WT/TPR/S/20
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II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES
(1) General Framework
1. NewZealand isaconstitutional monarchy withaunicameral Parliament. TheCrown isvested
inthereigning British Monarch, whoappoints aGovernor-General toexercise royal powers.1
Parliamentary elections areheldatleastevery three years. Asaresult ofreferenda heldin1992 and
1993, future elections willbeheldunder asystem ofmixed member proportional (MMP) representation
rather thantheprevious first-past-the-post system, achange thatisexpected toincrease thelikelihood
ofcoalition governments. Thenextelection isscheduled for12October 1996.
2. Parliament enacts lawsandsupervises theadministration oftheGovernment. Proposed laws
areplaced before theHouse intheform ofBills, either bytheGovernment orbyaprivate member.
Government Billsareplaced before theHouse bytherelevant Minister, andMember 'sBillsareplaced
bymembers oftheHouse whoarenotMinisters. ABillisusually senttoaSelect Committee following
afirstreading intheHouse; asecond reading includes formal debate ontheprinciples oftheBill.
TheGovernor-General 'sassent isrequired before aBillcanbecome law.
3. TheExecutive Council, composed ofallMinisters, advises theGovernor-General onthebasis
ofpolicy formulated inCabinet, andpromulgates government decisions, suchasstatutory regulations.
TheCabinet iscomposed ofselected Ministers andisineffect thehighest council ofGovernment;
itsproceedings areinformal andconfidential. InCabinet, theGovernment co-ordinates thework of
Ministers anddecides onadministrative andlegislative proposals andpolicies. Trade policy initiatives
maycome fromaministry or,morerarely, theParliament. Parliament candelegate limited law-making
power totheExecutive Council tomake regulations.
4. Several ministries andagencies havetrade-related responsibilities. TheMinistry ofForeign
Affairs andTrade (formerly theMinistry ofExternal Relations andTrade) hasoverall responsibility
fortradepolicy matters, including tradenegotiations andexternal traderelations. Theresponsibilities
oftheMinistry ofCommerce include tariffpolicy (including tariffconcessions forgoods notproduced
inNewZealand); safeguards, anti-dumping andcountervailing measures; telecommunications policy;
standards policy; competition policy; andpolicy regarding intellectual property. TheMinistry 's
commercial affairs responsibilities havebeenadded sinceNewZealand 'sprevious Trade Policy Review
in1990.2SectoralministrieswithkeytraderesponsibilitiesincludetheMinistryofAgriculture,Ministry
ofFisheries, Ministry ofForestry, andtheMinistry ofTransport. TheDepartment ofCustoms, a
separate department thatisnotpartofanyMinistry andisheaded bytheMinister ofCustoms, isnow
responsible exclusively fortheborder enforcement ofpolicies made byotherMinistries orDepartments.
TheReserveBankofNewZealandregistersbanksandotherfinancialserviceprovidersandisresponsible
formonetary policy within aframework ofpolicy targets agreed withtheMinister ofFinance. The
Treasury plays averyimportant co-ordinating rôleineconomic policy andhasspecific responsibilities
inmany areas suchastaxation, thebudget, privatization, andinvestment. ThePrime Minister and
Cabinet areserved byanInternational Affairs Advisor.
1TheGovernor-General isrequired bytheconstitution tofollow theadvice ofMinisters. Further information
onthestructure ofgovernment andthelegislative process isavailable inGATT (1990).
2These responsibilities, which were transferred from theMinistry ofJustice aspartofongoing public sector
restructuringaimedatimprovingefficiency,include:RegistrarandRegistries,CharitableTrusts,andRegistration
andLiquidation ofCompanies.New Zealand WT/TPR/S/20
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5. Powers oflocalgovernment arelimited tothose conferred byParliament anddonotoriginate
intheauthorities themselves. Local governments donothavepower intrade policy formulation or
administration. Thecentral government purchasing guidelines alsoserve asrecommended principles
andprocedures forlocalauthorities.
6. Private-sectorinputintotradepolicyismadedirectlytoParliamentarySelectCommitteesduring
theirdeliberation ofaBill,andthisprocess often leads toamendments todraftlegislation. Various
interests arerepresented through national organizations, suchastheManufacturers Federation, Business
Roundtable, Coalition ofService Industries, Federated Farmers, andgroups representing labour and
consumer organizations. Research institutes provide valuable information andexternal analysis of
economic policy.
7. Broadparticipationinpolicymakingistypical.WhiletheMinisterofCommercehastheprimary
responsibility forsetting tariffs, the1994 "Review ofPost-1996 Tariff Policy" wasconducted byan
Officials Committee chaired bytheSecretary ofCommerce andincluding representatives from the
Ministry ofCommerce, theMinistry ofForeign Affairs andTrade, theTreasury, theMinistry of
Agriculture andFisheries (then oneMinistry), Customs, andtheDepartment ofthePrime Minister
andCabinet. Itcommissioned papers bytheNewZealand Institute forEconomic Research (NZIER)
andother research institutes, andtheReview itself contains athoughtful anddetailed discussion of
economicissuessurroundingfurthertariffreductions.Officialsmetwithrepresentativesof70companies
andlaterreviewed formal submissions made byindustry representatives, major interest groups and
nationalorganizations,includingtheRetailandWholesaleMerchantsAssociation,theImportersInstitute,
theConsumers 'Institute, andtheChambers ofCommerce andIndustry. Thepositions ofthegroups
consulted aresummarized intheReview. Suchbroad participation helps toensure thatthegains from
more liberal trade willbeadequately considered along withthenecessary adjustments.
(i) Legal structure andtrade laws
8. NewZealand 'scourt system includes asystem ofDistrict Courts, theHigh Court, andthe
Court ofAppeal. Allcourts exercise bothcriminal andciviljurisdiction. TheHighCourt hasoriginal
jurisdiction incases ofmajor crimes andimportant civilcases, andhears appeals fromDistrict Courts,
Specialist Courts, andTribunals onother matters. Theprimary function oftheCourt ofAppeal is
tosettle thelawofNewZealand andtoreconcile conflicting decisions oflower courts. Decisions
oftheCourt ofAppeal arefinal, except where anappeal issenttotheJudicial Committee ofthePrivy
Council. TheCommittee 'smembership isprimarily eminent British judges, although NewZealand
judges havesatonitinrecent years.3According totheauthorities, aBillhasbeenintroduced into
Parliament which, ifpassed, would make theNewZealand Court ofAppeal thefinalappellate court.
9. NewZealand isbothanoriginal GATT signatory andWTO member, having ratified the
Marrakesh Agreement on7December 1994. Since thelastreview ofNewZealand, nosubstantial
changes havebeenmade tothedomestic legalstatus ofWTO orother international agreements. WTO
obligations areimplemented domestically through legislation, regulations, administrative provisions
anddepartmental policies. They arenotenforceable inNewZealand Courts, although thelegislation
giving effect totherelevant provisions oftheMarrakesh Agreement isenforceable. According tothe
authorities, theCourts willseektointerpret statutory provisions inamanner consistent withinternational
obligations.
3ThePrivy Council submits itsopinion totheSovereign, whomakes thenecessary order.WT/TPR/S/20
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10. TheCustoms andExcise Act1996 isthekeylegislation withregard tocustoms issues and
willreplace the1966Customs Actsometime in1996.4Tariff ratesaresetunder theTariff Act1986.
TheTemporary Safeguards Authorities Act1987andtheDumping andCountervailing Duties Act1988
settheframework fortheserespective types ofaction. TheOverseas Investment Amendment Act1995
concerns foreign direct investment approval. Intellectual property-related legislation includes thePatents
Act1953,theTradeMarksAct1953,theDesignsAct1953,theCopyrightAct1994,theLayoutDesigns
Act1994andtheGeographical Indications Act1994. TheFairTrading Act1986provides additional
protection fortrademarks andgeographical indications. TheCommerce Act1986 isthebasis for
competition policy.
(2) Trade Policy Objectives
11. Trade policy ispartofNewZealand 'sbroader external policy strategy, which alsoencompasses
suchareas asinvestment andimmigration. Theunderlying trade policy objective isto"promote
NewZealand'seconomicgrowththroughtradeandthusimprovethelivingstandardsofNewZealanders
onasustainable basis."5Animportant manifestation ofthisobjective hasbeentheelimination of
licensing andsubsidies andtheuseoftariffs asvirtually theonlymeans ofimport protection. Trade
strategy attempts tobuildon,andtocomplement, theoutward orientation ofdomestic economic policies.
ThisstrategyispursuedthroughNewZealand'sfourtradepolicytracks:unilateral,multilateral,regional
andbilateral.
(i) Theunilateral track
12. Successive NewZealand governments since 1984 have recognized thatunilateral trade
liberalization isinNewZealand 'sbestinterests, despite restrictions faced inexport markets andthe
effects ofsubsidized exports inthirdmarkets. Behind theunilateral track oftrade policy strategy lies
adesire toinduce greater interest inexporting andabelief inimport liberalization asexport promotion.
Most oftheimport-liberalizing reforms ofthepasttwelve years, including theabolition ofimport
licensingandsubstantialtariffreductions,havebeenimplementedundertheunilateraltrack.Importantly,
trade reforms wereembedded inaprogramme ofstructural reform thatwassupported bydisciplined
macroeconomic policies. These included Stateenterprise privatization; sectoral liberalization inareas
suchastransport, telecommunications andfinancial services; civilservice restructuring (BoxII.1);
labour market deregulation; taxreform; andliberalization oftheforeign exchange market.6
4AsatJuly1996, regulations were stillbeing formulated. AnOrder inCouncil wasexpected tobring the
Actintoeffect inAugust 1996.
5Ministry ofForeign Affairs andTrade (1993), p.iii.
6SeeAnnex I.1andMassey (1995).New Zealand WT/TPR/S/20
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BoxII.1: Civil Service Reform
A1987 report bytheTreasury argued formajor reforms ofthegovernment sector, stating that:
"...Government requires apublic service that provides high quality advice, delivers effective
implementation ofGovernment policies, andprovides arewarding andstimulating environment inwhich
people canwork. Toachieve this,some basic principles should guide reform ofthepublic sector. The
strengthening ofaccountability mechanisms iscrucial. Aslongasdepartments areconstrained byinput
controls themonitoring ofperformance willbedifficult. Itisimportant tohave structures inplace that
encourage public sector managers toactinthebestinterests oftheir clients. These clients may be
Ministers, ortheymaybethegeneral public."a
Input controls were viewed asunduly reducing managers 'discretion. Thealternative toinput controls
wastoassess theperformance ofmanagers, including howwelltheymanaged resources, andtomake the
positions ofmanagers contingent onthisassessment.
State sector reform wasguided byfiveprinciples: (i)theState should notbeinvolved inactivities that
would bemore efficiently andeffectively performed bythecommunity orbyprivate business, (ii)trading
enterprises would operate most efficiently andeffectively ifstructured along thelines ofprivate sector
business, (iii)government departments would operate most efficiently andeffectively with clearly
specified andunambiguous functions, (iv)managers would perform most effectively ifmade fully
accountable fortheefficient running oftheirorganizations, without central control, and(v)costs ofState
activities should bebased onrealmarket factors, andthequality, quantity andcosts ofproducts should
bedetermined bypurchasers 'requirements.b
Theadoption ofthisalternative approach topublic sector management hashadwide-ranging implications.
Reforms arebased onadistinction between theGovernment 'sinterests asapurchaser ofservices, asan
intermediary, andasanowner ofassets. Changes inpublic sector financial procedures nowhelpensure
financial control while simultaneously providing incentives forimproved performance; thePublic
Finance Act1989 requires, forexample, thatgovernment accounts bekeptonanaccruals basis. High-
level public servants areemployed onfive-year contracts. Theperformance ofdepartmental chief
executives issubject toannual review bytheState Services Commission (SSC). Candidates from both
outside andinside thepublic service aretobesought forallsenior posts. TheGovernment retains the
ultimate control ofappointments, buttheSSCmakes recommendations, andiftheGovernment rejects a
recommendation itmust make apublic announcement onthematter. Departments have been given much
greater discretion regarding thepayandemployment conditions oftheir staffs, andmay substitute
between labour andother resources astheyseefit.Agreements between Ministers andchief executives
specify theoutputs tobesupplied byDepartments andtheefficiency withwhich Departments willberun.
These agreements comprise thebasis fortheSSC'sperformance assessment ofachief executive, and
rewards andpenalties inchief executive contracts arelinked tothisperformance assessment. Toagreat
extent, once aDepartment 'sobjectives have been agreed anditsoverall budget hasbeen set,the
Department allocates itsbudget asitseesfit.
a TheNew Zealand Treasury (1987).
b Statistics New Zealand (1995), p.65.
Source: Based onMassey (1995).
13. Reductions inNewZealand 'spreviously veryhightariffs havebeenundertaken toimprove
economic efficiency, rather thaninresponse tointernational pressure, andoffer anexample of
NewZealand 'ssuccessful unilateral reforms. Tariffs exceeding 25percentonproducts other than
those covered byindustry plans (which applied tothemostsensitive sectors) werereduced inJuly1986WT/TPR/S/20 Trade Policy Review
Page 22
andagain inJuly1987. Sixmonths latertheGovernment announced aSwiss formula tariff reduction
programme7,which wasimplemented fromJuly1988toJuly1992; tariffs forgoods covered byindustry
plans followed more modest individual reduction schedules. InSeptember 1991, wellbefore thefinal
reductions ofthe1988-92 programme wereimplemented, theGovernment announced its1993-1996
tariff reduction programme, withsome goods -textiles, apparel, tyres, footwear, andmotor vehicles
andparts -again treated under theirownprogrammes. InDecember 1994 thecurrent programme,
covering theperiod 1997-2000, wasannounced, andwillleadtofurther substantial tariff cuts
(Chapter III(2)). TheGovernment iscommitted toa1998 tariff review, when itwilldetermine how
tomove tariffs towards zeroacross theboard.
14. Themanner inwhich theGovernment formulated andimplemented theseprogrammes hasbeen
instrumental intheirsuccess. Bypre-announcing theprogrammes andadhering strictly tothescheduled
reductions, theGovernment established credibility forfuture plans. Firms received prior notice of
tariffreductionssufficientlyearlytomakeappropriateinvestmentandhiringdecisions,helpingtosmooth
theresponse oftheeconomy. Notably, there hasbeennobacksliding -either through reversals of
tariff reductions orthrough resort tooptions suchasanti-dumping -which could havecreated doubts
about theGovernment 'scommitment toreform.
(ii) Themultilateral track: NewZealand andtheWTO
15. NewZealand haspractised unilateral liberalization innearly allareas ofitstrade policy, but
itseesmultilateral freetradeasthebestpossible policy setting andworks toward thisendintheWTO.
Ithasexpressed frustration, however, withthecomplexity andslowpaceofpastmultilateral trade
negotiations. Although theUruguay Round didnotgoasfarinliberalizing trade asNewZealand
would havelikedinareassuchasagriculture, textiles andtropical products, moststudies oftheUruguay
Round havefound, andtheauthorities agree, thatNewZealand willbeamong theRound 'sgreatest
beneficiaries.8Studies suggest asustained increase ineconomic welfare equivalent toaone-time increase
ofsome 1to3percentofGDP resulting from the"quantifiable" aspects oftheRound, neglecting
such important areas asservices, intellectual property andrules onsubsidies andanti-dumping.
NewZealand alsorecognized thatfewother countries stood tobenefit asgreatly from asuccessful
Uruguay Round. Thisisparticularly trueinagriculture, asnoted inagovernment report: "Every
single piece ofeconomic research onthematter overthelastfifteen years confirms theobvious, namely
thatNewZealand would belikely togainmore thananyother developed country fromcomprehensive
liberalisation ofagriculture."
16. Unlike mostcountries, whose Uruguay Round benefits stemprimarily fromtheirownreforms
agreed under theRound, mostofNewZealand 'sexpected benefits willresult fromtheUruguay Round
reforms ofother countries. There arethreereasons. First, thedomestic reforms, suchasthose noted
above, havemade itseconomy more flexible andbetter abletoexploit newtrading opportunities.
Second, because ofunilateral reforms, changes required ofNewZealand bytheUruguay Round are
7TheSwiss formula, sonamed because ofaSwiss tariff proposal during theTokyo Round, leads toagreater
percentage cutofhightariffs ascompared tolowtariffs andthustoarationalization oftariff rates. Under this
formula thenewtariff isequal to(ax)/(a+x), where "x"istheinitial tariff and"a"isaparameter; thesmaller
is"a"thegreater willbethetariff reduction. New Zealand chose "a=175" andrepeated thetariff reduction
overfiveyears, leading toa5.0percenttariff being reduced to4.0percent, buta30.0percenttariff falling
to16.2 percent.
8ForexamplesofUruguayRoundstudiesseeFrancois,McDonaldandNordstrom(1995);Harrison,Rutherford
andTarr(1995); andtheoverview ofmodel results intheMinistry ofForeign Affairs andTrade (1994).New Zealand WT/TPR/S/20
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relatively minor. Finally, theUruguay Round sawsubstantial market-opening forproducts ofexport
interest toNewZealand.9These products havelongbeensubjected toheavy import restrictions and
exportsubsidiesbyothercountries.InthisrespectNewZealand'sexpectedlargegainsfromtheUruguay
Round reflect thecosts ithasbeensuffering from distortive trade measures ofother countries.
(a) Implementation oftheUruguay Round results
17. Asaresult oftheUruguay Round, theshare ofNewZealand 'stariff linesbound intheWTO
hasincreased from 55toover99percent, andalltariffs onagricultural products havebeenbound.
Remaining unbound tariffs arelimited tousedmotor vehicles andusedclothing andfootwear. Given
thepaceofunilateral tariff liberalization, many tariff bindings arenowatceiling rates(Table III.4).
NewZealand, byagreeing toreduce itstrade-weighted average bound tariff forindustrial products
fromabaseof24.2percentto11.9percent,exceeded theRound 'sone-third reduction target.10This
includes NewZealand 'sparticipation in"zero forzero" arrangements withother countries toeliminate
m.f.n. tariffs onbeer(by2002), pharmaceuticals (by1997) andpulpandpaper (by2004). NewZealand
alsoexceeded the36percentreduction target foragricultural products, reducing theaverage bound
tariffforthese products from17.8percentto7.1percent. Moreover, among thecountries reporting
base-period agricultural export subsidies NewZealand wastheonlyparticipant toagree tocompletely
eliminate them.11
18. Largely because ofunilateral reforms undertaken since 1984 andtheincorporation ofthese
reforms intolegislation andgovernment practice, implementation ofNewZealand 'sWTO obligations
didnot,accordingtotheauthorities,requiremajorchanges.Toensureconsistencywithnewobligations,
some changes, noted below andinChapter III,were made torules oforigin andintheareas of
intellectual property andtrade remedies.
19. Tocomply withitsobligations under theAgreement onTrade-Related Intellectual Property
Rights (TRIPS), NewZealand made amendments toitsPatents Act,Trade Marks Act,Animal Remedies
Act,Pesticides Act,andMedicines Act. TheCopyright Act1994 wasenacted toupdate legislation
from1962, andtheGeographical Indications ActandtheLayout Designs Actarenew(Chapter III(4)).
Amendments tothePatents Actincluded extending thetermofapatent from16to20years, specifying
thecircumstances under which acompulsory licence would begranted andtherequirements attached
tosuchagrant, andrestricting grounds uponwhich aninvention could beexcluded frompatentability.
AsaresultofamendmentstotheTradeMarksAct,borderprotectionmeasures,coveringparallelimports
aswellascounterfeit trade mark goods, arebeing applied toimported goods thatinfringe trademarks
registered inNewZealand. Thedefinition ofatrademark "infringement" hasbeenextended tocover
9Ministry ofForeign Affairs andTrade (1993).
10GATT (1994). Agricultural tariff binding commitments aregenerally being implemented overtheperiod
1995-2000. Many commitments were implemented fully in1995, however, while those onbeerandmaltare
being implemented onlyin2002. Most industrial tariff binding commitments arebeing implemented overthe
period 1995-1999; pulp, paper andprinted material products inHSChapters 47-49 areexceptional, with
commitments inthisareabeing implemented from 1995 to2004.
11GATT(1994).Theexportsubsidyprogramme notifiedbyNewZealandconcernedRuralExportSuspensory
Loans. Thisscheme wasterminated in1985 andfinalpayments were received in1994/95. Thus New Zealand
hasnownotified thatithasnoexport subsidy programmes ineffect thataresubject toreduction commitments
(WTOdocumentG/AG/N/NZL/3,September1995).Furthermore,NewZealandhasundertakennottointroduce
anysubsidies linked totheexport ofspecific agricultural products.WT/TPR/S/20 Trade Policy Review
Page 24
theuseoftrademarks withrespect tosimilar goods andservices. Amendments totheAnimal Remedies
Act,Pesticides ActandMedicines Actweremade toprotect information supplied byanapplicant to
aregulatory authority when approval issought tomarket ananimal remedy, agricultural chemical or
pharmaceutical.12According totheauthorities, thenewCopyright Actcomplies withArticles 1to21
ofthe1971 revision oftheBerne Copyright Convention.13TheGeographical Indications Acthas
established arégime toprotect NewZealand andforeign geographic indications fromfalseormisleading
use;suchprotection had,toalargeextent, beenprovided under theFairTrading Act1986. TheLayout
Designs Acthascreated astatutory intellectual property rightinrespect oflayout designs forintegrated
circuits, giving effect toNewZealand 'sobligations inthisareaunder theAgreement onTRIPS.
20. Toensure consistency withtheWTO Agreement onSafeguards, NewZealand amended its
TemporarySafeguardsAuthoritiesActtoincludedefinitionsof"industry","directlycompetitivegoods",
and"serious injury" consistent withtheAgreement; italsoamended thedescription ofinjury factors
tobeconsidered bythecompetent authority andamended theprovisions onthenature, rate,extent
andduration ofasafeguard action thattheauthority mayrecommend. Amendments totheDumping
andCountervailing Duties Actwere made toensure consistency with theWTO Agreement on
Implementation ofArticle VIoftheGATT 1994(Anti-dumping) andtheWTO Agreement onSubsidies
andCountervailing Measures. Afive-year limitwasintroduced foranti-dumping andcountervailing
duties, thedefinition ofsubsidy wasamended, theprovisions oftheSubsidies Agreement relating to
thecalculation ofsubsidies wereincorporated intotheAct,provisions forestablishing normal values
inState-trading countries wereremoved, andarequirement thatapplications contain certain information,
suchastheextent ofindustry support foraninvestigation, wasintroduced.
21. NewZealandwasveryactiveduringtheUruguayRoundnegotiations,particularlyinagriculture,
where itisamember oftheCairns Group.14Thishighlevelofinvolvement hascontinued during the
implementation stage oftheUruguay Round, insubsequent services sectoral negotiations, andin
preparations fortheSingapore Ministerial Conference inDecember 1996. NewZealand believes the
mostpressing multilateral taskistoensure thattheresults oftheUruguay Round arefullyimplemented
andthattheWTO negotiations result infurther comprehensive andbalanced liberalization.
(iii) Theregional track
22. New Zealand 'sthird trade policy track isregionalism. Theexpansion ofregional trade
agreements around theworld has,according totheauthorities, influenced NewZealand trade policy
inthree keyways. First, ithascultivated asense thatastrong multilateral system isneeded toensure
themutually advantageous coexistence ofsucharrangements. Second, ithasencouraged NewZealand
tostrengthen andbroaden theCloser Economic Relations (CER) agreement withAustralia, which
NewZealand seespartly asawaytohelpitattain "critical mass" fortrade withother entities. Acting
alone, NewZealand feels, itwould bedifficult toattract regional partners intoaliberal trade
arrangement. Finally, ithasledNewZealand tosignal itsinterest inexploring closer trade relations
withanyofitssignificant regional trade partners, subject tocertain principles. These arethatsuch
12TheGovernment considers thatthefive-year period ofprotection meets itsobligations under theAgreement
onTRIPS, which does notspecify theterm ofprotection.
13Thenewlegislation islargely based ontheUnited Kingdom 'sCopyright, Designs andPatents Act1988,
which according totheNew Zealand authorities isconsistent withtheAgreement onTRIPS.
14Othermemb ersoftheCairnsGroupareArgentina,Australia,Brazil,Canada,Chile,Colombia,Fiji,Hungary,
Indonesia, Malaysia, thePhilippines, Thailand andUruguay.New Zealand WT/TPR/S/20
Page 25
agreements: (i)beoutward-looking, WTO-consistent andnotraisenewbarriers totrade withthird
countries;(ii)beopentothepossibilityofexpandedmembership;(iii)notinterferewithNewZealand's
ability toundertake further unilateral reform; (iv)becomprehensive andinclude allagricultural and
natural-resource-based products; and(v)becompatible withNewZealand 'sconstruction ofcloser
traderelations intheAsia-Pacific region. NewZealand views theAsia-Pacific Economic Community
(APEC) asclearly consistent withtheseprinciples. Inparticular, NewZealand fullysupports APEC 's
"open regionalism" approach totrade liberalization, which theNewZealand authorities interpret to
mean that,under thecurrent approach, measures agreed inAPEC willbeimplemented onanm.f.n.
basisandmembership willbeopentoexpansion. NewZealand 'sIndividual Action Planwill,according
totheauthorities, conform tothisapproach. Theauthorities believe thatAPEC would consider a
preferential approach toitstrade liberalization onlyifmultilateral liberalization ceases.
(iv) Thebilateral track
23. NewZealand alsopursues sometradeinterests onabilateral basis. Reciprocal tradepreferences
areineffect withAustralia andCanada.15
24. Bilateral relations withAustralia concentrate ontheCER, which NewZealand hastermed "by
farourmost important [preferential] trade policy agreement".16Merchandise trade withAustralia
accounted for21percentofNewZealand 'sexports andthesame share ofitsimports intheyearto
June1995, withtotalmerchandise trade having expanded some 160percentinnominal terms since
1984. Moreover, thegrowth ofexports toAustralia hasbeenanimportant source ofoverall economic
growth since 1991.
25. In1988, theimplementation dateforfreetrade ingoods wasbrought forward from 1995 to
July1990. Atthattime, thetwocountries alsoextended theirrespective competition lawstobilateral
trade, forgoing anti-dumping action against oneanother (Chapter III(5)(ii)).17Prior tothisdecision,
Australian firms werethemostcommon target ofNewZealand anti-dumping actions.18TheCERalso
hasfreed trans-Tasman tradeinservices, withtheexception ofafewsectors inscribed innegative lists
inthecountries 'respective services protocols. NewZealand 'snegative listconsists ofcertain aspects
ofairways services, telecommunications andpostal services. TheProtocol onServices extended subsidy
disciplines toservices trade.19Averycomprehensive Trans-Tasman Mutual Recognition Agreement,
applying togoods andoccupations, isexpected tocome intoforce on1January 1997. NewZealand
andAustraliabeganworkingtowardsajointfoodstandardscodeinJuly1996,beginningwithatransition
period inwhich NewZealand isadopting theAustralian codealongside itsownregulations. Agreement
15Tariff preferences onimports from theUnited Kingdom arelimited tomotor vehicles. Asaresult ofthe
1994 "Review ofPost-1996 Tariff Policy", theBritish Preference willbeabolished when them.f.n. tariff reaches
20percent.
16Ministry ofForeign Affairs andTrade (1993), p.85.
17Details arecontained inanOECD document jointly drafted bythetwocountries. SeeOECD document
COM/DAFFE/CLP/TD(92)100, "The Extension ofCompetition Policy toTrans-Tasman Trade andtheRemoval
ofAnti-dumping Laws", November 1992.
18GATT(1990), p.189.
19Obligations areenforceable through theProtocol 'sdispute settlement mechanism andremedies such as
countervailing measures arenotcontemplated. SeeWTO document S/WPGR/W/12, May 1996.WT/TPR/S/20 Trade Policy Review
Page 26
hasalsobeenreached ondeveloping acommon approach tofoodsafety issues, particularly attheborder.
Besides itsobvious importance forNewZealand 'straderelationship withitslargest partner, theCER
alsoserves asa"testing ground" forideas thatmaybeapplied more broadly, suchasinAPEC.
26. NewZealand grants tariff preferences toCanada, based onthe1982 Trade andEconomic
CooperationAgreement,onabroadrangeofproducts(ChapterIII(2)(ii)).OnepurposeoftheAgreement
istomaintain minimum margins ofpreference, butthesemargins maybereduced following consultation
withtheother Party. NewZealand accepts theequivalence ofCanadian foodsafety rules, andimports
sourced from Canada thatmeet Canadian rules areautomatically acceptable onfoodsafety grounds
inNewZealand.20
27. NewZealand'sbilateralrelationshipwiththeEuropeanUnion(EU)tookonparticularimportance
when theUnited Kingdom (UK), thenNewZealand 'slargest trade partner, joined theEUin1973.
Access toEUagricultural markets forNewZealand hassince beenanimportant bilateral issue; with
theimplementation oftheUruguay Round, theauthorities believe theuncertainty ofthisaccess isbeing
reduced. Among other bilateral relations, theTrade andInvestment Framework Agreement withthe
United States setstheframework forthemanagement ofbilateral tradeandinvestment issues between
thetwocountries; italsoprovides forconsultation intheevent ofatrade-related dispute, which serves
asanalternative totheWTO process. Bilateral issues inthepasthaveincluded anti-dumping and
countervailing dutycases, anddairy export subsidies. Australia, theEU,theUnited States andJapan
together formthe"four pillars" ofNewZealand 'sbilateral track.21Theapproach withthese andother
partners istousebilateral means toaddress bilateral issues making useofmultilateral provisions.
(v) Non-reciprocal trade preferences
28. NewZealand'sGeneralizedSystemofPreferences(GSP)systemdatesfrom1972andpreferential
access iscurrently extended tosome 151countries andterritories, subject tocountry graduation and
product graduation (Chapter III(2)(i)(k)). AsatJuly1995, 25countries andterritories thathadonce
beeneligible hadbeenexcluded through country graduation, including Greece, Hong Kong, Singapore
andSpain; fivehavesubsequently beenreinstated andarecurrent beneficiaries: Bahrain, Libya, Oman,
Saudi Arabia, andTrinidad andTobago. Product (tariff-line specific) graduation wasapplied tospecific
tariff lines andconcerning 13countries orterritories, totalling some 180country/tariff line
combinations.22In1994, merchandise imports from countries eligible forGSPtreatment comprised
13percentofNewZealand 'stotalmerchandise imports.
29. UndertheSouthPacificRegionalTradeandEconomicAgreement(SPARTECA),NewZealand
(along withAustralia) provides duty-free andunrestricted access toitsmarket formostproducts exported
bythethirteen Forum Island countries (Chapter III).23In1995, merchandise imports fromSPARTECA
countries comprised 0.8percentofNewZealand 'stotalmerchandise imports. New, more liberal,
rules oforigin concerning imports under SPARTECA came intoforce inJanuary 1995.
20New Zealand alsoaccepts asequivalent thefoodsafety rules oftheUnited States andtheEuropean Union.
21New Zealand hasbilateral agreements withJapan onfisheries (from 1978) andairservices (1980).
22Ministry ofCommerce (1995a).
23Cook Islands*, Fiji,Kiribati, Marshall Islands*, Micronesia, Nauru*, Niue*, Papua NewGuinea, Solomon
Islands, Tonga, Tuvalu, Vanuatu, andWestern Samoa. Allexcept those marked (*)alsoreceive GSPtreatment.New Zealand WT/TPR/S/20
Page 27
(3) Notification Obligations Under theWTO
30. NewZealand, based onitsobligations under various WTO Agreements andGATT Decisions,
hasbeenactively making notifications totheWTO. Asurvey ofthestatus ofselected NewZealand
notification obligations iscontained inTable II.1,which provides abriefdescription ofthenotification
obligation, itssource andperiodicity.24
(4) Disputes Under theGATT andWTO
31. Since itsprevious review in1990, NewZealand hasnotbeeninvolved inanyformal disputes
intheGATT orWTO. NewZealand made athird party submission tothePanel onUnited States
Restrictions onImports ofTuna in1994. InFebruary 1996 NewZealand requested tojoininthe
consultations initiated bytheUnited States withtheEuropean Union (EU)inregard totheEUCouncil
Directive Prohibiting theUseinLivestock Farming ofCertain Substances Having aHormonal Action
andrelated measures; thisrequest wasaccepted bytheEUinMarch 1996.25
24Notification obligations aretoonumerous toreport hereinfull; included arethose considered tobeof
greatest relevance forNew Zealand. Information onother New Zealand notification obligations maybefound
inWTO document G/NOP/W/14.
25WTO documents WT/DS26/2 andWT/DS26/5.WT/TPR/S/20 Trade Policy Review
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Table II.1
Status ofselected notification requirements totheWTO, asatMay 1996
WTO
AgreementDescription of
requirementPeriodicityDocument No.ofmost
recent notif. (ifnone,
dateofscheduled
notification)Comments
Agriculture
(Art. 18)Info. ontariff quotas
(TQs)Once, thenchanges G/AG/N/NZL/1,
Feb.1995NZhasnotimplemented TQsfor
goods inSection 1-BofitsSchedule
because theirapplied dutyrateiszero.
Agriculture
(Art. 5)Summary ofspecial
safeguards takenAnnual, endofMY G/AG/N/NZL/4,
March 1996NoSpecial Agricultural Safeguards
were invoked in1995.
Agriculture
(Art. 18)Aggregate Measure of
SupportAnnual, endofMY G/AG/N/NZL/2,
Sep.1995Asfrom July1995, nodomestic
support progs. thataresubject to
reduction commits havebeenineffect.
Agriculture
(Art. 18)Export subsidies
(outlays, quantities)Annual, endofMY G/AG/N/NZL/3,
Sep.1995Asfrom July1995, noexport subsidy
progs. thataresubject toreduction
commits. havebeenineffect
Subsidies
(Art. 25)Specific subsidies Annual G/SCM/N/3/NZL,
July1995NZhasnosuchsubsidies.
Subsidies
(Art. 32)Laws &regs. Once byMarch
1995, thenchangesG/SCM/N/1/NZL/2,
Aug. 1995
Subsidies
(Art. 25)Countervailing duty
actions takenEvery sixmonths G/SCM/N/12/NZL,
Feb.1996Asatend-1995 oneundertaking wasin
force.
Anti-dumping
(Art. 18)Laws &regs. Once byMarch
1995, thenchangesG/ADP/N/1/NZL/2,
Aug. 1995
Anti-dumping
(Art. 16)Anti-dumping actions
takenEvery sixmonths G/ADP/N/9/NZL,
Feb.1996Asatend-1995, 25definitive duties
were inforce.
Safeguards
(Art. 12)Laws &regs. Once byMarch
1995, thenchangesG/SG/N/1/NZL/1,
April 1995
TBT
(Art. 15)Laws, regs. &admin.
arrangementsOnce, upon EIF
TBT
(Art. 2)Technical regulations Adhoc G/TBT/Notif. 96.128 Onenotification in1995 andone
notification todatein1996.
GATT 1994 State trading Annual G/STR/N/1/NZL,
Aug. 1995Fiveorganizations withexport
marketing powers andthree with
export licensing powers
GATT 1994
(Art. XXIV)Customs union or
free-trade areaAdhoc GATT L/6460,
Jan.1989Notification oftheCER withAustralia
GATT CPs
(BISD
32S/92-93)Non-tariff measures Every twoyears,
beginning
January 1996G/MA/NTM/QR/1,
March 1996Fullnotification available inSecretariat
GATT CPs
(BISD
34S/66)Integrated database Annual Relevant information
provided aspartofthe
TPRin1996
GATS
(Art. III)Changes tocertain
lawsandregs.Annual (January 1996)
GATS
(Art. V)Economic integration
agreementsOnce, andupon
changesReferenced inS/C/M/T,
Dec. 1995Services protocol oftheAustralia-NZ
CER Agreement.
GATS
(Art. XXVIII)Treatment of
permanent residentsOnce S/C/N/0002, Jan.1995 Gives substantially thesame treatment
toresidents astonationals.
TRIPS
(Art. 63.2)Laws andregulations Notspecified IP/N/1/NZL/1,
Jan.1996
Sources: WTO documents G/NOP/W/2/Rev.1, G/NOP/W/5, andG/NOP/W/14 andtheWTO Agreements.
EIF-entry intoforce oftheWTO Agreement (January 1995); MY-marketing year; NZ-NewZealand.