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NSW trade rules leads to criticism over protectionism

NSW trade rules leads to criticism over protectionism article image

The NSW government has put forward a policy that allows Australian firms to bid up to 25 percent higher than overseas rivals for government contracts and still win the tender. Federal Minister for Trade Simon Crean has criticised the policy for its protectionist overtones, especially at a time when Australia has been actively promoting free trade. "It will invite retaliatory action by our trading partners. Already, we have had significant queries by the EU and the US as to what this means," he said. While such measures are usually designed to protect jobs, Crean says it will have the opposite effect. ""If we go down a path that invites retaliatory trade action, it will in fact cost jobs," he said. "Under free trade agreements, we seek access to other countries' government procurement markets. What sort of a signal are we sending if we're restricting ours by effectively imposing a 25 percent tariff, but still expecting access to theirs?" NSW Premier Nathan Rees says the policy merely reflects other states' policies: "Every other state has this as well and we believe it's appropriate in the current environment." The policy relates to $4 billion worth in government contracts.

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