New rule for Tasman trade

Press, 14 July 1980, Page 13

New rule for Tasman trade

PA Wellington Provisions in N.A.F.T.A. for reciprocal inter-company trade deals across the Tasman have been amended, putting such trade on a straight dollar-for-dollar exchange basis. To date, such deals, which are additional to and separate from the import licensing scheme, have worked on

i.ai; adjusted quid pro quo system. A New Zealand company exports goods to Australia, and in return an Australian company exports ’ m New Zealand goods to 90 , per cent of the value. But that is only 90 per cent of the value of the New Zealand input of those exports. A New Zc-.land company might export $2OO worth of

whiteware, for instance, to Australia. However, only $lOO worth of that whiteware is attributable to New Zealand input — the rest may be in imported componentry used in the manufacture. So the existing formula allows Australian exports to the value of 90 per cent of the New Zealand input, which in this case amounts to $9O. The reciprocal Australian company can therefore export $9O • >rth of goods to every $2OO worth of whiteware that particular New Zealand company sells to Australia. Under the amended N.A.F.T.A. arrangement the inter-company deals will be dollar-for-dollar, says the Minister of Trade and Industry (Mr Adams-Schnei-der). Both the New Zealand input provision and the percentage bases will disappear. “Under the new arrangement SNZI c.i.f. (landed

cost) will be imported for every SNZI f.o.b. (freight on board) expert: 2,” he says. The new formula will apply from January 1 next year. Companies working under the old formula will be required to convert to the amended system by January 1, 1983. Mr Adams-Schneider said the change did not automatically mean an increase in imports into New Zealand, as proposals under the scheme would have to be considered in relation to over-all Government policies. A Trade and Industry Department spokesman said his department really did not know what degree of difference the change would bring. About $3O million worth of goods is imported byNew Zealand annually under this quid pro quo scheme but companies involved must have departmental authority.