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Trade Liberalisation Cuts Tariffs On NZ Goods

27 March 2002

Trade Liberalisation Cuts Tariffs On NZ Goods By $525 Million

A Foreign Affairs and Trade Ministry report published today showed that trade liberalisation as part of the Uruguay Round cut the duties paid on New Zealand exports by $525 million, Trade Negotiations Minister Jim Sutton said.

Mr Sutton told the Meat NZ annual general meeting in Wellington today that the MFAT report evaluated the gains to New Zealand from the Uruguay Round by comparing the tariffs actually paid on our exports in the calendar year 2000 to the duties that would have been payable at pre-Uruguay Round rates.

"It is therefore a partial one-year snapshot of a single component of Uruguay Round gains to New Zealand."

He said that duties paid on $17.06 billion of New Zealand exports to WTO founding nations were $525 million lower in 2000 than they might otherwise have been, because of the Uruguay Round commitments which had come into force.

"Of those gains, $397 million of duty savings applies to agricultural exports. Those agricultural gains are concentrated in the meat and dairy sectors, with $191 million and $131 million respectively.

"Overall, there were significant gains from duty reductions in the meat sector, of $191 million on sales to GATT members of $3.35 billion during 2000. The majority of those gains came from two markets: the European Union and the United States."

Mr Sutton said while these figures were good news, it did not mean it was time to have a cup of tea and slow down the trade liberalisation work.

"While the report found that duties paid on our $17.06 billion of exports to WTO founding members were $525 million lower in 2000 because of the Uruguay Round than they would have otherwise been, those exports still attracted tariffs of $884 million, so there is still considerable scope to push for further reductions in access barriers to our exports."

He said he hoped that the gains of the impending Doha Round will be much greater than those achieved in the Uruguay Round.

Mr Sutton said preliminary figures from Agriculture and Forestry Ministry officials had been released earlier this week, which indicated that each and every sheep, beef, and dairy farmer earned an average of more than $11,500 extra in 2000 solely because of gains from the Uruguay Round.

"The MAF and MFAT figures cannot be added together to give a single estimate of the gains from the Uruguay Round as some of the material overlaps and would be double-counted. I hope to have the two integrated later this year.

"However, as Uruguay Round decisions are being implemented progressively, it is reasonable to estimate that total gains to New Zealand agriculture since the conclusion of that round have already exceeded $1 billion and that the value of those gains is increasing each year.

"There are also other benefits from the Uruguay Round that are harder to quantify, such as the introduction of a binding disputes settlement process. This is vital for small countries such as New Zealand, where we don't have the muscle to push big economic powers around. The WTO can and has provided the muscle to enforce international trade rules."


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