Progressive Abolition Of Import Controls Urged

Press, Volume CVIII, Issue 31614, 27 February 1968, Page 13

Progressive Abolition Of Import Controls Urged

Replacement of the import licensing system by an import tariff structure in progressive steps, preferably over three years from July 1, this year, is recommended by the Monetary and Economic Council.

In its fourteenth report, which was completely rewritten to take devaluation into account, the council outlines progressive steps “so that an orderly adjustment in production and trading conditions is maintained.”

The council recommends: — From July 1, the abolition of import licensing on all manufacturing material not made or processed in New Zealand: and also on all other components or processed material used by manufacturers, where adequate tariff protection can be granted by July 1, this year. Serious consideration be given to removing import controls over completely knocked down motor vehicles as from July 1, provided that the automotive component industry can, by that date, be adequately protected by tariff. In the case of C.K.D. cars, a temporary increase of sales tax could be introduced if the Government fears any substantial surge in im- ' ports. Imports of fully assembled ( motor vehicles should in the meantime remain . under import control. J As a second stage, the aboli- j tion of import licensing ' on the balance of manu- j factoring material, on i plant and machinery, and on fully assembled motor ( vehicles after any tariff ( adjustment deemed neces- £ sary. f As a third stage, the aboli- c tion of import licensing!

on the balance of consumer goods. The council said it would like to see these measures carried out over three years but realised that dismemberment of a system which had been in force for 30 years was likely to present numerous administrative difficulties. It could be encompassed, during balance of payment difficulties, only if the Government maintained firm restraint on the economy and kept a close watch on the effect on the balance of payments of each move made. “Manufactured goods must become a major source of income,” the council states. “Tourism must be planned as an important earner of overseas funds: our mineral, timber and fishing resources should be further investigated and exploited; farm exports should be expanded, although possibly mainly in new products and for new markets. “These changes are of such a fundamental nature that a dynamic and flexible economy is essential to achieve them. The imagination of New Zealanders must be given free rein. “For this reason the council believes that the system of import licensing should be almost entirely abandoned in favour of a system of tariffs on imports. “The revised tariff structure

should give adequate protection to established local industries and should recognise that some duty levels may have to be raised to achieve this,” the council’s report adds Tariff levels should be set in a small number of “bands” 1 to simplify administration. ; The report said procedures , of the Tariff and Develop- ■ ment Board might not faciliI tate rapid decisions required s in the change-over. Special tariff authority provided for in recent legisla- , tion should be promptly ent gaged to investigate and act ■ quickly on applications for . tariff protection. I “When there is doubt, this . authority should err on the . generous side in the initial level of protection granted, and leave these tariffs to be

■ reviewed at a later date, as • part of the long-term develop- ; ment of the tariff structure • by the Tariff and Develop- ■ merit Board,” the report adds. It points out that consultations on tariff revisions will : be required in some cases 1 with G.A.T.T., or with countries with which New Zea- ; land has trade agreements. “Such negotiations should ■ be conducted as far as posI sible on an ‘en bloc’ basis, and it will be necessary to take • the stand that an adequate • tariff structure is essential to the dismantling of New Zea- : land’s import licensing system. “The margin between the ‘British preferential’ and the ; ‘most favoured nation’ tariffs ; should be reduced by the maximum consistent with our contractual undertakings to the United Kingdom.”