WORLD TRADE  
ORGANIZATION   
G/STR/Q1/NZL/7 
21 November 2011 
 (11-6043) 
Working Party on 
State Trading Enterprises Original:   English 
 
 
 
STATE TRADING 
 
Replies to Questions Posed by the EUROPEAN UNION1 Concerning the New  
and Full Article XVII Notification of NEW ZEALAND2 
   The following communication, dated 28 October 2011, is being circulated at the request of the Delegation of New Zealand.    
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Question 1 
  With respect to Section III.B of notification G/STR/N/13/NZL: 
 
a) Could New Zealand elaborate on what is meant by "nor does it receive any trade-distorting subsidies"? 
 
Reply 
  The WTO classifies subsidies which stimulate production or affect prices as trade distorting.  The only support provided in New Zealand is in accordance with Annex 2 of the Agreement on 
Agriculture and as such, it is deemed "non or minima lly" trade distorting.  Therefore, Zespri does not 
receive any trade distorting subsidies from the New Zealand government.   b) Could New Zealand clarify whether Zespri receives any subsidies that are not trade-
distorting? 
 
c) If yes, could New Zealand indicate their just ification and inform in which notification it 
reports these subsidies to the WTO? 
 
Reply 
  The New Zealand government does not provide any subsidies or direct support to Zespri.   
 New Zealand operates a research fund consistent  with 2(a) General Services of Annex 2 of 
the Agreement on Agriculture.  Under this programme  funds are provided by the Ministry of Science 
and Innovation (formally the Foun dation for Research Science and Technology (FRST)) for research 
directly related to agricultural production including forage, animal and dairy industries, horticulture, 
arable and other food and beverage industries.  As part of this programme, research funding has been 
                                                      
1 G/STR/Q1/NZL/6.   
2 G/STR/N/13/NZL.   G/STR/Q1/NZL/7 
Page 2  
 
  provided to help develop new kiwifruit varieties. Th is is a joint government industry programme with 
potential to benefit New Zealand kiwifruit growers.   Funding is not paid to Zespri under this 
programme.  This programme was notified most recently in G/AG/N/NZL/69.  
  New Zealand also provides programmes aime d at pest and disease control consistent 
with 2(b) General Services of Annex 2 of the Ag reement on Agriculture.  This includes responses to 
pest and disease incursions which could negatively impact on kiwifruit growers.  Funding is not paid 
to Zespri under this programme.  This programme was notified most recently in G/AG/N/NZL/69.  
 
Question 2 
 
 With respect to Section III.C of notification G/STR/N/13/NZL:  a) Could New Zealand provide information on how the independence of Kiwifruit New 
Zealand is assessed? 
 
Reply 
  Kiwifruit New Zealand (KNZ) has distinct regulatory functions in the kiwifruit industry which make it independent from other industry entities.   It is also independent from  the government 
in the sense that there is no government representation on its board. Its regulatory functions include 
approving collaborative marketing arrangements and monitoring and enforcing Zespri's compliance 
with the Kiwifruit Export Regulations 1999.   Kiwifruit growers elect three Directors of KNZ, New Zealand Kiwifruit Growers Incorporated appoint one Director, and the four Directors in turn appoint a Chairperson who has no 
association with the industry.  The current Chair is Sir Brian Elwood, a former Chief Ombudsmen, 
who has no commercial interests in the New Zealand kiwifruit industry. 
  An election is held each year for one of the three Directors that is elected by growers.  
  KNZ has a procedures manual, which includes two codes of conduct, one for conflicts of 
interest, and one for trades in kiwifruit company securities.   
 
b) Has the quantity of kiwifruit exported  under the collaborative marketing regime 
increased since 2009?  
 Reply 
 
 Yes.  In 2009 approximately 6 million kg of  kiwifruit were exported in collaborative 
marketing arrangements.  The volume of ki wifruit exported under collaborative marketing 
arrangements increased to approximately 9 million kg in 2010, and is expected to increase to 
approximately 12 million kg in 2011. 
 
 Anyone can submit an application for a collabor ative marketing arrangement and there are no 
limitations on its form, content, term or any other aspect.    G/STR/Q1/NZL/7 
 Page 3 
 
 
  Question 3 
  With respect to Section III.G of notification G/STR/N/13/NZL:    a) Do Zespri's 3-year rolling average contract s renew automatically each season and in the 
event of termination by the grower, must the grower supply Zespri for the remainder of the 3-
year term?  
Reply 
  The terms and conditions of these contracts are agreed between growers and Zespri on a 
private commercial basis.  .   
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