ASEAN-Australia-New Zealand Free Trade Area Bill

The Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area was signed by New Zealand, Australia, and ASEAN parties on 27 February 2009. The Foreign Affairs, Defence and Trade Committee considered the treaty and reported back to Parliament on 8 April 2009. New Zealand is a small export-driven and trade-dependent economy. This is the source of much of our current and future prosperity. Improving market access for New Zealand firms through a progressive trade agenda, including through this agreement, will stimulate economic growth and help to create and safeguard the jobs of New Zealanders. The ASEAN-Australia-New Zealand Free Trade Area represents a significant economic and strategic achievement for New Zealand. One needs to look only at the statistics to get a sense of the scale of the commercial opportunities this free-trade area creates. New Zealand - ASEAN two-way trade was worth more than $12 billion last year, which was 85 percent greater than New Zealand trade with China for the same period. Meanwhile New Zealand exports to the ASEAN region grew at a staggering 24 percent per year over the past 3 years. The ASEAN-Australia-New Zealand Free Trade Area eliminates tariffs on New Zealand exports to this important market, facilitating even further export growth. Amendments to the existing New Zealand legislation are necessary, and they prepare New Zealand for this agreement’s entry into force.

The ASEAN-Australia-New Zealand Free Trade Area Bill seeks to amend the Tariff Act 1988 and the Customs and Excise Act 1996. Amendments to the Tariff Act 1988 are required to allow for the application of preferential tariff rates and to provide for traditional safeguard measures to be applied in certain circumstances to imported goods under the ASEAN-Australia-New Zealand Free Trade Agreement. Amendments to the Customs and Excise Act 1996 are also required to create a system for issuing bodies to be able to issue the necessary certificates of origin. In summary, these amendments will allow New Zealand to grant its ASEAN and Australian partners preferential access to the New Zealand market once they have opened their markets to New Zealand exports.

💬 Hon Member: That’s wonderful, John.

I thought so.

I rise to speak to the ASEAN-Australia-New Zealand Free Trade Area Bill, a good bill because it fits very well with this Government’s agenda of having a focus on growth and trade. The bill will enable two-way trade between New Zealand and ASEAN countries. This is good news, particularly for our agricultural exporters. The whole-of-Government approach is also good news. This approach is focused on productivity and growth, and it has turned attention to the provisions and requirements that the enactment of this legislation will have on various entities.

Firstly, I want to talk about New Zealand Trade and Enterprise. Minister Groser indicated to the Foreign Affairs, Defence and Trade Committee that New Zealand Trade and Enterprise would have a strong focus on enabling trade between New Zealand and its free-trade partners. Most pertinent to that is the legislation before us today, but it also pertains to our free-trade agreement with China. New Zealand Trade and Enterprise will be tasked to enable trade, and that is good news.

I also turn my attention to the New Zealand Customs Service. The excellent honourable member Maurice Williamson appeared before the select committee this morning and indicated that there would be a strong focus on behalf of the New Zealand Customs Service on implementing the provisions of this bill. It is all very well for Parliament to consider this legislation and put it into force, and excellent work has gone on behind the scenes for many years to bring this legislation to the House, but it is what happens next that is most important. It is very encouraging that submissions in support of the legislation were brought to the select committee from organisations such as Fonterra, the chambers of commerce, the Seafood Industry Council, and other industry groups.

Part 1 of the bill amends the Tariff Act 1988. Those amendments were necessary to bring the Tariff Act up to date to meet the requirements of this legislation. The amendments to the Tariff Act enable the application of preferential tariff rates under the ASEAN-Australia-New Zealand Free Trade Area and the application of transitional safeguard measures where appropriate. That is most important, and the select committee gave it good consideration. The application of transitional safeguard measures, where they are appropriate—they are not always appropriate, but in some industries and sectors they are—are on imports originating from ASEAN-Australia-New Zealand Free Trade Area party countries. Of course, this free-trade agreement is a two-way arrangement. It deals not only with exports from New Zealand and on behalf of exporters, but also with imports into New Zealand. That being the case, with tariffs being reduced, it is considered vital that there are transitional safeguard measures to protect New Zealand manufacturers and producers where it is deemed necessary. Part 1 also adds definitions to the Tariff Act relating to the agreement, including a definition of a specified ASEAN-Australia-New Zealand Free Trade Area party. It is a lot of words, but this legislation will have far-reaching benefits for New Zealand and in particular for the primary production sector, which is under some pressure in the current economic conditions. Thank you, Mr Chairman.

The ASEAN-Australia-New Zealand Free Trade Agreement is much more exciting than we have been led to believe by listening to the two previous speakers. Although the acting Minister, John Carter, is in the chair, and I acknowledge that, a little bit of enthusiasm is justified, because this is quite an extraordinary achievement. I understand that the Minister in the chair is acting for the Minister in charge of the bill, but really and truly it is hard to imagine that something could be made to sound as dull as he made it.

However, the ASEAN free-trade agreement is hugely significant for this country. It is one of a kind. It is has set a benchmark, I think, for multilateral trade agreements in the rest of the world. It establishes an architecture around free trade that is novel, and for New Zealand it is of particular benefit because of the speed at which we arrive at zero tariffs. That is one of the things that is most significant.

I will give just a word on the ASEAN countries and New Zealand’s relationship with them. New Zealand’s exports to the ASEAN countries have increased by some 121 percent since 2000, to around $4.6 billion in 2008. This really is a free-trade agreement to get excited about. Over the same period, imports from ASEAN countries have increased by 244 percent, to almost $7.6 billion in 2008. This builds on what was already a dynamic relationship, but it secures for New Zealand some significant advantages over previous agreements. With the passage of this legislation, and with the passage of legislation in participating countries, we will be able to access a market of more than 566 million people, and that region accounts for some US$1,400 billion of global trade. That is total trade, not trade with New Zealand. That is $1.4 trillion, if anybody can get his or her head around those sorts of numbers.

Suffice to say that it is an extraordinary market. It is nearer to us than our traditional markets, which is an advantage, and these countries, despite the recession, have a growing and developing middle class that will be interested in the three things this free-trade agreement delivers. It delivers results in goods, it delivers results in services, and it delivers results in investment. In addition to that, some sort of people-to-people flow mechanism will also enhance our trade relationships. This is an exciting development, and it is something we can be very proud of.

Even in this Committee stage—I know this has been done before—I commend the Minister, Tim Groser, for bringing this agreement to a conclusion. I also commend his predecessor, Phil Goff, and before him Jim Sutton, who also contributed to the development and building of what I have referred to as this free-trade architecture. That is indeed what it provides for the future.

One of the things that New Zealand will benefit from, within 12 years, is the elimination of tariffs on 99 percent of New Zealand’s current exports to the four key export markets in the ASEAN grouping: Indonesia, Malaysia, the Philippines, and Viet Nam. That may be able to be said quite quickly, but the important thing about it is that when this agreement is fully implemented, there will be a saving of approximately $50 million, based on current trade alone—$50 million to New Zealand exporters, based on current figures alone. Of course, I anticipate that we will do much better than that.

This is my second opportunity to take a call as this important ASEAN-Australia-New Zealand Free Trade Area Bill continues its passage through this Committee, and, as the Hon Maryan Street has just acknowledged, it is good to speak on a matter that enjoys such broad multiparty, although not entirely unanimous, support in this House.

Part 1 focuses on the requisite updates to the Tariff Act 1988. Clauses 3 to 10, among other matters, amend the principal Act and add definitions relating to the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area to section 2. Importantly, the amendments in Part 1 create the legislative means to designate preferential tariffs for goods that are produced or manufactured by the agreement’s parties.

From New Zealand’s perspective, the practical effect of all this will be far-reaching, and full implementation in 2020 will see the absence of tariffs on 99 percent of New Zealand’s current exports to the four key markets, mentioned a moment ago by the Hon Maryan Street, of Indonesia, the Philippines, Viet Nam, and Malaysia. In turn, this development, based on current trade levels, will provide a total saving in duties to our country of NZ$50 million and will no doubt escalate in value to our producers and exporters over succeeding years.

There will be near-immediate benefits from the enactment of this measure, in that tariffs will be eliminated on $429 million worth of current New Zealand exports to Indonesia, Malaysia, and the Philippines as early as next year, and a further $435 million worth of exports to those countries, with the addition of Viet Nam, will have tariffs removed between 2011 and 2020. There are comparable benefits to our ASEAN trading partners in the provisions of Part 1, which will ultimately see all New Zealand tariffs on ASEAN products phased out altogether by 2020.

The bill provides for longer phase-out periods—and this is an important safeguard in the agreement—for sensitive sectors such as, but not restricted to, clothing, footwear, carpets, some textiles, and some manufactured products such as steel, wooden furniture, and plasterboard.

The overall impact of the enactment of Part 1 will be far-reaching and immensely valuable to this country, especially in this very difficult economic climate, when we must do all we can to increase the volume of our exports and, as my excellent colleague from Otago said in her comments, create in our economy the conditions for growth that will see an export-led recovery out of a global recession.

💬 Stuart Nash: Well, Tim, why did you cut $10 million from the NZTE budget?

I had absolutely nothing to do with that measure, as I am sure Mr Nash is aware. It is a great shame that Mr Nash—who, I am sure, will stand up in a moment and speak eloquently in support of this bill—wishes to raise red herrings at this point.

💬 Hon David Cunliffe: He hasn’t learnt collective responsibility—what are the whips doing?

This bill is a significant development, I tell Mr Cunliffe, for a new Government that is determined to support our productive sector and to facilitate significant and lasting growth in our economy. I can only assume from the fact that the Opposition members are barracking so loudly that they really do not have a clue how to achieve that, or how to overcome the obstacles to trade—I emphasise: the obstacles to trade—that hinder our exporters and drive up the prices paid by New Zealanders for our imported goods. Perhaps the Labour members might like to reflect on that benefit, as well, and listen to what is being said.

I would like to return to the more magnanimous approach that was adopted a minute ago, before the cherubs of the Opposition started to chirp, and acknowledge the outstanding leadership of the Hon Tim Groser. He stands foremost and pre-eminent right around the world, and he is highly regarded on the international stage for the superb work he has done over many years as a trade negotiator and now as our Minister of Trade. That is no mean achievement. He is an outstanding New Zealander, and we are so lucky to have somebody of that talent and experience in this House.

I acknowledge, as did Maryan Street, the former Ministers in the previous Government, and the officials, who have done such outstanding and challenging work. They have shown such tenacity in bringing this agreement to the stage where we have the opportunity to bring it into enactment.

I am delighted to rise in support of this bill. It is not before time that we are concluding this agreement with the ASEAN countries—the 10 ASEAN countries, plus Timor-Leste, another country that wants to be a member of ASEAN, and of course Papua New Guinea, which is an observer country for the ASEAN region. I am really pleased that at long last New Zealand is concluding this agreement with ASEAN, because I have seen development in the ASEAN region for many, many years.

It was 30-odd years ago that I first travelled to the region, and a country like Singapore was pretty poor in those days. As the British would say, it was pretty much a coolie State. But I have travelled through Singapore for 35 years and seen it develop, almost every year, from a Third World, or Fourth World, country into a First World country. Its standard of living has now gone ahead of New Zealand’s, and the whole region—like Singapore, Malaysia, and Thailand—has made many strides in development and progress. I have had the opportunity to travel to most of the countries in the region. I think I have travelled to all the nine countries except Burma, and I have seen progress in all of them.

It is tremendous that we have this free-trade agreement, and there are over 560 million people in the region. It is to New Zealand’s advantage that we are developing an economic relationship, but it will also further promote people engagement, like diplomatic arrangements. In many different ways the two regions—New Zealand and Australia, and ASEAN—will develop into a major economic bloc, similar to the European Union and other regional blocs. It is important for us to see the economic development. There has been a 24 percent annual growth in trade. In the last few years there has been tremendous growth; it is more than our trade with China, in our agricultural products. From my experience in agriculture, in terms of growth in the standard of living of those countries, their annual growth in educational requirements, and all the amenities they have, New Zealand has a lot to offer. Over the years those countries have sent many students to study in New Zealand, and we started that with the Colombo Plan. In those days we used to give scholarships to those Third World countries, and it is interesting to see the development in those countries. A lot of students came from Singapore, Malaysia, and Thailand. Now, Singapore is offering scholarships not only to the region but also to New Zealand and to the countries surrounding Singapore.

There has been huge change, but if people have not travelled to the region they will not appreciate that or know what is going on. I have had the opportunity to see the development in many of those countries and to do some work over the years, on behalf of Massey University, as a consultant on agriculture. This free-trade agreement is not before time, and it is nothing to worry about. Often people worry that it will adversely affect a lot of things in New Zealand. But I do have one personal reservation. We have to be very mindful that a lot of our people have not travelled to those countries, and they often worry about the potential problems if a lot of people from those countries are travelling around New Zealand. They worry about the possibility of diseases being brought here, and about quarantine issues. We have to make sure that we educate our people, particularly on our side of the equation.

I am delighted to have the opportunity to speak on Part 1 of the ASEAN-Australia-New Zealand Free Trade Area Bill. It was great to see Maryan Street so excited by this bill, and it is most unusual for the Hon John Carter to ever be remarked on as being unexcited. This bill is a sign that New Zealand is getting better and better, which is exactly what the Hon John Carter’s answerphone says.

As the Hon Maryan Street pointed out, this is an exciting bill. It is an extremely exciting bill for New Zealand, because it broadens our opportunities for trade enormously. The region has 12 countries, 566 million people, and, overall, a GDP of $700 billion. I am not too sure, again, where the Hon Maryan Street got the trillions from, but, undoubtedly, within the next few decades there will be trillions of dollars of trade within this free-trade agreement.

I too will mention those who have been responsible for the genesis of this bill and the culmination of it going through Parliament today. Obviously, the Hon Tim Groser has been incredibly instrumental, and it is quite right that he is given appropriate praise for his professionalism and skills. Before him, of course, there was the Hon Phil Goff and Jim Sutton. As I mentioned the other day, the real antecedence was the work of our current Speaker, the Hon Lockwood Smith, who spent a lot of time in the ASEAN region sowing the seeds for this agreement to finally come about. It was great work, and it finally has come about.

One of the quite impressive things about this bill is the work behind it, which was done, I understand, so that there would not be any amendments to the bill. It was unanimously agreed on by the select committee—

💬 Hon David Cunliffe: What’s the bill about?

Well, I hope Mr Cunliffe knows. After all, it is absolutely pivotal to New Zealand’s future. I would hope that he, of all people, would know. If the Hon David Cunliffe does not know, well, the leadership bid will be in a bad way. However, I wanted to mention that the national interest analysis was done extremely well.

💬 Hon David Cunliffe: Is it quantitative?

It is, actually. Several of the things that were pointed out were the areas where New Zealand would have opportunities that we do not have now. For instance, some countries do not have a sophisticated infrastructure in the electronic commerce area, but New Zealand, under an excellent National Government, is expanding broadband so that we will be poised to take advantage in that area. As well as that, the area of trade in services is something that will give New Zealand great opportunities for the future, and that has been widely commented on by the submitters.

I was quite interested to hear from the Seafood Industry Council. It said that we were not ambitious enough in terms of what we could do with our potential seafood prospects here in New Zealand. Unfortunately, our proportion of seafood trade worldwide is very, very small—it is less than 1 percent, I think—yet we have a vast economic zone with enormous potential to expand trade in the ASEAN region, and this bill provides the framework for New Zealand to do exactly that.

Undoubtedly, this bill will help New Zealand towards economic recovery in the short, medium, and long term. After all, there has been great concern about the present situation, and this legislation is one instrument that will help us to recover.

I stand in support of the ASEAN-Australia-New Zealand Free Trade Area Bill for many reasons. I would like to make it clear that we should give credit where credit is due—as should Mr Macindoe and Mr Hutchison. There is no doubt that Mr Groser knows a little bit about trade. I have never heard him speak on trade in the House, but I am sure he knows a lot about it. But let us face facts: this deal was negotiated by the Hon Phil Goff. The great thing about that is that the next Prime Minister of New Zealand will be Phil Goff. I should correct myself there: the next Prime Minister of New Zealand will be Bill English, but the next elected Prime Minister of New Zealand will be Phil Goff. Phil Goff understands the true value of international trade, because he is the man who negotiated this deal. He also negotiated the free-trade agreement with China and opened up the first step into a whole lot of other markets that New Zealand will have free-trade agreements with.

I ask those members to please give credit where it is due. Their smiles say they know it is true, and the public know it is true, and good on them. We also know that not just free trade but all trade is vital for the growth of New Zealand, without a question of a doubt. Trade is the only way that New Zealand will achieve sustainable economic growth. The last time we were in a recession we got out of it by trading our way out. We are a trading nation; we always have been and we always will be.

We face barriers to successful trading in the global economy. One of the problems is the tyranny of distance, so we must seek new markets with countries that are close to us. Unfortunately, the countries we are talking about and those within the ASEAN region have different languages, different business cultures, different legal systems, different ways of doing business, and a different mentality. That is why free-trade agreements that allow the opening up of those areas will make us so successful. Trade is the only way we will get into the top quartile of the OECD.

Let us get back to the bill. Without a question of a doubt, it is absolutely fantastic. The figures speak for themselves. Here is a market of about 500 million people who are entering the age of consumerism. That means they have discretionary money to spend on the products and services that New Zealand produces. As my learned colleague Dr Ashraf Choudhary mentioned, education is a huge portion of New Zealand’s export and import industry.

The ASEAN region is vital to New Zealand’s trade. It accounts for around 10 percent of all our exports at the moment, before this bill goes through, or about $4.7 billion, which is a hell of a lot of money. We also import about $7.5 billion worth of products and services from the ASEAN region, and $3.1 billion is in crude or non-crude oil. This bill will be good for the consumer, because hopefully the tariffs on oil will drop and petrol prices will be cheaper.

There are also some other surprising things. We bring in $42 million worth of caviar—Todd McClay will be happy about that; his caviar may come down in price, which will go down well—and the value has increased by over 50 percent. The people of Rotorua will be happy to know about that. As Mr Cunliffe said, this is one of our largest trading blocs and it is very, very important to us. That is why this bill is so important.

I have to say that $2.2 billion of the products we export to the ASEAN region are dairy products. We all know that the dairy industry is vital to New Zealand’s economy and that it is the backbone of our economy. The industry is innovative, geared up, incredible, and has good leadership, and it will really benefit from this agreement. One thing that worries me ever so slightly is that as a country we need to diversify. We need to get hold of our competitive advantages outside of dairy and agriculture, and diversify. The problem we have is that 97 percent of New Zealand businesses are small to medium sized enterprises. The vast majority do not have the ability, money, or resources to hire an international market development manager. They rely on the New Zealand Government through New Zealand Trade and Enterprise.

The CHAIRPERSON (Hon Rick Barker): Before I take the next call I remind members that this is the Committee stage. It is about the nuts and bolts of the bill; it is not a general debate or a second reading. I remind members that we are on Part 1 of the ASEAN-Australia-New Zealand Free Trade Area Bill

I would like to set the scene of Part 1 by going through some of the background to how we got here today. Today is an exciting day, and the bill is a very important and exciting one for New Zealand. Anything that does more for our trade is important. A previous speaker from the other side of the Chamber, Maryan Street, suggested that the acting Minister should be showing a bit more excitement when it comes to the ASEAN Free Trade Agreement. From where I was sitting, the acting Minister could hardly control himself. In his electorate, as in my electorate, there are many excellent dairy farmers. They will benefit directly from this bill, because from the moment the agreement enters into force there will be some $50 million worth of savings for the dairy industry for exports to the ASEAN countries. The reduction in tariff rates is a great thing for dairy farmers. The acting Minister is well aware of the importance of this agreement to rural parts of New Zealand. In rural areas excitement is often understated, but the smile on the acting Minister’s face suggests that he realises how important this bill will be for his farming community.

This is a very important day. I pay tribute to the many people who were involved in moving us to this point. We have heard about Minister Tim Groser and the Hon Phil Goff when he was Minister, and of course Minister Sutton. I will use the free-trade agreement as an analogy with a rugby game. All three of the people I mentioned have played a part. The Hon Jim Sutton, when he was Minister, was late to the game of rugby and therefore had to rush. At half-time Phil Goff as Minister had a little discussion with him and said “I think we’d better do a bit more work here. It’s not looking good. I don’t know how much longer we’ll have our jobs.” Minister Groser, of course, is the man who has kicked the ball between the posts and scored the winning points for New Zealand. Indeed, Mr Nash made mention of this.

Some of the changes in Part 1 are around rules for intellectual property. I say to Stuart Nash that I am not sure the part of the bill that looks at intellectual property applies to him. He suggested that the next elected Prime Minister of this country would be Phil Goff. There is not a lot of intellectual anything in that statement. It is important to recognise that all three of those people, as Ministers, played an important part in what is very important legislation and a great agreement for New Zealand. I pay tribute to former Minister Sutton, previous Minister Goff, and now Tim Groser, who has a lot more work to do in this area.

I will also talk a little bit about the officials. I have had the duty—I would like to say I have had the pleasure—to attend many trade negotiations over many years. They are not as much fun as they sound, and certainly not as enjoyable as a 5-minute speech in this House. The officials, directed by their Ministers, do the day in, day out work in the discussions. It is the detail that they put in and their hard work that gets us to where we are today.

Part 1, in particular, looks at preferential tariff rates and sets up changes to the Tariff Act. It is important that preferential tariffs can be applied, because not all countries we trade with have the same tariff rates applied to them at the same time. Indeed, when we look at the substantial increase in New Zealand’s export trade to these countries, we see that there has been a 121 percent increase—from memory—over 9 years, and over the same 9 years there has been a 244 percent increase in goods exported from Asian countries to New Zealand. For goods being exported to those countries, the tariff rates and the elimination of barriers will not be lifted to the same degree at the same time in all countries. But by 2020, over the next 12 years, our access will be much better.

When we look at some of the detail around preferential trade access and changes to it, we see there will be significant benefits to New Zealand businesses. I will focus for a moment on the agricultural industry. The debate on this very issue last night was interesting. I remember the many submissions we received from people in the agricultural sector and traders of primary products as a whole that, without exception, fully supported the bill and asked us to get it in force quickly because they know they can benefit from it quickly. I remember a member on this side of the Chamber suggested that, compared with the Opposition, National predominantly represents the agricultural sector of New Zealand. I did a little bit of work when I got back to my office and found that, with the exception of the odd farmer in Queen Street and down in Christchurch, where cows occasionally run around the airport, the people who have an interest in the agricultural sector are represented by members on this side of the Chamber.

The CHAIRPERSON (Hon Rick Barker): Before I call the next member I will reiterate my point that speeches are to be about the Committee stage, not a general second reading speech. Therefore, if I hear more second reading speeches I simply will put the question. Members are not complying with rules the members have themselves set for the House. This is the Committee stage.

I will direct my comments to some of the very specific provisions of the ASEAN-Australia-New Zealand Free Trade Area Bill and to the very specific benefits that will accrue to New Zealand exporters as a result of this legislation being passed. But I will first say, as a number of people have said before, that this bill has significant benefits for New Zealand producers and the New Zealand economy. We are talking about, over time, the elimination of $50 million in tariffs that are currently being paid by New Zealand exporters, and strengthening our relationship with a very significant market of 566 million people that accounts for $1.4 trillion in global trade. Whichever way we slice it, this bill is significant. It is not a panacea, but it is a very useful building block in the long-term engagement of New Zealand with that incredibly important regional market.

I will talk about some of the specific benefits for New Zealand and our firms. If we take, for instance, the dairy sector, by 2010 tariffs will be eliminated on whole-milk powder, butter, ice cream, and cheese in Indonesia, and on casein, milk powder, cheese, and buttermilk in the Philippines.

💬 Hone Harawira: Our next Prime Minister.

I would expect members on the other side of the Chamber to realise just what a significant benefit that is for New Zealand producers. It is not only the trade in dairy products. Let us talk about the meat and wool industry. Tariffs on key beef exports will be eliminated in the Philippines by 2012, and in Indonesia in 2020. Tariffs on sheep meat for the Philippines will be gone by 2010, and in Viet Nam by 2016. Let us talk about forestry. Over a 12-year period from 2010 tariffs on key products will be eliminated, including tariffs on fibreboard and paper in Indonesia, and on less-processed wood products for the Philippines. It is not only dairy, meat, wool, and forestry; a wide variety of horticultural products will benefit, with some global exports subject to early tariff elimination. For instance, apples and kiwifruit will benefit from the removal of tariffs in 2010 in Indonesia, in 2011 in the Philippines, in 2012 in Malaysia, and in 2016 in Viet Nam. In relation to manufactured goods, a key benefit of this agreement is that for our manufacturers, the rules of origin can be met on a regional basis. This means that New Zealand manufacturers will benefit from not only improved direct access but also the ability to include New Zealand materials in the origin assessment of goods manufactured and traded within the region. The trade in services also has important outcomes for New Zealand producers. This agreement will greatly assist in the expansion of trade and services between New Zealand and our ASEAN partners.

The free-trade agreement includes a trigger for negotiations on improving services commitments. If after this agreement comes into force any of the ASEAN partners negotiate a subsequent agreement on trade in services at some stage in the future, those benefits over and above this agreement will automatically be passed on to New Zealand. In addition to that clause, Viet Nam has committed to provide most favoured nation treatment to New Zealand for certain higher education services, including distance learning and Internet-based education services. Any improvements that Viet Nam provides to a future partner will be passed on to New Zealand. Those are valuable benefits to New Zealand exporters.

New Zealand business services that will benefit from this legislation include legal services for Indonesia and Viet Nam, accounting services for Malaysia, Burma, and the Philippines, and taxation services for Malaysia. The list just goes on and on: computer and related services, and research and development services with Indonesia. We are also talking about communications, such as telecommunications in Brunei, Indonesia, Malaysia, the Philippines, and Thailand. It is very significant and includes construction and related engineering services, and educational and environmental services. The other important area in this agreement is investment. The agreement delivers some fantastic protections for New Zealand investors.

The question was put that the amendments set out on Supplementary Order Paper 27 in the name of the Hon Tim Groser to Part 1 be agreed to.

Amendments agreed to.

Part 1 as amended agreed to.

Part 2 Amendments to Customs and Excise Act 1996