This study, just released looks at the investment relationships between Hong Kong and New Zealand. It uncovers multi-billion financial transfers to New Zealand for "tax minimisation purposes". The strange "intermediary" relationship Hong Kong plays with China is analysed; again avoidance of taxes and tariffs are primary drivers. It finds that the New Zealand and Hong Kong governments are currently engaged in "exploratory talks" with the aim of negotiating a free trade and investment agreement (FTIA). Though the government has failed to release any details of what is proposed to the public, this paper finds that if such an agreement is based on the recently ratified Singapore-New Zealand Closer Economic Partnership (SNZCEP), an existing Investment Promotion and Protection Agreement (IPPA), and the WTO, it presents the following dangers to New Zealand, among others:

· Destruction of the remaining textiles, clothing and footwear industry

· Litigation by investors in closed international tribunals against the effects and existence of laws and regulations that protect our environment and economic development, resulting in multi-million dollar compensation payments and possible reversal of local and central government policies.

· Further pressure to commercialise our social services such as education, health, public broadcasting, waste disposal and water.

· Further constraints on the use of central and local government procurement to encourage economic development.

· Growing constraints on local government in all these areas.

· Encouragement of large short term international capital movements, and further loss of the control of capital movements and foreign investment which are essential to develop New Zealand's economy and protect ownership of land and fishing quota.

The paper is available from ARENA in book form: contact ARENA, Action Research & Education Network of Aotearoa, PO Box 2450, Christchurch. Phone: (03) 381 2951 Fax (03) 3668035, Email: arena.nz@clear.net.nz, Web page: www.arena.org.nz.