WORLD TRADE WT/COMTD/N/5/Add.2
10November 1997
ORGANIZATION(97-4902)
Original: English Committee onTrade andDevelopment
GENERALIZED SYSTEM OFPREFERENCES
Notification byNewZealand
Addendum
Inacommunication dated 30September 1997, thePermanent Mission ofNewZealand has
notified thefollowing changes toNew Zealand 'sGeneralized System ofPreferences Scheme for
developing andleast-developed economies.
________________
Background
Since1972NewZealandhasoperatedaGeneralizedSystemof(Tariff)Preferences(GSPscheme)
providing tariffpreferences forgoods imported fromdeveloping countries andleast-developed countries
(LDCs). Fordeveloping countries there isastandard 20percentreduction innormal tariff ratesand
forLDCs, most products enter NewZealand dutyfree. Inaddition, Pacific Island countries trade
under themoreextensive tariffpreference provisions ofSPARTECA, theSouth Pacific Regional Trade
andEconomic Cooperation Agreement which entered intoforce in1981.
NewZealand hasrecently reviewed itsGSPscheme todetermine whether anychanges tothe
scope, coverage and/or operation oftheGSPwere warranted inview ofsignificant changes inthe
domestic andinternational environments since thelastcomprehensive review in1988.
Thisreview tookplace against thebackground ofNewZealand 'soverall movement towards
zerotariffs. By2000, mostnormal tariffs -covering 89percentofNewZealand tariff items -will
beatzeroor5percentduty. GSPpreferences willbeminimal since forallthose items, thestandard
margin ofpreference willbezeroor1percent. Fortheremaining 11percentoftarifflinesthemargin
ofpreference willrange between only1-3percent.
Post-2000, theGovernment hasindicated itsintention tomove quickly tozerotariffs, well
before theAPEC deadline of2010 (forexample, tariffs onmotor vehicles willberemoved by2002
atthelatest). Inaddition tounilateral reduction programmes, NewZealand willcontinue toparticipate
inregional andinternational activities suchastheAPEC sector liberalization initiative andWTO zero
forzeroagreements.
Thereview determined thatchanges intheNewZealand tariffregime andintheinternational
trading environment mean thatNewZealand 'sGSP scheme, created 25years ago,isnolonger
appropriate andthatcertain modifications arerequired.
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Changes totheNewZealand GSPScheme
Inthelightofthereview, theNewZealand Government hasdecided:
(a) thattheNewZealand GSPscheme willcontinue initscurrent formforleast-developed
countries. They willcontinue toenjoy duty-free access except onsome footwear and
some apparel. TheGovernment agreed thattheGSPscheme beformally abolished
when thenormal ratesfalltozeroforalltariff items thatreceive LDC preferences;
(b) thatdeveloping country preferential rates under theGSPscheme willbefrozen at
1July2000 andwellthenphase outasnormal tariffs reduce tozero. There willbe
noincreases indeveloping country tariffrateswhile theprocess isbeing implemented;
(c) thattheproduct graduation element ofthescheme beabolished attheearliest practicable
date(onorbefore 1January 1998) andthatallpreviously graduated products be
reinstated todeveloping country ratesfrom thatdate).
- Asregards product graduation, under NewZealand 'scurrent GSPscheme,
when imports fromadeveloping country under aparticular tariffitemexceed
thetwinbenchmarks ofimport share (25percentoftotalimports) andacertain
value forduty(NZ$122,000 in1996), those imports losetheirpreferential
status. TheGovernment considered this'product graduation 'element ofthe
scheme wasnotfullyconsistent withitsoverall policy oftariffreductions since
itcreated uncertainty andunpredictability fordeveloping country exporters
andNewZealand importers, andaccordingly decided onthechange above;
and
(d) thattheexisting policy oncountry graduation istoremain unchanged. Since 1984,
theNewZealand GSPscheme hasgraduated those countries andeconomies whose
percapita GNPwasabove 70percentofNewZealand 's(ie.alltariffpreferences are
lostwhen aneconomy 'spercapita GNP reaches 70percentofNewZealand level
GNP).
- However, theGovernment hasalsohadapolicy ofallowing anycountry
affected bycountry graduation toapply forreinstatement ofpreferential duty
ratesonnominated tariff items which weresignificant tothatcountry. Only
three economies haveeverapplied forreinstatement ofpreferential treatment
forcertain items andanagreed listofitems wasconsolidated intoanew
concessions category. Inthecontext oftheGovernment 'sgeneral reform of
theGSP scheme andthefactthatreinstated imports areinsignificant
(NZ$13,564, withdutyforgone totheamount ofNZ$517 in1996) andhave
steadily declined overrecent years, theGovernment hasdecided torevoke this
special tariff concessions category.
Conclusion
Thechanges made totheGSPscheme arepartoftheGovernment 'scontinuing efforts toreduce
tariffs andrationalize thetariff structure inNewZealand, while preserving benefits fordeveloping
and,inparticular, least-developed trading partners. TheGovernment iscommitted toapolicy offurther
tariff reductions andinthisregard hascommenced atariff review exercise todetermine thetimetable
forremoving alltariffs wellbefore 2010.