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Singapore agreement debate and vote speech notes

Hon. Jim Sutton


Singapore Closer Economic Partnership agreement debate and vote speech notes

Mr Speaker, I believe the agreement represents an excellent opportunity for New Zealand and I recommend that the House support it.

This agreement will put our trade, economic and investment relationship with Singapore, one of the most dynamic Asian economies, on a new and firmer footing. The agreement, based on a modern and forward-looking body of trade rules, will provide for more secure and open access for New Zealand exports of goods and services to that market.

It will deliver immediate benefits and these will grow over time. The Agreement we will put in place a new comprehensive partnership with Singapore with provisions on services, investment, competition policy, government procurement, customs co-operation, the reductionof technical barriers and compliance costs for business.

All remaining tariffs will be eliminated reciprocally on entry into force. This means Singapore will remove its high tariffs on New Zealand beer exports.

In return, New Zealand will eliminate all tariffs on goods of Singapore origin - although I note that New Zealand already accords duty free treatment to over 95% of imports from Singapore.

A new provision is the 40% ex factory cost threshold which will determine origin of goods for tariff preference. This is a valuable precedent. It sets a new benchmark which will assist our export effort.

The Agreement sets a new standard by comprehensively outlawing export subsidies on all goods including agricultural products. Let our other trading partners in Europe and North America take note!

Trade in services will be progressively liberalised. Services generate 80 per cent of all New Zealand jobs, creating $8 billion in exports. The export of services is an increasingly important dimension of NZ's international trade profile.

There will be improved access for NZ services exporters to a wide range of Singapore's services sectors including: telecommunications, financial, educational, engineering and architecture services. Singapore provides a shop window for NZ to sell its services further abroad. A new provision to deal with recognition of qualifications will assist New Zealand services exporters to access Singapore.

The provisions to address technical, sanitary and phytosanitary barriers to trade will reduce compliance costs. We will have more secure access to the Singapore government procurement market. Our respective investment regimes will be made transparent and more certain. Barriers to investment will be gradually eliminated.

In short, the Agreement is good news for New Zealand; it will encourage trade in goods and services, promote investment, create jobs especially in service industries, and assist our economic development.

Importantly as well, the CEP sends a very positive signal to our other Asian trading partners about our willingness to engage with them.

Conversely, failure to ratify this Agreement would send a very negative signal and be seriously prejudicial to our trade and economic interests generally.

Let me now comment on some of the criticisms that are being levelled, misguidedly, against this Agreement.

We are told that as a result of the CEP the NZ textile, clothing and footwear industries will 'simply disappear'. This is rubbish and irresponsible scare-mongering.

Singapore is not a significant producer and exporter of these items.There will be no explosion of imports from Singapore after the agreement comes into effect. Less than 0.3% of our total textiles, clothing and footwear imports come from Singapore, and accordingly the impact on our protected industries from tariff elimination (for Singapore alone, NOT the whole world as some seem to believe) will be minimal.

There has been a lot of loose comment about imports from low wage processing zones such as those in Indonesia, taking an unintended advantage of the CEP's tariff preferences.

The Agreement provides that the New Zealand Customs Service will be able to prevent circumvention or fraud so that third countries do not derive an unintended benefit from the elimination of tariffs. Unless ourCustoms is satisfied as to origin, the concession will not apply.

I note, Mr Speaker, that the Customs Service provided an assurance to the Select Committee that the integrity of its verification and monitoring process can be maintained and that the Select Committee will, over the first two years, receive six monthly reports on verification and enforcement of the rules.

Another criticism is that Singapore might set up a private University here and remit the profits overseas. Actually there is nothing to stop an overseas University doing that today - they don't need a CEP to do so - but if they did, they still have to adhere to NZ rules and regulations.

What are the critics afraid of? Competition? From courses that NZ students will want to attend? Let's be clear - the CEP does not oblige NZ to extend state subsidies to private Singaporean institutions.

And what about regional and local government. The Select Committee's report notes that the CEP 'has no direct impact on local government under NZ law'. The CEP doesn't prevent regional and local governments from buying locally if they wish - it provides only that a NZ Government cannot force them to buy locally. So where is the problem?

And sovereignty? The claim that we are renouncing our sovereignty by negotiating the CEP is rubbish. NZ is party to hundreds of international trade, economic, environmental, labour and other treaties which impose rights and obligations on us. We have signed up to them because successive governments have concluded that they are in our interests. We can withdraw from them in the future in the unlikely event we decide they are not in our interests.

Far from undermining our sovereignty, our membership of such agreements enables us to have a voice in the international community, to advance and protect our national interests. They make us stronger, more independent, self confident and prosperous.

The CEP is a bilateral Agreement. Any other agreements which New Zealand might seek to enter into will be negotiated separately, with fresh negotiating mandates from the Government. But of course, the CEP with Singapore is available as a model. Others can sign up to it should they wish, provided they have our and Singapore's approval.

Most of us realise we can do better and be more productive when we concentrate on what we do best. It's the same for countries. But we have to do that through trade.

The CEP Agreement will send a positive signal to our business community about this Government's commitment to prise open export markets and promote economic growth.

I would encourage the House to indicate its support for the Agreement, in order that we can complete our approval processes, and pass the necessary amending legislation, so this historic CEP between New Zealand and Singapore can enter into force on 1 January 2001.

Office of Hon Jim Sutton


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