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Mapp: NZ - China FTA Agreement Bill Speech

Dr Wayne Mapp – New Zealand China Free Trade Agreement Bill

First Reading Speech : 15 May 2008

National will, of course, be supporting the New Zealand - China Free Trade Agreement Bill into law, through all its stages. I suggest it is the most significant bill that this Parliament will be passing during its three-year period.

I have to say this: would this not be the opportunity that the Government should have taken to sketch out just how significant this agreement will be for the nation, when we are in Parliament with the Minister essentially talking about New Zealand breaking ground on a global scale by being first. In fact, members on this side of the Chamber were very disappointed in Mr Shane Jones’ speech, and in him not lifting his vision but simply focusing—in a first reading speech—on minor technical detail.

It is not often that Parliament has the opportunity to pass law that will add hundreds of millions of dollars—even billions of dollars—to the wealth of our community. Virtually everyone in the nation will win on this agreement; almost no one will lose. The reason, of course, is that the growth of China has been the transformative event of the 21st century.

Members should just remember that barely 20 years ago China was a closed society coming out of the Cultural Revolution and was one of the poorest nations per capita on the globe. Our trade with China 20 years ago was a mere $600 million. Today, in the space of just one generation, China has become a great economic power. It will be a crucial factor in New Zealand’s economic future—of course, not just New Zealand’s but that of the entire planet. China has already overtaken the United Kingdom as our fourth largest export market. I suggest that as a result of this agreement China will soon be No. 2, or maybe No. 1. It is already the second largest source of imports into New Zealand. China is, in fact, the second largest economy in the world. It is the world’s leading manufacturer in consumer goods, electronics, steel, textiles—it is literally the factory to the world.

New Zealand has made a fundamental judgment with this agreement; we accept that China is a free and open market economy. With that freeness—and I want to point this out to those who oppose the agreement—there is a much greater level of personal and social choice for the Chinese people.

I am not going to suggest that China is a free society, but it is self-evident that the Chinese people are vastly more free than they were two decades ago. They can buy property, they can travel, and they have a level of access to international media. No one can seriously pretend that China is essentially a closed society. That is why National supports the agreement.

We recognise that the economic and social progress in China is sufficient for it to be credible for New Zealand to enter into a free-trade agreement with it. I want to remind members that 10 years ago New Zealand was the key promoter of China’s entry into the *World Trade Organization. That was the most significant gain out of the APEC conference in Auckland in 1999. Who could possibly doubt today the value of China’s admission into the World Trade Organization? As a direct result of that, in the last decade there has been an unparalleled increase in global trade and living standards, and China has been the engine that has driven that.

So the growth in our country has been crucially dependent on China’s growth. China’s demand has driven up the price of virtually every export commodity. Our dairy farmers are directly wealthier as a result of that. Even Solid Energy, in one mine—Stockton—will generate $600 million of revenue this year. Not one bit of that coal goes into a dirty coal-fired power station; it is all about smelting steel, and members should know that the only way one can actually smelt steel is with coke and coal. So our exports do not in any significant way add to carbon dioxide emission increases where there are other options.

We have been hearing the submissions presented to the select committee, and one of the things that struck us is the wide level of support for the agreement. It does not come just from the leading business and agricultural organisations; it comes from right across the board, including virtually every Māori business organisation. One would like to think that the Māori Party, in particular, will have taken that onboard. Māori business organisations—mostly iwi based—know that the China free-trade agreement will boost the wealth and incomes of Māori people.

Even the trade union movement understands that important value. The Council of Trade Unions knows that New Zealand’s wealth is dependent on international trade. So why would one vote against the agreement—a vote that will harm trade? That is what some parties will do today. They will vote against this agreement, and that will harm trade and harm the prosperity of ordinary New Zealanders. Obviously there are some concerns about the agreement, particularly on political issues surrounding Tibet. On that ground, I would ask people who oppose the agreement this question: do they, by their vociferous dissent, want to reinforce Chinese xenophobia? That is the implication, actually, of isolating China. Surely we want to have the opportunity of bringing China more in to the framework of global society. Of course China is not democratic in the way we recognise that. Of course it has difficulties in understanding the legitimate aspirations of the Tibetan people. The free-trade agreement does not stop New Zealand raising those issues with China. In fact, I would suggest that it makes it easier for us to raise those issues, because now New Zealand has a privileged level of access with China, and we have greater opportunities to raise those issues with the Chinese Government.

If China follows the pattern of much of the rest of Asia—South Korea, the Philippines, Indonesia, Taiwan, Thailand, and Singapore—it is likely that as China becomes more wealthy and as its middle class grows, there will be a greater demand for freedom and democracy. We have seen that happen right throughout Asia, and China, I know—I have spoken to many of its officials and parliamentarians—is looking carefully at the democratic models that those countries offer. China is looking to see whether it can make a transition to a more open, democratic society without endangering its stability. I suggest that the Chinese are learning lessons from South-east Asia in that regard. The constructive engagement of New Zealand with those South-east Asian countries during that time, in the 1990s especially, helped speed up that process, along with that of other countries.

This free trade agreement sends a much bigger signal than just being an agreement between 1.3 billion and a country of four million. The New Zealand - China free trade agreement offers an historic opportunity for the whole Asia-Pacific region. We should bear in mind that this is China’s first free-trade agreement. Everyone accepts that it is a high-quality agreement covering all sectors, agriculture included. It is only a 12-year period before we have a full free-trade agreement across every sector. We all know that China is already in negotiations with Australia. They will come to fruition within, maybe, 2 or 3 years. At that point we will have an agreement between 1.3 billion and 25 million people, and, indeed, some of the wealthier nations within the Asia-Pacific region. How long, then, can it be before Japan and Korea find the economic and political need to enter into such agreements? Indeed, this week that is exactly what the Prime Minister is negotiating.

So I ask members to imagine a network of free-trade agreements in the Asia-Pacific region. It will act as an impetus for the full promise of APEC. APEC did have the promise of a comprehensive free-trade agreement covering all economies. This agreement will accelerate that promise. That is the strategic opportunity that this agreement offers. It is not about just New Zealand and China. This agreement is the pathway to liberalising and revitalising free trade throughout the globe, and I suggest that it is that promise over the last decade that has driven prosperity to a higher level than in any other time in the history of the world.


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