FTA with China puts jobs at risk - CTU

From www.stuff.co.nz

FTA with China puts jobs at risk - CTU

2 September 2004

A free trade agreement (FTA) with China puts thousands of manufacturing jobs and the future of the sector at risk, Council of Trade Unions (CTU) president Ross Wilson said yesterday.

Speaking at the Gateway to China trade summit in Auckland, Mr Wilson warned that it was important not to "talk up" potential gains while "talking down" the loss to manufacturing.

However, he said an FTA with China might open up big opportunities in the primary production and processing sector.

"FTA enthusiasts may argue that if the benefits exceed the costs, then those who suffer as a consequence should be given transitional assistance or time to adjust," he said.

"But that approach accepts that New Zealand does not have a serious future in general manufacturing."

The CTU represents 300,000 New Zealanders.

The country’s manufacturing sector employs 292,600, compared to agriculture and forestry with 143,700 workers.

AdvertisementAdvertisementMr Wilson said he also feared an FTA would drastically increase breaches of intellectual property rights.

In June, Interlock, a manufacturer of window and door locks, said it had to move part of its operation to China as a competitor in that country had copied one of its products.

Interlock has since confirmed more than 300 jobs will be lost and the entire New Zealand plant will close.

A Canterbury manufacturer of saw blades has seen a Chinese manufacturer directly copy one of its blade designs.

They even copied one batch number on to every saw blade rather than sequentially numbering the batches, Mr Wilson said.

He questioned whether such breaches could be addressed under an FTA.

Unions were also concerned the Government included labour rights for Chinese workers in the FTA.

"Failure to recognise these rights or to enforce China’s own minimum labour code has artificially suppressed the price of Chinese labour by between 47 per cent and 86 per cent, to a level below the baseline of comparative advantage defined by standard trade theory," he said.

"Even developing countries like Bangladesh and Indonesia will each lose up to one million manufacturing jobs to China.

"New Zealand already trades extensively with China. . . we are already taking advantage of cheap imports produced in labour conditions that breach core international labour conventions."

Mr Wilson said it was fundamental that labour rights be properly addressed.

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