Labour MP David Parker is unrepentant about referring to New Zealand becoming "Australia's Mexico" despite a public telling-off by Mexico's ambassador.

Mr Parker said New Zealand was at risk of becoming 'Australia's Mexico' after news that firms such as Imperial Tobacco, Woolworths, Heinz and McCain were expanding their operations in New Zealand to take advantage of its lower wages.

The quip did not please Leonora Rueda, Mexico's ambassador in New Zealand. Ms Rueda released a letter she sent to Mr Parker which she said would give him "a better and more complete understanding of the current state of affairs" and set out at length Mexico's economic advancement over recent times.

She said Mr Parker had unfairly chosen Mexico as his comparison and while it had troubles in the past, it had made up substantial ground.


"I don't feel offended at those declarations, but I do think they have to be contextualised in the whole situation of the development of the economy. Mexico now is not the Mexico it was 20 years ago."

Yesterday Mr Parker said he stood by the comparison.

"What I said wasn't a criticism of Mexico, it was a statement of fact. Mexico is a low wage economy relative to its neighbour, the United States, and despite the fact National promised the wage gap was going to close with Australia, it is now heading in the same direction [as Mexico]."

He said the size difference between the economies of Mexico and the United States was similar to that of New Zealand and Australia. Mexico's per capita GDP in 2010 was US$13,000 compared with the United States' US$42,000. New Zealand was US$25,600 compared to Australia's at US$36,500.

"It shouldn't be offensive for Mexican officials to have that statement of fact pointed out. We are in some ways in a similar position - we are neighbouring countries and Labour certainly doesn't want New Zealand to be a low-wage servicer of Australia."

In her letter Ms Rueda pointed out that this week Mexico was hosting the Economic Ministers Meeting in the lead-up to the G20 leaders' summit. Trade Minister Tim Groser is at that meeting - the first time New Zealand had been invited to attend.

She said there had been substantial investment in infrastructure and a growth in skilled work in industries such as aeronautics, telecommunications and biotechnology.

"Long gone are the days when the maquiladoras [assembly plants] were the only intensive job-creating resource!

"Honourable Mr Parker, I hope this information might be useful to you should you wish to make any other comments regarding the Mexican economy."

Mr Parker said he was keen on the suggestion of fellow Labour MP Phil Twyford who suggested Mr Parker be immediately dispatched to Mexico to deal with the "diplomatic crisis".

That was a tongue in cheek reference to Government minister Gerry Brownlee who was "invited" to Finland after he made comments about its crime rate and education system - causing a minor diplomatic row.