Tariff (PACER Plus) Amendment Bill

I rise to take a call on the second reading of the PACER-Plus legislation, and I welcome the opportunity to speak in—

💬 DEPUTY SPEAKER: I’d appreciate it if you could move it.

I move that the motion be put.

💬 DEPUTY SPEAKER: No, no. If you could move that the Tariff (PACER Plus) Amendment Bill be now read a second time, that would be helpful.

Thank you for the tolerance of members. I move, That the Tariff (PACER Plus) Amendment Bill be now read a second time.

💬 DEPUTY SPEAKER: Thank you.

I welcome the opportunity to speak in support of that motion. As members of the House will be aware, the global trading environment’s becoming very challenging—more and more challenging by the day for small countries, small countries like ours, and it’s especially true for even smaller countries such as those in the Pacific. I think all members in the House would agree that a stable and prosperous Pacific is also a more secure Pacific, and that New Zealand has a role to play in achieving that.

When the Prime Minister visited Tonga earlier this year, it was sobering to be reminded that when Pacific Island countries are hit by a major cyclone, it can literally wipe out a third of their gross domestic product—a third. It’s an astounding number, and, of course, an effect that big has knock-on effects for the years that follow. This Government’s taking steps to rebalance our focus on our support for the Pacific: firstly, by taking more steps to mitigate the impacts of climate change; secondly, by helping Pacific countries meet their significant adaptation challenges; and, thirdly, through trade. And, of course, PACER-Plus has a role to play in boosting the economic resilience of the region, through, in part, trade.

At its core, PACER-Plus aims to build resilience through expanding trade opportunities, boosting investment, and facilitating private sector growth to create jobs. As some members will be aware, we’ve recently announced our Trade For All Agenda, which looks at how we can use trade policy to contribute to the addressing of global and regional issues of concern, and we’ll be asking New Zealanders to think about how trade can support sustainable economic development while taking into account the impact on the environment, and how we can have inclusive development of the New Zealand economy that supports all New Zealanders and all regions to benefit from trade, including women, Māori, and people in small to medium sized enterprises. In many ways, PACER-Plus shows that our Pacific neighbours want to pursue the same kinds of outcomes. They want sustainable economic development and they want as many people as possible to benefit.

It’s gratifying to see that in the House today there’s widespread support for ratifying PACER-Plus and passing the bill. I must say, I find it somewhat sad that critics here and abroad are still scaremongering that PACER-Plus is about driving down Pacific Island revenue sources through tariff liberalisation, or about New Zealand selling more goods to the Pacific. I believe it’s patronising to think that Pacific Island countries couldn’t negotiate an agreement of benefit to themselves. It’s just wrong to suggest that they would be signing up if they didn’t think it was going to benefit them. They signed because they believe it struck the right balance for them—the balance for them between their right to regulate for the public good and incentivising more trade in goods and services for the benefit of their economies. They signed PACER-Plus because they think it strikes the right balance between preserving traditional land tenure and signalling they want to attract more investment.

The Pacific reset that the Minister of Foreign Affairs announced earlier also requires a fresh approach to building the deeper partnerships that we want with Pacific Island countries. When we implement PACER-Plus, we’ll be applying the principles of the reset: understanding, friendship, mutual benefit, collective ambition, and sustainability. With its development focus, PACER-Plus will help. Through the tools and the financial assistance it provides to partner countries, PACER-Plus can help New Zealand address the economic and social outcomes that we want and the challenges that the Pacific region faces.

Work is already under way to ensure that when PACER-Plus does enter into force, Pacific countries are already positioned to benefit. Customs training is well advanced. Legislative reviews are complete. Work is about to get under way to create a suite of online tools that will increase the ease of doing business in the Pacific. Officials are looking at how we can use existing sustainable economic development programmes to better support PACER-Plus. In addition, thanks to the 30 percent in official development assistance—a 30 percent boost to official development assistance; it’s worth repeating that—which was announced by Minister Peters in 2018, the portion of New Zealand’s aid that goes to trade initiatives can also target new funding.

Eight ratifications are needed to bring PACER-Plus into force. It’s right that New Zealand is one of the first to ratify, as a sign of our genuine and longstanding commitment to the Pacific. In March, at an earlier reading, I explained to the House why PACER-Plus wasn’t typical of our other trade agreements, given its focus on the needs and aspirations of our trading partners in the Pacific. So whilst it’s not as liberalising as a lot of our trade agreements, it still presents some opportunities for New Zealand businesses to boost their own commercial ties into the Pacific while they help boost Pacific productivity. They’re going to be developing ventures that will benefit both New Zealand and the Pacific.

We do want to encourage more New Zealand investment into the Pacific. We want to see more Māori and New Zealand Pasifika businesses trading in the Pacific region. We’ve got the opportunity to increase the use of business models and ethics which reflect the common whakapapa that New Zealand shares with the Pacific—business models and ethics that will help Pacific countries chart a development pathway that best suits their values and aspirations.

Labour is also a catalyst for economic resilience, and the New Zealand Recognised Seasonal Employer scheme is globally recognised as the best of its kind. It was actually originally introduced by the last Labour Government, quite some time ago, and it benefits both Pacific countries and New Zealand. New Zealand has the enormous benefit of access to reliable and efficient workers in horticulture and viticulture industries to meet seasonal peaks in demand that we just can’t do from New Zealand’s labour market, but these workers also benefit themselves. They send remittances home, they take money home when they leave to return to their country of origin, and they also obtain skills which help them contribute to their home economy. I know that New Zealand has an ambition to lift the capability of the Pacific countries who send their people here to work and who return home with new skills.

PACER-Plus allows us to go further in helping Pacific Island workers use their time in New Zealand to build up the funds, training, and contacts that will make them more successful and entrepreneurs when they return home. We’ve already seen pilot schemes for construction and fisheries successfully roll out, and these schemes help fill vacancies when New Zealanders aren’t available. There’s going to be more discussion of this in the Solomon Islands, when a labour mobility conference will be held, where all PACER-Plus countries will be present.

The Pacific Islands Forum leaders launched PACER-Plus negotiations back in 2009, with the intent of increasing regional economic integration and boosting trade capacity in the region. It hasn’t been a straightforward journey. I would like to see all Pacific Islands Forum members join PACER-Plus, but we must acknowledge that this is a decision for each country to take, and we respect those decisions. The majority of the forum membership has decided to join PACER-Plus because it’s in their national interests. We hope others will join, too. For now, the sooner PACER-Plus enters into force, the sooner PACER-Plus can be implemented in a way that realises its potential as a catalyst for sustainable economic growth in the Pacific. I commend this motion to the House.

Thank you, Mr Assistant Speaker. I’m pleased, as the chair of the Foreign Affairs, Defence and Trade Committee, to address this amendment bill in its second reading and to acknowledge, first and foremost, Minister David Parker’s speech to the House. I think that while I will, obviously, speak to it, as with other colleagues, I thought it was a very good summation of what the bill is attempting to achieve and the purposes of free trade in New Zealand and across the Pacific.

It’ll be no surprise to the House that National supports this bill. We have always been strong and vocal proponents of free trade. As I’ve acknowledged—I suppose in this role, but just as an MP—we have, unfortunately, particularly in the previous Parliament, gone through a period where the bipartisan approach to trade was not occurring, as this Government, actually, along with other agreements such as the TPP, was also championing the likes of PACER-Plus. But I’m really pleased to see that the new Government’s now on board.

Look, we are debating, obviously, the second reading. This is a bill that has returned from the select committee, and if I could, to start—well, somewhat start, seeing I’m already about a minute in—thank the members of the select committee for their work on this amendment bill and that organisation—only one organisation—that presented to the committee. So I think a little bit of context may be needed around that.

Look, fundamentally, PACER-Plus is a free-trade agreement into the Pacific Islands. As you might anticipate, “PACER-Plus” is an acronym, and it’s for the “Pacific Agreement on Closer Economic Relations Plus”. It involves, currently, 11 countries: obviously, the Realm of New Zealand, but working with Australia, the Cook Islands, Kiribati, Nauru, Niue, Samoa, the Solomon Islands, Tonga, Tuvalu, and Vanuatu.

Importantly, there are other countries in the wing that are looking to come on board—the likes of Fiji, Papua New Guinea, the Federated States of Micronesia, Palau, and the Marshall Islands. I won’t go through all the particular reasons why those countries have not yet signed up. Obviously, it’s first and foremost for them to make a decision, but, by and large, they’re just a bit further back in the process. But there’s a hope, I think, not only here in New Zealand but through the other 10 countries within the PACER-Plus framework that they will come on board, because, ultimately, this is a free-trade agreement aimed at assisting the Pacific, and I’ll touch on that a little bit further on.

It is probably important for the House to note, and perhaps for those listening at home, that this is, obviously, a free-trade agreement. It is an agreement which requires domestic legislation in order to move through this House. So it is the prerogative of the executive—that is, Cabinet—to decide and sign off on treaties and agreements. This is indeed a treaty that was signed, actually, in Tonga in about the middle of last year, and, in saying that, I acknowledge Todd McClay, the then Minister of Trade, for his work in bringing, in effect, this agreement to where it is now. He had negotiated and worked with other parties and brought it to this House.

A treaty is signed by the executive—that has been done. It’s then referred to the Foreign Affairs, Defence and Trade Committee, and a good few months ago we went through, effectively, a discussion with the public around what they thought of the treaty. In many ways, it’s a feeding back, if you will, on what the treaty has done. The Foreign Affairs, Defence and Trade Committee has no powers, if you will, to change the treaty. Again, that’s negotiated by the Ministers of trade and others, including perhaps, sometimes, the Minister of Foreign Affairs.

But we listened to the public. We had a good number of submissions at that time, and why I mention that is, of course, as I mentioned earlier, this particular amendment bill only had the one submitter. But, prior to that, a good number of New Zealanders spoke, by and large in favour—which is probably no surprise—of the agreement and of this free-trade deal. They saw it as something incredibly positive. Really importantly—and my impression is that it will be interesting for other speakers, particularly those who sat on the committee—it was seen as being good for New Zealand, of course; one would never act against the national interest. But those who were speaking to the committee spoke about the positivity, as well, that it’s going to bring for the Pacific, and not in the sense of it being something imposed, but, actually, in their engagement, often, with existing traders into the Pacific, and we should understand that those countries want a free-trade deal like this. They want to be involved and they see the benefits of this agreement.

As you might appreciate, seeing that this sits within the executive to make its decisions, we, as a committee, heard what people thought about it. In fact, this is almost unheard of, but we returned to the House to have a full debate, or a discussion really. There wasn’t—well, there is a little bit of resistance to this bill, and, depending on how we go on time, we might mention the Greens. There’s a little bit of resistance from them, and, look, speaking as the chair of the select committee, that’s absolutely the prerogative of a political party or any individual MP to voice their opinion on these things. I think it’s actually particularly healthy that an individual MP or a party or a member of Parliament within that can actually speak their mind without consequence. So I think that’s positive.

We came to the House and we discussed the merits of the agreement. However, for the agreement, an international treaty, to come into effect, the New Zealand House of Representatives—this Parliament—needs to pass a bill, a piece of domestic legislation. So it’s only a couple of pages long. Again, I suppose I’m sharing this not so much for the benefit of members of the House, as I’m sure they’re up to speed on it, but it is in some ways, hopefully, educative for the public that this 2½ pages of documentation—this bill—is not the free-trade agreement itself. It’s simply the domestic legislation which enables this agreement, this free-trade deal, to come to pass.

Look, fundamentally, what it’s doing is facilitating free trade across the Pacific, and it’s doing it in a somewhat unique way. First and foremost, it is prioritising New Zealand’s aid into the Pacific—up to about 20 percent of our aid. That’s nothing new. New Zealand has always focused its work into the Pacific, and proudly so. I’ve had the pleasure, particularly living in Fiji, to see the benefit of that. While it’s easy to talk about Pacific resets and so forth, there wasn’t really much to reset. New Zealand has always contributed substantially into the Pacific. But through PACER-Plus the intention is to not only provide aid for the services that we might think of—roads and hospitals and the like—but also ensure that our Pacific partners can develop in their trading abilities. So whether that’s, obviously, helping them relook at their legislation and regulation around tariffs, customs, and excises; whether it’s actually helping businesses to develop their skills—that’s what PACER is aiming to do.

I do know that the Green minority view—and I’m sure they will speak to it themselves if they take a call—is they sort of feel that it’s not quite doing enough. Unfortunately, I have quoted Voltaire at the Greens quite a few times, but the message doesn’t seem to be getting through. But, you know, “The perfect is the enemy of the good.” This is a very good piece of legislation, bringing a free-trade agreement into reality. I think it’s something that the Pacific wants.

When we heard from the submitters, or the submitter in the singular, on this bill—it was from the New Zealand Federation of Business and Professional Women, who by and large were supportive but were obviously really keen, particularly on how agreements like this will affect women. In many ways the committee felt, by majority, that that was important to hear. It’s something, obviously, that foreign affairs need to engage with as it continues its work, but it’s not something that was needed in the bill. I suppose it’s a somewhat political if not philosophical argument of just how far free-trade agreements can go. The long and the short of that is that people like myself see that a free-trade agreement is just that. It’s about trade. It’s not a vehicle or a back door to bring in every other treaty to deal with climate change rights as they’re perceived by different groups. That’s not the primary purpose. But I think really fundamentally, and particularly speaking to the submitters from the federation, it is important that through other mechanisms, particularly in our unilateral, bilateral, and multilateral relationships into the Pacific, we make sure that on issues affecting various groups—in this case they were focusing on women—we can have those conversations.

So, look, I think it’s a very good free-trade agreement. It’s positive to see that after all these years, we’ve engaged other countries around the world and we’ve finally been able to reach an agreement with our countries, our friends here in the Pacific. I’m looking forward to this progressing again. My thanks to the Minister for his work, acknowledging the previous Minister, Todd McClay, for his work there too. I look forward to it completing its second reading.

Thank you very much, Mr Assistant Speaker. It’s an honour to follow my colleague the Hon David Parker, who, as Minister, has introduced this bill, and the previous speaker, Simon O’Connor, who sits on the Foreign Affairs, Defence and Trade Committee, to acknowledge a lot of the good work and the intent of this.

It’s very timely. We have just embarked upon a programme around the country of trade for all, talking to New Zealanders and explaining to them the benefits of trade. One might have thought that that was rather obvious, but, actually, for an increasing number of people who are not directly involved in trade—they live their busy lives in New Zealand—they don’t appreciate that we export the vast majority of that which we produce and we open the doors to goods from all around the world, and, in particular, from Pacific nations. They are our closest and dearest friends in many, many ways.

We’ve been the beneficiaries, I guess—and I hate to say it this way—of the trade in people, where good people from the Pacific Islands have come to New Zealand and have helped us build an economy. The least we can do is then take goods from those countries and help them build capability within their own island nations. Indeed, we’ve had an agreement in place: SPARTECA, the South Pacific Regional Trade and Economic Cooperation Agreement. It’s been in place, but this is an upgrade of that. I acknowledge the previous Minister, Todd McClay, who signed this off, and the Government in working through the process to arrive at an agreement. From my perspective, I guess, as Minister of State for Trade and Export Growth, I’m very happy to endorse that good work and ensure that we carry on with not only convincing New Zealanders but actually convincing the world of the value and benefits of trade for all, ensuring that benefits flow right through.

Some of the issues, in relation to trade, that are of concern are biosecurity, in particular, and we do have some risks in trade with Pacific nations. What this agreement does is not in any way diminish or undermine the biosecurity requirements that we have in place, and there are some issues that we’ve got to try and avoid around fruit fly from some of the Pacific nations. What we will do, of course, is assist them, and through the, I guess, increase in the overseas development aid that Minister Peters announced in the last Budget, we will have more money to assist the nations to build their capability to have in place the best customs and biosecurity systems, so that, in building their trade with our country, we don’t put ourselves at risk from, in some areas, simple lack of capacity. And that’s why, as a Government, we’re not just taking a one-dimensional approach to this; our approach to the Pacific nations is not just opening the door for trade but building capability and, of course, encouraging some collaboration.

There are 11 members who have signed this agreement—two major players outside the agreement. And we’d welcome, and I’m sure that all the members would welcome, both Fiji or Papua New Guinea coming into that at any stage. That would add further strength to what is truly a Pacific bloc and trade agreement. I say that we have a real interest in a stable and prosperous Pacific. There is a lot of interest in that area at the moment from nations who understand, I guess, the sea and marine life. The marine resources of those nations are quite significant collectively, and that’s why they are of interest to, traditionally, over the years, the French and then the wider European nations, the US, and now more recently China. But all the way through that, New Zealand has been, and we must be, a friendly neighbour and someone who can assist them to move themselves into what is a challenging world of not only climate change but disruption in world markets, and this agreement is a good step down the path to stronger relationships with our Pacific neighbours and building the capability, limited as it is in many places, to develop industries that will, I guess, allow them to export to the world.

There are technical issues that will be adjusted, like the rules of origin, that will enable them to, I guess, better source their products, to develop products that might be from a number of their nations, and that will then provide access into both Australia and New Zealand. And that’s off the back of, I guess, the SPARTECA, which did have that open entry into our two countries. This just provides some more flexibility in that area. I think the objective is, of course, to go beyond commodities and create higher value-added products, and I have to say that not only is it in importing products but actually we have to do the same with ours on the way out. So we’ll be sharing knowledge and how we build better value from everything that we do, and I think we have some experience, but so too there is some wisdom within the Pacific nations that we should take on board as we move forward.

I won’t talk for too much longer other than to say that, as a Government, we are very, very proud and happy to bring this piece of legislation into the House as a step to assist our Pacific neighbours and repay them, I guess, in some ways, for the wonderful contribution that they have brought to New Zealand by way of people, their culture, their manual labour sometimes, their intellect, and their creativity. That’s helped us, and now this piece of legislation is our turn to repay that debt and to assist in the development of a trade agreement that is an evolution, as I said, of SPARTECA and is one that we, I think, should be very, very proud of. I’m sure that the Minister of Foreign Affairs will be happy to assist them with their capability building through the additional money that has been provided by this Government in the Budget. This is trade for all, a benefit for all, and something that we as a nation are very proud to promote.

Debate interrupted.

The House adjourned at 10 p.m.