WELLINGTON - Tariffs will be frozen for the next five years in a move the Government argues will save jobs.
Opposition parties attacked the move, saying it would hit families in the pocket by preventing price cuts in some imported goods.
The tariff freeze applies to clothing, footwear, textiles and related industries and will keep tariffs (import taxes) at 19 per cent for most of the goods affected.
Tariffs remain on only a small range of goods, and New Zealand is one of the least-protected economies in the developed world.
Acting Commerce Minister Trevor Mallard said the Government would introduce legislation to stop tariff cuts scheduled for July 1.
The Green Party, whose support the Government would need to pass the legislation, supports the decision.
Mr Mallard said New Zealand's past policy of cutting tariffs faster than its trading partners had cost "tens of thousands, if not hundreds of thousands" of jobs.
The decision means there will be no more unilateral cuts but does not prevent limited cuts being made as part of free-trade agreements with other countries.
Such a deal is being negotiated with Singapore.
Mr Mallard said the decision had been signalled in the election policies of both Labour and the Alliance.
"I think it's sending a signal to New Zealanders that we think jobs are important and we are no longer following a blind ideological approach to tariffs," he said.
"The signal to other countries is that no longer can New Zealand be relied on to be foolish."
Prime Minister Helen Clark said the freeze would give the fashion and footwear industries time to develop so they could eventually face world-class competition.
"It seems entirely logical that if Italy can be making money out of high-fashion goods and clothing and shoes, that New Zealand could too, but it takes some time."
National's trade negotiations spokesman, John Luxton, said Labour was ignoring the human face of the freeze.
"Tariff reductions have cut the price of necessities like clothes and shoes dramatically, and that's helped people stretch their budgets to pay for other things."
He said freezing tariffs would wipe $40 million a year from the pockets of ordinary people.
Federated Farmers vice-president Tom Lambie said last night that the decision was unfriendly to business.
- NZPA