Real Change on free trade

Thu, 21 Jul, 2022

“ACT is proposing that New Zealand unilaterally abolishes all remaining tariffs to ease the cost-of-living crisis, boost productivity and growth, and show global leadership on free trade,” says ACT Deputy Leader and Trade spokesperson Brooke van Velden.

“The New Zealand Government levies $195 million of tariffs (taxes) on products New Zealanders purchase from abroad. Clothing, chocolate biscuits, chardonnay, railway locomotives, and ambulances are some of the many products still subject to tariffs.

“These tariffs increase the costs facing everyday New Zealanders in three ways:

  1. They directly increase the price of imports we purchase. Our estimates suggest that tariffs could increase the cost of a school uniform for an average New Zealand child by more than $20
  2. They reduce competition in New Zealand, allowing domestic producers to charge higher prices
  3. They impose a compliance burden on importers, which delays and increases the cost of importing products into New Zealand.

“ACT says we should remove these restrictions for the benefit of New Zealanders now.

“In the long run, it will drive our producers to become more productive and competitive on the international stage as well. Just look at our world-leading agriculture industry. Abolishing agricultural tariffs in the 1990s helped our farmers develop products that the rest of the world desires because of their quality alone.

“The reality is that tariff levels barely factor into our FTA negotiations now. They no longer apply to most agricultural products anyway, and the rest of our market is small enough that offering the carrot of reduced tariffs is unlikely to make an impact. Singapore is a shining example of this, unilaterally abolishing tariffs and becoming an archetype of free trade.

“New Zealand has preached the gospel of free trade on the international stage since the 1980s. It is time to practice what we preach and unilaterally abolish New Zealand’s remaining tariffs. It will save Kiwi families almost $200 million, while making our economy more efficient and productive.

“Not only is free trade the best policy when other governments practice it; it’s also the best policy even when other governments are protectionist. The case for free trade is a unilateral one: we improve the wellbeing of New Zealanders by pursuing free trade regardless of what other countries do.

“This is the sort of real change New Zealand needs. New Zealand can’t afford more business as usual from the Beehive. While other parties are focused on the next election, ACT is focused on the next generation.”

The cost of living document can be found here. 

A cost of living crisis can be found here