Tariff (Trans-Pacific Strategic Economic Partnership) Amendment Bill

Hon PHIL GOFF (Minister of Trade) Link to this

I move, That the Tariff (Trans-Pacific Strategic Economic Partnership) Amendment Bill be now read a first time. I intend to move that the bill will be considered by the Foreign Affairs, Defence and Trade Committee, with an instruction to the committee to present its report to the House on, or before, 13 March 2006. I also intend to move that the committee have the authority to meet at any time while the House is sitting except during oral questions, during any evening on a day in which there has been a sitting of the House, on Friday in a week in which there has been a sitting of the House, and outside the Wellington region on a day the House is sitting, despite Standing Orders 192, 194(a), and 195(1)(b) and (c).

The Trans-Pacific Strategic Economic Partnership Agreement is a four-way agreement to liberalise trade between Brunei, Chile, New Zealand, and Singapore. In fact, it is the first trade agreement that spans four countries across Asia and the Pacific, and it offers strategic and economic opportunities for New Zealand. Together the four countries, which are all member economies of the APEC organisation, have a combined GDP of some NZ$400 billion, and trade flows amongst the four countries are worth over NZ$2.5 billion per year. The agreement not only reinforces the desire of New Zealand and Chile to deliver trade and economic relations with Asia but also serves as a building block to wider trade liberalisation within the APEC region as a whole.

The bill amends New Zealand’s domestic legislation in order to bring it in line with the Trans-Pacific Strategic Economic Partnership Agreement. This bill in fact allows the agreement to come into force. That entails an amendment to the Tariff Act 1988, to enable the 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 spelled out in the agreement, will be added to the tariff by a subsequent Order in Council.

The tariff reductions under the agreement will make New Zealand’s exports more competitive, and will bring small but useful immediate benefits to our exporters. On entry into force of the agreement, tariffs on 89 percent of New Zealand’s current exports to Chile will be immediately eliminated. All remaining tariffs will be phased out by 2017. That will bring savings to New Zealand exporters of around $2.2 million in import duties—the amount incurred in the year ended June 2004. In that way the agreement will immediately deliver benefits to New Zealand exporters, including exporters of products such as coal and a wide range of agricultural technology products where New Zealand’s exports are currently growing, such as seeds, animal genetic material, and veterinary vaccines. New Zealand exported only a small quantity of goods, worth $3.55 million, to Brunei Darussalam in 2004, incurring duties estimated at $52,000. Brunei will bind at zero tariffs, covering 92 percent of New Zealand’s exports to Brunei. It will eliminate all remaining tariffs by 2015. Tariffs between New Zealand and Singapore are already zero, under the existing New Zealand - Singapore closer economic partnership agreement.

This agreement, however, is about much more than just tariffs. It has a clear strategic focus beyond the direct tariff benefits that will accrue to the parties. The agreement will provide more opportunities, and greater certainty and transparency, for New Zealand businesses that wish to operate in Chile, Singapore, and, eventually, Brunei Darussalam, across a whole new range of services and sectors. New Zealand companies will be able to bid for Government procurement on the same footing as domestic suppliers. The partnership provides a framework for resolving issues concerning technical barriers to trade, and concerning sanitary and phytosanitary measures. Some barriers identified by New Zealand exporters have been included in the immediate work programme of the Committee on Technical Barriers to Trade, which has been set up.

The agreement also establishes a framework for closer economic, scientific, technological, educational, cultural, and primary industry cooperation. The objective is to build on existing cooperative relationships, with a focus on innovation, research, and development, creating new opportunities for all parties. Cooperation programmes to support sustainable development will also be established under the Environment Cooperation Agreement and the Memorandum of Understanding on Labour Cooperation, which were concluded as part of the overall package of the agreement.

This is New Zealand’s first trade agreement with a Latin American country. It will put New Zealand’s relationship with Chile—one of our closest Latin American partners—on a new level. As relatively small agricultural traders with comparable productive structures, the agreement provides the basis to foster a closer sense of partnership between Chile and New Zealand, opening the way to working collaboratively in third markets. Chile has established itself as a business platform for South America, in a similar way to the way in which Singapore acts as a hub in South-east Asia. The partnership will raise New Zealand’s profile in Latin America and will make it easier for businesses to use Chile as a launch pad. Since the signing of the agreement, there has already been increased interest among businesses and Crown research institutes in the opportunities that Chile presents. The membership of Singapore and Brunei, as ASEAN countries, is also an important part of the strategic rationale of the agreement, and adds significantly to the combined GDP of the member countries.

The Foreign Affairs, Defence and Trade Committee has considered this agreement, under the international treaty examination process. Its report to the House notes that the agreement serves New Zealand’s objective of broadening relations with Latin America and Asia, as well as promoting New Zealand’s wider trade policy interests in APEC and multilaterally.

To conclude, the agreement represents a significant economic and strategic opportunity for New Zealand. It enjoys strong support from the business community and others, including educational institutions with an interest in strengthening relations between New Zealand and the Latin American and Asian regions. The Government would wish to see the bill enacted by 23 March, in order to allow adoption by Order in Council of relevant regulations within the time frame in which the parties hope to ratify the agreement.

I commend this bill to the House.

Hon MURRAY McCULLY (National—East Coast Bays) Link to this

I will not detain the House for long in relation to this matter. The Minister has drawn our attention to the significance of the bill, and I want to say a few words about that. Also, I want to comment on the rather unusual process by which the House will be invited to support the motion that the Minister has given notice he intends to move.

I will speak briefly on the bill, because my two most learned colleagues—former Ministry of Foreign Affairs and Trade officials, Mr Groser and Mr Hayes—will no doubt speak at great length and with great eloquence in relation to the trade policy issues that sit behind the legislation. As the Minister pointed out, the measure is an important one. It cements some important trade relationships in place and provides the opportunity for us to see reduced tariffs between New Zealand and some important trading partners—and that, as I think the Minister indicated to the House, will see substantial reductions in tariffs in respect of some of those relationships, and quite quickly. So, for that reason, and because of some of the other facilitation measures that will flow—as the Minister has also pointed out—the National Party is unambiguously in support of this bill.

However, I want to make it clear that the process by which it is to be passed is a somewhat unusual one, and I want to reflect on the timetable that now lies ahead of the House in relation to the measure. According to the note I have here, I understand that this measure needs to be passed into law by the end of March and come into effect by 1 May 2006. It is not every day that the Government comes to the House and asks the other parties to facilitate a measure in quite such a short time frame. Indeed, as the Minister has already told us, the Foreign Affairs, Defence and Trade Committee will be asked to meet virtually any hour that is available, and the time that it will be given in which to report back is about as tight as one could possibly have while still having a select committee process.

I want to explain to the House why the National Party is being so soft and accommodating as to agree to those conditions. First and foremost, I say to the Minister that the National Party is very keen to cooperate with the Government on matters of trade. We want to send a clear and unambiguous signal to the other countries with which we do business. Also, we want to send a clear and unambiguous signal to the business community that it can look to the major political parties in New Zealand to cooperate on such matters and that any element of petty politics is removed from the proceedings. Just in that context, I say to the Minister that we would like a slightly more generous time frame, generally, in relation to legislation he brings to the House. I acknowledge that because of the election in the latter part of last year and some no doubt difficult machinery matters that the officials have to deal with, regrettably we have a somewhat less generous amount of time available to us than would normally be the case. However, I am satisfied that no one’s interests will be compromised by that process. As the Minister has already told the House, this treaty has already been before the select committee, and it has hardly been kept a secret from those in the business community or from those who otherwise might be affected by it. I am therefore quite satisfied that the highly truncated select committee process this bill will go through will not prejudice the interests of any party, in the way that would normally be the case with a timetable of the sort being recommended to the House today.

Having said that, we want to send a clear and unambiguous signal that the National Party will cooperate on these matters and therefore will do its best to cooperate with the select committee. I say to the chair of the committee, Dianne Yates, who is in the Chamber at the moment, that I trust that the Government will reciprocate the generous spirit that is being demonstrated from this side of the House by ensuring that the very lax resolution we are to agree to is not taken advantage of in any shape or form. We genuinely want to cooperate and we ask that the provisions that are being granted here will be reciprocated.

The Minister knows that in matters relating to trade New Zealand is too small a country, is in too remote a part of the globe, and has too great a dependence upon international trade as its lifeblood for us to play petty politics in any shape or form. So we will send this measure to the select committee, we will support it through that process, and we will make sure that all of those who do business with New Zealand feel that at least the major players are doing their bit. I am pleased to hear that the New Zealand First Party intends to support the bill to the select committee. I know that the bill will perhaps present some issues for its members, but I encourage them to approach the process with an open mind. The more that political parties in this country can send a signal that we stand together on these issues the better it is for all of us, particularly in relation to the position of the Minister of Foreign Affairs. I hope that those members do not make his life unduly difficult, or complicate the nature of the relationships or future discussions that need to be held, by putting him in a position where his own party is seen to be taking an unduly negative—an unhelpful—view in relation to a bill of this sort.

I join the Minister in welcoming the bill into the House and pledge the cooperation of the National Party during the select committee process and the bill’s subsequent stages. I say to those who stand to benefit from this measure that I trust they will take full advantage of the negotiations that have been held in bringing this treaty together and in the expeditious progress of the bill through the House, as I am sure we will see.

DIANNE YATES (Labour) Link to this

I thank the Hon Murray McCully for his comments on this bill. I might point out that it is a very small bill, comprising only two pages, so it will not take the Foreign Affairs, Defence and Trade Committee a great deal of time to process.

The general policy statement in the explanatory note states: “The Bill amends the Tariff Act 1988 to enable the Trans-Pacific Strategic Economic Partnership Agreement (TPA) to be brought into force. The TPA has been signed by Brunei Darussalam, Chile, New Zealand, and Singapore. The agreement obliges each party to phase out duties on goods imported from the other parties. As goods imported into New Zealand from Singapore are already exempt under the New Zealand/Singapore Closer Economic Partnership Act 2000, the preferential tariffs provided for by the Bill will apply to goods originating from Brunei Darussalam and Chile.”

So this bill is actually a small technical bill to allow the treaty to continue and to become part of our law. This measure is not being hurried. The negotiations for the Trans-Pacific Strategic Economic Partnership Agreement started in 2002 with the New Zealand Government, the Prime Minister of Singapore, and the President of Chile. The agreement was originally known as the “P3” agreement, because it involved three countries: New Zealand, Singapore, and Chile. It was then extended to include Brunei Darussalam. So the bill will not take a great deal of time.

Also, the bill has gone through the treaty procedure, which means that the select committee has already looked at the national interest analysis and reported back on it to the House. During that stage we had public consultation and brought people in to the committee to give us their opinion, so we are now really only going through another step in the process.

The national interest analysis lists about five pages of people who were consulted in the process. Individual businesses were written to, and meetings took place with the Council of Trade Unions, Local Government New Zealand, the Federation of Māori Authorities, at least 51 companies, the New Zealand universities, and non-governmental organisations. Chambers of commerce have held workshops on the whole issue. So I do not think it is quite right to say that the matter is being rushed through. A great deal of consultation has taken place in relation to the bill.

I want to point out a couple of matters. One is about cultural effect, and there was some discussion when we looked at the national interest analysis. We have been assured that the Trans-Pacific Strategic Economic Partnership Agreement contains safeguards to ensure that there are no adverse effects on New Zealand cultural values, including Māori interests. One part of the analysis states: “Provided such measures are not used for trade protectionist purposes, the Trans-Pacific SEP also gives successive New Zealand governments the right to adopt measures they deem necessary in relation to Māori, including in fulfilment of Treaty of Waitangi obligations. Furthermore, interpretation of the Treaty of Waitangi is not subject to any dispute settlement provisions under the Trans-Pacific SEP.”

The analysis also has information on the full communication programme. For those people who are interested and listening to the radio, if they can access the national interest analysis, then that would give them far more detail on the Trans-Pacific Strategic Economic Partnership Agreement, the “P4 treaty”. I refer members also to the initial booklet that came out about that, and to the statement Jim Sutton made at the time. This is the first trade agreement to involve several Pacific Rim countries, and the Trans-Pacific Strategic Economic Partnership Agreement—also known as the “P4”—has a strong strategic dimension and will serve to deepen the economic relationships between New Zealand, Brunei Darussalam, Chile, and Singapore.

The Trans-Pacific Strategic Economic Partnership Agreement is a high-quality trade agreement. It establishes a free-trade area and liberalises trade between New Zealand, Brunei Darussalam, Chile, and Singapore in both goods and services. The Hon Jim Sutton went on to state: “It achieves a benchmark reached by few bilateral trade agreements in having a commitment by the four countries to eliminate tariffs on all traded goods, and at the same time adopts a high-quality approach to trade in services. The shared vision is to stimulate more open trade within the Asia-Pacific region, and New Zealand is keen to see the membership of the Trans-Pacific SEP expand as other Asia-Pacific nations look to take part. For New Zealand the economic benefits of the Trans-Pacific SEP will be seen from the day it enters into force.”

From that day, as the Minister of Trade, Phil Goff, has told us, 90 percent of New Zealand’s exports to Chile will enter duty-free, as will 92 percent of New Zealand’s exports to Brunei Darussalam. Tariffs between New Zealand and Singapore are already zero, as we have said, under the existing New Zealand - Singapore closer economic partnership. These tariff reductions will open up new market opportunities and restore level playing fields for our exporters with competitors from those countries like the United States that already have trade agreements with Chile and Singapore.

The Trans-Pacific Strategic Economic Partnership Agreement is a model of free-trade agreements, which further establishes New Zealand’s credentials as a progressive trading partner. With the potential for more countries to join the Trans-Pacific Strategic Economic Partnership Agreement, now is the time—and we are keen that this legislation will progress—for Government and business to work together to maximise the benefits and opportunities it offers to enhance trade and economic links.

I am pleased that we have the support of the other side of the House. I thank those members opposite who were previously involved in some of those negotiations who are now members of the House. In fact, they will probably find it very interesting, after their having worked on the original negotiations, to be able to follow the bill’s process through the House and to see this agreement signed. I certainly know that the Prime Minister is looking forward to the signing of this agreement. Once again, along with the Minister, I commend this legislation to the House and look forward to its speedy process.

TIM GROSER (National) Link to this

When the chief whip asked me to fill the speaking slot—and I see now that it is only 7 minutes to 6—Mr McCully, a man I hold in enormous respect, expressed some doubt as to whether, given my background and the nature of the subject, I could express my views in anything under 3 hours. The second surprise was that I know he is expecting me to launch into a deep, geopolitical analysis of this agreement in the 7 minutes before we go to get something to eat. However, Mr McCully was so cooperative, so diplomatic, and so reasonable in his approach that I am afraid Mr Hayes and I have just had a quick consultation and we feel the need to slightly rebalance the equation. So before I get into the geopolitics of this subject—which I will address probably in 15 seconds, because basically Mr Goff the Minister has analysed it in correct and orthodox terms—I just want to make a few reflections on the issue of trade and foreign policy.

It is quite interesting to ask ourselves why we are in the situation that Mr McCully summed up in the way in which he approached this. Why is it that we are in this bipartisan space? When I first became involved in trade policy in the 1970s when working in the New Zealand Treasury, I can assure members, and I am sure members can recall, that it was anything but a bipartisan policy. In fact, we faced a bitterly divided country on those issues, for two reasons. Firstly, it was because we had the developed world’s highest form of import protection around our border for fear of being swamped by competition and, secondly, because on the other side of the equation the General Agreement on Tariffs and Trade, the premier institution of the international trading system, was seen as completely unfair and biased against us. It had its rules on industrial products, an area where we feared we lacked all chance of ever becoming competitive, yet when it came to agriculture there was no sign of balance, whatsoever. So this is not a policy that has been all sweetness and light historically, as this debate indicates. We have moved strategically into this situation.

Like many New Zealanders, I have a view on MMP that I do not think is in any way original, and it would be summed up as follows. I think that when New Zealanders voted for it, they were voting not just for a change in the electoral system. I think what they wanted was a change in style, as well. I think they wanted a more cooperative approach, of which this trade policy is a very good example. I know that the Prime Minister finds it difficult to issue two sentences in a row without the word “inclusive” in them, but I do not see, apart from a few exceptions such as this agreement, a great deal of evidence of a new approach. I see instead that a largely partisan, “take no prisoners” approach to politics is still prevailing.

But there is another model, and if the Government had had the decency to listen to what Dr Brash was saying at the beginning of this session, it would know that we are prepared as a party to look case by case at other issues—exactly as we have done successfully in this country. We put forward the issue of climate change, but the Government would not even listen. But there is that other model, and as we sit down here in the comfort of that nice cooperative approach it is worth reflecting on the fact that it has served this country well. It is a model to use, if the Government can escape from the partisan model it is following in just about all other areas.

Now, let us have a little think about trade policy in the context of what it is. The Minister of Foreign Affairs, Mr Peters, gave a very nice speech a week or two ago, followed by Mr McCully. It was a standard Ministry of Foreign Affairs speech given to a new Minister. It is the seamless-web theory of foreign policy. Let me explain what that theory is really all about. It is a correct view, in my strong personal opinion, about how foreign policy actually works. It is not a matter of just putting foreign policy in one box and domestic policy in another—and that applies even more strongly to trade policy; they are closely interlinked

But of course we have a problem, and I shall not comment at large on it. We all know what the problem is and we saw it demonstrated today when the Green Party asked the Minister a series of questions. All he could do was act as a postbox, and in fact he was absolutely correct, in my opinion, in taking that approach. But when he is overseas there is no postbox beside him, and he will have to defend the Government’s position. I do hope that when my former colleagues in the Ministry of Foreign Affairs gave him their standard, seamless-web theory of foreign policy they did not use those words “seamless web” because, my goodness gracious me, that would be an unfortunate metaphor with regard to Mr Peters. What it brings to mind, of course, is the ancient child’s fable, The Spider and the Fly. Many of those children’s fables contain great wisdom that one should absorb by the age of 6.

Whether Mr Peters absorbed the wisdom of that fable is a question that we might examine in the moments we have left. Members will recall the original parable:

Will you walk into my coalition? said the spider to the fly.

’Tis the prettiest little coalition that you ever did espy.

The way into my coalition is up a winding stair,

And I have many curious baubles to show you when you’re there.

The problem is that Mr Peters clearly thinks he still has his exit strategy. However, the member for Tauranga—and I would refer to him by his name “Bob the Builder” if it were not a technical breach of the Standing Orders—has rather closed that option off. So we will find in due course what happens to the spider and the fly. We know who the fly is. I do not want to be too crude and suggest who the spider is in this case, except we know that she likes fast cars, provided she is not driving personally, of course. We will find out, I think, that this ends rather stickily for the fly—in this case, New Zealand First.

Nevertheless, the point about the seamless web theory is essentially correct. In terms of trade policy it is really important to understand that the real agenda for New Zealand, in terms of its domestic agenda, has moved on.

BARBARA STEWART (NZ First) Link to this

I rise on behalf of New Zealand First to speak to the Tariff (Trans-Pacific Strategic Economic Partnership) Amendment Bill. I advise the last speaker, Tim Groser, that the fly has landed in a positive place for all New Zealanders, which is far preferable to being Little Bo Peep who is valiantly trying to keep all of her sheep in order, as the National Party is doing at present. We know too that the dags of those sheep were in such a bad condition that the flies were not tempted, at all.

This legislation basically amends the Tariff Act to allow the Tariff (Trans-Pacific Strategic Economic Partnership) Agreement to come into force. With that comes the obligation on each partner—New Zealand, Chile, Singapore, and Brunei—to phase out duties. Singapore, of course, is already the subject of an agreement, so in reality we are talking about Chile and Brunei. New Zealand First will support the bill going to a select committee to enable members’ scrutiny and public submissions, and to acknowledge the strategic potential of an agreement that involves both Asia and South America—two areas of great importance to our future.

The agreement comes out of negotiations that began at APEC in 2002, and the national interest analysis was tabled in the House last year. It is New Zealand’s first agreement with a Latin American country. Tariff reduction will be phased in, with the longest protection—relating to textiles, clothing, footwear, and carpet—lasting until 2015. New Zealand First has long advocated that policy makers should give priority to New Zealand industries and communities when setting any programmes on tariff. In this instance, the value of the agreement is clearly strategic rather than financial. New Zealand goods going to Chile have been incurring a little over $2 million in import duties, and only $50,000 to $60,000 for our exports to Brunei. Those are not earth-shattering figures, but for a party that has succeeded in gaining an agreement that 2007 will be an export year, and for a party that has long advocated that we need to win the export and employment stakes, not some artificial tariff-removal race, the opportunity to open doors in South America and Asia is not lost on us. Around 99 percent of imports from Brunei, and around two-thirds of those from Chile, already enter New Zealand duty-free.

Although New Zealand First is absolutely not committed to a global liberalisation agenda, it is not inclined to oppose the measure on ideological grounds, when it has such strategic potential for our exporters, with little real threat to local producers. Let us consider the costs and benefits of the agreement, both in light of our trade and foreign relations objectives and against the background of a global liberalisation programme that clearly requires serious review. The place to do that, and to allow the public to have its say, is at the select committee. So New Zealand First supports the bill going to the Foreign Affairs, Defence and Trade Committee.

KEITH LOCKE (Green) Link to this

The Green Party will be opposing the legislation, because we oppose the Trans-Pacific Strategic Economic Partnership Agreement, which this legislation is implementing. It is not that we are against trade agreements, but we are against this particular agreement. On an ideological basis, it is an agreement that just reduces tariffs everywhere, without demonstrating practical, positive effects for New Zealand.

If one looks at the tariff reductions in the bill, one must ask how they will overcome the huge trade deficit that we currently face, which was at the record level to the year ended January of about $7 billion. There has not been any working through of that issue. In one respect, the removal of the tariffs in the other three countries in the agreement, and the lowering of barriers there, will allow some of our exporters to export more into those economies. But that does not necessarily mean that there will be a net benefit, and it does not necessarily mean that we will get more for our existing exports. Phil Goff talked about companies saving $2.2 million in Chile in the duties they currently pay. Well, it is not necessarily a saving, because if those duties are built into the price that exporters get in Chile, when those duties are removed, the retail price drops down proportionately. It may not result in any savings for the New Zealand exporting companies. It is true that when we have knocked off duties in New Zealand, the prices have often gone down, and it has not necessarily meant an increase for the overseas companies exporting into New Zealand.

It is true that, as the previous speaker said, this is not a major agreement, in the sense that it does not change an existing situation dramatically, but it could lead in the direction of losing export capacity if the removal of tariffs in New Zealand made it more difficult for New Zealand manufacturers who might then have gone on to export. It could reduce our exporting capacity because we are competing with a lower-wage economy in the case of Chile, and with an economy that is not a level playing field in the case of Singapore. The Singapore Government plays a big role in many of its industries and can undercut New Zealand in its exports and bids for services—as it has already done. It is true that the existing free-trade agreement with Singapore has not demonstrably benefited New Zealand in terms of the balance of trade. It has tended to go more in Singapore’s favour, although there are arguments about what the current situation is. Some argue there has been a bit of an upturn in our favour if we consider the last few months, but over the last 4 years a benefit cannot really be demonstrated for New Zealand.

As Phil Goff, Murray McCully, and Tim Groser have all indicated, this agreement is not to be viewed on its own but as part of a larger strategic plan for free-trade agreements in Asia and in our whole region. It is a stalking horse for free-trade agreements with China—a much bigger economy—and with Malaysia, etc. If we look at these issues more broadly, towards a free-trade agreement with China, we are looking at the serious problem of losing more of our manufacturing industry, particularly in the textile, clothing, and footwear areas that are already hard hit and finding it difficult to compete. We want to retain some infrastructure in that area, and these agreements, and moves in this direction, are making that more difficult.

They take us in the opposite direction to what the Government, in cooperation with the Greens, is rightly doing—that is, promoting a Buy New Zealand Made campaign—whereas this agreement says there shall be absolutely no preference for New Zealand products over those from Chile, Singapore, or Brunei, and equal treatment has to be given to all exporters from those countries. That applies, for example, to the area of Government procurement, but if we are to have a successful Buy New Zealand Made campaign, the Government will have to take the lead and encourage local bodies to procure locally, too.

However, this agreement says that we cannot give any preference to New Zealand products over products from those other countries, or services from them in terms of procurement. If we were worried about unfair competition, about bad labour standards in Singapore, Chile, or Brunei, or about bad environmental practices there, all of which were undercutting our ability to trade and which were not leading to good situations in those countries, then there is a provision in this agreement—not in the bill itself but in the agreement—to have discussions about those problems. But there is no implementation enforcement procedure in the agreement. So I think that if we look at that, we will see that this agreement will have a detrimental effect, as a whole.

We should not look just at the balance of trade; we should look more broadly than that to the whole balance of payments, which is pretty dire in New Zealand at the present time and going very much against New Zealand, with billions of dollars worth of dividends going out of the country each year because so much of our economy has been taken over by foreign investors. There is roughly about $80 billion of foreign investment in New Zealand, and about only $20 billion of outgoing investment. There is a huge imbalance there, and it is getting worse all the time.

Unfortunately, this agreement helps to lock in an approach that will lead to even more foreign control of our economy. The Green Party believes that the existing excessively high threshold of $100 million, under which approvals are not needed for foreign investors coming into the country, is locked into this agreement with Singapore, Brunei, and Chile, and a future Government will not be able to change it, because there is a ratchet provision there saying that once we have agreed we cannot then push the threshold down, in the case of the investment side of the agreement. Even though this is not an investment agreement as such, New Zealand has committed itself under that agreement to locking in that $100 million threshold in a way that cannot be changed by a future Government. That undermines the sovereign power of any future Government that wants to change things, and of this Parliament itself.

The Minister of Trade indicated in his speech that services are also covered in this agreement, and the Greens have a particular concern there. The Minister said that educational institutions are quite keen on this agreement; unfortunately, it is the private educational institutions that are the most interested. The New Zealand Government is very involved in promoting those private educational institutions abroad, particularly through the World Trade Organization’s General Agreement on Trade in Services (GATS) round. It is true that some New Zealand providers might get a certain advantage out of those practices, but it works the other way, too, with private providers from overseas coming in and potentially gaining a big foothold in control in our own education system. Under those arrangements, and under this one, foreign providers have to be given equal treatment and equal Government subsidies—if Government subsidies are to be provided to private education services.

There is a new approach in this agreement to service commitments, which is different from the normal GATS approach, whereby the four countries are to provide what is called a negative list of services—that is, things they want kept out of the agreement in terms of provision of services, but with a free rein on everything else. So if this Government forgets to put certain things in that negative list, then for all time the other things—and they may be the result of further technological development—stay outside of the commitment and it is a free-for-all between those four countries in terms of the provision of those services. There is also ambiguity in the list of services that are excluded from free competition, which is provided in the treaty, as to exactly how they apply, and the determination of how they apply is not made by New Zealand—not the sovereign Government or Parliament of New Zealand—but by international arbitration. When we talk about the agreement protecting public education, and a lot of education services are, in reality, mixed public/private, who is to determine what is protected?

TE URUROA FLAVELL (Māori Party—Waiariki) Link to this

The Māori Party’s contribution to this debate tonight is based on a Māori history of negotiation and alliances, in which our people have always looked at the potential for strategic and economic opportunities for Aotearoa. It is a history we know well, and it guides our decision making in all international trade agreements. As this nation entered the second half of the 19th century, the Māori partner to Te Tiriti o Waitangi was the dominant force in a vibrant, growing, and prosperous economy. For examples of that, we need just to look up State Highway 1 to Ngāti Toa and the rohe of Ngāti Toa Rangatira.

Two years ago, in the closing submissions of counsel for Ngāti Toa Rangatira to the Waitangi Tribunal, Matiu Rei, Te Waari Carkeek, and Professor Richard Boast, among others, gave evidence of the trading empire developed by Ngāti Toa with Pākehā/Europeans. They described the harvesting of flax, the use of European vessels and technology, and the full-scale involvement in the whale trade. Evidence was given by Professor Alan Ward and Dr Ann Parsonson of the reputation Ngāti Toa had as a maritime trading empire, controlling trade, the use of the coast, and access across both sides of Cook Strait. The significance of the coast and trade routes for Ngāti Toa, and its history of relation-building—of alliances, marriages, negotiations, and resource sharing—provided a solid base for an agreement to develop trade and benefit from multilateral cooperation. The concept of nation-to-nation strategic economic partnership agreements is therefore very familiar to tangata whenua.

Yet despite the glowing reputation of Ngāti Toa as an aggressive and energetic entrepreneurial group, its fortunes just as rapidly deteriorated. Submissions to the tribunal included the following: “… Ngati Toa, one of the most powerful tribes in Te Tau Ihu as at 1840, ideally situated, equipped with outstanding resources and exceptional leadership, a signatory to the Treaty and keen to benefit from the ‘benefits’ of European settlement, found itself by the turn of the century marginalized. Impoverished and reduced to virtually no land base, with its leadership scattered and decimated, its traditional tribal relationships and customary land tenure in a state of disarray …”.

So something happened, and I suppose that is where the Māori Party comes in. Our party is here to declare that we want to defend the rights and uphold the aspirations of the indigenous peoples of the world. In considering this legislation, I must think about the indigenous communities in Brunei—communities like the Malay, the Tutong people, the Bisaya people, the Dusun people, and many others. What happens when local and regional sovereignty interacts with multinational and international identity? It usually involves the loss of local identity and local and ethnic practices, which become subsumed under flows of global trade, colonialism, and assumptions of universalism. How will the indigenous communities of Brunei benefit from the Trans-Pacific Strategic Economic Partnership Agreement?

The bill proposes that Singapore will act as a hub in South-east Asia, and that Chile will become a similar launch pad for South America. But still some questions concern us. How will the indigenous communities fare in this four-way trade agreement that opens the door to wider trade liberalisation within the APEC region? Have those communities experienced the same reversal of fortune that saw Ngāti Toa—or, for that matter, any hapū or iwi—decline? Have similar steps been taken to destroy the mana and rangatiratanga—the power base—of indigenous communities implicated in this trans-Pacific agreement? Our knowledge of indigenous communities is that across the globe, traditional ways of life and homelands are being destroyed by overpopulation, growth, and industrial development, all in the name of progress—but to whose advantage? It is generally not to the advantage of tangata whenua.

Since the Spanish conquest, indigenous peoples have been used as labourers—poorly paid and lacking political representation. Although those conditions of semi-servitude are changing slowly, just 4 months ago the indigenous people of Chile gathered in Santiago for the First Forum of Indigenous Peoples on Poverty Eradication. They gave some indication of their plight. Their letter to the Presidents of Latin America and the Caribbean makes for interesting reading, as we consider the place of this bill today. It states: “In spite of the call by the international community with regards to decisively improving the human rights situation of Indigenous Peoples, the State of Chile persistently refuses to acknowledge Indigenous Peoples and their rights in the constitution … This legal lack of protection in terms of collective rights places Indigenous Peoples at a disadvantage before the rest of the Chilean society … In Particular, for Indigenous Peoples like the Aymara, Quechuas, and Likanantay, a real commitment to overcome poverty implies the acknowledgment and enjoyment of our rights to superficial and subterranean water sources, the acknowledgment of our rights over mining fields existing in our ancestral land and the right to have a share in profits resulting from their exploitation.”

I ask this House to seriously consider this whole bill and how we can sign up to a four-way trade agreement linking Latin America, the Pacific, and Asia, when we have such gaps at home with regard to indigenous people—Māori. One would hope that this nation, understanding the strategic and constitutional significance of Te Tiriti o Waitangi, would ensure that Treaty responsiveness in any international trade and tariff agreement is given considered thought by any Government entering into such an agreement. The Māori Party therefore looks for a guaranteed involvement of Māori as Treaty partners in the negotiation of, or enforcement of process under, such agreements. The national interest analysis, however, is guarded in its application of Te Tiriti o Waitangi. It states that the trans-Pacific agreement contains: “safeguards which will ensure that there are no adverse effects on New Zealand cultural values, including Māori interests”, which earlier speakers talked about. It is hardly a full endorsement of pride in tangata whenua achievements, is it?

This could have been an excellent opportunity for the New Zealand Government to recognise the unique contribution that Māori offer to the domestic New Zealand economy. Instead, the strongest position put forward is that there is nothing in the agreement that will prevent the Government from fulfilling any obligations under Te Tiriti o Waitangi. It is no wonder that there is general scepticism on the part of tangata whenua that those acknowledgments amount to any more than a paper promise. Commitments are avoided, and any real benefits are geared to the Crown, not to Māori or any other indigenous parties implicated in this relationship.

The relationships envisaged for tangata whenua communities as Treaty signatories should entitle us to enjoy the rights as a Treaty partner that attach to these international agreements. The commitments articulated in Te Tiriti o Waitangi should translate into international trade agreements such as the Trans-Pacific Strategic Economic Partnership Agreement. Promises made should be promises upheld. There is certainly space for greater collaboration between Māori and other indigenous communities about how international agreements like the Treaty could work in practice at international and domestic levels in contemporary times, but our treaties should be used as affirmations of, or a source of, political rights and status. They should be used to provide power as a vehicle for revitalisation.

The Māori Party will not stand by and allow, or turn a blind eye to, the situation that tangata whenua in other places—our brothers and sisters overseas—find themselves facing, and to the gross injustices and inequalities outlined by the indigenous communities implicated by this treaty. Our decision to oppose this bill is influenced finally by an ancient Incan prophecy from the Mapuche people of Chile and Argentina: “One day the great sacred birds of the North and the South will fly together. When the eagle of the North and the Condor of the South fly together, the Earth will awaken. The eagles of the North cannot be free without the condors of the South. Now it is happening. Now is the time.” Indeed, now is the time for the Māori Party to defend the rights, and uphold the aspirations, of indigenous communities across the globe. In doing so, we honour the inherent entrepreneurial capacity of tangata whenua and will do our very best to protect it for future generations.

Hon PETER DUNNE (Leader—United Future) Link to this

In a roundabout way the previous speaker, when he talked at the commencement of his speech about the people of Ngāti Toa—not far from here—and their history as traders, encapsulated New Zealand’s history and the rationale behind this bill. He went on to move some distance from that point. But the starting point has to be that New Zealand is a small country, at the end of most of the world’s major trading routes, that historically has lived by its capacity to trade. We have significant natural advantages, but proximity to markets is not one of them. We have capacity in terms of attractive products that we produce, but we need willing markets into which to sell those products.

In today’s global environment where—notwithstanding delays in completing the Doha round or other international agreements—more and more multilateral agreements are being entered into between countries that believe they share a common interest, it is only rational that New Zealand looks to maximise its opportunity in this regard. That is why United Future supports the Tariff (Trans-Pacific Strategic Economic Partnership) Amendment Bill.

I was momentarily encouraged when the Green speaker said that the Green Party was not opposed to trade. Then I reflected on all the trade agreements that we have discussed in this House over the last few years, and I could not think of one that the Green Party had actually supported. I also recalled his leader making a comment at one stage, in 1999, that New Zealand’s biggest export was soil—windblown by erosion—and that if we stopped international trade, we could cut international air travel in half, because all those trade negotiators would not be flying back and forth and, therefore, the polluting effects of aviation fuel in the upper atmosphere would be minimised. So I thought for a moment that we might have been seeing a change of heart, but it was not to be.

I listened to both the previous speakers, and one of the points that came through—which is one that is always raised when these types of agreements are being debated—was the question of what essentially is in it for the various partners. When we look at this agreement, we might ask: “New Zealand, Chile, Singapore, Brunei Darussalam—what is in it for New Zealand?”. There is the opportunity for us to have access into markets that we might not have access into in the same way at the moment, but the downside risk is argued to be that we have to accept products, services, and all sorts of things coming the other way.

About 18 months ago, in the Legislative Council Chamber next door, I hosted a three-way discussion between the ambassadors for the United States and Mexico and the High Commissioner for Canada to commemorate 10 years of the signing of the North American Free Trade Agreement. One of the key messages relevant to this bill that came forward at that meeting was the mutuality of benefits to all three countries over that 10-year period. Each country had benefited from the agreement, perhaps in different ways, but no country could report that it was worse off as a result of having concluded that agreement.

I think that is the lesson here. We know the advantages we have achieved from some of our bilateral trade agreements, going right back to the Closer Economic Relations agreement with Australia, which is the obvious one. But this is the first multilateral agreement of its type that we are seeking to conclude, and it recognises the common interests we have already with Singapore, the various ties we have with Brunei, and the fact—as the previous Chilean ambassador to New Zealand, Mr Appelgren, was so fond of reminding us of—that Chile is our nearest neighbour to the east. This is about bringing together a large regional agreement between countries that already have some interests in common and countries that have a willingness to expand those trade and political partnerships.

The format of the bill is exactly the same as with other trade agreements. The amendments it makes are to the Tariff Act, and that is entirely as it should be. They have come after the consideration by the Foreign Affairs, Defence and Trade Committee of a national interest analysis, and in some cases, the draft treaty. The bill will go back to the committee for some period for the consideration of submissions, and I wager that, in this particular situation, we will hear many of the arguments, from the same sorts of groups, that have been rehearsed in respect of every previous trade agreement, and not a great deal of light will be shed on events as a consequence.

I also make the point that in the last Parliament, the Foreign Affairs, Defence and Trade Committee carried out an inquiry into New Zealand’s relationship with the countries of Latin America. The Government response to that report, which was tabled in the House just recently, acknowledged the importance of New Zealand’s developing trade relations with all of those countries, and with Chile in particular, because of the opportunities that are there for us in terms of countries of similar latitude and geography, and countries where the markets that we might be seeking to promote are likely to be favourably viewed. This agreement, bringing Chile into the fold, as it were, as far as New Zealand is concerned, is, in my view, extremely welcome.

The way of the future will be these types of agreement. New Zealand is already negotiating with China, we have agreements with Thailand, Singapore, and Australia, and there is talk of more and more regional cooperation. We cannot pretend, particularly as a country of our type and size, that we can somehow stay outside that set of new environments. We live by trade. We will perish if we are unable to trade effectively in the future. I say to those people who criticise this legislation as implying a loss of sovereignty, or a surrender to the evil power of the multinationals, to look at what is happening elsewhere. Last night a group of us had dinner with the delegation from the European Parliament.

One of the issues I raised in discussion with a number of people—from new Europeans, such as the Poles, through to some of the more traditional members of the European Union—was how, in this new European environment, is national identity preserved? How can people who have spent the best part of the last couple of hundred years fighting each other come together in a political and economic union that is sustainable and viable? And the answer I received from those people, from Britain, Poland, Austria, and other countries, who were at our table was that culture and language is the distinctive thing. The Germans are no less German because they are in the European Union. The British, despite people like Margaret Thatcher, are no less British because of the European Union. The national culture preserves that identity. I say to those, therefore, who worry that somehow we are surrendering culture and identity through these agreements that, if anything, we are providing the opportunity to strengthen those links.

So we welcome this bill. We will certainly be supporting it. We are confident in the advantages it will bring to the New Zealand economy, and we look forward to the bill being passed and the relevant agreements coming into effect as soon as possible.

JOHN HAYES (National—Wairarapa) Link to this

I was interested in the platitudes of the previous speaker, who clearly has not done very much homework. He would know, for example, if he had done some, that we do not have an agreement with China, and if he reads today’s copy of the Independent, he might find the reasons why we might not get one.

KEITH LOCKE (Green) Link to this

I raise a point of order, Mr Speaker. During that speech John Hayes made accusations against me, and previously in this Parliament members have been forced to withdraw and apologise for saying that I supported Pol Pot. I never supported Pol Pot in his crimes, and that member should be asked to withdraw and apologise.

KEITH LOCKE (Green) Link to this

I raise a point of order, Mr Speaker. The member over there said: “But not to Stalin.” He is implying I supported Stalin. I never supported Stalin.

TAITO PHILLIP FIELD (Labour—Mangere) Link to this

I raise a point of order, Mr Speaker. I distinctly recall John Hayes including in his accusation reference to Mr Locke supporting not only Pol Pot but Stalin, as well.

Hon CHRIS CARTER (Minister of Conservation) Link to this

I move, That the Tariff (Trans-Pacific Strategic Economic Partnership) Amendment Bill be referred to the Foreign Affairs, Defence and Trade Committee