26 Mar 2015

NZ to sign government procurement deal

6:48 am on 26 March 2015

The Government is set to sign up to an international deal on government procurement contracts it says will open up a $US1.7 trillion market to New Zealand exporters.

Tim Groser.

Tim Groser. Photo: NATIONAL PARTY

But the Council of Trade Unions (CTU) warns it will damage domestic firms because the New Zealand Government will have to use more foreign firms to supply goods and services here.

The agreement on government procurement contracts covers the rules governments can impose on goods and services they buy from overseas suppliers.

Forty-three World Trade Organisation members, including Hong Kong, the European Union and the United States, are already signed up.

Trade Minister Tim Groser said the deal is a huge bonus for the country's exporters.

"We've been excluded from, we think about, $US1.7 trillion in terms of the available market, with the biggest one of all the US market."

He said it put New Zealand exporters on a level playing field with other companies.

The Foreign Affairs, Defence and Trade Committee has recommended to Parliament that, on balance, the agreement would benefit New Zealand.

International Business Forum executive director Stephen Jacobi said the deal would not damage the interests of domestic suppliers, and would open up new markets for exporters, particularly in the US and Europe.

"They are very important market niches there and we're some way away from negotiating a FTA [Free Trade Agreement] with the European Union."

"Also there are a number of other countries who over time will join this agreement and it means that we will be in a privileged position as other people come on board."

But CTU secretary Sam Huggard said it was a bad agreeement and he was concerned Parliament had approved the deal behind closed doors.

"It locks in future Government's to make decisions around Government purchasing," he said.

Mr Huggard said a Government majority on the committee vetoed any public input.

"What the select committee's done is heard a couple of comments from some Government agencies who are cheerleading this agreement."

Labour Party trade spokesperson David Parker said it set a scary precedent for trade agreements - particularly with the talks on the controversial Trans Pacific Partnership deal nearing an end.

"We've been calling for the Government to be more open around the Trans Pacific Partnership agreement which is a more significant agreement than this by far," he said.

"It's quite proper for New Zealanders to expect some transparency."

But Mr Groser argued there would only be a select few against the procurement deal.

"I can imagine the few anti-trade ideologues - but the public of New Zealand having a problem with this? I don't buy it."

The Government has submitted a formal application, and has until July to agree to the terms of the deal.

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