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Asia, the economy and exports

Canterbury Manufacturers’ Association.
Media Release.
5 July 2006

The Canterbury Manufacturers’ Association says that while Asia is important to New Zealand’s future economic growth, as stated in the Asia Knowledge Working Group’s report released this week, we must not sacrifice our own exporting capability when developing trade relations with other countries.

The Association recognises the rapidly growing market and exporting opportunities which Asia presents for New Zealand companies and says that local companies risk being marginalised by international competitors unless they understand and successfully engage with these markets. The CMA says that trade liberalisation, whether it is bilateral or regional, is becoming a political and economic fact of life. In December 2004, China and ASEAN signed an accord which once fully implemented will create a market of over 2 billion people by 2010 that can compete with Europe and the United States.

Trade is fundamental to New Zealand as exports are the key to this country’s future. However other countries maintain policies to protect their economies even when negotiating Preferential Trade Agreements and the CMA says that New Zealand can choose do the same.

Chief Executive John Walley says that the details around the negotiation of trade agreements, compliance and approval regimes, safeguards, dispute resolution, are as important as the tariff headline rates, country of origin definition, country of origin marking. The other critical area is the balancing of other export subsidies and export supports often present in developing and low cost economies. This does not mean that New Zealand should turn its back on trade and increased economic interaction with other countries. “Thoughtful negotiations would help New Zealand exporters access overseas markets before the competition and avoid a number of potentially negative outcomes.” says Mr. Walley

Mr. Walley says that with a more level playing field, New Zealand, manufacturers and exporters are able to compete with overseas cost based competition. This capability has developed over many years and could quickly be lost in a rush to try and secure preferential trade agreements with the low-cost countries. The loss of capability means the loss of the ability to make the most of future opportunities. To some extent when we loose capability, we loose the future.

“New Zealand can extend its ties with China and other Asian nations at all levels of society. Local companies can develop markets for niche, high-value products and are successfully doing so. Through this process, exports and future economic growth will be built” says Mr. Walley. “However, New Zealand should avoid pursing this course on any terms and at any price and will only benefit if the trade framework is developed smarter, not faster”.

ENDS

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