Free trade deals 'no danger to economy'

The Government today assured manufacturers it would look after their interests when free trade deals were negotiated, and said fears the domestic economy would be damaged were unfounded.

Trade Negotiations Minister Jim Sutton said New Zealanders would never have a first-world standard of living if they only concentrated on the domestic market.

"We have to trade internationally to achieve the scale and specialisation required to support the living standards to which we aspire. But that doesn't mean we are reckless about it," he said.

"There will always be people able to produce some things more cheaply than us. But we have a competitive advantage in a number of areas and we need to work to enhance those."

The Government is negotiating a free trade agreement with China, which is being cited as the most serious threat to local manufacturers because it would mean removing import tariffs which protect locally-made goods.

Mr Sutton said the needs and potential of manufacturers were taken into account when trade agreements were negotiated.

Concerns that globalisation and further trade agreements would damage the country were unfounded.

"In the recently completed trade agreement with Thailand, for example, tariffs on whiteware are maintained for an extended period," he said.

"But manufacturers -- like other producers -- can't stand still. They have to innovate."

The Government would help them with grants to fund research projects, and had already given the textile, clothing and footwear industry more than $3 million, he said.

"What recent experience shows us is that it is characteristic of many successful manufacturers that they invest in research and development and constantly produce new products and new ways of doing things.

"This tends to keep them in that part of the market where price is not so important."

- NZPA