The first reading of the Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill was completed this afternoon with NZ First and the Greens Opposed.
Minister for Trade Tim Groser said the agreement would reduce barriers to trade and investment between the two countries. It was a significant step forward in relations with the New Zealand’s sixth largest trade barriers and it gave the opportunity for this to grow.
The bill was part of the wider trade network which New Zealand was keen to expand.
David Parker said Labour would support the bill at first reading. There was broad agreement between the two main parties on the benefits of trade without the legislation exporters would not benefit from the tariff reductions and also would face further competition from those exporting to Korea from other countries who had deals in place.
Parker said there was some unease in parts of NZ about some aspects of trade deals, not so much around trade in goods, but in the areas of services and potential loss of sovereignty.
The Government needed to do more to explain what was in deals to allay concerns, Parker said.
Green Co-leader James Shaw said he applauded those who worked on the trade deal. The Greens acknowledged the reduction in tariffs would help exporters, but the Greens were still concerned about the protocols to the agreement around environmental, human rights and other issues. These seemed to achieve nothing as they were non-binding and for Green support in the future other deals would require them to be meaningful.
There was widespread concern about investor state dispute mechanisms and the part they may play in the future. While there had not been a case in New Zealand, we should be wary, Shaw said.
For this and other reasons the Greens would be opposing.
NZ First also opposed the bill with MPs saying while New Zealand relied on trade this was a trade deal in name only as it only had partial effect and this was phased in. NZ had given up little because it was already an open economy and because of this New Zealand had to agree to the investor dispute mechanism which eroded sovereignty.
Treasury said New Zealand will benefit from the removal over time of tariffs on approximately 98 percent of New Zealand’s current exports to Korea. It is estimated that New Zealand exporters currently pay around NZ$229million in duties each year to Korean authorities. On entry-into-force tariffs on 48.3 percent or NZ$793.7 million of New Zealand’s current exports to Korea will be eliminated. This includes New Zealand wine, cherries, hides and skins, some forestry products, some aluminium and many industrial goods exports will become duty-free on EIF.
New Zealand beef exports to Korea (worth NZ$120.6 million in the year ending June 2014) will become duty and safeguard-free 15 years after implementation, with an estimated annual duty saving to New Zealand of NZ$48.2 million.
All duties on New Zealand kiwifruit exports to Korea (worth NZ$44.3 million in the year ending June 2014) will be eliminated over five years, with an estimated annual duty saving to New Zealand of around NZ$20 million.
The bill was sent to Foreign Affairs and Trade Committee by 95 to 26 with Greens and NZ First opposed. It was given a report back date November 3 in order to ratify the treaty as quickly as possible
Earlier the Appropriation (2014/15 Supplementary Estimates) Bill completed its first reading without debate by 63 to 58 with National, Maori Party, ACT and United Future in favour
MPs then returned to the interrupted second reading of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) (Transitional Provisions) Amendment Bill and
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