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Import Tariffs And Double Standards

3 May 2002

A recent Oxfam report, Rigged Rules and Double Standards, exposes the duplicity of protectionists who want to keep out imports from poorer countries.

(This article was first published in the New Zealand Herald, 3 May 2002, and was based on the Institute's submission to the post-2005 Tariffs Review).

This year, the Government abolished tariffs for 48 of the poorest countries. Rod Donald, co-leader of the Green Party, described the decision as the "death knell for the clothing industry".

It was no such thing - New Zealand's imports from those countries are negligible.

Oxfam says: "Competition in the international trading system can be likened to a hurdle race with a difference: the weakest athletes face the highest hurdles. When desperately poor smallholder farmers or women garment workers enter world markets, they face import barriers four times as high as those faced by producers in rich countries."

New Zealand is a good example. Eliminating tariffs for the 48 poorest countries, such as Somalia, Mozambique and Sierra Leone, was a symbolic gesture - we do not trade with those countries.

The developing countries we do trade with, such as India, China and Pakistan, still face tariffs of 19 per cent on clothes and shoes.

Oxfam asked for a general reduction in tariff peaks, so that no tariffs applied against developing country exports exceed 5 per cent.

It also asked for market access for textiles and garments, "which are the main labour-intensive exports of the developing world".

So, there we have it. The ideological excuse used by this Government for keeping high tariffs against imports of clothing and shoes from poor countries collapses.

All that protectionists can now claim is that they want tariffs to protect the profits of some local clothing makers.

The Government has decided to conduct yet another review of tariffs. This one differs slightly from its predecessors in that it wants to be "widely inclusive of all stakeholders and sectors of the economy, and ensure that Maori, women and Pacific Island business groups are effectively consulted".

Same old, same old, but served this time with lashings of political correctness.

This review seems to be little more than an exercise in political management. Decisions will be made well after the election, by whichever Government we decide to vote in.

The high tariffs do not contribute to higher employment in the local clothing industry. Most of the employment in that industry is in importing, wholesaling, distribution and retail.

The small amount of manufacturing left is in niches, such as high fashion or branded sports goods, which do not rely on tariffs for their existence.

All the tariffs seem to achieve is to make clothing and shoes for New Zealand families more expensive than they need to be.

The Importers Institute has again urged the Government to abolish all tariffs.


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