New Zealand WT/TPR/S/216 
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II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
(1) OVERVIEW  
1. During the period under review (2003-09), no major changes have been made to the 
framework for trade policy formulation in New Z ealand.  New Zealand h as remained on the cutting 
edge of pro-competitive regulatory reform efforts, wh ich have focused on proposals that are likely to 
have a significant positive impact on economic growth. 
2. While remaining committed to multilateralism a nd a successful outcome of the Doha Round 
negotiations, in addition to its increasingly closer  economic partnership with Australia, New Zealand 
has pursued comprehensive preferential trade agreem ents with major trading partners (e.g. China, 
Thailand) or regional groups (e.g. the Associ ation of South East Asian Nations (ASEAN), 
Trans-Pacific Strategic Economic Partnership) and con tinues, or is planning, negotiations with several 
others.  New Zealand has continued to provide du ty-free treatment for imports from least developed 
countries (LDCs) while preferences to less devel oped (i.e. developing) co untries continue to be 
eroded by MFN tariff cuts and other developments.   It has been an active provider of Aid for Trade.  
New Zealand has been involved as a complain ant in one WTO dispute settlement case and 
participated in several others as a third party. 
3. New Zealand has maintained its open stance to wards foreign investment;  its legislative 
framework and procedures in this area are highl y rated worldwide.  The foreign investment 
legislation, which was amended in 2005, continues to screen investment in a few areas of critical 
interest, i.e. certain sensitive types of land, signi ficant business assets other than land, strategically 
important infrastructure on sensitive land, and fishing quotas. 
(2) GENERAL CONSTITUTIONAL AND LEGAL FRAMEWORK  
4. There have been no major changes in New Zealand's general constitutional and legal 
framework since its previous review in 2003.1  New Zealand is a constitutional Monarchy, and a fully 
independent member of the Commonwealth.  
5. Legislative power is vested in a unicameral body, the House of Representatives (Parliament).  
The 122-member Parliament holds the Government  accountable for its policies and actions, and 
grants authority for raising revenue  by taxation and for expenditure of public money.  MPs are elected 
for a term of up to three years:  the last general election was held on 8 November 2008 and the next is due in 2011.  
6. Executive government is based on the principle th at "The Queen reigns, but the Government 
rules, so long as it has the support of the House of  Representatives";  hence the Head of State (the 
Queen, represented by the Governor-General) follows the advice of the Government and plays only a 
formal role in the executive, excep t with respect to the formation and dismissal of governments and 
the use of the reserve powers.  The New Zealand Cabinet, composed of the Prime Minister and Ministers, functions as the policy and decision-maki ng body of the executive branch.  Nine Cabinet 
Committees, consisting of ministers who have responsi bility in related areas of policy, discuss issues 
within their competence (e.g. economic developm ent, legislation, government expenditure, and 
administration);  other Cabinet Committees may be established on a temporary basis. 
                                                     
 
1 In the absence of a single written Constitution, the most important constitutional provisions that had 
been enacted in various statutes we re updated and brought together in one piece of legislation through the 
Constitution Act of 1986.  For further information, see Governor-General of New Zealand online information.  
Viewed at:  http://www.gg.govt.nz/role/constofnz.htm [12 August 2008]. WT/TPR/S/216 Trade Policy Review 
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7. The judiciary consists of the Supreme Court (established in 2003)2, the Court of Appeal, the 
High Court, and the District Courts.  There are al so several specialist courts (including the Family 
Court, the Youth Court, the Employment Court) a nd a number of tribunals (e.g. the Disputes Tribunal, 
the Tenancy Tribunal). 
(3) TRADE POLICY FORMULATION , IMPLEMENTATION , AND EVALUATION  
8. The main agency dealing with trade policy form ulation and implementation is the Ministry of 
Foreign Affairs and Trade (MFAT) in close cooperati on with other key ministries.  The Ministry of 
Economic Development (MED) implements policy in areas such as tariffs, trade remedies, standards 
and conformance, competition policy, intellectual property rights (IPRs), corporate governance, and 
financial sector policy.  The Ministry of Agriculture and Forestry, inter alia,  works with the MFAT to 
ensure market access for New Zeal and's agricultural exports.  The MFAT is also in charge of 
negotiating international treaties and agreements, and ensuring nati onal compliance with the treaties 
New Zealand has signed.3  In this respect, the MFAT cooperates with other national entities with 
external interests in supporting the negotiation of many of the FTA chapters.4  
9. MFAT's objectives include security, and prosperity  priorities, such as:  to secure increased 
market access through trade negotiations;  to help transform the domestic economy through 
international links;  to help New Zealand business e xploit opportunities;  and to increase inflows of 
goods, services, technology, investment, and skills.5 
10. New Zealand does not have any independent  agencies to assess government policy.  
However, the extensive consultation process through wh ich policy is formulated and reviewed ensures 
a high level of transparency in the policy-maki ng process in connection with the regulatory impact 
analysis process (section (5)).6  The MFAT, in developing trade policy, consults routinely with 
stakeholders, including business, unions, Maori and consumer representatives, as well as local 
government and other non-governmental  organizations.  For instance, in 2006-07 in response to the 
interest of New Zealand firms and business associa tions in public procurement markets overseas, the 
Government conducted a review of its policy towards membership of the WTO Government 
Procurement Agreement (GPA).7  Following a subsequent review in 2008, which noted that changes 
to the domestic procurement regime had lessened th e force of previous objections on the grounds of 
the GPA's prescriptive nature and compliance costs, New Zealand applied to become an observer to 
the WTO GPA.  Before launching trade negotiations , a process of public consultation is routinely 
undertaken.  A National Interest Analysis (NIA) on the effects of a prospective preferential trade 
agreement is prepared prior to Parliame ntary examination of any such agreement8;  it provides a good 
basis for public consultations during Parlia ment's consideration of the agreement. 
                                                      
2 The Supreme Court Act 2003, terminated the right of  final appeal at the Privy Council in London as 
of 2004, and established the Supreme Court of New Zealand in Wellington, which began hearings in July 2004.   
3 Ministry of Foreign Affairs and Trade (2008). 
4 Ministry of Economic Development (2008b). 
5 Ministry of Foreign Affairs and Trade (2008). 
6 New Zealand's Parliamentary process ensures acco untability through its officers, i.e. the Auditor 
General, the Parliamentary Commissioner for the Environment and Ombudsmen. 
7 Reportedly, membership to the GPA would impose a more prescriptive and potentially expensive 
procedural regime on New Zealand Agencies.  The original review was conducted by the Ministry of Economic 
Development, in collaboration with the Ministry of Fo reign Affairs and Trade.  MED online information.  
Viewed at:  http://www.med.govt.nz/templates/Cont entTopicSummary____23537.aspx [11 August 2008]. 
8 According to the 2008 Cabinet Manual, an NIA must be submitted to Cabinet prior to binding treaty 
action being taken.  Under Parliamentary Standing Order 389(1), the NIA should address issues such as:  reasons, costs and benefits of the proposed agreement. New Zealand WT/TPR/S/216 
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(4) TRADE POLICY OBJECTIVES  
11. Recognizing that trade is vital to the New Zeal and economy and to raising living standards of 
the population, successive governments have striven to reduce barriers to imports.  During the period 
under review, the trade liberalization trend in Ne w Zealand's open economy has continued, with 
further reduction of tariff protection;  the pro cess has been complemented  by the negotiation and 
conclusion of several preferential trade agreements (see below and section (6)(ii)).  The tariff, which 
remains a key economic policy instrument and one of the main trade policy tool s, has been simplified 
considerably since July 2006, thus further erodi ng preferential and concessional tariff treatment in 
place (section (6)(ii)(d) and Chapter III).  The auth orities consider that tariff policy helped improve 
productivity for firms and increased welfare, partic ularly for consumers, through a programme of 
tariff reductions, which have increased e xposure to international competition.   
12. The Economic Transformation Agenda (ET)9 was established on 6 March 2006 as one of the 
key priorities for the next decade.  The ET age nda focuses on raising New Zealand's productivity in 
an environmentally sustainable way.  Higher rat es of productivity and economic growth by "driving 
innovation" and "increasing New Zealand's integrat ion with the global economy" are among the main 
objectives.  To achieve this, polic ies are focused on increasing the ra tio of exports to GDP, building 
international business connections and increasing the number of New Zealand businesses successfully 
exporting and investing offshore.  Support and assi stance services (e.g. advice and mentoring, 
training, skill development and ne tworking opportunities, market intelligence) are mainly available 
from the national economic development agency, Ne w Zealand Trade and Enterprise (NZTE), which 
since July 2003 has helped to develop and promote business and increase exports.10 
13. New Zealand's multi-track trade policy objectives include:  multilateral trade liberalization 
through the WTO negotiations (section (6)(i)(a));  regional cooperation and liberalization through 
active membership in relevant fora (e.g. the As ia Pacific Economic Cooperation (APEC), the East 
Asia Summit);  bilateral trade arrangements;  and a focus on developing a regional network of 
relations through various policy initiatives (section (6 )(ii)).  Consistent with these objectives, one of 
the strategic outcomes of MFAT's Statement of  Intent for the period 2008-11 is to promote 
New Zealand's international connections with a vi ew to achieving ET through a more intense bilateral 
and plurilateral trade negotiations agenda.11 
(5) TRADE LAWS AND REGULATIONS  
14. According to an independent APEC peer revi ew study (section (6)(ii)(a)), New Zealand has 
long been on the cutting edge of pro-competitive regulatory reform efforts in product and factor 
markets and consistently ranks among the world's leading economies as regards the quality of its 
domestic regulatory regimes and institutions.12  Regulatory review has proceeded on an ad hoc basis 
across the various sectors and ministries.  However, in its post-election plan, the new Government signalled its intention to begin a regulatory review programme to identify and remove inefficient and 
superfluous regulation. 
                                                     
 
9 Ministers agreed that ET work should be ad vanced within five sub-themes:  world class 
infrastructure, environmental sustai nability, innovative and productive work places, globally competitive firms, 
and Auckland – an internationally competitive city. 
10 NZTE online information.  Viewed at:  http://www.nzte.govt.nz/ section/14067.aspx 
[14 August 2008]. 
11 See Ministry of Foreign Affairs and Trade (2 008), "Intermediate Outcome II of the MFAT". 
12 In the World Bank's 2007 "Doing Business" report, the country's regulatory environment is ranked as 
number two in the world behind Singapore for overall ease of doing business (APEC, 2007b, Agenda Item: III). WT/TPR/S/216 Trade Policy Review 
Page 20 
 
 
15. In June 2008, the Government took decisi ons to strengthen the regulatory management 
system and put in place a more strategic approach to managing the impact of regulation on economic performance.  This included assigning Treasury responsibility for setting a prioritized regulatory review work programme and coordinating across go vernment agencies to deliver on this programme, 
as well as strategic coordination of the regulatory management system.  In addition, as from 
3 November 2008, responsibility for regulatory impact  analysis, which was previously done by the 
Regulatory Impact Analysis Unit in the Ministry of Economic Development, shifted to the Regulatory Impact Analysis Team (RIAT) in the Treasury.
13  The Regulatory Impact Statement (RIS) regime is 
administered by the RIAT, which focuses on proposals that are likely to have a significant impact on 
economic growth.  Departments are responsible for ensuring that sector-specific regulation is tailored 
to fit the relevant sector of the economy while en suring compliance with key regulatory principles 
reflected in the Code of Good Regulatory Practice (e fficiency, effectiveness, transparency, clarity, and 
equity).14  They also consult domestic business stakeholders at an early stage on potential policy 
proposals.  Despite a strong culture of regulator y reform and the sophistication of the policy 
instruments and consultative processes deployed in its pursuit, both of which easily ensure 
New Zealand's compliance with its APEC Bogor Go als, the APEC peer review study notes private-
sector concerns over a recent trend towards "regulatory creep" in a number of areas, such as labour market, energy or environmental regulation. 
16. In order to meet its constitutional and intern ational obligations, including those under the 
WTO Agreement, legislation is enacted whenever n ecessary by the Parliament.  Through this process, 
new obligations are incorporated into domestic la w and are enforceable in New Zealand's courts.  
Transparency of trade laws and regulation 
17. Under the Acts and Regulations Publication Ac t 1989, all New Zealand legislation must be 
published and on sale at a reasonable price.
15  All statutory and parliamentary notices must be 
published in the Government's  official newspaper, the  New Zealand Gazette , which is published 
weekly, and is available online.16  The Official Information Act 1982 provides for access to 
information, written or otherwise, held by Mini sters of the Crown government departments, Crown 
entities, Crown companies and some other organi zations.  Anyone in Ne w Zealand may request 
official information.  New Zealand citizens ove rseas and corporate bodies with a place of business in 
New Zealand may also apply. 
18. During the period under review, trade and trad e-related legislation was passed in areas 
including customs and excise (import and export pr ohibition, excises), tariffs, overseas investment, 
companies auditing, competition policy, anti-dumping,  biosecurity, trade mark s, copyright, animal 
products, dairy industry, telecommunications, and va rious undertakings under different preferential 
trade agreements.  Legislation on geographical i ndications and obligations under preferential trade 
agreements is to be passed during 2009 or later.   
                                                      
13 For a Guide to undertaking regulatory impact an alysis and preparing Regulatory Impact Statements, 
see Treasury (2008d). 
14 Ministry of Economic Development (2006). 
15 APEC (2006), Chapter on  Transparency.  Legislation can be pur chased from selected retail outlets, 
or viewed at:  www.legislation.govt.nz and downloaded free of charge.   
16 New Zealand Gazette .  Viewed at:  http://www.dia.govt.nz/ diawebsite.nsf/wpg _URL/Services-New-
Zealand-Gazette-Index?OpenDocument. New Zealand WT/TPR/S/216 
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19. New Zealand has made regular notifications to the WTO (Table II.1).  It submits tariff and 
trade data annually to the WTO Integrated Data Base (IDB);  however, data  covering 2007 and 2008 
were submitted only in 2009.17 
Table II.1 
Status of selected notifications to the WTO, March 2009  
Agreement Requirement/content Periodicity WTO document and date  
(latest document if recurrent) 
Agreement on Agriculture 
Articles 10 and 18.2 Tables ES:1 and ES:2 – Export subsidies Annual G/AG/N/NZL/53, 28/10/2008 
Article 18.2 Table MA:2 – Imports under tariff 
quotas Annual G/AG/N/NZL/55, 28/10/2008 
Article 18.2 Table DS:1  – Domestic Support Annual G/AG/N/NZL/52, 28/10/2008 
Article 18.3 Table DS:2 – New or modified domestic 
support measures exempt from reduction Ad hoc G/AG/N/NZL/51, 21/09/2007 
Articles 5.7 and 18.2 Table MA:5 – Special safeguards Ad hoc G/AG/N/NZL/54, 28/10/2008 
Articles 16.2 Measures concerning the possible 
negative effects of the reform programme on least developed and net 
food importing developing countries  G/AG/N/NZL/56/Corr.1, 26/01/2009 
Agreement on Implementation of Article VI of the GATT 1994 (Anti-dumping) 
Article 16.4 Reports concerning anti-dumpi ng actions Ad hoc G/ADP/N/169, 18/03/2008 
 Semi-annual reports of anti-dumping 
actions (taken within the preceding 
six months) Semi-annual G/ADP/N/180/NZL, 20/02/2009 
Article 18.5 Laws and regulations Once, th en changes G/ADP/N/1/NZL/2/Suppl.3, 23/02/2007 
Articles 16.5 Competent authority to initiate anti-
dumping investigations Once, then changes G/ADP/N/14/Add.16, 30/07/2003 
Agreement on Implementation of Articl e VII of the GATT 1994 (Customs valuation) 
Article 22.2 Changes in laws, regulations and 
administration Ad hoc G/VAL/N/1/NZL/1, 28/08/1995 
Agreement on Implementation of Article XVI I:4(a) of the GATT 1994 (State trading) 
Article XVII:4(a) Notification on state-trading enterprises Ad hoc G/STR/N/10/NZL, 08/11/2004 
Agreement on Implementation of Article XXIV:7(a) of the GATT 1994 (Free-trade areas)  
Article XXIV:7(a) of 
the GATT 1994 and 
Article V:7(a) of the 
GATS Free-trade area for trade in goods and 
trade in services Ad hoc WT/REG229/N/1 and S/C/N/394, 
21/05/2007 
WT/REG207/N/1 and S/C/N/361, 
02/12/2005 
General Agreement on Trade in Services 
Article III:4 and IV:2 Contact and e nquiry points Within two years from 
entry into force of WTO, 
then changes S/ENQ/78/Rev.3, 18/12/2002 
Agreement on Rules of Origin 
Annex II, Para. 4 Preferential rules of  origin Ad hoc G/RO/N/51, 01/06/2007 
Agreement on Safeguards  
Article 12.5  Notification and consultations on 
safeguard measures Ad hoc G/SG/N/12/NZL/1, 17/05/2002 
Article 12.6 Laws and regulations Once, then changes G/SG/N/1/NZL/1, 07/04/1995  
Table II.1 (cont'd) 
                                                      
17 WTO Secretariat and document G/MA /IDB/2/Rev.28, 10 October 2008. WT/TPR/S/216 Trade Policy Review 
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Agreement Requirement/content Periodicity WTO document and date  
(latest document if recurrent) 
Agreement on the Application of Sanitary and Phytosanitary Measures  
Article 7 and Annex B Laws, regulations and emergency 
measures Ad hoc G/SPS/N/NZL/417, 04/02/2009 
Agreement on Subsidies a nd Countervailing Measures  
Article 25.1 to 25.6 Annual report on s ubsidies Annual G/SCM/N/155/NZL, 06/07/2007  
Article 25.11 Semi-annual report on countervailing 
duty actions Semi-annual G/SCM/N/185/NZL, 24/02/2009 
Article 25.12 Competent authority to initiate 
countervailing investigations Ad hoc G/SCM/N/18/Add.16, 30/07/2003 
Article 32.6 Laws and regulations Once, then  changes G/SCM/N/1/NZL/2/Suppl.3, 23/02/2007 
Agreement on Technical Barriers to Trade [Article 2.9] 
Articles 10.1 and 10.3 Enquiry points  Once, then changes G/TBT/ENQ/21, 29/11/2002  
Article 10.6 Proposed and adopted technical 
regulations Ad hoc G/TBT/N//NZL/49, 18/11/2008 
Annex 3C Acceptance of code of good pr actice Ad hoc G/TBT/CS/N/86, 10/12/1997 
Agreement on Trade-Related Aspect s of Intellectual Property Rights  
Article 63.2 Laws and regulations  Once, then changes IP/N/1/NZL/4,14/07/2004 (and series 
IP/N/1/NZL/C, D, I, L, P, T) 
Article 69 Contact points Once, then changes IP/N/3/Rev.2, 22/07/1996 
Agreement on Trade-Rela ted Investment Measures  
Article 6.2 Publications Once, then changes G/TRIMS/N/2/Rev.10, 11/12/2002 
Source:  WTO Secretariat. 
(6) TRADE AGREEMENTS AND ARRANGEMENTS  
(i) WTO 
20. New Zealand, an original Member of the WTO, provides at least MFN treatment to all 
Members.  As a small open economy, New Zealand believes that a rules-based multilateral trade 
system is important in advancing and protecting its trade interests.  New Zealand is also a signatory to 
the Fourth and Fifth Protocols to the General Agre ement on Trade in Services (GATS) (Chapter IV), a 
member of the Information Technology Agreement (ITA) and, as of December 2008, an observer to 
the Plurilateral Agreement on Gove rnment Procurement (GPA).  New Zealand considers the WTO 
disciplines as a means to reinforce and compleme nt its domestic policy choices, and to achieve 
economic growth.18 
21. New Zealand believes that the Trade Policy Review Mechanism (TPRM) can help to 
highlight the relationship between trade and deve lopment and to identify how trade policies and 
practices contribute to development and poverty redu ction.  The authorities consider that the TPRM 
should be utilized more deliberately and directly to assess the impact of OECD Members' trade policies on developing countries' economic prosp ects as well as progress in implementing any 
commitments on Aid for Trade (section (b) below).
19 
                                                      
18 APEC (2007b), Agenda Item: III. 
19 New Zealand strongly advocated  an enhanced role for the TP RM at the WTO General Council 
debate on Aid for Trade in November 2007. New Zealand WT/TPR/S/216 
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(a) Trade negotiations 
22. At the multilateral level, the Doha Developm ent Agenda remains New Zealand's overriding 
trade priority, as it is the only means for reducing or eliminating international trade barriers and 
distortions at the multilateral level and for producin g results that are binding for all WTO Members.  
At the Ministerial meeting in Hong Kong, China in  December 2005, New Zealand reiterated the need 
to keep in mind the development focus of the Doha Round, and its concern regarding the lack of real 
ambition in the market access pillars of the negotia tions, especially in agriculture, as trade protection 
in this area greatly damaged developing countries' interests.20  A successful outcome of the Round 
would offer the best prospect for long-term impr ovements in market access and trading conditions for 
New Zealand, especially in agriculture, which gene rates a large part of total export earnings, and 
services, which are of prime importance to its economy.21  An agreement to reduce tariff rates on 
industrial goods to a maximum of 8% in develo ped countries would be particularly helpful for 
New Zealand's fish and forestry exports.22  New Zealand is a strong proponent of additional 
liberalization via sectoral initiatives within th e NAMA negotiations and has sponsored sectoral 
initiatives on fisheries and forestry.  In addition,  New Zealand considers the removal of non-tariff 
measures (NTMs) to be an important factor in  the negotiations, and has submitted a number of 
proposals to the WTO on these issues.23   
(b) Aid for Trade 
23. Although New Zealand's trade and development po licy was designed in 2003, it is in line with 
the relevant provisions of the December 2005 WTO Ministerial Declaration.24  Its action covers 
several areas among which:  trade-related capacity  building and trade facilitation;  supply-side 
constraints issues;  and support for capacity buildin g for trade policy and regulations at the macro 
level.  Within the MFAT, the New Zealand Agency  for International Development (NZAID) is in 
charge of administering the Official Developm ent Assistance (ODA) programme.  The two focus 
regions are Asia and the Pacific. 
24. NZAID currently provides general budget support (GBS) to a number of countries and is 
actively exploring further opportunities to do so.  Ho wever, this GBS is not provided specifically in 
the context of trade-related assistance or adjust ment.  New Zealand has not included GBS in its 
definition of Aid for Trade from the perspective th at it is too broad to be considered as just 
trade-related.   
25. NZAID recognizes that the biggest barrier to trade, particularly for its Pacific island partners, 
is often constraints on the supply-side.  NZAID wo rks with its partners to address this, and other 
trade-related issues (e.g. trade facilitation and pr omotion), through its ODA.  NZAID allocates the 
ODA in accordance with trade-related assistance priorities identified by the partner-government 
agency and defined in a mutually agreed strategy.  The overall ODA budget is set to rise from 0.27% 
                                                      
20 WTO document WT/MIN(05)/ST/27, 14 December 2005. 
21 Treasury (2008b). 
22 Government of New Zealand online information, "WTO talks end without result", 30 July 2008.  
Viewed at:  http://www.beehive.govt.nz/release/wt o+talks+end+without+result [8 August 2008]. 
23 New Zealand made, inter alia,  a specific proposal aimed at t ackling standards and technical 
regulations that restrict the use of timber in bu ilding construction (APEC, 2007b, Agenda Item: III). 
24 Paragraph 57 of the Ministerial Declaration stipulates:  "Aid for Trade should aim to help developing 
countries to build the supply-side capacity and trade-rela ted infrastructure that they need to assist them to 
implement and benefit from WTO Agreements and more broadly to expand their trade".  See WTO document WT/MIN(05)/DEC, 22 December 2005. WT/TPR/S/216 Trade Policy Review 
Page 24 
 
 
of GNI in 2006 to 0.35% in 2010.25  New Zealand's trade-related assistance increased from 
US$11.5 million in 2002 to US$22.5 m illion in 2005, and has increased since December 2005.  It is 
expected to increase further as new trade-related programmes are entered into.  NZAID has not made 
any high level pledges on Aid for Trade as some other donors have done.  
26. NZAID's trade and development policy is twofold:   to engage on policy issues, and to work 
through its ODA programming.  In respect of policy issues, at the multilateral level, it cooperates with other government agencies
26 on several issues where there is common interest, including:  special and 
differential treatment for developing countries in the agricultural and NAMA negotiations;  trade 
facilitation;  Aid for Trade;  improvement of acce ss for the poor to essential medicines under TRIPS;  
and core partners' WTO accession negotiations.  WT O Accessions of core ODA partners have 
included Tonga and Viet Nam (now complete), and Vanuatu and Samoa (ongoing).  New Zealand 
also seeks to take account of ways in which to  assist developing countries meet New Zealand's risk-
based requirements in areas such as SPS, rules of origin, and food safety.  
27. In respect of its ODA programming, NZAID also gets involved in trade-related issues through 
many of its regional and  bilateral programmes, focused on three priority areas:  accessing the benefits 
of multilateral and regional processes;  trade-relate d institutional and human ca pacity building;  and 
community development.  In general NZ AID programmes are focused on the Pacific27 and Asia.28  
Small regional programmes also opera te in Africa and Latin America.29  
(c) Disputes and consultations  
28. Since its previous Review, New Zealand has been  directly involved in one dispute settlement 
case, as a complainant against Australia regardin g measures affecting its exports of apples;  a 
preliminary ruling by the Panel was issued in June 2008 and its final report to the parties is expected 
to be issued by July 2009.30  As a third party, New Zealand has participated in 14 disputes involving 
mainly trade in agricultural items.  New Zealand h as not been a respondent in any WTO dispute case. 
(ii) Preferential trade agreements 
29. Although the multilateral (WTO) process offers the largest potential gains, New Zealand 
considers that the scale of WTO negotiations and the diversity of interests involved mean that 
progress is often slow.31  As a result, New Zealand considers its overseas network of preferential trade 
agreements (PTAs) as a complement in its wi der trade strategy, a way to create new trade 
opportunities in a shorter timeframe, and to improve access for its exporters of goods and services to 
key markets in the region and beyond.32  New Zealand expects these agreements to be consistent with 
                                                      
25 OECD (2007b). 
26 NZAID funds the Pacific Regional Trade Facilitation Programme, and works in support of regional 
frameworks, more specifically the Pacific Plan an d the Vientiane Plan.  S ee also OECD (2007b). 
27 The Cook Islands, Fiji, Kiribati, Niue, Papua New Guinea, Samoa, the Solomon Islands, Tokelau, 
Tonga, Tuvalu, and Vanuatu. 
28 Cambodia, Indonesia, Lao PDR, the Ph ilippines, Timor-Leste, and Viet Nam. 
29 Further information on each programme is provided in NZAID online information.  Viewed at:  
http://www.nzaid.govt.nz/about/aid -budget.html [29 July 2008]. 
30 WTO document WT/DS367/7,  23 June 2008.  A second case, the US-Steel Safeguard case, 
concluded in late 2003. 
31 APEC (2007b), Agenda Item: III. 
32 APEC (2007b), Agenda Item: III.  See also Ministry of Foreign Affairs and Trade (2008). New Zealand WT/TPR/S/216 
 Page 25 
 
 
its commitments at the multilateral level, to gene rate momentum for the WTO process, and contribute 
to achieving the APEC Bogor Goals (section (a) below).33  
30. In its PTAs negotiations, New Zealand aims to secure WTO+ outcomes, including the 
elimination of tariffs on all goods, the liberalization of  trade in services, the removal of restrictions on 
participation in government procurement as well as  provisions relating to investment, competition 
policy, intellectual property rights, dispute settlement , labour, and environment.  Nevertheless, not all 
of its PTAs are similarly comprehensive but furt her work is being undertaken to address this.34 
(a) Regional/plurilateral agreements 
Asia-Pacific Economic Cooperation (APEC)35 
31. New Zealand is a founding member of APEC and has played a prominent role in its activities 
since its creation.  New Zealand intends to meet APEC's target of free and open trade, including in services and investment by 2010, as envisaged for developed economies (2020 for developing 
economies), through its current agreements in the Asia-Pacific region and its FTA negotiation 
programme with other APEC countries.  This is  being achieved on a voluntary and non-binding basis 
(concerted unilateral liberalizati on) using Individual Action Plans (IAPs) containing intended action 
in 15 policy areas.  The IAPs are updated annually. 
32. New Zealand attaches high impor tance to APEC and has conti nued to support APEC's work 
during the review period.
36  New Zealand's priorities in APEC are to promote:  multilateral and 
regional trade liberalization;  high-quality PTAs;  lower transaction costs at the border, through 
improved customs and standards procedures;  freer  movement of people and greater recognition of 
qualifications;  higher quality regu lation and governance in the region;  safe movement of people and 
goods;  and APEC's dialogue on structural reform issues, a strong complement to work for trade 
liberalization.  Progress in these areas should continue to make it easier for New Zealand to do business throughout the APEC region. 
33. APEC's strengthened peer review process is aimed at examining more rigorously the progress 
of member economies in achieving the Bogor targets.   New Zealand was reviewed in July 2007.  The 
independent study prepared as part of that revi ew concluded that New Zealand had risen to the 
challenge, and was well on its way to full realiza tion of the Bogor Goals by 2010.  New Zealand had 
achieved 11 out of 13 key areas re viewed and progress was expected towards achieving the goals set 
in the two remaining areas, i.e. the total elimina tion of tariffs and the full opening up of services 
sector. 
South Pacific Regional Trade and Economic Agreement (SPARTECA) 
34. Since the previous Review of New Zealand, no new agreements have been signed in the 
framework of the SPARTECA.  SPARTECA is a non-reciprocal trade agreement under which 
Australia and New Zealand offer duty-free and unrestricted or concessional access for almost all 
                                                     
 
33 APEC (2007b), Agenda Item: III. 
34 APEC (2007b), Agenda Item: III. 
35 This section is based on the APEC (2007b), Agenda Item: III.  Other APEC members are:  Australia;  
Brunei Darussalam;  Canada;  Chile;  China;  Hong Kong , China;  Indonesia;  Japan;  Korea;  Malaysia;  
Mexico;  Papua New Guinea;  Peru;  the Philippines;  the Russian Federation;  Singapore;  Chinese Taipei;  
Thailand;  the United States;  and Viet Nam. 
36 The APEC region accounts for over 70% of New Zealand's total trade and some 60% of its inward 
foreign direct investment.   WT/TPR/S/216 Trade Policy Review 
Page 26 
 
 
products originating from the Forum Island countries (FICs).37  These preferences are maintained 
under the Pacific Agreement on Closer Economic Relations (PACER).  
Pacific Agreement on Closer Economic Relations (PACER) 
35. The Pacific Agreement on Closer Economic Re lations, signed in August 2001 and in force 
since October 2002, is a framework agreement for the future development of trade and economic 
relations across the region, including the gradual and progressive integration of the FICs into the 
international economy.  It does not contain substan tive trade liberalization provisions, but envisages a 
step by step trade liberalization process, starting with a subsidiary free-trade agreement in goods 
among Pacific Island Countries (the Pacific Isla nd countries Trade Agreement, PICTA), which 
entered into force in 2003 and became operationa l as from 2007, and provides a framework for the 
future negotiation of forum-wide reciprocal free-trade agreements (including Australia and 
New Zealand).  More specifically, these negotiati ons should commence eight years after PICTA has 
entered into force (i.e. by 2011);  there is also  scope for beginning negotiations earlier than 2011 
between New Zealand (and Australia) and FICs wher e they have commenced FTA negotiations with a 
developed non-Forum country.  For instance, Fiji 's initialing in November 2007 of an Economic 
Partnership Agreement (EPA) with the EC has seemi ngly triggered PACER-Plus initial consultations 
for negotiations with Australia and New Zealand38;  while formal negotiations have yet to start, 
Australia, New Zealand, and FIC officials have been  involved in a series of informal meetings on the 
possibility of launching formal negotiations.  Unde r the PACER, Australia and New Zealand must 
continue to provide individual Forum Island countri es with the existing level of market access until 
new arrangements are concluded providi ng equal or better market access.   
The Trans-Pacific Strategic Economic Partn ership Agreement (TPSEPA or TransPac or P4) 
36. The P4, which was signed in 2005 between Brunei Darussalam, Chile, New Zealand, and 
Singapore39, entered into force on 1 May 2006 for New Zealand.40  It was notified to the WTO in 
May 2007 and examined by the Committee on Regi onal Trade Agreements (CRTA) in September 
2008.41  It covers virtually 100% of tariff lines, w ith two qualifications:  pending the outcome of 
further discussions, Brunei Darussalam  will retain tariffs on a short lis t of products exempt on moral, 
human health and security grounds;  and, while all products are covered by Chile's tariff elimination 
schedule, for sugar products (HS1701) the tariff redu ction only occurs if parties have an exportable 
surplus.42  New Zealand is phasing out all its tariffs in four stages:  May 2006 (96.5% of imports from 
Chile), January 2008, January 2 010, and January 2015, depending on the sensitivity of the item;  
                                                      
37 While there is provision under SPARTECA for New Zealand to apply tariffs on a very small number 
of goods originating from the FICs (e.g. some fruit juices), in practice New Zealand allows duty-free and 
unrestricted access on all imports from the FICs.  The FICs are:  the Cook Islands, Federated States of 
Micronesia, Fiji, Kiribati, Nauru, Niue, Palau, Papua New Guinea, Republic of the Marshall Islands, Samoa, 
Solomon Islands, Tonga, Tuvalu, and Vanuatu. 
38 WTO document WT/TPR/S/213, 18 February 2009. 
39 In addressing the issue of possible overlap with the earlier New Zealand-Singapore CEP (NZSCEP), 
Article 18.2 of the TPSEPA states that no provision of the Agreement derogates from "the existing rights and 
obligations of a Party under the WTO Agreement or any other multilateral or bilateral agreement".  Therefore 
the NZSCEP remains in force.  In an  arrangement between New Zealand and Singapore designed to ensure that 
no trader is worse off, exporters fro m both countries will be able to choose the better of the treatment afforded 
under the NZSCEP or the TPSEPA (Ministr y of Foreign Affairs and Trade (2005d). 
40 Ministry of Foreign Affairs and Trade (2005c).  A booklet presenting the core elements of the 
Agreement is also available at:  http://www.mfat. govt.nz/downloads/trade-ag reement/transpacific/trans-
pacificbooklet.pdf [12 August 2008]. 
41 WTO documents WT/REG229/1, 9 May 2008 and WT/REG229/M/1, 27 October 2008. 
42 APEC (2006), Chapter on FTAs and RTAs. New Zealand WT/TPR/S/216 
 Page 27 
 
 
textiles, clothing, footwear, and carpet are scheduled for the last stage.43  Upon entry into force of 
TPSEPA, duties were eliminated on 90% of New Z ealand's exports to Chile, representing an 
immediate duty saving of NZ$1.9 million, and on 92% of New Zealand's exports to Brunei 
Darussalam.  Chile's remaining tariffs on New Zeal and's exports are to be phased out by 2017 and 
those of Brunei Darussalam by 2015.  The P4 also covers trade in services44 as well as IPRs, technical 
barriers to trade (TBT), sanitary and phytosan itary measures (SPS), government procurement and 
competition policy.  A binding Labour Cooperati on Memorandum and an Environment Cooperation 
Agreement were also signed.  Regarding rules of  origin (Chapter III), the change of tariff 
classification (CTC) approach applies, except for so me products subject to additional regional value 
content (RVC) requirement (e.g. textiles, clothing, and footwear).45 
37. The P4 agreement, which contains an open accession clause, is considered as a potential 
driver for a larger trans-Pacific arrangement (e.g . Asia Pacific Free Trade Area – APFTA).  On 
22 September 2008, comprehensive negotiations fo r the United States to join the TPSEPA were 
launched and were scheduled to begin in March 2009.46  On 20 November 2008, Australia and Peru 
announced their intention to join this agreemen t by participating in the first round of the 
comprehensive negotiations in March 2009.  
(b) Bilateral agreements 
Australia and New Zealand Closer Economic  Relations Trade Agreement (ANZCERTA) 
38. Australia is New Zealand's main trading partne r (Chapter I).  Bilateral trade has developed 
through the ANZCERTA, in force since 1 January 1983.  The ANZCERTA covers all trade in goods, 
with all tariffs and quantitative restricti ons removed in 1990, and, as from 1988, services.47  However, 
as MFN tariffs in both countries are relatively low and have declined steadily, preferential access has 
continued to be eroded.  The agreement contains provisions, inter alia , dealing with anti-dumping, 
competition, and government procurement.  ANZCE RTA has also developed through amendment or 
addition of various associated instruments that to go  beyond traditional "at the border" issues.  These 
instruments include an arrangement for the mutual recognition of sales-related regulatory 
requirements for goods and occupations registration,  an agreement establishing a joint authority (Food 
Standards Australia New Zealand) to develop food standards for both countries (Chapter III)48 and 
arrangements to provide for the free movement of people between Australia and New Zealand.   
39. Since 2004, an important part of the deepening and broadening of the ANZCERTA 
relationship has been the work toward the devel opment of a Single Economic Market (SEM) between 
Australia and New Zealand.  The SEM agenda  builds on ANZCERTA integration by identifying 
innovative, low-cost actions to reduce the impact of  borders on flows of goods, services, capital, and 
people;  improve the business environment;  and e nhance regulatory effectiveness.  This helps to 
                                                      
43 For New Zealand, this liberalization involves main ly Chile, as tariffs on imports from Singapore are 
already zero under the New Zealand-Singapore Closer Economic Partnership CEP and 99% of imports from 
Brunei Darussalam comprise oil. 
44 The agreement takes a negative list approach to  services commitments while the GATS takes a 
positive list approach.  A negative list is more comprehensive than a positive list.   
45 These products must meet the CTC requirement plus a RVC threshold of 50%. 
46 Ministry of Foreign Affairs and Trade (2005d). 
47 In services, each country's exceptions are cont ained in separate "negative lists":  two for 
New Zealand (air services and coastal shipping);  and si x for Australia (air services , broadcasting, television, 
third party insurance, postal se rvices, and coastal shipping). 
48 Agreement between the Government of Australia and the Government of New Zealand Concerning a 
Joint Food Standards System (1995). WT/TPR/S/216 Trade Policy Review 
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ensure that the gains to both countries fro m the ANZCERTA are maximized.  The SEM work 
programme currently includes taxation (for exampl e, through renegotiation of the Australia-New 
Zealand Double Taxation Agreement), business law in itiatives (including coordination on financial 
reporting standards and on competition and consumer law, recognition of disqualification of directors, 
and mutual recognition of auditors), portability of retirement savings, exploring ways to streamline 
border processes, joint work on accounting standards and banking supervision, and encouraging 
business linkages.  Recent achievements under the SEM  agenda include the entry into effect of a 
regime between Australia and New Zealand for the mutual recognition of securities offerings 
(MRSO), on 13 June 200849, allowing an offer lawfully made in  either country to be extended to 
investors in the other without being required to fulfil additional requirements that would make the 
process financially prohibitive.  This reduces thei r compliance and capital-raising costs, providing 
enhanced investment opportunities.   
40. In 2005, New Zealand and Australia committed to negotiations for an investment protocol to 
ANZCERTA, so as to ensure that the agreement remains comprehensive and effective, and to 
streamline regulatory processes and allow businesses to make more efficient investment decisions.  This has been an important part of the SEM agen da.  Negotiations on the investment protocol are 
ongoing.  A number of other elements of the CER ha ve been or are being revised, including:  the 
Government Procurement Agreemen t, which was renegotiated and signed in January 2008;  the 
Double Taxation Agreement, which was renegotiated during 2008 and on which work is continuing;  
the CER Rules of Origin, which were changed fro m RVC to CTC in 2007 and are undergoing further 
review;  and the Joint Food Standards Treaty, which is due to be renegotiated in 2009. 
New Zealand–Singapore Closer Economic Partnership (NZSCEP) 
41. Apart from the ANZCERTA, the CEP Agreement between New Zealand and Singapore, in 
force since January 2001, notified to the WTO in Se ptember of the same year, and examined by the 
CRTA on three occasions (November 2002, December 2003, October 2004)
50, has been one of 
New Zealand's most comprehensive bilateral trade agreements.51  It, inter alia,  covers goods (all tariff 
lines), services, investment, technical barriers to tr ade (TBT), intellectual property (IPRs), sanitary 
and phytosanitary measures (SPS), competition principl es, and government procurement.  No change 
other than the entry in force of the TPSEPA (section (a) above) has affected the operation of this 
NZSCEP since the previous Review.   
42. New Zealand's services commitments under the NZSCEP, in general, exceed those under its 
current GATS Schedule of Specific Commitments.  In the NZ-Singapore CEP, New Zealand builds 
upon its GATS horizontal commitments (for example, by increasing the investment screening threshold for services supplied through commercial presence) and coverage in the following sectors:  
business services, communication services, distribution services, financial services, health related and 
social services, tourism and travel related services,  and transport services.  Moreover, the horizontal 
and sectoral commitments contained in New Zeala nd's 2005 revised DDA offer, on balance, improve 
and build upon the commitments made in the NZSCEP. 
                                                     
 
49 This agreement's objective is "to remove unnecessary  regulatory barriers to trans-Tasman securities 
offerings, and to thereby facilitate investment betw een the two countries, enhance competition in capital 
markets, reduce compliance costs for business, and in crease choice for investors".  The full text of the 
agreement is available at:  http://www.med.govt.nz/upl oad/31106/text-of-agreement.pdf [8 August 2008]. 
50 See also WTO documents WT/REG127/M/1, 21 January 2003, WT/REG127/M/2, 
23 December 2003, and WT/REG 127/M/3, 10 November 2004. 
51 Ministry of Foreign Affairs (2005a);  and APEC (2006), Chapter on FTAs and RTAs. New Zealand WT/TPR/S/216 
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New Zealand–Thailand Closer Economic Partnership (NZTCEP or TNZCEP) 
43. The New Zealand–Thailand Closer Economic Partnership was signed on 19 April 2005, 
entered into force on 1 July 2005, was notified to  the WTO in December 2005 and considered by the 
CRTA in May 2007.52  Tariffs on 100% of New Zealand impor ts from Thailand will be phased out by 
1 January 2015, while Thailand will phase out tariffs and quotas on 100% of imports from 
New Zealand by 2025.53  It was agreed that on implementation, 71% of bilateral trade would be duty 
free, a proportion estimated to rise to 84% by 2010.54  The provisions on RoO are consistent with the 
new CTC approach.55 The NZTCEP encompasses provisions on investment56 and government 
procurement57, and provides a platform for substantive ne gotiations on liberalization and rulemaking 
on trade in services.  
44. A Joint Commission to ensure the implemen tation of the agreement was established at 
Ministerial level.  At their first meeting in Ma y 2006, Ministers decided to commence negotiations on 
government procurement but no progress has been made ;  the Joint Commission is scheduled to meet 
again in 2009.   
New Zealand and China FTA 
45. The Free Trade Agreement between New Zealand and China was signed on 7 April 2008 and 
entered into force on 1 October 2008;  its notificati on to the WTO is expected in the course of 2009.  
This first bilateral FTA between China and a developed economy covers goods, services, and 
investment (with MFN provisions) as well as TBT,  SPS, IPRs, labour and environment provisions.58  
Under the FTA, New Zealand will eliminate tariffs on all products of Chinese origin, while providing 
time for any resulting adjustment in import-sens itive manufacturing sectors through tariff phase-out 
programmes.59  Upon entry into force of the agreemen t, New Zealand provided duty-free access for 
39% of imports from China.  Tariffs on most tex tile, apparel, footwear, a nd carpet products will be 
phased out between 2014 and 2016.  Tariffs on all other products (including steel, white ware, 
plastics, and furniture) will be phased out in 2012 an d 2013 with the majority of such tariffs being 
eliminated by 2012.  The agreement provides for elimination of China's tariffs on 96% of New Zealand's exports as follows:  35% of impor ts from New Zealand are duty free upon entry into 
force;  duties on a further 31% of imports from Ne w Zealand will be phased out by 2012.  Tariffs 
                                                     
 
52 Parallel with the agreement, both countries have entered into arrangements on labour and 
environment, setting out political commitments and establishing mechanisms for ongoing cooperation on these 
issues (Ministry of Foreign Affairs and Trade, 2005c).  See also WTO documents WT/REG207/M/1, 
12 June 2007 and WT/REG207/3, 3 January 2007. 
53 APEC (2006), Chapter on FTAs and RTAs. 
54 The Tariff Amendment Order  2005 (Thailand) brought into effect changes in tariffs applying to 
goods originating in Thailand following the conclusion of the NZTCEP Agreement. 
55 Ministry of Foreign Affairs (2005b), Chapter 4:  Ru les of Origin.  For the product-specific rules see:  
http://www.mfat.govt.nz/downloads/tr ade-agreement/thailand/nzthairulesoforiginannex.pdf [6 August 2008]. 
56 See Annex 4.1 and 4.2 of the NZTCEP, respectively on Thailand's and New Zealand's Schedules on 
Investment. 
57 The government procurement chapter makes a general commitment to promote and implement, to 
the extent possible, the APEC Tran sparency Standard for Government Procurement;  it also provides for 
exchange of information and future negotiations in this area. 
58 New Zealand and China had already concluded an Investment Promotion and Protection Agreement 
in 1988.  More information for business and the full text of the agreement are available at:  
http://www.chinafta.govt.nz. 
59 Online information available a t:  http://www.chinafta. govt.nz/1-The-agreement/3-Publications/Key-
outcomes.pdf [17 November 2008]. WT/TPR/S/216 Trade Policy Review 
Page 30 
 
 
greater than 20% will be reduced to 20%, and then phased out by 2013.  Rema ining tariffs covered by 
the agreement will be phased out by 1 January 2019.  
46. The agreement incorporates New Zealand's ex isting GATS commitments as well as additional 
undertakings (across modes 1, 2, and 3), including:  other education services, environmental services, 
computer services (maintenance and repair of office machinery and equipment, including computers;  
and other computer services), photographic servi ces duplicating services and construction services 
(consultancy related to construction services).  Ch ina's undertakings in services also go beyond its 
commitments under the GATS. 
(c) Agreements under negotiation 
ASEAN-Australia/NZ Free Trade Agreement (AANZFTA) 
47. In November 2004, Australia, New Zealand, and ten ASEAN countries launched negotiations 
for an ASEAN-Australia/New Zealand FTA (AANZFTA)60;  the negotiations concluded on 
28 August 2008.  The agreement was signed by all pa rticipants on 27 February 2009;  it is to enter 
into force in the second half of 2009 once all memb ers finalize their ratification procedures.  The 
AANZFTA will create new opportunities for New Zealand's exporters of goods and services as well 
as investors in one of the world's most dynamic comb ined markets and third largest export market.  It 
expected to be fully implemented within ten year s, be comprehensive in scope and provide for the 
progressive elimination of all barriers to trade in goods, services, and investment.61 
New Zealand and Malaysia Free Trade Agreement  
48. On 31 March 2005, New Zealand and Malaysia launched negotiations for an FTA to cover 
goods, services, and investment.  Since then there ha ve been eight negotiating rounds and by early 
2009, negotiations were entering their closing phase.  A number of chapters of the agreement have 
been concluded, including intellectual property,  competition policy, sanitary and phytosanitary 
measures, technical barriers to trade, and transpar ency.  Officials are seeking a comprehensive FTA 
that builds on the recently concluded AANZFTA.  An agreement with Malaysia together with those 
already in force with Thailand and Singapore, are s een as precursors to an ASEAN+6 (e.g. East Asian 
Summit) market-opening agreement. 
New Zealand-Gulf Cooperation Council Free Trade Agreement 
49. On 30 July 2007, New Zealand and the six members of the Gulf Cooperation Council 
(GCC)62 started, negotiations for an FTA covering subs tantially all trade, including goods, services 
and investment, trade and labour, trade and envi ronment, and government procurement.  The 
agreement should also contain provisions on cust oms procedures, competition, trade remedies, and 
address non-tariff measures such as IPRs, government  procurement, SPS, and TBT.  New Zealand 
and the GCC have held three rounds of negotiations since July 2007.  A fourth round was planned for 
February 2009.  Progress to date is considered promising, particularly in the goods and services 
negotiations.  It is hoped the ag reement will be concluded followi ng three more negotiating rounds 
(including the February round). 
                                                      
60 The ten ASEAN countries are:  Brunei, Cambodia,  Indonesia, Laos, Malaysia, Myanmar, Thailand, 
Philippines, Singapore, and Viet Nam. 
61 Another round was held in Singapore, from 21-26 July 2008. 
62 The GCC members are:  Saudi Ar abia, Kuwait, Bahrain, Qatar, United Arab Emirates, and Oman. New Zealand WT/TPR/S/216 
 Page 31 
 
 
Other 
50. Since its previous Review, New Zealand has advanced preparatory work for launching FTA 
negotiations with Korea, Japan, and India.63  New Zealand has also been working to resume 
negotiations for a bilateral Closer Economic Partne rship agreement, with Hong Kong, China, after 
these were suspended in late 2002 after the fifth round of negotiations.64  
51. Since March 2008, New Zealand has participated in four rounds of discussions for an 
Anti-Counterfeiting Trade Agreement (ACTA) with a view to establishing global standards to fight 
commercial-scale counterfeiting and piracy.65  ACTA would focus on three areas:  increasing 
international cooperation between  enforcement agencies and rights holders;  establishing best 
practices for enforcement;  and providing a more e ffective legal framework.  It would be grounded on 
the existing legal framework linked to the protecti on and enforcement of intellectual IPRs, including 
the WTO TRIPS Agreement. 
(d) Unilateral trade preferences 
52. Under New Zealand's Generalized System of Preferences (GSP) preferential treatment is 
granted to goods originating in least developed countries (LDCs) and less developed countries;  
preferences for the latter are being removed and/ or eroded by MFN tariff reductions (Chapter III)66, 
and 11 of them ceased to be part of the group on 1 April 2005.67  All goods of LDC origin have 
qualified for duty-free entry into New Zealand since 1 July 2001.  As of August 2008, 91 less developed countries and 50 least developed countries benefited from New Zealand's GSP scheme.
68  
A long-standing Commonwealth tariff preference for certain goods from Canada and a few motor 
vehicle parts from Great Britain remains in place.  
(7) FOREIGN INVESTMENT REGIME  
53. New Zealand has maintained an open stance towards overseas investment, encouraging it 
without discrimination, although subject to specific regulations.69  In 2007, New Zealand was 
recognized by the World Bank as the second best place (after Singapore) in the world for overall ease 
                                                      
63 A joint study on the feasibility of an NZ-Korea FTA, completed at the end of 2007, concluded that 
an FTA would generate benefits for both countries.  During the first Partnership Dialogue with Japan in 
April 2007, the Prime Ministers agreed to launch a join t study into the implications of a Japan-New Zealand 
Economic Partnership Agreement.  As for India, an Officials' Joint Study Group launched in 2007 was to report 
back before the end of 2008.  In February 2009, negotiations were expected to be concluded later in the year.  
See Government of New Zealand online information 2008, "Developments on free trade negotiations", 15 July.  Viewed at:  http://beehive.govt.nz/speech/free+trade+negotiation+developments [8 August 2008]. 
64 New Zealand and Hong Kong concluded an Investment Protection and Promotion Agreement (IPPA) 
in 1995, signed prior to Hong Kong's reversion to Chinese sovereignty. 
65 Representatives from Australia, Canada, the European Union, Japan, Korea, Mexico, Morocco, 
New Zealand, Singapore, Switzerland, the United Arab Em irates, and the United States participated in these 
rounds (MFAT online information.  Viewed at:  http://www.mfat.govt.nz/Trade- and-Economic-Relations/ 
Trade-Agreements/Anti-Counterfeiting/ 0-ACTA.php [17 November 2008]). 
66 Six past beneficiaries joined the European Un ion in May 2004, i.e. th e Czech Republic, Hungary, 
Poland, the Slovak Republic, Malta, and Slovenia;  the rest are the Cayman Islands, Korea, Barbados, Bahrain, 
and Macau Special Administrative Region.  See Tari ff (Less Developed Countries and Least Developed 
Countries) Order 2005, (SR 2005/18).  Viewed at:   http://www.legislation.govt.nz//regulation/public/ 
2005/0018/latest/DLM312430.html?search=ts_regulation_tariff&sr=1 [9 August 2008]. 
67 APEC (2007b), Agenda Item: III. 
68 Schedule 1 and Schedule 2, respectively, of the Tariff Order 2005. 
69 For details on the amendments to the New Zealand investment regime see WTO (2003). WT/TPR/S/216 Trade Policy Review 
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of doing business;  it ranked first in areas such as  dealing with licences, registering property, and 
protecting investors.70  Foreign direct investment (FDI) is cr itical to New Zealand in addressing issues 
such as:  the small size of its economy;  the need  for access to foreign capital in order to bridge the 
gap between gross domestic investment and nationa l saving;  and helping to build more globally 
competitive firms by facilitating their international connections. 
(a) Legislative framework and procedures 
54. Following a review of its foreign investment  screening regime, in 2003-04, New Zealand 
implemented a number of improvements via the Ov erseas Investment Act 2005 (OIA), which entered 
into force on 25 August 2005.  Most of the legislation previously governing overseas investment in 
New Zealand was incorporated into the new Act.71  The purpose of the OIA 2005 is to provide 
additional flexibility in the foreign investment screening regime.72  In order to simplify the 
administration of FDI regulations, an Overseas Invest ment Office (OIO) took over the functions of the 
Overseas Investment Commission when the 2005 Act was passed.73   
55. New Zealand's approach is to target FDI screeni ng in a few areas of critical interest:  certain 
sensitive types of land74;  significant business assets other than land;  and fishing quotas.  Overseas 
persons are expected to pass an investor test that  considers character, business acumen, and level of 
financial commitment.75  Where the investment includes sensitiv e land they must also show that the 
investment will provide significant benefits for New Zealand.  Fishing quota investments must pass a 
national interest test.76 
                                                      
70 New Zealand was ranked in top of the World Bank's ranking for ease of doing business in 2006 
(World Bank, 2008). 
71 The Act replaced the Overseas Investment Act 1973, the Overseas Investment Regulations 1995, and 
the Overseas Exemption Notice 2001.  Provisions of the Overseas Investment Regulations 1995 contained in the 
OIA 2005 include:  the maintenance of a minimal level of control over "significant" investment, which relates to an overseas person owning or controlling 25% or more of:  business or property worth more than 
NZ$50 million;  land over 5 hectares and/or worth more than NZ$10 million;  land on most offshore islands;  
and land over 0.4 hectares that includes or adjoins "sen sitive" land (such as on specific islands, next to reserves, 
historic or heritage areas or lakes).  See WTO (2003). 
72 The OIA 2005 states that its purpose is to "acknowledge that it is a privilege for overseas persons to 
own or control sensitive New Zealand assets by requiring overseas investments in those assets to meet criteria 
for consent and imposing conditions on those overseas investments".  Screening requirements may be used to 
limit investments for non-economic reasons. 
73 The OIO was established within a government department, Land Information New Zealand, 
responsible for land titles, geodetic and cadastral surv ey systems, topographic information, hydrographic 
information, managing Crown property and a variety of other functions.  For further information see:  
http://www.linz.govt.nz. 
74 The definition of sensitive lands, as given in Schedule 1 of the OIA 2005, includes, inter alia :  
non-urban land of over 5 hectares, land on offshore islands, land that is over 0.4 hectares and adjoins reserves, 
historic or heritage areas, or lakes and rivers. 
75 The Overseas Investment Office (OIO), "under de legation from" the Minister of Finance acts as the 
regulator.  Although there is no statutory time frame with in which an application for consent must be decided, 
the OIO aims to decide delegated applications within 10 working days of all information being provided, and 25 working days of all information being provided where decisions have to be taken by the relevant Ministers.  
For further information and legislation, see Land Inform ation New Zealand online information.  Viewed at:  
http://www.linz.govt.nz/overseas-i nvestment/about-oio/legislation/index.aspx [5 August 2008]. 
76 The factors for determining whether overseas investment in fishing quota is in the national interest 
are:  (a) whether the overseas investment will, or is lik ely to, result in (i) the creation of new job opportunities in 
New Zealand or the retention of existing jobs in New Zealand that would or might otherwise be lost;  or (ii) the introduction into New Zealand of new technology or bu siness skills;  or (iii) increased export receipts for New Zealand WT/TPR/S/216 
 Page 33 
 
 
56. The 2005 Act no longer screens the acquisition of  urban land and land adjoining some 
reserves (unless these investments meet other criteria for screening under the Act);  consent is no longer required for land with an unimproved va lue over NZ$10 million, where the land is not 
screened for other reasons.  Consent must be sought to purchase land that is, or includes, foreshore or 
seabed without any minimum threshold;  under the former regulation lands under 0.2 hectares 
including or adjoining foreshore or seabed were not screened.  Under the OIA 2005, the threshold 
remains the same for land adjoining foreshore or seabed.
77  Lands adjoining some non-sensitive 
reserves, for example drainage and hospital reser ves, fall outside the purview of the OIA 2005. 
57. Between August 2002 and August 2008, 1,609 investment applications were screened;  only 
33 were rejected, and these related to sensitive land.  The processing time for applications seems to be 
lengthy. 
58. The threshold for screening non-land transactions involving significant business assets, where 
the proposed acquisition entails a 25% or more sh areholding, has been raised from NZ$50 million to 
NZ$100 million, regardless of the nature of the investment.78  New Zealand's current GATS mode 3 
horizontal commitment binds a screening threshold of NZ$10 million.  
59. As for the fishing quotas79, the obligation for obtaining consent when an overseas person 
wants to buy a 25% or more stake in a fish quota owning company has been transferred from the 
company to the overseas investor, in or der to limit the cost to the taxpayer.80 
60. On 4 March 2008, the Government added a ne w regulation to the OIA 2005 enabling the OIO 
to take into account "whether the overseas investme nt will, or is likely to, assist New Zealand to 
maintain New Zealand control of strategica lly important infrastructure on sensitive land".81  T h e  
regulation was in response to uncertainty and de bate that surrounded the Canadian Pension Plan 
Investment Board's offer to shareholders in Auckla nd International Airport (AIAL).  As a result, in 
April 2008 New Zealand refused cons ent for this investment project.82 
                                                                                                                                                                     
New Zealand exporters;  or (iv) added market competition, greater efficiency or productivity, or enhanced 
domestic services, in New Zealand;  or (v) the introduction into New Zealand of additional investment for 
purposes of significant development;  or (vi) increased processing in New Zealand of fish, aquatic life, or 
seaweed;  or (b) any other factors that are set out in regulations under the Overseas Investment Act 2005 or that the relevant Ministers, having regard to the circumstances and the nature of the application, think fit (Overseas 
Investment Act 2005.  Viewed at:  http://www.le gislation.govt.nz/act/publ ic/2005/0082/latest/DLM 
356881.html?search=ts_act_Overseas+Investment+Act+2005_resel&sr=1). 
77 Other provisions of the OIA 2005 include:  non-approval by the OIO of purchase of farm land by an 
overseas person unless that land has first been offered for sale on the open market in New Zealand;  and a new 
right of first refusal granted by the Crown over foreshore and seabed land where this would otherwise be sold to foreign ownership. 
78 As defined in Section 13 of the OIA 2005.  The th reshold had last been adjusted in 1999 when it was 
increased from NZ$10 million to NZ$50 million.  See http://www.beehive.govt.nz/node/20367 [5 August 2008]. 
79 The OIO administers sections 56 and 57 of the Fisheries Act 1996, which regulate the issuing of 
fishing quotas. 
80 Other key changes include monitoring and enforcement provisions:  fines for overseas investors not 
in compliance with the conditions of consent, were increased from NZ$30,000 for individuals and NZ$100,000 
for companies to NZ$300,000 for both. 
81 Amendment by Order in Council of Regulation 28 (h) of the Overseas Investment Act 2005.  Viewed 
at:  http://www.linz.govt.nz/overseas% 2Dinvestment/ [5 August 2008]. 
82 For further details see:  http://www.beehive.govt.nz/release/strategic+assets+be+protected+ 
national+interest [5 August 2008]. WT/TPR/S/216 Trade Policy Review 
Page 34 
 
 
61. New Zealand maintains a network of 35 do uble tax agreements or arrangements (DTAs)83 
aimed at:  ensuring that businesses are not taxed tw ice on income earned in the other country;  and 
assisting the enforcement of tax laws in both countri es.  Since its previous Review, New Zealand has 
amended agreements through protoc ols signed with United States (signed on 1 December 2008, not 
yet in force);  the United Kingdom (in force since 29 August 2008);  Singapore (in force since 
17 August 2006), and Australia (in force since 22 Ja nuary 2007).  Negotiations on a revised DTA with 
Australia were held throughout 2008 as part of the joint ANZCERTA Single Economic Market 
agenda.  Most recent DTAs include:  South Africa (in force since 23 July 2004);  the United Arab 
Emirates (29 July 2004);  Chile (21 June 2006);  Spain (31 July 2006);  Poland (16 August 2006);  
Mexico (16 June 2007);  Austria (1 December 2007);  and the Czech Republic (29 August 2008). 
62. None of these DTAs or protocols contain "tax sparing provisions".  Se veral of New Zealand's 
DTAs contain forms of MFN provisions, including those with Chile, Mexico, and Spain, and the 
protocols with Australia and the United States. 
 
                                                      
83 All DTA protocols and texts are available from  the Policy Advice Division of the New Zealand 
Inland Revenue Department.  Viewed at:  http://ta xpolicy.ird.govt.nz/intern ational/DTA/index.html 
[11 August 2008].