CPTPP on the menu as minister visits city

Trade Minister David Parker says a strong focus on exports and innovation will help drive forward New Zealand’s economy in the 21st century.

Parker was in Invercargill on Thursday to speak to Southland business leaders about trade, and the effect of the newly signed Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) agreement.

Parker stressed the benefits of CPTPP for breaking into new export markets, and the safeguards implemented to ease public concerns about the deal.

The Ministry of Foreign Affairs and Trade are predicting up to $16 million a year will be saved on tariffs in Southland through the trade agreement.

For some of Southland’s key exports, there will be significant reductions and even elimination of tariffs into several new markets.

These include elimination of all tariffs for sheepmeat within eight years, and a reduction of tariffs for dairy products exported from New Zealand.

Tariffs for fisheries imports into Japan will also be reduced by 99 per cent within 11 years.

Parker said with markets such as Japan, the third-largest in the world, there would have been no realistic opportunity for a free trade agreement without CPTPP.

‘‘The benefits are pretty clear. CPTPP is very important, it covers 500 million people, with $10 trillion of GDP between them.

‘‘They include Japan, Canada, and Mexico – we don’t have a trade deal with any of those countries, so this is a big deal for New Zealand.’’

Parker said while there had been a rising anti-trade sentiment both nationally and globally, trade itself was not the problem.

Parker said rising levels of automation, high house prices, and a decreasing proportion of GDP, going back working people was making middle class New Zealanders feel more insecure.

‘‘Trade might be blamed for a lot of these things, but it’s being unfairly blamed.

‘‘Technological change and disruption is caused by technology; it’s coming and there’s nothing we can do about that ... we do need to be more generous as a government to have a retraining safety net.’’

He restated the Government’s commitment to its five ‘‘bottom lines’’ on the revised deal.

These included protecting Pharmac, upholding the Treaty of Waitangi, making meaningful gains in tariff reductions and market access, keeping the right to restrict land and house sales to foreigners, and stopping corporations from suing the Government for regulating in the public interest.

In response to questions on the effect of the government’s immigration policy for Southland, Parker said there was a need to keep labour market issues separate from trade agreements.

Parker said while the government wanted to promote a bias for immigration towards the regions and away from major cities, there needed to be more discernment about who could come into the country.

‘‘If someone’s got a great idea and they want to develop that idea from New Zealand, they’ve got a pathway here. But if they’re coming to do [hospitality] work, then no.

‘‘I’m a bit of a pure market theorist on this, I think markets should work within geographic boundaries, that’s how you move the economy towards higher value output.’’

Attracting 10,000 people to the Southland region by 2025 is one of the main goals of the Southland Regional Development Strategy (formed in 2016).

‘‘We’re not saying no immigration, but the labour market is meant to be a market, and it’s meant to be a competitive one,’’ Parker said.

‘‘You’ve got to be careful that you don’t allow such high rates of immigration that you breach the geographic boundary of the market, in a way that undermines the wages of those who are at the bottom.’’

The CPTPP will be a free trade agreement involving 11 countries in the AsiaPacific region, including New Zealand, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, and Vietnam.

The agreement was signed by the member nations on March 9 in Santiago, but is still to be ratified in legislature by the New Zealand Government.