A Chinese trade breakthrough could put hundreds of millions of dollars in farmers' pockets -- but the textile, garment and footwear industries are bracing to pay the price. The Government said yesterday New Zealand had become the first developed nation to reach agreement on free trade talks with China. Talks will begin next year after costs and benefits of a deal are studied. They offer the tantalising prospect of improved access to the world's fastest growing major economy.
If successful, the immediate winners would be dairy, fruit and vegetable producers who all face tariffs on exports. Foresters and whiteware manufacturers could also benefit from removing tariffs on exports of processed wood products, dishwashers and air conditioning units.
Federated Farmers president Tom Lambie said a deal would deliver similar benefits to a deal with the United States. It was "fantastic" that New Zealand was first off the rank.
But manufacturers and unionists said it was bad news for the 18,000 workers in the textile, garment, footwear and carpet industries. Mark Anderson, business development manager for New Zealand's biggest garment manufacturer -- Christchurch-based Lane Walker Rudkin -- said local manufacturers could not compete with the Chinese. "The reality is a company in China can employ children, a company in China can pour whatever it likes down the drains. They don't have to pay ACC, they don't have to pay time and a half, they don't have to pay sick pay. And they get government support." Clothing workers union secretary Maxine Gay said a deal would destroy the manufacturing base of some of New Zealand's most fragile industries. "We just feel like we have got battered industries syndrome and it is the Government beating us up."
However, Trade Negotiations Minister Jim Sutton was confident the Government could "mitigate any adverse effects to a high degree". The industries were already adjusting to planned 2005 tariff reductions. The agreement to begin talks -- reached by officials in Beijing last week -- catapults New Zealand past Australia in the race to become the first developed nation to negotiate a free trade deal with China.
Prime Minister Helen Clark said Australian Prime Minister John Howard offered congratulations when she briefed him on progress a few weeks ago. Pivotal to the agreement was New Zealand's willingness to accept that China had established a "market economy system" -- a sticking point for other negotiators. Acceptance stops New Zealand applying special anti-dumping provisions agreed to when China joined the World Trade Organisation, but Mr Sutton said that was not a problem for New Zealand. It had never applied the provisions.
He was reluctant to value a deal but "we'd be talking hundreds of millions rather than tens of millions".
New Zealand would still raise human rights and labour standards issues but could not be expected to single-handedly change China's policy.
