G/STR/Q1/NZL/20  
 
24 October 2018  
(18-6685) Page: 1/2 
Working Party on State Trading Enterprises  Original: English  
 
  
STATE TRADING  
REPLIES TO QUESTION S1 FROM THE EUROPEAN U NION  
REGARDING NEW ZEALAND 'S NEW AND FULL NOTIFIC ATION2 
The following communication, dated 1 8 October 2018, is being circulated at the request of the 
Delegation of the New Zealand . 
 
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Question 1  
 
New Zealand states in the notification that "Zespri Group Limited has total discretion over 
the quantities it decides to export." We also note in the statistical Tables provided in the 
notification that almost an entire annual production of k iwifruit in New Zealand gets 
exported. Considering this very substantial role of Zespri in trade the EU would like to ask 
New Zealand to clarify how New Zealand ensures that Zespri "acts in a manner consistent 
with the general principles of non -discriminat ory treatment" affecting other traders as 
per 1(a) of GATT Article XVII.   
 
Reply : 
 
As the EU is aware, New Zealand is an efficient agricultural producer with a comparatively small 
domestic market, which means that we export the majority of the primary prod ucts we produce. As 
the country that pioneered the commercialisation of the kiwifruit, it is therefore unsurprising that 
our kiwifruit industry remains globally renowned for producing the highest quality fruit available, 
and for innovation, including in th e development of new kiwifruit varieties.  
 
Given Zespri 's regulated automatic, but not exclusive, right to export kiwifruit from New Zealand to 
markets other than Australia, the Kiwifruit Export Regula tions 1999 require that Zespri " must not 
unjustifiably  discriminate among suppliers and potential suppliers in respect of – (a) a decision on 
whether to purchase kiwifruit; or (b) the terms of the purchase contract. " The Regulations set out 
that "Discrimination (or the extent of the discrimination) is justifi able if it is on commercial grounds" . 
 
Kiwifruit New Zealand, the independent regulator, is responsible for monitoring and enforcement of 
non-discrimination rules.  
 
Question 2  
 
The EU continues to be concerned with Zespri 's decisions relating to the provision of 
nursery -stock to overseas growers. We have recently asked New Zealand about this in the 
regular Committee on Agriculture. Zespri is an STE and so is subject to commitments of 
the Nairobi Decision on STEs, including that of paragraph 20 which r ules that "Members 
shall ensure that agricultural exporting state trading enterprises do not operate in a 
manner that circumvents any other disciplines contained in this Decision". Export 
monopoly rights granted to Zespri by the New Zealand's government al low Zespri to 
provide its kiwifruit nursery stock free -of-charge to growers outside New Zealand. In EU 's 
                                                
1 G/STR/Q1/NZL/19.  
2 G/STR/N/17 /NZL. G/STR/Q1/NZL/20  
 
- 2 - 
 
  view this is a circumvention of the Nairobi commitment to ban granting export subsidies. 
Without its export monopoly Zespri would likely not be able to  provide kiwifruit nursery 
stock free -of-charge to growers outside New Zealand. Could New Zealand please explain 
how it intends to bring itself into compliance with the Nairobi Decision?  
 
Reply : 
 
New Zealand thanks the EU for its interesting question, and for providing the opportunity to again 
confirm the New Zealand Government remains in full compliance with the MC10 Export Competition 
Decision, including with respect to regulations that apply to the private company Zespri Group 
Limited (Zespri). The EU's assertion that there is circumvention of the MC10 Export Competition 
Decision is simply not correct.  
 
Zespri can only be considered a state trading enterprise by virtue of the fact that it has an  automatic, 
but not exclusive, right to export kiwifruit from New Zealand to markets other than Australia. This 
is set out in New Zealand's Kiwifruit Export Regulations 1999.  
 
As New Zealand has already informed the EU, the New Zealand Government has no ro le in Zespri's 
management or commercial decisions. Zespri's decisions to invest or establish partnerships with 
companies in third countries are, therefore, driven solely by commercial considerations. Its activities 
in third countries are subject to those c ountries laws and regulations. Nothing in the Kiwifruit Export 
Regulations 1999 requires Zespri to engage in such activities.  
 
Further, Zespri does not receive any trade distorting subsidies, tax advantages, special financing, or 
preferential access to for eign exchange from the New Zealand Government. Like other companies 
and industries, where eligible, Zespri can apply for Government support for research and 
development activities.  
 
Any suggestion, therefore, that such a private company cannot determine wh at contractual 
arrangements are commercially viable, because of an automatic, but not exclusive, right to export 
kiwifruit from New Zealand to markets other than Australia, has no basis in fact.  
 
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