Sitting date: 10 Apr 2025

UNITED ARAB EMIRATES COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT LEGISLATION AMENDMENT BILL

First Reading

INTERNATIONAL TREATY EXAMINATIONS

NZ-UAE Comprehensive Economic Partnership Agreement, And Agreement Between the Government of New Zealand and the Government of the United Arab Emirates on the Promotion and Protection of Investments—Report of the Foreign Affairs, Defence, and Trade Committee

Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): I present a legislative statement on the United Arab Emirates Comprehensive Economic Partnership Agreement Legislation Amendment Bill.

SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon SCOTT SIMPSON: I move, That the United Arab Emirates Comprehensive Economic Partnership Agreement Legislation Amendment Bill be now read a first time, and that the report of the Foreign Affairs, Defence, and Trade Committee be noted. I further nominate the Foreign Affairs, Defence, and Trade Committee to consider the bill.

The New Zealand-UAE Comprehensive Economic Partnership Agreement, or CEPA, is a significant achievement. It was New Zealand's faster ever free-trade agreement negotiation, concluded in just over four months, from May through till September 2024, and signed in January this year during the Prime Minister and Minister for Trade and Investment's visit to the UAE. Now more than ever, it's critical that we work to strengthen our trading ties around the world. This free-trade agreement (FTA), our first with a Middle Eastern State, will do so, helping to reinforce our flourishing bilateral relationship and grow our economic ties with the UAE. It's a dynamic and internationally connected economy that is an important trade and investment partner in its own right, as well as a gateway to the region for New Zealand exporters, and a key global hub. The UAE is New Zealand's equal-largest export destination in the Middle East, with our goods and service exports up 15 percent in 2024, and a total of NZ$1.2 billion.

The CEPA, once enforced, will improve conditions for Kiwi exporters in the UAE market, with tariffs eliminated on 98.5 percent of our goods exported immediately, growing to 99 percent within three years. With the final 1 percent receiving an immediate tariff reduction, plus a commitment to extend New Zealand any further liberalisation the UAE may agree to in the future, with any other trading partner. This makes the New Zealand-UAE CEPA the best and most liberalising of any of the UAE's CEPAs to date.

In addition to these high-quality commitments for goods, the agreement features trade-facilitative rules, designed to reduce behind-the-border barriers. New Zealand's services exporters will also benefit from improved commitments and enhanced guaranteed access, with important most favoured nation commitments. That means that Kiwi service exporters in important sectors, like education, professional services, environmental, and health services, will always benefit from the best-available treatment in the UAE market, and of course, vice versa. That will futureproof the agreement, and at the same time—and consistent with New Zealand's free-trade agreements to date—the agreement preserves the Government's right to regulate in the public interest, and preserves the status of the Treaty of Waitangi.

This Government recognises that trade is a crucial factor to our economic success. We know that in one in four New Zealanders' jobs depend on trade. The UAE is currently the world's 20th-largest economy, with a GDP of over USD $500 billion. It is also a significant outbound investor, and the CEPA and accompanying bilateral investment treaty will create opportunities for increasing two-way investment flows to support economic growth. In fact, Minister for Trade and Investment Todd McClay, whose active engagement was so instrumental in getting this high-quality agreement concluded in such quick time, has been in the UAE this very week to attend the Annual Investment Meeting Congress, and that will further strengthen strategic ties with the UAE and their investors, and will further showcase New Zealand as an attractive investment destination.

In addition, the agreement includes the most comprehensive commitments on inclusive and sustainable trade in any UAE CEPA, including to adopt and maintain internationally recognised labour standards, to promote high levels of environmental protection, and support women's access to the benefits and opportunities that flow from trade and investment. The CEPA also contains an "Indigenous Peoples Economic and Trade Cooperation" chapter, creating a framework for enhancing Māori trade, investment innovation, cultural exchange, people-to-people links, and, of course, wellbeing. There are a limited number of legislative and regulatory amendments that are required to align New Zealand's domestic law with our obligations in the CEPA; this bill makes the changes required for New Zealand to implement its obligations under this agreement and to bring it into force.

Both sides on this agreement are working to ratify the New Zealand-UAE Comprehensive Economic Partnership Agreement just as soon as possible, to bring its full effect into force. This agreement, coupled with the recently concluded NZ-Gulf Cooperation Council FTA, will position New Zealand to maximise the opportunities in the dynamic Gulf region, including in pursuit of the Government's ambitious goal of doubling exports over coming decades. It will further expand the footprint of New Zealand's network of free trade agreements, now covering over 70 percent of our exports globally. That provides enhanced commercial certainty and opportunity for New Zealand exporters. This is especially important given the acute challenges the international trading system is experiencing at this time. So it's my privilege and pleasure to commend the United Arab Emirates Comprehensive Economic Partnership Agreement Legislation Amendment Bill to the House.

ASSISTANT SPEAKER (Greg O'Connor): The question is that the motion be agreed to and that the House note the report of the Foreign Affairs, Defence and Trade Committee.

Hon DAMIEN O'CONNOR (Labour): Thank you, Mr Speaker. I can say that, on behalf of the Labour Opposition, we will be supporting this piece of legislation. It comes at a very important time in international trade, when I think we, more than ever, rely on the rules and the arrangements of trade to give us some security in an otherwise very, very uncertain world.

I'll just go back—the origins of this deal go back some way, and back in 2007, in fact, the Ministry of Foreign Affairs and Trade (MFAT) and officials were very busy negotiating two trade deals. One was with China, and that was signed by the Labour Government of the day, and the other one was with the GCC—the Gulf Cooperation Council. We'd actually got close to conclusion there, at the change of Government, and then, it was continued on by the incoming Government. But, actually, the GCC decided to halt that, in 2009, and not proceed with any further trade agreements.

That, effectively, was parked right through the period of the National Government. Then, of course, Labour, coming in, in 2017, had a few options—we upgraded the China free-trade agreement, looking to the UK, of course, post-Brexit, and then the EU. So there was a lot going on, and the GCC was still, effectively, parked up. The Gulf Cooperation Council came back and said, "Look, we're interested in restarting negotiations." There was a limit to the resources within MFAT, but indeed, that was progressed slowly. The UAE, on the other hand, had been out doing deals with other countries on a bilateral basis—not the preferred option for our country; we always prefer a multilateral. That delivers greater benefits across more countries. But none the less, we saw the value in that, and indeed, in May 2023, when the UAE's Minister of State for International Cooperation came to New Zealand, she sought an assurance from us that we would start and engage on the basis of negotiating a free-trade agreement. Indeed, we confirmed that, in September 2023, we would start negotiations, and then I took a trade delegation to the UAE later on in September.

Can I say, though, that the incoming Government did pick that up and ran with it, and I want to acknowledge the efforts of Minister McClay, who got stuck into it and, indeed, as it was said, negotiated very quickly a trade agreement. I think, as always, it is across the borders and the boundaries of this House and the parties of this House that we see the value in progressing trade agreements. It has been a long time coming. We welcome it into the House.

I would like to, on behalf of the UAE, clarify—and after that, of course, the agreement with the GCC—on the world of the Middle East in which we are dealing, it's quite different from that of 2007, 2009. Of course, the perception that this is a bunch of countries that are, perhaps, not as up to date with their rights for workers, rights for women, advocacy for women, but, actually, the agreement that has been signed here goes a long way to moving down the path to a place, not in the same league as New Zealand and Australia and other like-minded countries, but none the less, from a culture that goes back thousands of years, we have to acknowledge that, actually, the UAE, in this deal, has made significant progress and concessions to meet the expectations that we have, as a country, in negotiating these agreements.

We set standards in the UK and EU trade agreements that held the rights and opportunities for small to medium enterprises, that protected the rights of workers, protected the rights for women, and advocated for them. This is a good deal. It does provide opportunities for our exporters and for the service sector, where they will be able to bid into a procurement for Government services in the UAE—a big, large, dynamic economy. As I say, at a time when New Zealand, as a trading nation, is looking for security around the world, this couldn't come at a better time. So I acknowledge the Government in progressing this through. Labour, in Opposition, will support the passage of this and the process through to select committee.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Speaker. I rise on behalf of the Green Party of Aotearoa New Zealand to oppose both this bill and the NZ-UAE Comprehensive Economic Partnership Agreement. There are several reasons for that. I think I will start with the economic reason. Trading goods, for example, is one of the main advantages of the agreement that has been proposed, and one of the most tangible benefits of this agreement was bringing a reduction of tariffs. As we have seen with some of the latest positioning around tariffs internationally, it is worth mentioning that the tariff that will potentially be removed as a part of this agreement is, at a maximum, worth $42.6 million per annum. There is a suggestion, as we go through the process, that this might increase the demand from the United Arab Emirates' (UAE) perspective on some of these, but that has yet to be proven. It is also worth noting that the majority of Aotearoa's exports into the UAE currently enter under the unilateral UAE duty-exemption programme. This agreement is also unlikely to have immediate commercial or economic benefit to exporters in Aotearoa. And there's no evidence that the enforceable Investment Facilitation chapter and the enforceable bilateral investment agreement will increase investment from UAE to Aotearoa as well.

From a service perspective, it's concerning that the State dispute settlements exist to a large extent, including the enforcement of the problematically open-ended investor protection on minimum standards of treatment and direct and indirect expropriation.

Overall, I think it's really important for us to note that as we have more and more free-trade agreements (FTAs) and comprehensive economic partnership agreements (CEPAs), proportionally speaking, we have not seen the equal growth in the number of exports in proportion to our GDP through all of these agreements. In fact, the FTAs and CEPAs that we have signed up to have not yielded the kind of return that we are hoping to see.

But that's not the only reason for this. We continuously, as the Greens, have issues with the Digital Trade chapter, which have serious concerns both from a data sovereignty and a mana raraunga perspective but also, in general, for the allowances they give to big tech.

While it is good, in this particular agreement, that we have seen that there is no provision protecting source code and algorithms from requirement for disclosure, we still have serious concerns in all Digital Trade chapters in our FTAs and CEPAs relating to the location of data and storage. And this is particularly in articles 10.13 and 10.14 of this particular agreement. To put it simply, there is no way for us to hold big tech accountable for data breaches and data violations in the way that we currently do it, internationally speaking. And also from a World Trade Organization perspective, we are just simply not equipped to do that. We have seen that perpetuated since the Trans-Pacific Partnership agreement—granted, the best example we have is in the EU-NZ FTA.

We must also mention the serious human rights concerns that we have, and the baseline is what values we are able to compromise. I would also like to draw the House's attention to the ongoing contribution of UAE to the Sudanese civil war, where thousands of people have been killed and also 12 million people have been displaced on the basis of UAE direct involvement in supporting the Rapid Support Forces. In fact, there is currently an application to the International Court of Justice from Sudan against the UAE, and that is also a serious concern we need to mention when we are looking at this agreement, and we just did not get the confidence from the Ministry of Foreign Affairs and Trade, as part of the process, that we are able to hold our partners accountable for both human rights violations as well as labour law violations.

Finally, considering that we had the Treaty principles bill second reading today, we must also mention that we have severe Te Tiriti concerns when it comes to this particular agreement. I want to focus on the fact that the non-paper on Māori and indigenous trade that the Crown provided to the UAE purports to explain Te Tiriti o Waitangi but misrepresented Te Tiriti and failed to acknowledge that Māori never ceded sovereignty to the Crown and that Te Tiriti guarantees the continued exercise of tino rangatiratanga.

There is also a lack of genuine accountability in chapters 13 and 15 of this agreement, and I would like to point to article 13.35. For example, it uses terms such as "endeavour" and "may" that give little confidence that such provisions will be implemented. With all of these reasons, we love trade, we want trade to benefit everyone, but we do not see that reflected in this agreement. Thank you.

Hon ANDREW HOGGARD (Minister for Biosecurity): Thank you, Mr Speaker. I rise on behalf of the ACT Party to speak in support of the United Arab Emirates Comprehensive Economic Partnership Agreement Legislation Amendment Bill—and I wish they'd come up with shorter names for these things. I won't reiterate what the first speaker said. The benefits of this agreement are well and truly laid out there. We know—as opposed to the de-growth Greens—that free trade benefits us. It is huge. We have seen, with the multiple free-trade agreements that this country has entered into, that results have come back to this country. Whether or not it's a Māori-led dairy company or just another dairy company, it doesn't matter—the results come back. No matter who owns the farm, or the business, they get the benefits. Trade benefits all, so we commend this bill to the House.

Hon MARK PATTERSON (NZ First): I rise on behalf of New Zealand First to support this United Arab Emirates Comprehensive Economic Partnership Agreement Legislation Amendment Bill. We absolutely support this bill. I can't believe what I'm hearing from the Greens over there not supporting this bill. What planet are they on? What world do they live in? They're over here day after day, week after week demanding extra public services when the very things that underpin our Public Service, the very income—words fail me.

We have been given the opportunity through outstanding work by our trade officials and our politicians to have this opportunity to get better access into the world's 20th biggest economy—with the 11th highest GDP per capita, I might say. This is an absolute gift-horse that we've been given the opportunity to put through the parliamentary process here. This is a very timely bill. I think Stalin's quote about "There are decades when nothing happens; and [there are] weeks when decades happen."—well, we're in one of those weeks just at the moment it feels. This is a very tumultuous geopolitical environment. There is a reordering of world trade going on.

With that we as a responsible Government—and hopefully with support from the Labour Party at the very least—have an opportunity in front of us here. We have to do the things that are within our control. One of the things that is within our control right now is to progress this United Arab Emirates free-trade agreement.

The coalition, of course, has been well ahead of the curve here. We've had huge international engagement since coming in not 18 months ago. We're very proud of the work—I know not just in New Zealand First, but across the Parliament and actually across the country—that our leader the Rt Hon Winston Peters is doing out there on the world stage representing us in these tumultuous times. The Prime Minister has absolutely shone on his international engagements. He's really energised those trade trips. Todd McClay has done a phenomenal job pulling in not only this trade deal, the New Zealand-Gulf Cooperation Council free trade agreement, and then following on the good work of the Hon Damien O'Connor in tidying up and finishing the UK and EU trade deal. Boy, are those deals going to be important for us at the moment.

Largely this has been bipartisan. I hope the Greens do reconsider because we just have not got the ability to turn down these sorts of opportunities from sitting in an ivory tower.

So we are a small island nation. We do make our living by trading food and fibre to the world—80 percent of our exports are food and fibre. This opens up a really important opportunity. It will be important for our exporters, for our rural communities, for our primary sector, and for New Zealand as a whole. I might say that I hear it's pretty hot over there; wool is very good with its temperature control in indoor environments, so I expect that they'll be coming over here looking for some of our finest wool products.

But with that, I will absolutely on behalf of New Zealand First commend this build of the House. We are for the gospel of growth. This is part of that plank and an important part indeed. Thank you.

MILES ANDERSON (National—Waitaki): Look, I'd like to reinforce the comments that the previous speaker, the Hon Mark Patterson, had. They are absolutely correct, and I agree with him that the Green Party are just out in the cold on this particular bill and with trade in general. With that, I'd like to commend this bill to the House.

Hon BARBARA EDMONDS (Labour—Mana): Thank you, Mr Speaker. It is a privilege always to rise in this House to speak, particularly on the United Arab Emirates Comprehensive Economic Partnership Agreement Legislation Amendment Bill, and in particular the international treaty examination of this bill by the Foreign Affairs, Defence and Trade Committee.

There are a number of things which for New Zealand's sake mean we have low productivity in our country. Some of them have been traversed quite in depth by the IMF, by the Productivity Commission before it was closed, and the Reserve Bank earlier this year set out what those reasons were. Some of those reasons are education, innovation, technology, and one which this bill seeks to address, and that is around our interconnectedness with the rest of the world.

Because we are geographically at the bottom of the world, in order to put things on ships or on planes in order to ship them elsewhere, there is a competitive disadvantage to New Zealand economically. And so this bill really speaks to just another tool with which we can help with the productivity of our country in order to be more connected to other parts of the world, particularly in trade.

We've heard from a number of speakers today—from the Minister and also from the Hon Damien O'Connor, the former Minister for Trade—about the importance of a trade agreement right now in this space and time of the world. Since last Thursday, it's been obvious that the US tariff imposition on the rest of the world has caused a lot of shocks. And each day they vary. And we saw that this morning—New Zealanders would have woken up this morning to another announcement in relation to those tariffs. And anybody in the House who follows the equities market can see both the peaks and the troughs, and in particular for a number of Kiwis here who have investments such as KiwiSaver, a lot of them won't be wanting to look at their KiwiSaver balances—maybe today's a bit better than yesterday.

The reason why the Labour Party is supporting this bill is because it's one of those rare times where we do agree with the Government, and then when Governments change over, we usually see this continuation of agreements, particularly when it comes to free trade. And as the Hon Damien O'Connor spoke about earlier, the discussions that started on this bill and this agreement happened towards the end of 2023. And so we do acknowledge that the Government has picked it up and we've come to this point now.

In the actual agreement itself, something that I do want to point out to the House and to members of the public is that there was a recognition by both New Zealand and the UAE around the goal of eliminating all forms of forced or compulsory labour, including child labour, and also the importance of supporting women's economic empowerment by adopting, maintaining and implementing laws, regulations, policies, and best practice, as well as the UN Convention on the Elimination of all Forms of Discrimination against Women.

I think that's a really important goal that we can do both together, particularly for New Zealand, because we all know that when it comes to the economic empowerment for women—particularly as women do take breaks within their career, and I know what that's like—ensuring that there are regulations and policies to support that both in New Zealand and in the UAE is important, which is why that particular clause in the agreement has my support.

It also speaks to the "Indigenous Peoples Economic and Trade Cooperation" chapter in this particular bill, which seems a little bit ironic given a couple of bills ago, but it's also important to see that this has support from both sides of the House in relation to that chapter.

Again, this bill is another way that New Zealand stays interconnected with the world, particularly in a very uncertain world. It's good to see the rules-based agreement, which has been agreed to by both the UAE and New Zealand, come to fruition. So I stand to support this bill and commend it to the House.

CAMERON BREWER (National—Upper Harbour): This bill cements our brand new free-trade agreement with the UAE, removing 98.5 percent of export tariffs for Kiwi exporters, making it easy for our businesses to sell products overseas and grow jobs here in New Zealand. So without hesitation, I commend this to the House.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Speaker. I remember, some years ago now, Nanaia Mahuta giving a speech called "The Taniwha and the Dragon", and the theme in it was the need to diversify in the face of global uncertainty. The theme of that speech was perhaps looking to the East rather than the West for that uncertainty, but uncertainty is certainly with us. On the back of good work that the Labour-Green Government did, this is a further step. The negotiations of these agreements have actually built on the work of successive Governments. The apparent speed with which this agreement was negotiated, I think, is largely because there's now a pretty broad understanding of what a good, comprehensive trade agreement looks like.

I think it's really important just to set out for the record that it isn't just lower tariffs across various goods; it's also making sure that there aren't inappropriate non-tariff barriers, which can be things like working conditions and environmental conditions, to make sure that both economies are trading on an even footing. Of course, the other thing that this agreement has in it is a Treaty of Waitangi clause, which is somewhat ironic given this Government's approach to Treaty of Waitangi clauses in our own legislation. But it's really important to have a Treaty clause, to say that the New Zealand Government can act in respect of trade in a way which is consistent with the principles of the Treaty of Waitangi—and that is not an illegitimate trade barrier, even if it may have some effect on pricing or market access. That's a really important part of this agreement.

But I do commend the Government for pressing on with this. I know that they've got aspirations elsewhere, and, on this side of the House, we'll support them in that. I think it's important that a signal is sent to potential trade partners that this isn't a matter where the policy of the Government will change with a change in Government; rather, we will stay the course. To that end, I know that there is a practice of taking Opposition members with whoever is in Government on some trade delegations, and I think that's a really good thing, for two reasons. One, for continuity across bargaining teams, but also for a very powerful signal that New Zealand is unified in being an open-trading nation.

This is in the face of the kind of tariff war that's going on overseas. This is sending a very powerful signal that, even in the face of that, we back our people to be competitive and not to need protection—that they are as good as any other businesses, farmers, game programmers and developers, aerospace engineers, all the things that we're great at—that we're as good or better than anyone in the world and we don't need false protections to prop up our industries. It's an approach we've taken for many decades and it's an approach we need to continue with. That's not to say there's not going to be some rough water ahead, and we may need some fiscal and monetary strategies around that, but in terms of our approach to trade, it's a good one. It's bipartisan and it serves our industry well, and I commend it. Kia ora.

CARL BATES (National—Whanganui): Trade is good, and therefore I commend this bill to the House.

Dr Tracey McLellan: Mr Speaker?

ASSISTANT SPEAKER (Greg O'Connor): The question is the report—

Dr Tracey McLellan: Te Pāti Māori didn't take their call.

ASSISTANT SPEAKER (Greg O'Connor): Has the member made an arrangement with Te Pāti Māori to take this call?

Dr Tracey McLellan: Yes.

Hon Members: No!

Dr Tracey McLellan: Did we?

Hon Kieran McAnulty: Point of order, sir. Just for clarity.

ASSISTANT SPEAKER (Greg O'Connor): Point of order, but the member needs to satisfy the Chair that they have an arrangement with Te Pāti Māori to take this call on the first reading.

Hon Kieran McAnulty: Yes. The understanding is that if the Māori Party don't take their call, then we're eligible to that split call.

ASSISTANT SPEAKER (Greg O'Connor): No, that is not correct. I want to satisfy the Chair that Te Pāti Māori have actually given you the call.

Dr Tracey McLellan: Speaking to the point of order. No, it's first reading. So, you're correct, Mr Speaker.

ASSISTANT SPEAKER (Greg O'Connor): The question is that the report be noted.

Motion agreed to.

Report noted.

ASSISTANT SPEAKER (Greg O'Connor): The question now is that the motion be agreed to.

Motion agreed to.

Bill read a first time.

ASSISTANT SPEAKER (Greg O'Connor): The question is, That the United Arab Emirates Comprehensive Economic Partnership Agreement Legislation Amendment Bill be considered by the Foreign Affairs, Defence and Trade Committee.

Motion agreed to.

Bill referred to the Foreign Affairs, Defence and Trade Committee.

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