Free trade agreements - What about the down sides?

Free trade agreements - What about the down sides?

Some adjustment is inevitable in concluding trade agreements with China, Thailand and Chile said Suse Reynolds, TLN Executive Director, when she spoke to Export New Zealand Canterbury today.

"New Zealanders need to be internationally competitive. It is a vital component of our own individual success and the country's economic growth.

"While we sometimes struggle to see the day to day relevance of economic growth it is of course directly related to the quality of our lifestyles, our environment and the state of our health and education systems," said Reynolds.

She urged all New Zealanders to ask themselves about the opportunities and, equally importantly, to consider what adjustments will be necessary when the agreements are concluded. Strategic and financial adjustment should be considered and implications for employment.

"Last week the window stay manufacturer, Interlock, announced the loss of up to eighty jobs as it transfers production to China. A number of our high profile outdoor companies, such as NZO mountain bike clothing and Christchurch's Macpac and Kathmandu, have also chosen to shift production to China.

While not downplaying the personal impact of job loss, Reynolds said there are a number of positive messages to take from this.

First, New Zealand is currently experiencing its lowest unemployment rates in decades so there is no shortage of job opportunities. New Zealand has a good social welfare system in place for those who take longer to find new jobs. In some sectors, such as clothing and footwear, the Government is also providing funding to assist with transition.

Second, none of the companies had gone out of business. In fact, quite the opposite, they are doing well.

Third, the tack these companies have taken recognises that in developed countries, such as New Zealand, the trend is for jobs to be lost in manufacturing and created in services and higher value enterprises. Our living standards are improving.

Fourth, we need to get rid of any outdated preconceptions we have about China, and Asia for that matter. These are not the developing economies of twenty, or even ten years ago. They are dynamic, fast growing, producers of high quality, cutting edge technology and goods.

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