Northland byelection: Free trade deal takes centre stage

NZ Prime Minister John Key shakes hands with South Korean President Park Geun-hye at the end of their joint press conference at the presidential Blue House in Seoul, South Korea. Photo / AP

The new Korea free trade deal with New Zealand was centre-stage yesterday of the Northland byelection campaign with National suggesting that Winston Peters' New Zealand First party could scuttle the deal that promises to benefit Northland's kiwifruit and avocado growers and dairy farmers.

Prime Minister John Key said from Korea that Mr Peters could "strike a dagger through the heart of a lot of New Zealand exports if we are going to start ripping up the China and Korean FTAs."

But Mr Peters scuttled their attack when he said he would vote for the Korea FTA despite believing the deal is sub-standard.

He thought the deal could have been a lot better and should have been because of New Zealand's involvement in the Korean War -- one of 16 countries -- and because it helped to bail out Korea during the Asian financial crisis.

Tariff reductions in the deal will have to be passed by Parliament before it can enter into effect.

Kiwifruit growers pay a 45 per cent tariff which will be phased out over five years and avocado growers a 30 per cent tariff which will be phased out over nine years.

The agreement was signed in Seoul this week and as soon as it is passed it will eliminate tariffs of $65 million a year on goods which at present are forced to pay tariffs of $229 million a year. Within 15 years 98 per cent of tariffs will go.

The attacks on Mr Peters came from Mr Key in South Korea, Finance Minister Bill English, Economic Development Minister Steven Joyce, and Environment Minister Nick Smith in Wellington, and National candidate Mark Osborne in Northland.

Dr Smith said that having worked with Mr Peters previously in Government he found him "Machiavellian."

"He is hard work and unpredictable and there in no questions that if Winston wins the Northland byelection, resource management reform will be more difficult."

Mr English and Mr Key suggested that a private members bill before the House sponsored by New Zealand First MP Fletcher Tabuteau could scuttle existing FTAs including the Korea deal if Mr Peters wins Northland and brings in another list MP.

"If they elect Mark Osborne, there will be no trouble about it going through. If they elect Winston Peters they are taking a punt."

But the Korea FTA is not under threat. The NZ First bill, which bans any Government from entering free trade agreements with an investor-state dispute settlement procedure (ISDS) including the Korean FTA, is opposed by National, Act's David Seymour and United Future's Peter Dunne with 61 votes combined.

That is enough to scuttle the bill either before or after the byelection to vote the bill down at its first reading on May 6.

But Mr English said that showed Mr Peters was saying one thing in Northland and yet in Wellington was supporting laws that moved in the opposite direction.

Labour leader Andrew Little clarified earlier statements to reporters suggesting his party would vote against any trade deal containing an ISDS -- which would include the Korea FTA.

"I may have somewhat overstated the issue," he told the Herald.

He said Labour's objection to ISDS was when they were used indiscriminately. Labour had put an ISDS clause in the free trade agreement with China but where two developed countries had faith in each other's judicial system, there was no need for it.