Trade (Anti-dumping and Countervailing Duties) Amendment Bill

I move, That the Trade (Anti-dumping and Countervailing Duties) Amendment Bill be now read a third time. I acknowledge the work of the Committee of the whole House yesterday, and commend it for progressing the bill to this stage and for adopting Supplementary Order Paper 289. I thank the members of the Commerce Committee, who have worked so hard, and those who have supported this bill.

The bill amends the Dumping and Countervailing Duties Act of 1988. The amendments in this bill will make the trade remedies regime more responsive to New Zealand’s best interests by ensuring that imposing anti-dumping and countervailing duties is in the interest of New Zealand in each case. It also gives the trade remedies regime more flexibility in the cases of natural disasters. This bill is common sense. New Zealand needs a trade remedies regime that considers the wider effects of taking action against dumping and subsidisation, including the effects on those who would be negatively affected by the imposition of duties, while continuing to protect our domestic industry appropriately against unfair practices.

To remind the House, dumping is when a product is exported for a price that is cheaper than it is sold at in its own country. When a complaint is made, the Government investigates whether dumped imports are materially injuring our domestic industries. If they are, duties can be imposed. Countervailing duties are similar duties that are imposed to level the playing field with products that can be imported cheaply because of subsidies by the exporting Government.

This speech gives me a final opportunity to emphasise some key aspects of the bill before the House. The bill does four things. Firstly, it inserts a public interest test into the trade remedies regime. Currently, the Act only allows the Government to consider the effect of a duty on the domestic industry. The Act does not allow the Government to consider the wider public interest before imposing duties. This means that the Government could impose duties even if the costs to New Zealand materially outweigh the benefits. The bill fixes this problem by introducing a public interest test, similar to those in the EU and Canada.

Secondly, the bill gives the Government the power to suspend, defer, terminate, or not impose duties in the case of a natural disaster or emergency. This will ensure that the trade remedies regime is flexible to New Zealand’s unique circumstances and will not become an obstruction to disaster recovery.

Thirdly, the bill extends the suspension of anti-dumping duties on residential building materials for another 2 years. This suspension is part of the Government’s commitment to making the construction of residential housing more affordable by reducing the import costs of building materials. This provision came to be part of the bill during the Committee of the whole House yesterday, through Supplementary Order Paper 289, and I thank the members who contributed.

Finally, the bill makes a number of minor and technical changes to clarify the Act in accordance with World Trade Organization requirements, and restructures the Act to make it easier to understand in a modern context.

I want to emphasise the importance of having a trade remedies regime that works for all New Zealanders. Currently the Government only considers the interests of New Zealand industries, which means that the Government can only consider half of the picture. This bill will allow the Government to also consider the effect on downstream industries and consumers before imposing duties. The public interest test has a presumption in favour of imposing duties. This means the public interest test will only prevent duties from being imposed if the costs to downstream industries and consumers materially outweigh the benefits.

When drafting this bill, the Government has been careful to promote dual objectives—supporting competition and consumer welfare, and maintaining an effective trade remedies regime. Canada and the European Union have both successfully introduced public interest tests in their anti-dumping regimes. Our public interest test takes features from both Canada and the EU, while adapting them to New Zealand’s particular economic, geographic, and commercial context.

I once again thank the Committee of the whole House for its valuable contribution to the development of this bill, and, particularly, the Commerce Committee, led by Melissa Lee. I am confident that the bill will provide a sustainable, responsible trade remedies system that meets the needs of New Zealand industries and consumers, and contributes to the prosperity of all New Zealanders, both now and into the future. I commend the bill to the House.

This bill would be laughable if it was not so tragic. This Government aimed, it said, at the beginning of its time, to increase exports as a proportion of the economy to 40 percent. It is now below 30 percent and dropping. The Government has failed to generate an export economy, and here is yet one more measure that undermines our domestic producers.

This solution, if you can call it that, is a solution to a problem that does not exist. This solution is one that Australia has twice looked at and rejected resoundingly. They know it would undermine their domestic producers. They know it would undermine productive industry in the Australian economy. Over there they are willing to ban non-resident foreign speculators from their housing market, and they support their domestic businesses.

Across the House here we see, from the National Government, no such willingness. It backs non-resident foreign speculators in our housing market, and allows them to bid up prices beyond what New Zealanders can afford—to not even live in the houses—and it is today introducing to this House, this Parliament, a measure that will undermine the competitiveness of New Zealand’s domestic producing businesses. There it is, undermining New Zealand’s businesses, and the Minister could not even answer a simple question, or several simple questions, that I put in the Committee stage.

How does this affect upstream suppliers? The bill does not even address that question. The officials who spoke to us at the Commerce Committee acknowledged that it did not address that question. The Minister, it seems, is not even aware that it does not address the issue of upstream suppliers and the effect on their businesses in New Zealand.

This bill proposes that we put aside the normal flat rules that World Trade Organization (WTO) standards would suggest were the logical thing to do to create fair markets across jurisdictions—the kind of thing that New Zealand argues for in international fora: that there should be a level playing field, where there are no massive subsidies for businesses and there is no protectionism across the board. This bill proposes that we put that to one side when it suits us.

So when we go to argue at an international trade forum that New Zealand believes in a level playing field, the rest of the world is going to laugh at us and say: “No, no. You oppose those kinds of things when it suits you—when it suits you. Right here and now you’re saying that you will accept dumped goods from overseas if you think it suits you—if you think they will come into the New Zealand market at a time that you need them to.”

We know that when this has been needed in the past, as with the Christchurch earthquake, the Parliament was willing to sit and put through measures that allowed dumped goods, or ones that had a countervailing duty element to them, into the country. We did that as a Parliament. Why would we want to put that power into one Minister’s hands? Why would we want to put that discretion into one single Minister’s hands, particularly when pressure from foreign Governments could be applied to that Minister to take dumped goods or face challenges when trying to get New Zealand goods into their country?

We know that non-tariff barriers are one of the big issues in contemporary trade internationally, and this makes us more vulnerable as a country to pressure placed on one Minister. This is a much less robust regime. That is without even mentioning how the Government would assess when it was harmful to the domestic industry. How much does this Government know about emerging technologies, about innovative new companies?

This Government has allowed fewer new businesses to form than was happening under the previous Labour Government. New business start-ups have been much slower under this Government, and that is backed up. They sing loud and clear about the fact that this Government is bad for small business in New Zealand.

Here is another example. It is the innovative players that come in that spot goods that seem to be a bit too expensive coming into our market and that come up with innovative solutions and start new companies. Instead, this Government is saying: “No. If we don’t know about you or we haven’t heard about you yet, we’ll allow these goods to come in from overseas and be dumped on the market and that will squash your innovative idea.” That is the effect of this legislation. The Minister has not even addressed that problem in the speech that she made just now.

Of course, there is also the problem of the criteria that are going to be applied. They are subjective. We heard from officials at the select committee that they could not say, because they were subjective—and they used the word “subjective”—how these criteria would be weighted. There are eight criteria put forward by the Government—eight factors that will be considered when assessing whether dumping in the New Zealand market is appropriate.

Here are the factors: a focus on prices; product choice and availability; product and service quality; the financial viability of the domestic industry, not specified how; employment levels, not specified at what level; and competition in the market, not specified at what level. All of these things are not specified at any particular level. There are eight of them, and the priority given to one over the other is also not specified.

This is basically a blank cheque to the Minister to say, at the Minister’s will, that he or she can allow goods to be dumped in the New Zealand market, affecting whatever industry. Possibly if that industry speaks up, it will get worse treatment. That has been the track record of this Government in the last week or so. If anyone opposes what they do, they will knock them on the head and tell them that the Government will not be sympathetic to them. That is what has happened. That is the Ngaro effect. That is what New Zealanders are worried about with this kind of legislation that concentrates power in one Minister’s hands and says that the Government knows best about innovation in the economy.

The Government knows better than the World Trade Organization (WTO) about setting a level playing field! The Government should just leave the decision in the hands of one Minister—in the hands of one Minister—about how this regime applies! I do not think that is right, and I think most New Zealanders would say that this bill introduces something that is not ideal for our country.

What we need, actually, is a fresh pair of eyes. We need a fresh approach to these issues. We actually need a new Government that will look to make sure that small business is not disadvantaged in this way, a Government that actually listens when business submitters come in and say: “This will jeopardise domestic industries.” We need a fresh approach where, when approached by businesses that come in to make submissions, the Government will say: “We understand that this will make your capital decisions more expensive and risky, and that you will be considering going to Australia and not investing in New Zealand as a consequence of this legislation the Government is ramming through the House.”

We need a fresh approach. We need a Labour Government, because Labour will listen to those small businesses and to the big businesses and to those who produce exports for New Zealand. Labour will not be content to manage demise, as the Government has. It has watched exports as a proportion of the economy drop year after year under its watch, and it is projected to drop further still. This Government has been managing an economy that is based on speculation, because it does not understand how to support the productive sector, how to grow exports. It can talk a big game, it can publish glossy brochures, but the facts speak for themselves.

We need a fresh look at these things. We need a Labour Government, which will actually understand small business and will support people to generate the wealth we need as a country, so that we are not an economy based on speculation and selling houses to one another. That is not the way to get rich long term, and I think most New Zealanders understand that and can see that this legislation contributes nothing to that picture.

I have touched briefly already on the concern that will be in the international fora for our foreign affairs folks, who are over there arguing for a level playing field. As we say, this will take that level playing field under WTO rules except where it suits us to do otherwise, and will concentrate that power in the hands of one person. I have raised the issue of how this bill solves a problem that does not really seem to exist, because when it has arisen in the past—when there has been a need for goods affected by countervailing duties to be brought into the country—we have as a Parliament agreed that it was a good thing. That was in the case of the Canterbury earthquake.

In the select committee, it became abundantly apparent that the Government did not really have a rationale for this bill. It is not clear what pressure has been put on the Government or whose bright idea it was to bring this legislation to the House, but it is a solution for a problem that does not exist. Worse than that, it will damage our domestic industries and will make their investment decisions more costly, because it introduces uncertainty. They have an uncertainty as a result of this, which they will have to factor into their cost of production, and they may decide to set up in Australia, as well.

It is really unfortunate that this Government is sitting with these old ideas—that it cannot take a fresh look at these issues and say: “We need a Government that supports business to build exports in a real way.” But that is not what it is doing. It is managing a decline in exports as a proportion of our economy. Building a housing speculators’ paradise is not good for most New Zealanders. The Government knows that middle New Zealand is getting sick of its arrogance, and this bill speaks to that. It speaks to a Government that is out of ideas. We need a fresh approach.

I just want to address a couple of things that the honourable member across on the other side, David Clark, has mentioned. He doubts whether one Minister can actually manage the decision-making process. I guess he comes from a party where its leaders cannot actually make decisions—it actually needs a consensus and a committee, and still cannot come up with a decision—so I do understand the member’s history and the reason why he has come to that sort of conclusion. But, on this side of the House, we have confidence in our Ministers. That member was concerned that this Minister, Jacqui Dean, might be browbeaten by foreign business people, who might actually beat her down into making an improper decision—that she might be influenced. I have to say that that member has never actually been in a room to have a discussion with this Minister. She is no pushover, let me just put it that way.

This bill had a significant amount of debate in the Commerce Committee. As the Minister has alluded to, we also had that during the Committee stage in this Chamber. I would just like to thank the members of the Commerce Committee. We are a tied committee and we often do have differences, but, I have to say, we do try to work through our differences, and have the mutual respect that is deserved during the committee stage. I appreciate all the work that the committee has done, and particularly, too, our secretariat. Our clerks have worked tirelessly and do actually help us a lot—and, of course, the departmental assistants whom we have had.

As the Minister alluded to earlier in her speech, when disaster strikes or an emergency takes place, we need to be able to have practical rules in place to support New Zealand families and businesses. Giving the responsible Minister the discretion to take leadership and to take action is an important thing, and can only be done through the implementation of this bill. In the legislation we hope to pass today it says, in new section 13B(3), inserted by clause 15, that “if the Minister considers that the users of the goods subject to an anti-dumping or countervailing duty have been significantly impacted by a natural disaster or emergency, the Minister may, by notice, terminate or suspend, in whole or in part, the imposition of the duty.” I note that this wording is important, because there will be occasions where goods may need to be completely free from duties due to the nature of the emergency, and how we should still be held accountable to our trading regimes that are not vital during disaster periods.

Consistently across our legislation, this has been a key goal during this Government. Part of the reason why we have a Minister for Regulatory Reform—now the Hon Paul Goldsmith, who is also the Minister formerly in charge of this bill. This bill allows for us to strengthen the Government’s capacity to respond to disasters by, effectively, tying it together with the Civil Defence Emergency Management Act, ensuring a consistent approach to handling emergency management needs across all of our legislation.

The Minister and the member opposite have also touched on the subject of public interest tests. The consumer test is a really important aspect of this bill, and one that I am very proud to support. I am glad that we have actually come to this position in this bill. We need to ensure that when we impose an at-the-border duty, we actually take into account the potential costs to users of the product when the duty is imposed and how that might affect the wider market for those goods. If a duty is imposed and it results in the market becoming fragile, or in a severe limitation of access to the necessary product, it is important that the tools are there to revise the decision prior to implementation and to provide a fair process.

This has been a very productive process, through the select committee process, and I thank the members once again. I believe that this is a good bill, and it will certainly make a difference for better New Zealand trade law. I commend this bill to the House.

I cannot do better than repeat the words of New Zealand Steel and its very clearly expressed concerns about this bill, when it described why this bill takes New Zealand backwards and undermines the interests of New Zealand producers facing unfair competition from overseas. It said: “New Zealand Steel does not support the Bill. In our view this bill, as it is currently drafted:”—and it has not changed materially in this regard—“(i) is an unnecessary and radical shift in New Zealand’s trade policy: there is no principled reason why New Zealand producers should be expected to compete with goods illegally dumped here below their cost of production offshore; (ii) will result in a materially weakened anti-dumping regime which does not protect local producers and which may chill investment in manufacturing capacity. In that regard, the Bill moves away from what is prescribed in the WTO anti-dumping rules, which do not require an unfettered ‘public interest’ exception; and (iii) is a significant threat to New Zealand industry. The Bill will, in its current form, result in unintended and significant consequences including the chilling of investment and possible closure and job losses for many major businesses unless amendments are made as outlined in the submission that follows.”—and those amendments were not made.

This legislation is not only unnecessary, it makes the situation worse for major New Zealand producers of goods that face dumping risks. This opens New Zealand Ministers up to being heavied by some of the biggest players in the world. There is a changing world dynamic. China is, quite rightly, taking its place as one of the global forces in the world. It was, until the 1800s, one of the major superpowers in the world. It went through a period of relative decline. The ascendency of America saw it as the ascendant global power. Russia was up there for a while. Russia fell. China is on the rise, and it truly is one of the world’s superpowers. With those powers also come responsibilities, and those responsibilities should be able to be met if they comply with World Trade Organization rules.

We know—not from what the Government has told us, because this lacking-transparency Government is often hiding the true reality of what is happening from New Zealand. We only know that there were threats against New Zealand corporates as a consequence of the suggestion that New Zealand would investigate whether there was dumping of steel within New Zealand because Vernon Small at the Dominion Post broke the story. It is pretty obvious, if you read between the lines, that the reason he was able to break that story is that there are people within the arms of government who do not like what is happening under the governance of National, in respect of issues like this.

💬 Hon Jacqui Dean: Oh God.

No, that is correct. That is correct. The Government is still redacting and refusing to disclose to the public the correspondence relating to threats that are alleged to have been made against New Zealand exporters into China in the kiwifruit industry and the dairy industry, if New Zealand investigated Chinese steel imports and looked at whether we should have anti-dumping additional tariffs on imported steel as a consequence. Is that something that New Zealand should be able to look at? Most clearly it is.

As New Zealand Steel says in this same submission, there is between 400 and 700 million tonnes of excess steel production in the world every year at the moment. Other countries, like the United States and the whole of Europe, have actually decided that some of the steel exports from China are being dumped on overseas markets. China has excess steel-making capacity, and it is selling—according to the Americans and the Europeans—into other countries at less than cost. The tariffs in America, in respect of some subsets of steel, like stainless steel, have been increased to as high as 160 percent. The higher tariffs that have been introduced in Europe, if my memory serves me correctly from what I looked at last night, have ranged from about 18 to 60 percent. The New Zealand Government has not been willing to look at it, despite complaints from New Zealand Steel.

What is the effect of this legislation on it? The effect of this legislation is very unwise, because it makes it easier for large players in the world—and I am not saying that China would ever do this, but we know from our history that big players occasionally do, whether it is the United States or Europe, we have seen their actions in respect of some of their exports over the years as well. We know that some of these big players do throw their weight around and try to pressure New Zealand, saying: “Oh, look, if you do something over there, we’re going to prejudice you in some other area of trade.”

This bill sets up a system that encourages it, because it introduces discretion for the Minister not to prevail with either an inquiry or anti-dumping duties, even if there is evidence that they would be justified. That is bad law, and that is why Business New Zealand, as well as New Zealand Steel, have come along, together with other submitters, and said: “This is wrong. This is wrong for New Zealand manufacturers.” Then the Government says: “Trust us. Trust us.” Well, why would we trust this Government, when its record on exports is so absolutely appalling?

We have a country that is investing far too much in selling houses to one another at ever-inflated prices—which is where so much of the investment capital is wasted in New Zealand—and not enough in the productive sector that grows exports to the rest of the world. That is why New Zealand’s productivity growth is virtually zero. Our productivity is not going up. As a consequence of that appalling record on productivity, our exports, as a percentage of the economy, are going backwards—backwards.

When the Government was elected in 2008, it promised to increase New Zealand’s exports from 30 to 40 percent of GDP. What has happened? It is the opposite: they have gone backwards. They went back to 26 percent of GDP; they are around 27 percent of GDP. What has the Government done? It has actually changed its targets. Have you noticed that? It has changed its targets. It has put “getting to 40 percent of GDP for exports”—you never hear it talking about that. Now its new target, which is just about meaningless, says it wants a certain percentage of our exports to be covered by free-trade agreements. Well, yeah, good. We actually like free-trade agreements. We do not like the Government selling out—

💬 Melissa Lee: Really? You didn’t vote for TPP.

Well, actually, they bring the Trans-Pacific Partnership (TPP) into this. I am glad they have.

The ASSISTANT SPEAKER (Lindsay Tisch): No, that is outside the—

No, Mr Assistant Speaker. They cannot yell out “TPP—put that on the record.”, and you deny me the right to respond to that point, Mr Assistant Speaker. The TPP is different from the Chinese free-trade agreement that we negotiated, because under the Chinese free-trade agreement we did not trade away the right of a future Government to ban overseas buyers of our land, but the National Government has in the TPP. Even now, it refuses to try to renegotiate that, having broken the bipartisan approach on trade in respect of that important aspect of sovereignty, the Government members sit there and pretend that they are superior. They cannot escape the fact that exports are going backwards, that their failed policies—after 9 years in Government—have exports lower as a percentage of GDP, when they promised to increase them from 30 percent upwards to 40 percent of GDP.

This is very poor legislation. Business New Zealand is right. New Zealand Steel is right. This is going to take New Zealand manufacturers backwards over time. The Minister is creating pressure points that can be used to distort what should happen when dumping is found to occur.

It is a pleasure to rise in support of this bill, the Trade (Anti-dumping and Countervailing Duties) Amendment Bill, in this its third reading. There are three things that I would like to cover today. The first one is actually what brought this bill about. We had a set of circumstances. The circumstances actually accrued from a natural disaster. After the Canterbury earthquakes, we determined that it would be a good idea to free up the ease of bringing building materials into New Zealand, because of the high volume of construction that was going to be required, which, ordinarily, would otherwise cause prices to rise. What the Opposition members do not realise, because they think—and you can hear it in their speeches throughout this bill’s passage—that it was because of the Christchurch earthquake. Well, the Christchurch earthquake was a set of circumstances under which the problem arose. The problem was the volume of construction required and what that would otherwise do to material prices.

In making a legislative change then, to allow us to act the way we needed to, we realised that, actually, there was an opportunity to put a framework in place to allow a Government of the day to adapt and respond to whatever sorts of events might be facing whatever part of our industry or economy at a given time. It is not just earthquakes or floods; there could be dry seasons that lead to growing issues. There could be any number of things that might occur that could lead to a shortage or a situation where allowing more free flowing of goods from outside New Zealand would be a good thing for consumers, in particular. So what we look at here in the Opposition’s opposition to this is that they are saying that every time something happens, pass another bill—get together in Parliament, take up time, do more legislation. What that shows us is that they are an issues-based group. They are down in the weeds at a detail level. If you want to be nice about it, we could say they are trying to manage things, whereas this Government, by putting in a proactive framework, is showing that we are about governing—governing, not simply managing.

The second part I would like to cover—and it was raised by the Hon David Parker yesterday, and I think he touched upon it again today, actually—is showing a failing of understanding of how the processes under the bill would work. In fact, it is a misunderstanding of how the process works today. It was raised, particularly yesterday, that the passage of this bill, when enacted, could mean that dumping would not be investigated. Well, that is simply not the case, because the process today is that if a complaint is made about a suspicion of dumping, an investigation is undertaken and it is determined whether or not it exists in fact. When this bill is passed, that will remain 100 percent the same: if there is a complaint that dumping could be occurring, an investigation will be undertaken. It will be determined whether or not that is happening in fact, and only then—then and only then—will it be decided whether a public interest test should be assessed. So this does not compromise the investigation into dumping nor the finding of fact as to whether it is occurring; it simply then gets to a point to say: “Right, we know it’s there. We know we now have a right to take action. Do we want to make an assessment as to whether there’s a public interest to set aside the action that we’re allowed to take?”.

The third part I will touch on before finishing is the idea that somehow the Minister is responsible for that. Again, it shows a complete lack of understanding of the bill and how the processes that flow from it work. The Minister gets to determine, yes, whether we should have a look to see whether there is a public interest in the situation, but it is officials who actually undertake the public interest test. They are the ones who publish the findings of that public interest test. Yes, the Minister will make a decision as to what to do, but they will make that decision with the information in the public domain. So, in fact, it is not really the Minister who will be determining, at their whim, whether or not a public interest will apply; they will be deciding whether to investigate that particular aspect and then making a decision based on official material that is supplied back.

So, very simply, this is a very good bill. It is a bill that shows a governing approach to the country not a management one. It is one that I wholeheartedly support, and I commend it to the House.

Tēnā koe e Te Māngai. Is it really too much to ask for a New Zealand business to call for a level playing field so that it can compete internationally, so that our businesses that invest their time, their capital, their skills, often their houses—everything they have—in their businesses are able to succeed in competition with international competitors? That should be the basis of our support for business—the fact that we will make sure that they have the opportunities to compete at least on a level playing field. However, in this world some companies compete unfairly. We have international competitors that dump their goods in New Zealand markets at below the market price in their home countries and below their costs. When they do that they adversely affect our New Zealand companies. That is why we have anti-dumping laws.

However, today we are considering a bill that is not about protecting New Zealand companies; it is actually about saying: “Let’s not apply these anti-dumping rules if we come up with some arcane public interest test that says we shouldn’t support New Zealand companies.” This bill removes that protection of New Zealand companies from predatory dumping by foreign competitors and exposes them to greater uncertainty, higher costs, and extremely long delays in order to get any remedies when they are being driven out of business by unfair competition.

The bill has three steps. Firstly, a company has 180 days—6 months—for its claim of anti-dumping to be processed. It has to provide a huge amount of information, which is a real burden on small to medium sized enterprises (SMEs). Secondly, then there will be a determination of whether it has a case and what the anti-dumping duty should be that is applied on the imports. What this bill does is it adds a third stage. After that it says: “Well, the Minister is then going to apply a test, and that test will say: ‘Should we completely disregard this whole analysis and should we just feed our local companies to the wolves? Should we just allow them to be predated and forced out of business by foreign competition?’ ”.

So what did the submitters say about this? Well, Business New Zealand is strongly against it. So is the Manufacturers and Exporters Association, so are the wood processors, so is Horticulture New Zealand, the Flower Growers Association, and virtually every other business group. They do not like this bill, and neither do we. It is a bad bill. The New Zealand Flower Growers Association says it rejects that there is a “need to tilt the playing field” in favour of dumped and subsidised goods from overseas against local business. What is this? We are tilting the playing field, not in favour of our small business but against it. What kind of support is that from the Government for small business?

So what happens if you create a bill like this? If you say to foreign companies “You can dump your products and then, actually, if you’re able to stay there for a while the Government may well then allow you to continue without duties.”, what kind of incentives does that create for foreign companies? They will come into this market in their droves. They will dump their goods, they will drive the local company out of business, and then what will they do? They will raise their prices again. And you cannot just turn around and recreate a company.

As the peach-growers association says, you cannot just turn the supply of peaches on and off. It takes 6 or 7 years to grow a proper peach crop. Their case, the Hawke’s Bay producers, was that they lost $15 million when Greek imports of peaches were dumped. They made the point that this is not just something that affects the peach growers; this affects the whole community. It affects the whole supplier base, the whole economy, and the whole community. This is what we are losing by leaving our local companies at the mercy of foreign predation.

We could also be talking to New Zealand Steel. The dumping by Chinese steel exporters has been proven in the United States and the European Union. They came here and, New Zealand Steel says, the price dropped by 82 percent on the New Zealand market. What is New Zealand Steel to do? It makes a complaint on anti-dumping. Now we have a law to say: “Well, you know, that’s OK. The consumers are actually benefiting from lower steel prices.” And what does that mean? It means that another New Zealand company may be driven to the wall if we apply a public interest test and we say that they should not be protected from unfair competition from overseas.

So in order to try to correct some of the worst aspects of this bill, which by the way we voted against, we put down some amendments. In one of the amendments we said: “OK, if you’re going to do this, you need not only to look at the short term; you need to look at the long term. What does it mean in terms of a dynamic economy?”. You cannot just take a snapshot in time. Actually, you have to understand the dynamics over many years—over the full life cycle of firms that may go bust and then a whole supply chain falls over, because there are interconnections between different industries through the supply chain. We said you have to look at that. You have to look at employment, you have to look at skills, and you have to look at a whole lot of factors that the Government is not looking at in its supposedly independent view of a public interest test. Our amendments on this bill were rejected, as were the recommendations in all of the submissions.

We are seeing a decline in manufacturing in New Zealand. This is not a short-term issue; it is a long-term issue. We are seeing a decline in productivity. We are falling down the rankings in the OECD on productivity. We are seeing a drop in exports as a proportion of GDP. The apparent success of our economy is built on services, on tax havens, on real estate, on speculation, and on the financialisation of our economy. We are seeing a hollowing out of the productive economy in New Zealand, we are seeing a productivity growth that is one of the worst in the OECD, and what are our young people going to do? Instead of going into high-skill, high-value manufacturing jobs, which are being hollowed out, they are going to have to flip hamburgers. This is the kind of economy that you have when you do not support the New Zealand manufacturing businesses and when you allow things like this bill to predate our local companies.

So we need to support our local business and SMEs. At the moment, what they are facing is not only this bill; they are facing a lack of protection against foreign companies and foreign multinationals that do not pay tax in New Zealand or anywhere else around the world, which have an inbuilt advantage. They are facing online products being sold by Amazon and others that do not have 15 percent GST, and now Amazon is setting up in Sydney. What is that going to do to New Zealand companies? It is going to wreck more New Zealand companies. And we are seeing trade agreements that do not look after small and medium sized producers, and we are looking at procurement rules that are tilted against small companies.

In each of these ways, this Government is failing small business. It is failing the productive economy. It is time that this Government actually started to realise that this is not the way to build a New Zealand economy of the future. It is a short-term, reckless, speculative economy, and it is time that this Government left. We will do better when we are in Government, on 23 September.

I am proud to rise on behalf of New Zealand First, and actually on behalf of my colleague Fletcher Tabuteau, to speak to the third reading of the Trade (Anti-dumping and Countervailing Duties) Amendment Bill. When the bill was first read, we in New Zealand First made it clear that we would support this legislation only to go into the select committee process, and that was because New Zealand First had major concerns about how this bill put up by that National Government would ultimately, in the end, make New Zealand made products vulnerable to unfair, predatory pricing by international companies.

This bill will affect the innovation of small businesses. Kiwi businesses actually have to compete around the world, globally, and this is no easy platform for our Kiwi businesses. What this Government has done through this legislation is add another hurdle into the mix, which will cause more risk and more uncertainty. Not only will our small businesses in New Zealand suffer through this but so will our manufacturing and export sector.

Let us talk about the public interest test, or, as Minister Jacqui Dean said last night, the consumer interest clause. I want you to listen up. I want you to listen up, National members on the backbenches today—

💬 Chris Bishop: Oh, righty-o.

I want you to listen carefully, Mr Bishop. The public interest test is the most damaging clause in this legislation—

💬 Chris Bishop: This’ll be good—trade expert, Ria Bond.

If you Government members had bothered to understand this, Mr Bishop, and actually listen and do some homework yourself, then you would have known by your research that this actual clause—and it is clear as crystal—gives foreign companies and Governments that are considering dumping into the New Zealand market a green light. The protection that should be there to protect our New Zealand market, which would have had the ability to kick-start a protection mechanism to alert foreign companies and Governments considering dumping, is simply not there. It is not there in this bill. Ultimately, sanctions against us are actually weakened.

This is the reason New Zealand First supported this bill to go into the select committee process. The reason why was so that members on the Government side of the House could actually hear the submitters, hear their voices, and hear how this bill will affect the market, which this bill presumably is meant to protect. What I am talking about, as other members have also said in this House today, and what was overwhelmingly obvious from the submitters, like Horticulture New Zealand, Business New Zealand, New Zealand Steel, Foodstuffs, and many more—what we heard was that, ultimately, this bill would be no good for them. At that stage, as other members have also said, we in the select committee did work really hard on this bill. We looked through all avenues and looked at the risk, we sought the advice of advisers, and the bill was returned to this House with no changes.

At that point, that should have indicated to the Minister that there was a real issue here. There should have been an indication. The Minister should have pulled this bill—as other members in this House have already said—and taken it back, had a look at it, and actually given careful consideration as to the limitless risk that this bill would put the New Zealand market through. Did that happen? No, it did not. It did not happen at all, and the Government kept pushing this bill through. What this bill will do—and I am going to repeat myself, I am sorry—is tilt the level playing field of dumped or subsidised imports, rather than support local producers and local jobs.

The submitters categorically told us that this bill was bad for them and bad for New Zealand. The public interest test—it was an absolute risk that the Government actually even had it there. Submitters wondered why—and other speakers have said this already—the Australian Government tried twice to have a similar type of regime to this, and both times it had listened to its businesses. It listened to the people who actually help import and export into that country. It listened to the risk that the small business owners faced—like the Kiwi business owners; the people whom we know in this country—and it said “Uh-uh, no deal here.”, and it flicked it off.

What we wanted to know—and what we have heard throughout the calls taken in this House—is why the Government is still supporting this. Why are the Government members still supporting this bill? Why are they still supporting the public interest test, which is almost like a bit of a cannonball that is going to come right through our market and shatter it over time?

On this side of the House, the Opposition did put forward a minority view, and what we did was we outlined the absolute risk involved in this bill. Actually, it could not have been any plainer. It could not have been any more crystal clear why this bill is not good for this country, and why this bill should have been taken away, taken back, and amended significantly to put the best interests of New Zealand first. But that has not happened.

I also want to say that the Minister produced a Supplementary Order Paper yesterday. I went through that Supplementary Order Paper and I was absolutely astounded that that Supplementary Order Paper only makes this bill worse. It only makes this bill worse. I sat there and I thought: “What is this Government doing? What are you doing to your businesses here in New Zealand?”. I thought “This is absolutely crazy.”, and I kind of sat here and thought: “I know automatically that this bill and the Supplementary Order Paper will actually take New Zealand businesses backwards.” It will take them backwards, not forwards. Someone with half a brain would have known that straight away.

New Zealand businesses are unnecessarily and radically—through the Supplementary Order Paper, without principle—materially weakened. It has absolutely weakened the anti-dumping regime. It is a move away from the World Trade Organization (WTO) rule and it will cause significant risk to all business closures and jobs.

I want to touch on what other members have actually mentioned throughout the time of the passage of the bill through the House. One of the members, Dr David Clark, summed it up nicely last night when he said that this bill is tragic. The solution undermines the New Zealand domestic producers. It undermines New Zealand businesses and their competitiveness. He also said that it also moves away from the WTO guidelines. That is why I sat there and I was astounded, and New Zealand First was absolutely astounded, when we saw that Supplementary Order Paper.

Other members also said, I think, from memory—we have all mentioned the fact that the Australian Government had the good sense to realise how bad the public interest test was, and it got rid of it because it did not want to create uncertainty in its market or have a crippling effect on the Australian market in terms of anti-dumping and countervailing. I have to say, and we say on this side of the House, that National cannot deny that there will be pressure put on the Government, that there will be all sorts of threats from around the world, and that flak will actually happen. As Mr Parker outlined earlier, we have seen evidence of it here already in recent New Zealand history.

I have got about 2 minutes left, and I want to talk about the fact of the general feeling about this bill. From the time that it came through the House for the first reading, through the select committee process, the second reading, and the Committee of the whole House last night, New Zealand First has not shifted its position. This is an absolutely appalling bill to this New Zealand country, which has been put forward by this Government. This bill will actually create absolute uncertainty throughout our market. It will not support local New Zealand businesses, and it will not support local people who need jobs in this country. It will actually cause mass job losses. New Zealand First absolutely does not support this bill.

I stand in support of the Trade (Anti-dumping and Countervailing Duties) Amendment Bill. This bill is in accordance to a World Trade Organization (WTO) agreement, and New Zealand is ratified according to the WTO agreement. This bill will introduce the test of an anti-dumping regime, which will be a better balance for consumers’ interests and those of manufacturers threatened by unfairly priced imports. We have to understand that we want to ensure that the consumers benefit from healthy competition, and this will create healthy competition for them. As we have seen in many areas, particularly in the construction area, competition has been unfair. We can import products on a cheaper base so that we can have healthy competition for the manufacturers over here, and this will go a long way. I hope that this bill will benefit not only the consumers but also others.

This bill introduces the public interest regime, which considers whether consumers are benefiting from the lower price, more choice, availability, and quality, and whether this outweighs the effects on industry. There are checks and balances available in this bill that will help both industry and consumers. I commend this bill to the House.

The next call is a split call. Mojo Mathers—5 minutes.

I would like to take a call on this Trade (Anti-dumping and Countervailing Duties) Amendment Bill. As someone who has sat through some of the select committee hearings and heard from the submitters, I have to say that it is extremely frustrating to see their concerns—very valid concerns—being completely dismissed and ignored by the Government. Previous speakers have outlined some of the very real risks and threats to local New Zealand industries.

They have also outlined very well why dumping is such a damaging practice. It is destructive, damaging, predatory, unfair—it is all of these things. That is why the original law that this bill would amend put in place a system of protections, of imposing anti-dumping duties and countervailing duties on the products that are deemed to have been dumped on the New Zealand market. This predatory practice is destructive, no matter which way you cut it, and, as my colleague said, once we lose manufacturing expertise in an area, it is very difficult to re-establish that at a later date when that product is no longer available at rock-bottom prices.

At the moment, New Zealand’s economy is already dangerously reliant on exporting large volumes of low-value commodity products. The last thing we need is a law that will immediately increase investment risk and undermine other value-added industries, especially in manufacturing and construction, which are the very areas that we need to help diversify the economy and increase economic resilience. Our largest economic trading bloc is Australia; they have decided against going down this path, and it is ridiculous that we in New Zealand, being a much smaller economy, are instead going ahead and weakening our already minimal protections for industries in New Zealand. It is almost like National is putting up a great big sign saying: “Do not invest here. Go to Australia instead.”

Losing local industries in the manufacturing sector also makes it much harder to monitor issues of quality control and accountability. Cheaper is not always better, especially when it comes to building or construction materials, when poor quality materials threaten people’s safety and homes. That was evident all too recently, when 1,600 tonnes of steel from China was found to be too weak for four bridges on the Huntly bypass project. Officials have already acknowledged that adding a new public interest test will make the Acts more complex, reduce the overall effectiveness of the New Zealand anti-dumping regime, and increase uncertainty into the process.

It is really important to realise that at the moment, right now, it is already a high threshold to reach to determine whether dumping is occurring. It is expensive and it is time-consuming. Industries only do that when they really have their backs up against the wall, they know they are not going to be viable, and they have a rock-hard case to bring. Now, when they bring that case, what is going to happen? All that effort could go down the gurgler because there has been an extra test introduced that says: “Oh, but there could be some benefit to consumers.” There will always be some benefit to consumers in the short term.

What we have to look at is the long term; what is in the national interest, not just what is in the interest of a few consumers buying that product right now. Where are we headed as a country? What is our long-term economic vision for the country? Do we want strong, resilient, robust New Zealand - based industries? We need that. That is what the Green Party supports. That is why we oppose this bill.

The Trade (Anti-dumping and Countervailing Duties) Amendment Bill is the ultimate example of a solution that is looking for a problem—the ultimate example of a solution looking for a problem. I have sat here and listened to speech after speech from the Government members, I have read departmental statements and media releases, and it is still unclear to me what the public policy problem is that we are trying to solve here. I will give some credit to Brett Hudson, when he got up to speak before, because he has been the only member from the Government benches who has actually tried to define what the problem is. It was painful—it was like Mr Magoo groping around during a power cut—but he came up with one reason why he thought that we needed this bill, the Trade (Anti-dumping and Countervailing Duties) Amendment Bill. He said, somewhat perplexingly, that if we have a drought, there might be a need to have cheaper products in our economy.

That spoke exactly to the problem, in fact. We have vulnerable producers in our country, vulnerable producers in our agricultural sector—people like the peach-growers, who have submitted to the select committee on this issue—who face issue after issue, challenge after challenge to keep their businesses sustainable without the threat of dumped goods coming in from overseas and entirely wiping out their businesses and their livelihoods. That was the closest we got to a reason for this bill, and I challenge any of the members who guffaw across there to actually put forward a reason for why we have this bill.

When you read the departmental disclosure statement, there are, I think, a sum total of seven current cases where we have anti-dumping duties and countervailing duties in place at the moment—about seven. Again, what problem are we trying to solve?

The other thing that has not been explained to me—I think it is absolutely mystifying and curious—is the fact that the public interest test runs directly counter to the point of anti-dumping duties. Here is the thing: why do you dump goods in a market? You dump goods in a market because you want to be able to sell them under the market price and you want to knock out the market producers. So the dumping relies entirely on your being able to sell your goods very, very cheaply. Yet, in the public interest test that the Minister considers, she has to consider the effect of the duty on the prices of like goods produced in New Zealand.

This runs directly counter to the point of us having duties in the first place. It would be like a robber standing before a judge before sentencing and the judge having to consider the injustice on the robber’s family of that family not being able to keep the stolen goods. The mischief here is that goods come in below market price, they knock out local producers, and here we have the Minister being able to consider that those low, below-market prices are a good thing, and she has to weigh that against the damage that is done to our producers. That is completely counterintuitive in a public policy sense.

We heard submission after submission from organisations that you would normally count as part of a solid National Party constituency: the agricultural producers, Business New Zealand, Horticulture New Zealand, and the peach-growers, and time and time again they raised the risk of this bill to their businesses and to their livelihoods. They made two very important points, which, again, have not been responded to by the Government benches. They raised these two points: that often, particularly in the agricultural sector—and I would have thought the National Party would be sensitive to this point—if dumped goods come in and they destroy businesses, that is it for a long time. Once the trees have been cut down because your peach orchard has been undermined by dumped goods, that is it. You cannot grow the trees and have peaches again next year; it is a 5- to 10-year downtime for that industry.

We heard from Business New Zealand as well about the downstream effect, something that is not considered in the public interest test, because many of these industries in horticulture and in manufacturing do not just employ people in their locale; they have a huge number of businesses and entities that supply them and rely on them and supply employment to large numbers of people. That will not be considered, and we have not heard a response to that from the Government.

This is going to be another kick in the guts for our exporters, who already have a hard time of it. We heard before from my colleague David Parker that this Government had a goal of increasing our exports to 40 percent of GDP. It has quietly dropped that one, as exports have dropped to under 30 percent of GDP, and this will make it more difficult for our exporters. This bill goes to the fact that this Government has no ideas to support our productive exporting economy, and it is time for a fresh start with a Labour Government after 23 September.

I am always struck by how those on the other side of the House have to sort of get their pre-set political lines out at the end, to keep manufacturing a crisis. In fact, this bill is nothing to do with any crises in the sectors.

What we are dealing with here is, actually, a piece of legislation that is dealing with exceptions. This is why it has been designed—it is to deal with exceptions and to allow a Minister, obviously working with advice and with prudence, to make some decisions when exceptional circumstances are required. And so that is particularly to do with duties, obviously, as we have heard from a number of speakers.

The long and the short is that discretion has been given in this bill to a Minister, in this case the Hon Jacqui Dean, to make a decision about whether a duty is or is not required, through the use of a public interest test. It is something that is not in play at the moment.

And, yes, we have heard from various people and organisations that are concerned it might impact their business. The important thing is that their voices still remain. There is still that opportunity to raise those issues, and the Minister will act accordingly.

I view this bill, particularly coming out of what has happened in our natural environment—those various disasters that have hit New Zealand. We saw, particularly in Canterbury, that part of the response was to remove duties in some areas, to make sure that we could get the goods required, particularly in the building sector, into the country quickly and at a lower price so that we could develop the rebuild.

So several members of the House have sort of asked: “Well, why is this being done? What’s the point of it? It’s just nonsensical.” In fact, it arises out of a very particular situation. And so while the bill, on one hand, is talking about the public interest test, the bill is also strengthening or learning, for want of a better word, from what happened in Canterbury as to how we better handle duties around natural disasters. I will not bore the House, for want of a better word, by going through some of the particular details, but those who know the bill well, know that we are also looking, through this Act—or, rather, Act-to-be, if that is not overly presumptuous of myself—to extend the suspension of anti-dumping duties for a couple more years. Again, it is coming out of the natural disasters that New Zealand has faced. We understand how we acted then, and we see that this is a bill that puts the mechanisms in place, whether there are further disasters or just simply a need that is in the public interest, so that the Government can act. So I heartily commend this bill to the House.

There has been a lot spoken about on this bill in the House over the last couple of days, and I think it is pretty clear that it has come down to the fact that, while New Zealand already has an existing system in place to apply these countervailing duties on dumped goods, what this bill is doing is applying a ministerial discretion, not only about whether or not a public interest test investigation can be undertaken but then, once that investigation is undertaken, what the outcome of that is going to be.

What the big concern is, not only on this side of the House but throughout our productive economy, from Business New Zealand down to the small flower-growers in New Zealand, is that this puts too much power in the hands of a Minister to make a decision based on a competing set of priorities with the concern that there might be the ability for influence provided by big countries with interests in putting their dumped goods into our country, which will have an adverse effect on our productive economy and on our industry.

That is the crux of it, and I have not heard any arguments provided from that side of the House—from the new Minister of Commerce and Consumer Affairs, Jacqui Dean, down through the National members who have got up and defended this bill as to what the overriding reason is. I think the last speaker, Simon O’Connor, got up and talked about the Christchurch earthquake as needing to bring in building goods—6, 5, or however many years later, that is no longer the case. Brett Hudson got up and talked about the fact that “Oh well, we don’t want to do it on a bill-by-bill basis; we need to take a governing approach to this.”, and yet there is no actual justification for this.

Our nearest neighbour, Australia—the Australian Productivity Commission looked at this. In fact, it has had two goes at this, and both times the Australian Parliament decided that it would not go down the course of action of introducing a public interest test. We are undertaking a lot of harmonisation legislation—moves towards harmonisation and different sorts of regimes, whether it is the accounting, the intellectual property, the patent attorneys, or the training regime for that. There are many other kinds of areas where we are looking at harmonisation with Australian law. Why is it that we are not doing that in this case—that we are not looking to be more in line?

The argument used by the Government is “Oh no, Canada has a public interest test.” Well, I went and looked up what that test has resulted in. Since 1990 the public interest test has been considered by Canadian authorities in five cases, with a further 12 requests that have been rejected. A reduction of duties was recommended in four, and the Canadian Government accepted this in three of the cases.

I do not know what the overriding argument is. What is the issue here? I think Michael Wood was right to say that this legislation is a solution looking for a problem. So there are many things to be very concerned about in this legislation. I am not going to relitigate all of them; I just want to touch on the fact that there are deep-held fears that the public interest test will harm our domestic industry. Introducing what is called a consumer test or a public interest test may end up harming our productive economy. How can that be a good thing, especially when our exports are not going forwards; they are going backwards? This Government claims to have a goal, although it has gone quiet on it, of having exports at 40 percent as a percentage of GDP. As David Parker, I think, pointed out earlier today, we are back under 30 percent, and around 27 percent. So how is it that this is actually good for the New Zealand economy? What is actually the benefit here?

The other issue that I am concerned about is the time taken. A number of the submitters on this bill talked about the time taken to undertake an investigation, and the impact that has on their industry while that happens. We heard from the steel industry that this legislation could actually end up sending it out the door. If there is a glut of, for example, Chinese steel on the New Zealand market, it will affect the New Zealand steel producers. If there was to be a public interest test undertaken—if there was to be the time taken to do that—what impact is that going to have on industry while we wait for the outcome of that?

The eight factors to be taken into account and the lack of prioritisation or any sense of what the weighting is of those factors—whether it is lowest price, or whether it is increased choice, or whether it is the quality of the product and the impact on the producers—there is no sense in the Government’s intent in this legislation as to whether any of those factors are to be considered any more important than any others. Therefore, it provides more uncertainty for our producers. It makes us wonder why on earth we are having this legislation in the first place.

So Labour opposes this bill. We supported it at first reading because we thought, you know, it was worth having a discussion about. We realised very quickly, as submitter after submitter after submitter came before us, and pleaded with us, and wrote to us afterwards with more information, how concerned our producers were in our country. As a result of that, the Opposition took the view that this was an ill-thought-out exercise. As the Commerce Committee is a split committee, the bill was sent back to the House unamended, and at the Committee of the whole House stage the Government used its majority to force it through.

So here we are in the third reading, having a debate about a piece of legislation that could have a significant adverse effect on the New Zealand economy and our ability to be a more productive economy. You have to ask yourself why that is, what the influence is that is being brought to bear on the Government in order to introduce this public interest test and to potentially allow large amounts of products to be dumped in our market and affect our economy. I think that is the $64,000 question before this House today. The Labour Party absolutely opposes this legislation.

I was not on the Commerce Committee during this process, and so I am a fresh set of eyes. I find it quite an interesting bill, and one that is extremely commendable—commendable—to the House. It has a new piece with regard to public interest, and that is what we do with everything we pass through this House. We should always have public interest in mind. The original Act, the Dumping and Countervailing Duties Act, does not have that aspect, which is being introduced with this bill, so for that reason alone that is a good thing. The example of the peach-grower or the orchardist was painted by the Opposition, and it was a little bit of a scaremongering example. It was like, you know, you bring in some cheap peaches and the whole peach industry is going to collapse. Well, that is not in the public’s best interests, to have the peach industry of New Zealand collapse. So, of course, that would not be an example where tariffs would be removed or allowed to be dumped if the result was that the peach industry would collapse.

Of course, the price of the domestic product is considered. The resilience of the industry and how it might affect that industry is considered as part of the public interest. It is not just about getting cheaper goods in here. You can imagine talking about a product—it does not really matter where it is from; coming in from China has been given as the example—that is going to be cheaper. The question is should we tariff it or should we not. Is it in the public interest to allow that stuff to come in? It may compete with other product from, say, Australia, or, say, from America. Why should it not be in the public interest to allow the Chinese product to come in and compete aggressively with, say, the American product or the other product? It is an excellent bill. It considers public interest, and I commend it to the House.