New Zealand must end imports of high-quality second-hand cars from Japan if it is to get better access to Australia’s market, Australia has warned.
New Zealand imports between 30,000 and 40,000 quality second-hand Japanese cars a year. The imports are permitted under New Zealand’s zero-tariff policy.
The Minister for Industry, Alan Griffiths, says Australia is not prepared to loosen vehicle trade between the countries under the Closer Economic Relations agreement unless New Zealand is prepared to do something about the imports.
New Zealand is seeking easier access to the Australia market for its fledgling vehicle industry. Its industry relies heavily upon assembly.
Present rules require 50 per cent New Zealand content before its exports to Australia can be come in duty-free under CER. New Zealand wants that cut to 40 per cent.
Mr Griffiths met his New Zealand counterpart, the Minister for Commerce, Philip Burdon, in Melbourne last week.
He said after the talks, “”Action by New Zealand on the matter of second-hand cars is an absolute precondition for further integration of the two automotive industries.”
Australia has in effect blocked imports of late-model used Japanese cars by imposing a $12,000 tariff. on them.
It is believed that Mr Burdon has proposed a sliding-scale tariff for New Zealand imports of used Japanese cars, but has met stiff resistance from New Zealand consumer and farming groups and New Zealand faces an election later this year.
He has also met resistance from within his own Cabinet by zero-tariff economic purists such as the Minister for Finance, Ruth Richardson.
The Japanese imports are affecting the sales of Australian cars in New Zealand. Also, there is a question of them being imported to Australia via New Zealand. The new market for new cars in New Zealand is about 55,000 vehicles units a year. However, It would probably be higher if the Japanese imports were stopped.
High-quality used cars are cheap available in Japan because Japanese registration fees discourage keeping a car longer than three years.
Australian sources said New Zealand had to make up its mind whether it wanted a car industry or whether to import second-hand cars from Japan. It could not pursue its zero-tariff dogma, allow the Japanese imports and expect Australian concessions.