KEY POINTS:
Defence Minister Wayne Mapp says he is going to find out what he can do about a $2 million Defence Force contract that is being shifted from New Zealand to China.
Levin clothing manufacturer Swazi Apparel has made wet weather gear for troops the past three years but the Defence Force says the contract will be cut by 93 per cent - more than $1.9 million - this year.
Swazi owner Davey Hughes said he felt "saddened and deeply disillusioned" after being given the news, the Dominion Post reported today.
"As a New Zealander I feel deeply betrayed. As an employer I am lost for words to deliver my staff," he said.
Dr Mapp said one of the problems was that the main Defence Force contract was with an Australian company, Yakka Apparel Solutions, and Swazi was a sub contractor.
"The contract comes up for renewal next year and then you've got an ability to look more carefully as to whether a bit more preference can be given to New Zealand clothing manufacturers," he said on Radio New Zealand.
"Obviously, it has to conform with WTO (World Trade Organisation) and CER (Closer Economic Relationship) rules."
Dr Mapp said that under CER, Australian and New Zealand companies had to be treated equally.
"I'm going to look at the rules to see whether we can do better," he said.
"We're going to see what we can do but obviously we've got free trade agreements and they include China."
News of the contract cut comes a day before the much-heralded summit called by Prime Minister John Key to find ways to protect jobs as the recession deepens.
Mr Hughes said he hoped to avoid laying off any of his 70 staff by taking new measures, including selling directly to the public.
- NZPA
