this stunning result. If we look back at New Zealand exports in the last 10 years—no sorry between 2008 and 2014 so it is 6 years. What we see is that our exports to countries with which we do not currently have a preferential agreement—let us call it loosely a free-trade - type agreement—have declined every year by an average of 2.6 percent so round it down to 2.5 percent. Every year our exports to countries that we do not have these preferential access agreements withhave declined by 2.5 percent. But to contrast this the countries that we do have agreements with and I believe that the figure with Korea when the agreement with Korea comes into force becomes something like 53 54 percent. The export growth of our exports to those countries has increased every year by an average of 10.4 percent.This is the conjunction of a highly successful trade negotiating strategy pursued both by this Government and the preceding Government. I madeat the Committee stage I think completely justifiably strong words of thanks to the Opposition—well the Labour Party—for its very constructive approach throughout this negotiation and I stand strongly behind those comments. It has been essential for us to target these emerging markets and create these platforms. I think this is a major opportunity for New Zealand. I will repeat another thing that I often say and I am sure others do too and that is that at the end of the day this agreement does not put a new dollar on the table; it creates an opportunity. It will be up to New Zealand business people—and we will strongly support them—to exploit the opportunities of this landmark agreement.The final thing I would say is that in a technical sense what we are doing here is not voting in a technical sense on the free-trade agreement but on the legislation that is necessary for New Zealand to be able to ratify the agreement. It is a proxy for exactly the same thing. In the light of a discussion that I hope this Parliament will have in the not-too-distant future on a certain other rather larger and more controversial trade agreement it will be exactly the same. So although Parliament will not be asked in effect to debate a trade agreement per se unless Parliament passes the necessary legislation to allow a New Zealand Government to ratify it it will not happen. In a very real sense when the moment comes—if it does come—this Parliament will be deciding through proxy whether it wants to advance New Zealand’s interests through this giant free-trade agreement that is still now at a very mature stage.I want to thank all of the people who have worked so hard on this agreement. I want to thank the political parties that have supported its passage through the House. I was speaking I guess only about a week ago to the Korean Minister of Trade and he assured me that the passage of this agreement through their own national assembly is proceeding and although there is a lot of controversy in Seoul around the free-trade agreement with China this looked reasonably promising on the New Zealand front. When we have the passage of this bill through the New Zealand Parliament and we hope in the very near future the corresponding actions through the Korean national assembly we will be able to at that stage I think open a bottle of champagne. Thank you.