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Union Slams Free Trade Agreement Scam

“New Zealand is set to be duped again as it continue its tradition of wide-eyed naivete in international trade negotiations,” TUF President and Clothing Union Secretary, Maxine Gay said today.

She was referring to rules of origin in the Singapore free trade agreement released today, which require 40% local content for goods to qualify for duty free status.

“This 40% threshold bears no resemblance to the 50% local content requirement which applies to goods imported from Australia under CER. It shows a frightening ignorance of how the global economy now works.

“Singapore has ties to significant offshore Export Processing Zones. Batam, for example has tens of thousands of workers living in dormitories, working in factories in which unions are illegal, earning as little as US 25c an hour.

The trick is simple. Under this agreement local content means 40% of the ex factory cost– not 40% of the work.

“Workers in Singapore are paid at least as much as workers here in New Zealand. The Singaporean input is also likely to be more highly skilled and can include elements prior to manufacture such as design.

“So hours of work on Batam at a fraction of a fair labour cost can be married to a few minutes pressing, labelling or packaging the product in Singapore before it is sent on, duty free, to New Zealand.

“The only beneficiary of this arrangement is Singaporean business interests. At every point in this chain workers are either exploited or displaced.

“We are particularly concerned that Singapore will become a conduit into New Zealand for textiles, clothing and footwear, taking advantage of the hole the agreement opens in our tariffs on those products.

“MFAT has blithely assured us that if Singaporean imports in TCF, worth about 5 million dollars at present, were to double then “only about three medium sized factories would close in New Zealand”.

“While this in itself would be totally unacceptable, we think the increase in duty free imports will be much greater over time.

“In terms of the textile, clothing and footwear industry, we see this foolish agreement as a direct breach of the Labour Party’s promise to support a freeze on tariffs in this sector. And we are extremely disappointed to learn that the Labour Party will join forces with National in order to continue the destruction of jobs and capital in New Zealand,” Ms Gay concluded.

For further information: Maxine Gay Ph:04 384 8963(W) 389 5399(H) 025 276 9225 (mob)

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