The Press / by Elinore Wellwood in Wellington Tariffs have been frozen until 2005 as New Zealand retreats from its previously enthusiastic participation in international agreements aiming to free up trade.
The Government announced yesterday proposed tariff reductions due to go ahead on July 1 would be scrapped, in line with Labour policy.
The Government will also move urgently to repeal a 1998 law, the Tariff (Zero Duty) Amendment Act, which would have phased out all tariffs by 2006.
New Zealand will, however, continue to drop tariffs in special agreements with other countries, such as new trade liaisons proposed with Chile and Singapore.
Tariffs are duties paid by importers into New Zealand, and are partly aimed at protecting Kiwi producers.
New Zealand has signed up to international movements such as the World Trade Organisation and Asia Pacific Economic Co-operation. The latter aims to cut tariffs to zero by 2010.
Opposition international trade negotiations spokesman John Luxton said the decision would make it harder for New Zealand to meet its Apec commitments in time.
The decision would also hit the pockets of many families who relied on cheaper clothes and shoes, he said.
"This Government is effectively forcing New Zealanders to pay about 20 per cent more for shoes and clothes than they would have been in 2006.
"The Government is also penalising New Zealand manufacturers and farmers, who will have to pay more for their raw materials."
Acting Commerce Minister Trevor Mallard said New Zealand had suffered from dropping tariffs before its major trading partners.
"In my opinion, we've lost tens, if not thousands, of jobs unnecessarily as a result of being world leaders ...
"We do not see any point in New Zealand leading the world in this way. We will consider tariff changes where there are clear benefits to New Zealand."
Clothing, headwear, furniture, carpets, and adults' footwear attract the highest tariffs, of 12.5 to 19 per cent, in a list including rubber, whiteware, paper, boats, and vehicle components.
Deputy Prime Minister Jim Anderton said he expected the freeze to save New Zealand businesses about $90 million.
The burgeoning balance of payments deficit would also be helped, he said.
While he was disappointed the Alliance's policy of putting up tariffs had not been acted on, Mr Anderton said he was happy they had at least been frozen.
Some engineering firms might suffer mildly because they would still have to pay higher prices on some componentry, he said.:
