Govt hammers China nail imports

Govt hammers China nail imports

Jul 6, 2011

In a rare move, New Zealand authorities have placed a trade barrier on imports of Chinese wire nails following an investigation that found they were having a negative impact on a local manufacturer.

The Ministry of Economic Development (MED) began investigating the issue late last year after Wireplus, which has manufacturing operations in Auckland and Christchurch, complained about anti-competitive pricing of nails arriving from China.

Robin Hill, a chief adviser at the MED, said the department established that a "significant proportion" of the nails were being dumped - meaning they were being sold at prices lower than what they were selling for on the Chinese market.

The ruling and duties were announced in a notice signed by Commerce Minister Simon Power.

"[The duties] are designed to essentially increase the imported price of the nails up to a non-dumped level," said Hill.

But Richard Anyon, director of planning and strategy at Wireplus' parent company United Industries Group, said the duties could have been higher.

However, he said the action taken by the MED would at least show other local manufacturers that they could take action against underpriced imports.

"We don't have an issue with competing on a like-for-like basis, but we do have an issue with a non-level playing field," Anyon said.

"There is life left in New Zealand manufacturing as long as there is a level playing field."

He said the dumping of Chinese goods had resulted in a decline in Wireplus' nail sales, and the new duties would help ease the problem.

Hill said instances of anti-dumping duties being applied to imports in New Zealand were rare.

"There haven't been many cases in recent years," Hill said. "This is the first new investigation that we've done since 2007."

An investigation is currently taking place into preserved peaches from Spain.

Business Roundtable executive director Roger Kerr said the remaining import tariffs in New Zealand were "basically a nuisance".

"There's no protectionist sentiment to speak of left in the country ..." he said.

"We've got back into the mindset thinking that [duties] are a negotiating coin for free trade agreements but you don't need tariffs for those purposes - countries like Hong Kong and Singapore are into agreements and they've got no tariffs."

Kerr said the only way dumping could be harmful was if a foreign firm was able to drive a New Zealand company out of business and then raise prices through a monopoly.

Anti-dumping duties

* A Ministry of Economic Development investigation resulted in seven Chinese manufacturers of wire nails facing import duties in New Zealand ranging from 6pc to 110pc.

* The duties will expire in five years.

* Anti-dumping duties are already applied to a number of imports into this country, including diaries from Malaysia and China and canned peaches from South Africa and Greece.

By Christopher Adams | NZ Hearld

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