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Free trade deal pegs NZ beneath Oz

Media statement
Monday, February 9th, 2004

Free trade deal pegs NZ beneath Oz

The comprehensive free trade deal between Australia and the US will make New Zealand more dependent on Australia while pegging our growth rates below theirs, the Employers & Manufacturers Association (Northern) says.

"We might have been cousins with Australians yesterday but now we've just been consigned to second cousin status," said Bruce Goldsworthy, EMA's Manufacturing Services Manager.

"Loud and long congratulations are due Australia!

"The agreement is great news for them though in future they'll be paying even less attention to New Zealand. Their focus will swing away from CER onto the US in short order.

"The rules for the agreement will see to it. For example, the Rules of Origin that determine where products are ultimately made are different for the new agreement than for CER. For the Australia-US deal substantial transformation is to be used whereas for CER the rules require 50 per cent value added.

"Investment in new production capacity, and the jobs that go with it, will trend towards Australia.

"With their standards of living racing ahead of ours the only benefit New Zealand will reap will be from selling more goods to Australia as their economy flourishes.

"We'll be constantly playing second fiddle to their economic orchestra.

"New Zealand should ponder the benefits Australia has just won. Their sheep and lamb meat farmers get duty free access to the US almost straight away, auto parts exports from Australia to the US worth about $A300 million will swing upwards as tariffs cease. For example, Aussie made utes will become a familiar American sight as the 25 per cent tariff disappears.

"97 per cent of all Australian exports to the US become duty free straight away, and they get access to the US Government's Federal procurement market worth $US200 billion a year.

"There's a silver lining in the agreement for our exporters to Australia but only if we can retain our competitive edge by keeping our business costs lower than theirs. Unfortunately there's no evidence this is on the Government's agenda."


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