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Local Content Quota Serious Breach of GATT Rules

The New Zealand economy could face international sanctions worth millions of dollars if Helen Clark and her Government introduce local content quota, said ACT Broadcasting spokesman Penny Webster.

Documents obtained from the Ministry of Foreign Affairs and Trade, under the Official Information Act, show that audio-visual (radio and television) quota introductions will be in breach of New Zealand’s overseas trade obligations.

“It appears that the only winner from Helen Clark’s quota quest will be her friends in the broadcasting industry. Her policy could see any one of our General Agreement on Trade and Services (GATS) partners impose sanctions. This will mean that prices go up, exports will be slashed and large job losses across the board.”

Under the GATS agreement, of which the Labour Government was a keen supporter, no member country can modify the conditions of competition in favour of it’s own suppliers. MFAT believes the introduction of local quota will be a breach of this rule.

Under WTO rules, the modifying member (New Zealand) must ‘notify the Council for Trade in Services of its intentions. Any Member which considers that its benefits under the GATS will be affected by the proposed modification or withdrawal may request that the modifying member enter into negotiations over compensation. If agreement cannot be reached on compensation, the affected Member(s) can request arbitration.’

“The results of arbitration are binding. If the results are breached, affected countries have the right to retaliate through modifying or withdrawing equivalent benefits. These trade retaliations could be in the food, electronic or any sector, they are not limited exclusively to the audio visual sector.”

“Local content quota will also effect New Zealand’s obligations under the Closer Economic Relations (CER) agreement with Australia.

“This means in no uncertain terms, that the introduction of local content quota led by Helen Clark and her Labour-led Government, will have a debilitating effect on the New Zealand economy.

“The GATS and CER agreements have given the average New Zealand consumer and wage earner numerous benefits over the years, yet the Government wants to place these advantages in jeopardy to appease an elite group of cultural lobbiers.

“I want Helen Clark to be honest with New Zealanders about the true costs of her policies. If the average New Zealander cannot afford a television because of trade sanctions, her local content quota will become a very poor second choice,” said Penny Webster.

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