WELLINGTON - Manufacturers have welcomed the Government's decision to freeze tariffs for five years, but farmers are unhappy.
Bruce Goldsworthy, of the Employers and Manufacturers Association (Northern), said New Zealand's "headlong pursuit" of free trade over the past decade had gone too far.
"It was so rapid it took us far ahead of our trading partners, many of whom are reluctant to honour their commitments to reduce barriers to trade, whether tariffs or other one-sided restrictions.
"Our market is one of the most open in the world, and as we have little to offer overseas trade partners we have lost the power to negotiate better reciprocal access for our goods."
Acting Commerce Minister Trevor Mallard said the tariff freeze, confirmed on Monday, would protect jobs and was in line with the tariff schedules of New Zealand's major trading partners.
Tariffs on clothing and footwear had been due to drop from 19 to 15 per cent, while falls of 2 percentage points had been scheduled for whiteware, paper products, plastics, prepared foods, furniture and carpets.
"We do not see any point in New Zealand leading the world in this way," said Mr Mallard. "We will consider tariff changes where there are clear benefits to New Zealand."
The decision meant there would be no more unilateral cuts, but did not prevent limited cuts as part of free trade agreements with other countries. Such a deal is being negotiated with Singapore.
But Opposition trade spokesman John Luxton said it would now be more difficult to meet Apec's Bogor commitment to have no tariffs by 2010.
The decision has angered farmers. Federated Farmers vice-president Tom Lambie described it as another blow to the competitiveness of the export sector and a blow for consumers, who could have expected annual household savings of $1000 from the complete removal of tariffs.
"In effect, the Government is telling existing businesses that they are going to be taxed at higher levels than was previously planned in order to fund industry development and employment elsewhere."
- STAFF REPORTER, NZPA
Joy and anger greet tariff freeze
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