The Council of Trade Unions (CTU) is backing the Buy Kiwi Made campaign and said a report suggesting companies move offshore is "a kick in the teeth" for 300,000 New Zealand workers.
The report was the sixth produced by The New Zealand Institute, which is running a seriesof think tanks on Creating a Global New Zealand Economy.
It said firms should be encouraged to locate production closer to international consumers so they did not have to rely on supply chains.
The report also criticised the Buy Kiwi Made campaign, initiated by the Green Party and supported by $11.5 million from the Government.
It said that by urging consumers to buy products made in New Zealand it was "sending the wrong message".
CTU president Ross Wilson said locally-made products had to remain the campaign's priority.
"The New Zealand Institute's latest report setting out the case to outsource manufacturing is a kick in the teeth to the 300,000 workers in manufacturing, and doesn't take account of the work being done to transform this industry," he said.
"The Manufacturing Plus initiative that unions, business and government are working on is charting out a modern, viable and growing manufacturing sector in New Zealand."
The Engineering, Printing and Manufacturing Union (EPMU) also criticised the report.
"It is not possible to achieve success in manufacturing if we don't have knowledge, understanding and experience in manufacturing in this country," said EPMU national secretary Andrew Little.
