VZCZCXRO2738
OO RUEHNZ
DE RUEHWL #0687 2630344
ZNR UUUUU ZZH
O 200344Z SEP 07
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4716
INFO RUEHBY/AMEMBASSY CANBERRA PRIORITY 4961
RUEHNZ/AMCONSUL AUCKLAND PRIORITY 1470
RUEHBN/AMCONSUL MELBOURNE PRIORITY 0117
RUEHDN/AMCONSUL SYDNEY PRIORITY 0580
RUCPDOC/USDOC WASHDC PRIORITY 0178

UNCLAS WELLINGTON 000687 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/ANP, EB/TPP/ABT GARY CLEMENTS, COMMERCE FOR 
ITA/OTEXA MARIA D'ANDREA, USTR FOR CAROLYN MILLER 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KTEX NZ
SUBJECT: NEW ZEALAND'S TEXTILE AND APPAREL SECTOR 
 
REF: STATE 114799 
 
¶1. New Zealand (NZ) is recognized as a global leader in the 
production of sheep's wool. With the exception of wool, this 
country's textile/apparel requirements are dominated by 
imports. New Zealand sheep's wool is the variety that is used 
mainly in interior textiles such as carpets, upholstery, 
furnishings, beddings and rugs. It is also used for 
hand-knitting yarn and in knitwear and blankets. The industry 
has estimated that in the domestic market, 34% of new Zealand 
wool is used in machine-made carpets, 12% in hand-knotted and 
hand-tufted carpets, 44% in apparel and 10% in other uses, 
primarily upholstery and bedding. 
 
¶2. The United States ranks as New Zealand's fifth most 
significant textile/apparel import source. China is 
the leading source of New Zealand's textile/apparel imports. 
Chinese textile/apparel imports represent approx 
74% of total textile/apparel imports into the NZ market. 
Australia is New Zealand's next most significant 
import source. In response to reftel, Statistics New Zealand 
reports for 2006 the following: 
 
- The value (i.e., operating income) of total manufacturing 
was approx. 52 billion USD in 2006. 
- The value (i.e., operating income) of total textile/apparel 
production was approx. 2 billion USD in 2006. 
- Textiles/Apparel comprise 0.6% of all NZ exports with raw 
wool amounting to an additional 2.73% of total exports. 
- Textiles/Apparel comprise approx 5% of all NZ imports. 
- New Zealand's Gross Domestic Product for 2006 was approx. 
90 billion USD. 
 
- The value of textile and apparel imports to NZ in 2006 is 
as follows: 
  apparel 864,962,900 USD and textiles 360,979,100 USD 
totaling 1,225,942,200 USD. 
- Chinese apparel imports were 639,491,000 USD and textiles 
imports were 45,660,990 USD 
  for a total of 685,151,990 USD in 2006. 
- U.S. apparel imports were 16,069,790 USD and textile 
imports imports were 27,438,460 USD 
  for a total of 43,508,250 USD in 2006. 
 
- The value of NZ apparel exports to the U.S. were 17,375,910 
USD and textiles were 33,086,650 USD 
  for a total of 50,462,560 USD in 2006. 
- Of a total employed workforce of 1,723,800 in 2006 there 
were 234,700 employed in the manufacturing sector of the 
  economy. 
 
¶3. Even with the currently high market penetration by China 
in the textile/apparel sector, negotiations are 
currently underway by GNZ to conclude a free trade agreement 
(FTA) with China which will spell even greater 
market penetration. The parties have to date concluded 
fourteen rounds of negotiations with the ambitious 
goal of concluding an FTA by April 2008. Despite the GNZ's 
optomestic forecast of the anticipated benefits of 
increased trade with China, New Zealand's powerful 
Manufacturers' Union has threatened to push back on any threat 
to local manufacturers from cheap Chinese imports but the 
battle for the textile/apparel sector may have already 
be a forgone conclusion based on the current import 
statistics. 
 
MCCORMICK