DAVID BENNETT (National—Hamilton East) Link to this
It gives us great pleasure to talk about the Tariff (AANZFTA) Amendment Bill and the Customs and Excise (AANZFTA) Amendment Bill this afternoon. This legislation relates to something that will be of benefit to New Zealand for a long time in the future as our country develops, and as the economies of the world and our region change to take into account the growing economic importance of the Asia-Pacific region.
Many New Zealanders will look back on this legislation in a few years’ time and say that it was very important for the future of our country. Essentially, New Zealand is becoming part of a host of free-trading countries in a very important bloc that will dominate world trade in the next generation or so and will be of great advantage to New Zealand, which is a primary-producing economy and therefore able to fit neatly within the manufacturing economies that make up the ASEAN-Australia-New Zealand Free Trade Area.
This legislation is important when we consider that New Zealand is a young country finding its place in the world of economic development, and that the other countries represented in this bloc of trading partners are also young countries finding their feet. It represents a commonality not only of economic interest but also of political and geographical interest, because New Zealand shares many common denominators with other countries in this group. Not only do we rely on this group to be an important factor in global and regional security, we also rely on this group as our friends and neighbours when it comes to advocating on a world stage. So there are a lot of advantages in New Zealand’s going into this economic combination with these other countries. This bill makes New Zealand’s domestic legislation of a nature that allows us to proceed and be successful.
When we look at the ASEAN countries—that is, the countries of the Association of South-east Asian Nations—we see that they represent a very big and growing percentage of our exports. New Zealand exports to this region have increased by 121 percent since the year 2000. This legislation is a starting point, and a very successful starting point, for our economy. Imports over this period of time have also increased, reflecting the trade advantage that these countries have with the New Zealand economy. Within the area we see a market of more than 566 million people, and this accounts for more than $1.4 billion of global trade.
Chris HipkinsThe members of the Labour Party are not excited about this legislation. They do not see the economic gains for New Zealand, whereas the National Government does. We see that there is a huge gain to be made. Represented in the association are countries that have a common interest with us, and we have many common backgrounds in the sense of having a historical link with many of these countries, as well.
This legislation is part of the free-trade mantra that is important for New Zealand as we look at getting out of this economic recession. If we do not have trade with other countries, we cannot grow the productive side of the New Zealand economy. That was lacking under the previous Government, which did not grow the productive side of this economy. The tradable side of the New Zealand economy did not grow under the Labour Government, and that was not in the best interests of New Zealanders. But this legislation is in the best interests of New Zealanders. We will grow the productive side of the New Zealand economy. That is part of the process we are engaging in through this legislation.
I think it is important that we recognise the long-term benefits for the New Zealand economy of this trading agreement. We need to ensure that the New Zealand legislature is of sufficient support to enable this agreement to proceed. That is what we are looking at in this legislation today; we support the legislation fully. We look forward to the House passing it in the best interests of the New Zealand economy going forward.
STUART NASH (Labour) Link to this
That was an impassioned speech from Mr Bennett. I tell him that his passion for international trade just shone through there—fantastic! I stand in support of this legislation. As Mr Bennett said, we usually stand together as a Parliament on free-trade agreements and international trade agreements—
—most of us. It is fantastic legislation and I take my hat off to Tim Groser. He is a good man and a very experienced trade negotiator, but—come on! I would like Mr Bennett to give credit where credit is due, for goodness’ sake. New Zealand’s next Prime Minister, Phil Goff—
—oh, sorry; will it be Bill English—was the man who negotiated this bill. Phil Goff went overseas and spent considerable time and energy negotiating this bill on behalf of New Zealand. Part of the vision for Helen Clark’s Government was to increase our international competitiveness, our international trade flows, through free-trade agreements. This legislation is fantastic, and I tell members—and I tell Mr Bennett—that the agricultural sector loves it. I have a quote from Federated Farmers: “Despite all the doom and gloom in the other sectors, it strategically sets New Zealand up for the long haul and farmers appreciate that.” Farmers really appreciate what Labour has done for the New Zealand economy, and, finally, farmers know that Labour is the party of the land. Labour is the party of farmers; in fact, all one has to do is have a look at what we did around Fast Forward. That was a fantastic initiative that pumped $700 million into recognising the value of our agricultural sector.
That is a very good question. What have the Nats done for farming? What have the Nats done for the agricultural sector? I tell Mr Bennett that they have not done much, at all. I know that he appreciates what happened in farming under the Labour Government. He did very well. But what has happened under the first year of the National Government? I tell him: “Oh, mate—it is not good. Lion Red!” Let us face facts: agriculture, forestry, and land-based industries are still the backbone of this country, which is why these sorts of free-trade agreements are absolutely fantastic for the country. But the business has changed. The business of agriculture, the issues, the challenges, and the opportunities have changed, and now it is about developing international contacts, international links, and international partnerships.
Phil Goff has a vision for New Zealand. He went out, as Helen Clark’s trade negotiations Minister, and negotiated this deal with vision, with foresight, and with a plan of where we wanted to go. It was aspirational. It was aspirational as opposed to the actions of the National Government, which has cut adult community education. Adult community education, according to PricewaterhouseCoopers, was worth $7.4 billion to the New Zealand economy, yet National has cut it. Those were people who were going to train themselves to become better New Zealanders and to contribute to the economy, and in export industries as well, but National has cut funding. Where is the aspiration there?
This legislation is truly aspirational because it is about putting New Zealand out into the international market and getting our brands out there. When Phil Goff negotiated this agreement, he did it with vision and with aspiration, and he walked the walk. As I mentioned, I support this legislation for a number of reasons. The first and foremost is that it covers an area comprising about 500 million people—500 million people. That is a hell of a big market.
It is a lot of customers, and a lot of these people are entering the age of consumerism for the first time. There is a recession going on in the developed world, but in the developing world a whole lot of these 500 million people for the first time have money in their pockets, and they want to buy what New Zealand can produce. When they see the New Zealand brand, they understand what it stands for, and their market is a hell of a big market. This region actually contributes $1.4 trillion to global trade. It is a significant trading bloc. In fact, it contributes about $4.7 billion, or about 10 percent, of all New Zealand’s exports, and of that about $2.2 billion is from dairy, actually, so even our largest company, even Fonterra, can benefit hugely from these free-trade agreements.
As Mr Bennett said, the value to New Zealand of this market since 2000 has increased by over 100 percent. Over the 9 years of a Labour Government, trade into this market increased by well over 100 percent. In fact, in the last 3 years of the Labour Government trade increased by over 24 percent—that is, there was 24 percent growth under the Labour Government. That is how aspirational this legislation is, because Phil Goff, the next Prime Minister of New Zealand, knew that this was where our future lay. He went out there, he courted global trade, and he got this agreement up and running. It is fantastic and aspirational. We import $7.5 billion worth from these economies; this legislation is hugely beneficial to this country and this economy.
As I mentioned, this legislation encapsulates a huge part of Labour’s vision for New Zealand, and that economic vision is around greater economic, international development. Sustainable economic growth for this country can really be achieved only through greater international agreements and engagement. Let us face facts: we are a country of just over 4 million people. If we can get it right here, we can take it international. We do not have one large company that has not grown because of international engagement. This legislation will allow that to happen. This legislation will allow some of the 97 percent of companies that are now small to medium sized enterprises to get out there and make it happen. It is absolutely fantastic. In this day and age of globalisation, economies the size of New Zealand need to develop country brands and a whole lot of brand attributes that sit against Brand New Zealand. We did that very well under Labour.
“100% Pure”, and 100 percent fantastic. I fear for this brand, though, when people like Rodney Hide stand up and doubt climate change. Goodness me, they think climate change does not exist. We have people like Nick Smith who go to international conferences and in the space of about 6 months we become the laughing stock after having been the leaders. How aspirational is that? It is a shame. It is a shame for our exporters—
That is a much better word. It is absolutely disgraceful. We need to develop international brand attributes that do not go against the brand that Labour has worked so hard to develop over the last 9 years. Then what happens is that companies go out and leverage their own brand against Brand New Zealand. Do members know who does this? It is New Zealand Trade and Enterprise. New Zealand Trade and Enterprise manages New Zealand’s international marketing and development. It goes out there and finds the channels to market, and the customers, and it makes it happen.
The member must be kidding me. Has $10 million been cut from our international marketing manager at this time? That is scurrilous. I cannot believe that. Why would the Government do that at this time? Why would it do it when it is implementing one of the most important free-trade agreements? I cannot understand it and I bet that Amy Adams cannot understand it at all. She is sitting there shaking her head in amusement.
It shows that Bill English just does not understand the economic drivers of this country. It is about sustainable economic development. It is appalling that he just does not understand. The reason this is so important is that 97 percent of New Zealand businesses are small to medium enterprises. They cannot afford to employ their own international marketing managers. They need New Zealand Trade and Enterprise, and the last thing they need is for it to have $10 million cut from its budget.
So I am fully supportive of this legislation, for a number of reasons. First and foremost, this implements a Labour vision for New Zealand. I would dearly love to see the vision and the resources necessary behind the legislation to make it happen. I am very, very sad—sad for myself, sad for the Government, sad for the country, and sad for New Zealand businesses because they know that it will be another 2 years and 2 months before the resources to implement this vision are put in place. Thank you very much.
AMY ADAMS (National—Selwyn) Link to this
I am delighted to have the chance to speak in support of these two bills: the Tariff (AANZFTA) Amendment Bill and the Customs and Excise (AANZFTA) Amendment Bill. As we have already heard in the debate, these bills will make the changes we need to make to our domestic legislation so that we can enter into the ASEAN-Australia-New Zealand Free Trade Area.
We have heard already from all sides of the House in this debate, as is usually the case in these free-trade matters, of the importance of free trade and exports to our economy. I do not think anyone in this House would cast any doubt on the fact that it is our export economy that will lead us out of the recession. That is one thing that this National-led Government understands at a fundamental level. Our businesses, our exporters, and our ability to be the food basket for the Asia-Pacific region in particular will be New Zealand’s pathway out of this recession. Because of that we have to put in place every assistance that we can as a Government to ensure that the roadblocks to our exporters are addressed. The free-trade area that will be created will go a huge way towards freeing up one of the most fundamental, progressive, and developing areas of trade in the world.
Let us look at the figures. In 2006 the ASEAN area represented $2.6 billion worth of trade to New Zealand. By 2007, a year later, that had gone up to $3.1 billion. By 2008 it was up to $4.6 billion. That sort of growth represents the strong importance of this area to our economy, and that is why when this agreement was signed in Thailand in February this year New Zealand should have let out a collective cheer and celebrated. Agreements like this help ensure that our exporters will be able to build the productivity that this country so desperately needs.
I want to talk for a little minute about the rural sector, which is essential to my electorate of Selwyn. I represent a vast area of rural production. In Selwyn that production is things like sheep, arable crops, horticulture, viticulture, dairy, beef, venison—the list is pretty much endless. In fact, the other day I even visited a wasabi exporter who is based in Selwyn. Those areas of rural production, primary production, and horticulture are, as I say, the foundation for exports. For my constituents, who rely on exports, agreements like this that open doors for them are absolutely essential. I know that the economy in Selwyn, as in all New Zealand, is fundamentally tied up with our ability to get our goods into offshore countries. Our population is not strong enough that we can rely entirely on domestic trade. We must export. We are a small country but we can do some things incredibly well, and agriculture is one of those things.
We heard the last speaker, Stuart Nash, pay lip-service to the farmers of New Zealand, which is pretty rich coming from a party that spent the last 9 years when it was in Government kicking farmers, criticising them, blaming them, and running them down at every single opportunity. Now that Labour is in Opposition it is trying to find friends anywhere it can. The National Party has always stood up for agriculture. It is the party that has always understood the need to get behind our farmers, our winemakers, and our growers. That commitment to agriculture can be seen in our commitment to trade and to growing our export markets.
In my patch we have a company that in the space of 2 years has gone from nothing to a $100 million processing plant, solely on the back of its exports into the Asian market. That is the sort of business we need to be encouraging. That is the sort of business that will get the country through the recession. That is the sort of business that will benefit from this agreement. That is why I am so proud to support this legislation. I commend the Minister of Trade, Tim Groser, for his work in concluding the agreement. Thank you.
MICHAEL WOODHOUSE (National) Link to this
It is my pleasure to add my support to the Tariff (AANZFTA) Amendment Bill and the Customs and Excise (AANZFTA) Amendment Bill for the ASEAN-Australia-New Zealand Free Trade Agreement. That could be one of the longest titles for legislation that I have seen in this House. In particular, I endorse the comments of those who spoke earlier today, and on previous sitting days, about the importance of free-trade agreements to New Zealand’s economy, and in particular to our recovery from the present recession. Few in this House would disagree with the importance of the role that our export sectors will play in that recovery. I think that the biggest risk to that export-led recovery is protectionism. Already there is evidence that barriers are being considered, or in some cases are already in place, that could seriously affect our prospects for that export-led recovery. The best means of managing that serious risk is to put in place free-trade agreements with our trading partners.
In the ASEAN nations there are already high levels of trade and significant growth even before the implementation of this agreement. New Zealand exports to ASEAN nations have increased by over 120 percent since 2000 to $4.6 billion in 2008. Imports over that same period increased nearly 250 percent to $7.6 billion. But as significant as those numbers are, they pale by comparison with the possibilities that a free-trade agreement creates. Those countries—Brunei, Cambodia, Indonesia, Laos, Malaysia, Burma, the Philippines, Singapore, Thailand, and Viet Nam—have more than half a billion people living in them. They comprise about 10 percent of the world’s population. They are also very much a part of the group of developing countries whose economies are growing at a rapid rate, many of them with double-digit GDP growth. Even during this worldwide recession, the scale of which we have not seen for nearly 80 years, many of those countries still experience strong growth.
Those who are listening carefully will have noticed that there is quite an imbalance between our exports to those nations and our imports from them. I think this is a good example of what the Prime Minister and the Minister of Finance have been talking about since the Budget. Those imports have contributed to debt-fuelled increases in consumption that, combined with large increases in Government spending, have meant, as the Prime Minister stated last week, that “In recent times the New Zealand economy has flattered to deceive.” The tradable sectors—things like agriculture, fisheries, manufacturing, tourism, and forestry—have effectively been in recession for the past 5 years as interest rates, exchange rates, high taxes, and an increasingly complicated regulatory environment have made it more and more difficult to export, and those exports have become less and less competitive.
This Government has embarked on a number of initiatives to improve that export performance. No one of them is a magic bullet, as the Opposition appears to think, but the free-trade agreements are very much part of those initiatives. It is worth acknowledging that the Labour Opposition also supports free-trade agreements and made good progress on free-trade agreements with China and others and on this free-trade agreement during the term of the previous administration. But it is also worth pointing out that the Association of South-east Asian Nations was founded in 1967. New Zealand became a dialogue partner shortly after that under the Holyoake Government, and the dialogue established that was the precursor to this free-trade agreement started as long ago as 1995 or 1996 under the Jim Bolger - led National Government. I am sure the present Government and our hard-working Minister of Trade, the Hon Tim Groser, will appreciate the continued bipartisan approach to free-trade agreements in the spirit of that shared understanding of the importance of these agreements to the New Zealand economy.
This agreement will be significant in so far as the outcome of it will be the elimination of tariffs on 99 percent of New Zealand’s current exports to the four key markets within the ASEAN region within 12 years. By any measure, that is a pretty speedy response. On full implementation of the agreement it will total savings to New Zealand of $50 million on current trade levels. We can expect those trade levels to significantly increase. There will be improved access to New Zealand markets through the elimination of those tariffs, and the possibilities for the agriculture sector, as the member for Selwyn pointed out, are quite exciting.
I support the bills and I look forward to their passage in the House. I also look forward to this Government working diligently on a free-trade framework that will result in more agreements in the next wee while. Thank you.