New Zealand welcomes US tariff proposal

The United States decision to propose eliminating all non-agricultural tariffs by 2015 would inject significant momentum into current World Trade Organisation negotiations, Trade Negotiations Minister Jim Sutton said today.

He said New Zealand strongly welcomed the American proposal, which was closely aligned with New Zealand's own WTO proposal earlier this month for a 'tariff free future'.

"The US has demonstrated real leadership in putting forward this proposal, showing again its commitment to an ambitious WTO round outcome, even if that means lowering protection in sensitive sectors."

Mr Sutton said the US proposal boosted prospects for a big overall result from the round, which would be overwhelmingly in New Zealand's interest.

"Estimated annual tariff savings for New Zealand forestry, fisheries, and manufactured products exporters would be at least NZ$185 million if WTO members agreed with the New Zealand and US proposals.

"Gains to agriculture from a big overall outcome from the Round have been estimated at NZ$1000 million."

Mr Sutton said the US proposal would also help to reassert the leadership of the multilateral trading system.

"Many countries are currently engaged in one or more FTA negotiations, which can offer liberalisation in specific markets over a shorter timeframe. But it's important the expanding FTA web is used as a building block for the first and best option of broader liberalisation in the WTO, not a substitute."

Mr Sutton said he had been encouraged by the support for tariff elimination from exporters worldwide since the launch of New Zealand's initiative.

"I've been heartened by the support from the forestry, fisheries, and manufacturing sectors in New Zealand. And I welcome the support for New Zealand's proposal from the United States National Foreign Trade Council. Even the American Apparel and Footwear Association has expressed its support for tariff elimination."

Mr Sutton said if WTO members agreed to tariff elimination on non-agricultural goods, reduction would start on negotiated timeframes from 2006 at the earliest.

"This means it would have no impact on the government's decision to freeze current tariff levels until 2005, contrary to statements made by some New Zealand commentators," he said.

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