Bid to protect parallel imports

Last updated 05:00 26/08/2012
Mark Powell
PHIL DOYLE/Fairfax NZ
MARK POWELL: Kiwis can buy goods at low prices, thanks to parallel imports.

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The Warehouse chief executive Mark Powell is fighting for New Zealanders' rights to buy parallel imports as rumours swirl that access to such goods could be restricted under new international "free trade" treaties.

Any such change could take cash directly out of the pockets of Kiwi consumers.

Powell said parallel imports could cut the cost of goods to local consumers by up to 50 per cent and he would be "very concerned" if a trade deal restricted the ability of retailers such as The Warehouse to directly import genuine branded products.

"That's about restricting channels. It's nothing to do with free trade," he said. In fact, he said, it would be an inappropriate restriction of free trade.

Powell said The Warehouse had made representations on the issue to Government and asked to be kept informed if there was any suggestion of a change in policy.

However, the negotiations for a new trade treaty, dubbed the Trans Pacific Partnership Agreement (TPPA), are being held under tight secrecy.

What is known publicly is the result only of a few leaked drafts.

The Ministry of Economic Development commissioned Australian economist Henry Ergas to carry out a study on the parallel importation regime last year, spurring further fears that a change is being considered as one possible trade-off in the negotiations.

Sunday Star-Times was denied access to the document, completed in August 2011 and described in parliamentary papers simply as "an assessment of the likely impact of changing NZ parallel importation laws", under the Official Information Act.

Powell said The Warehouse imported genuine products directly from multinational manufacturers.

"I'd be very concerned if the TPP restricted that.

This has nothing to do with intellectual property," he said. He said the current regime allowed New Zealanders to take advantage of shifts in the exchange rate and differential pricing between markets.

Undoing it meant reintroducing barriers to trade. "We're able to bring goods to New Zealand at prices way below those in the market," he said. "It's up to the multinationals to say why there is that [pricing] difference."

Other local regimes potentially subject to the TPP negotiations include drug-buying agency Pharmac, agricultural structures such as Fonterra, environmental protections, consumer protection and labour rights.

Any TPP deal could also restrict the Government's ability to regulate allowing overseas investors to sue the Government if new laws damaged their business interests.

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Trade Minister Tim Groser, in a speech to the Pacific Economic Co-operation Council in June, described the TPP as a tremendous opportunity for New Zealand, but warned it would challenge some.

"Make no mistake about it. This is going to challenge a number of the participants, especially on their most sensitive agriculture sectors, but if this is not to end as a farce, it is something they are going to have to do," he said.

"At the same time, since dairy lies at the heart of some of the most politically sensitive issues . . . we and Australia have said we can be very, very patient to get to the right place."

Groser said he spent a good deal of time "batting back constant attempts to destroy the negotiations anti-trade activists".

"They have never seen a trade agreement they have liked and never will.

"TPP is a tremendous opportunity for New Zealand and I am confident we can manage the risks professionally," Mr Groser said.

The New Zealand Council of Trade Unions has been watching the negotiations closely. In a leaflet to members it said "what we will get we will have to pay for".

"We are not against trade. It can provide jobs, but it must be fair. It often has not been fair to working people," the CTU said.

"But the TPP is about much more than trade. Any trade benefits are likely to be tiny. "Unless we receive assurances that the dangers . . . are being addressed, we will oppose it."

- Sunday Star Times

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