G/STR/Q1/NZL/17  
 
31 October 2016 
(16-5942) Page: 1/2 
Working Party on State Trading Enterprises  Original: English  
 
STATE TRADING  
REPLY TO THE QUESTION1 POSED BY CHILE REGARDING  
THE NEW AND FULL NOT IFICATION OF NEW ZEALAND2 
The following communication, dated 21 October 2016, is being circulated at the request of the 
Delegation of New Zealand . 
 
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Question  
 
As mentioned in the last meeting of the Working Group on State Trading Enterprises, as 
well as the Agriculture Committee in June, New Zealand is undertaking amendments on 
the Kiwifruit Export Regulations 1999.  
 
As stated in the current regulation (Kiwifr uit Export Regulations 1999), Zespri's core 
business is:  
 
"a) the purchase of New Zealand -grown kiwifruit for export where the point of 
acquisition of title to fruit is at FOBS6 and the export of that fruit;  
 
b) excludes the export at FOBS of kiwifruit fo r consumption in Australia; and  
 
c) excludes the sale of kiwifruit in New Zealand."  
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7 Regulation 11(2) provides that Zespri is able to supply the New Zealand market provided the level 
of sales is incidental to the size of the total New Zealand  market, and provided the total sales do 
not exceed 300,000  trays of kiwifruit.  
 
According to the latest information provided in the Ministry of Primary Industry's 
website, the Cabinet agreed changes to the Kiwifruit Export Regulations 1999, one of 
them be ing Zespri's core business. Regarding this issue, it notes that the purpose is to 
"clarify that Zespri's core business includes the marketing of New Zealand -grown 
kiwifruit, market development for New Zealand -grown kiwifruit, and kiwifruit research 
and dev elopment." The objective of these changes would be "to provide more certainty 
about the business activities that Zespri can undertake without seeking the approval of 
its providers of capital, while also streamlining the process by which Zespri can seek 
approval."  
 
Moreover, paragraph 21 of the Nairobi Decision regarding Export Competition states that 
"Members shall make their best efforts to ensure that the use of export monopoly 
powers by agricultural exporting state trading enterprises is exercised in a manner that 
minimizes trade distorting effects and does not result in displacing or impeding the 
exports of another Member."  
 
Given that Zespri represents more than 40% of the world's kiwifruit exports, holding 
significant shares in many different markets  around the globe, the Government of Chile 
would like to ask the following question:  
                                                
1 G/STR/Q1/N ZL/16. 
2 G/STR/N/16/NZL . G/STR/Q1/NZL/17  
 
- 2 - 
 
   
How will the Government of New Zealand ensure that the "market development" 
strategies undertaken in foreign markets - that will be part of the core business of Zespri 
(a private company, as New Zealand commonly alleges) - will comply with the 
international commitments undertaken by the New Zealand Government, particularly 
those recently entered in Nairobi?  
 
Reply  
 
We welcome Chile 's acknowledgement that, Zespri Group Limite d (Zespri) is a private company 
owned by kiwifruit growers. The New  Zealand Government has no ownership interest in or control 
of this company.  Zespri does not receive trade -distorting subsidies, tax advantages, special 
financing, or preferential access to  foreign exchange.  The New Zealand Government has ensured 
that the regulatory structure that governs the export of kiwifruit from New Zealand is consistent 
with New Zealand 's WTO obligations, including those introduced as a result of the Nairobi 
Decisions.  New Zealand is ready and willing to answer any question Chile may have regarding the 
regulation of kiwifruit exports from New Zealand.  These regulations are set out in New Zealand 's 
Kiwifruit Export Regulations 1999, which are publically available on the New Zealand Legislation 
website - http://www.legislation.govt.nz . 
 
 
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