NZ sits tight on trade concessions

By BRIAN FALLOW economics editor

Aircraft maintenance, stevedoring and postal services are among a modest list of sectors in which New Zealand is making offers under controversial services trade negotiations.

Releasing New Zealand's initial offers in the General Agreement on Trade in Services (Gats) talks yesterday, Trade Negotiations Minister Jim Sutton said New Zealand had been a pace-setter in trade liberalisation and its "name was up in lights" because of that.

"But we are not seeking to be a pace-setter in the further liberalisation of services, just to be a good example."

New Zealand did not have to open up its economy any more than it was already, he said.

No offers are being made in the especially sensitive sectors of education, health and water.

But New Zealand is offering commitments in aircraft repair and maintenance and in air cargo and baggage handling. Stevedoring services at ports are also on the list.

The effect of committing a service sector to Gats disciplines is to make a binding undertaking not to regulate those services in a way which discriminates against overseas-owned companies or which restricts the size and shape of the relevant market, for example, by limiting the number of service providers.

Ports spokesman Barrie Saunders said the ports environment was pretty open and competitive. "I doubt this will cause a great deal of heartache."

Neil Calvert of the Stevedoring Employers Association agreed. "We are not in the business of encouraging restrictions on entry."

But Council of Trade Unions secretary Paul Goulter said the unions were not happy and had requested clarification of what the commitments on maritime cargo handling would mean.

Engineers Union general secretary Andrew Little said Air New Zealand engineers had proven competitive in an already open market.

"We have been a net exporter of aircraft engineering services and I would be pretty confident that we will remain competitive," he said.

Of more concern to the union was the proposal to open up postal services, but the offer has "carve-outs".

His understanding, after talking to ministers and Ministry of Foreign Affairs and Trade officials, was that New Zealand would remain the designated provider under the international Universal Postal Union agreement and the issuer of stamps, so it would not be open slather.

Other industries for opening to Gats disciplines include credit reporting and collection agency services; management consultants; personnel placement and supply; interior design; environmental consultancy services and urban planning and landscape architecture.

Sutton said the initial offers were not binding and included nothing that went beyond existing policy.

But critics such as Auckland University law professor Dr Jane Kelsey say the effect of a Gats commitment is to put a ratchet under what are highly deregulated policy settings, making it very difficult and costly for any future government to reregulate should it want to.

The Gats negotiations form part of the World Trade Organisation's Doha round of trade talks. The services negotiations are often seen as the area in which industrialised countries, protectionist in agriculture, will seek concessions in return for farm trade liberalisation.

What is Gats?

* The General Agreement on Trade in Services is an international agreement enforceable through the World Trade Organisation.

* It covers trade in services such as tourism and education.

It also covers investment - the right of a services company from one country to set up shop in another and compete on equal terms with local firms.

* It covers rights of people to work in countries other than their own.

* Services exports are growing fast but still make up only 25 per cent of New Zealand trade receipts.