Trade talks failure will hit Australia ‘as much as N.Z.’

Press, 15 August 1980, Page 2

Trade talks failure will hit Australia ‘as much as N.Z.’

The collapse of the Canberra N.A.F.TiA. talks on trans-Tasman trade in clothing is expected to have similar effects on both New Zealand and Australia, according to the president of the Textile and Garment Federation (Mr John Penney) in Christchurch yesterday. The 1977 agreement, now to end on August 31, allowed New Zealand manu-fa-turers to send 2.9 million garments a year worth nearly $2O million to Australia. In return, Australian clothing manufacturers were allowed to send 4 per cent of New Zealand clothing needs of particular items. Had the agreement continued, quantities would have increased by 10 per cent next year.

Mr Penney said yesterday the amount of exports to Australia that would be lost to New Zealand through the collapse of the agreement would approximate the amount of exports to New Zealand lost by Australia. He did not expect the end of the agreement to be followed by further cutbacks in factory staff, because the New Zealand industry was well equipped to produce the garments that would no longer be available from Australia. He said the termination of the agreement should not lead to any reduction in the workforce in Christchurch. “There should not be too much disruption at all," he said.

Mr Penney asserted that the way the Australian quota was distributed and administered prevented any new New Zealand exporter from getting a footing in the Australian market. The Australian Government’s recent tighter restrictions on New Zealand imports had prompted his federation to reject the continuing agreement completely, he said. “These latest Australian proposals impose further substantial cuts in the allocation quota to New Zealand,” sail Mr Penney. “On top of this there is a demand for a larger share of the New Zealand apparel market, which would, spell disaster for an industry already suffering from grave

setbacks through restructuring and the current bleak economic climate,” he said. The Retailers’ Federation was furious yesterday after learning of the breakdown of the agreement that was meant to be renewed on September 1. The executive director of the federation (Mr B. I, Purdy) said, “Our attitude to the Textile and Garment Manufacturers’ Federation is going to be very sharp and short over this.”

“The people who are going to lose are the consumer and the manufacturers who want to export.” He said that although the Australian imports of clothing into. New Zealand had not exceeded 4 per cent, they had had an . excellent effect on New' Zealand manufacturers and forced them to become more competitive. The whole range of clothing available to consumers had improved as a result.

Mr Purdy said: the manufacturers had abused the licence scheme, and proved they were not willing to accept the Government’s restructuring of their industry, which envisages an eventual import level of 10 per cent of the local market.

One manufacturer, Mr John Carter, the managing director of Carter’s Fashions, Wellington, said he was sitting on $50,000 worth of exports for Australia that would not be able to cross the Tasman before September 1. His only hope was

that he could get the garments to Australia under the global quota in competition with the rest of the world. Mr Carter is both an exporter and importer and described the breakdown in talks as “diabolical.” He said the result for the New Zealand consumer would be “drabber, more uniform, less interesting” clothing. “I would say, without fear of contradiction, that the New Zealand clothing industry is the worst in the world,” he said. A big feature of the talks involving the Deputy -Prime Minister (Mr Taiboys) and the Minister of Trade and Industry (Mr Adams-Schnei-der) had been a review of progress by officials on steps towards closer economic co-operation between the countries.

In a statement issued after their talks, the Ministers said they were “encouraged” by the review and believed that the exercise would be advanced significantly before the end of the year. The Australian Deputy Prime Minister (Mr Douglas Anthony) later told a press conference that the Governments expected to be in a position to study the detailed reports by the end of -this year and then there would 'be further consultations.

Only after. that would decisions be taken on whether to go ahead, he said. The statement said that particular attention in the studies was being devoted to tariffs, import licensing, and tariff quota arrangements, agricultural support and stabilisation measures, the applicability of export incentive schemes, and “intermediate goods” issues. It was also expected that a major study on trans-Tas-man transport, an item which the Prime Ministers had identified as requiring special review, would be completed soon.

Mr Anthony told the press conference that the report was being studied by the Australian Bureau of Transport.

“I think investigations have shown that we are probably up to as high a level of efficiency as we can reasonably achieve,” he said.