Government defends trade expansion plans

1.00pm

The Government is defending its trade expansion plans against strong criticism from the Green Party, which says New Zealand should not make deals with oppressive, low-wage Asian countries.

Free trade talks have started with the Association of South-East Asian Nations (Asean) and final decisions are expected in November.

Trade Negotiations Minister Jim Sutton has also announced that a separate free trade agreement (FTA) with Malaysia is being negotiated, and he says there will be huge benefits for New Zealand exporters.

The Greens oppose international trade liberalisation, and today co-leader Rod Donald said some of the Asean countries had the lowest wages in the world while one of them, Myanmar, had one of the most oppressive regimes.

"New Zealand should not be establishing preferential trade relations with countries which treat their people like that," he said.

"All these economies are busily competing with each other. Factories are closing in Thailand because wages are even lower in China."

Mr Donald said he did not think New Zealand should be "competing in a race for the bottom" but Mr Sutton said all countries benefited from increased trade.

"It's by engaging with these countries that improvements can be made," he said.

"The situation will improve in Myanmar because of the growing engagement with the rest of Asia... things won't be changed by us refusing to buy goods from their workers. That would thrust them further into poverty."

Mr Donald said trading with countries which ignored core international labour standards "just gives them an excuse for carrying on what they're doing".

He said New Zealand manufacturers would suffer from FTAs with Asean countries.

"We've suffered enormous job losses because of tariff reductions, and to go ahead and basically kill off what's left of the textile, clothing and footwear manufacturers just doesn't make economic sense."

Mr Sutton and Mr Donald were speaking on National Radio.


Mr Sutton said New Zealand had gained jobs through trade liberalisation, and unemployment was lower now than it had been for many years.

"New Zealand industry has faced competition, and as a result we're more productive and have higher wages and a better standard of living," he said.

"We have hundreds of thousands more jobs than we had when there was restrictive trade back in the Muldoon years."

- NZPA