Shock at likely tariff removal

By ELLEN READ

The clothing, textiles and footwear industry is bracing itself for the increasingly likely removal of tariffs on imports by 2010.

Tariffs of between 17 and 19 per cent protect the local industry and its 18,000 workers at present.

But after a meeting with Commerce Minister Lianne Dalziel on Wednesday, union officials expect these to be removed despite New Zealand's major trading partners not following suit.

"We were quite shocked to hear her say that to us. We're quite upset," said Clothing Workers Union industry official Robert Reid.

While a complete removal is not definite yet, Reid said the minister gave the unions a month to convince her otherwise.

Prime Minister Helen Clark's desire to meet Asia Pacific Economic Cooperation goals of free trade by 2010 is behind the planned tariff elimination, but Reid said that was not necessary because the Apec goals talk about free trade, not zero tariffs.

Tariffs of between 5 and 10 per cent would meet free-trade requirements, he said, adding that a World Trade Organisation agreement allows a 37 per cent tariff on textiles, clothing and footwear for New Zealand.

"So even if we do nothing, we are still meeting our obligations," said Reid.

New Zealand's tariffs were frozen by the Labour-Alliance Government in 1999 and will stay that way until 2005. The Government began a tariff review last year but until now had given no indication of what would happen after 2005.

That report is complete and Dalziel will present it to the Cabinet at the end of the month. She was not available for comment yesterday.

Reid said several other countries, including Japan, the US and Australia, had indicated they have no intention of totally removing tariffs by 2010.

Australia, where textile tariffs are about 25 per cent, has legislation in place to drop to 10 per cent by 2010.