Hon CHRISTOPHER FINLAYSON (Acting Minister of Trade) : I move, That the Tariff (AANZFTA) Amendment Bill and the Customs and Excise (AANZFTA) Amendment Bill be now read a third time. The ASEAN-Australia-New Zealand Free Trade Area Bill was referred to the Foreign Affairs, Defence and Trade Committee on 28 April. The committee recommended in its 15 May report to the House that the bill be passed with no amendments. Since then, the bill has had its second reading, on 24 June, and went through the Committee stage on 25 June. The legislation was then split into its two present parts, after the debate in the Committee of the whole House. The two parts should be read together today.
This legislation amends New Zealand’s domestic legislation so that New Zealand can be ready to enter into force the ASEAN-Australia-New Zealand Free Trade Area agreement by the target date of 1 July 2009. The agreement is a significant achievement for New Zealand, because we are so dependent on trade for our economic well-being and prosperity. The current global economic crisis and the protectionist sentiment it has fed has made gaining and maintaining access to valuable and dynamic export markets, such as ASEAN, more critical to New Zealand firms than ever before. Improving market access for New Zealand firms through trade agreements such as this agreement ensures we can continue to stimulate economic growth and help safeguard the jobs of the many thousands of New Zealanders who work in or who support export-oriented industries. There is a growing body of evidence that backs this up. Recent OECD data suggests that a 10 percent increase in trade is associated with as much as a 4 percent rise in per capita income.
This agreement, like all of our trade agreements, is about facilitating trade by negotiating an environment that makes it easier, more profitable, and more predictable for New Zealand businesses to enter markets and then do business in those markets. As a market of more than 566 million people, ASEAN is an increasingly important destination for New Zealand goods, service suppliers, and outward investment. The immediate trade benefits of the agreement are clear for all to see. ASEAN has now become New Zealand’s third-largest export market for merchandised goods, and those were worth NZ$4.6 billion in the year to June 2008. Our trade has grown at a staggering 24 percent per year over the last 3 years, with seven of the ASEAN member countries now featuring in New Zealand’s list of top 30 bilateral trading partners.
The agreement also represents the first time ASEAN has negotiated a comprehensive free-trade agreement as part of a single undertaking. That means it includes trade in goods and trade in services and investment, as well as the other subjects that are covered in a modern free-trade agreement, such as protection of intellectual property and competition policy. In the area of goods exports, the outcome that the Government has secured is a very good one indeed. Within 12 years, 99 percent of New Zealand’s current trade with Indonesia, Malaysia, the Philippines, and Viet Nam will be duty-free. For New Zealand businesses operating in those markets, this is a major advancement in terms of their market access into those major and growing markets.
But the agreement does more than simply address tariff lines for merchandised trade. For New Zealand exporters in the services sector, the agreement also represents real gains in New Zealand’s priority service sectors, including education services. New Zealand investors and their investments will benefit from the new and additional protections for their investments into the region, including through the potential for recourse to binding investor State arbitration procedures. The agreement includes a disputes settlement framework to resolve any trade-related disputes that may arise between New Zealand and its ASEAN partners.
In addition to this agreement, New Zealand has also concluded legally binding agreements on trade and labour, and trade and environment, with the Philippines. Those outcomes build on existing instruments on these issues with other ASEAN partners Thailand, Brunei, and Singapore, and ongoing work with Indonesia and Malaysia.
The difficulty of successfully negotiating a free-trade agreement simultaneously with 10 very diverse members of ASEAN should not be underestimated, so I acknowledge the efforts of officials, previous Ministers of Trade, and all of the stakeholders who have contributed to this very good outcome. I acknowledge and thank members of the Foreign Affairs, Defence and Trade Committee for their consideration of the legislation, and I thank those who submitted to the committee.
The legislation we are voting on today is relatively straightforward. It mirrors both in structure and content what was done for previous free-trade agreement legislation. It amends two Acts: the Tariff Act 1988 and the Customs and Excise Act 1996. The amendments to the Tariff Act allow for the application of the preferential tariff rates made under the ASEAN-Australia-New Zealand Free Trade Agreement to other parties of the agreement. Amendments to that Act also allow for New Zealand to apply transitional safeguard measures in certain circumstances on imports from the free-trade agreement party countries. Amendments to the Customs and Excise Act are required to provide for a system to enable issuing bodies to issue the necessary certificates of origin. These certificates will be required by exporters to establish that they are eligible to receive the preferential tariff rate in the free-trade agreement importing country. Subsequent to the passage of this legislation, implementing regulations will be required to implement the preferential rates of duty and the rules of origin.
The ASEAN-Australia-New Zealand Free Trade Area is a significant economic and strategic investment for New Zealand, in line with this country’s fundamental trade priorities. Our priority as a nation depends on our ability to trade and invest in the world market. We also depend on rules to govern trade and remove barriers so that our traders can fairly compete. These are among the goals of the agreement, which will benefit New Zealanders. I understand that the legislation is supported by a majority of the members of the House. I commend this legislation to the House.
This agreement, like all of our trade agreements, is about facilitating trade by negotiating an environment that makes it easier, more profitable, and more predictable for New Zealand businesses to enter markets and then do business in those markets. As a market of more than 566 million people, ASEAN is an increasingly important destination for New Zealand goods, service suppliers, and outward investment. The immediate trade benefits of the agreement are clear for all to see. ASEAN has now become New Zealand’s third-largest export market for merchandised goods, and those were worth NZ$4.6 billion in the year to June 2008. Our trade has grown at a staggering 24 percent per year over the last 3 years, with seven of the ASEAN member countries now featuring in New Zealand’s list of top 30 bilateral trading partners.
The agreement also represents the first time ASEAN has negotiated a comprehensive free-trade agreement as part of a single undertaking. That means it includes trade in goods and trade in services and investment, as well as the other subjects that are covered in a modern free-trade agreement, such as protection of intellectual property and competition policy. In the area of goods exports, the outcome that the Government has secured is a very good one indeed. Within 12 years, 99 percent of New Zealand’s current trade with Indonesia, Malaysia, the Philippines, and Viet Nam will be duty-free. For New Zealand businesses operating in those markets, this is a major advancement in terms of their market access into those major and growing markets.
But the agreement does more than simply address tariff lines for merchandised trade. For New Zealand exporters in the services sector, the agreement also represents real gains in New Zealand’s priority service sectors, including education services. New Zealand investors and their investments will benefit from the new and additional protections for their investments into the region, including through the potential for recourse to binding investor State arbitration procedures. The agreement includes a disputes settlement framework to resolve any trade-related disputes that may arise between New Zealand and its ASEAN partners.
In addition to this agreement, New Zealand has also concluded legally binding agreements on trade and labour, and trade and environment, with the Philippines. Those outcomes build on existing instruments on these issues with other ASEAN partners Thailand, Brunei, and Singapore, and ongoing work with Indonesia and Malaysia.
The difficulty of successfully negotiating a free-trade agreement simultaneously with 10 very diverse members of ASEAN should not be underestimated, so I acknowledge the efforts of officials, previous Ministers of Trade, and all of the stakeholders who have contributed to this very good outcome. I acknowledge and thank members of the Foreign Affairs, Defence and Trade Committee for their consideration of the legislation, and I thank those who submitted to the committee.
The legislation we are voting on today is relatively straightforward. It mirrors both in structure and content what was done for previous free-trade agreement legislation. It amends two Acts: the Tariff Act 1988 and the Customs and Excise Act 1996. The amendments to the Tariff Act allow for the application of the preferential tariff rates made under the ASEAN-Australia-New Zealand Free Trade Agreement to other parties of the agreement. Amendments to that Act also allow for New Zealand to apply transitional safeguard measures in certain circumstances on imports from the free-trade agreement party countries. Amendments to the Customs and Excise Act are required to provide for a system to enable issuing bodies to issue the necessary certificates of origin. These certificates will be required by exporters to establish that they are eligible to receive the preferential tariff rate in the free-trade agreement importing country. Subsequent to the passage of this legislation, implementing regulations will be required to implement the preferential rates of duty and the rules of origin.
The ASEAN-Australia-New Zealand Free Trade Area is a significant economic and strategic investment for New Zealand, in line with this country’s fundamental trade priorities. Our priority as a nation depends on our ability to trade and invest in the world market. We also depend on rules to govern trade and remove barriers so that our traders can fairly compete. These are among the goals of the agreement, which will benefit New Zealanders. I understand that the legislation is supported by a majority of the members of the House. I commend this legislation to the House.
