THE PRESS TUESDAY, FEBRUARY 10, 1981. Sharing the clothing market

Press, 10 February 1981, Page 16

THE PRESS TUESDAY, FEBRUARY 10, 1981. Sharing the clothing market

Clothing manufacturers have an assured share of the New Zealand market under the terms of a new plan recently announced by the Minister of Trade arid Industry, Mr Adams-Schneider. This should enable them to plan both for local production and for export. The proposal that an extra 10 per cent, of the New Zealand market should be opened for imports arises from the report of the Industries Development Commission in 1979. The slowness in implementing the proposal has come about partly because the Department of Trade and Industry had to arrange for the tendering of import licences as part of an. over-ail plan. Advertisements* for tenders for some import licences have been printed in newspapers recently. The calling of tenders for clothing import licences will eventually be Technical problems also arose in dealing with. import licences which were calculated in dollar values and in assessing the New Zealand market and imports calculated in quantities rather than by values. ' Imports have generally been limited in the past to about 3 per cent of the New Zealand market. Under the apparel arrangement with Australia, imports rose by another 4 per cent or so. The agreement collapsed last year, but it was a step towards opening up the New Zealand market. The gradual introduction of another 10 per cent of imports means on the one. hand that the consumer should have a wider range of goods to choose from; on the

other hand it means that the manufacturers in New Zealand are assured of- nearly 90 per cent of the controlled New Zealand market. Babywear and a few other items have been removed from import licensing in New Zealand, thus reducing the original, controlled 3 per cent down to perhaps 1 per cent. The tendering system will be reviewed in due course. Some monitoring will be needed to establish whether licences are being used. In the past some holders of; clothing, import licenced have been manufacturers and riot all. the licences

have been used. The consumer does not benefit from such, an arrangement. The collapse of the apparel arrangement last year was bad for New Zealand exports to Australia. When the figures for this trade are published they are likely to show a marked drop. Overall exports of clothing may prove to be about the same, as the previous year. The apparel agreement with Australia gave New Zealand a special quota in the Australian market; when the agreement collapsed, New -Zealand manufacturers had to bid for their share of* the Australian market under Australia’s global quotas. The introduction of the increased imports into New Zealand is an effective establishment of a global quota in New Zealand as well. Australian manufacturers will be able to export to New Zealand, but they will find themselves in competition with Asian manufacturers and the price difference may make importers give their preference to Asian manufacturers. The new arrangement may have to be related to the plans for closer economic relations between New Zealand and Australia. At present, New Zealand has. something of a tariff preference in Australia; Australian manufacturers have less of a tariff preference in New Zealand. The moves towards closer economic relations may well include giving Australia a greater tariff preference compared with that available to some other countries. It is not expected to mean increased import quotas for Australia.

The clothing manufacturers appear to be welcoming the new arrangement. Although they are going to have to share the New Zealand market with imports, at least they know the limit of that sharing. But for the new provision that ensures measurement .of imports by volume, the New Zealand manufacturers might have had a smaller share. Having been given an assurance of a proportion of the domestic market, New Zealand manufacturers should, be able to continue or revive their efforts to export.