Border Control Must Be Beefed Up For Singapore FTA

Apparel & Textile Federation

Apparel & Textile Federation Warns That Border Control Must Be Beefed Up To Monitor Singapore Free Trade

The Apparel & Textile Federation is concerned that the Singapore Free Trade Agreement which allows for duty free access into New Zealand of goods manufactured in Singapore will result in “backdoor” duty free entry for products from other Asian countries.

The agreement requires that products must have 40% of their value in labour or materials made in Singapore to qualify for duty free access. CEO Paul Blomfield said that area content is a technical issue and it is impossible for anyone but an expert to identify which product qualifies and which doesn’t. “It is likely that there will be a significant volume of clothing coming into the country duty free and marked “Made in Singapore” but is in fact made in neighbouring Asian countries.”

Content is always a tricky issue as sometimes different processes take place in different countries. Sometimes yarn from one country will go to another to be knitted and another to be cut and sewn. The final equation of “area content” is decided by how much of the manufacturing process was done in the country of last process; in this case Singapore.

If an unscrupulous company has products made in Indonesia for example, and then only relabeled in Singapore, these items would not qualify, yet it would be up to New Zealand Customs agents to identify and stop them. “Frankly, we do not believe that our border protection agencies are equipped to recognise these “backdoor” duty free imports, and by the time they are spotted in the marketplace, the damage is already done.”

The Apparel & Textile Federation also questions the decision to set the required local content at 40%. “Every other current trade agreement that affects the apparel, textile, footwear and carpet industries has a local content requirement of 50% and the industry has designed its products to meet this content level. The Federation believes that the Singapore arrangement should have been in line with these other agreements.”

Mr Blomfield says that he has asked for assurances from the Government that Customs would be properly resourced to monitor the introduction of free trade with Singapore. “The industry is in favour of expanded trade agreements but urges caution to ensure New Zealand jobs are not thrown away in the process.”

For further information contact: Paul Blomfield, CEO, Apparel & Textile Federation, PH:(021) 970 871

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