New Zealand Delays Tariff Elimination

The government of Prime Minister Jenny Shipley has postponed its plan to eliminate tariffs on textiles, clothing, carpets, and footwear, to give New Zealand's domestic manufacturers more time to develop new products and new markets. The tariffs, which were to have been reduced rapidly beginning in 2000, will now be frozen at the current rate of 15% until 2004; elimination is to follow in 2006. Shipley made the concession to independent members of Parliament whose support she needed for the sale of state-owned electricity generator Contact Energy. Shipley also needed Parliament support for the passage of a number of other controversial measures to cut government spending and counter the fiscal impact of the Asian crisis as well as the recent downgrading of New Zealand's credit rating by Moody's Investors Service.

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