Reducing tariffs creates jobs

Media release - 14 July 2003

Reducing tariffs creates jobs

Press ahead with tariff reduction is the Trade Liberalisation Network’s message to the Government.

“The average New Zealand family now spends $700 less a year on clothing than it did in the mid-eighties. To put it another way, when tariffs were at their height buying clothes for the family took twice as much from the household budget as it does today,” TLN, Executive Director, Suse Reynolds, said in response to the CTU’s call for the current tariff freeze to continue until at least 2008.

“Many said that reducing tariff protection for domestic clothing manufacturers would decimate the industry. But in fact between 1986 and 2001 the value of our clothing exports quadrupled from $41 million to $170 million,” Reynolds stated.

Deflecting criticism that imports destroy jobs, Reynolds noted that international research shows a rising level of imports usually signals the creation of more jobs.

“Imports may displace some workers in non-competitive industries, but the overall level of employment is determined by monetary policy, labour market flexibility and other non-trade factors,” Reynolds argued.

The TLN agreed with the CTU’s call for an economic development approach to the sector.

“We are not advocating over night removal. Tariff removal should include recognition of the need for readjustment and job replacement. Careful consideration should also be given to the role removal might play in securing concessions in the current Doha Development trade round,” Reynolds concluded.

ENDS

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