‘Ease trade bar to create jobs’

Press, 4 September 1980, Page 10

‘Ease trade bar to create jobs’

It is commonly believed i that New Zealand needs to keep its trade barriers against cheap Asian-made imports or New Zealand . industries will suffer from unfair competition and workers will have to be laid off, leading to worse unemployment. Last week, for instance; the secretary of the Clothing Worker’s Federation (Mr F. .B. Thorn) called for a. ban on imported cheap clothing. Complaints have also been made recently by the Footwear Workers’ Union about cheap imported footwear. But an International; Labour Organisation economist, Geoff Renshaw argues that it may be in the interests of the developed countries such as New Zealand to ease their trade rather than adopt-a' more protectionist stance;; 7 .:. , His > report, called J ' “Employment, Trade and North-South Co-operation 1 ?; * an Overview,” was pre- A pared for., ttie tripartitesymposium on -- Inter:nati o n a '1 Employment, ■' International Trade and'. : NOrthrSouth r Co-operation in Geneva in May. ; , c If developed .countries . lowered; ..somei .of their , . trade ~ barriers -against :; manufactured goods . from developing . ... pountries, unemployment ; in • the Third World could tie ’cut' by about' six million .by 1986 and employment -. 1 would increase, in. -the ’ developed' countries, /tie J said. '■ ' Projecting trends .in . 1 trade and employment to 1986; the study* Jddks' at ■ t\vo possible scenarios for ’’the future: a protectionist ! one based on. a contin*

nation of ' the present trends in which manufactured exports from developing countries to developed countries would .grow at only 8.8 per.cent a year; and a liberalised scenario in which they would grow at 11 per cent a year. Under the protectionist . scenario the developed countries would continue to gain jobs , but the developing countries would-face the prospect of a rise-in unemployment from 59 million in 1976 to 65 million' in 1986. Under the scenario of liberalised trade both sides would stand to gain. The national wealth of .the d e v e loping countries would grow faster and this would allow job opportunities to increase more rapidly than the number of job-seekers, so that unemployemnt in the Third World could be cut to 53 million by 1986. - The developed countries 'wbuid gain slightly fewer jobs than under the protectionist ' scenario, but they; would, still enjoy a net direct -gain; of 282,000 jobs from the .trade with' the Third World,’ -.thanks to their , continuing i trade surplus; with the Third World. - Mr Renstiaw, said that since developing countries would, have more income to buy more exports from the developed countries, economic growih in. the developed; countries could be boosted - and this would lead to a far greater indirect gain in jobs. He also said that developing countries had continued to import goods from the 'deveics>ed'coun-/ tries in *Spjfe of the rising

oil prices, by going deeply', into debt • If the developing coun-* tries could not earn* enough from exports to .repay these debts, many of which would be due in. the 1980 s, * they - would have to cut back on imports and this would slow economic growth in the developed countries and lead to more unemployment. <• ■Mr Renshaw said that (a significant degree of redeployment of workers would have to be done by the developed countries, i In a statement which seems to echo the findings of the recent Industries Development Commission report on the textile industry and current New Zealand Government policy, Mr Renshaw said that instead of preserving jobs in declining industries such as textiles and footwear, developed countries should make it easier for enterprises and workers to shift into more dynamic activities by improving their training and retraining.