Tariff (New Zealand - Thailand Closer Economic Partnership) Bill

I move, That the Tariff (New Zealand - Thailand Closer Economic Partnership) Bill be now read a third time. The bill allows the agreement negotiated between Thailand and New Zealand for a closer economic partnership to come into force once Thailand has also completed its domestic implementation process. The agreement provides for all tariffs applying goods of New Zealand or Thai origin traded between the two countries to be either eliminated immediately or phased out over a schedule period.

Sitting suspended from 6 p.m. to 7 p.m.

As well as providing for all tariffs applying to goods traded between the two countries to be eliminated, the agreement provides for the early commencement of negotiation to liberalise trade in services. The agreement also provides for the use of bilateral transitional safeguards by both New Zealand and Thailand. Members opposite seem to have difficulty in understanding that concept. I am not sure what it was that they could not understand, but I will just point out to them that the bilateral transitional safeguards under the closer economic partnership simply allow New Zealand to raise tariffs on Thai goods back to the level applying to imports from other countries, in the event of serious injury or threat of serious injury because of a sudden and dramatic surge in imports.

The World Trade Organization global safeguards apply generally to imports from all countries, and can raise tariff rates above the World Trade Organization bound rates if a World Trade Organization safeguard is applied. I think that explains the relationship between the two.

Clearly, most members who have participated in the debate, like most New Zealanders, recognise the value of freer and fairer trade, and have supported this bill accordingly. The National Party members have spent most of their debating time raging against the presence of a Treaty of Waitangi carve-out article in the bill, an article that is identical in effect to the one they had proposed in the Singapore - New Zealand closer economic partnership, and one that they cheerfully agreed to put in New Zealand’s treaty binding us to the General Agreement on Trade in Services of the World Trade Organization. However, they seem to get particularly exercised by this article. Their necks turn red before our very eyes as they rage against it.

The meaning of the article that they have trouble understanding is, I suggest, plain on the face of it. The Government has no particular plans for more favourable treatment of Māori, but given the historical injustices perpetrated by the Crown on Māori in breach of the treaty over the years, we deem it equitable not to preclude some favourable treatment by way of redress, if this seems necessary to the Government of the day at some time in the future. National members may shout until their necks turn red but Labour believes in justice.

I thank everybody in the House, and in particular the members of the Foreign Affairs, Defence and Trade Committee, for their attention to this important legislation. I would also like to thank the officials who were involved in the negotiation of the agreement, especially the team leader, Rachel Fry, and the members of the public and private sectors who provided invaluable input into the process. They can all be proud of their special efforts and their achievement.

The agreement opens up substantial opportunities for exporters, both immediately and over the longer term, and will enable New Zealand’s trading relationship with Thailand to achieve its full potential. Moreover, the closer economic partnership will serve as a springboard for developing aspects of the New Zealand - Thai relationship beyond the economic domain. The conclusion of the agreement has already provided the impetus to introduce a working holiday scheme with Thailand, and it creates a platform for greater cooperation in areas such as tourism, education, cultural links, and scientific exchange. Beyond this, the agreement with Thailand has added impetus to the pursuit of New Zealand’s wider trade strategy objectives in South-east Asia, with negotiations now under way on free-trade agreements with Malaysia and, indeed, the entire ASEAN membership. I commend the bill to the House.

In speaking to the third reading of the Tariff (New Zealand - Thailand Closer Economic Partnership) Bill, I want to reflect on what took place in the Committee stage. The Committee did canvass a number of issues in relation to this legislation, which, I make clear from the outset, National supports—not because we think it is a great piece of legislation or because we think the Thai trade agreement is a great agreement, but because we believe that any trade liberalisation is positive for New Zealand and is worthy of support. I congratulate the Government on making some progress in trade negotiations, and I congratulate the Minister for Trade Negotiations on having made some progress on trade negotiations.

But having said that, I am troubled by the quality of the agreement, which this legislation implements here in New Zealand. I think any reasonably objective examination of it would show that, on balance, it is worth doing, but there are quality issues. New Zealand up until now has set very high standards in our bilateral work. During the second reading debate I mentioned that CER was a very high-standard agreement. Our Singapore agreement is a high-standard agreement. I accept that the Singapore agreement was probably easier to negotiate, although services with Singapore were not easy to deal with, I think it is fair to say—but they are included.

Of course, one of the troubles with this agreement is that services are not included, and services make up over two-thirds of our economy. It is a serious concern that they are not included. OK, the Minister says that negotiations on that are to commence within 3 years. At least that is something, and services are not left out altogether, but it sets a poor precedent when agreements go ahead with bits having been left behind for a period of time. I guess the Government was getting a bit desperate. It had failed with the Hong Kong free-trade agreement. That one had been initiated a long time ago, and the Government had failed on it. The Government had no runs on the board in respect of bilateral trade agreements, at all, so I guess it wanted to get this one in the bag regardless of the quality.

There is a second concern about quality, and that is the extension of New Zealand’s undertakings beyond our APEC goals. OK, I accept that the Minister could not necessarily have negotiated with Thailand to phase out its tariffs earlier than the date it has agreed to do that—2025, from memory. But that is no reason for New Zealand not to agree to phase out our tariffs sooner. People are starting to learn a lot about trade. I have heard speeches this afternoon from members pointing out how important trade is to maintaining and enhancing peace and security in the world. I think I heard a member talking about trade lifting the tide and raising the living standards of all people in the nations that are trading. What I have not heard members of this Parliament begin to understand is that for us to remove barriers to trade with us, for us not necessarily to have as long a phase-out time as other countries, is to our advantage. It actually would have made sense to phase out New Zealand’s tariffs by 2010—our APEC goal commitment—because that would be good for New Zealand and the New Zealand economy. Why did the Government agree to phase out our tariffs on goods from Thailand by 2015? That hurts our economy. All the research is so clear: the countries that open up their economies first will be in the strongest position in this globalising world. Here, this Government has chosen to maintain a long phase-out of our own tariffs, and that is a reflection of poor quality and confused thinking.

💬 Hon David Cunliffe: Why does nobody do that in the real world?

Dr the Hon LOCKWOOD SMITH: In fact, quite a few successful economies have—Hong Kong, for one. Singapore did not maintain tariffs around its goods. New Zealand, of course, legislated to phase out tariffs, and Labour actually repealed that legislation, and New Zealand’s economy will suffer because of that. The economies that are the first to open their markets are the economies that become the strongest in a globalising world. That is clear, if the member would only open his eyes to see.

We raised a number of questions, and, in fairness, I must say that the Minister did start to answer those questions. But then I guess the questions got a wee bit harder, and the Minister, the Hon Jim Sutton, got a bit petulant, started to throw his toys out of the cot, and refused to answer any more questions. Jim Sutton is not a bad bloke, I guess. He used to be a good guy, till Labour wrecked him. He certainly stopped answering questions. He became a bit more petulant and threw his toys out of the cot. These are the serious issues that we asked questions about and never got answers to.

The first question was about the transitional safeguard measures. For the first time, New Zealand is implementing specific transitional safeguard measures in our law. Sure, we are party to the transitional safeguard measures involved in our World Trade Organization agreements, but good questions were asked. Why legislate for this, when we are already covered by the transitional safeguard measures of the World Trade Organization? It makes more sense for Thailand to want to put crazy restrictions into its law, but why do we follow suit? Why do we not stick to the World Trade Organization provisions? Why are we putting into our law the set of measures in Part 2 of this bill? I think it was Dail Jones from New Zealand First who said that they will be a lawyer’s dream.

One does not need to be much of a lawyer to realise that, once one reads that the bill talks about a threat of injury and an increase in the volume of imports. I think the Minister, in his third reading contribution, talked about a rush of imports, or a huge increase in imports. The legislation does not state that. It refers just to an increase, either in real terms or in relative terms. Once we have those kinds of words in our law, once we have words such as “like goods”, lawyers will have a field day. It does not have to be an increase in imports of one’s own product; it just has to be an increase in imports of like products—and this legislation tries to define what like products are.

Why put this sort of stuff in our law, when there already are safeguard provisions in the World Trade Organization agreements, which have some precedents around them? These provisions are a bit different, a bit new in our law, and I predict we will see a new industry emerge that challenges imports under these transitional safeguard provisions. If this agreement works—and we hope it will—imports from Thailand will increase. That is what we want. We want an increase in our exports to Thailand. So I think it was short-sighted of the Government to put those transitional safeguard measures into our law, and it is sad that the Minister did not have the heart to respond to the very good questions from my colleague Richard Worth in relation to why we should do that when the World Trade Organization already has similar provisions that would be quite adequate for New Zealand.

The last question on a serious issue that we raised with the Minister was why have in this agreement an article that states: “… nothing in this Agreement shall preclude the adoption by New Zealand of measures it deems necessary to accord more favourable treatment to Maori in respect of matters covered by this Agreement including in fulfilment of its obligations under the Treaty of Waitangi.” We asked the Minister—which I think was perfectly fair, as this is now to be part of our law—what that meant. The Minister refused to answer. He got up and raved on, but clearly did not answer. In fact, he misquoted the article and sought to downplay it through misquoting it. The article clearly states that the Government intends to be able to accord more favourable treatment to Māori.

New Zealanders find that objectionable. That was very clear following Don Brash’s Ōrewa speech last year. Trevor Mallard promised after that speech that Labour’s policy had changed, that in future it would not accord more favourable treatment to Māori. Clearly, Labour will say anything it if thinks it will help it in the polls. That is quite clear. The polls were running against Labour last year on these treaty issues, so Helen Clark appointed Trevor Mallard as the Coordinating Minister, Race Relations to quieten everything down. He made a public statement at Victoria University that Māori have no extra rights or privileges under the treaty, or in the policy of the New Zealand Government, and within weeks—in fact, at the very same time—he knew, or should have known, that the Government was incorporating into a treaty with Thailand a provision that does exactly that; a provision that does accord more favourable treatment to Māori.

National members object to that, although we do support the bill in its overall impact.

Kia ora, talofa lava, sawasdee, and warm Pacific greetings. I have much pleasure indeed in standing to speak during the third reading of this very, very historic legislation, the Tariff (New Zealand - Thailand Closer Economic Partnership) Bill of 2005. I want to thank especially the honourable Minister for Trade Negotiations, Jim Sutton, and also the officials from the Ministry of Foreign Affairs and Trade who have worked tirelessly in negotiating this special agreement between the peoples of Thailand and of New Zealand. It does indeed represent a significant economic and strategic opportunity for New Zealand. It not only opens up more opportunities for New Zealand businesses but is also an important step towards improving our trading environment in the region and worldwide.

I want to respond to a couple of issues. One, raised by some members on the Foreign Affairs, Defence and Trade Committee, was the Treaty of Waitangi. The relevant provision in this closer economic partnership does not have any impact on the nature of the Government’s policy in relation to Māori. It is not uncommon in international trade agreements for countries to reserve the right to accord more favourable treatment to indigenous peoples or ethnic minorities. In fact, back in 1994 New Zealand recorded a reservation in its schedule of commitments under the General Agreement on Trade in Services (GATS). That provided for more favourable treatment to be accorded to any Māori person or organisation, but Australia, Canada, Malaysia, the United States, and France—on behalf of New Caledonia—have all included some form of indigenous reservation in their GATS schedules.

I also want to respond to my colleague from New Zealand First, in terms of the impact of the closer economic partnership on jobs. Although a lot of allegations about job losses are made by a lot of people who are essentially opposed to free-trade agreements, there is no evidence to substantiate those allegations. The impact of opening up the New Zealand market to imports from Thailand is expected to be very muted. It is not expected that tariff reduction and removal on imports from Thailand will have a direct impact on employment.

On the other side of the ledger, a good number of export-focused industries have welcomed the outcome of the closer economic partnership and the opportunities it opens up for developing trade with Thailand. At this point in time, I want to point out the benefits, and how New Zealand will gain from this agreement. I will give some examples of the sectors that will benefit from the complete elimination of tariffs from 1 July this year. There will not be annual duty payments of about NZ$3 million on current levels of infant milk-food products. New opportunities will be opened up for the export of avocados, cherries, persimmons, and kiwifruit as a result of the removal of the 30 to 40 percent tariffs on those products. The removal of the 40 percent tariff on carrots will allow New Zealand exporters to regain the NZ$2.5 million market lost to China. A large number of manufactured exports will see their tariffs completely eliminated, including the 15 percent tariff on gas pumps, the 5 to 10 percent tariffs on plastic moulding equipment, and the 15 percent tariff on radio parts.

I refer now to a letter that the New Zealand Horticulture Export Authority wrote to the Foreign Affairs, Defence and Trade Committee, urging it to support this special partnership agreement. The authority stated: “New Zealand fruit and vegetable exports have dropped from almost $13 million in 2002-03 to $7 million in 2003-04. This is the direct result of the free-trade agreement signed between Thailand and China coming into effect on 1 October 2003, providing tariff-free access for all fruit and vegetables. The New Zealand - Thailand CEP will reduce tariffs on a range of products from 40 percent to 0 from 1 July 2005, allowing New Zealand exporters to compete on a level footing with Chinese suppliers.” The authority stated in the last paragraph of its letter: “Thailand, particularly Bangkok, is a dynamic and rapidly growing economy. This positions the New Zealand horticultural industry extremely well to take advantage of growing demand and affluence. The New Zealand horticultural industry looks forward to the passing of the Tariff (New Zealand - Thailand Closer Economic Partnership) Bill, which will deliver real benefits to our growers and exporters.”

It is indeed a pleasure to stand to support the bill. I thank all those involved, including the chair of the select committee, the Hon Peter Dunne, my colleague the Hon Lockwood Smith, our other National colleagues who have supported the passage of this bill, the Hon Matt Robson from the Progressives, and also my Labour colleagues. I also thank New Zealand First and the Greens for not supporting us. Other than that, this is a great day for New Zealand, and I thank you.

The first thing I should do is indicate the nature of the trade between Thailand and New Zealand, based on Statistics New Zealand external trade statistics for New Zealand exports to Thailand in the December years—say, December 2004, and also December 2002 and December 2003. The astonishing thing is that I have to disagree with the preceding speaker. She has misinformed the House, based on the letter she received from the Horticulture Export Authority. I look at the reference I have to horticultural exports. The member said that they totalled $7 million last year. The member has the letter, but I have the statistics. The statistics do not confirm what is in the letter. The letter is seemingly untrue, and that member, a Government member, has not bothered to check the facts. She must not repeat things that are told to her, assuming they are true.

According to these—[Interruption] The member should not look at me like that. These are the statistics, and I will read them out. If we look at the top 20 subtotal for exports to Thailand, there is not one dollar for horticulture, and the statistics go down to $3 million. There is not one dollar of horticultural export goods mentioned there. These statistics are for the top 20 exports. We have milk-powder extract, buttermilk, butter, timber, fish, raw hides, frozen beef, air vacuum pumps—$3.3 million for those—and $3 million for iron or non-alloy steel flat-rolled products. There is nothing for horticultural products.

So if the member is going to quote statistics, she has to get them right. She has to check what she is quoting. Just because somebody has told her something, that does not mean that it is true. That is the basic rule of politics. She has been caught short badly. I read that letter and I thought I would check the figures. That letter was wrong. If it is right, I will look forward to discussing it with the authority. I would like to see members of the authority tomorrow, because these statistics must be right, surely. This document has been given to me by the Parliamentary Library. It is quite clearly entitled “Statistics New Zealand external trade statistics 2004, 2003”, and there is a reference to 2002. It is as simple as that. So the previous speaker has mud all over her face.

Of course, this bill is also about horticulture. While we are on that topic I will make just one more point. Why did the member not quote this from the Horticulture Export Authority? The authority told the select committee considering the bill: “However, new residue testing requirements proposed by the Thai Government have the potential to significantly reduce the benefits from the agreement. These requirements are viewed by both the New Zealand export industry and Thai fruit and vegetable importers as a non-tariff trade barrier, focused on reducing imports of Chinese fruit and vegetables. We are working with the Ministry of Foreign Affairs and Trade to address this issue.”

The barriers they are putting up against China affect New Zealand as well, so the amount of fruit exported to Thailand from New Zealand will be virtually nil. I have those two documents here, and the member can comment on them. I am prepared to table them, to make them available to anybody. Clearly, it is all very well for the Minister to parrot something and for this other Labour member to parrot something, but parrots are only parrots. We have to think for ourselves sometimes, and that is what we do in New Zealand First.

We care about the workers of New Zealand. The National Party wants more and more imports into New Zealand, and their members support this bill. The Labour Party gets its facts wrong, and its members stand there and say how wonderful this legislation is. There are more and more imports into New Zealand, and more jobs are being lost for workers in Porirua.

What about the workers in Porirua? They will suffer as a result of this legislation. New Zealand First made that clear. Once again, we quoted from the information in the report, which was supplied by the officials. The national interest analysis on page 21 has the following statement, and refers to the New Zealand First minority view on the agreement: “The clothing, footwear, and carpet sector, where the highest tariff of 17.9 percent prevails, has traditionally seen the most sensitive tariff reductions. Concern in relation to imports from Thailand was also raised in respect of whiteware, plasterboard, steel, and certain textiles.”

New Zealand First is concerned about workers in those industries, some of whom I am sure are in the Porirua and Wellington areas. The previous speaker, who represents an area of Wellington, seems to have no regard for them whatsoever. I can say that New Zealand First does have concern for those workers.

It is interesting to read about the imports from Thailand, and I mentioned this in the Committee stage. One of the imports is caviar—$21 million of caviar is imported from Thailand. I can just imagine all the Chardonnay-sipping Labour socialists now will be adding Thailand caviar to their lovely lattes and coffees when they are in Ponsonby, Grafton, Parnell, and wherever else one goes in Auckland to enjoy a Saturday latte. Now they will have a touch of caviar, probably on their French-imported biscuits. That is what the Labour Party has to offer to the workers. If they cannot have bread, they can have some caviar—imported especially from Thailand.

What a state this Labour Party is in today. No one in this Labour Party has shown any concern for the workers of New Zealand. New Zealand First has been concerned, and the Greens have shown some concern, although they seem to be almost as concerned about the workers in Thailand as they are about the workers in New Zealand.

National Party members made some very good speeches on this bill. I had regarded them as being in opposition to the legislation. I commend Dr Lockwood Smith for his speeches. They were all in opposition to the legislation. He has admitted that it is a poor-quality agreement. I think he is just going on the basis that any trade agreement is a good trade agreement, it does not matter what the quality is. As far as New Zealand First is concerned, it has to be a good-quality agreement, and the prime requirement is the welfare of the workers of New Zealand.

What does this agreement offer New Zealand in that very important area of services? This agreement does not include services, and that is despite services contributing 68 percent of New Zealand’s GDP. This agreement provides for negotiation to be only initiated within the next 3 years. Initiated negotiations do not necessarily end in completed negotiations. They begin in 3 years’ time, and how long will they go on for? We are talking about services being 68 percent of our GDP, and they are not even included in this agreement.

Dr Lockwood Smith said that it set a bad precedent. It sets a terribly bad precedent. One can imagine that if we are going into a deal with China, and they see what we have agreed to in this agreement, well the Chinese will have read every last word of it and they will be going for the same sort of deal. They will not want to give us services, because they will say: “Well, you agreed to do that deal with Thailand, so why should you not do it with us as well?”. It is an appalling agreement in that respect, also.

As far as services are concerned, it seems to be a bit of a one-way street. As the reports from the officials pointed out, it seems we make provisions for Thai chefs and Thai female massagers to come to New Zealand.

💬 Hon Dover Samuels: Really?

That is true, yes.

💬 Hon Dover Samuels: The member seems to know all about them.

I do. I had to read it a few times. I cannot pronounce it—there are too many “ths” and I lose track of it so I have abbreviated it a little, I have to confess. Dover Samuels looks up. Yes, there is a special provision for Thai chefs and Thai female massagers. What sort of an agreement is that? I asked the Minister in the chair, Mr Sutton, when these people actually go back, because they seem to be here temporarily. I never got any answer from the Minister. He was too flabbergasted himself to think about it. Although I think I did get an answer about how wonderful it would be for me to have a Thai female massage. What sort of an answer is that? We in New Zealand First want to know how long these people are going to stay in New Zealand, what they are going to do here, and why New Zealanders cannot do those jobs. New Zealanders should get those jobs first. Surely, after all these years of links with Thailand, we should have people capable of doing massages and knocking up a nice Thai curry for us all, without having to go to Thailand or having a Thai chef to do it.

Finally, I just make the point that the bill is a travesty as far as parliamentary process is concerned. The Prime Minister, in her arrogant way, and ready to get any sort of photo opportunity, had already signed this agreement. We saw her and the Thai people signing it, yet here we are, wasting our time in Parliament, pretending to approve an agreement that the Labour Government has already signed. That is an arrogant attitude. I draw the attention of the member concerned to the submissions on the agreement, which are not necessarily the submissions on the bill. She clearly has not read the submission of the New Zealand Horticulture Export Authority. I have read the letter that she has given. I checked the facts in it about trade, and they are wrong.

I seek the leave of the House to table the extract from Statistics New Zealand’s external trade statistics showing New Zealand exports to Thailand in December of the years 2002, 2003, and 2004, and imports from Thailand, which make no reference to horticultural products being $7 million.

Document, by leave, laid on the Table of the House.

I seek leave to table the letter from the New Zealand Horticulture Export Authority, the chief executive of the New Zealand Fruitgrowers Association, and the New Zealand Vegetable and Potato Growers Federation to the Foreign Affairs, Defence and Trade Committee to support the New Zealand - Thailand closer economic partnership agreement.

Document, by leave, laid on the Table of the House.

The Greens will oppose the Tariff (New Zealand - Thailand Closer Economic Partnership) Bill, because although there are some advantages for New Zealand exporters—fruit and vegetable exporters have been referred to—overall, it will be a disadvantage to a good many people, both in Thailand and in New Zealand. Workers in both countries will not be the beneficiaries. In my earlier contributions, I talked about the disadvantages that Thai workers face at the present time, with very low wages, with international labour standards not applying, and with very poor conditions in the factories they work in. They actually want our assistance. Thai workers have been out here campaigning against this agreement, because what they want are agreements that have attached to them some advantage for them in terms of better wages, better conditions, and more adherence by their Government to international labour standards.

Just last week I received an email from a New Zealand unionist, a friend of mine, in Thailand. He was visiting various unions there, and he said: “Yesterday I met again the president of an electronics factory union. He also works in the factory. They have problems, including how hot the factory gets. However, he was telling me about the number of relatively young people who are dying as a result of chemicals at work. One worker was just 27 years old. She had breathed in solder fumes continuously for 5 years. Another young woman, 32 years old, agreed to give a newspaper interview about her work-related fatal illness but died 2 days later, on the day she was to be interviewed. Two of the women workers I have met on the last three visits seem to be suffering from some effects of chemicals at their work.”

Then he goes on to say that another major in the factory is subcontracting. One of the subcontracting companies in the factory again did not pay its employees on time. As a result the workers have to pay an extra 50 baht a day in rent until they pay their due rent. He says: “I am wondering about the Thailand NZFDA and how we can work closer with Thai workers on issues like chemical poisoning and subcontracting.” So there are contacts between New Zealand workers and Thai workers to try to get mutual benefits for both. This free-trade agreement and the legislation we are discussing today do not really advance that. In fact, if we work in such a way with these agreements so as to increase the wages and conditions of Thai workers, that helps us, because it reduces the wage gap in production, both in Thailand and in New Zealand, so there is less likelihood of the very low wages in Thailand undermining the exports of New Zealand manufacturers or undermining the production of New Zealand manufactures here, which could accompany goods produced by cheap labour flooding into New Zealand.

We have to realise that we should not take an ideological approach to trade and say that all free trade is good and it will all come out right at the end, or, as one speaker said today, that somehow it raises the level of us all. In fact, that is not true. Industries are undermined and destroyed by free trade. The Greens do not say that we have to be totally self-sufficient, or that we have the complete, full range of manufacturing that we once had, but we do not want to undermine all our manufacturing by competing with very low-wage economies. As I quoted earlier from Oxfam, there is a potential for New Zealand trade in dairy products to Thailand to undermine the Thai dairy industry, whereas if we build in transitions, where we help increase the efficiency of the Thai dairy industry at the same time as we are easing in imports, then it is a win-win situation. There is a growing market in Thailand, as other speakers have said, and it can accommodate efficient Thai dairy production while not destroying those farmers as well as exports from New Zealand. That is what we should be working towards.

Sometimes these free-trade agreements are surrounded by myths. That applies not only to the agreement we are implementing in legislation here today but also to the free-trade agreement with China that is in the pipeline. One of the myths is that New Zealand will keep its manufacturing industry, because we will move out of mass production of manufactured items and into high-level, high-value-added quality goods. That myth has been in New Zealand society for some time. I remember many years ago, when the Japanese were just starting to pick up their industrialisation, New Zealanders used to say: “Oh, these cheap Japanese goods—they’re no good. They’re not really a threat to us.”, and put them down as low quality, etc. There is a bit of that myth around in relation to the newly emerging economies of east Asia, be it China or be it Thailand, that somehow they are producing in a mass way and we can compete with quality goods. In fact, if one does not have a proper manufacturing base, one does not get the quality at the top end.

One has to realise that countries the size of Thailand and, particularly, China, have both. They have the mass production, and they have a very strong and growing quality-research end, a high-tech end, that will compete directly with us on all levels of manufacturing. If we destroy our manufacturing base, or limit it so much that we do not have the skills in the economy, be it in clothing or other forms of manufacturing, we will not be able to compete at any end of the market. Even our fashion designers are finding that at the moment. They look around for really skilled people to sew up their garments, and they are finding a shortage because of the collapse of the clothing industry in New Zealand, which this bill we are discussing here today will increase. It is the same in other forms of manufacturing as well, be it metallurgy or whatever. We need the tradespeople and the designers to be able to produce for the domestic economy and compete in the international economy. To use an analogy with the rugby game that is going on tonight, one does not get a quality team, be it the Wellington Lions or be it the All Blacks, if one does not have a big playing base. The quality comes out of that big base. We have to take note of that if we want to protect our own manufacturing here.

The Greens tried to improve this bill with amendments to make any transitional agreements subject to ILO standards, but we failed. I think we have to remember that this bill is the first of a range of bills that may come in to cover the other aspects of that agreement in relation to investment and, later, to services, if that gets agreed to. We have a problem in New Zealand at the moment with quite a foreign takeover of our industries and land, and we do not want to increase that through these free-trade and investment agreements that make us even more like foreigners in our own country in the sense of our ownership of infrastructure, industry, and agricultural land. Labour should be a little bit ashamed about this. Traditionally, Labour has had a close association with the trade union movement, but that association is loosening now because Labour is not taking note, in terms of this bill, of the criticisms made by the Council of Trade Unions of the free-trade agreement and what has come out of it. Unfortunately Labour is adopting more and more this ideology that free trade is everything and that we should just pursue it wholesale without taking into account the interests of New Zealand workers.

ACT will certainly be supporting this bill. We are the champions of free trade. We recognise the benefits that come from freer trade in the international community. In fact, my colleague Kenneth Wang, New Zealand’s newest member of Parliament, was just saying to me that those Green Party people are mad. That is what he said. He said that because the Greens believe that New Zealand can just lock itself in a cocoon—the “fortress New Zealand” approach—when at the end of the day New Zealand is, perhaps, as a percentage of GDP, more dependent on trade than just about any other economy in the world. If we accept the basic fact that New Zealand is dependent on trade, then we can see that it is certainly in our overwhelming interest to be the champion of free trade and to look at breaking down barriers wherever we can.

The harsh reality is that trade liberalisation is progressing at glacially slow speeds. We had the Tokyo round in the 1960s and 1970s, followed by the Uruguay round, which slowly crawled on. We had the Cairns group trying to promote agriculture right through that era. We now have the Doha round. It is frustrating. I commend trade Ministers from successive Governments, because I think that trade is non-partisan. We as a Parliament should be supporting our trade Ministers, whatever Government they are from. Some say that those Ministers are just swanning off around the world and having meetings every other week in some other place. It is actually a hard slog. I know that. Any gains we make are made very slowly. Right from Jack Marshall’s time onwards, through successive Governments, we have had good trade Ministers who have worked in New Zealand’s interests.

It is overwhelmingly in our interest to get comprehensive liberalisation of trade, because we have been disadvantaged proportionately very highly. The Rogernomics Government of the 1980s transformed the New Zealand economy. I was very proud to be a member of that Government. Most people in the ACT party relate to those reforms—the current Labour Government, of course, denies them—and those reforms are the reason for the prosperous situation this country is in today. That is the reality. The Government of the time broke down those barriers and took the hard yards back in the latter part of the 1980s, and that continued in the early 1990s under Ruth Richardson, until Jim Bolger sacked her. That is when the hard yards were done. That is when we took the bold decisions to take away our subsidies and to start taking away our tariff protections, and to the extent that, for a long period, we as a nation led the world, we are in a stronger position. We are in a stronger position because we have already taken away many of our trade barriers, and therefore we are poised to gain proportionately more than most by getting breakthroughs in agreements.

I understand that the tariff against our sawn timber going into Thailand is up in the 15 to 20 percent range. Officials could probably confirm that. That is a very serious obstacle to the profitability of our very important forest industry. Yes, we may lose in footwear, clothing, and textiles, because in those instances Thailand has the comparative advantage. But that is the beauty of freer trade. Both economies will be better off. Both peoples in both nations will be more prosperous. Overall, the global benefits and prosperity that come from freer trade are overwhelming. That is what the Green Party and, I regret to say, the xenophobic New Zealand First Party, simply do not understand. They do not get it. They believe in “fortress New Zealand”. They like to stoke prejudice and say that people will lose their jobs to foreigners. What utter nonsense! The benefits for New Zealand in freer trade are overwhelming, because freer trade is based on comparative advantage. That is Economics 101. Therefore, the ACT party is very enthusiastic in supporting freer trade.

However, I have to say that, regrettably, this agreement, which has been signed, does have some serious shortcomings and deficiencies. Unfortunately, the current socialist Labour Government has imported into it all sorts of extraneous and strange concepts that actually debase the value of it—like the fact that we will have more favourable treatment for Māori. That is PC socialist nonsense—absolute nonsense. That provision is a foolish addition to this free-trade agreement. I am sure that the officials did not recommend it. It was a straight policy decision from this Labour Government—this misguided Labour Government, in this instance—and I actually feel sorry for our Minister for Trade Negotiations, Jim Sutton, for having to tolerate that sort of pollution of what could have been a much more robust and sensible negotiated position.

I am sure that the Minister did not support the insertion of that silly provision. What are we actually saying here? Is there something special about Māori apples? If we want to put apples into the Thailand market, are we saying that if they are grown by Māori there is something special about them? What absolute nonsense—what absolute patronising pap! Who on earth thought up that provision, other than, perhaps, some Māori militant who is going for separate sovereignty or something and sees this as part of the leverage towards that. There is no place for that sort of nonsense in international trade agreements. We would certainly oppose it if another nation tried to impose those sorts of provisions, so why on earth did this Labour Government succumb to that sort of nonsense? I bet that the young member for Otaki, Darren Hughes, did not support that proposal. He is a rational young man, from what I have seen of him. I do not know who in that Labour Government carried the day and imposed that sort of nonsense on a trade agreement.

I have to say to the House that although the ACT party champions free trade, and although we have indicated our support and will be voting for this bill, that provision almost swung it for us. We find it totally objectionable that stuff like this—like the principles of the Treaty of Waitangi—continues to be perpetrated in legislation, and ACT consistently votes against them. The “Winston First” party members always oppose them verbally. They go out to public meetings and say that they are opposed to bills that refer to the principles of the treaty, but every time it comes to a vote in Parliament, they vote for them. The ACT party walks the talk, and it was on that basis that we were almost spun out of voting for this bill. It is a particularly foolish provision to have in this negotiated free-trade agreement.

I note that there are rules of origin, and we have been given some assurance that they will not be exploited. We take that on trust. We also note with disappointment that services are not provided for in this agreement. I understand that the only commitment Thailand has made is to initiate negotiations in 3 years’ time. Of course, that is pretty meaningless; we appreciate that. But that is the nature of these trade agreements. The big picture is that we have taken a step. We have a commitment between two nations to move forward with a bilateral agreement. We would far rather have a multilateral agreement. Multilateral trade agreements are far preferable, but because of the sluggish progress made under the Doha round—and it will always be so, I fear. In the meantime we have all these bilateral agreements between nations. It is only when one gets to a collective point at which a sufficient number of these bilateral agreements exist that one gets a culture globally to swing in behind the multilateral agreement. That is the reality. So the ACT party will support the bill, but again I must stress that we express our serious disappointment with these foolish, extraneous clip-ons that the Labour Government, for politically correct reasons, has put in the agreement. They do not belong in it, they are foolish, and they are perverse.

As I look around the House tonight, I see the member who has just resumed his seat, Ken Shirley, and the member who spoke a little earlier, Dail Jones. I can see no one else who has actually experienced what is it like to be part of Government that is about to lose an election. Those who have been through that, like Ken Shirley, Dail Jones, and myself, know what the smell is like. They know the feeling. They sit there and they look. They smell the stench. They feel the decay. They understand what a party on its way out feels like. That is what we are seeing—

💬 Hon Ruth Dyson: Have you got only one speech?

Ruth Dyson has asked me whether I have only one speech. Quite honestly, at the moment it is the only one I feel like giving, and it is glad tidings for New Zealand. At last it looks as if this lot is on its way out. The point I am making is that members sit there, emitting hope, thinking they may be able to hang on, and not looking at reality. I look at things like this legislation, and I look at the headline: “Labour backs ‘sorry’ envoy”, and I see that it has happened again, has it not? This is what happens when a Government is going out of power. The stories are bad. The Government brings legislation through, because it worries that it will not get another chance to do some of the socialist things it wants to do as a socialist Government.

We have had the first reading debate, the second reading debate, and today the Committee stage of this bill. We have pushed this bill through under urgency. It is an important bill, because it organises free-trade relations between our country and another. But underlying it are all the things this Government was asked to tell us about but could not or would not—one or the other. Those of us who have been around for a while know why. It is because one gets to the stage when one is too tired to respond. It is such a big effort to bring legislation of this nature forward that when the Opposition starts asking deep questions such as why there are exceptions in the legislation and why there are clauses in it that refer to the Treaty of Waitangi—we want to know that means, what the implications are, and what the words “obligations under the Treaty of Waitangi” mean—the Government cannot answer them. We know that it has spent all its energy on getting the legislation into the House, and that it is beyond its ability to explain its reasons any more. That is why someone with a few years’ experience in this place can smell the decay and the stench. One can smell the rotting carcass of a Government on its way out of office.

This is a great day. Here we are debating the Tariff (New Zealand - Thailand Closer Economic Partnership) Bill, which is an important piece of legislation. The Labour Government, after 6 long years—far longer than 9 years under National—has finally given us something positive. I must say that I commend the officials who have worked hard to make this happen. Good on them. I commend their Minister for the work he has done, because undoubtedly lots of hard work has been done. But unfortunately there are so many qualifications around the agreement that it is limited at this stage. But that is OK, because at least we have a foundation so that the incoming Government can fix it up, and that can be done too.

I want to focus on two issues tonight. The first is the fact that we have all these exceptions—all these issues that really matter. The fact is that all the qualifications around the agreement will cause lots of complications. Mark my words—as previous speakers have said, there are issues that will cause us problems as we develop this agreement. In fact, one of my colleagues said to me earlier, as other speakers have said, that it is a lawyer’s dream. [Interruption] Yes, well, one of them was unkind enough to say that there is some good in it, because it will help the lawyers, but, of course, that is not the intention. The agreement is intended to help the country, and it will. But, sadly, it will cause some legal complications on the way through. The second important issue is the fact that this Government is still trying to tell the nation—as in the speech made by Mr Mallard in the middle of last year—that there are no preferences for Māori under the Labour Government any more. Yet in this bill we have a clause that gives preferential treatment to Māori. In my view, that is an absolute insult.

💬 Jill Pettis: When are you going to mention the whānau?

I do not need to. I seriously do not need to. The fact that this clause is in the bill says enough. It says that this Government has not moved away from patronising the Māori people of this country. The Government is saying that the Māori are not as good as the rest of New Zealanders, whereas people like me who represent a good number of Māori people know that they are just as good and make as big a contribution to this nation as any other New Zealanders. And they do so because they are New Zealanders, not because of their race. That is the issue that Labour unfortunately cannot get its mind around. It is not a matter of race; it is a matter of contribution. It is a matter of doing what is right because one is a New Zealander, and the people of Northland, Māori and non-Māori, do.

I am proud to represent the people of Northland. I am proud that those people, if they were in this House today, would support my saying these words, regardless of their race. They are Northlanders and they are New Zealanders. They want to see this nation go ahead, and they do not need clauses in legislation that give special preferences to anybody. They are not those sorts of people. They are here for New Zealanders. They do accept that there are some in our society who need assistance from time to time and who, for some reason, have not done as well as others and need some support. They understand that the incoming National Government will give those people that support. What they cannot accept is the fact that they currently have a Government that thinks it can condescend to Māori and give them a special preference when they do not need it. That is one of the reasons—one of the many reasons—why this Government has suddenly acquired the smell of an outgoing Government. It suddenly has that aroma—one that it cannot wash off. Members can put on as much under-arm deodorant, aftershave, and spray as they like, but the aroma does not go away. Ken Shirley knows that; he has been there. Dail Jones knows that; he has been there. I have, too, and however much one washes, it does not disappear. When members are on their way out, they are on their way out. We support this bill, but we do so with some qualifications.