Govt to be flexible on new tariffs policy

Press, 28 June 1989, Page 33

Govt to be flexible on new tariffs policy

Wellington reporter Manufacturers and importers disadvantaged by abolition of the tariffs concession policy may find the Government willing to create new classifications in the main tariff to meet their needs.

Signs are emerging from sources close to the tariff concessions review that the Government is prepared to make adjustments which could allow the exercise to be used for some relitigation of levels of protection. But the Minister of Commerce, Mr Butcher, is at this stage making no public statements on this, fearing a possible flood of

requests for new items to be added to the tariff. The tariff concessions policy currently lists about 25,000 specific products which are deemed not to be made in New Zealand and are, therefore, imported duty free. The unwieldy and internationally unusual system is being rationalised in a year-long exercise led by the Customs Department and the Ministry of Commerce.

But it is raising fears among importers that they may face duty on finished goods previously brought in duty free.

This is because of the broader definitions of

goods under the main tariff, which has only around 7000 headings, all expressed in internationally accepted terminology. Many concession items were tightly defined, many even using brand names.

Manufacturers may welcome the possibility of some goods they previously competed against becoming more expensive because they will attract duty. But they are equally concerned that raw materials and product inputs previously imported duty free could be caught in the same trap. Meanwhile, Govern-

ment officials are concerned that the whole tariff classification exercise could throw open new arguments about levels of protection due to particular goods or industries. The first draft reclassification results will be available for inspection and challenging by relevant parties early next month.

Mechanisms exist for extending the classifications in the main tariff. But officials are keen to stop the exercise becoming a de facto translation of the existing tariff concessions into future trade protection policy.