RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/REG207/M/1 
12 June 2007 
 (07-2454) 
Committee on Regional Trade Agreements 
Forty Sixth Session  
 
 
 
CONSIDERATION OF THE CLOSER ECONOMIC PARTNERSHIP AGREEMENT 
BETWEEN THAILAND AND NEW ZEALAND, GOODS 
Note on the Meeting of 14-15 May 2007  
Chairman:  Mr J.  Metcalfe (United Kingdom) 
 
 
1. The meeting was convened in document WTO/AIR/2993. 
 2. Under Agenda item B.III the Committee on Regional Trade Agreements (CRTA or the 
Committee) took up the consideration of the Cl oser Economic Partners hip Agreement between 
Thailand and New Zealand (TNZCEP), goods.   
3. The Chairman
 noted that the TNZCEP had been signed by Thailand and New Zealand on 
19 April 2005 and had entered into force on 1 July 2005.  The goods and services aspects of the 
TNZCEP had been notified to the WTO by the Par ties to the Agreement on 2 December 2005.  For 
goods, the Agreement had been notified under Article XXIV:7(a) of the GATT 1994 and the 
Understanding on the Interpretati on of Article XXIV of GATT 1994 as an agreement establishing a 
free-trade area (WT/REG207/N/1).  The text of th e Agreement had been circ ulated to Members as 
document WT/REG207/1, and was also available, togeth er with its Annexes, on the Parties' official 
websites. 
4. On 1 December 2005, the Parties to the TNZCEP Agreement had requested the Secretariat to 
prepare a factual presentation on their behalf in accordance with the Guidelines on Procedures to 
Improve and Facilitate the Examination Process (document WT/REG/W/15/Add.1).  The factual 
presentation (document WT/REG207/3 dated 3 Ja nuary 2007) had been drawn up by the 
WTO Secretariat on its own responsibility in full cons ultation with the Parties.  Written questions and 
replies on the TNZCEP Agreement had been dist ributed in document WT/REG207/4 dated 9 May 
2007.  He proposed to organize the consideration of the Agreement by first asking the Parties and then 
other Members for general comments.  The Comm ittee would then turn to the specifics of the 
Agreement, using the Factual Presen tation to guide the debate, follow ed by the questions and replies 
document. 
5. The representative of Thailand  said Thailand was honoured th at the TNZCEP was the second 
RTA involving Thailand to be considered by th e Committee under the new Tr ansparency Mechanism 
(TM).  While wishing to avoid repetition of what had already been stated in the previous agenda item, 
such as Thailand’s RTA negotiating strategy, it was important to reiterate Thailand's commitment to 
the multilateral trading system and its firm convic tion that trade liberalization through RTAs could 
and should be complementary to the WTO process.   Thailand also supported work on strengthening 
WTO rules in this area.  He highlighted some background to, and important aspects of, the partnership.  Both Parties had good longstanding  relations and had celebrated 50 years of formal 
diplomatic relations in 2006.  They were also  founding members of APEC and the Cairns Group and 
New Zealand was an ASEAN Dialogue Partner.  He not ed that many Thai professionals received their WT/REG207/M/1 
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tertiary education in New Zealand, including th e chief negotiator of the TNZCEP and himself.  
Another aspect was the importance and complementary nature of bilateral trade.  Thailand exported 
predominantly manufactured goods to New Zealand, while New Z ealand specialized in exporting 
agriculture-based goods and some niche manufactured items.  Furthermore, due to New Zealand being 
in the Southern hemisphere, and the seasonal varian ces with Northern hemisphere markets there was 
potential for all year round exports of Thai agricultural produce.  The Parties had shared objectives, as 
captured in Article 1.1 of the TNZCEP, namely, to  strengthen the trade and economic relationship; 
create favourable conditions for the stimulation of  trade and investment; support APEC; build upon 
WTO commitments; encourage and facilitate coopera tion; promote conditions for fair competition, 
innovation and mutually beneficial business collabo ration; and facilitate trade and investment by 
establishing a framework of transparent rules and minimizing transaction costs. 
6. The TNZCEP had been negotiated over six months  in the second half of 2004, following a 
Joint Study by New Zealand and Thailand.  While, for Thailand, the negotia tions were based on the 
TAFTA text, the resulting Agreement reflected adjustme nts to suit the interests of both Parties.  Some 
of the important aspects of the TNZCEP were: it co vered substantially all tr ade between the Parties 
and did not raise protection against non-parties; it committed the Parties to enter into negotiations on 
the liberalization of trade in servi ces within three years i.e. by 30 June 2008; it made reference to 
existing WTO Agreements and APEC instruments where relevant, including APEC principles on 
paperless trading, TBT, competition policy and gove rnment procurement, which were introduced as 
references for implementing the TNZCEP; it adde d value to the WTO framework by including 
provisions on investment; it promoted the use of e-commerce to facilitate trade and included 
transparency standards; and it was also agreed  to start negotiations on competition policy and 
government procurement.  Article 18.5 provided an opportunity for any WTO Member, any other 
state or separate customs territory to accede to, or associate itself with, the TNZCEP.  Provisions on 
cooperation had been included in a number of chap ters.  For example, under Chapter 9 on Investment, 
Article 9.4 stated that "the Parties shall strengt hen and develop cooperation efforts in investment 
through: R&D; IT networking; HRD; informati on exchange; and, capacity building, including for 
SMEs.  Furthermore, the Parties shall foster coope ration in key industries, including in biotechnology, 
software, electronic manufacturing and agro-process ing."  Cooperation was an important component 
of Thailand's RTAs to ensure developmental ga ins from trade liberalization and partnership. 
7. Turning to the overall benefits of the TNZC EP to Thailand, according to Thailand's trade 
statistics, bilateral trade had increased considerably from US$567 million in 2004 to US$849 million 
in 2006.  Thailand’s total exports to New Ze aland were US$528 milli on in 2006.  Although the 
New Zealand market was small in terms of size of population, it was not small in terms of potential 
purchasing power.  The New Zealand market also  afforded great investment opportunities for 
Thailand, with up to 100 per cent foreign equity par ticipation possible in all sectors, except fishing.  
Areas with potential for Thailand included auto repa ir, beauty and health spas, construction, Thai 
language, cooking, and traditional massage schools.  Thailand considered that the economic potential 
of the TNZCEP was underutilized and more needed to be  done to inform Thai traders and investors of 
the opportunities that remained to be tapped.  Th ailand looked forward to further deepening and 
broadening its economic relationship with New Z ealand through the ongoing negotiation provisions 
of the TNZCEP and other frameworks, particularly  ASEAN and APEC.  He also thanked the WTO 
Secretariat for preparing the Factual Presentation,  coordinating the comments and questions and 
answers, Members for their interest and questions, and New Zealand, for its friendship. 
8. The representative of New Zealand
 appreciated Thailand's introduction of the TNZCEP.  New 
Zealand was delighted that the TNZCEP was one of th e first RTAs to be considered by the Committee 
under the Transparency Mechanism.  He congratulated  and thanked the Secretariat for its preparation 
of the Factual Presentation and for guidance through the new mechanism, and hoped that 
consideration under the new procedures would increase understanding among Members of the nature 
and aims of the TNZCEP. The TNZCEP had played a key role in advancing the concept of a strategic 
partnership between New Zealand, and a leading ASEAN country and a fellow member of APEC, and 
reflected New Zealand's commitment to engage more in tensively with South East Asia.  It also served 
to boost prospects for a comprehensive and amb itious agreement in the negotiations currently  WT/REG207/M/1 
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  underway for an RTA linking ASEAN members with Au stralia and New Zealand.  Consideration of 
the previous agenda item (Free Trade Agreem ent between Thailand and Australia, goods and 
services) was therefore probably appropriate.  New Zealand and Thailand had enjoyed close and 
warm relations for many years and the TNZCEP was a means of unlocking the potential of the trade and economic relationship.  Since it had come into  affect, the value of two-way trade had increased 
substantially and over time was expected to play a catalytic role in breaking down trade barriers and 
in alerting the business community in both countries to  what they had to offer to each other.  New 
Zealand believed this was a very important point and it had been underlined by Thailand as well. 
9. The TNZCEP provided for the elimination over ti me of tariffs on all goods traded between 
the Parties.  It was important to recognize that alongside trade liberalization, there were important 
commitments in the TNZCEP to facilitate trade and improve the environment for doing business 
between New Zealand and Thailand.  It also prom oted cooperation in areas ranging from customs to 
sanitary and phyto-sanitary issues, intellectual pr operty and competition policy and it also provided 
for future negotiations in services and government pr ocurement.  Members had also heard about the 
strength of the relationship in education services.   New Zealand was also very pleased to have 
Thailand as a Closer Economic Partner and looked forw ard to the consideration of the Agreement.  
10. The representative of the United States
 thanked the Parties and the Secretariat for a 
comprehensive and well-crafted Factual Presentation  Sh e also thanked the Parties for their answers to 
questions submitted in writing and for the helpful or al presentation.  She commended the Parties, both 
developed and developing, on thei r having negotiated an Agreement liberalizing both their markets 
and creating opportunities for growth and economic  development.  The United States applauded 
Thailand's acting on the assumption that a developing country could eliminate tariffs on substantially 
all trade and expect to profit as a result.  
11. The representative of the European Communities  had a question on Section II.B.3, "Export 
duties and charges, and quantitative restrictions".  The Factual Presentation on page 12, paragraph 33 
stated that the Agreement did not deal with export duties.  She asked the Parties to elaborate on the 
reason for having left the use of export duties out of the Agreement and whether export duties were 
considered to distort trade between the Parties.  The EC also asked for an indication of the products from New Zealand and Thailand on which export duties were  applied and the amount these represented.  The 
representative of New Zealand
 drew the attention of the European Communities to a written response 
to a question on export duties raised by the United St ates (Question 11).  In addition, he noted that 
under the TNZCEP there was a mechanism to addr ess any concerns that may arise including for 
export duties, although this had not been the case.   He also recognized that this issue was under 
consideration elsewhere in the WTO and the Parties would be following those developments closely.  
The representative of Thailand  said that Thailand maintained export duties for environmental and 
security considerations.  At present these covere d rice, metal scrap, rubber sap, wood and wood 
products, raw silk and fish meal, although no duti es were currently applied to these products.   
12. On Section II.C.2, "Safeguard Mechanism", th e representative of the European Communities  
asked whether Article 55.1 allowed special safeguard s during the transition period up to 2015 or 2020 
for 41 agricultural products.  The Parties had already provided information in document WT/REG 207/4 
on special safeguard measur es imposed since 2006 and the EC wished to know whether they intended to 
review the regime in 2008 as envisaged within three y ears of entry into force of the agreement.  If so, 
what changes did the Parties intend to implement.  The representative of New Zealand  confirmed that 
there would be a review in 2008, and he expected  all aspects of the TNZCEP including the special 
safeguard, to be covered by the review.  However discussions were still to be initiated.  A Joint 
Commission had also been scheduled which would be another opport unity to raise such issues although 
this had not yet occurred.  The representative of Thailand  added that the intention of the special 
safeguards was to help domestic industry to adjust .  They covered four main areas – meat products, 
dairy products, fruit and vegetables including honey.  Either Party to the RTA could request WT/REG207/M/1 
Page 4  
 
consultations on these special safeguards so the revi ew would depend on whether the issue was raised 
at the second Joint Commission expected to be held in the last quarter of 2007. 
13. The representative of China
 asked what the trigger point wa s when taking special safeguard 
measures on agricultural products under the TNZCEP.  The representative of New Zealand  replied that 
details were in Annex 3 of the Agreement and available on the webs ite.  New Zealand had provided a 
photocopy of the relevant section to the representative from China.  
14. The representative of th e European Communities  asked whether the Parties could elaborate 
on the current APEC principles on government proc urement.  Secondly, in document WT/REG207/4, 
the Parties had indicated that the working party on government procurement reported to the CEP Joint 
Commission.  She asked for elaboration on the expected scope and content of the government 
procurement chapter and whether the Parties could confirm if these negotiations would be concluded 
by the end of 2007.  The representative of Thailand  explained that there were five APEC non-binding 
principles on government procurement:  value for money;  open and effective competition;  
accountability and due process;  fair dealing;  and non-discrimination.  The working group on 
government procurement had met on 2 May 2006 in  Bangkok and had agreed that in principle a 
government procurement chapter should contain pr ovisions consistent with the application of 
transparency, value for money, open and effectiv e competition, fair dealing, accountability and due 
process and non-discrimination in non-government pr ocurement procedures which were more or less 
the same as the APEC non-binding princi ples. The representative of New Zealand  added that he 
would provide a copy of the APEC non-binding princi ples on government procurement to the European 
Communities.  The intent of the TNZCEP was to asso ciate itself with the APEC approach and this was 
reflected in the TNZCEP.     
15. On the questions and responses provided by th e Parties (WT/REG207/4), the representative of 
the European Communities  noted that the Parties had agreed to conclude an Agreement on trade in 
services and to begin negot iations on 1 July 2008 and asked them to  elaborate on its scope and content. 
The representative of New Zealand  confirmed the intention to initia te negotiations by 30 June 2008, 
that is, within three years of the entry into force of the TNZCEP.  As with the special safeguards, the 
parties had yet to enter into discussions on this i ssue but obviously would look for an ambitious result, 
something that was GATS plus and c onsistent with GATS Article V.   
16. The representative of Chinese Taipei  said that in response to a question raised by Chinese 
Taipei on global safeguards, the Parties had indicated that if an investigation revealed that the other 
Party did not contribute to the cause of the surge in  imports, it could be excluded from the safeguard 
measure.  Given that the WTO Agreement on Safegua rds did not distinguish the source of imports, he 
did not understand how such a two step analysis  could be rationalized under the WTO Agreement. 
17. The representative of the European Communities  thanked the parties for their responses and 
asked whether it would be possible to have them in writing.  The representative of New Zealand  
agreed to provide the answers in writing and reque sted the European Commu nities to also provide 
questions in writing. 
18. The Chairman  noted that the consideration of the Thailand – New Zealand Closer Economic 
Partnership Agreement had allowed the Committee to clarify a number of questions and there 
appeared to be no outstanding issues.  The consid eration of this Agreement could thus be deemed 
complete.  He suggested the minutes of the meetin g, questions and replies and any other related 
documents form the basis of the report which woul d be made available on the WTO website and sent 
to the Council for Trade in Goods.  
19. The Committee took note  of the comments made. 
__________