Free trade deal with Hong Kong 'stalled'

MONDAY , 16 SEPTEMBER 2002
A free trade agreement with Hong Kong, New Zealand's tenth-largest trading partner, has stalled, according to Wellington Chamber of Commerce chief executive Phil Lewin.

The potential free trade agreement was in danger of "suffocation for lack of political oxygen", Mr Lewin said from Hong Kong.

In Hong Kong for a week as a guest of the Special Administrative Region government, Mr Lewin said he had found a "passive" mood about the proposed free trade agreement with New Zealand.

"The thing has stalled for six months, at the level of the bureaucrats," he said.

The breakdown was on the "rules of origin" for goods - to determine where export products are made and the level of local content, especially textiles, clothing and footwear.

"There needs to be a renewed commitment on both sides," he said.

A free trade deal with Hong Kong should be easy and officials should be told to "get on and do it".

Mr Lewin said there was "enormous potential" from a free trade agreement with Hong Kong, especially for Wellington service companies, worth possibly tens of millions of dollars a year in time.

That included things such as legal services, engineering, architecture, education and tourism, and could mean partnerships between firms from both sides.

Latest July trade figures show trade with Hong Kong has fallen about 20 percent in the past year to $681 million.

The Hong Kong economy had hit a low patch after property prices slumped by 50 percent, he said.

But the "clincher" for New Zealand was that Hong Kong had a skilled, increasingly professional, workforce of wealthy consumers on the doorstep of China, with 1.2 billion people.

Both New Zealand and Hong Kong were open economies without big interventions. Hong Kong was already tariff-free on goods and fairly free in most services sectors.

New Zealand politicians, including Prime Minister Helen Clark, Finance Minister Michael Cullen and Trade Minister Jim Sutton, had visited Hong Kong and seemed to get acceptance that a free trade deal was a good idea but that had not filtered down to officials in Hong Kong, Mr Lewin said.


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