WORLD TRADE  
ORGANIZATION  WT/REG207/4 
9 May 2007 
 
 (07-1925) 
Committee on Regional Trade Agreements Original:   English 
  
 
CLOSER ECONOMIC PARTNERSHIP AGREEMENT 
BETWEEN THAILAND AND NEW ZEALAND 
 
Questions and Replies
 
 
 
 The following communication, dated 1 May 2007, is being circulated at the request of the 
Delegations of Thailand and New Zealand.   This document reproduces the questions addressed to the Parties and the responses submitted.  
  
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Questions from the Delegation of Australia 
 
1. How do the Parties assess the effectiveness of  the use of "declarations of origin" for 
determining whether a shipment is eligible for preferential treatment? 
 An importer making a claim for a preferential dut y rate may be required to provide supporting 
information at the time of entry or any subseq uent time.  Such information may comprise an 
appropriate form of statement, certification or doc umentation.  A common method is a declaration on 
a commercial document such as an invoice.  Such "declarations of origin" will, if applied in 
association with robust modern risk management techniques, generally suffice.  
2. The FTA contains an inbuilt agenda relating to, inter alia,  further negotiations on 
government procurement and services.  Could the parties provide an update on progress of this 
inbuilt agenda? 
 New Zealand and Thailand have agreed to conc lude an agreement which liberalises trade in 
services consistent with GATS Article s V.1 and V.3, and to enter into negotiations within three years 
from the date of entry into force of the CEP, i.e.  by 1 July 2008.  Negotiations have not yet begun. 
The Working Group on Government Procurement me t in May 2006 and reported to the CEP Joint 
Commission that negotiations should commence on a Government Procurement Chapter under the 
NZTCEP and  be concluded, if possible, by the second meeting of the CEP Joint Commission due to 
be held in New Zealand in 2007.   
Questions from the Delegation of Japan 
 
3. With respect to the descriptions in Paragra ph 19, Page 8 of the Factual Presentations 
(WT/REG207/3), in the year 2025, will Thailand eliminate tariff-rate quotas completely? Will 
Thailand eliminate out-quota duty as well as in -quota duty regarding those 10 agricultural 
products by the year 2025? WT/REG207/4 
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   Thailand will completely eliminate tariff-rate quotas by the year 2025.  Both out-quota and in-
quota duties on 10 agricultural products will also be eliminated by 2025.  
4. With respect to provisions in Article 2.4, were there any “acceleration of tariff 
elimination” which occurred after th e entry into force of the agreement?  
 No acceleration of tariff elimination has been considered by the parties since the CEP entered 
into effect on 1 July 2005.  
5. With respect to the Provision in Article 5.11, or the descriptions in Paragraph 44, 
Page 14 of the Factual Presentations (WT/RE G207/3), was there any case where SSG measures 
were imposed? 
 Last year Thailand applied the SSG measure for four products: Milk and cream (HS 040291); 
Butter (HS 040510); Fresh cheese (HS 040610) and Other cheese (HS 040690).  For this year to date 
Thailand has applied the SSG measure for Other cheese (HS 040690).    6. With respect to the provisions in Article 13.5 and the descriptions in Paragraph 58, 
Page 18 of the Factual Presentations (WT/REG207/ 3), could the Parties inform us of the recent 
development of the recommendation on the comme ncement of bilateral negotiations to expand 
the application of the Chapter? What is the content of the recommendations? 
 The Working Group on Government Procurem ent met in May 2006 and reported to the 
CEP Joint Commission that negotiations should commence on a Government Procurement Chapter 
under the NZTCEP and  be concluded, if possible, by the second meeting of the CEP Joint 
Commission due to be held in New Zealand in 2007.   
Questions from the Delegation of the European Communities 
 
7. In light of the ongoing negotiations on a free trade agreement between Australia, New 
Zealand and ASEAN, could the Parties indicate how they intend to ensure full consistence and 
coherence between the FTA and the CEPA? If any, what would be the added value of keeping both Agreements into force.  How would the Pa rties ensure the creation of genuine building 
blocks? Do the Parties anticipate any potential burden or confusion that exporters could face 
caused by the multiplicity of bilateral agreements within the area? If so, how do the Parties plan 
to tackle them? 
 The ASEAN-Australia/New Zealand FTA will be  negotiated mindful of, and building on, the 
existing bilateral commitments.  The ASEAN-Austra lia/New Zealand FTA will establish a plurilateral 
set of commitments that will sit parallel to the pre-existing bilateral agreements.  A key principle 
agreed by Leaders when the AANZFTA negotiations  were launched was that  existing agreements 
between the parties "will continue to exist as distin ct, functioning agreements ... No provision in the 
FTA will detract from the terms and conditions of  bilateral and plurilateral FTAs between 
ASEAN Member Countries, Australia and New Zeala nd."  The content and geographic scope of these 
agreements will differ, but  there will also be ma ny common strands in these agreements which will 
support the aim of facilitating trade in the Asia Paci fic region.  The aim is to  build upon existing 
agreements where possible. 
 
 Exporters have been closely consulted in th e development of the Thailand–New Zealand CEP 
and the ASEAN-Australia/New Zealand FTA negot iations.  The conclusion of the AANZFTA will 
add to their options.  Exporters are the primary be neficiaries of a more liberal trading environment 
negotiated under the Thailand-New Zealand CEP - b ilateral trade between Thailand and New Zealand  WT/REG207/4 
 Page 3 
 
 
  has increased since the CEP came into  effect 1 July 2005.  It is anticipated that the ASEAN agreement 
will have similar positive effects on trade.  
8. Could the Parties elaborate on the state of play of the discussions on equivalence? 
Which products have been covered in these discu ssions? Which other products may become the 
object of discussion?  
 New Zealand made a submission to Thailand to have New Zealand's regulatory system 
deemed equivalent for the purposes of meeting Th ailand's SPS requirements in July 2005.  This 
submission was discussed at the first SPS Committe e meeting between New Zealand and Thailand at 
the end of 2006 and remains under consideration. 
 
9. Could the Parties provide further information regarding the current state of play of the 
discussions on harmonization of legislation? Which products have been covered in these discussions? Which other products may become the object of discussions?  
 There have been no discussions on harmoniza tion of legislation re lating to SPS between 
New Zealand and Thailand, and there are no provi sions in the New Zealand - Thailand CEP SPS 
chapter that require harmonization to be discussed or occur.  
10. The first Joint SPS Committee was convened in 2006, and some details on the outcome 
have been provided in footnote 16 of the fa ctual presentation.  Could the Parties elaborate 
further on the conclusions and further steps to take? 
 Following the first SPS Committee meeting New Zealand has completed the finalization of 
Import Health Standards for durian (whole fruit) an d has provided technical assistance to Thailand (as 
requested) in regard to shellfish inspection and cer tification, and electronic certification of products. 
 
Questions from the Delegation of the United States 
 
11. Article 2.3, as well as Annex 1, of the Thailand-New Zealand Closer Economic 
Partnership provide for the elimination of import duties on goods originating in the other Party.  
The Agreement does not, however,  provide for the elimination of export duties.  Thailand 
currently maintains export duties on a number of products, including such important products 
as rice, rubber and metal scraps.  Although the export duties on most of the subject products 
are currently applied at zero, they could be reint roduced up to the statutory rate, as high as 
50 per cent.    
 - How is the retention of these export duties consistent with the otherwise 
 apparent objective of the FTA to eliminate barriers to trade between the  parties? 
 The NZTCEP stipulates that Parties will not adopt or maintain non-tariff measures on the 
exportation of any good except in accordance with its  WTO commitments or in accordance with other 
provisions of the agreement (Article  2.7(1)) and requires transparency in regard to application of non 
tariff measures (Article 2.7 (2)).  The NZTCEP also  provides an avenue for the general review of 
matters related to the operation a nd implementation of the Agreement (Article 16.2 and 16.5), which 
could if appropriate include the application of export duties. 
 
 The application of the export duties in questi on is consistent with the WTO and is by no 
means intended as protection for domestic industries nor trade barriers.   WT/REG207/4 
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  12. Article 7.6.8 provides that "The parties shall utilise to the maximum extent possible 
existing mutual recognition arrangements in  relation to the acceptance of conformity 
assessment procedures." What are the mutual re cognition arrangements contemplated by this 
provision of the Thailand-New Zealand CEP, and how will third parties be restricted by such 
arrangements?  
 The intention of this provision is to avoid dup lication of efforts by encouraging the Parties to 
make use of existing mutual recognition arrangements for the acceptance of conformity assessment procedures and results, where available.  Existing mutual recognition arrangements could include the 
APEC Tel MRA and the APEC EE MRA.  They coul d also include the international network of 
multilateral recognition arrangements negotiated in  the voluntary sector by groupings such as 
International Laboratory Accreditation Co-operation (ILAC), Asia Pacific Laboratory Accreditation 
Cooperation (APLAC), Pacific Accreditation Co-ope ration (PAC) and the International Accreditation 
Forum (IAF).    While Thailand and New Zealand may benefit from such arrangements, they will not alter 
existing arrangements with third parties.  Furthe rmore, this provision does not preclude the Parties 
from negotiating new bilateral MRAs wher e there is a need to do so.    
 
13. Article 3.8 (1) of the Thailand-New Zealand CEP ensures the right of appeal, "without 
penalty" of an administrative ruling, determin ation or declaration (emphasis added).  Please 
describe the penalty that is waived under the CE P.  Under what circumstances is the penalty 
imposed on appeals by non-Parties? 
 New Zealand's Customs legislation does not provide for the imposition of any penalties upon 
appeals against administrative rulings, determinations or decisions.    Article 3.8 (1)  articulates a general polic y which does not distinguish between trading 
partners. 
  Thailand’s Customs legislation does not pr ovide for the imposition of any penalties 
concerning the reviews and appeals.  
14. The Thailand-New Zealand CEP commits the pa rties to undertake to ensure that all 
commercial activities are subject to competitio n laws, with the possibility of exemption "some 
specific measures or sectors".  Please elaborate on which measures and sectors you anticipated 
exempting.  At what point in time you expect to exempt these measures or sectors?  
Thailand
 
 
 The TNZCEP (Article 11.5) stipulates that Parties may exempt specific measures or sectors 
from the application of their general competition la w provided that such exemptions are transparent 
and undertaken on the grounds of public policy or public interest.    Under Thailand’s Competition Act (1999), th e following measures or sectors are currently 
being exempted from the application of the competition law: 
 
 - central administration, provincial administration or local administration;  - state enterprises under the law on budgetary procedure;  and  - farmers’ groups, co-operatives or co- operative societies recognized by law and 
having as their object the operation of businesses for the benefit of the occupation of 
farmers. 
  WT/REG207/4 
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   In the future these exemptions will gradually be  reviewed and reduced to provide for a greater 
level of competition.  New Zealand 
 
 
 The provision applies to exemptions that are al ready in existence.  A ll countries maintain at 
least some exemptions to competition laws.  The co verage of New Zealand’s competition law is very 
broad by international standards and therefore New Zealand exempts few measures or sectors.  There are some standard exemptions in areas such as civil aviation and intellectual property.  In addition, by 
way of example, New Zealand has notified certain  specific exemptions under another RTA (the 
Trans-Pacific Strategic Economic Partnership Agreement).  These included the following: 
  • Pharmaceuticals subsidies by Pharmac (Section 53 of New Zealand Public Health and 
Disability Act 2000) – The Act exempts certa in agreements relating to the purchase 
and subsidising of pharmaceuticals from Part II of the Commerce Act (restrictive 
trade practices). 
  • Export arrangements (Section 44(1)(g)) - "Export arrangements" that relate 
exclusively to the export of goods from New Zealand or exclusively to the supply of services wholly outside New Zealand are exempt from the Commerce Act (Part II on restrictive trade practices), under conditions of due notification to the Commerce 
Commission. 
  • Agricultural Producer Boards – Limited exemptions from Part II of the Commerce 
Act (restrictive trade practices) are cont ained in the Meat Board Act 2004 and the 
Pork Industry Board Act 1997.  These exemp tions relate to arrangements for setting 
levies by the Boards for the purpose of funding their industry-good activities 
(e.g. market promotion and research).  In the case of the Meat Board, the exemption 
extends to the Board’s administration of export tariff quota arrangements. 
 
Questions from the Delegation of Chinese Taipei 
 
15. (para. 41) Could the Parties please explai n how they would ensure that the exclusion 
requirement in the global safeguard section in the Agreement is implemented in a manner that 
is WTO-consistent? Assuming the degree of injury caused by the imports of a Party is the same 
as that caused by a non-Party, would not the exclusion requirement unfairly raise a barrier to 
the trade of the non-Party? 
New Zealand
 
  If an analysis shows that imports of the pr oduct under investigation from the other Party were 
not a cause of serious injury and an exempti on was to be given from a global safeguard, the 
investigation would firstly take into account all impor ts of the product.  Assuming this demonstrated 
that increased imports did cause or threaten to ca use serious injury, but that imports from the other 
Party did not contribute to the cause or threat of serious injury, then a further analysis would be 
conducted which excluded imports from the other Pa rty from the examination of whether increased 
imports caused or threatened to cause serious inju ry, and any resulting safeguard measure would not 
be applied to those imports.  Excluding imports from the other Party in this way would be consistent 
with WTO jurisprudence e.g. the Appellate Body in  United States - Definitive Safeguard Measures on 
Imports of Certain Steel Products.  
  WT/REG207/4 
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   Excluding the application of a safeguard meas ure to imports from the other Party in this 
manner would be in accordance with the purpo se of a free trade agreement, which is to 
provide preferential treatment to the trade between the free trade partners.  Thailand
 
 
 Paragraph 1 of Article 5.3 reinforces that th e Party is to apply the WTO Agreements with 
respect to global safeguards.  Consideration is give n to the treatment of imports from the other Party 
in a decision to initiate safeguard investigations.  If imports from the other Party were excluded from 
the injury phase, the requirements of Article 4.2( b) of the WTO Safeguards Agreement are relevant. 
That is, if imports from the other Party were ex cluded from a determination of whether increased 
imports have caused, or threatened to cause, serious  injury, such imports ne ed to be examined as a 
factor “other than increased imports” which is causing injury within the meaning of Article 4.2(b) of 
the WTO Safeguards Agreement.   
 The exclusion requirement (Article 5.3 (2)) is provided in accordance with the purpose of a 
free trade agreement which is to provide preferential treatment between the free trade partners.  The provision of such requirement does not necessarily raise a barrier to trade to non-Parties.    
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