We then come to the question of what New Zealand had to abandon in order to find common ground in this trade agreement. We have not been able to negotiate or compromise tariffs or quotas because we are already one of the most open economies in the world. We don`t hold cards in this commercial game. In fact, we received a card, and we were forced to play that card. We now have to play it every time. It is recalled that our compromise – the only thing the Koreans are asking for in this agreement – was the inclusion of the investor-state dispute settlement provision in this agreement. The investor-state dispute settlement clause was pretty much what we give in exchange for what I would call the manipulation of tariffs. We are being asked to give up our sovereignty at the same time. Korea and New Zealand`s investment promises include an investor-state dispute settlement mechanism. This allows for the use of negotiation and arbitration when an investor feels that a government has not complied with the investment obligations imposed on it under the agreement and has been harmed. The investor-state dispute settlement provisions contain important transparency requirements and safeguards to preserve the government`s right to regulate for legitimate public policy purposes. These provisions have been developed in a way that reflects New Zealand`s approach to these provisions in existing free trade agreements, as well as international developments related to investor-state dispute settlement, and ensures a fair balance between investor protection and governments` rights and obligations to protect public health, safety and the environment. The good thing about this agreement is that over time, it eliminates most of the $229 million that our exporters pay in tariffs to the Koreans.
Of our current exports, 98% of tariffs are abolished. This figure distorts the reality of the image. Since tariffs on powdered milk are maintained, which is not a major export of electricity because of this customs barrier, the agreement is not as good as it appears on the surface, but it is certainly worth it. For kiwi exporters, for example, they paid 45 per cent tariffs. Chile is now duty-free in Korea. It is our main competitor, it was a significant gain, and it will come into effect in five years. In terms of beef exports, we pay 40%. It will be abolished in 15 years. For sheep meat, 22 per cent, and this will be eliminated in 10 years. For 10 years, we have been exporting forest to Korea, largely duty-free, and in 14 years of cheese and butter exports. The Greens will never approve free trade.
The Greens will find in the book all the excuses for not having free trade. It doesn`t matter if it`s the best free trade agreement ever written. Even if Kennedy had written the agreement to Graham, he would not vote because those members would not. The Greens do not philosophically agree with free trade. This bloc of the New Zealand opposition is therefore against free trade, and that is what New Zealanders must take away from this debate. The free trade agreement between New Zealand and the Republic of Korea is an important development of our bilateral relations dating back to the Korean War. Since then, Korea has become an important trading partner. Korea is New Zealand`s sixth largest export and our 8th largest source of imports. In 2014, our total trade with Korea was $4.5 billion and two-way investments were close to $1 billion. There is significant potential for trade and investment to grow in the years to come.