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NZ - China “Free” Trade Agreement improvement

Monday 7 April 2008


Textile Union says NZ - China “Free” Trade Agreement improvement on current Government policy for sector

The gradually reducing tariff reduction regime for textiles, clothing and footwear in the NZ – China FTA is a welcome departure from the extremist free trade policies of the past,” said Robert Reid, President of the National Distribution Union.

The NDU organises workers in the textile, clothing and footwear (TCF) sector in New Zealand, the major sector that still has tariffs and so faces the greatest challenge from free trade with China. The trade agreement sees tariffs on TCF imports from China reducing in equal steps to zero by the middle of next decade.

“The NDU does not promote free trade and we have always argued that there is a place for the protection of domestic manufacturing and service industries both here and in China. However we have taken the opportunity offered to engage through the FTA negotiation process and are pleased that the outcome will at least provide more certainty to the local TCF industry than New Zealand’s own unilateral tariff reduction programme has over the years,” said Robert Reid.

“The 1996 -99 National Government tried to eliminate all TCF tariffs by 2006. This was stopped by the Alliance Party securing a tariff freeze from 2000 – 2005 as part of its Coalition Agreement with Labour in 1999. Without the Alliance, Labour re-introduced a post 2005 tariff reduction regime that has TCF tariffs reducing to 10% by 2009. However Labour remained committed to APEC Bogor goals that require all tariffs to be removed in developed countries by 2010.

“The timetable for tariff reductions in the NZ - China Trade Agreement blows New Zealand’s APEC commitments out of the water. This is good news for the TCF sector.

“The NZ China Trade Agreement may be called a Free Trade Agreement but it is in essence a “Managed” Trade Agreement” said Robert Reid.

“The National Distribution Union has treated these negotiations very seriously. We made early submissions to the Government for a gradual, rather than an immediate elimination of tariffs as did the NZ Council of Trade Unions and Textiles NZ.

“We were part of two delegations to China during the negotiation period that met with Chinese Trade Unions, Communist Party and Government officials. We strongly put the case to them that China should not demand the immediate elimination of tariffs as part of their negotiations with New Zealand. We received a good hearing,” Robert Reid said.

“However if the TCF industry is to survive we need two further commitments from our Government. First is that any future unilateral tariff reduction programme by New Zealand will not phase our tariffs faster than the China Trade Agreement. Second, the Government must provide a major funding programme to the local TCF industry to help it adjust, transform and innovate to meet the reducing tariff regime in this trade agreement. Such funding has been scaled down since the commitments made at the time the tariff reduction programme was re-started,” said Robert Reid.

ENDS

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