Business New Zealand says an international deal the Government is expected to sign won't damage the interests of domestic suppliers, despite concerns from the Council of Trade Unions.
The CTU has warned the Government Procurement Agreement damages the interests of New Zealand firms.
The agreement covers the rules governments can impose on goods and services they buy from overseas suppliers. It operates under the auspices of the World Trade Organisation, but not all the organisation's members have signed up to it.
CTU economist Bill Rosenberg said if New Zealand signs, the Government will only be able to put certain conditions on overseas suppliers.
He said it would not be able to require those suppliers to pay employees a living wage, nor could it give an advantage to local suppliers which would be likely to penalise small New Zealand firms and not-for-profit service providers.
But Business New Zealand chief executive Phil O'Reilly said the Government has never been able to favour local companies and the agreement will actually help local suppliers.
"This agreement, in saying we can't favour anybody but neither can other governments that are party to the agreement, actually opens up those other government procurement chains to New Zealand businesses."