New Zealand WT/TPR/S/20
Page 29
III. TRADE POLICIES AND PRACTICES BYMEASURE
(1) Overview
1. Since its1990Trade Policy Review, NewZealand hascontinued tovigorously implement the
market-oriented reforms begun inthemid-1980s. These haveincluded thefurther privatization of
State-owned enterprises, theelimination ofimport licensing, andsignificant reductions inimport
tariffs. Intheopinion oftheGATT Secretariat, in1990 NewZealand was"still aconsiderable
distance from being anopen economy."1Today, tariffs arevirtually theonlyremaining import
protective measure. Tariff rates aremoderate anddeclining. Export restrictions arefew, and
domestic reforms haveincreased theeconomy 'sflexibility andability toexploit trade opportunities.
2. Abrieflookatitspre-reform tradepolicy highlights theprogress thatNewZealand hasmade.
Previously, inasystem fraught withstructural rigidities, including inflexible labour laws, resources
were attracted intocertain activities purely because ofthehigh returns resulting from import
protection. Notonlydidthismean thatlabour andcapital werenotengaged intheirmostproductive
activities, aswould occur ifproduction werealigned withacountry 'scomparative advantage, butin
extreme cases resources were engaged innegative value-added activities, activities where theinput
costs alone (excluding capital andlabour) exceeded theprice atwhich thefinished good could be
purchased ontheworld market.2Trade policy reform, bycorrecting suchserious distortions, has
played aleading rôleinthetransition thathasbrought theNewZealand economy from among the
mostregulated andprotectionist intheworld intheearly 1980s, outside thecentrally-planned block,
tooneoftheworld 'smost dynamic andopeneconomies.
3. Trade policy reforms deserve much ofthecredit forNewZealand 'seconomic health. While
there isstillroom forimprovement, theremaining trade-related distortions result principally froma
certain unevenness across sectors intheimport tariff. TheGovernment, withaverycredible record
oftariff reduction andthesupport ofsome keyindustry andagricultural groups, hasalready
announced itsplantoremedy thisunevenness: itwillsubstantially reduce tariffs across theboard
from 1997 to2000 andintends subsequently toeliminate tariffs, withparticulars tobedetermined
inareview tobeundertaken in1998.3
1GATT (1990), p.240.
2Abusinessman hasdescribed thetelevision factory thatheestablished inNew Zealand prior tothe
economic reforms (Massey, 1995, pp.22-23). Hecontracted withaJapanese firmtosupply television parts
forassembly inNew Zealand. Because thescale oftheNew Zealand operation wasrelatively small, the
Japanese firm'scheapest means ofsupply wastodisassemble itsfinished televisions, package theparts, andship
them toNew Zealand. Tocover disassembly andrelated costs, theJapanese firmcharged 110percentofthe
price itcharged forfinished television sets. Afactory wasbuilt toreassemble thetelevisions andthe
New Zealand businessman, having alsotopaycapital, labour, electricity, andother costs, soldthetelevisions
domestically fordouble theworld price. Thiswaspossible onlybecause ofsevere import restrictions.
3Incomments during the1994 "Review ofpost-1996 Tariff Policy" (Ministry ofCommerce, 1994a) some
groups called forthemore rapid elimination oftariffs. TheFederated Farmers ofNew Zealand, amajor farm
group, stated that"Alltariffs should beeliminated completely by1July1997" andthat"any relief provided
toindustries facing substantial protection lossshould betemporary andfully transparent." TheNew Zealand
Business Roundtable proposed thereduction ofmost tariffs tozerooraminimal level by2000, andthatifundue
adjustment problems were created, anyassistance given should "beinanexplicit budgetary form andlimited
intime andamount." TheImporters Institute stated thattariffs should beeliminated by2000, without
exception. TheNew Zealand Chambers ofCommerce andIndustry noted the"virtually unanimous agreement
bybusiness organizations thattariffs should beeliminated bytheyear2000" andthatmost ofitsmembers
(continued...)WT/TPR/S/20 Trade Policy Review
Page 30
(2) Measures Directly Affecting Imports
4. Tariffs areNewZealand 'smain trade policy instrument, withallother methods ofborder
protection virtually eliminated since themid-tolate-1980s. Thisreliance ontariffs isanimportant,
positive aspect ofNewZealand 'simport régime: notonlyaretariffs more transparent thanother
types ofimport protection, buttheyarealsoquantifiable andthusmore amenable toreduction and
eventual elimination. NewZealand hasmoved, inatransparent andconsistent manner, to
considerably lower tariff rates, andfurther reductions arescheduled.
5. Them.f.n. tariff average ismoderate, ataround 6percent. However, ratesinsome sectors,
including textiles andclothing, footwear andmotor vehicles, remain relatively high, despite
substantial reductions4,while many tariff lines aredutyfree, andtariffs have been eliminated on
thousands ofother products thatarenotproduced domestically.
6. NewZealand intends tobring further uniformity toitstariff byimplementing scheduled
unilateral tariff reduction programmes. Such pre-announced programmes began withtheJuly1988-
July1992 programme, announced inDecember 1987, which halved rates onmost manufactured
products. Thiswasfollowed bytheJuly1993-July 1996programme, announced inSeptember 1991,
which ledtotariff reductions ofsome onethird onmost products; thisplancontained special
provisions forcertain sensitive products: textiles, apparel, tyres, footwear, andmotor vehicles and
parts. These products hadrelatively highaverage tariff rates in1987, including 40percentfor
carpets, 65percentforsome apparel, 40percentfortyres, 48percentforfootwear, and55percent
forautomobiles. With thefinalinstalment applied inJuly1996, tariffs ranged from0to15percent
formost categories ofgoods, butwithtariffs of20to30percentformany ofthese sensitive
products.
7. Thetariff reduction programme announced bytheGovernment inDecember 1994 and
applying from July1997 toJuly2000 willfurther reduce rates andrationalize thetariff structure;
byJuly2000, allrates willbeeither dutyfreeorat15,10,or5percent. AsatJuly1996,
49percentoftariff linesaredutyfree. Alltariff ratesatorbelow 5percent(3percentoftariff
lines) willbecome dutyfreebyJuly1998. Rates above 5andupto15percent(34percentoftariff
lines) willbereduced to5percentbyJuly2000. Rates above 15andupto20percent(1percent
oftariff lines) willbecutto10percentby2000.5Finally, ratesabove 20percent(6percentof
lines) willbecutto15percentby2000.6Alternative-specific rates, covering 3.5percentoftariff
linesandmostly onapparel andalcohol, willbereduced inlinewithadvalorem rates.7
8. TheGovernment hasindicated itsintention togradually eliminate tariffs andhascommitted
toareview oftariff policy in1998 inwhich itwill"determine howtomove toward azeroend-point
3(...continued)
believed there should benoexceptions. Comments favouring aslower approach were alsoreceived. However,
thecomments noted hereillustrate substantial support fortariff elimination.
4Effective rates ofassistance forNew Zealand manufacturing industries in1993 were estimated tobe
particularly highfortextiles, apparel andfootwear, andtransport equipment; thisstudy neglected theeffects
oftariff concessions (Ministry ofCommerce, 1994a).
5Products inthisgroup aretyres, after-market motor vehicle components, andsome textiles.
6Included arecarpets, apparel, footwear, motor vehicles andmotor vehicle components.
7Alternative-specific rates onused motor vehicles aresubject toseparate review.New Zealand WT/TPR/S/20
Page 31
under aunilateral domestic tariff reduction programme."8TheGovernment has,intheframework
ofAPEC, committed totheelimination oftariffs onanm.f.n. basis by2010.
(i) Tariffs andother price-based policies
9. NewZealand grants atleastm.f.n. treatment toalltrading partners. TheNewZealand tariff
iscomposed ofthestandard tariff, which setsouttheclassification ofgoods andtheirsubstantive rates
ofduty(Part I),andtariff concessions (Part II).
(a) General features
10. Since 1988, NewZealand 'stariff classification hasbeenbased ontheHarmonized System
(HS).9The1996/97 tariff consists of7,271 tariff linesattheeight-digit level. AsatJuly1996 the
tariff structure wascharacterized byasimple average m.f.n. rateof6.2percent, withastandard
deviation of7.9percent(Table III.1).10Noadvalorem tariff exceeds 30percent. Non-ad valorem
tariffs arelimited to303tariff lineswithspecific oralternative-specific rates; novariable import
levies areused. Because ofpreferential agreements, unilaterally extended preferences, andtariff
concessions (section (2)(i)(d)), theauthorities estimate thatsome 90percentofimports, byvalue,
enter NewZealand dutyfree.
11. Tariffs inNewZealand varymoderately across HSChapters. While m.f.n. tariffs arezero
fornearly allproducts insome categories, including liveanimals, some animal products, silkcotton,
andman-made staple fibres11;theyaverage over20percentforcertain textiles andclothing products
(Table III.2).12This variability willbesubstantially reduced bytheunilateral tariff reduction
programme.
12. Duty-free treatment isgranted toallimports fromAustralia under ANZCERTA andfromthe
Pacific Island Forum Countries under SPARTECA (section (k)),along withnearly allproducts from
least-developed countries. Under aCanada/New Zealand agreement ontrade andeconomic co-
operation, imports from Canada faceimport duties thatin1995/96 averaged some 4.4percentage
points lessthanm.f.n. rates, while duties onimports from developing countries averaged some
1.3percentage points lessthanm.f.n. rates.
8TheMinistry ofCommere (Ministry ofCommerce, 1994a) hasestimated thattheelimination ofremaining
import tariffs would provide asustained increase inNew Zealand 'seconomic welfare equivalent tosome 1.4per
centofGDP.
9New Zealand implemented theHSin1988 andthe1996 revision oftheHSon1January 1996.
10Tariffs were most recently reduced on1July1996.
11These include HSChapters 01,05,50,52,53,75and81.
12HSChapters 57,61and62.WT/TPR/S/20 Trade Policy Review
Page 32
Table III.1
Summary ofNewZealand tariffs andtariff preferences, 1995-2000
(Percent)
Preferential tariffs, 1995-96a
M.f.n.
1995/96aM.f.n.
1996/97bM.f.n.
2000/01cAustralia Canada DC LDC SPARTECA
Simple average 7.1 6.2 3.0 0.0 2.7 5.8 1.1 0.0
Simple average (six-digit) 6.3 5.5 ... 0.0 2.5 5.1 1.1 0.0
Weighted average (six-digit) 7.6 5.7 ... 0.0 1.6 ... ... 0.0
Datafor1996/97:
No.oftariff linesattheeight-digit level: 7,271
No.oftariff lineswithnon-ad valorem tariffs: 303Standard deviation ofm.f.n. tariffsd:7.9percent
Range ofm.f.n. tariffs: 0to30percent
... Notavailable.
a Rates ineffect July1995 -June1996.
b Rates ineffect July1996 -June1997.
c Rates programmed tobeineffect July2000 -June2001.
d Thestandard deviation oftheratesprogrammed for2000/01 is4.1percent.
DC-Developing Countries; LDC -Least Developed Countries.
Note: Tariff averages consider onlythose tariff lineswithadvalorem rates. "Simple average" indicates thatasimple average ofall
eight-digit tariff lineswastaken. Thismaynotbeappropriate forcomparison withother countries because theHarmonized
System isunique uptosix-digits. "Simple average (six-digit)" indicates thateight-digit tariff lineswere firstaveraged within
eachsix-digit category, thenasimple average ofallsix-digit categories wastaken. Thisismore appropriate forcross-country
comparisons andforcomparison totheimport-weighted averages. "Weighted averages (six-digit)" indicates thateight-digit tariff
lineswere firstaveraged within eachsix-digit category (tomatch import value data, which were available onlytothesix-digit
level), thenanimport-weighted average ofallsix-digit categories wastaken. Weighted averages arebased on1995import values.
Source: WTO Secretariat calculations, based ondataprovided bytheNewZealand Government.
(b) Tariff escalation
13. NewZealand 'stariffs arehigher onfullyprocessed goods thanonsemi-processed goods or
primary products (Table III.3). Thesimple average tariff onfully processed goods, acategory
covering 4,147 tariff lines, is8.4percent. Imports ofsemi-processed products faceanaverage
m.f.n. tariff of3.6percent. Primary products havethelowest tariffs ofthethree categories, with
anaverage rateof1.2percent. Theses ratesaretobeconsiderably reduced under NewZealand 's
unilateral tariff reforms. Thus bytheyear2000, average rates onprimary, semi-processed and
finished products willbe0.4,1.6and4.0percent, respectively.New Zealand WT/TPR/S/20
Page 33
Table III.2
Simple andweighted average m.f.n. andpreferential tariffs byHSChapter, 1995-1996a
(Percent)
HSNo.of
linesDescription1996/97
M.f.n.
simple1995/96
M.f.n. Canada DC
Simple Wtd. Simple Wtd. Simple
01 17Liveanimals 0.0 0.0 0.0 0.0 0.0 0.0
02 53Meat andedible meat offal 3.9 4.7 0.0 1.3 0.0 3.6
03 87Fish, crustaceans, molluscs, other aquatic invertebrates 0.3 0.4 0.0 0.0 0.0 0.3
04 27Dairy prods.; birds'eggs; nat.honey; edible prods. 3.6 4.2 0.1 0.7 0.2 3.4
05 17Products ofanimal origin, n.e.s. orincluded 0.0 0.0 0.0 0.0 0.0 0.0
06 12Livetrees&other plants; bulbs; roots; cutflowers 0.9 1.0 0.0 0.0 0.0 0.0
07 56Edible vegetables andcertain roots andtubers 4.3 5.2 2.8 0.1 0.0 1.5
08 55Edible fruitandnuts; peelofcitrus fruitormelons 1.0 1.1 0.0 0.0 0.0 0.8
09 32Coffee, tea,maté andspices 3.5 4.1 6.6 0.0 0.0 3.3
10 16Cereals 0.6 0.8 3.7 0.0 0.0 0.6
11 34Millind.prods; malt; starches; inulin; wheat gluten 6.3 7.5 0.1 2.4 3.0 6.1
12 44Oilseed, oleagi fruit; misc. grain, seed, fruit, etc. 0.2 0.3 0.0 0.1 0.0 0.2
13 12Lac; gums, resins andother vegetable saps&extracts 0.0 0.0 0.0 0.0 0.0 0.0
14 10Vegetable plaiting materials; vegetable prods., n.e.s. 0.0 0.0 n.a 0.0 0.0 0.0
15 46Animal/veg. fats&oils&theircleavage prods.; etc. 1.5 1.8 0.5 0.1 0.2 1.2
16 26Preps. ofmeat, fishorcrustaceans, molluscs, etc. 4.9 5.8 2.4 0.9 0.2 4.5
17 16Sugar andsugar confectionery 2.5 3.0 11.1 1.1 5.4 1.6
18 11Cocoa andcocoa preparations 7.3 8.7 12.0 4.1 9.0 6.9
19 17Preps. cereal, flour, starch/milk; pastrycooks 'prods. 9.4 11.5 9.0 5.7 5.7 9.2
20 44Preps. ofvegetable, fruit, nutsorother parts ofplants 7.7 9.2 7.5 1.9 0.1 5.9
21 16Miscellaneous edible preparations 8.1 9.7 2.8 3.0 3.3 7.1
22 22Beverages, spirits andvinegar 7.4 7.7 8.8 1.6 7.1 4.1
23 25Food ind.residues &waste, preps. animal fodder 2.2 2.6 11.9 0.2 1.8 1.8
24 8Tobacco andmanufactured tobacco substitutes 4.2 5.0 n.a. 1.6 n.a. 2.6
25 74Salt,sulphur, earth, stone, plastng. mats, lime, cement 1.6 1.9 1.7 0.0 0.0 0.1
26 34Ores, slagandash 0.1 0.1 n.a. 0.0 n.a. 0.0
27 37Mineral fuels, oils&prods. oftheirdistillation, etc. 0.6 0.7 2.4 0.1 0.8 0.3
28 187Inorg chems, compds precmets, radioactive elements 0.2 0.2 0.0 0.0 0.0 0.0
29 317Organic chemicals 0.1 0.2 0.0 0.1 0.0 0.1
30 29Pharmaceutical products 1.8 2.9 3.4 0.2 0.1 1.8
31 26Fertilizers 0.2 0.2 0.0 0.0 0.0 0.0
32 46Tanning/dyeing extrs., tannin &derivatives, pigments 1.6 2.0 5.0 0.2 0.0 1.4
33 35Ess.oils&resinoids, perfumes, cosmetic/toilet preps 6.0 7.2 12.9 0.1 0.1 5.7
34 23Soap, organic surface-active agents, washing preps. 7.4 9.1 10.8 4.4 7.4 7.4
35 15Albuminoidal substncs; mod. starches; glues; enzymes 3.8 4.4 4.8 0.2 0.0 3.5
36 8Explosives, pyrotechnic prods., matches, pyrop. alloy 2.9 3.4 0.0 1.5 n.a. 2.0
37 36Photographic orcinematographic goods 1.2 1.4 4.6 0.0 0.0 0.6
38 63Miscellaneous chemical products 3.0 3.7 6.2 0.5 3.9 1.4
39 126Plastics andarticles thereof 5.7 6.7 7.0 3.2 1.5 5.0
40 72Rubber andarticles thereof 6.9 9.1 12.4 3.3 5.0 5.3
41 34Rawhides andskins (other thanfurskins) andleather 1.9 2.3 10.5 0.9 3.0 1.2
42 22Articles ofleather; saddlery/harness; travel goods, etc. 10.1 11.8 12.5 7.6 9.3 8.9
43 18Furskins andartificial fur;manufactures thereof 4.2 5.0 10.5 0.8 n.a. 3.8
44 68Wood andarticles ofwood; wood charcoal 5.6 6.9 7.3 1.1 1.2 4.8
45 7Cork andarticles ofcork 1.0 1.2 8.3 0.1 0.9 1.0
46 6Manfs. ofstraw, esparto/other plaiting materials, etc. 1.9 2.3 8.0 1.3 n.a. 1.8
47 20Pulpofwood/fibrous cellulosic materials; waste, etc. 1.5 1.8 n.a. 0.0 n.a. 0.0
48 109Paper/paperboard; arts.paper pulp, paper/paperboard 9.5 11.5 11.6 5.3 6.6 8.9
49 19Printed books, newspapers, pictures andother prods. 3.5 4.2 5.2 1.8 1.2 3.4
50 10Silk 0.0 0.0 n.a. 0.0 n.a. 0.0
Table III.2 (cont'd)WT/TPR/S/20 Trade Policy Review
Page 34
HSNo.of
linesDescription1996/97
M.f.n.
simple1995/96
M.f.n. Canada DC
Simple Wtd. Simple Wtd. Simple
51 36Wool, fine/coarse animal hair,horsehair yarn&fabric 5.7 6.0 18.4 3.2 n.a. 4.8
52 131Cotton 0.0 0.0 0.0 0.0 0.0 0.0
53 31Other veg.textile fibres, paper yarn&woven fabric 0.0 0.0 n.a. 0.0 n.a. 0.0
54 66Man-made filaments 2.7 2.8 1.3 0.6 1.3 2.2
55 115Man-made staple fibres 3.2 3.4 0.0 1.5 1.3 2.7
56 34Wadding, felt&non-woven, yarn, twine, cordage 9.1 10.8 10.9 3.6 4.4 7.9
57 23Carpets andother textile floor coverings 22.0 24.1 23.7 21.1 20.1 19.2
58 41Spec. woven fabs., tufted textile fabs, lace, tapestries 4.6 5.3 8.5 2.9 0.3 4.1
59 25Impregnated, coated, cover/laminated textile fabric 3.8 4.9 6.0 1.4 0.1 3.4
60 18Knitted orcrocheted fabrics 12.0 12.6 11.0 8.0 8.7 10.0
61 113Art.ofapparel &clothing accs, knitted orcrocheted 28.7 31.1 31.8 17.7 19.4 30.9
62 118Art.ofapparel &clothing accs, notknitted/crocheted 28.4 30.9 30.4 15.6 15.3 30.8
63 59Other made-up textile articles, sets,worn clothing 10.7 12.2 8.1 4.3 0.8 9.0
64 29Footwear, gaiters andthelike,parts ofsucharticles 16.4 18.5 20.1 1.3 1.4 18.1
65 11Headgear andparts thereof 14.7 15.0 18.6 10.9 14.2 12.0
66 7Umbrellas, walking sticks, seatsticks, whips, etc. 6.7 7.7 13.4 4.6 3.0 6.0
67 8Preps feathers &down, artif. flowers, artshuman hair 7.8 9.5 n.a. 6.6 0.0 6.9
68 52Arts. stone, plaster, cement, asbestos, mica/sim. mats. 5.7 6.6 7.0 1.3 0.1 4.5
69 29Ceramic products 8.8 10.5 12.5 0.9 0.0 8.7
70 66Glass andglassware 3.2 3.7 3.8 0.5 1.7 1.6
71 52Natural/cultured pearls, prec. stones &metals, coins 2.1 2.5 8.4 1.9 63.0 2.0
72 171Ironandsteel 2.7 3.1 6.4 0.2 0.3 0.7
73 122Articles ofironorsteel 7.6 9.3 9.8 3.1 2.5 6.9
74 59Copper andarticles thereof 4.2 4.9 9.1 1.6 0.7 3.5
75 17Nickel andarticles thereof 0.0 0.0 n.a. 0.0 0.0 0.0
76 36Aluminium andarticles thereof 7.8 9.5 11.4 2.6 0.4 7.5
78 10Lead andarticles thereof 2.7 3.2 n.a. 0.8 0.0 2.6
79 10Zincandarticles thereof 1.0 1.3 0.0 0.8 0.0 1.0
80 8Tinandarticles thereof 1.1 1.3 n.a. 0.0 0.0 0.0
81 36Other basemetals 0.0 0.0 n.a. 0.0 0.0 0.0
82 66Tools, implements andcutlery ofbasemetal, etc. 5.3 6.6 6.3 3.5 5.0 5.2
83 36Miscellaneous articles ofbasemetal 8.4 10.1 11.0 3.3 3.3 7.5
84 509Nuclear reactors, boilers, mach./mech. appl., parts 6.6 7.9 6.4 3.7 3.7 5.6
85 289Elec. mach., equipment, parts thereof, sound recorder 6.5 7.6 9.1 3.4 4.4 2.8
86 24Rail/tramway locomotives, rolling-stock, parts thereof 7.8 9.5 n.a. 0.1 0.0 7.1
87 76Vehicles o/trail/tramway rolling-stock, parts &accs 8.6 9.6 10.9 2.0 0.8 1.4
88 15Aircraft, spacecraft, andparts thereof 0.0 0.0 0.0 0.0 0.0 0.0
89 17Ships, boats andfloating structures 6.8 8.2 13.8 2.1 1.7 3.6
90 154Optical, photo., cine., measuring, checking, precision 3.2 3.8 6.5 0.6 2.0 1.4
91 52Clocks andwatches andparts thereof 0.8 1.0 1.5 0.2 0.2 0.6
92 23Musical instruments; parts andaccess ofsucharticles 0.0 0.0 0.0 0.0 0.0 0.0
93 17Arms andammunition, parts andaccessories thereof 2.6 3.2 0.9 1.5 4.4 1.8
94 37Furniture, bedding, mattress, mattr.support, cushion 10.7 12.7 13.3 3.8 3.4 9.8
95 43Toys, games &sports requisites, parts &accessories 10.1 12.8 12.2 7.3 8.0 9.6
96 50Miscellaneous manufactured articles 7.8 9.7 11.6 4.6 4.4 7.3
97 7Works ofart,collectors pieces andantiques 0.0 0.0 0.0 0.0 0.0 0.0
n.a. Notapplicable.
a Weighted averages arebased on1995 import data. Them.f.n. weighted average isbased onimports fromm.f.n. sources only.
CAN -Canada; DC-Developing Countries.
Note: Allmerchandise imports fromAustralia andSPARTECA countries areduty-free. Merchanidse imports fromleast-developped
countries aredutyfree,except apparel andfootwear. Tariff averages arefrom 6-digit data, asdescribed inTable III.1.
Source: WTO Secretariat calculations, based ondataprovided bytheNewZealand authorities.New Zealand WT/TPR/S/20
Page 35
Table III.3
Simple average m.f.n. tariffs bystage ofprocessing, 1996aand2000b
Stage ofprocessing
Primary products Semi-processed products Fully-processed products
Number oflines(eight-digit) 699 2,119 4,147
Simple average m.f.n. tariff
(percent)1996
20001.2
0.43.5
1.68.4
4.0
Standard deviation ofm.f.n. tariffs 1996
20002.8
1.45.4
2.78.7
4.6
a Rates ineffect July1996 -June1997.
b Rates programmed tobeineffect, July2000 -June2001.
Note: Tariff averages consider onlythose tariff lineswithadvalorem rates.
Source: WTO Secretariat calculations, based ondataprovided bytheNewZealand authorities.
(c) Tariff bindings
14. NewZealand increased thecoverage ofitstariffbindings from55percenttoover99percent
oflines asaresult oftheUruguay Round. Under theAgreement onAgriculture, alltariffs on
agricultural products havebeenbound. Theonlyremaining unbound tariffs areontenlinespertaining
tousedclothing, usedfootwear andusedmotor vehicles.13In1991, imports under these tariff lines
accounted forsome 3.6percentoftotalmerchandise import value.14Imports ofusedmotor vehicles
under thetariff linesthatarenotbound areassessed alternative-specific rates ofduty: bothanad
valorem andaspecific rateexist, andthedutypaidisthehigher ofthetwo. Theadvalorem
equivalent dutyonlower-valued products isthushigher thanthatonhigher-valued products. While
bound tariffratesarebeing substantially reduced asaresult oftheUruguay Round, applied tariffrates
arefalling more rapidly because ofunilateral tariff reductions. Many applied ratesarealready well
below thefinalUruguay Round bound tariff rates(Table III.4).15NewZealand participated inthree
oftheso-called "zero-for-zero" sectoral tariff arrangements intheUruguay Round: beer; pulp,
paper andprinted material; andpharmaceuticals. New Zealand alsomade significant binding
reductions inchemicals tariffs.16
15. Reductions tobound m.f.n. tariff rates, asagreed intheUruguay Round, willcut
NewZealand 'saverage bound m.f.n. ratetosome 12.0percentbytheendofitsimplementation
13These products form portions ofHS6309.00, 8703.21, 8703.22, 8703.23, 8703.24, 8703.31, 9807.32,
8703.33, and8703.90.
14WTO Integrated Database (IDB) CD-ROM.
15Available data from theWTO 'sIntegrated Data Base (IDB) indicate thatsome 43percent of
New Zealand 'sUruguay Round final bound rates areabove the1991 applied rates.
16USTR (1996a).WT/TPR/S/20 Trade Policy Review
Page 36
period in2004. Theaverage bound ratewillbe7.1percentforagricultural products and
12.8percentforother products. Theimplementation period formost products endsin1999, the
exceptions being pulp, paper andprinted material inHSChapters 47,48and49.Bycontrast,
NewZealand 'sunilateral tariff reduction programme isscheduled tohave reduced theaverage,
applied m.f.n. tariff tosome 3.0percentbyJuly2000.17
(d) Duty concessions, drawbacks andexemptions
16. NewZealand hasseveral duty concession, drawback andexemption provisions. Tariff
concessions provide fortheremission ofduties forpurposes ofindustry assistance, tradepolicy, social
orhumanitarian reasons. Most important among these areReference Number 99(Ref. No.99)
general concessions, pertaining toimports ofproducts forwhich nosuitable domestically produced
alternative exists.18Some 40percentofNewZealand merchandise imports enter dutyfreeunder
these concessions. Imports under allconcessions arenonetheless subject totheGoods andServices
Tax(section 5(v)).
17. Applications forgeneral concessions under Ref.No.99arenormally made forproducts
defined more narrowly thanunder thetariff classification.19Some 23,000 general concessions were
ineffect asofApril 1996 andtheauthorities estimate thatabout 15,000 ofthese wereinactive use.20
General concessions aregranted following anapplication from animporter orother party tothe
Ministry ofCommerce andpayment ofafeetocover administrative costs ($252 asatApril 1996);
concessions arevalid from thefirstdayofthemonth inwhich theapplication isreceived.
Applications areadvertised, andNewZealand producers ofasuitable alternative product withatleast
25percentdomestic content mayobject tothegranting ofaconcession. Once approved by
administrative decision oftheMinistry, theconcession isautomatically extended toother importers
andisapplied onanon-discriminatory basis.21Thelistofconcessions isupdated andpublished every
twomonths.
17This figure isbased ontariffs attheeight-digit level andiscomparable tothefigure applicable through
June 1996 of7.1percentinTable III.1. Thesimple average for2000 atthesix-digit level, calculated as
explained inthenotetoTable III.1, is2.6percent.
18Section 8oftheTariff Act1988. Information onthese concessions ismade available bytheMinistry of
Commerce initspamphlet entitled "Reference 99Tariff Concessions: AGuide totheSystem." Suitable
alternative goods aredefined asthose that"perform thesame orasimilar function totheimported goods for
which aconcession issought" andarelimited tocases where theimported good would compete directly inthe
same market withadomestically produced suitable alternative.
19According totheauthorities, analternative method -adding further detail tothetariff classification -was
considered, butwasrejected ashaving higher administrative costs.
20Inputs andconsumer goods arecovered roughly equally byconcessions.
21Decisions onconcession applications andrequests forrevocation maybeappealed totheMinistry of
Commerce.New Zealand WT/TPR/S/20
Page 37
Table III.4
Uruguay Round tariff bindings andprogrammed tariff rates for2000
(Percent)
HS Description Final bindings Programmed rates
July2000a
01 Liveanimals 0.0 0.0
02 Meat andedible meat offal 8.4 2.4
03 Fish, crustaceans, molluscs, other aquatic invertebrates 1.0 0.3
04 Dairy prods.; birds'eggs; nat.honey; edible prods. 8.8 2.1
05 Products ofanimal origin, n.e.s. orincluded 0.2 0.0
06 Livetrees&other plants; bulbs; roots; cutflowers 2.0 1.0
07 Edible vegetables andcertain roots andtubers 7.0 1.7
08 Edible fruitandnuts; peelofcitrus fruitormelons 2.8 0.7
09 Coffee, tea,maté andspices 5.2 2.1
10 Cereals 0.8 0.0
11 Millind.prods; malt; starches; inulin; wheat gluten 11.4 3.4
12 Oilseed, oleagi fruit; misc. grain, seed, fruit, etc. 1.2 0.2
13 Lac; gums, resins andother vegetable saps&extracts 0.8 0.0
14 Vegetable plaiting materials; vegetable prods., n.e.s. 0.0 0.0
15 Animal/veg. fats&oils&theircleavage prods.; etc. 4.5 1.1
16 Preps. ofmeat, fishorcrustaceans, molluscs, etc. 8.0 2.7
17 Sugar andsugar confectionery 4.3 1.8
18 Cocoa andcocoa preparations 12.0 3.6
19 Preps. cereal, flour, starch/milk; pastrycooks 'prods. 16.4 4.6
20 Preps. ofvegetable, fruit, nutsorother parts ofplants 15.7 4.3
21 Miscellaneous edible preparations 14.0 2.6
22 Beverages, spirits andvinegar 10.6 2.1
23 Food ind.residues &waste, preps. animal fodder 4.8 1.3
24 Tobacco andmanufactured tobacco substitutes 9.6 2.4
25 Salt,sulphur, earth, stone, plastng. mats, lime, cement 2.5 0.1
26 Ores, slagandash 0.3 0.0
27 Mineral fuels, oils&prods. oftheirdistillation, etc. 3.3 0.6
28 Inorg chems, compds precmets, radioactive elements 0.4 0.1
29 Organic chemicals 0.5 0.1
30 Pharmaceutical products 0.0 0.0
31 Fertilizers 0.4 0.0
32 Tanning/dyeing extrs., tannin &derivatives, pigments 4.8 1.3
33 Ess.oils&resinoids, perfumes, cosmetic/toilet preps 14.4 2.4
34 Soap, organic surface-active agents, washing preps. 16.1 3.5
35 Albuminoidal substncs; mod. starches; glues; enzymes 7.9 2.4
36 Explosives, pyrotechnic prods., matches, pyrop. alloy 9.5 1.9
37 Photographic orcinematographic goods 3.5 0.9
38 Miscellaneous chemical products 6.4 1.2
39 Plastics andarticles thereof 16.4 3.3
40 Rubber andarticles thereof 12.7 4.0
41 Rawhides andskins (other thanfurskins) andleather 6.3 1.1
42 Articles ofleather; saddlery/harness; travel goods, etc. 18.4 5.2
43 Furskins andartificial fur;manufactures thereof 12.2 3.0
44 Wood andarticles ofwood; wood charcoal 8.5 3.1
45 Cork andarticles ofcork 7.0 1.1
46 Manfs. ofstraw, esparto/other plaiting materials, etc. 6.8 1.7
47 Pulpofwood/fibrous cellulosic materials; waste, etc. 0.0 0.0
48 Paper/paperboard; arts.paper pulp, paper/paperboard 0.0 0.0
49 Printed books, newspapers, pictures andother prods. 0.0 0.0
50 Silk 0.0 0.0
Table III.4 (cont'd)WT/TPR/S/20 Trade Policy Review
Page 38
HS Description Final bindings Programmed rates
July2000a
51 Wool, fine/coarse animal hair,horsehair yarn&fabric 14.4 3.1
52 Cotton 1.9 0.0
53 Other veg.textile fibres, paper yarn&woven fabric 0.0 0.0
54 Man-made filaments 6.4 2.2
55 Man-made staple fibres 7.7 1.4
56 Wadding, felt&non-woven, yarn, twine, cordage 19.8 4.4
57 Carpets andother textile floor coverings 35.9 14.0
58 Spec. woven fabs., tufted textile fabs, lace, tapestries 12.5 2.4
59 Impregnated, coated, cover/laminated textile fabric 12.0 1.9
60 Knitted orcrocheted fabrics 21.2 6.2
61 Art.ofapparel &clothing accs, knitted orcrocheted 49.2 13.8
62 Art.ofapparel &clothing accs, notknitted/crocheted 37.3 14.2
63 Other made-up textile articles, sets,worn clothing 20.2 5.3
64 Footwear, gaiters andthelike,parts ofsucharticles 32.4 9.2
65 Headgear andparts thereof 26.8 9.6
66 Umbrellas, walking sticks, seatsticks, whips, etc. 11.4 2.5
67 Preps feathers &down, artif. flowers, artshuman hair 19.1 3.6
68 Arts. stone, plaster, cement, asbestos, mica/sim. mats. 10.2 2.7
69 Ceramic products 17.2 4.0
70 Glass andglassware 11.5 2.2
71 Natural/cultured pearls, prec. stones &metals, coins 7.1 1.2
72 Ironandsteel 10.1 2.3
73 Articles ofironorsteel 16.6 3.5
74 Copper andarticles thereof 10.2 2.4
75 Nickel andarticles thereof 0.0 0.0
76 Aluminium andarticles thereof 16.5 3.6
78 Lead andarticles thereof 6.5 1.8
79 Zincandarticles thereof 4.7 0.5
80 Tinandarticles thereof 2.5 0.6
81 Other basemetals 0.0 0.0
82 Tools, implements andcutlery ofbasemetal, etc. 12.7 2.7
83 Miscellaneous articles ofbasemetal 16.8 3.5
84 Nuclear reactors, boilers, mach./mech. appl., parts 14.9 2.9
85 Elec. mach., equipment, parts thereof, sound recorder 15.9 3.1
86 Rail/tramway locomotives, rolling-stock, parts thereof 17.1 3.3
87 Vehicles o/trail/tramway rolling-stock, parts &accs 18.5 4.9
88 Aircraft, spacecraft, andparts thereof 1.3 0.0
89 Ships, boats andfloating structures 15.0 3.1
90 Optical, photo., cine., measuring, checking, precision 8.3 1.5
91 Clocks andwatches andparts thereof 2.9 0.6
92 Musical instruments; parts andaccess ofsucharticles 3.4 0.0
93 Arms andammunition, parts andaccessories thereof 12.5 2.3
94 Furniture, bedding, mattress, mattr.support, cushion 21.5 4.7
95 Toys, games &sports requisites, parts &accessories 23.2 4.1
96 Miscellaneous manufactured articles 14.8 3.2
97 Works ofart,collectors pieces andantiques 1.4 0.0
98 Special Classification Provisions n.a. n.a.
n.a. Notapplicable.
a Includes effects of"zero-for-zero" tariff commitments made intheUruguay Round andaffecting averages forHS
Chapters 22,30,47,48and49,some ofwhich willnotbefullyimplemented until2004.
Source: WTO Secretariat calculations based oninformation provided bytheNewZealand authorities.New Zealand WT/TPR/S/20
Page 39
18. Concessions mayberevoked either foradministrative reasons (e.g., ifithasbeenapproved
inerror) oronadiscretionary basis when anexisting producer extends itsrange ofproducts to
include aproduct considered tobeasuitable alternative totheimported product onwhich the
concession hasbeen granted. According totheauthorities, however, theyarereluctant togrant
revocations because theydonotwishtoengender uncertainty withrespect tothetariff; discretionary
revocations arenotgranted for"infant industry" orother reasons toanewproducer. Concessions
thathavebeeninforce forfiveyears ormore aregenerally irrevocable; there havebeenonlytwo
exceptions tothisruleinthepastfiveyears.
19. Tariff concession schemes suchasNewZealand 'sRef.No.99general concessions canraise
twoareas ofconcern.22Thefirstrelates totransparency. Efforts must bemade toensure thatsuch
schemes donotinadvertently provide advantages tocertain domestic users oftheimported product
(e.g., those thatfiletheconcession application) overothers. NewZealand hasinplace public notice
requirements thatgofarinassuaging such concerns.23Thesecond concern isabout effective
protection. Concessions reduce costs forproducers inindustries thatuseimported inputs entering
under concessions. Ifthese industries themselves produce products thatreceive protection from
imports, theeffective rateofprotection fortheirvalue added isincreased bythereduction ininput
costs stemming from thetariff concessions. Theintroduction oftariff concessions forinputs not
produced domestically, while tariff ratesondomestically produced goods remain constant, increases
thedifference between thevalue ofanindustry 'soutput anditscosts, thusincreasing returns inthe
industry. These higher returns attract capital andlabour from other industries andcanleadto
domestic resource misallocation. Theconcession policy makes iteven more important that
NewZealand reduces tariffs onimports ofproducts thatareproduced domestically. Theongoing
programme oftariff reductions isreducing effective rates ofprotection andmoving NewZealand
toward uniformity ofitsapplied tariffs, including tariff concessions, atlowrates.
20. Temporary tariff concessions maybeavailable under Ref.No.99forimports ofdomestically
produced goods. Concessions forimports ofcapital equipment aregranted inorder toassist industry
inbuilding orupgrading manufacturing capacity. Concessions aregranted under the"shortfall"
provision ifdomestic goods become temporarily unavailable (butnotinthecaseofashortage
resulting from increased demand) and,when aconcession would notnormally begranted interms
ofthedefinition ofa"suitable alternative", under the"inputs tomanufacturing" provision inorder
toassist adomestic industry inreducing itscosts (generally, onlyifapproval hasbeenreceived from
theimport-competing domestic producer). These temporary concessions areusedlessfrequently than
general concessions, which remove duties onanongoing basis.
21. NewZealand hastwodutydrawback programmes inforce. Thefirst,which according tothe
authorities isnotheavily used, istheRef.No.55Concessions under theTariff Act1988. This
concession allows goods temporarily imported "forthepurpose ofbeing usedin,wrought intoor
attached togoods forsubsequent exportation" tobeimported dutyfree; thelistofgoods qualifying
forsuchtreatment isdetermined bytheMinister ofCommerce, whomaysetconditions fortheuse
22Other countries, including Australia, have similar schemes.
23Alltariff concession approvals arepublished intheCustoms publication "Consolidated ListofApprovals
Relating toPartIIoftheTariff ofNew Zealand."WT/TPR/S/20 Trade Policy Review
Page 40
oftheconcession.24Sections 110and111oftheCustoms andExcise Act1996 alsoallow theduty-
freeimportation ofgoods thattheComptroller ofCustoms issatisfied willbeexported within twelve
months from thedateofimportation, ortherefund ofduties ongoods subsequently exported.25
(e) Customs valuation andclearance
22. NewZealand 'scustoms valuation legislation isbased ontheAgreement ontheImplementation
ofArticle VIIoftheGATT 1994.26Customs valuation legislation willbecontained intheCustoms
andExcise Act1996; however, according totheauthorities there willbenosubstantial changes
regarding customs valuation orother customs procedures fromtheamended 1966Act.NewZealand
values imports forcustoms dutypurposes onanf.o.b. basis. Thiseffectively results inlower duties
being applied, compared tovaluation onac.i.f. basis. Forexample, a15percenttariff applied on
ashipment withanf.o.b. value of$1million would result inadutyof$150,000. Withduties applied
onac.i.f. basis andac.i.f./f.o.b. margin of8.5percent, thecustoms valuation would be
$1.085 million andthedutywould be8.5percentgreater, or$162,750.27
23. Customs clearance isrequired forallgoods imported toorexported from NewZealand.
Following theintroduction ofanelectronic dataimport entry system inMarch 1995, some 97percent
ofimport shipments arecleared electronically. Valuation isbased onself-declaration, withabout
10percentofentries being checked forcompliance. Entries thatarenotselected forthecompliance
check arenormally cleared inamatter ofminutes, according totheauthorities; those subject tothe
check maytakedaysforclearance. Allexport shipments arechecked manually.
24. Until thepromulgation oftheCustoms andExcise Act1996, NewZealand Customs hasno
administrative appeals authority. Appeals regarding tariff classification canbemade toaTariff
Classification Mediator, butother appeals aremade directly totheHigh Court.28ThenewAct
introduces Customs Appeal Authorities, towhich administrative rulings ontariff andexcise
24According totheauthorities, Ref.No.55concessions donotnormally apply togoods ofthetypemade
inNew Zealand. Along withthewide product coverage ofRef.No.99concessions, thismayexplain why
Ref.No.55concessions arenotheavily used.
25Inthisregard, there were nosubstantial changes from the1966 Act.
26In1982, New Zealand acceded totheTokyo Round Agreement onImplementation ofGATT Article VII
(Customs Valuation Code), andchanged itsvaluation legislation atthattimetobring itintoconformity withthe
Code.
27Total merchandise imports valued atc.i.f. exceeded imports valued fordutypurposes (which isthef.o.b.
value, except insome limited circumstances when theex-works price maybeused) by8.5percentintheyear
ended June1994, indicating thatduties paidwere approximately 8.5percentlessthantheywould have been
ifNew Zealand used c.i.f. valuation.
28From thetimetheTariff Classification Mediator wascreated in1989 until March 1996 there were 32
appeal decisions, 14ofwhich allowed theappeal andfour ofwhich were subsequently appealed tothe
High Court.New Zealand WT/TPR/S/20
Page 41
classification, valuation, origin, andtheapplication ofatariff concession maybeappealed.29Further
appeals, either onpoints oflaworfact, maybemade totheHigh Court; subsequent appeals tothe
Court ofAppeal arepossible onlyonpoints oflaw.
(f) Tariff quotas
25. NewZealand usesnotariff quotas; thetariff quotas onhops, fresh apples andfresh pears
listed initsUruguay Round Schedule havenotbeenimplemented because theapplied m.f.n. ratesof
dutyonimports ofthese products iszero.
(g) Variable andother import levies
26. NewZealand doesnothavevariable import levies. Alternative-specific duties arecharged on
imports ofsome usedmotor vehicles, usedapparel andspirits. These duties arespecified aseither
anadvalorem dutyoraspecific duty, depending onwhich dutyyields thehigher dutyrevenue. The
effect ofalternative-specific duties istocharge ahigher advalorem equivalent dutyonshipments with
alowprice perunit.30Thepurpose ofthistypeofduty, according totheauthorities, istoafford
greater protection against imports from low-cost sources.
(h) Levies andother charges
27. NewZealand imposes nolevies oradditional charges onimports thatarenotimposed on
domestic products, other thancustoms duties. Other levies include thegoods andservices tax(GST),
excise taxes, theAlcoholic Liquor Advisory Council Levy andtheHeavy Engineering Research Levy
(section 5(v)).
(i) Minimum import prices
28. NewZealand applies nominimum import prices.
(j) Seasonal tariffs
29. NewZealand applies noseasonal tariffs.
(k) Tariff preferences
30. NewZealand offers preferential tariff access toimports from Australia andCanada under
regional agreements (section (iii)), todeveloping countries under theGeneralized System of
Preferences, andtoPacific Island Forum countries under theSPARTECA Agreement.
29Customs Appeal Authorities areindividuals appointed bytheGovernor-General ontherecommendation
oftheMinister ofJustice. They must beserving District Court Judges, barristers, orsolicitors ofthe
High Court having practised atleast seven years.
30This issimilar totheoperation ofaspecific tariff except thattheadvalorem equivalent above acertain
price remains constant.WT/TPR/S/20 Trade Policy Review
Page 42
TheGeneralized System ofPreferences (GSP)
31. NewZealand introduced itsGSPprogramme in1972andcurrently offers GSPbenefits to103
developing countries (DCs) and47least-developed countries (LDCs) (Table III.5).31Product
coverage isbased onanegative listapproach; i.e.,allgoods aresubject topreference unless they
arespecifically excluded. Imports from GSP beneficiaries accounted forsome 14percentof
NewZealand 'stotal merchandise imports in1991-1994.32TheMinistry ofCommerce has
responsibility fortheGSPprogramme andisconducting areview oftheGSPprogramme in1996.33
China accounted forsome 36percentofGSP-eligible imports intoNewZealand in1994, followed
bytheRepublic ofKorea (13percent), andMalaysia, Thailand, Indonesia andIndia (each between
5and7percent).34Industrial products (HSChapters 25-96) accounted forsome 90percentof
NewZealand 'simports from GSP-eligible countries.
32. Countries apply toNewZealand fordeveloping country status under theGSPprogramme and
aregenerally granted thisstatus iftheirpercapita income is70percentorlessofNewZealand 's.
Developing countries withpercapita incomes exceeding the70percentthreshold aregraduated from
theprogramme. Since 1989, 25countries have beengraduated, including Chinese Taipei, Hong
Kong, Israel andSingapore. Fivecountries subsequently slipped below thethreshold andwere
reinstated; these areBahrain, Libya, Oman, Saudi Arabia, andTrinidad andTobago. Preferences
fordeveloping countries, where theyexist, aregenerally setat80percentofthem.f.n. rate;35for
least-developed countries (LDCs) ratesaregenerally free. Acountry 'sstatus asaLDC isbased on
United Nations criteria, including apercapita income capofUS$400 ayear.
33. OfNewZealand 'sdutiable tariff lines(those lineswithpositive applied m.f.n. tariff rates),
some 72percentprovide developing country preferences and93percentprovide preferences for
LDCs.36Sectoral exclusions existforcertain products thatwerepreviously subject toindustry plans.
Ofthe431dutiable tarifflinesinapparel (HSChapters 61and62),14lineshavepreferences forDCs
and300havesubstantive preferences forLDCs. Infootwear (HSChapter 64),mostpreferences for
DCsandLDCs were phased down andtheneliminated inJuly1994.37Other sectors partially or
31Thefigure of46includes fiveSPARTECA member countries.
32Ofthistotal, some 57percententered under duty-free m.f.n. rates, while 15percent, orone-third of
GSP-eligible imports, entered dutyfreeunder tariff concessions (section (d)).
33Previous reviews tookplace in1976, 1984, 1986 and1988. Possible issues inthereview include methods
forcountry andproduct graduation, product coverage, theimpact ofGSPonNew Zealand producers, andthe
effect ofreductions inm.f.n. tariffs ontheGSP (Ministry ofCommerce, 1995a).
34Others withashare exceeding 1percent, indescending order, were Brazil, Fiji,Philippines andPakistan.
35Since 1986 New Zealand hasusedastandard formula forcalculating thedeveloping country rateofduty
foritems whose m.f.n. ratewasreduced orforitems thatwere newly granted preferential treatment, solong
asthisdidnotimply anincrease intherate. (GATT, 1990, PartB).
36Some 98.5 percentofimports under dutiable tariff lines from LDC countries enter dutyfree(Ministry
ofCommerce, 1995a).
37DCandLDC preferences forfootwear remain onfivetariff lines.New Zealand WT/TPR/S/20
Page 43
wholly excluded fromDCpreferences arecommercial shipbuilding, electronics, rubber goods, glass,
motor vehicles andceramics. Average GSPtariffs forDCsandLDCs, byHSChapter, areshown
inTable III.2.
Table III.5
Countries granted GSPtreatment, January 1996
COUNTRIES CLASSIFIED ASDEVELOPING
Albania Croatia Libya St.Lucia
Algeria Cuba Lithuania St.Vincent andtheGrenadines
Angola Czech Republic Macau Saudi Arabia
Anguilla Dominica Macedonia Senegal
Antigua andBarbuda Dominican Republic Malaysia Seychelles
Argentina Ecuador Malta Slovak Republic
Aruba Egypt Mauritius Slovenia, Rep. of
Bahrain ElSalvador Mexico SriLanka
Barbados Falkland Islands (Malvinas) Mongolia Suriname
Belize Gabon Montserrat Swaziland
Bolivia Ghana Morocco Syrian Arab Republic
Bosnia-Herzegovina Gibraltar Nicaragua Thailand
Brazil Grenada Nigeria Trinidad andTobago
British Indian Ocean
TerritoryGuatemala Norfolk Island Tunisia
Guyana Oman Turkey
British Virgin Islands Honduras Pakistan Turks andCaicos Islands
Bulgaria Hungary Palau United States Minor Outlying
Islands Cameroon India Panama
Cayman Islands Indonesia Papua NewGuinea Uruguay
Chile Iran, Islamic Rep. of Paraguay Venezuela
China Iraq Peru VietNam
Christmas Island Jamaica Philippines Wallis andFutuna Islands
Cocos (Keeling) Islands Jordan Pitcairn Islands Yugoslavia, Fed.Rep. of
Colombia Kenya Poland Zimbabwe
Congo Korea, Rep. of Romania
Costa Rica Lebanon St.Helena
Côted'Ivoire Liberia St.Kitts-Nevis
COUNTRIES CLASSIFIED ASLEAST-DEVELOPED
Afghanistan Djibouti Maldives Solomon Islands
Bangladesh Equatorial Guinea Mali Somalia
Benin Ethiopia Mauritania Sudan
Bhutan Gambia Micronesia, Fed.States of Tanzania
Botswana Guinea Mozambique Togo
Burkina Faso Guinea-Bissau Myanmar Tuvalu
Burundi Haiti Namibia Uganda
Cambodia Kiribati Nepal Vanuatu
Cape Verde LaoPeople 'sDem. Rep. Niger Western Samoa
Central African Republic Lesotho Rwanda Zaïre
Chad Madagascar SaoTome andPrincipe Zambia
Comores Malawi Sierra Leone
Source: Government ofNewZealand.WT/TPR/S/20 Trade Policy Review
Page 44
34. NewZealand introduced product graduation toitsGSPprogramme in1989. ADC'srights
toGSPtreatment under aparticular tariff linearelostwhen itsannual exports exceed $122,000 and
itsshare oftotalNewZealand imports ofthattariff lineexceeds 25percent.38AsatJuly1996,
specific products from15beneficiaries in202tarifflineshadbeengraduated, andproduct graduation
wasapplied tosome 237country -tariff linecombinations. China wastheGSPbeneficiary withthe
most graduated tariff lines, at119, followed bytheRepublic ofKorea (29), Malaysia (24),
Thailand (17),andIndia (15).39Reinstatement isallowed ifthethreshold criteria arenotmetfortwo
consecutive years. Product graduation isbeing reviewed inthecontext oftheMinistry of
Commerce 's1996 review oftheGSPprogramme.
SPARTECA
35. NewZealand (andAustralia) unilaterally grants duty-free andunrestricted access toallgoods
from theForum Island Countries (FICs) under theSouth Pacific Regional Trade andEconomic
Agreement (SPARTECA).40Merchandise imports from these countries account forsome 1to
2percentoftotalNewZealand merchandise imports.41SPARTECA extends togeneral economic,
commercial andtechnical co-operation. Safeguard provisions exist, buthavenotbeenapplied by
NewZealand, andwould require consultation withallSPARTECA parties.
Preferential rules oforigin
36. Rules oforigin under NewZealand 'sGSP programme grant global cumulation toall
beneficiaries oftheGSPscheme, andNewZealand allows itsownproduction inputs tobeincluded
inqualifying content.42Thelastmanufacturing process musthavetaken place inthecountry claiming
thepreference. Dataindicate thatonlysome 5percentofimports ofproducts inrelevant tariff lines
fromGSPeligible countries failtoqualify, normally because ofrulesoforigin orthedirect shipment
criteria.43
38TheProduct Graduation valuation benchmark, lastchanged inJuly1996, isincreased annually bya
percentage equivalent tothepercentage increase intheProducer Price Index theprevious calendar year.
Imports under tariff concessions areexcluded from thetotalforpurposes ofproduct graduation.
39Other countries with graduations inmore thantwotariff lines were Pakistan, Indonesia, Brazil, and
Philippines.
40TheFICareCook Islands*, Fiji,Kiribati, Marshall Islands*, Micronesia, Nauru*, Niue*, Papua New
Guinea, Solomon Islands, Tonga, Tuvalu, Vanuatu, andWestern Samoa. Allexcept those marked (*)arealso
eligible forbenefits under New Zealand 'sGSPtreatment programme.
41Grynberg andPowell (1995) argue thatthere hasbeen nodiscernible effect onoverall imports from FICs
since SPARTECA entered intoforce inJanuary 1981 andthat"The only notable success hasbeen the
development oftheFijigarment industry inthewake oftheNew Zealand textile, clothing andfootwear
deregulation in1987" andthat"The treaty hasotherwise failed tofulfil itsstated objectives." Thesuccess of
Fiji'sgarment industry, according totheauthors, appears tohave been equally related toFijian domestic
reforms, which allowed theindustry torespond favourably tonewexport opportunities. Inthislight, the
authors conclude that"Ifthere hasbeen nobenefit from SPARTECA, however, itisprimarily because FICs
themselves areunwilling totakeadvantage ofthetreaty."
42Atleast50percentoftheexpenditure inrespect ofthegoods must relate tomaterials andother specified
items offactory orworks costoriginating orincurred inoneormore LDCs orLLDCs, orinNew Zealand.
43Data provided bytheNew Zealand authorities.New Zealand WT/TPR/S/20
Page 45
37. NewZealand 'srules oforigin under SPARTECA specify aminimum 25percentFIC
content44(with cumulation allowed across allFICcountries andNewZealand) jointly withaminimum
50percentoverall requirement (with cumulation allowed across allFICs, NewZealand and
Australia). Toqualify forSPARTECA preferences, thefinalmanufacturing process ofagood must
takeplace intheFIC; goods may, however, enter intothecommerce ofanyother country. With
effect fromNovember 1994, NewZealand reduced theoverall requirement forclothing exports from
FICs to45percent, forthree years.45AsatJuly1996, nodecision hadbeenmade ontherenewal
ofthisderogation.
38. Rules oforigin under theregional agreements withAustralia andCanada arediscussed in
section (ii)below.
(ii) Regional trade agreements
(a) Trade relations withAustralia
39. Australia isNewZealand 'smostimportant bilateral trading partner, accounting for19percent
ofexports and21percentofimports in1995. TheAustralia NewZealand Closer Economic
Relations Trade Agreement (CER) entered intoforce inJanuary 1983, replacing amore limited
agreement thathadbeenconcluded in1965. ThetwoParties conducted reviews oftheCERin1988,
1992and1995. Empirical results fromcomputable general equilibrium (CGE) models suggest annual
economic welfare gains accruing toNewZealand asaresult oftheCER tobeequivalent tosome
0.5percentto1.5percentofGDP.46TheCER hasbeen described as,nexttotheEuropean
Community, themost comprehensive trading agreement intheworld.47Inother policy areas,
agreements have been negotiated thatcomplement theCER; forexample, thefreemovement of
labour under theTrans-Tasman Travel Arrangement, theReciprocal Health Agreement andthe
Australia-New Zealand Social Security Agreement.
40. Since July1990, bilateral merchandise trade isfreeoftariffs andquantitative restrictions.48
Alsoatthattime, theParties forswore theuseofanti-dumping measures against eachothers 'products
andsome provisions ofcompetition lawwere applied totrans-Tasman trade (section 5(ii)).49
According totheauthorities, similar provisions toprevent theapplication ofcountervailing measures
arenotbeing considered because Australia maintains arange ofsubsidy programmes; however,
44This requirement wasreviewed in1995/1996 andthe25percentrulewasconfirmed.
45This derogation isprimarily meant tobenefit Fiji'sclothing sector (Ministry ofCommerce, 1995b).
46Nana, HallandPhilpott (1995) andBIE(1995). Therange ofestimates includes static estimates and
estimates inwhich some dynamic effects have been considered. Both models assume perfectly competitive
markets; experience withother models using monopolistically competitive markets often leads tomuch higher
estimates oftheeconomic welfare results accruing from trade liberalization (Francois, McDonald and
Nordstrom, 1995).
47Menon andDixon (1995). These authors find that trans-Tasman trade contributed more than
proportionately totheincrease inNew Zealand 'sintra-industry trade during theperiod 1981-1991.
48GATT (1994b).
49Atthattime, Australian products were themost common target ofNew Zealand dumping measures
(GATT, 1990).WT/TPR/S/20 Trade Policy Review
Page 46
obligations regarding subsidies aresubject toenforcement through thebilateral dispute settlement
mechanism.50Under theCER, safeguard measures maynotbeapplied ontrade between thetwo
countries.51
41. TheCER Protocol onTrade inServices wassigned in1988 andentered intoforce in
January 1989.52Bilateral services tradehasbeenliberalized, andeachParty grants theother'sservice
suppliers m.f.n. treatment, national treatment (with exceptions) andtherighttochoose theform of
their commercial presence.53Exceptions tonational treatment relate tothose sectors subject to
regulation atthetimetheProtocol wassigned andwhich remain inscribed intheAnnex tothe
Protocol. Services inscribed byNewZealand, asatApril 1996, wereaspects oftheairways services,
telecommunications, andpostal services sectors. Australia, according totheNewZealand authorities,
hasinscribed aspects oftelecommunications, airport services, domestic airservices, international
aviation (passenger andfreight services), coastal shipping, broadcasting andtelevision (short-wave
andsatellite broadcasting), basic health insurance services, third party insurance, workers '
compensation insurance andpostal services.54Unlike thecounterpart agreement ongoods trade, the
Protocol onTrade inServices hasnotsetatarget datefortheelimination ofallsectoral exemptions;
however, Article 10provides fortheir regular review. TheTrans-Tasman Travel Arrangement,
which gives Australian andNewZealand citizens unlimited work rights inbothcountries, facilitates
bilateral services trade.
42. Rules oforigin formerchandise trade between theParties, which generally arebased on
50percentofvalue added andlastprocess ofmanufacture criteria, havebeendiscussed bythetwo
Parties inthecontext oftheirCERreviews andmeetings ofaJointWorking Group.55Oneresult has
beentheintroduction ofa2percentmargin oftolerance forproduct shipments thatwould otherwise
failtoqualify forpreferential entry because ofunforeseen circumstances. Since then, NewZealand
hastried"toensure thattheCER Rules ofOrigin continue tobeaneffective means offacilitating
trans-Tasman trade."56Rules oforigin tendtohave more restrictive effects onsmaller, more
specialized economies, asexports fromthese economies would normally haverelatively lowdomestic
content. Atrans-Tasman Working Group isexamining CER rules oforigin inlight of:(i)the
increasing globalization ofproduction, (ii)theinternational trend toward theuseofachange-of-tariff-
50Under theProtocol onServices, thisalsoapplies tobilateral services trade (Chapter II). Australia and
New Zealand have committed, aspartoftheAgreed Minute onIndustry Assistance which resulted from the
1988 CER review, toavoid providing industry assistance thatwould directly affect trans-Tasman trade.
51Such measures were possible during thetransition period (WTO document G/SG/W/175, June 1996).
52Information onthenegotiation oftheProtocol onServices isprovided inHolmes (1990).
53Allnewservices areautomatically subject totheprovisions oftheProtocol.
54Following the1992 CER review, New Zealand removed exemptions forradio andtelevision broadcasting,
stevedoring, andsome aspects ofaviation services; andAustralia removed exemptions forbanking andfor
government preferences forAustralian companies inconstruction, engineering andgeneral consultancy.
Exclusions fortelecommunications andpostal services were amended bybothcountries (BIE, 1995).
55New Zealand andAustralia havejointly produced aninformation pamphlet onthesubject, which includes
details onqualifying costs under the50percentvalue added criterion andontolerances. SeeNew Zealand
Customs (1995a).
56Ministry ofCommerce (1995).New Zealand WT/TPR/S/20
Page 47
heading approach torules oforigin, ascompared tothecurrent value added approach usedinthe
CER, (iii)prospective links between theCER andtheAssociation ofSoutheast Asian Nation 's
(ASEAN) FreeTrade Area(AFTA), (iv)theintention toachieve freetrade among APEC members,
and(v)developments intheWTO regarding rulesoforigin. Nospecial provisions existforparticular
industries. However, the1995Protocol onCustoms Procedures establishes special review procedures
forenquiries regarding CERrulesoforigin fortextiles, clothing andfootwear.57Rules oforigin can
beparticularly important insectors where m.f.n. tariffs onimports from third countries differ
substantially between parties toafree-trade agreement. IntheCER, thisisthecasefortextiles and
clothing, where insome HSchapters thedifference inthesimple average tariff in1993 exceeded
20percentage points.58
43. Inaddition toprovisions described above, substantial advances havebeenmade withrespect
togovernment procurement (section (vii)), themutual recognition offoodstandards (section (vi)), and
occupational qualifications.
44. Arecent Australian government publication identified several areas inwhich impediments to
trans-Tasman tradeandinvestment remain.59Thusithasbeennoted thatsome liberalization measures
envisaged intheCivil Aviation Memorandum ofUnderstanding, signed inAugust 1992, remain
unexploited (Chapter IV(4)). Further, trans-Tasman shipping remains costly byinternational
standards because anon-governmental agreement, theAustralian andNewZealand Maritime and
Stevedoring Accord between relevant labour unions, raises shipping costs. Inaddition, trans-Tasman
capital flows remain outside theCERframework, andtheCERProtocol onTrade inServices subjects
thetrans-Tasman right ofestablishment forservices providers totheforeign investment policies of
thehostcountry; according totheNewZealand authorities, aTrans-Tasman investment agreement
hasbeenproposed.
(b) Canada
45. NewZealand grants substantial tariff preferences toCanada under the1982 Agreement on
Trade andEconomic Cooperation (Chapter II(2)(iv)). These preferences, which areinplace ona
broad range ofimports, reduced the1995/96 simple average tariff from the7.1percentapplied to
m.f.n. imports to2.7percent.60TheAgreement intends tomaintain minimum margins oftariff
preferences, butcontains nolegal requirement forcompensatory action byaparty thatreduces a
preference margin. NewZealand willmaintain margins ofpreference, inpercentage point terms,
untilsuchtimeastherateonimports from Canada fallstozero.
46. Trade withCanada accounted for1.4percentoftotalNewZealand merchandise trade in
1995. Rules oforigin intheAgreement generally arebased on50percentvalue added andlast
process ofmanufacture criteria. Under theCustoms Regulations 1968, asamended, qualifying
57New Zealand Customs (1995b). "The procedures will,however, beextended asappropriate totheconduct
ofanyrequest foraninvestigation intotheeligibility ofother goods forduty-free trade under theprovisions
ofCER".
58BIE(1995).
59BIE(1995).
60Data on1996/97 preferences forimports from Canada were notavailable electronically.WT/TPR/S/20 Trade Policy Review
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imports must notenter thecommerce ofanythird country before entry intoNewZealand.
Cumulation oforigin islimited toNewZealand andCanadian content.
(c) APEC
47. Trade withAsia-Pacific Economic Co-operation (APEC) countries61in1995 accounted for
70percentofNewZealand exports, upfrom some 60percenttenyears ago; some 71percentof
NewZealand 'simports werefrom APEC countries, ofwhich about twothirds werefromAustralia,
Japan andtheUnited States.
48. IntheBogor Declaration ofNovember 1994, APEC members committed themselves tofree
andopen trade andinvestment intheregion by2010 forindustrialized countries and2020 for
developing countries. Thisliberalization commitment, covering goods, services andcapital flows,
wasmatched byagreement toundertake trade andinvestment facilitation programmes thatwould
complement theliberalization process. NewZealand views theliberalization andtrade facilitation
aspects astwoofthefourmajor advantages ofitsparticipation inAPEC, theothers being thecreation
ofadialogue ontrade andeconomic policy, andthebroad political benefits ofco-operation with
regional trading partners. NewZealand 'sprimary policy objectives under APEC aretomeetitsown
liberalization commitment under theBogor Declaration andtocontribute substantively totheprocess
bywhich other APEC members achieve theirBogor commitments (Chapter II(2)(iii)).
49. NewZealand fullysupports the"open regionalism" approach toAPEC trade liberalization,
which itinterprets tomean thatmeasures agreed inAPEC willbeimplemented onanm.f.n. basis
andAPEC membership willbeopentoexpansion.
50. TheNovember 1995Osaka Action Agenda defined objectives andsetguidelines forindividual
orcollective action inseveral work areas, including tariffs, non-tariff measures, services, investment,
standards, customs, intellectual property rights, competition policy, government procurement,
deregulation, rules oforigin, dispute mediation, mobility ofbusiness people, implementation of
Uruguay Round outcomes, andinformation gathering andanalysis.62Individual andcollective action
plans aretobesubmitted fortheNovember 1996 APEC Ministerial andLeaders 'Meeting.
NewZealand intends thatallcommitments offered aspartofits1996 Individual Action Planbe
implemented onanm.f.n. basis.
(iii) Import licensing andpermit requirements
51. Theshare ofimports covered bylicensing wasreduced from25percentin1984to3percent
in1989, when theonlyremaining products subject tolicensing were certain categories oftextiles,
footwear, ceramics andplastic tapes. Theschedule foreliminating theremaining licensing
61APEC members areAustralia, Brunei Darussalam, Canada, Chile, China, Chinese Taipei, Hong Kong,
Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, thePhilippines, Singapore, Thailand, Papua
New Guinea andtheUnited States. Information onthetrade policies ofAPEC countries hasbeen compiled
byPECC (1995).
62Forexample, work onadraftfoodMutual Recognition Arrangement isprogressing intheSub-Committee
onStandards andConformance. TheAPEC Eminent Persons Group, noting potential conflict between APEC
andsub-regional rules oforigin, hasrecommended theadoption ofAPEC-wide rules oforigin based on
simplicity andtransparency, andapplied comprehensively across sectors. More recently, theAPEC Secretariat
hasreported thatmember economies willalign their rules oforigin withinternationally-harmonized rules of
origin tobeadopted asaresult oftheWTO/World Customs Organization process (APEC, 1995).New Zealand WT/TPR/S/20
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requirements wassetoutbytheauthorities inthe1990 Trade Policy Review (GATT, 1990).63This
schedule wasadhered to,andthelastlicensing restrictions forimport protective reasons (onapparel)
were eliminated inJuly1992.
Restrictions forenvironmental reasons
52. Forenvironmental reasons, NewZealand controls theconsumption ofozone-depleting
substances (which itdoesnotproduce) andhazardous substances through import licensing.64Imports
ofchlorofluorocarbons (CFCs), hydrochlorofluorocarbons (HCFCs) andmethyl bromide arerestricted
inorder tocontrol theirconsumption inaccordance withrequirements oftheMontreal Protocol on
Substances thatDeplete theOzone Layer.
53. Imports ofCFCs were phased down andeliminated from 1January 1996. Exemption
provisions existforreasons ofhealth andsafety, withnoquantitative limitsetforsuchexemptions.65
Many products containing ozone-depleting substances maynotbeimported from countries not
members oftheMontreal Protocol; theseproducts include automobile andtruck airconditioning units
(whether ornotincorporated inthevehicle), refrigerators, dehumidifiers, water coolers, icemachines,
airconditioning andheatpumps, other domestic andcommercial refrigerators andairconditioning
orheatpump equipment, aerosol products (other thanmedical aerosol), portable fireextinguishers,
insulation boards, panels andpipecovers, andpre-polymers.
54. Imports, andthusconsumption, ofHCFCs arebeing phased outovertheperiod 1996to2015.
NewZealand 'sbaseamount under theMontreal Protocol is1,085 metric tonnes ayear, and1996
consumption islimited to75percentofthatbase, dropping to50percentin2000, 40percentin
2006 and20percentin2010. Import permits areissued bytheMinistry ofCommerce; factors
include historical useduring theperiod 1991-1993 andtheconversion ofCFC permits toHCFC
permits. Imports ofmethyl bromide intoNewZealand arerestricted tothe1990 consumption level
of150metric tonnes.66Forthese imports, theMinistry ofCommerce grants permits totwo
wholesalers according tohistorical use; these wholesalers actonbehalf ofclients.
55. Controls areinplace onmovements ofhazardous wastes inaccordance with theBasel
Convention ontheTransboundary Movement ofHazardous Waste, which callsfortheestablishment
ofasystem ofpriorinformed consent forhazardous waste trade. Suchconsent mustbeobtained from
thecompetent authorities inthesource, destination andtransit countries before shipment; movements
toandfrom non-parties areprohibited. InNewZealand, thisisimplemented through import and
export permit requirements administered bytheMinistry ofCommerce. Itisunderstood thatthe
Convention justifies thismeasure under Article XX(b) oftheGATT 1994. InSeptember 1995 a
decision wastaken intheBasel Convention nottoallow, from 31December 1997, trade from
countries listed inAnnex 7(mostly OECD countries) toother countries. NewZealand has
63GATT (1990) PartB,p.37.
64Further information hasbeen provided totheWTO Secretariat asaresult ofNew Zealand 'ssubmission
under Notification Procedures forQuantitative Restrictions (adopted bytheWTO Council forTrade inGoods
inWTO document G/L/59, December 1995) andWTO document G/MA/NTM/QR/1, March 1996.
65Exemption permits areissued bytheMinistry ofCommerce.
66Consumption forpurposes ofquarantine andpreshipment applications iscurrently exempt from such
controls.WT/TPR/S/20 Trade Policy Review
Page 50
acknowledged theconsensus leading tothisdecision buthasnotendorsed therelevant amendment.
Ithasnoted thattheamendment preserves theoption forStates toenter intoagreements thatreflect
thediffering circumstances andneeds ofdeveloping countries.
(iv) State trading
56. NewZealand hasnoState-trading enterprises thatexercise exclusive powers withrespect to
imports. TheState trading ofexports isdiscussed insection 3(iii).
(v) Standards andtechnical regulations
57. NewZealand wasanoriginal signatory totheTokyo Round Agreement onTechnical Barriers
toTrade andnowapplies theWTO Agreement onTechnical Barriers toTrade. Standards New
Zealand (SNZ), thenational standards body, serves astheWTO Enquiry Point. NewZealand isa
member ofmany international standards-related organization, including theInternational Organization
forStandards (ISO) andtheInternational Electrotechnical Commission (IEC).
58. NewZealand 'sapproach tostandards setting isbased ontheuseofvoluntary norms, andthe
adoption ofinternational standards where appropriate andavailable. Standards aresometimes cited
inlegislation asrequirements, butusually arecited asameans ofcompliance. TheMinistry of
Commerce hasoverall policy responsibility intheareaofstandards andtechnical regulations. SNZ
isanarmoftheStandards Council, aCrown entity, andoperates under theStandards Act1988.67
Ithasaccepted theCode ofGood Practice oftheWTO TBTAgreement.68Inpractice, NewZealand
applies mandatory standards andconformance measures onlywhere these arenecessary toprotect
health, safety andtheenvironment.69According totheauthorities, allstandards, technical regulations,
andconformity assessment procedures apply equally todomestically produced andimported goods
andservices. Sanitary andPhytosanitary Measures aretheresponsibility ofthree agencies: the
Ministries ofAgriculture, Health, andForestry (section (vi)).
59. Asat30June1996, NewZealand hadadopted 2,149 approved standards. Some 25percent
ofstandards arecited inlegislation oraremandatory. Ofthese, 20percentareNewZealand-
developed; 41percentarejoint Australia-New Zealand standards; 16percentareAustralian
standards approved forNewZealand use; 15percentareother overseas-sourced standards, often
67Standards New Zealand receives nodirect government funding; itsfinancial support isbased onthesale
ofstandards (35percent), certification services (30percent), contracts forservices (25percent), membership
subscriptions (5percent) andmiscellaneous revenues (Standards New Zealand, 1995). Standards New Zealand
alsorepresents New Zealand intheISOandtheIEC, andoperates astheenquiry point under theTBT
Agreement. Ithasaformal relationship with Standards Australia under the1992 Active Co-operation
Agreement.
68WTO document G/TBT/CS/N/6/Rev.1, August 1995. Substantive provisions oftheCode ofGood
Practice include thatstandards bodies having accepted theCode: (i)apply national treatment toproducts
originating inother countries, (ii)donotusestandards thathave theeffect ofcreating unnecessary obstacles
totrade, (iii)useinternational standards, where theyexist, asthebasis fordomestic standards, except where
theinternational standards would beineffective orinappropriate, (iv)specify standards based, wherever
appropriate, interms ofperformance rather thandesign ordescriptive characteristics, and(v)publish, atleast
semi-annually, itswork programme, including thestandards currently being prepared andthose adopted inthe
preceding period.
69Mimeo, "New Zealand: Liberalisation andDeregulation Initiatives", provided bytheauthorities.New Zealand WT/TPR/S/20
Page 51
ofCanada, theUnited Kingdom, theUnited States orMember States oftheEuropean Union (EU);
and8percentareinternational standards. According totheauthorities, 29percentofNewZealand-
approved orjoint Australia-New Zealand standards areidentical to,technically equivalent to,or
closely aligned withinternational standards.
60. NewZealand 'svoluntary system ofconformity assessment fortesting andcalibration activities
isoperated bytheTesting Laboratory Registration Council (Telarc NewZealand), auser-funded
statutory body owned bytheNewZealand Government andreporting totheMinister ofCommerce.
Thenational accreditation programme forInspection Bodies, established byTelarc, hasoperated since
July1995. Telarc isactive intheAsia-Pacific Laboratory Accreditation Co-operation grouping in
APEC andonISOtechnical committees. Ithasestablished mutual recognition arrangements (MRAs)
forlaboratory accreditation withsimilar entities inmany countries, including most EUmember
States70,Australia, Hong Kong, Singapore, andtheUnited States.
61. Australia andNewZealand havenegotiated several agreements onstandards andtechnical
regulations under Article 12oftheCER. Under theAgreement onStandards, Accreditation and
Quality (ASAQ) entered intobytheAustralian Commonwealth andState Governments andthe
NewZealand Government inOctober 199071,theParties agreed totheprinciples oftheharmonization
ofstandards andthemutual acceptance ofcertification andaccreditation andtoalign theirstandards,
accreditation, product certification andquality practices asfaraspossible withthose recognized
internationally. TheJoint Accreditation System ofAustralia andNewZealand (JAS-ANZ) was
established in1991 bythetwoGovernments toestablish anaccreditation system forthecertification
ofconformity assessment systems.72Aprogramme torationalize standards hassofarresulted inthe
adoption ofsome 1,000 Joint Australia-New Zealand Standards, mostly based onISOorIEC
Standards, andtheauthorities expect thatsome 2,000 ofNewZealand 'sstandards willeventually be
jointwithAustralia.73Perhaps mostimportantly, theTrans-Tasman Mutual Recognition Arrangement
(TTMRA), regarding goods andoccupations, wasconcluded inJuly1996; itisexpected toenter into
force inmid-1997. Upon implementation oftheTTMRA, imported goods legally soldinonecountry
maybesoldintheother without theneedtocomply withadditional requirements ofthelatter,74and
persons registered topractice anoccupation inonecountry maycarry outthesame occupation inthe
other. Thepurpose oftheTTMRA istoimmediately remove technical barriers totrade andtothe
movement ofpersonnel, without theneedtofirstcomplete theharmonization ofstandards.75Laws
relating toquarantine requirements arepermanently exempt from theTTMRA.
70Austria, Portugal andtheBenelux countries aretheonlyexceptions.
71This reinforced a1988 Memorandum ofUnderstanding.
72Agreement Between New Zealand andAustralia Concerning theEstablishment oftheCouncil oftheJoint
Accreditation System ofNew Zealand andAustralia (JAS-ANZ). Standards New Zealand isaninternationally
recognized certification body andhasmettherequirements oftheJAS-ANZ; itoffers various marks, including
the'S'Mark andtheQuality Assured Supplier Mark, allofwhich areavailable tobothdomestic andimported
products.
73IfNew Zealand replaces itspractice ofaccepting overseas standards infavour ofadopting more Australian
Standards asjoint standards, joint standards would beexpected tonumber some 5,000.
74Toqualify, goods must bephysically imported intothefirstcountry.
75TheTTMRA isbased onAustralia 'sexisting inter-State mutual recognition scheme.WT/TPR/S/20 Trade Policy Review
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62. NewZealand andtheEuropean Union haveinitialled anagreement forthemutual recognition
ofconformity assessment. Thefinaltextwillenter intoforce afterbeing signed bytheauthorities
ofthetwoParties. Under theagreement, thetwoparties would, indesignated sectors, grant mutual
acceptance ofreports, certificates andmarks ofconformity drawn upandissued bycompetent bodies
ofaparty totheagreement. InAPEC, agreement hasbeenreached toalign national standards to
international standards, where feasible andappropriate; priority areas foralignment have been
identified.76
63. Intheareaoftelecommunications, theTelecommunications Act1987 provides network
operators inNewZealand therighttoestablish standards forcustomer premises equipment (CPE) to
beconnected totheir network.77Network operators aresubject tocompetition legislation inthis
respect, asinother matters. Telecom, theformer State-owned monopoly (Chapter IV(4)) andthe
largest network operator, hasestablished a"Permit toConnect" (PTC) certification system. Telecom
prepares PTC specifications andaccredits laboratories, bothinNewZealand (including Telecom
laboratories) andoverseas, forthetesting tothese specifications. Complying equipment isallowed
tocarry the"Telepermit" label, subject tothepayment ofcertain feessetbythetesting laboratories.78
Telecom issues abi-monthly Telepermit Register indicating allTelepermits granted andproviding the
industry withinformation onthecurrent market situation.
(vi) Sanitary andphytosanitary measures
64. Three agencies inNewZealand haveresponsibilities intheareaofsanitary andphytosanitary
(SPS) measures. TheMinistry ofAgriculture administers regulations regarding animal health and
plant health measures fortheimport andexport ofanimals, plants andtheir products. Italso
administers human health measures forexports ofprimary products (such asmeat, dairy, seafood and
horticultural products) andforallmeat anddairy products soldonthedomestic market (whether
domestically produced orimported) andprovides export certification formeat, fishanddairy
exports.79TheMinistry ofHealth administers human health measures (other thanformeatanddairy
products)80,aswellaslabelling andcomposition standards, forfoodsoldonthedomestic market;
andsanitary measures against pestsand/or disease vectors. Italsofacilitates theclearance ofimported
foods andtheexport offoodmanufactured under itscontrol. TheMinistry ofForestry administers
plant health measures forforestry imports andexports. Inallcases, thestandards faced byimports
arethesame asthose facing domestic products.
65. Theauthorities haveassessed NewZealand 'slawsandregulations andconcluded thatthey
areinconformity withNewZealand 'sobligations under theWTO Agreement ontheApplication of
Sanitary andPhytosanitary Measures. NewZealand believes thatthisAgreement isleading toa
76Thefourinitial priority areas are: refrigerators, televisions andairconditioners; rubber condoms and
medical gloves; unplasticized PVC pipes andfittings; andfoodlabelling. Case studies have been conducted
inthese areas, andrecommendations arebeing provided. Future priority areas arebeing determined.
77Ministry ofCommerce (1993).
78InNew Zealand, thistesting function isopen tocompetition.
79New Zealand 'smeat inspection programme isdescribed inMinistry ofAgriculture (1995).
80Thefoodstandard system iscurrently under review andthesystem fordevelopment andpromulgation of
food standards maybestreamlined.New Zealand WT/TPR/S/20
Page 53
general improvement inthemanner inwhich SPSmeasures areapplied byWTO Members, andthat
thisishelping toopentrade.
66. Theprocess ofdeveloping andadopting SPSmeasures inNewZealand, toprotect agricultural
industries from theintroduction ofnewpests anddiseases, begins withthedetermination ofthe
required SPSstandards andmeasures.81Thisdetermination, made bytheappropriate agency, isbased
onaproposal forimport, which maycontain information onorganisms associated withtheproduct
proposed forimport, andanassessment oftheriskassociated withtheimportation oftheproduct.82
Standards andmeasures arethendesigned withtheobjective ofeffectively managing these riskswhile
taking intoaccount relevant international agreements, standards andguidelines. Following aprocess
ofconsultation withinterested domestic andforeign parties, theMinistry ofAgriculture finalizes these
standards andmeasures. Following publication, thecompliance ofexporting countries withthe
standards andmeasures areassessed, andcompliance checks andinspections, perhaps including a
period ofpost-entry quarantine, arecarried out, normally upon entry intoNewZealand.83
Surveillance systems existtodetect theintroduction ofnewpests anddiseases, andresponse systems
andstrategies havebeenformulated toeradicate orcontain them. Theprocedure fordeveloping and
implementing aplant import health standard, beginning with therequest foraccess from the
designated National Plant Protection Organization (NPPO) oraNewZealand importer, isshown in
Chart III.1.84
67. According totheauthorities, NewZealand aimsatanacceptable levelofriskwithrespect to
imports ofanimals andanimal products. Thisapproach, based onanassessment ofhazards and
knowledge orexperience withexternal factors thatmayconstitute arisktoanimal health, combined
withNewZealand 'sparticular situation asanagricultural-based island country, hasledtotheeffective
prohibition ofimports ofcertain products, suchasfresh chicken, andunpasteurized cheeses.85The
authorities recognize thatprohibitions suchasthatonfresh chicken have theincidental effect of
providing protection forthedomestic industry.
68. Since theimplementation oftheNewZealand/Australia JointFood Standards Setting System
on1July1996, foodsoldinNewZealand mustmeettherequirements ofeither the1981 Food Act
andthe1984Food Regulations (which specify compositional andlabelling requirements foreachfood
orgroup offood) ortheAustralian Food Standards Code.86From 1July1996, NewZealand and
Australia haveagreed toco-operate ondeveloping common criteria forclassifying andmonitoring
high-risk imported foods. Imported foodismonitored forfoodsafety compliance bytheMinistry of
81Theprincipal features ofNew Zealand 'sSPSregulatory framework aresetoutinWTO document
G/SPS/W/3, April 1995. New Zealand 'scontact point under theWTO Agreement ontheApplication of
Sanitary andPhytosanitary Measures isprovided inG/SPS/ENQ/3/Rev.1.
82New Zealand 'sriskassessment procedures areexplained inWTO document G/SPS/W/20, June 1995.
83New Zealand setspre-export testing procedures aspartoftheSPSrequirements forparticular imports or
from particular countries.
84This isanupdated andcorrected version ofanattachment toWTO document G/SPS/W/36, November
1995, which explains thedevelopment andimplementation ofaplant import health standard inNew Zealand.
85Theauthorities have noted thatwhile New Zealand lawrequires thepasteurization ofallcheeses,
unpasteurized hardcheeses present nodanger.
86This isatransitional agreement pending constitution ofajoint setofstandards.WT/TPR/S/20 Trade Policy Review
Page 54
Health. Imported foodproducts, including alllow-acid canned foods, softcheeses, shellfish, and
some spices, aremonitored bytheMinistry ofHealth onthebasis oftheriskposed topublic health
andmaynotbeimported without explicit approval from theMinistry. According totheauthorities,
theintensity ofsurveillance depends ontheMinistry 'slevel ofconfidence incertification bythe
exporting country. Food safety certification oftheexporting country isaccepted bytheMinistry of
Health, based onitsevaluation ofthemethod ofinspection andsampling, testing, laboratory
accreditation, andother factors.
69. NewZealand haspursued mutual recognition arrangements (MRAs) intheagriculture and
foodsector. Aco-operation agreement withtheUnited States isinforce withregard totrade infish
andfishery products87,andanequivalency agreement isinforce withCanada forseafood. A
veterinary agreement withtheEUiswell-advanced; under it,theEUandNewZealand areto
recognize theequivalency ofeachother'ssanitary measures, initially onanagreed listofanimals and
animal products. NewZealand accepts asequivalent theinspection andcontrol systems orsanitary
measures ofCanada andtheUnited States forthefoodproducts covered intherespective MRA; this
would eventually apply totheEUaswell. Thus, foodimports sourced from these countries and
meeting theconditions oftheMRA aredeemed tomeet NewZealand 'sfoodstandard criteria.88
87United States Federal Register, 26February 1996.
88However, some testing ofsuch products isstillperformed inorder toverify conformity with the
arrangement.New Zealand WT/TPR/S/20
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Generic MRA models arebeing established inthecontext oftheAPEC toprovide acommon
framework forbilateral MRAs among APEC members. The1995 Agreement onJoint Food
Standards wasthefirsttodevelop asingle authority todevelop jointstandards forAustralia and
NewZealand. Theharmonized Australia-New Zealand Food Standards Code isexpected tobe
completed in1999; intheinterim, asystem ofdualstandards andmutual recognition isinplace to
remove technical barriers totrade inthefoodsector, withtheexception ofsome SPSmeasures.
(vii) Government procurement
70. NewZealand, which views government purchasing decisions asbeing essentially thesame as
commercial private purchasing decisions, relies heavily onindividual public entities tominimize the
costs oftheirownpurchases. Asaresult ofpublic sector reforms (Chapter II,BoxII.1), public
sector chief executive officers areheldstrictly accountable totheir respective Ministers forthe
performance ofpublic entities, including thecontainment ofcosts.89Great flexibility isprovided to
public entities fortheprocurement ofgoods andservices astheyseefit:nolegislation orregulations
arespecifically directed atgovernment procurement, andthere isnoofficial uniform procurement
procedure inNewZealand, although asnoted below, there areguidelines issued bytheMinistry of
Commerce. Thus while there isnoprovision fortheuseoflocalpreferences,90neither arethere any
explicit restrictions ontheiruse,andtheguidelines areadvisory. Because ofitsdecentralized nature,
according totheauthorities nostatistical dataareavailable withrespect togovernment procurement.91
71. NewZealand isnotasignatory totheplurilateral WTO Agreement onGovernment
Procurement anddoesnotintend toseekmembership totheAgreement. Theauthorities areofthe
view that: thetrade-liberalizing effects oftheAgreement arelimited byitsaccommodation of
bilateral reciprocity andsectoral exceptions; administrative rulesoftheAgreement would, ineffect,
require NewZealand tore-regulate itsdecentralized procurement policy; andpractices and
compliance costs forNewZealand would besubstantial. Theauthorities believe NewZealand 's
régime tobemore liberal thanthatrequired bytheAgreement.
72. TheMinistry ofCommerce haspolicy, monitoring andcomplaints investigation responsibility
forgovernment procurement. Itspurchasing policy guidelines provide recommended procedures for
government purchasers.92Purchasers areadvised to"fully consider theadvantages ofpurchasing
locally" butto"make thefinalchoice onthebasis ofvalue formoney." Itisgovernment policy,
however, thatprocurement procedures provide fullandfairopportunity forlocalsuppliers. Central
89Inthisrespect, itisimportant tonotethatNew Zealand 'spublic service isconsidered among theleast
corrupt intheworld (based onthe1996 Internet Corruption Ranking ofTransparency International andthe
University ofGöttingen (http://www.gwdg.de/ ~uwvw/icr.htm )).Arecent report bytheOffice oftheU.S.Trade
Representative noted that"Much ofthecredit forNew Zealand 'sderegulated procurement system being
competitive must gotoitsstiffanti-corruption laws" andtheir strict enforcement (USTR, 1996b).
90New Zealand eliminated remaining government purchasing preferences fordomestic goods inJuly1992,
coinciding withtheremoval ofimport licensing forprivate sector imports.
91Government agencies arenotrequired to,andaccording totheauthorities donot,collect data on
purchasing. Itisestimated thattheNew Zealand Government annually purchases some $3billion ofgoods and
services from theprivate sector; information ontheshare ofcontracts granted toforeign suppliers isnot
available.
92Principles forthese guidelines were approved bytheCabinet. Ministry ofCommerce (1994b) and
Ministry ofCommerce (1994c).WT/TPR/S/20 Trade Policy Review
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government departments andministries arerequired toobtain origin andlocal-content information on
alloffers tosupply goods. TheIndustrial Supplies Office oftheMinistry ofCommerce provides
support forthepolicy oflocal purchasing byfacilitating contact andtheexchange ofinformation
between public sector buyers andsuppliers. Itprovides market research andmaintains adatabase of
information onNewZealand industry andlinks withAustralia 'snetwork ofsimilar offices.
73. NewZealand isamember oftheGovernment Procurement Agreement (GPA), having joined
itspredecessor, theNational Preference Agreement among Australian States, in1989. Under the
GPA, theNewZealand Government andbodies controlled byitmust treatAustralian products and
suppliers equally withNewZealand products andsuppliers inallaspects ofgovernment purchasing,
andtheAustralian Commonwealth, State andTerritory Governments undertake similar obligations.
IntheGPA, NewZealand hasalsoundertaken tocontinue itscurrent policy ofnotapplying a
preference margin toanypurchases. TheGPA extends topurchases ofallservices, including those
services listed intherespective CER Services Protocols.
74. Government purchasing policy istobeincluded ineachAPEC country 'sIndividual Action
Plan. According totheauthorities, noNewZealand practices arecounter totheAPEC principles on
government procurement. NewZealand believes thatgovernment procurement intheAPEC context
doesnotrequire special rules andthattheapplication andenforcement ofbasic multilateral trade
principles ofnational treatment, non-discrimination andtransparency isthemost appropriate
approach. NewZealand willseektohavethisapproach adopted inAPEC 'snon-binding principles
onprocurement, which aretobedeveloped by2000.
(viii) Local-content requirements
75. NewZealand hasnolocal-content requirements outside ofdefence-related purchasing. In
other areas ofgovernment procurement, government departments mustrequire information onlocal
content ofgoods andservices offered forsupply butaretoaward contracts tothebestavailable
source, based ontheirownassessment ofallcosts andbenefits.
(ix) Anti-dumping andcountervailing dutyactions
76. NewZealand hasbeenamoderately active userofanti-dumping actions andhasoccasionally
usedcountervailing (anti-subsidy) actions. From June1990 toApril 1996, NewZealand initiated
44anti-dumping investigations, leading totheimposition of23additional finalmeasures. Asat
February 1996, 26definitive anti-dumping duties wereinforce, including fouragainst Thailand and
three eachagainst China, Chinese Taipei, andKorea.93Since 1990, NewZealand hasinitiated four
subsidies investigations, leading totheimposition ofoneadditional finalcountervailing dutymeasure.
NewZealand 'santi-dumping andcountervailing measure actions areshown inTable III.6: thetable
indicates thedateofinitiation ofaninvestigation; itsresult; thedatebywhich anexisting measure
istobereviewed; andthedatebywhich measures currently inforce willhavetobeterminated,
according tothefive-year limitontheduration ofanti-dumping andcountervailing measures. Ofthe
70anti-dumping investigations initiated since 1982, 29have been rejected, usually because the
relevant injury criterion hadnotbeenmet. Allanti-dumping measures resulting fromactions initiated
before 1988 havebeenrevoked, ashavesome more recent measures. Sixofthetencountervailing
dutyinvestigations initiated since 1982 haveledtorejections, andnofinaldetermination hasbeen
reached intwocases asatJuly1996.
93WTO document G/ADP/N/9/NZL, February 1996, andinformation provided bytheauthorities.New Zealand WT/TPR/S/20
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Table III.6
Anti-dumping andcountervailing dutyactions, 1982-1996
Product Exporting country Date of
initiationResult Review Date of5-year
sunset
Antidumping actions initiated
Power transformers
Powers transformers
Harbour tugs
Canned beer
Power transformers
Aluminium foil
Welding electrodes
Surgical facemasks
Twist drills
Conveyor belting
Hairshampoo base
Wheat
Choline chloride
Aluminum sheet plate andcoil
Aluminum passenger catamarans
Hogbristle paint brushes
Refined sugar
Refined sugar
Refined sugar
Aluminium sheet
Canned catfood
Refined sugar
Refined sugar
Refined sugar
Refined sugar
Plasterboard
Lead acidbatteries
Lead acidbatteries
Lead acidbatteries
Lead acidbatteries
Lead acidbatteries
Lead acidbatteries
Passenger radial tyres
Passenger radial tyres
Passenger radial tyres
Primary cellbatteries
Lead acidbatteries
Certain men'sfootwear
Certain men'sfootwear
Certain men'sfootwear
Certain men'sfootwear
Certain men'sfootwear
Certain men'sfootwear
Certain non-leather women 'sfootwear
PVC cling film
PVC cling film
Oilfilters
Steel reinforcing bar
Home brew beerkits
Plaster ofParis bandagesEU-Finland
EU-Italy
Australia
Australia
EU-Italy
Australia
Australia
Japan
Australia
Japan
Australia
Australia
Germany
Australia
Australia
China
EU-Germany
Malaysia
Thailand
Indonesia
Australia
EU-Belgium
EU-Denmark
EU-Netherlands
Papua NewGuinea
Thailand
Indonesia
Korea
Malaysia
Singapore
Chinese Taipei
Thailand
Japan
Korea
Chinese Taipei
Korea
Philippines
China
Hong Kong
Indonesia
Korea
Chinese Taipei
Thailand
China
Korea
Chinese Taipei
USA
India
EU-United Kingdom
EU-GermanyJune1982
Aug. 1984
Nov. 1984
Nov. 1985
July1986
Oct.1986
Oct.1986
Oct.1986
Oct.1986
Nov. 1986
Jan.1987
Feb.1987
March 1987
Sept. 1987
Dec. 1987
Jan.1988
May1988
May1988
May1988
Oct.1988
Dec. 1988
Dec. 1988
Dec. 1988
Dec. 1988
Dec. 1988
July1989
June1991
June1991
June1991
June1991
June1991
June1991
Nov. 1991
Nov. 1991
Nov. 1991
Jan.1992
Feb.1992
March 1992
March 1992
March 1992
March 1992
March 1992
March 1992
April 1992
April 1992
April 1992
July1992
Sept. 1992
Dec. 1992
Dec. 1992D(rev.)
R
D(rev.)
D(rev.)
D(rev.)
D(rev.)
D(rev.)
R
R
R
R
R
R
D(rev.)
D(rev.)
D
D
D
D
R
R
D
D
D
R
D
D
D
D
D
D
R
R
R
R
U(rev.)
D
D
R
D
D(rev.)
D(rev.)
D
D
D(rev.)
D(rev.)
D
R
R
*April 1992
Nov. 1993
Nov. 1993
Nov. 1993
Nov. 1993
Nov. 1993
Nov. 1993
Feb.1996
June1994
June1994
June1994
June1994
June1994
Sept. 1993
July1996
July1996
July1996
July1996
July1996
March 1996
Oct.1994
Oct.1994
April 1996April 1997
Nov. 1998
Nov. 1998
Nov. 1998
Nov. 1998
Nov. 1998
Nov. 1998
Feb.2001
June1999
June1999
June1999
June1999
June1999
Feb.1997
July2001
July2001
July2001
March 2001
April 2001
Table III.6 (cont'd)WT/TPR/S/20 Trade Policy Review
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Product Exporting country Date of
initiationResult Review Date of5-year
sunset
Men'sshirts
Men'sshirts
Aluminium foil
Aluminium tread plate
Sweetened condensed milk
Leather jackets
Disposable lighters
Disposable lighters
Abrasive wheels
Abrasive wheels
Disposable lighters
G-clamps
Oilfilters
Oilfilters
Oilfilters
Oilfilters
Certain other plasterboard
10mm plasterboard
Canned peaches
Canned apricots
Countervailing dutyactions initiated
Harbour tugs
Wheat
Aluminium passenger catamarans
Edible rapeseed oil
Edible rapeseed oil
Edible rapeseed oil
Alloy wheels
Sweetened condensed milk
Baked beans intomato sauce
Spaghetti intomato sauceChina
Hong Kong
Indonesia
EU-Italy
Thailand
Pakistan
China
Philippines
Korea
Chinese Taipei
Indonesia
EU-United Kingdom
Canada
Indonesia
Korea
Thailand
Thailand
Thailand
South Africa
South Africa
Australia
Australia
Australia
Canada
EU-Germany
EU-Netherlands
Australia
Thailand
EU-Italy
EU-ItalyJan.1994
Jan.1994
Aug. 1994
Oct.1994
Nov. 1994
Dec. 1994
Feb.1995
Feb.1995
April 1995
April 1995
May1995
July1995
July1995
July1995
July1995
July1995
Oct.1995
Jan.1996
Feb.1996
April 1996
Nov. 1984
Feb.1987
Oct.1987
May1988
May1988
May1988
Dec. 1990
July1995
March 1996
March 1996R
R
R
R
D
R
R
R
D
D
R
D
R
R
R
R
D
D
D
-
R
R
D(rev.)
R
R
R
U
R
-
-Aug. 1990
Aug. 1994Nov. 1999
April 2000
April 2000
July2000
Oct.2000
July2001
Aug. 2001
Aug. 1999
Note: D-duty; U-undertaking; R-rejection; (rev.) -measure applied andsubsequently revoked.
* Affirmative finaldetermination, butnoaction taken.
- Nofinaldetermination asatJuly1996.
Source: Information provided bytheNewZealand authorities.
77. The1988 Dumping andCountervailing Duties Act,asamended, comprises NewZealand 's
subsidies andanti-dumping legislation. NewZealand acceded totheTokyo Round Agreement on
Interpretation andApplication ofGATT Articles VI,XVI, andXXIII (theSubsidies Code) in1981
andtotheAgreement onImplementation ofGATT Article VI(theAnti-Dumping Code) in1988.
During theUruguay Round negotiations, itwasNewZealand 'sposition thatfewchanges wereneeded
totheAnti-Dumping Code, butthattheanti-dumping practices ofsome countries should more closely
follow theprinciples andprovisions oftheCode.94Subsequent totheRound, NewZealand legislation
wasamended toreflect theobligations oftheWTO Agreement onSubsidies andCountervailing
Measures andtheWTO Agreement ontheImplementation ofArticle VIoftheGATT 1994.95The
94Ministry ofCommerce (1994), p.11.
95Relevant legislation was notified totheWTO inWTO documents G/ADP/N/1/NZL/2 and
G/SCM/N/1/NZL/2, August 1995.New Zealand WT/TPR/S/20
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process ofincorporating thenewobligations intodomestic lawbegan withanexplanatory paper by
theMinistry ofCommerce, inwhich amendments tothelegislation were suggested.96Following
comments, adraftbillwasprepared andfollowed thenormal Parliamentary process, resulting inthe
Dumping andCountervailing Duties Amendment Act1994. Changes include amendments tothe
definition of"subsidy"; theestablishment ofarequirement thatdomestic producers explicitly
supporting ananti-dumping petition account foratleast25percentofdomestic output produced for
domestic consumption inorder toinitiate aninvestigation; theintroduction ofafive-year limiton
theduration ofcountervailing andanti-dumping duties; theremoval ofprovisions forthe
establishment ofnormal values inananti-dumping investigation concerning State-trading countries;
andtheintroduction ofdeminimis margins withrespect tolevels ofimports andinjury.
78. TheNewZealand authorities areconsidering initiating public discussions ofproposals that
involve giving greater weight tothenational interest indeciding whether toimpose anti-dumping
measures. Thisstems from arecognition thatwhile "dumped" imports maycause injury tothe
competing domestic industry, theuseofanti-dumping measures canoften cause injury toother
domestic industries andtodomestic consumers. Such discussions could alsoinclude theissue of
whether theauthorities could consider certain conditions intheexporting country, suchastheimport
régime andtheeffectiveness ofcompetition policy, indetermining thenature oftheresponse toa
finding ofdumping.
79. From 1982 to1990, 10ofthe26anti-dumping investigations initiated byNewZealand were
against Australian firms, andsixfinalmeasures wereputintoforce against Australian firms. Since
July1990, NewZealand andAustralia havenotapplied anti-dumping provisions totheirbilateral
trade.97Thetwocountries weremoving froma"managed tradeenvironment, including anti-dumping
policy, tofreetrade"98andreasoned thatanti-dumping actions were ananomaly insuch an
environment. Theextension ofeach country 'scompetition lawtocover trans-Tasman trade
(section 5)wasanimportant political economy consideration thatfacilitated theelimination oftrans-
Tasman anti-dumping.
96Ministry ofCommerce (1994d).
97Thepossibility ofcountervailing measures asaresponse tosubsidies continues toapply.
98Australia andNew Zealand jointly submitted apaper onthissubject totheOECD in1992 (OECD, 1992).
Foradissenting view seeKewalram (1993), whoargues thatsince "Anti-dumping duties aimatprotecting
domestic industry, which canbeharmed withorwithout tariff barriers", that"there isnoinherent requirement
thatthecreation ofafreetrade areamust leadtotheremoval ofanti-dumping duties between Australia and
New Zealand."WT/TPR/S/20 Trade Policy Review
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(x) Safeguard actions
80. NewZealand made several amendments toitsTemporary Safeguards Authorities Actin1994
inorder toensure consistency withtheWTO Agreement onSafeguards.99Definitions wereamended
orintroduced fortheterms "industry", "directly competitive goods", and"serious injury"; the
description ofthefactors tobeconsidered when determining injury wasamended. NewZealand 's
previous legislation hadlimited theduration ofsafeguard measures to12months; intheamended
legislation, NewZealand allows thefullduration consistent withitsWTO obligations.100
81. NewZealand didnotretain theright tothespecial safeguard provisions oftheWTO
Agreement onTextiles andClothing.101Under theprovisions oftheWTO Agreement onAgriculture,
NewZealand retained theright tospecial safeguards forapples (HS0808.10), pears (0808.20) and
hops(1210.10 and1210.20); NewZealand hasnotinvoked these provisions anddoesnotintend to
invoke them inthefuture.102
82. Under itsTemporary Safeguard Authorities Act,NewZealand hasmade fourinquiries since
1988.103These havebeenonfootwear; usedtyres; abrasive discsandwheels; andmen'sandboys'
briefs. Only thelatter resulted inasafeguard action.104
(3) Measures Directly Affecting Exports
(i) Export taxes andsubsidies
83. NewZealand neither applies export taxes norgrants export subsidies.
(ii) Export licensing andexport permit requirements
84. NewZealand hasveryfewexport restrictions. Fordomestic supply reasons, itmayprohibit
orrestrict exports ofcopper andcopper-based metals andscrap, other than toAustralia
(Table III.7).105Theauthorities havemade reference toArticle XX(j) oftheGATT 1994 forthis
99Background information isprovided inMinistry ofCommerce (1994d).
100Article 7oftheAgreement limits theduration tofour years butmakes provision, under certain
circumstances, forextension andatotal duration ofuptoeight years.
101WTO document G/TMB/N/119, August 1995.
102WTO document G/AG/N/NZL/4, March 1996.
103TheActwasnotified totheWTO indocument G/SG/N/1/NZL/1, April 1995.
104Anincrease indutyof37cents perpairwasinplace from 1January 1993 to26May 1994.
105Therestriction applies tocopper waste andscrap; copper bars, rodsandprofiles; copper wire; and
copper tubes andpipes (HS74.04, 74.07, 74.08 and74.11, respectively).New Zealand WT/TPR/S/20
Page 61
measure.106Thepurpose oftherestrictions isto"ensure thatlocal supplies arenotdepleted tothe
detriment oflocalindustry." TheMinistry ofCommerce isresponsible forissuing permits andwill
dosoonlywhen thecopper hasbeenoffered locally forsaleandlocalpurchasers haveindicated that
theydonotrequire thecopper. According totheauthorities, exports ofcopper usually occur without
restriction; theprovisions areinplace tofacilitate export monitoring andtoenable theauthorities
tostabilize export flows intheevent ofadomestic shortage. NewZealand hasalsoundertaken export
restrictions onsubstances harmful totheozone layerunder theMontreal Protocol ontheOzone Layer
andonhazardous wastes under theBasel Convention ontheTransboundary Movement ofHazardous
Wastes andhasmade reference toArticles XX(b) andXX(g) oftheGATT 1994 forthese measures
(section 2(iii)). Other export prohibitions orrestrictions areinplace forreasons suchassecurity,
animal welfare, conservation, andconsistency withUnited Nations sanctions.
85. Exports ofcertain agricultural products arerestricted totherespective marketing board,
exporters approved bysuchaboard, orrelevant producer organizations (section (iii)below). The
products covered areapples andpears; fishandfishproducts; kiwifruit; meat; dairy products;
raspberries; certain other horticultural products; andgrape andkiwifruit wine. Forthese measures,
theauthorities invoke inparticular Article XI(2)(b) oftheGATT 1994, which refers tomeasures
"necessary totheapplication ofstandards orregulations fortheclassification, grading ormarketing
ofcommodities ininternational trade."
106Submission under theNotification Procedures forQuantitative Restrictions (adopted bytheWTO Council
forTrade inGoods inWTO document G/L/59, Dec. 1995) andWTO document G/MA/NTM/QR/1, March
1996. Thetextofthesubmission isavailable forconsultation intheSecretariat.WT/TPR/S/20 Trade Policy Review
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Table III.7
Export prohibitions andrestrictions asatMarch 1995
AuthorityProducts covered Purpose ofprohibitionResponsible
ministry or
department
Export Prohibition
Regs.Copper andcopper-based metals andscrap,
other thantoAustraliaTocontrol theexport of
copper scrapMin. ofCommerce
FishPacking forExport
Regs.; FishExport
Licensing Regs.Fish, fishmeal, fishoilandproducts
containing more than5percentbyweight of
fishintended forbaitorhuman consumptionQuality control Fishing Industry
Board; Min. of
Agric. andFisheries
Apple andPear
Marketing Act1971Apples andpears Marketing ofapples and
pearsNZApple andPear
Marketing Board;
Min. ofAgric. and
Fisheries
Kiwifruit Marketing
Licensing Regs.Kiwifruit Marketing ofkiwifruit NZKiwifruit
Marketing Board
Meat Act1981 Meat andgame products Quality control Min. ofAgric. and
Fisheries
NZDairy Board Act
1961Dairy produce Marketing ofdairy
productsNZDairy Board
NZHorticulture Export
Authority Act1987Certain horticultural products (e.g. apricots,
blueberries, squash)Marketing ofthese
horticultural productsNZHorticultural
Export Authority
Raspberry Marketing
Regs. 1979Raspberries Marketing ofraspberries Raspberry Marketing
Council
Wine Makers Act1981 Grape andkiwifruit wine Quality control Min. ofHealth
Export Prohibition
Regs.Catskins Toprevent export
Export Prohibition
Regs.Cattle, deer, goats andsheep Animal welfare Min. ofAgric. and
Fisheries
Export Prohibition
Regs.Hazardous wastes covered bytheBasel
ConventionTocontrol theexport of
hazardous wastesMin. ofCommerce
Export Prohibition
Regs.Sealskins Conservation measure Dept. of
Conservation
Marine Mammals
Protection Act1978Marine mammals Toprotect marine
mammalsMin. ofAgric. and
Fisheries
Misuse ofDrugs Act
1975Controlled drugs Tocontrol theexport of
drugsMin. ofHealth
Ozone Layer Protection
ActOzone-harmful substances exported to
countries notparty totheMontreal ProtocolToprotect theozone layer Min. ofCommerce
Civil Aviation Regs.
1953Aircraft Registration ofaircraft Civil Aviation
Authority
Niue Act1966; Cook
Islands Amendment
Act1966Intoxicating liquor Prevent export of
intoxicating liquor to
Niue andtheCook
Islandsn.a.
Table III.7 (cont'd)New Zealand WT/TPR/S/20
Page 63
AuthorityProducts covered Purpose ofprohibitionResponsible
ministry or
department
Wool Industry Act
1977Wool Toensure thecollection
ofWool Board LeviesNZWool Board
Antiquities Act1975 Antiquities Tocontrol theexport of
these articlesDept. ofInternal
Affairs
Export Prohibition
Regs.Forest produce (e.g. logs, sawn timber) Conservation/quality
control measuresMin. ofForestry
Export Prohibition
Regs.Greenstone (articles made from greenstone are
notincluded intheprohibition)Conservation measure Min. ofMaori
Development
Trade inEndangered
Species Act1989Endangered, threatened andexploited species Prevent trade inthese
species andtheirproductsDept. of
Conservation
Wildlife Act1953 Birds (other thandomestic birds) andother
wildlifeConservation measure Dept. of
Conservation
Export Prohibition
Regs.Strategic goods (e.g. computers, firearms,
ammunition)Control theexport of
strategic goodsMin. ofForeign
Affairs andTrade
Export Prohibition
Regs.Chemicals, biological agents andchemical
pathogens, anddual-use equipment useful in
themanufacture ofchemical andbiological
weaponsTocontrol theexport of
chemicals thatmaybe
usedinthemanufacture
ofsuchweaponsMin. ofForeign
Affairs andTrade
U.N. Sanctions (Iraq)
Regs. 1991Allgoods toIraq U.N. sanctions Min. ofForeign
Affairs andTrade
U.N. Sanctions
(Liberia) Regs. 1992Weapons andmilitary equipment toLiberia U.N. sanctions Min. ofForeign
Affairs andTrade
U.N. Sanctions (Libya)
Regs. 1992Thefollowing goods toLibya: weapons,
aircraft andcomponents, oilandnatural gas
refining equipment, andmaterial forairfield
constructionU.N. sanctions Min. ofForeign
Affairs andTrade
U.N. Relations
Sanctions (Rwanda)
Regs. 1994Weapons, etc.toRwanda U.N. sanctions Min. ofForeign
Affairs andTrade
U.N. Sanctions
(Somalia) Regs. 1992Weapons andmilitary equipment toSomalia U.N. sanctions Min. ofForeign
Affairs andTrade
n.a. Notapplicable.
Source: NewZealand Customs (1995b).
(iii) Export monopolies andexport marketing restrictions
86. NewZealand hasseveral export monopolies, which market certain agricultural products on
acommercial basis andwithout government financial support. Thus, apples andpears maybe
exported onlybytheApple andPearMarketing Board, orwithpermission oftheBoard. The
domestic andexport marketing ofhopsiscontrolled bytheHopMarketing Board, which also,until
1995, controlled thevolume ofhops imports forlocal brewing purposes. Dairy products maybe
exported onlybytheNewZealand Dairy Board, orbyagents whohavetheBoard 'spermission. The
Raspberry Marketing Council controls theexportation ofraspberries andhastheauthority tofix
domestic marketing quotas. TheNewZealand Kiwifruit Marketing Board exercises amonopoly over
theexportation ofkiwifruit, other thantoAustralia. Exports toAustralia other thanbytheBoard areWT/TPR/S/20 Trade Policy Review
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limited tokiwifruit forconsumption inAustralia; thisexclusion exists because theBoard was
established aftertheCER entered intoeffect.107TheWool Board andMeat Producers Board have
latent export marketing powers, andtheGame Industry Board haslatent export licensing powers.108
Theresponsibilities ofsome ofthese entities arefurther examined inChapter IV(2).
87. Themarketing boards havebeencriticized bothinNewZealand andbysome trading partners.
In1991, astudy commissioned bytheNewZealand Trade Development Board argued forare-
examination ofmarketing boards andtheirmonopoly rights.109Considerable reform hastaken place.
Forexample, thedomestic markets forapples andpears werederegulated asfromJanuary 1994. The
Dairy Board andtheApple andPear Marketing Board arenowrequired topublish guidelines
specifying thecriteria tobeusedindetermining whether togrant export permission toother agents.
Theauthority tonegotiate andapprove services andratesforthetransport ofmeat andwool from
NewZealand aretoberemoved asaresult ofrecent reviews ofthese Boards. Nevertheless, the
boards stillfacesome domestic opposition.110Proposals resulting from recent reviews oftheDairy
Board andtheKiwifruit Marketing Board would largely leave intact their directly trade-related
responsibilities orauthority (Chapter IV(2)).
88. TheNewZealand Horticulture Export Authority (NZHEA) facilitates theorganization of
export marketing strategies byhorticultural producer groups. Onepotential component ofagroup 's
export strategy istolimitthenumber ofexporters tobelicensed toanymarket orpartofamarket;
theNZHEA grants theexport licences.111According totheauthorities, theNZHEA currently grants
licences toallreasonable applicants andexport volumes arenotrestricted. However, exporters that
donotfollow theagreed strategy aresubject tothelossoftheirexport licence.
107Allother producer boards were established prior totheCER entering intoforce.
108Theentities inthisparagraph were described inNew Zealand 'snotification regarding State-trading
enterprises, WTO document G/STR/N/1/NZL, August 1995. TheWool Board hastheauthority to"control
thesale,disposal andexport ofwool" butdoesnotexercise thiscontrol inanydirect way. TheMeat Producers
Board hastheauthority "toassume control (notownership) ofexport meat, arrange foritsexport andsale, and
arrange forthepayment ofthenetproceeds totheowners" buthasnotexercised thisauthority inthelastten
years. TheGame Industry Board hastheauthority tolicence exports ofdeerproducts butdoes notexercise
thisauthority. TheGovernment hasagreed toremove these export marketing powers oftheMeat Producers
Board andtheWool Board andthelicensing powers oftheWool Board.
109Crocombe etal.(1991).
110InNew Zealand Business Roundtable (1996) itisnoted that"The arguments thathavebeenadvanced for
statutory controls onexports, such astheability toexploit market power, donotwithstand scrutiny.
Restrictions onexporting reduce product andmarket innovation...."
111Horticultural products currently recognized under theNZHEA are: apricots, avocados, blackcurrants,
blueberries, boysenberries, citrus, feijoas, garlic, myoga, nashi (Asian pears), nectarines, peaches, persimmons,
plums, squash, sweet cherries, table grapes, tamarillos andwasabi. Allexcept citrus arecurrently subject to
export licensing.New Zealand WT/TPR/S/20
Page 65
(iv) Export incentives andfinance
89. Theauthorities areoftheview thattheprivate sector hasbetter information thanthe
Government onwhich toassess risk; therefore, theNewZealand Government isnotinvolved inthe
provision ofexport credit guarantees.112According totheauthorities, theGovernment doesnot
provide export financing, export insurance, ortaxadvantages forthepromotion ofexports.113
(v) Export promotion andmarketing assistance
90. TheNewZealand Trade Development Board (TRADENZ) isaCrown entity whose purpose
is"Tofoster thedevelopment andexpansion ofNewZealand 'sforeign exchange earnings"114by
assisting theprivate sector indeveloping itsoverseas business. Services toexporters are,according
totheauthorities, generally provided onacost-recovery basis, except forthesupport ofparticipation
intrade fairsandcertain trade promotion activities forwhich theprivate sector assumes atleasthalf
thecost. TheGovernment 'scontribution totheTRADENZ budget issome $52million ayear,
equivalent toabout 90percentofthetotalbudget.115TRADENZ rewards outstanding export
performance withnon-financial awards tobeusedtoadvance foreign exchange earning efforts.116
(vi) Policies implemented inother countries
91. While recognizing thatitsownbestpolicy isoneofliberal trade, regardless ofpolicies
undertaken byitstrading partners, NewZealand closely monitors other countries 'measures thatit
believes restrict NewZealand exports. Prominent aremeasures onagricultural items, particularly
those forwhich non-tariff measures were recently tariffied under theprovisions oftheWTO
Agreement onAgriculture. Other general areas ofconcern regarding policies ofother countries
include standards, sanitary andphytosanitary measures, theeffects ofsubsidized exports inthird-
country markets andanti-dumping andcountervailing duty measures. Final anti-dumping and
countervailing dutymeasures ineffect against NewZealand asatend-1995 arelisted inTable III.8.
112TheGovernment solditsexport credit insurance business, EXGO, in1990 andhasnotissued such
insurance since 1991. Provision exists fortheCrown tocontract with EXGO tounderwrite export credit
insurance thattheGovernment considers tobeinthenational interest butthisprovision hasnotbeen used.
Officials oftheNew Zealand Trade Development Board have indicated thatcertain types offinancing have not
been offered bytheprivate sector, notably two- tofive-year export credits forrelatively risky countries.
113TheExport Market Development Taxation Incentive waseliminated in1990.
114TRADENZ (1995).
115New Zealand Business Roundtable (1996).
116Statistics New Zealand (1995a), p.539.WT/TPR/S/20 Trade Policy Review
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Table III.8
Anti-dumping andcountervailing dutymeasures onNewZealand exports
CountryHStariff
classification/
descriptionProduct group Type ofmeasure
Canada 9001.20 Steel sheet Anti-dumping duties
United
States0810.90
7408
7213.20
7229.90
7317.00Kiwifruit
Bronzing copper wire
Carbon steelwirerock
Steel wire
Steel wirenailsAnti-dumping duties atratesupto27percent.
Anti-dumping duties andsubsidy countervailing measures
Subsidy countervailing measures
Subsidy countervailing measures
Subsidy countervailing measures
Source: WTO Secretariat.
(4) Intellectual Property Protection
92. NewZealand hascomprehensively reviewed itsintellectual property rights legislation overthe
pastseveral years inorder to:takeaccount ofitsobligations under theWTO Agreement onTrade-
Related Intellectual Property Rights (TRIPS) andofdomestic andinternational developments in
business andtechnology; promote innovation; encourage theinward transfer oftechnology; and
minimize thecosts tobusinesses ofprotecting theirintellectual property rights. Themotivation for
many ofthechanges toNewZealand 'sintellectual property régime in1994 wastheimminent entry
intoforce oftheTRIPS Agreement in1995, along withtheother listed factors. NewZealand 's
intellectual property protection issummarized inTable III.9. Implementation isusually administered
bytheMinistry ofCommerce. Since October 1995, theMinistry hasbeen responsible forthe
administration ofcopyright andrelated rights, which previously were administered bytheMinistry
ofJustice.
93. NewZealand 'sintellectual property legislation generally doesnotallow forparallel imports.
However, thisvaries somewhat according tothetypeofintellectual property. Inallcases, itisup
totheNewZealand licensee topursue action against parallel imports. Thepolicy concerning parallel
imports interms ofpatents, designs andtrademarks iscovered bythePatents Act1953, theDesigns
Act1953, theTrade Marks Act1953 andtheassociated caselaw. Thecaselawhasestablished the
following principles. Where thetrademark onimported goods hasbeen applied bytheoverseas
parent company (being theregistered proprietor ofthetrademark) oftheregistered userofthe
trademark intheimporting country, andtheparent company hasnotsoldthegoods subject toa
condition prohibiting export ofthegoods, theregistered userisdeemed tohaveconsented totheuse
ofthemark forthepurposes ofSection 8(3)(a) oftheTrade Marks Act1953. Where thetrademark
onimported goods hasbeenapplied byalicensee oftheoverseas parent company oftheregistered
userintheimporting country, andthelicence under which thetrademark isapplied tothegoods is
subject toaterritorial limitation thatdoesnotallow theuseofatrademark intheimporting country,
theimportation ofthegoods willconstitute aninfringement ofthetrademark. Knowledge oflackof
consent totheuseofatrademark doesnothavetobeestablished inorder toestablish infringement.
Thelicensing oftheuseofatrademark bytheregistered proprietor inrelation tocountries other than
theimporting country isnottheexercise oftherightgiven byregistration intheimporting country
forthepurposes ofSection 8(3)(a) oftheTrade Marks Act1953, itistheexercise ofrights given by
registration inthecountry orcountries towhich thelicence relates.New Zealand WT/TPR/S/20
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Table III.9
Summary ofintellectual property protection inNewZealand corresponding toTRIPS obligations
Form Main legislation DurationTRIPS minimum
duration ofprotectionComments
Copyrights and
related rightsCopyright Act
1994Works: lifeofauthor
plus50years;
recordings and
programmes: 50years;
others: varied durationLifeofauthor plus
50years; 50years from
yearofperformance or
fixation; 20years from
yearofbroadcast
Geographical
indicationsGeographical
Indications Act
1994Unlimited Unlimited Newrégime; protection
against falseormisleading
usehadbeenprovided by
theFairTrading Act1986
Industrial designs Designs Act1953 15years 10years Protection forindustrial
designs isalsoprovided
under theCopyright Act
Patents Patents Act1953 20years 20years from filing
dateAmendments in1994 to
giveeffect torelated TRIPS
obligations, including
extension ofpatent duration
from 16to20years
Topographies of
integrated circuitsLayout Designs
Act199410years from first
commercial exploitationa10years from filing
date(or,ifearlier, from
firstuse)Enacted togiveeffect toall
TRIPS obligations inthis
area
Trademarks Trade Marks Act
19537years; renewable
indefinitely for14-year
periods7-year protection,
renewable indefinitelyAmendments in1994 to
giveeffect torelated TRIPS
obligations (eg., border
protection measures against
infringing goods; wider
scope ofprotected marks)
Undisclosed
information (reg.
animal remedies,
agric. chems. or
pharms.)Animal Remedies
Act1967;
Medicines Act
1981; Pesticides
Act19795years Nospecific period of
protection isprovidedAmendments in1994 to
giveeffect torelated TRIPS
obligations
a Ifthelayout design isfirstcommercially exploited within fivecalendar years following itsmaking, protection extends totheend
ofthetenth calendar yearafterthatinwhich thelayout design wasfirstcommercially exploited; otherwise protection extends
totheendofthefifteenth calendar yearafterthatinwhich thelayout design wasmade.
Source: Information provided bytheNewZealand authorities; andWTO Agreement onTrade-Related Intellectual Property Rights.
94. Where apatentee orasubsidiary sells overseas goods thataresubject toapatent in
NewZealand without anyrestriction onafurther saleorexport ofthegoods, theimportation ofthose
goods intoNewZealand willnotconstitute aninfringement ofthepatent. Where apatentee orits
subsidiary sellsoverseas goods thataresubject toapatent inNewZealand withrestrictions onthe
saleofthegoods, apurchaser ofthegoods whohasnotice ofsuchrestrictions canberestrained from
importing thegoods intoNewZealand forresale. Where alicencee sellsoverseas, intheterritory
covered bythelicensee 'slicence, goods thataresubject tothepatent inNewZealand, theimportation
ofthegoods intoNewZealand willbeaninfringement oftheNewZealand patent.
95. TheCopyright Act1994prohibits parallel imports except forprivate anddomestic use.This
policy retains thatapplying under theprevious 1962Act. TheGovernment decided onthisapproach
afterconsidering theresults ofaneconomic study andtaking intoaccount international considerations.WT/TPR/S/20 Trade Policy Review
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96. Copyrights andrelated rights areprovided bytheCopyright Act1994, which completely
rewrote thepre-existing copyright lawunder 1962 legislation inorder, interalia,togiveeffect to
obligations under theTRIPS Agreement. According totheauthorities, thenewlegislation, which is
based onthatoftheUnited Kingdom, complies withArticles 1-21ofthe1971 Revision oftheBerne
Copyright Convention.117TheActprovides protection forliterary (including computer programmes),
dramatic, musical andartistic works; sound recordings andfilms; broadcasts andcable programmes;
andthetypographical arrangement ofpublished editions. Changes made inorder tomeet TRIPS
Agreement obligations included: (i)theprotection ofdatabases andother material thatconstitutes
anintellectual creation, andclarification oftheprotection ofcomputer programs asliterary works,
(ii)thegranting oftherighttoauthorize orprohibit thecommercial rental oftheircopyrighted works
tocopyright owners ofcomputer programs andfilmandsound recordings,118(iii)giving performers
therighttoprevent therecording orbroadcast oftheirliveperformances, (iv)extension oftheterm
ofprotection forsound recordings from50years fromtheendofthecalender yearinwhich theyare
made, to50years from theendofthecalendar yearinwhich theyaremade available tothepublic,
and(v)thestrengthening ofborder enforcement andcriminal penalties withrespect tocopyright
piracy. ThenewActalsosubstitutes civilpenalties forcriminal penalties withrespect toparallel
imports.119
97. The1994amendments totheTrade Marks Act1953broadened thedefinition of"trademark",
withtheaimoffacilitating developments inmarketing andtechnology; extended therights given a
trademark proprietor totheuseofasignthatis"similar to"theregistered trademark120;and
introduced border protection measures. Thetermofatrademark inNewZealand isseven years,
renewable indefinitely for14-year periods.121
98. Special provisions forborder enforcement areinplace forcopyright andtrademark
protection.122These provisions donotapply toimports forprivate use,goods intransit, orexports
from NewZealand. Thenewborder protection provisions address obligations under Articles 51to
117Changes required inorder toconform tothe1971 Revision were thefollowing: (i)protection for
choreographic works, however recorded, (ii)protection forarchitectural works erected inNew Zealand even
iftheauthor isnotacitizen ofNew Zealand orofaConvention country, (iii)extension oftheterm of
protection forfilms to50years from theyear itismade, or50years from theyear inwhich itismade
available tothepublic, and(iv)extension ofthetermofprotection forworks ofapplied artprotected asartistic
works toaminimum of25years.
118Where aTribunal deems thataperformer hasunreasonably withheld consent, theTribunal mayorder the
consent under conditions itseesfit(Section 192oftheCopyright Act).
119TheGovernment mayparallel-import printed materials associated withparallel-imported medicines for
which thepatent hasexpired, buthasnotdone so.
120Implications ofthischange arethatinfringement mayoccur where theuseofaproduct islikely todeceive
orconfuse and,since infringement nowmayextend across classes ofgoods andservices, theneed toregister
trademarks inmultiple classes isreduced.
121Theprocess ofobtaining atrademark inNew Zealand isexplained inNew Zealand Patent Office (1995).
122Sections 54Ato54MoftheTrade Marks Amendment Act1994, andSections 135to146oftheCopyright
Act1994.New Zealand WT/TPR/S/20
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60oftheTRIPS Agreement andprovide forenforcement byprivate action.123Theproprietor ofa
copyright oraregistered trademark mayrequest theDepartment ofCustoms todetain infringing
imported goods, andisrequired topostsecurity.124Theproprietor isthennotified when goods
bearing aninfringing mark areimported andisgiven tenworking days(with apossible ten-day
extension) toinitiate court proceedings against theimporter; otherwise, thegoods arereleased. If
court proceedings areinitiated, Customs takes action inaccordance withthedecision oftheCourt.125
99. NewZealand 'sTRIPS-related obligations required, according totheauthorities, several major
changes tothePatents Act1953.126First, thegrounds onwhich aninvention canbeexcluded from
patentability wererestricted. Previously, inventions werenotpatentable iftheywere: (i)contrary to
natural laws, (ii)contrary tolawormorality, or(iii)useable asfoods ormedicines andthatwere
merely mixtures ofknown ingredients. Withtheexception ofthemorality provision, these exclusions
havebeeneliminated.127Second, thepatent termhasbeenextended from 16to20years, andthe
possibility ofextending patents hasbeen eliminated. Third, thecircumstances under which a
compulsory licence could begranted were specified.128Such licences maynowbegranted on
application totheHigh Court ifamarket isnotbeing supplied withthepatented invention orisnot
being supplied onreasonable terms; however, alicence cannot begranted within three years ofthe
dateapatent issealed orfouryears from thedateofpatent. Finally, consistent withArticle 34of
theTRIPS Agreement, theActwasamended toprovide forthereversal oftheburden ofproof with
respect toprocess patents. Alleged infringers willberequired toshow thattheirproduct hasnotbeen
derived from thepatented process inquestion; thepatentee isnotrequired toprove infringement.
Nocompulsory licences havebeengranted inrecent years.
100. TheGeographical Indications Act1994established arégime fortheprotection ofgeographical
indications from falseormisleading use,including aregister ofbothdomestic andforeign protected
geographical indications. While theFairTrading Act1986 hadprovided, andcontinues toprovide,
123Previously, border protection provisions were included intheFair Trading Act1986, andcovered
registered andunregistered trade marks. However, theTrade Marks Act,asallowed bytheTRIPS Agreement,
provides forborder protection onlyforregistered marks. Goods thatmayinfringe anunregistered mark will
stillbesubject toprovisions oftheFairTrading Actbutarenotdetained attheborder.
124Thesecurity isnormally setat$5,000 andisintended bothtoprotect theDepartment ofCustoms from
action taken under anotice andtoprevent theabuse byright holders ofthedetention provisions.
125Customs hasnoauthority totakeexofficio action against infringing goods. Remedies available tothe
Courts include ordering thatinfringing goods beforfeited totheCrown ordestroyed.
126Theprocess ofobtaining apatent inNew Zealand isexplained inNew Zealand Patent Office (1995).
127Themorality exclusion maybeeliminated ifconcerns overthepatenting oflifeforms canberesolved.
Theelimination ofthisexclusion hadbeen recommended bytheMinistry ofCommerce, which considered it
inappropriate fortheCommissioner ofPatents tobeplaced intheposition ofdeciding issues ofmorality
(Ministry ofCommerce, 1994h). New Zealand hasnotsought toexclude from patentability certain types of
inventions thattheTRIPS Agreement allows tobeexcluded. TheGovernment believes thatpatent lawisnot
aneffective way tocontrol theuseofsocially undesirable inventions (eg., those with serious negative
environmental consequences) andthatcontrols ontheuseofsuch inventions ismore appropriate.
128The1994 amendment tothecompulsory licensing provisions ofthePatents Act1953: (i)restricted the
terms under which acompulsory licence could begranted; (ii)required thatapplications bemade totheHigh
Court rather thantheCommissioner ofPatents; and(iii)amended thetimelimits from three years from the
dateofsealing tothelater ofthree years from thedateofsealing orfouryears from thedateofthepatent.WT/TPR/S/20 Trade Policy Review
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suchprotection, theauthorities areoftheviewthatthenewlegislation allows NewZealand tofully
meet itsTRIPS obligations, andthatitputsinplace aframework under which anymultilateral
obligations likely toresult fromfuture WTO negotiations canbemet. Inaddition, obligations under
aproposed NewZealand -European Union wineagreement could bemet.129Theprovisions ofthe
Actapply notonlytowine buttoother products, such ascheese. False ormisleading useof
protected geographic indications notexempted under theActisanoffence under theFairTrading Act.
101. Theannual numbers ofapplications filed inNewZealand forpatents, trademarks and
industrial designs arenoted inTable III.10. Of4,503 patent applications intheyeartoJune1995,
29percent originated inNewZealand, 29percent intheUnited States, 8percent inthe
United Kingdom and8percentinAustralia. Other countries with atleast 2percentofthe
applications were (indescending order) Germany, France, Switzerland, Sweden andJapan.130
NewZealand patent application numbers fellin1993 and1994 asaresult ofNewZealand becoming
aparty tothePatent Co-operation Treaty (PCT) inDecember 1992; thePCTallows thefiling ofone
"international application" totrigger applications inother countries thatareparty tothetreaty. The
13,325 trademark registration applications in1995 alsooriginated primarily from NewZealand
(41percent), theUnited States (23percent) andAustralia (11percent), followed bythe
United Kingdom, Germany, France andJapan.
Table III.10
Applications forpatents, trademarks anddesigns, 1989-1995
Year ended March Patents Trademarks Designs
1989 4,455 12,562 630
1990 4,582 8,327 656
1991 4,488 8,168 637
1992 4,534 8,178 606
Year ended June
1993 3,643 8,720 690
1994 3,197 10,258 652
1995 4,503 13,325 807
Source: Dataprovided bytheNewZealand authorities.
(5) Measures Affecting Trade andProduction
(i) Corporatization andPrivatization
102. State-owned enterprises (SOEs) inNewZealand havebeenaggressively reformed since the
1986passage oftheState-Owned Enterprise Act,which ledtothe"corporatization", orestablishment
onacommercial basis, ofmany SOEs. Principles underlying theAct,which wereannounced inlate
1985, arethat: non-commercial functions would betransferred from major SOEs toother State
agencies; Ministers would setstrictly commercial goals forSOEs andmanagers would beheld
accountable forachieving these goals; andSOEs would trade without advantage ordisadvantage in
129This bilateral agreement would require EUgeographical indications forwine tobeprotected in
New Zealand andreciprocal protection tobegiven New Zealand indications.
130Statistics New Zealand (1995a).New Zealand WT/TPR/S/20
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respect ofother firms.131Under theAct,iftheGovernment wishes anSOEtocontinue certain non-
commercial operations itmust negotiate anexplicit contract tothateffect. TheState-Owned
Enterprise Actestablished aconsistent framework forcorporatization andthusmade case-by-case
legislation unnecessary. Bytheendof1993, 31State-trading activities, including public corporations
andgovernment departments, hadbeen corporatized, affecting sectors suchastransport, finance,
tourism, forestry, broadcasting, andutilities (Chapter IV(4)).132Asnoted byMassey, "The
introduction ofcompetition intoareas thathadpreviously beenthemonopoly preserve ofSOEs was
seenasanessential element inthereform process."133Itwasalsoimportant thatthesaleofSOEs
didnotproceed untilstepshadbeentaken toenhance competition, particularly theremoval ofbarriers
toentry andexitandthefurther liberalization ofinternational trade.134
103. Many SOEs, oncecorporatized, were subsequently privatized. Since 1987, 22SOEs have
been soldforatotal of$13.3 billion, revenue thatalmost exclusively went forpublic debt
reduction.135Thelargest-valued saleshaveincluded theTelecom Corporation ofNewZealand, the
Petroleum Corporation ofNew Zealand, theBank ofNew Zealand, AirNew Zealand, and
NewZealand Steel. According totheauthorities, theGovernment recognized thatitwasnotina
position either toprovide necessary expertise ortomanage theinherent risksofownership; theywere
alsoaware ofthehighlevelofpublic debtandoftheneedtoreduce theburden thisdebtplaced on
NewZealand. Inthisprocess ofprivatization, according toBollard (1994), "Little distinction was
made among buyers, withforeigners aswelcome asdomestic investors."
104. SOEs accounted forsome 12percentofGDP in1984. Tenyears laterthisfigure, forthe
remaining SOEs, hadbeenreduced to5percent. Theprincipal remaining SOEs are:NewZealand
Post, theCoal Corporation ofNew Zealand, theElectricity Corporation ofNew Zealand, Trans
Power NewZealand, Television NewZealand, Radio NewZealand, andtheForestry Corporation.
Thevalue ofSOEs andCrown entities inJune1995 hasbeenestimated as$16.7 billion.136Asa
result ofthecontribution ofprivatization toeconomic revitalization, some observers havestressed the
importance ofgoing further. Some further candidates forprivatization havebeensuggested, suchas
theCoal Corporation ofNewZealand andCrown interests intheAuckland, Wellington and
Christchurch airports.137TheGovernment recently initiated saleprocesses forWorks Corporation,
andthesaleofRadio NewZealand wasrecently completed. Subject toconsultations withMaori, the
Government hasannounced intentions tosellagroup ofsmall hydro-electric stations.
131Inaddition, newdirectors forSOEs would largely come from theprivate sector (Massey, 1995).
132TheGovernment alsousedcorporatization toreorganize activities suchasStateresearch anddevelopment,
health services, andlocal government services (Bollard, 1994).
133Massey (1995), p.136.
134Massey (1995) alsonotes thatthisavoided simply transforming apublic monopoly intoaprivate one,
which "may actually leadtoaworse situation."
135Total asatJuly1996. Details areprovided inNew Zealand Treasury (1996a). Theinformation provided
includes thesales price, settlement date, andpurchaser, aswellasanarrative oneach sale.
136New Zealand Business Roundtable (1996). This excludes some physical assets, such ascommercial
forests.
137Debt Management Office (1996).WT/TPR/S/20 Trade Policy Review
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105. Throughout theprivatization process, NewZealand hasavoided theuseofspecial regulatory
structures assubstitutes forcompetitive pressures. Suchregulation hassometimes beenusedbyother
countries inindustries where SOEs previously helddominant positions, suchaselectricity, gasand
telecommunications. NewZealand 'sapproach wasapparently influenced byeconomists 'thinking on
contestability theory, which holds thatifitiseasyfornewfirms tobothenter andexitamarket, then
existing firms, including monopolies oroligopolies, willbehave competitively andefficiently, under
theconstant threat ofentry. Thus akeyaspect oftheNewZealand reform process wastheremoval
oflegislative barriers toentry andother policies thatrestricted firms'flexibility toenter orexit
markets. Following this, theauthorities determined thatinmost former SOE sectors general
competition lawcould berelied on.138
(ii) Competition lawandpractice
106. Theprimary competition legislation inNewZealand istheCommerce Act1986. TheAct
prohibits: (i)contracts, arrangements andunderstandings thatsubstantially lessen competition
(including through price fixing), (ii)mergers andacquisitions thatcreate orstrengthen adominant
position, (iii)theabuse ofadominant position, (iv)resale price maintenance, and(v)certain
collective horizontal boycotts. TheCommerce Actisenforced through theCourts bytheCommerce
Commission andbyprivate action.139TheCommission, inaddition, considers applications forthe
advance authorization ofconduct thatmaycontravene theAct,andfortheadvance clearance of
mergers andacquisitions;140theCommission considers anyefficiencies thatitbelieves mayresult,
andgrants clearance orauthorization ifitfeelsthepublic benefit willoutweigh theanti-competitive
detriment associated withtheconduct oracquisition.
107. TheCommerce Commission hasproduced documents toelaborate itsapproach toenforcing
theCommerce Act,including draftmerger guidelines andthe"Guidelines totheAnalysis ofPublic
Benefits andDetriments intheContext oftheCommerce Act", (Commerce Commission, 1994). The
Guidelines clarify thatthe"Actisbased ontheprinciple ofpromoting andprotecting competition,
not(atleastdirectly) onprotecting competitors orconsumers." They provide examples ofpotential
public benefits, including tangible benefits suchaseconomies ofscale, economies ofscope, and
reduced transaction costs, andintangible benefits suchasenvironmental orhealth improvements.
With respect totheassessment ofdetriments, theystatethatthefocus istobeonthepotential for
market power "toproduce future detriments rather thancurrent detriments." "...theCommission
needs tofocus onthestructure ofmarkets and,therefore, thepotential fordetriments tooccur ...".
138Theoriginal proponents ofcontestability theory recognized thatnotallmarkets were, ornecessarily could
bemade, contestable: "Contestability theory does not,andwasnotintended to,lendsupport tothose who
believe ...thattheunrestrained market automatically solves alleconomic problems andthatvirtually all
regulation andantitrust activity constitutes apointless andcostly source ofeconomic inefficiency...."
"...before anyone canlegitimately usetheanalysis toinfer thatvirtue reigns insome economic sector andthat
interference istherefore unwarranted, thatperson must firstprovide evidence thattheareainquestion is,in
fact, highly contestable" (Baumol andWillig, 1986).
139TheMinistry ofCommerce hasresponsibility forcompetition policy.
140There arenoadvance notification requirements formergers andacquisitions. However, strong incentives
topre-notify mergers andacquisitions thatraise genuine competition concerns doexist, because theparties
otherwise riskdelay oftheir transaction, expensive litigation (initiated bytheCommission, bycompetitors or
byconsumers), andthepossibility thattheHigh Court mayeventually reject thetransaction.New Zealand WT/TPR/S/20
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108. Theconcept ofcontestability isthususednotonlyinmarkets inwhich former SOEs operate
(asnoted insection (i))butalsointheassessment ofpossible benefits anddetriments associated with
certain conduct andmergers throughout theeconomy. Liberal trade policy contributes tomarket
contestability andreduces thescope for"future detriments", tipping thebalance infavour ofpublic
benefits. Bymaintaining openmarkets, NewZealand veryoften neutralizes thedetriments andcan
therefore enjoy thepotential benefits, suchasscale economies, thatmight otherwise bebypassed.141
Theauthorities areoftheview thatNewZealand 'spolicy andpractice withrespect toefficiency
arguments issuchthatinpractice, oneortwomergers annually thatwould otherwise berejected are
allowed, because some short-term reduction incompetition issacrificed intheinterest ofproductive
efficiency gains andenhanced long-term competition.
109. Nosectors oftheeconomy areentirely exempt from theCommerce Act. NewZealand has
established general principles andrulesforapplication across sectors andhastended toavoid sector-
specific statutes andregulations. However, under certain circumstances exceptions existwithrespect
tointernational shipping, international airtransport, andsome statutory functions oftheagricultural
producers boards (Chapter IV(2)).
110. NewZealand 'sreliance onmarket forces extends totheregulation ofessential facilities,
including telecommunications networks andcertain energy andtransport facilities. Markets for
essential facilities have been opened tocompetition where possible; however, where dominant
positions remain, theCommerce Actcanbeusedtocontrol anti-competitive conduct byessential
facility operators. Inthisregard, therearerequirements forthedisclosure ofcertain information that
could support litigation under theCommerce Actorexpose inefficiencies ormonopoly pricing. The
Government hasexplicitly threatened increased regulation asaresponse toanti-competitive conduct
byessential facility operators. Asaresult ofthisoverall approach, therelevant parties, rather than
aregulatory agency, decide ontheterms andconditions ofaccess toanessential facility
(Chapter IV(4)).
111. Adominant supplier inaNewZealand market isprohibited bySection 36oftheCommerce
Actfrom using thatposition forcertain anti-competitive purposes inanyNewZealand market; this
applies alsotoanyAustralian firmwithadominant position inaNewZealand market.142However,
Section 36oftheCommerce Actdoesnotapply toanAustralian firmwithadominant position inan
Australian market, evenifitsconduct affects aNewZealand market. Toaddress this,inJuly1990
NewZealand, byintroducing Section 36A oftheCommerce Act, extended thescope ofits
competition lawtocover certain trans-Tasman aspects ofcompetition, namely thebehaviour of
Australian firms withmarket power inaNewZealand oracombined Australian/New Zealand market.
Australia similarly extended thescope ofitslaw.143
112. Oneoftheobjectives ofthistrans-Tasman extension ofcompetition lawwastoredirect
allegations ofanti-competitive behaviour fromanti-dumping authorities tocompetition authorities, in
accord withtheCER agreement toforgo theuseofanti-dumping measures ontheirbilateral trade
141These issues arereviewed byPickford (1992).
142Section 36oftheNew Zealand Commerce Actismodelled onArticle 86oftheTreaty ofRome.
143Seethepaper submitted jointly totheOECD byAustralia andNew Zealand (OECD, 1992).WT/TPR/S/20 Trade Policy Review
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(sections 2(ii)and2(ix)).144Although Australian firms hadbeen themost common target of
NewZealand anti-dumping actions, theNewZealand Commerce Commission hasreceived no
complaints under Section 36Ainthesixyears following thechange. Thiscould atleastpartly be
attributed tothemore difficult standard tobemetunder competition law,particularly theneedto
show anti-competitive intent.145
113. Other reforms oftrans-Tasman aspects ofcompetition lawcomplemented theintroduction of
Section 36A. Jurisdictional, procedural andevidentiary provisions were alsoputinplace inboth
countries in1990. Forexample, enforcement agencies areempowered toobtain information or
documents intheother country; Courts maysitintheother country; orders maybeserved inthe
other country; Courts mayobtain evidence onbehalf ofaCourt intheother country; and
judgements andorders, including injunctions, areenforceable inaCourt oftheother country.
Subsequently, in1994 theCommerce Commission andtheAustralian Trade Practices Commission
concluded aCo-operation andCo-ordination Agreement to"lessen thepossibility ofdifferences
between theagencies intheapplication oftheir competition andconsumer laws where these
differences arenottheresult ofstatutory provisions."
114. Oneparticular issue related toNewZealand competition policy hasbeen raised bythe
United States.146Thefourgovernment-funded regional health authorities (RHAs) purchase health
services andmanage contracts withservice providers. In1993, intheinterest ofcutting costs, they
established thePharmaceutical Management Agency (PHARMAC). PHARMAC, which hassome
aspects ofitsactivities exempted from most keyprovisions oftheCommerce Act,147establishes
subsidy levels forcertain pharmaceuticals forout-patient use.148Itoperates asfollows: (i)therapeutic
groups ofdrugs having similar applications aredefined, (ii)PHARMAC determines which products
willbeeligible forsubsidies (based onwhether theproduct issufficiently therapeutic andaffordable)
and"lists" these products under eachtherapeutic group, (iii)subsidy ratesaresetequal totheprice
ofthelowest-priced listed product ineachgroup, and(iv)subsidies atthisratearemade available
forpurchases ofanylisted product, withtheconsumer responsible forthecostdifferential.149
According totheauthorities, should acheaper alternative become available, thesubsidy would be
reduced butnodrugs would beremoved from thelistasaresult. Intheviewoftheauthorities, the
144Theproposal toforgo anti-dumping actions initially wassupported byNew Zealand manufacturers.
However, prior tothesigning oftheCER Protocol onAcceleration ofFree Trade inGoods opposition was
raised. New Zealand reported, initssubmission toOECD, thatmuch ofthebusiness community "didnot
appreciate thattheobjective ofcompetition lawistoprotect thecompetitive process andnotcompetitors" or
that"competition policy would notprohibit alltheactions covered byanti-dumping law" (OECD, 1992).
145Ahdar (1991) notes thatanti-dumping andcompetition lawdiffer inbothprinciple andpractice andthat
competition lawtypically hasahigher standard tomeet. Henotes that"Whether thisisgood orbaddepends
onone'sfaithintheprinciple offreetrade versus adesire toprotect andnurture domestic industry asathing
ofvalue initself."
146USTR (1996b).
147Legislation challenging PHARMAC 'sCommerce Actexemptions ispending.
148According totheauthorities, PHARMAC hasnoinfluence ondrugregistration orwhether adrugcanbe
legally soldinNew Zealand.
149According totheauthorities, private insurance companies normally cover thedifferential.New Zealand WT/TPR/S/20
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effects ofPHARMAC aresimilar tothose ofprogrammes inmany countries, inwhich government-
backed agencies strive tonegotiate discounts from pharmaceutical suppliers.
(iii) Labour markets
115. Prior tothestartofitsreform process inthemid-1980s, NewZealand 'slabour markets were
centralized andhighly regulated. While some flexibility wasintroduced in1987 and1988,
significantly more deregulation tookplace withthepassage oftheEmployment Contracts Act(ECA)
in1991. Under theECA, employees choose tobargain individually orcollectively (inwhich case
theyarefreetochoose theirownrepresentation); andemployers decide whether tobargain atthe
workplace levelorthefirmlevel, ortobargain inconjunction withother employers.150Inessence,
employment contracts aretreated similarly toother commercial transactions andaresubject tocontract
lawandsome minimum standards, butfewother external legal constraints; among theremaining
legalobligations areminimum wages, statutory holidays andparental leave.
(iv) Forms ofdomestic support
116. TheFoundation forResearch, Science andTechnology isastatutory body thatreports tothe
Minister ofResearch, Science andTechnology. TheFoundation invests some $300 million annually
inresearch anddevelopment (R&D) according tosectoral research strategies andtheGovernment 's
broad priorities.151ItsTechnology forBusiness Growth programme provides some $11.3 million
annually toNewZealand firms forR&D withcommercial outcomes.152TheBusiness Development
Programme provided grants ofupto$20,000 toindividuals andfirms toinvestigate theeconomic or
technical feasibility ofapotential commercial activity newtotheregion; intheyeartoJune1994,
1,432 grants totalling $11.8 million were provided. According totheauthorities, asuccessor
programme begun inDecember 1995 isbeing funded at$19.8 million for1996/97. Several
programmes areinplace tofacilitate labour mobility orpromote labour training; these include the
National Qualifications Framework, SkillNewZealand, andtheTraining Opportunities Programme.
Concessional taxtreatment isgiven tofirms operating inthemineral mining industry (Chapter IV(2)).
TheGovernment hasassumed responsibility forthatportion ofthedebtresulting from refinancing
oftheNZRailways Corporation, theElectricity Corporation ofNewZealand, andNewZealand Steel
Development, Ltd.153
(v) Direct andindirect taxation
117. TheGoods andServices Tax(GST, avalue-added tax)andtheincome taxareNewZealand 's
twomain taxes. TheGSTwasintroduced in1986, marking ashiftaway from direct taxation. It
applies atarateof12.5 percentonallgoods andservices except housing rental andfinancial
150Labour market agreements areexcepted from theCommerce Actbutlabour market power issues are
addressed intheECA.
151SeeMRST (1994a).
152Statistics New Zealand (1995), p.344; andMRST (1994a).
153New Zealand Treasury (1996a), p.15.Prior totheprivatization ofNew Zealand Steel Development
(NZSD) in1988, 60percentofwhich wasunder Crown ownership, theGovernment negotiated afinancial
restructuring ofthecompany, taking oversome $1.2 billion indebtin1985 and1986. In1990, theCrown
accepted responsibility forloans ofNew Zealand Railways Corporation (NZRC) totalling $1.1 billion; NZRC,
which owns leases forrailway tracks andisnotengaged inrailoperations, remains under Crown ownership.WT/TPR/S/20 Trade Policy Review
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services. Thetaxislevied onimports onaduty-inclusive basis andisnotlevied onexported goods
orservices. Other indirect taxes aretheexcise taxes onalcohol andtobacco products; petroleum
fuels; gaming; andstamp, cheque andgiftduties.154
118. Personal income taxratesare24and33percent, withtheratethreshold setattheincome
level equivalent tocurrent average full-time earnings.155With theexception ofcapital gains, all
income istaxed. Therateofthecompany taxis33percent. Newassets aredepreciated based on
theireconomic lifeplusa20percentloading.156Special, more favourable, rules apply forsome
development costs, particularly inforestry, petroleum andmineral mining, andagriculture. Taxcuts
wereannounced inearly 1996, withthefirststage ofimplementation on1July1996, andareaimed
atlow-andmiddle-income families; under fullimplementation ofthese cutsin1998/99, annual tax
revenue isexpected tobereduced bysome $2.7billion, orsome 3percentofGDP.157
119. TheGovernment enacted revenue-neutral international taxreforms inDecember 1995, capping
taxes onnon-residents atthe33percentrateapplied todomestic investors, andeliminating theuse
ofthincapitalization ortransfer pricing techniques bynon-residents toerode thetaxbase.
154Thetobacco excise isbased onanequal charge perkg.oftobacco. Thealcohol excise isbased on
alcohol content, butwithahigher rateperlitreofalcohol forspirits thanforwine andbeer. These excise taxes
areindexed toinflation onanannual basis.
155Through arebate scheme, alower rateof15percent effectively applies tolowincomes derived
exclusively from wages andsalaries.
156Forexample, iftherateofdepreciation is10percent, companies mayclaim 12percentdepreciation for
taxpurposes.
157During thisperiod, government expenditures areexpected tobereduced bytheequivalent of
3.8percentage points, from 34.9 to31.1 percentofGDP.