WORLD TRADE  
ORGANIZATION  WT/REG266/1  
20 September 2010 
 (10-4812) 
Committee on Regional Trade Agreements  
 
 
 
 
 
 
 
FACTUAL PRESENTATION 
 
Free Trade Agreement between  
China and New Zealand 
(Goods and Services) 
 
Report by the Secretariat 
 
 
 
 
This report, prepared for the considera tion of the Free Trade Agreement between 
China and New Zealand has been drawn up by the WTO Secretariat on its own 
responsibility and in full consultation with the Parties.  The report has been drawn 
up in accordance with the rules and pro cedures contained in the Decision for a 
Transparency Mechanism for Regiona l Trade Agreements (WT/L/671).  
 
Any technical questions arising from this report may be addressed to 
Ms Juneyoung Lee (tel: +41 22 739 67 91).  WT/REG266/1 
 Page iii 
 
 
  TABLE OF CONTENTS 
 
  Page 
 
I. TRADE ENVIRONMENT 1  
A. MERCHANDISE TRADE  1  
B. TRADE IN SERVICES AND INVESTMENT  5  
II. CHARACTERISTIC ELEMENTS OF THE AGREEMENT 8  
A. BACKGROUND INFORMATION  8  
III. TRADE IN GOODS 10  
A. IMPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  10  
1. General provisions 10  
2. Liberalization of trade and tariff lines 10  
3. China's liberalization schedule 11  
4. New Zealand's liberalization schedule 14  
5. Tariff-rate quotas 15  
(a) China 15  
(b) New Zealand 16  
B. RULES OF ORIGIN  16  
C. EXPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  17  
D. REGULATORY PROVISIONS ON TRADE IN GOODS  17  
1. Standards 17  
(a) Sanitary and phytosanitary measures 17  
(b) Technical barriers to trade 18  
2. Trade remedies 19  
(a) Safeguard mechanisms 19  
(i) Global safeguards 19  
(ii) Bilateral safeguards 19  
(iii) Special safeguards 21  
(b) Anti-dumping measures 22  
(c) Subsidies and countervailing measures 22  
IV. TRADE IN SERVICES AND INVESTMENT 23  
A. SCOPE AND DEFINITIONS  23  
B. DENIAL OF BENEFITS  24  
C. GENERAL PROVISIONS ON TRADE IN SERVICES  24  
1. Market access 24  
2. National treatment 24  
3. MFN treatment 25  
4. Commercial presence 25  
5. Movement of natural persons 25  
D. LIBERALIZATION COMMITMENTS  27  
1. China 28  
(a) Horizontal co mmitments 28  
(b) Sector specific commitments 28  
2. New Zealand 29  
(a) Horizontal co mmitments 29  
(b) Sector specific commitments 30  WT/REG266/1 
Page iv 
 
 
  E. REGULATORY PROVISIONS ON TRADE IN SERVICES AND INVESTMENT  31  
1. Domestic regulation 31  
2. Recognition 31  
3. Payments and transfers 32  
4. Safeguard measures/subsidies 32  
5. Monopolies and exclusive service suppliers 32  
6. Expropriation 32  
V. GENERAL PROVISIONS OF THE AGREEMENT 33  
A. TRANSPARENCY  33  
B. EXCEPTIONS  33  
C. ACCESSION AND TERMINATION  33  
D. INSTITUTIONAL FRAMEWORK  33  
E. DISPUTE SETTLEMENT  34  
F. RELATIONSHIP WITH OTHER AGREEMENTS CONCLUDED BY THE PARTIES  36  
G. GOVERNMENT PROCUREMENT  36  
H. INTELLECTUAL PROPERTY RIGHTS  37  
I. COOPERATION  37  
 
ANNEX 38 
 
  
 
 
 
  WT/REG266/1 
 Page 1 
 
 
  I. TRADE ENVIRONMENT 
1. The Free Trade Agreement (FTA) between China a nd New Zealand (hereinafter referred to as 
"the Agreement") is China's eighth and New Zeala nd's fifth FTA.  The Agreement is China's first 
FTA partnered with a member state of the Orga nization for Economic C ooperation and Development 
(OECD).  
2. In 2008 China's GDP was estimated at US$3, 860 billion while that of New Zealand was 
US$130.6 billion.  With total merchandise exports  of US$1,428.3 billion, China was the world's 
second largest exporter and third largest importer in 2008 compared to New Zealand ranking at 63rd 
and 60th exporter and importer (its merchandise expor ts were US$30.5 billion and imports US$34.3 
billion respectively).  In commercia l services also, while China ranked fifth in terms of both exports 
and imports (US$146.4 billi on and US$158 billion respectively), New Zealand ranked 54th and 53rd 
for exports and imports (exports at US$8.8 billion and imports at US$9.4 billion respectively).  
China's trade to GDP ratio at 73.4 averaged over 2006-2008 is relatively similar that of New Zealand 
at 58.6.1 
A. MERCHANDISE TRADE  
3. In 2008 China was New Zealand's fourth largest export market (5.9% of New Zealand's 
exports) and second largest source of imports (13.3% of its imports) for goods.  New Zealand was 
China's 59th largest export market (0.2% of China's exports) and 52nd largest source of imports 
(0.2% of its imports).2 
4. Recent developments in global and intra-Party trad e are presented in Charts I.1 and I.2.  Over 
the period surveyed (1997-2008), China's trade surplu s with the world has been widening since 2004.  
Bilateral trade with New Zealand moved into a surp lus in 2005 and has continued to widen since then. 
New Zealand has had a trade deficit in its global trade since 2002, which after widening in 2005, has 
remained steady since.  The trad e deficit with China has been wi dening since 2002 especially due to 
rapid growth in imports.3 
                                                      
1 WTO Statistics Database, Trade Profile (October 2009). 
2 UNSD, Comtrade database (2008).  The ranking is individually reported for the members of the 
European Communities to Comtrade. 
3 The discrepancy in the trade data reported by China and New Zealand to the UNSD Comtrade 
database according to the Parties, appears to be mostly due  to the fact that Chinese st atistics do not record trans-
shipments of exports through third country ports such as Hong Kong, China or Singapore where the end 
destination is New Zealand. WT/REG266/1 
Page 2 
 
 
  01002003004005006007008009001,0001,1001,2001,3001,4001,500
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20080.00.51.01.52.02.53.03.54.04.55.0US$billion US$billionChart I.1 - China: Merchandise imports from and exports to world 
and New Zealand, 1997-2008
Source : UNSD, Comtrade database.Imports from New Zealand
Exports to New ZealandTotal imports
Total exportsLeft hand scale: Right hand scale:
 
 
05101520253035404550
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008012345678US$billion US$billionChart I.2 - New Zealand: Merchandise imports from and exports to 
world and China, 1997-2008
Sources : UNSD, Comtrade database.Imports from China
Exports to ChinaTotal imports
Total exportsLeft hand scale: Right hand scale:
 
 
5. The commodity structure of trade between the Pa rties, as well as of their imports and exports 
to the world in the period 2005-2007, is shown in Chart I.3 on the basis of the Harmonized System 
(HS) sections.  WT/REG266/1 
 Page 3 
 
 
  6. Over half of China's exports in 2005-2007 we re accounted for by machinery and textiles, 
followed by, base metals;  the two largest categor ies are also New Zealand's main imports from 
China, accounting for 55.3% of its imports.  Animal  products, which are New Zealand's largest global 
exports, are also China's largest import category from New Zealand;  wood pulp and articles of wood 
account for a large share of its imports from Ne w Zealand (26%), followed by textiles (8.5%). WT/REG266/1 
Page 4 
 
 
  Chart I.3
China and New Zealand: pr oduct composition of m erchandise trade, annual 
average (2005-2007)
China's imports from New Zealand New Zealand's imports from China
 Note:     Miscellaneous composes HS  chapters 94 (furniture), 95 (toys) and 96 (other miscellaneous manufactured 
               articles). Source:  UNSD, Comtrade database.Per cent
Total:  US$1.4 billion Total:  US$3.4 billion
Total:  US$802 billion Total: US$28 billion
Total:  US$983 billion Total:  US$24 billionChina's global exportsNew Zealand's global exportsChina's global imports New Zealand's global importsOther
3.1
Animal products
27.9Base metals 2.7
Machinery
34.8Other 
8.2
Footwear 4.4
Base metals 6.5
Other 
6.7Machinery
21.8
Textiles 4.5Optical 3.1Other
7.7
Minerals
15.7Optical  7.6Machinery
40.7Vehicles 3.5
Chemicals 
7.3Textiles 3.1
Prepared foods 5.1Plastics 5.8
Plastics 4.9
Other 
8.9Other 
10.3
Vehicles 4.1Chemicals 4.1
Base metals 8.7Miscellaneous (e.g. 
furniture and toys) 5.7
Base metals 7.2Articles of wood 6.0
Machinery 
8.4Minerals 2.7
Chemicals 4.8Fats and oils 3.8
Chemicals 
9.3Wood pulp  3.5Stone, Cement 2.7
Base metals 
8.1
Vehicles 2.8Raw hides 5.9Vegetables 2.6
Prepared foods 7.2Plastics 4.0
Chemicals 4.3
Textiles 14.0Machinery 
42.9Plastics 3.0
Optical 3.6 Wood pulp 3.3Footwear 2.7Minerals 2.2Optical 2.3Wood pulp 2.1
Wood pulp 1.6
Miscellaneous 2.7Articles of wood 
13.8
Wood pulp 12.2Textiles 8.5Minerals 4.7Chemicals 4.1Machinery 3.4
Textiles 20.5Miscelleneous 
10.3
Vehicles 17.0
Minerals 14.4Base metals 5.9
Animal products 
36.8
Prepared foods
8.3Vegetables 5.4Textiles 3.9
 
  WT/REG266/1 
 Page 5 
 
 
  B. TRADE IN SERVICES AND INVESTMENT  
7. In 2008 China exported and imported US$1 46.4 billion and US$158 billion worth of 
commercial services, a significant change from 2000 , when exports and imports were US$30.1 billion 
and US$35.9 billion respectively.  Chart I.4 shows the breakdown of commercial services trade for 
China in 2000-2008.  During this period, China has run a constant tr ade deficit in these services.  The 
top three categories for both exports and imports were: other business services, transportation 
services, and travel services. 
020406080100120140160180200
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: IMF, BOP CD-ROM.Chart I.4
China, total commercial se rvices trade, 2000-2008
US$ billion
Transportation services
Travel services
Communication services
Construction servicesFinancial services
Computer and information services
Royalties and license feesOther business services
Personal, cultural and 
recreational services
Government servicesInsurance services
 
 
8. Chart I.5 shows the breakdown of commercial services trade for New Zealand in 2003-2008 
for which years New Zealand registered a surplus ex cept in 2008.  As in th e case of China, the top 
three categories for both exports and imports were: travel services, transportation services, and other 
business services. WT/REG266/1 
Page 6 
 
 
  0246810
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
2003 2004 2005 2006 2007 2008
Source: data provided by New Zealand; International Monetary Fund (Construction trade in 2008, imports on Communications 
services and Insurance services in 2008).Chart I.5
New Zealand, total commercial  services trade, 2003-2008
US$ billion
Transportation services
Travel
Communications services
ConstructionFinancial services
Computer and information services
Royalties and license feesOther business services
Personal, cultural and 
recreational servicesInsurance services
Government services,n.i.e.
 
 
9. China's global investment position is depicted  in Chart I.6.  With stocks of over 
US$350 billion in 2008, China remains an important net recipient of direct investment from the world.  
Its stock of inward FDI in 2008, at US$378 b illion was around two and a half times higher than its 
outward FDI stock in the same year.  Outward FD I from China which was less than US$30 billion in 
2000 has also gradually increased particularly si nce 2004, reaching just unde r US$150 billion in 2008.  WT/REG266/1 
 Page 7 
 
 
  050100150200250300350400450500
2000 2001 2002 2003 2004 2005 2006 2007 2008050100150200250300350400450500
2000 2001 2002 2003 2004 2005 2006 2007 2008Chart I.6
China, inward and outwar d foreign investment stoc k with world, 2000-2008
Inward OutwardUS$ billion US$ billion
Source: UNCTAD, Foreign Direct Investment database.
 
 
10. New Zealand's global investment position in 2003-2 008 is depicted in Chart I.7.  During this 
period while inward investment increased from US$33.9 billion in 2003 to US$65.5 billion in 2008, 
New Zealand's stock of FDI elsewhere has remain ed at between US$10 billion and US$15 billion.   WT/REG266/1 
Page 8 
 
 
  01020304050607080
2003 2004 2005 2006 2007 200801020304050607080
2003 2004 2005 2006 2007 2008Chart I.7
New Zealand, inward and outward foreign direct investment stock with world, 
2003-2008
Inward Outward
US$ billion US$ billion
Source: data provided by New Zealand.
 
 
11. Table I.1 shows New Zealand's inward and outward  FDI stock with China in 2005-2008.     
For reasons of confidentiality, only data for 2005 are available for inward investment.  New Zealand's 
stock of FDI in China was valued at US$44 million in  2008, 0.3% of its total investment in the world 
in the same year.  Its stock of FDI from China was va lued at US$91 million in 2005, 0.17% of its total 
investment from the world in the same year. 
Table I.1 
New Zealand, foreign direct investment stock with China and world, 2003-2008 (US$ million)  
China World 
 2005 2006 2007 2008 2005 2006 2007 2008 
Outward c c 29 44 14,271 11,878 14,263 14,663 
Inward 91 c c c 51,866 50,634 66,587 65,573 
 
c – confidential. 
 
Source:  Data provided by New Zealand. 
 
II. CHARACTERISTIC ELEMEN TS OF THE AGREEMENT 
A. BACKGROUND INFORMATION  
12. The Agreement was signed by the Parties on 7 Ap ril 2008 and entered into force on 1 October 
2008. 
13. The goods and services aspects of the Agreement were notified to the WTO by the Parties on 
21 April 2009 under Article XXIV:7(a) of the GATT 1994, and Article V:7(a) of the GATS,  WT/REG266/1 
 Page 9 
 
 
  respectively (document WT/REG266/N/1 and S/C/N/491).  The text of the Agreement is available, 
together with its related Annexes, on the following official websites: 
China:    http://fta.mofcom.gov.cn/newzealand/xiedinggaishu.shtml  
New Zealand:   http://chinafta.govt.nz//1-The-agree ment/2-Text-of-the-agreement/0-
downloads/NZ-ChinaFTA-Agreement-text.pdf  
14. The Agreement is composed of 18 Chapters  and has related Annexes, implementing 
arrangements and side letters, as follows: 
Box II.1:  Composition of the Agreement 
Chapters, Annexes and Le tters Title/description 
Chapter 1 Initial Provisions 
Chapter 2 General Definitions 
Chapter 3 Trade in Goods 
Annex 1 Tariff Schedules 
Annex 2 Special Agricultu ral Safeguard Measures 
Annex 3  Mid-Term Review Mechanism 
Annex 4 China's Country-Specific Tariff Quotas for Wool and Wool 
Tops 
Chapter 4 Rules of Origin and Operational Procedures 
Annex 5 Product Specific Rules of Origin 
Annex 6 Certificate of Origin 
Annex 7  Declaration of Origin 
Chapter 5 Customs Proce dures and Cooperation 
Chapter 6 Trade Remedies 
Chapter 7 Sanitary and Phytosanitary Measures 
Implementing Arrangements on: Competent Authorities and Sanitary and Phytosanitary Contact 
Points;  Risk Analysis;  Adaptation to Regional Conditions;  Determination of Equivalence;  
Verification;  Certificates;  Import Checks;  and Cooperation  
Chapter 8 Technical Barriers to Trade 
Agreement (Annex 14) and its Implementing Arrangement between the Parties on Cooperation in 
the filed of Conformity Assessment in relati on to Electrical and Electronic Equipment and 
Components  
Implementing Arrangement on Technical Barriers to Trade Competent Authorities 
Chapter 9 Trade in Services 
Annex 8 Schedules of Specific Commitments on Services 
Annex 9  Sectoral Coverage under Article 107 
Chapter 10 Movement of Natural Persons 
Annex 10  Commitments on Temporary Entry by Natural Persons 
Annex 11 Commitments on Temporary Employment Entry by Natural 
Persons 
Annex 12 Visa Facilitation 
Chapter 11 Investment 
Annex 13 Expropriation 
Chapter 12 Intellectual Property 
Chapter 13 Transparency 
Chapter 14 Cooperation 
Chapter 15 Administrative and Institutional Provisions 
Chapter 16 Dispute Settlement 
Chapter 17 Exceptions 
Chapter 18  Final Provisions 
Side Letters on Skilled Workers 
Side Letters on Doctoral Research Scholarships Programme 
Arrangement on a Working Holiday Scheme 
Source : Free Trade Agreement between China and New Zealand.  WT/REG266/1 
Page 10 
 
 
  III. TRADE IN GOODS 
A. IMPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  
1. General provisions 
15. Each Party accords national treatment to goo ds from the other Party in accordance with 
Article III of the GATT 1994 which was incorporated  into and became part of the Agreement 
(Article 6). 
16. Except as otherwise provided for in the Agreem ent, the Parties may not increase any existing 
duty, or adopt any new duty on an originating good of the other Party (Article 7.1) and they shall 
eliminate their duties on an originating good of the other Party except as otherwise provided for in the 
Agreement, and subject to a Party's tariff schedule in  Annex 1 (Article 7.2).  The Parties shall consult 
to consider accelerating the elimination of cu stoms duties on goods in their tariff schedules in 
Annex 1 upon the request of either Party (Article 8. 1)  The elimination of customs duties may also be 
unilaterally accelerated (Article 8.3). 
17. The Parties agree not to adopt or maintain an y non-tariff measures on the import of any goods 
from the other Party, except in accordance with their WTO rights and obligations , or other provisions 
in the Agreement (Article 11.1). 
2. Liberalization of trade and tariff lines 
18. Trade in goods under the Agreement is classified under the 2007 nomenclature of the 
Harmonized System (HS).  The elimination of tariffs  applicable between the Parties is scheduled in 
Parts A and B of Annex 1, for China and New Zealand, respectively.   
19. Overall tariff elimination under the Agreement is depicted in Tables III.1.A and III.1.B.  
Table III.1.A shows duty elimination in terms of tari ff lines and trade, as applied by China to imports 
from New Zealand.  Before the entry into for ce of the Agreement, 639 tariff lines (8.4% of 
China's tariff) were already duty-free on an MFN basis.4  Upon entry into force of the Agreement, an 
additional 1,204 tariff lin es (15.7% of the tariff) became duty-fr ee for imports from New Zealand;  as 
a result, 24.1% of China's tariff lines became duty-free corresponding to 33.4% of imports by value 
from New Zealand.  The remaining tariffs are to be progressively eliminated in five additional stages 
starting from 2012, when more than half of its tariff lin es are due to be eliminated and ending in 2019.  
By 2018, after ten years of implementation, a fu rther 5,576 lines are to become duty-free (72.9% of 
the tariff lines) amounting to 39% of the value of  imports from New Zealand.  By the end of 
implementation in 2019, 97.1% of tariff lines and 88% imports by value from New Zealand will be 
duty-free. 
 
  
 
  
 
 
                                                     
 
4 China's MFN tariff schedule in the year of entry into force of the Agreement (2008) comprised 
7,646 tariff lines at the HS 8-dig it level;  99.4% of this tariff is ad valorem , 0.58% relates to lines with specific 
duties;  and 0.07% to others.    WT/REG266/1 
 Page 11 
 
 
  Table III.1 
Tariff elimination commitments under the Agreement and corresponding average trade 
A.  China 
Duty phase-out period Number of lines % of total lines in 
China's tariff schedule Value of China's imports 
from New Zealand 
(2005-2007) 
in million US$ % of China's total 
imports from 
New Zealand  
2005-2007 
MFN duty free (2008) 639 8.4 349.2 25.9 
2008-2011 1,204 15.7 100.9 7.5 
2012 5,100 66.7 414.7 30.8 
2013-2015 437 5.7 1.2 0.1 
2016 32 0.4 70.5 5.2 
2017-2018 7 0.1 38.8 2.9 
2019 4 0.1 210.5 15.6 
Remain dutiable 223 2.9 161.9 12.0 
Total 7,646 100.0 1,347.7 100.0 
 
Note: Based on the HS 2007 nomenclature. 
 
Source :  WTO estimates based on data pr ovided by China and the WTO-IDB. 
 
20. Table III.1.B shows New Zealand's duty eliminati on in terms of tariff lines and trade, applied 
to China.  Before the entry into force of the Ag reement, 4,190 tariff lines (57.6% of New Zealand's 
tariff) were already duty-free on an MFN basis.5  Upon entry into force of the Agreement, an 
additional 415 tariff lines (5.7% of the tariff) became  duty-free for imports from China;  as a result, 
63.3% of New Zealand's tariff lines became duty-free corresponding to 39.2% of imports by value 
from China.  The remaining tariffs are to be progr essively eliminated in four additional stages 
between 2012, when most remaining tariffs are due  to be eliminated and 2016.  By the end of 
implementation in 2016, eight years after the entry in to force of the Agreement, 100% of tariff lines 
and 100% of imports by value from China will be duty-free. 
Table III.1 
Tariff reduction commitments under the Ag reement and corresponding average trade 
B.  New Zealand 
Duty phase-out 
period Number of lines % of total lines in New 
Zealand's tariff 
schedule Value of New Zealand's 
imports from China 
(2005-2007) 
in million US$ % of New Zealand's 
total imports from 
China  
2005-2007 
MFN duty free (2008) 4,190 57.6 1,264.8 37.4 
2008-2011 415 5.7 60.5 1.79 
2012 1,967 27.1 1,237.0 36.58 
2013 86 1.2 5.4 0.16 
2014-2015 466 6.4 148.6 4.39 
2016 146 2.0 665.5 19.68 
Total 7,270 100.0 3,381.7 a 100.0 
 
a Only trade falling under HS Chapter 1-97 is included. 
 
Note: Based on the HS 2007 nomenclature. 
 
Source :  WTO estimates based on data provide d by New Zealand and the WTO-IDB. 
 
3. China's liberalization schedule 
21. Table III.2 shows China's tariff elimination commitments vis-à-vis  New Zealand by 
HS section product categories.  Of the 1,204 tariff lines liberalized upon entry into force of the Agreement, the vast majority fall under HS sec tions V (minerals), VI (chemicals and chemical 
products), XI (textiles and textiles articles), XV (base metals and base metals products), and 
                                                     
 
5 New Zealand's MFN tariff schedule  in the year of entry into forc e of the Agreement (2008) comprised 
7,270 tariff lines at the HS 8-digit level;  99.5% of this tariff is ad valorem , 0.1% relates to lines with specific 
duties;  and 0.4% to others. WT/REG266/1 
Page 12 
 
 
  XVI (machinery).  The 5,100 tariff lines that are become duty-free in 2012 are distributed across all 
HS sections with the majority in HS sections VI  (chemicals and chemical products), XI (textiles and 
textiles articles) and XVI (machinery). 
22. The 223 tariff lines that will remain dutiable at the end of the implementation period (2019) 
are mainly pulp and paper, with a relatively low final average tariff of 6.7%.  The highest average 
final tariff on the remaining dutiable lines, 55.8%, is found in vegetable products.   
Table III.2 
China: Tariff reduction under the Agreement, by HS section 
Number of duty-free lines  
HS section  MFN 
average.
% Total 
No. of 
lines  MFN 
2008  
2008-2011 
2012 
2013-2015 
2016 
2017-2018 
2019 
No. of Remain 
dutiable lines  
Avg. Final Tariff 
(Dutiable)  
I Live animals and animal 
products 12.3 377 44 6 284 14 18 7 4   
II Vegetable products 14.5 457 48 36 304 38 6   25 55.8 
III Animal or vegetable fats 
and oils 12.9 53  1 30 3    19 9.3 
IV Prepared foods etc. 18.0 279 1 41 150 78 3   6 50.0 
V Minerals 3.7 199 37 116 46       
VI Chemicals and chemical 
products 6.6 1,189 9 195 967 15    3 50.0 
VII Plastics and rubber 9.5 263 1 6 248 8      
VIII Hides and skins 12.3 106  15 86 1 4     
IX Wood and articles 4.3 189 72 31 45     41 6.0 
X Pulp, paper etc. 5.3 160 35  7     118 6.7 
XI Textiles and textiles 
articles 11.6 1,105  195 890 9    11 38.4 
XII Footwear, headgear 18.4 56   32 24      
XIII Articles of stone 13.4 184 1 6 147 30      
XIV Precious stones, etc. 10.0 84 32 10 22 20      
XV Base metals and base 
metals products 7.4 714 4 234 464 12      
XVI Machinery 8.4 1,398 259 187 883 68 1     
XVII Transport equipment 12.3 318 1 60 195 62      
XVIII Precision equipment 10.2 307 31 65 196 15      
XIX Arms and ammunition 13.0 21   21       
XX Misc. manufactured 
articles 11.6 178 62  76 40      
XXI Works of art, etc. 9.6 9 2  7       
Total 9.8 7,646 639 1,204 5,100 437 32 7 4 223 15.6 
 
Note: Tariff lines subject to TRQs only the out-of-quota duty is  included in the tariff-related calculations;  for tariff lines  with non 
ad valorem  components, only the ad valorem  part of alternate rates are included in the calculation. 
 
 Based on the HS 2007 nomenclature. 
 
Source:  WTO estimates based on data provide d by New Zealand and the WTO-IDB. 
 
23. Charts III.1-2 show a comparison of average dutia ble rates in those HS sections and chapters, 
respectively, where preferential duties remain at  the end of the implementation period.  The 
comparison is made between the average preferentia l and MFN rates for lines subject to preferential 
duties only.  For those HS sections where tariff pe aks remain after implementation of the Agreement 
is completed, the preferential duties are identical  to the MFN duties for corresponding products in 
HS sections II-IV, VI, and X-XI, whereas the pref erential duty (6.0%) will be lower than the MFN 
duty (6.9%) for HS section IX (wood and articles). 
  WT/REG266/1 
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  0 1 02 03 04 05 06 0XXIXXXIXXVIIIXVIIXVIXVXIVXIIIXIIXIXIXVIIIVIIVIVIVIIIIIIChart III.1
China:  Average of remain dutiable rates, by HS Section
HS Section  
Source :  WTO Secretariat estimates, based on data provided by China and WTO-IDB.Average rate of duty (%)
MFN Preferential
 
 
 
24. Chart III.2 shows a comparison of average du tiable rates in those HS chapters where 
preferential duties remain at the end of the implem entation period.  The comparison is made between 
the average preferential and MFN rates for lines s ubject to preferential duties only.  For those 
HS chapters where tariff peaks remain after impl ementation of the Agreement is completed, the 
preferential duties will be identical to th e MFN duties for corresponding products in 
HS chapters 10-11, 15, 17, 31, 48-49, and 51-52, wh ereas the preferential duty will be lower than the 
MFN duty for HS chapter 44. WT/REG266/1 
Page 14 
 
 
  0510152025303540455055606570
10 11 15 170510152025303540455055606570
31 44 48 49 51 52Chart III.2
China: Average of remain dutiable rates, by HS Chapter
HS  01-24 HS 25-97Average rate of duty (%)  
Average rate of duty (%)  
HS Chapter HS Chapter
MFN Preferential
So u r c e :  WTO Secretariat estimates based on data provided by China and WTO-IDB. 
 
 
4. New Zealand's liberalization schedule 
25. Table III.3 shows New Zealand's tariff elimination commitments vis-à-vis China by 
HS section product categories.  The 415 tariff lines lib eralized upon entry into force of the Agreement 
are distributed across the all HS sections except HS sections XII (footwear, headgear), XIV (precious 
stones), and XIX (arms and ammunition).  As in the case of China, the main tariff elimination is planned for 2012 with the majority of lines to be  eliminated found in HS sections VII (plastics and 
rubber), XV (base metals and base metals  products) and XVI (machinery).   
Table III.3 
New Zealand: Tariff elimination und er the Agreement, by HS section 
Number of duty-free lines 
HS section  MFN 
average.
% Total No. 
of lines  MFN 
2008  2008-
2011 2012 2013 2014-
2015 2016 
I Live animals and animal products 0.8 251 209 23 19    
II Vegetable products 1.2 300 231 43 26    
III Animal or vegetable fats and 
oils 1.1 58 45 4 9    
IV Prepared foods etc. 2.6 482 226 75 181    
V Minerals 0.2 181 172 1 8    
VI Chemicals and chemical 
products 0.7 941 805 39 91  6  
VII Plastics and rubber 3.2 390 153 31 194 2 7 3 
VIII Hides and skins 2.6 102 54 6 29  10 3 
IX Wood and articles 2.5 205 102 42 61    
Table III.3 (Cont'd)   WT/REG266/1 
 Page 15 
 
 
  Number of duty-free lines 
HS section  MFN 
average.
% Total No. 
of lines  MFN 
2008  2008-
2011 2012 2013 2014-
2015 2016 
X Pulp, paper etc. 0.0 228 228      
XI Textiles and textiles ar ticles 4.9 1,059 484 24 9 49 400 93 
XII Footwear, headgear 7.0 106 38  9  43 16 
XIII Articles of stone 2.5 226 119 13 91 3   
XIV Precious stones, etc. 1.2 68 52  16    
XV Base metals and base metals 
products 2.6 802 397 27 374 4   
XVI Machinery 2.8 1,178 513 67 579 3  16 
XVII Transport equipment 3.6 233 99 4 105 24  1 
XVIII Precision equipment 0.9 240 188 10 34   8 
XIX Arms and ammunition 1.8 35 21  12   2 
XX Misc. manufactured articles 3.7 178 47 6 120 1  4 
XXI Works of art, etc. 0.0 7 7      
Total 2.5 7,270 4,190 415 1,967 86 466 146 
 
Note: Based on the HS 2007 nomenclature. 
 
Source:  WTO estimates based on data provide d by New Zealand and the WTO-IDB. 
 
5. Tariff-rate quotas 
(a) China 
26. Under the Agreement, China maintains a count ry-specific tariff-rate quota (TRQ) for nine 
tariff lines on wool and wool tops for which it also maintained TRQs in 2009 on an MFN basis 
(Annex 4).  In addition, on an MFN basis, Chin a maintains TRQs on 36 tariff lines relating to wheat6, 
corn7, rice8, sugar9, fertilizer10, and cotton.11 
27. Details of the quantities and rates applying to  products under TRQs under the Agreement are 
given in Table III.4 below.  For wool, the TRQ qua ntity in 2009 was 25,000 tonnes to increase to 
36,936 tonnes by 2017;  for wool tops the quantity in 2009 was 450 tonnes to rise to 665 tonnes by 
2017, and to remain at the same level unless the Par ties determine otherwise.  The Parties clarify that 
quota is in addition to the MFN TRQ quantity for the same products.   The in-quota rates for such 
products are all duty-free, compared to 1% or 3% on a MFN basis in 2009.  Imports above the quota 
quantity enter at the prevailing MFN rate, that is 38% in 2009.  The operation of the TRQs shall be 
transparent and if the New Zealand contact point requests, China shall provide information on the 
quantity of TRQs issued. 
  
 
                                                     
 
6 HS 10011000;  10019010;  10019090;  11010000;  11031100;  and 11032010. 
7 HS 10051000;  10059000;  11022000;  11031300;  and 11042300. 
8 HS 10061011;  10061019;  10061091;  10061099;  10062010;  10062090;  10063010;  10063090;  
10064010;  10064090;  11029011;  11029019;  11031921;  and 11031929. 
9 HS 17011100;  17011200;  17019100;  17019910;  17019920;  and 17019990. 
10 HS 31021000;  31052000;  and 31053000. 
11 HS 52010000;  and 52030000. WT/REG266/1 
Page 16 
 
 
  Table III.4 
China: Tariff-rate quotas for wool and wool tops pro ducts originating in New Zealand under the Agreement 
TRQ  
Quantity  Duty  HS Code  
 In-quota Out of quota 
51011100;  51011900;  
51012100;  51012900;  
51013000;  51031010 25,000 tonnes in 2009 
increasing annually to 36,936 
tonnes in 2017.  duty-free  
(whereas 1% on an 2009 MFN 
basis) 
 MFN 
(38% in 2009) 
 
51051000;  51052100;  
51052900 450 tonnes in 2009 increasing 
annually to 665 tonnes in 2017 duty-free 
(whereas 3% on an 2009 MFN 
basis) MFN 
(38% in 2009) 
Note: The operation of the TRQs is based on calendar year. 
Source: Annex 4 of the Free Trade Agreemen t between China and New Zealand. 
 
(b) New Zealand 
28. New Zealand has no tariff rate quotas.   
B. RULES OF ORIGIN  
29.  Disciplines regarding rules of origin and custom s procedures are set out in Chapters 4 and 5, 
respectively.  Articles 17-43 deal with the ru les of origin, while Articles 44-59 cover other 
customs-related issues. 
30. The general requirement for a good to be consider ed originating (Article 19) is that it is: i) 
wholly obtained or produced as set out and defi ned in Article 20, including where required under 
Annex 5 on product specific rules of origin;  ii) produced entirely in one or both Parties, exclusively 
from materials whose origin conforms to the provisions of Section 1 of Chapter 4;  or iii) produced in 
one or both Parties, using non-originating materials that have satisfied requirements of a change in 
tariff classification (CTC) (Article 21), a regional va lue content (Article 22), a process requirement or 
other requirements specified in Anne x 5, and other applicable provisi ons in Section 1 of Chapter 4. 
31. Annex 5 sets out product specific rules of origin for non-originating materials to meet so that 
the final product acquires originating status.  In most cases in Annex 5, origin is granted if the 
non-originating materials have undergone a CTC on the basis of HS chapter, or HS headings or 
subheadings (i.e. at the four or six-digit level).  In cases where th e regional value content rule is 
utilized, mostly the CTC is applied provided that there is a qualifying minimum value content of 30%, 
40%, 45%, or 50% of materials exported from one Pa rty to another.  There are four products in 
Annex 5 for which the regional value c ontent rule is applied exclusively.12 
32. Bilateral cumulation between the Parties is po ssible (Article 23).  Article 31 establishes a 
de minimis  principle whereby a product is considered to be originating if the value of all non 
originating materials that do not meet the CTC re quirement is no more than 10% of the free on board 
(FOB) value of the products, and the good satisfi es all other applicable criteria of Section 1 of 
Chapter 4. 
33. Articles 26-30 specify how certain materials (p acking and containers for transportation and 
retail sale;  accessories, spare parts and tools;  neutra l elements;  and interchangeable materials) are to 
be treated when determining their origin.  Article 25  allows direct transport and transport through one 
or more non-Parties with or without trans-shipment or temporary storage of up to six months in the 
                                                      
12 HS 320611 (RVC 50%);  HS 330112 (RVC 50%);  HS 330125 (RVC 30%);  and HS 340213 
(RVC 40%).    WT/REG266/1 
 Page 17 
 
 
  non-Parties provided that:  i) the products in question ar e not traded in the non-Parties;  and ii) there is 
no operation besides unloading and reloading, repack ing, or any operation to preserve the product's 
good condition. 
C. EXPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  
34. The Parties agree not to adopt or maintain an y non-tariff measures on the export of any good 
destined for the other Party, ex cept in accordance with their WTO rights and obligations, or other 
provisions in the Agreement (Article 11.1). 
D. REGULATORY PROVISIONS  ON TRADE IN GOODS  
1. Standards 
(a) Sanitary and phytosanitary measures 
35. Chapter 7 provides a framework for sanitary and phytosanitary measures (SPS) whose 
objectives are to: uphold and enhance implementati on of the WTO Agreement on SPS;  facilitate 
trade while protecting human, animal or plant life  or heath;  and provide a means to improve 
communication and consultation on SPS issues (Article 74).  The Parties' rights and obligations in the 
WTO Agreement on SPS shall not be limited by th e Chapter or its 11 Implementing Arrangements 
(Articles 76-77). 
36. The Parties shall endeavour to expedite market access requests from each other particularly 
for any risk analysis process (Article 79.3).  For undertaking risk analyses, the Joint Management 
Committee shall establish for each Party a priority order for considering market access requests from 
the other Party (Article 79.2).  Where a Party objectively demonstrates that an area or part of its territory is free of a pest or disease or has low pest prevalence, and follo wing an assessment by the 
other Party, the Parties may agree to recognize the pest or disease free status (Article 80.1).   The 
Parties will jointly develop principles, criteria and processes on which recognition of such adaptation 
to regional conditions will be based. 
37. The importing Party shall accept the SPS measures of the exporting Party as equivalent to its 
level of protection if the exporting Party objectiv ely demonstrates that it s measures achieve the 
importing Party's appropriate level of protection (Article 81.3).  Th e determination of equivalence 
may be made on the existing, revised or proposed SPS measures (Article 81.2) which can be determined either partially or fully (Article 81.1) .  When a Party considers a request from the other 
Party to recognize the equivalence of its measures fo r a specific product, the consideration itself shall 
not be a reason to disrupt or suspend ongoi ng imports from the other Party of the product 
(Article 81.8).  
38. The Chapter contains new features compar ed to the WTO SPS Agreement, such as 
verification (Article 82) and import checks (Article 84) .  The Parties shall have the right to audit and 
verify the procedures of the exporting Party.  Further, the Parties may share the results and 
conclusions of the audit and verification procedures and checks with non-Parties.  They may also use 
results and conclusions reached by  non-Parties (Article 82.3).   
39. Import checks on imported animals, animal pr oducts, plants and plant products or other 
related goods are based on the risks associated with their import;  they shall be conducted without 
undue delay and be as least trade-restrictive as possible (Article 84.1).  Upon request, the importing Party shall inform the exporting Party of the freque ncy of import checks and any amendments shall be 
communicated with an explanation, or follow-up c onsultations, if requested (Article 84.2).  The 
exporting Party can provide any relevant information to the importing Party assisting it to take a final WT/REG266/1 
Page 18 
 
 
  decision.  During this process, if necessary, joint t esting of the preserved samples can be carried out 
by the Parties (Article 84.5).  If the import check s conclude that the relevant standards and/or 
requirements are not met, the action taken by the im porting party should be proportionate to the risk 
involved (Article 84.4). 
40. Other provisions define coopera tion (Article 85), notification (Article 86), exchange of 
information (Article 87), and the joint management committee (Article 88).  In particular, provisions 
on notification specify clear time frames, such as when a Party must notify serious and immediate 
concerns regarding human, animal or plant life or heal th (Article 86.2);  when  consultations regarding 
such a situation shall take place (Article 86.3);  and when a provisional SPS measure shall be notified 
(Article 86.5).  
(b) Technical barriers to trade 
41. Chapter 8 on technical barriers to trade (TBT) aims at, inter alia , reducing unnecessary costs 
and promoting regulatory cooperation to manage ri sks to health, safety and the environment by 
eliminating unnecessary technical barriers to bilateral trade in goods (Article 90).  The Parties affirm 
their existing rights and obligations in the WTO Agreement on TBT (Article 91). 
42. The Chapter applies to all standards, tec hnical regulations and conformity assessment 
procedures that may directly or indirectly affect bilateral trade in goods that are manufactured or 
assembled in the territory of one or both Parties a nd are consigned directly between the Parties, except 
for government purchasing purposes and goods c overed by SPS measures (Articles 92 and 93). 
43. A new feature compared to the WTO Agreemen t on TBT, is that each Party shall give 
positive consideration to accepting as equivalent, th e other Party's technical regulations if they 
produce outcomes that are equivalent to those produced  by its own technical re gulations in meeting its 
legitimate objectives and achieving the sa me level of protection (Article 95). 
44. Each Party shall accredit or otherwise recogni ze conformity assessment bodies in the territory 
of the other Party on terms no less favourable than  those it accords to conformity assessment bodies in 
its territory (Article 97.5). 
45. The Parties can request technical consultations on the application of any technical regulation 
or the recognition of any standard or conformity assessment procedure, which shall be held within 
60 days from the request, unless the Parties determine otherwise.  Where a Party has requested the 
consultations, the other Party shall: investigat e the issues;  address any irregularities in the 
implementation;  and report to the requesting Party on the outcome of its investigations (Article 101).  
The technical consultations are without prejudice to  the rights and obligations of the Parties under 
Chapter on dispute settlement (Article 101.3).13  
46. The Chapter establish es a Joint Committee, inter alia , to set up working groups to consider 
issues relating to: WTO enquiry and notification points;  standardization;  and accreditation and 
conformity assessment;  and to identify priority sect ors for enhanced cooperation, including giving 
favourable consideration to any sector-specific propo sal made by a Party (Article 100).  The Parties 
                                                      
13 The Parties confirm that if technical consultati ons under Article 101.3 fail, they may then have 
recourse to the Chapter on dispute settlement, but must still go through the Article 186 consultations procedure 
before they can request the establishment of an arbitral tr ibunal under Article 188.  They may also go directly to 
the Article 186 consultations proced ures without conducting technical c onsultations under Article 101.3.  WT/REG266/1 
 Page 19 
 
 
  may conclude Annexes and implementing arrangeme nts which may include the use of asymmetrical 
approaches, where appropriate (Article 102).14  
47. Other provisions define regulatory cooperation (A rticle 96), transparency (Article 98), and  
technical assistance (Article 99).  The Parties sh all strengthen coordination with each other in the 
WTO Committees on SPS and TBT (Articles 88.3.a nd 94.3).  Annex 14 sets out an Agreement 
between the Parties on Cooperation in the field of C onformity Assessment in relation to Electrical and 
Electronic Equipment and Components.  Its relate d Arrangement lists mandatory standards required 
for specified products (schedule 1 of the Arrangement).    
2. Trade remedies 
48. Chapter 6 on trade remedies contains a pr ovision on cooperation and consultation in 
administrating the Chapter (Article 65).  The Partie s shall provide information on their contact points 
to the other Party (Article 65.2), through which they can consult on any matter arising under the 
Chapter.  Any such consultations shall take pl ace within 30 days of any request unless the Parties 
mutually agree otherwise (Article 65.3).  Actions under the Chapter will be taken in a transparent 
manner (Article 61.2). 
(a) Safeguard mechanisms 
(i) Global safeguards 
49. The Parties maintain their rights and obliga tions under Article XIX of GATT 1994 and the 
WTO Agreement on Safeguards (Article 61.1).  Th ey may exclude each others' products from global 
safeguard measures, provided that such bilateral imports are "non-injurious" (Article 64.1).  The 
Parties clarify that as the Agreement does not contain a definition of "non-injurious", it would be for 
the Party contemplating an exemption to determ ine whether imports from the other Party are non-
injurious.  Therefore, the granting of an exemption is at the discretion of the importing Party.  The Party that initiates a global safeguards investigation shall advise the contact point of the other Party of 
the investigation and the reasons for it (Article 64.2). 
50. A product that is subject to a global safeguard ma y not be subject simultaneously to a bilateral 
safeguard.  In addition, neither Party may continue maintaining a bilateral sa feguard on a product that 
becomes subject to a global safeguard (Article 68.3). 
(ii) Bilateral safeguards 
51. As a result of the reduction or elimination of customs duties under the Agreement, if a good 
benefiting from preferential tariff treatment under th e Agreement is being imported into the territory 
of a Party in such increased quantities, in absolute terms or relative to dom estic production, and under 
such conditions that the imports constitute a cause of serious injury or threat thereof in accordance 
with Article 4.2 of the WTO Agreement on Safeguards  (Article 69.2), to a domestic industry of the 
importing Party, the importing Party may apply a bilateral safeguard, to the extent necessary to 
                                                     
 
14 According to the Parties, the asymmetric appr oach is taken when the obligations have been 
developed to take into account the specific needs and circ umstances of the Parties and as such may not be the 
same on both Parties.  The arrangements may involve as ymmetric commitments on th e Parties that reflect and 
capture the strengths of the respec tive regulatory regimes and differences in approaches to regulatory 
interventions.  Their agreement on cooperation in the field of conf ormity assessment in relation to electrical and 
electronic equipment and components  (Annex 14 of the Agreement) is an  example of such an approach.  
Chinese exports to New Zealand under the agreement sh ould comply with Chinese st andards (plus New Zealand 
deviations) and Chinese regulatory requirements.  Wherea s, New Zealand exports to China under the agreement 
should comply with International Eelectrotechnical Commission standards plus Chinese deviations.   WT/REG266/1 
Page 20 
 
 
  prevent or remedy the serious injury, or th reat thereof, and to facilitate adjustment 
(Articles 67.1-67.2).   
52. After investigation in accordance with Artic le 3 of the WTO Agreement on Safeguards 
(Article 69.1), bilateral safeguards may take the fo rm of i) suspension of the further reduction of 
customs duty on the good;  or ii) increased customs duty to a level not exceeding the lesser of the 
applied MFN duty on the day immediately preceding the da te of entry into force of the Agreement, or 
when the measure is taken (Article 67.2).   
53. Bilateral safeguards may be applied for an initia l period of a maximum of two years, but may 
be extended for another maximum pe riod of one year subject to a finding that such a prolongation is 
necessary to prevent or remedy serious injury and that the affected domestic industry is adjusting 
(Article 68.1).  Regardless of its duration, any safeguard shall be terminated at the end of the 
transition period.  Under Article 66, the transition period is defined as three years from the date of 
entry into force of the Agreement, except for pr oducts for which the liberalization process in Annex 1 
lasts five years or more.  In such cases, the tran sition period shall be the period in which such a 
product reaches zero tariff according to Annex 1 plus two years.15 
54. Although provisional measures may be taken in critical circumstances where delay would 
cause damage difficult to repair, the customs duty imposed as a result of the measure shall be 
promptly refunded if the subsequent investigation do es not determine that increased imports caused or 
threatened to cause serious injury to a domestic industry.  The duration of provisional measures 
cannot exceed 200 days within the overall period of the safeguard (Article 70).   
55. Safeguards measures including provisional app lication cannot be imposed on goods which 
have been already subject to such measures, fo r a period equal to the duration of the previous 
measure, provided that the period of non-applica tion is at least two years (Article 68.2).   
56. Compensation for applying a measure shall be provided to the exporting Party (compared to 
the "endeavour" provision in th e WTO Agreement on Safeguards) in the form of substantially 
equivalent concessions during the period of applicati on of the measure (Article 72.1).  If an agreeable 
compensation cannot be agreed within 45 days fro m the application of the measure, the exporting 
Party can suspend the application of substantially equivalent concessions to the trade of the other 
Party.  However, the suspension by the exporting Party cannot be initiated during the first year of 
implementation, provided that the measure has been  taken as a result of an absolute increase in 
imports and that it conforms to the provisions of Ch apter 6 (Article 72.2).  The Parties clarify that in 
the case that the measure has been taken as a resu lt of an increase in imports relative to domestic 
production but not in absolute terms, the exporting Pa rty would be free to suspend the application of 
substantially equivalent concessions immediately foll owing the end of the 45 da y period referred to in 
Article 72.2, provided that the measure conformed to the provisions of the Chapter.  The exporting 
Party shall notify the other Party in writing at least 30 days before the suspension (Article 72.3).  Both 
the compensation and suspension shall be remove d when the safeguard measure is terminated 
(Article 72.4). 
57. Modelled on Article 12 of the WTO Agreemen t on Safeguards, the Agreement obliges the 
Parties to promptly notify each other at various st ages of the safeguard investigation (Article 71.1). 
                                                      
15 The Parties clarify that products for which the tari ff is eliminated in less than five years from the 
entry into force of the Agre ement cannot be subject to a bilateral safe guard measure three years after the entry 
into force of the Agreement.  Consequently, products whose tariff will be eliminated in 2008-2011cannot be 
subject to an investigation or a measure from 1st October 2011 onwards.  Products whose tariffs will be 
eliminated in 2012 have a trans ition period of two years following liberalization, i.e., up to 2014.  WT/REG266/1 
 Page 21 
 
 
  (iii) Special safeguards 
58. Special safeguards may be applied by China on imports of dairy products from New Zealand.  
If the volume of 11 tariff lines relating to dairy products from New Zealand exceeds a quantity-based 
trigger level, then China may apply a special safegua rds measure on those products in the form of an 
additional customs duty during a calendar year for the period commencing from the date of entry into 
force until 2021 (up to 2023 for some concentrated milk and cream, and possibly up to 2024 in the 
case of a negative impact concluded by the mid-term review16). (Article 13 and Annexes 2-3) 
(See table III.5 below).  However, China may not appl y or maintain a special safeguards measure if a 
measure is concurrently applied or maintained  on the product concerned under Article XIX of 
GATT 1994 and the WTO Agreement on Safeguards or  a bilateral safeguard under the Agreement 
(Article 13.7). 
59. The sum of the additional customs duty and any other customs duties applied to the product 
shall not exceed the lesser of the applied MFN dut y on the date when the special safeguards measure 
is applied or the base rate (Article 13.3).  This measure shall remain in effect until the end of the 
calendar year in which it is applied (Article 13.4).  No special safeguards will apply to supplies of the 
products already en route  to China under a contract settled pr ior to application of the safeguard 
measure.  However, the volume of such supplies may be counted in the volume of imports of the 
products for the following calendar year (Article 13.5). 
60. China shall regularly publish the volume of its  imports in a manner that New Zealand can 
readily access as far in advance as may be practicable, but no later than ten days from the implementation of a special safe guard measure.  All special safeguards shall be applied in a 
transparent manner (Article 13.6). 
61. Table III.5 below shows China's special agri cultural safeguard sche me based on quantity 
triggers with corresponding preferen tial rates of duty.  The quantity is  to be increased by 5% each 
year.  At the mid-term review, due to take place af ter the implementation of tariff reductions in 2013, 
but before the implementation of tariff reductions in 2014 (Article 14), if the Committee on Trade in 
Goods determines an overall negative impact on four tariff lines relating to milk and cream 
(04021000, 04022100, 04022900, and 04029100), then the add itional liberalization scheduled for 
2014 will not take place;  consequently, the special  safeguard provision will be continued until 2024 
rather than 2023 (paragraph 5, Annex 3).   The Parties state that no special agricultural safeguards 
measure can be applied from 2024. 
Table III.5  
China:  Special agricultural safeguards for certain dairy products under the Agreement 
 Certain milk and cream Butter and other fats and  
oils from milk Certain cheese 
HS Code  04012000, 04013000 04021000*, 04022100*, 
04022900*, 04029100* 04051000, 04059000 04061000, 04063000, 
04069000 
Preferential 
rate (%)  
Preferential 
rate (%) Quantity 
(tonnes) Preferential 
rate (%) Quantity 
(tonnes) 0405 
1000 0405 
9000 Quantity 
(tonnes) Preferential 
rate (%) Quantity 
(tonnes) 
MFN 2008 15.0  10.0 10.0  12.0 
EiF 13.5 1,300  9.2  95,000 8.0 16.0  9,400 10.8 3,600 
2009 12.0 1,365  8.3  99,750 6.0 12.0  9,870  9.6 3,780 
2010 10.5 1,433  7.5 104,738 4.0  8.0 10,364  8.4 3,969 
2011  9.0 1,505  6.7 109,974 2.0  4.0 10,882  7.2 4,167 
2012  7.5 1,580  5.8 115,473 0.0  0.0 11,426  6.0 4,376 
2013  6.0 1,659  5.0 121,247 0.0  0.0 11,997  4.8 4,595 
Table III.5 (Cont'd)  
                                                      
16 According to the Parties, the mid-term review will take place in 2013. WT/REG266/1 
Page 22 
 
 
   Certain milk and cream Butter and other fats and  
oils from milk Certain cheese 
HS Code  04012000, 04013000 04021000*, 04022100*, 
04022900*, 04029100* 04051000, 04059000 04061000, 04063000, 
04069000 
Preferential 
rate (%)  
Preferential 
rate (%) Quantity 
(tonnes) Preferential 
rate (%) Quantity 
(tonnes) 0405 
1000 0405 
9000 Quantity 
(tonnes) Preferential 
rate (%) Quantity 
(tonnes) 
2014  4.5 1,742  4.2 
 (5.0)* 127,309 
(121,247)* 0.0  0.0 12,597  3.6 4,824 
2015  3.0 1,829  3.3 
 (4.2)* 133,675 
(127,309)* 0.0  0.0 13,227  2.4 5,066 
2016  1.5 1,921  2.5 
 (3.3)* 140,358 
(133,675)* 0.0  0.0 13,888  1.2 5,319 
2017  0.0 2,017  1.7 
 (2.5)* 147,376 
(140,358)* 0.0  0.0 14,582  0.0 5,585 
2018  0.0 2,118  0.8 
 (1.7)* 154,745 
(147,376)* 0.0  0.0 15,312  0.0 5,864 
2019  0.0 2,223  0.0 
 (0.8)* 162,482 
(154,745)* 0.0  0.0 16,077  0.0 6,157 
2020  0.0 2,335  0.0 
 (0.0)* 170,606 
(162,482)* 0.0  0.0 16,881  0.0 6,465 
2021  0.0 2,451  0.0 
 (0.0)* 179,137 
(170,606)* 0.0  0.0 17,725  0.0 6,788 
2022  0.0 -  0.0 
 (0.0)* 188,094 
(179,137)* 0.0  0.0 -  0.0 - 
2023  0.0 -  0.0 
 (0.0)* 197,498 
(188,094)* 0.0  0.0 -  0.0 - 
2024*    (0.0)* (197,498)*      
 
* If the Committee on Trade in Goods determ ines that an overall negative impact has o ccurred on the four tariff lines, then the 
 figures in brackets will apply (paragraph 5 of Annex 3). - No special agricultural sa feguard permitted in 2022 and 2023.  
Source: Article 13 and Annexes 2-3 of the Free Trad e Agreement between China and New Zealand. 
 
(b) Anti-dumping measures 
62. The Parties maintain their rights and obligations under the WTO Agreement on 
Implementation of Article VI of GA TT 1994 (Article 61.1).  They agree not to take any action in an 
arbitrary or protectionist manner (Article 62.1).  The Party that accepts an application from its 
industry requesting initiation of an anti-dumping inv estigation shall inform the contact point of the 
other Party of the application as soon as possible (Article 62.2). 
(c) Subsidies and countervailing measures 
63. The Parties are determined to cooperate towa rds an agreement in the WTO to eliminate 
agricultural export subsidies and prevent their rein troduction in any forms (Articles 10.1-10.2).  The 
Parties shall not introduce or maintain export subs idies on any agricultural goods destined for the 
territory of the other Party (Article 10.3).17 
64. The Parties maintain their rights and obligati ons under the WTO Agreement on Subsidies and 
Countervailing Measures (Article 61.1).  They agree not to introduce or maintain any form of export 
subsidy on goods destined for the terr itory of the other Party (Article 63). 
                                                      
17 For the purpose of Article 10, agricultural good s means those products listed in Annex 1 of the 
WTO Agreement on Agriculture and export subsidies sh all have the meaning assigned to that term in 
Article 1(e) of the WTO Agreement on Agricultu re, including any amendment of that article.  WT/REG266/1 
 Page 23 
 
 
  IV. TRADE IN SERVICES AND INVESTMENT 
A. SCOPE AND DEFINITIONS  
65. Recognising the role of governments in regul ating services, and in providing and funding 
public services;  the need to take into c onsideration national policy objectives and local 
circumstances;   and the asymmetries existing with respect to the degree of development in services 
regulations between the Parties (Article 104), Chapte r 9 governs a Party's measures affecting trade in 
services.  The Chapter covers GATS modes of su pply 1 (cross-border), 2 (consumption abroad), 3 
(commercial presence) and 4 (temporary movement of  natural persons).  Commercial presence means 
any type of business or professional establishment, including through: i) the constitution, acquisition 
or maintenance of a juridical person;  or ii) the cr eation or maintenance of a branch or a representative 
office;  within the territory of a Party for the purpose of supplying a service (Article 103). 
66. Chapter 9 does not apply to: i) services supplied in the exercise of governmental authority;  or 
laws, regulations, policies or procedures on govern ment procurement of services in the exercise of 
non-commercial resale and use;  ii) measures affecting air traffic rights or services directly related to the exercise of air traffic rights other than measures affecting aircraft repair and maintenance, sales 
and marketing of air transport services, computer reserv ation system services;  iii) subsidies or grants 
provided by a Party, except as provided for in Artic le 119;  iv) measures affecting natural persons 
seeking access to the employment market of a Part y (Article 105);  and v) measures pursuant to 
citizenship, nationality, residence or employ ment on a permanent basis (Article 127.2).
18 
67. Chapter 11 on investment appli es to measures adopted or maintained by a Party relating to 
investors of the other Party and investments by in vestors of the other Party (Article 137.1).  The 
measures adopted or maintained by a Party affecting trade in services are not subject to the Chapter on 
investment, except that investment through commerci al presence is subject to some provisions in the 
Chapter on investment: Articles 142 (transfers), 143 (fair and equitable treatment), 144 (compensation 
for losses), 145 (expropriation), and 148 (subrogation), for the protection of investment purposes.  In 
addition, provisions on investor-state dispute se ttlement (Articles 152-158) apply to Articles 142-145, 
and 148 with respect to the supply of a service through commercial presence.  All investments by 
investors of a Party in the territory of other Party, whether made before or after the entry into force of 
the Agreement are subject to the Chapter, although provisions on investor-state dispute settlement do 
not apply to any dispute or claim which was alread y under judicial and arbitral process before the 
entry into force of the Agreement (Article 137.6).  Chapter 11 does not apply to: i) laws, regulations, 
policies or procedures on government procuremen t of goods and services in the exercise of 
non-commercial resale and use;  and ii) subsidies or grants provided by a Party (Article 137.5). 
68. To promote transparency, the Parties agree to publish information on in ternational agreements 
(including FTAs involving the Parties)  relating to or affecting trade in services and investment to 
which they are a party (Articles 116 and 146) an d convey such information on trade in services 
through contact points (Article 116).  Committees on Services and Movement of Natural Persons, 
respectively were established to review the implemen tation and operation of each Chapter;  to identify 
and recommend measures to promote increased bilateral services trade and movement of natural 
persons;  and to consider other issues of interest to a Party (Articles 117 and 133).19   
                                                      
18 Chapters 10 (movement of natural persons) and 11 (investment) also do not apply to measures 
pursuant to citizenship, nationality, residence or employment on a permanent basis (Article 127.2). 
19 According to the Parties, the Committee on Servi ces has not met as of July 2010.  The Committee on 
Movement of Natural Persons made progress on an arrangement on temporary entry encouraging Chinese 
applicants under the Agreement to use identified recruitment agents;  exchanged data on the Working Holiday 
Scheme and the number of visitors visas issued to bu siness people;  discussed policies for the setting of visa WT/REG266/1 
Page 24 
 
 
  69. Under the provision on cooperation (Article 122), China's current status as a developing 
country is recognized.  The Parties agree to expl ore ways to expand bilateral services trade which 
recognize their different levels of development.  Within two years of entry into force of the 
Agreement and at least every three years thereafter,  or as otherwise agreed, the Parties shall review 
the implementation of the Chapter and consider othe r trade in services issues of mutual interests with 
a view to the progressive liberalization of bilateral trade in services on a mutually advantageous basis 
(Article 124).  
70. The WTO Agreement on Trade-related Investment measures (TRIMs) applies mutatis 
mutandis  to the Agreement and all investments with in the scope of Chapter 11 on investment 
(Article 140). 
B. DENIAL OF BENEFITS  
71. Subject to prior notification and consultation, a Party may deny the benefits of Chapters 9 or 
11 to a service supplier/investor of the other Party if the service/investment is supplied/made by a 
juridical person (referred to 'enterpris e' under Chapter on investment) owned20 or controlled21 by 
persons of a non-Party or by the denying Party, an d that has no substantive business operations in the 
territory of the other Party (Articles 115 and 149).  
C. GENERAL PROVISIONS ON TRADE IN SERVICES  
1. Market access 
72. The market access provision is along the lines of Article XVI of the GATS, providing that, 
where specific market access commitments are unde rtaken, six types of limitations cannot be 
maintained or adopted by the Parties, unless otherw ise specified in their schedules (Article 108).  The 
Chapter on investment contains no specific provision on market access, per se .  
2. National treatment 
73. Under Article 106 each Party will, subject to its commitments, accord to services and service 
suppliers of the other Party treatment no less favour able than it accords, to its own like services and 
service suppliers.  The Article mirrors Article XVII of the GATS.   
74. Except for any existing non-conforming measures (Article 141.1) that are not listed under the 
Agreement, Chapter 11 on investment requires each Party to accord national treatment (Article 138), 
in like circumstances, to investments and activities asso ciated with such investments, with respect to 
the management, conduct, operation, maintenance, use,  enjoyment or disposal, by the investors of the 
other Party, i.e., 'post-establishment'.  The commi tment to national treatment (Article 138) does not 
apply to any measure which would not be within the scope of the national treatment obligations of any 
of that Party's existing bilateral investment tr eaties (Article 141.3).  The Parties endeavour to 
progressively remove the non-conforming measures within their territories (Article 141.2) and such measures shall be governed by a Committee on I nvestment which will consider developing 
                                                                                                                                                                    
 
fees, possibilities for expanding policies on transit vi sas;  and advanced a programme assisting Mandarin 
language assistants to ente r and work in New Zealand. 
20 "Owned" by juridical persons if holding more than 50% of the equity interest in the legal entity 
(Article 103). 
21 "Controlled" by juridical persons if having the power to name a majority of directors or otherwise 
legally direct the legal entity's actions (Article 103).  WT/REG266/1 
 Page 25 
 
 
  procedures to enhance transparency (Article 150.2.(c)). 22   According to the Par ties, the Committee on 
Investment had not met as at 30 June 2010.  
3. MFN treatment 
75. The Parties shall accord to services and service s uppliers of the other Party for services listed 
in Annex 9, treatment no less favourable than that th ey accord to like services and service suppliers of 
a non-Party.  The sectors are:  environmental service s;  construction and rela ted engineering services;  
services incidental to agriculture and forestry;  engineering services;   integrated engineering services;  
computer and related services;  and tourism and trav el related services.  In particular, for services 
incidental to agriculture and forestry, China's MF N commitment is limited to preferential treatment 
accorded to members of the Organization for Economic Cooperation a nd Development (OECD) 
(Article 107 and Annex 9).  This  would permit China could under a future RTA with a non-OECD 
country to provide better treatment to suppliers of se rvices incidental to agriculture and forestry from 
any such non-OECD country than it provides to New Zealand exporters of the same service.  The 
rationale is to reserve China's rights to accord mo re preferential treatment to developing countries, 
than for a developed country.  This MFN trea tment does not apply to RTAs or multilateral 
international agreements in force or signed prio r to the Agreement (Article 107.2), i.e., the MFN 
treatment provision applies to any preference arising from 'future' RTAs.  In addition, the scope of the 
MFN treatment can be extended to other services sect ors beyond the currently agreed sectors listed in 
Annex 9 (Article 124). 
76. Chapter 11 on investment requires each Party to accord to investors, investments and 
activities associated with such inv estment by investors of the other Party treatment no less favourable 
than that accorded, in like circumstances, to the investments and associated activities by the investors 
of any third Party with respect to admission,  expansion, management , conduct, operation, 
maintenance, use, enjoyment and disposal.  However, the Parties reserve the right to adopt or maintain 
any measures providing differen tial treatment to third parties under: i) any FTA or multilateral 
international agreement which is opera tional or is signed prior to the date of the entry into force of the 
Agreement (Article 139.3);  and ii) a ny international agreement in force or signed after the date of the 
entry into force of the Agreement involving fi sheries and maritime matters (Article 139.5).23 
4. Commercial presence 
77. No specific provision on commercial presence, per se , is stated under Chapter 9.  The 
limitations on commercial presence in the subscribed  services sectors in the Parties' schedules of 
commitments are summarized under the section on liberalization commitments in this presentation. 
5. Movement of natural persons 
78. The Agreement contains a separate Chapter on th e movement of natural persons.  Chapter 10 
and its related Annexes 10 (commi tments on temporary entry by na tural persons), 11 (commitments 
on temporary employment entry by natural persons ), and 12 (visa facilitation) contain additional 
provisions on the movement of natural persons.  As  Article 128.1 implies, the Chapter not only deals 
with trade in services, but also trade in goods and investment activities.   
                                                      
22 The Parties clarify that each Party's national treatme nt obligation is determined by the scope of their 
existing bilateral investment treaties, so the obliga tion is not necessarily identical for both Parties. 
23 The Parties explain that they may need to prov ide differential treatment to third parties under 
international agreements in respect of maritime and fisheries.  These issues are potentially covered by 
international agreements, such as those which establish Regional Fisheries Management Organisations or other 
maritime organisations.  It was considered important that the Agreement should not cut across the rights and 
obligations under those agreements.  WT/REG266/1 
Page 26 
 
 
  79. The Chapter covers the Parties' commitments fo r two types of entry: i) temporary entry of 
natural persons (Article 129) and ii) temporary 'emp loyment' entry of natura l persons (Article 130), 
for which only New Zealand has commitments vis-à-vis  China.  Natural persons are categorized as: 
i) business visitors;  ii) contractual services suppliers ;  iii) intra-corporate transferees;  iv) skilled 
workers;  or v) installers and servicers (Article 127).  Both Parties' GATS commitments in respect of 
the presence of natural persons apply to the services s uppliers of the other Party (paragraph 2, Part A 
of Annex 10 and paragraph 3, Part B of Annex 10). 
80. Labour market and economic needs testing or othe r procedures of similar effect 'shall' not be 
required as a condition for the grant of 'temporary empl oyment entry' (Article 130.4), but the Parties 
may impose numerical restrictions.  The numerical restrictions are set out in Annex 11 (see Table 
IV.2).  While for the grant of 'temporary entry' such conditions 'may' not be imposed unless otherwise 
specified in Annex 10 (Article 129.4). 
81. The duration of temporary entry that each Party gr ants to the other Party's natural persons is 
summarized in Table IV.1 below.   
82. Periods of temporary entry may be extended by New Zealand (maximum six years subject to 
continuous needs) to Chinese executives, managers and specialist personnel in some services sectors, 
i.e. maintenance and repair of office machinery an d equipment, including computers, other computer 
services, photographic services, duplication services, construction and relate d engineering services, 
other education services, and environmental services (p aragraphs 4-5, Part B of Annex 10).  These are 
sectors/sub-sectors for which New Zealand has no GATS commitments. 
Table IV.1 
Duration of temporary entry for a natural person  of a Party in the territory of other Party 
 China New Zealand 
Business visitors 
  Maximum six months. 
 No indication of extension criteria.  Not exceeding in aggregate three 
months in any calendar year 
 No indication of extension criteria. 
Intra-corporate transferees 
(i.e. executive, manager or 
specialist) 
  Either period indicated in the 
contract or an initial stay of three 
years, whichever is shorter. 
 No indication of extension criteria.   Executives and manager s: initial stay of 
maximum three years provided there 
has been a minimum of 12 months prior 
employment by employer.  May be extended for a further three years for sector listed in paragraph 4 Annex 10. 
 Specialists being transferred to 
undertake a specific or specialist task at 
a senior level within the company : 
initial stay of maximum 12 months 
 Specialists with trade, technical or 
professional skills ; maximum three 
years (subject to a labour market test). 
May be extended for a further three years for sectors listed in paragraph 4  Annex 10. 
Installers and servicers 
  Subject to the duration of the 
contract, but no more than three months. 
 No indication of extension criteria.  
 Maximum three months in any twelve-
month period. 
 
Source :  Article 125 and Parts A and B, Annex 10 of the Agreement. 
83. Subject to conditions under Annex 11 (suc h as annual quotas and duration of entry for 
temporary employment.  See Table IV.2 below), New Zealand has made commitments on temporary 
employment entry for natural persons in the o ccupations of: i) traditional Chinese medicine 
practitioners including nurses;  ii) Chinese chefs;  iii ) Mandarin teaching aides;  iv) Chinese 'wushu' 
martial arts coaches;  and v) Chinese tour guid es;  and vi) Chinese skilled workers in specified 
occupations which have been identified as being in shortage in New Zealand.  Twenty such skilled  WT/REG266/1 
 Page 27 
 
 
  occupations have been identified and confirmed through an exchange  of side letters by the Parties.24  
Such skilled occupations shall be reviewed ever y five years by the Committee on Movement of 
Natural Persons.   Chinese natural persons entering under Annex 11 can stay in New Zealand for up to 
three years without the possibility of extension but can later apply for a work visa or permit under the 
Agreement after they have spent a minimum of thre e years outside New Zealand.  New Zealand will 
also ensure that student visas fo r Chinese students will be processed within ten working days subject 
to conditions and will implement a group transit visa for Chinese natural persons transiting New 
Zealand to and from other destinations (Annex 12) .  Under the Arrangement on a Working Holiday 
Scheme between the Parties, Chin ese nationals aged between 18 and 30 years, subject to fulfilling 
certain requirements, can stay in New Zealand for up to 12 months.  The primary intention of the stay 
shall be holiday in New Zealand with employment be ing an incidental rather than a primary reason.  
Table IV.2 
Annual quotas of temporary employment entry by  a Chinese natural person in New Zealand 
Occupations for temporary employment entry Annual Quotas 
Traditional Chinese medicine practitioners including nurses Up to 200 at any one time   
Chinese chefs Up to 200 at any one time 
Mandarin teaching aides Up to 150 at any one time 
Chinese 'wushu' martial arts coaches Up to 150 at any one time 
Chinese tour guides Up to 100 at any one time 
Chinese skilled workers in specified skilled occupations Up to 100 for any specified skilled occupation category at 
any one time, and in any case not to exceed 1,000 at any 
one time 
Source :  Annex 11 of the Agreement. 
84. The Parties shall expeditiously process applicati ons from natural persons of the other Party.  
In particular, within ten working days after an app lication is considered the Parties must inform the 
applicant of the result or advise the applicant wh en a decision will be made (Article 128.2).  The 
dispute settlement mechanism can be invoked when the Parties cannot agree with each other on any 
issue under the Chapter (Article 134). 
D. LIBERALIZATION COMMITMENTS25 
85. The schedule of commitments is contained in  Annex 8 with individual schedules for each 
Party.  The Annex follows a "positive-list appro ach" whereby the obligations of market access 
(Article 108), national treatment (A rticle 106) and additional commitmen ts (Article 110) apply only to 
the sectors listed therein, subject to limitations and conditions inscribed.   
86. The schedule of specific commitments may be modified subject to conditions 
(e.g. modification is only possible after three year s have elapsed from the entry into force of the 
Agreement) in Article 120.  If the Parties cannot agree on the appropriate compensatory adjustment, 
                                                      
24 The 20 specified skilled occupations are: 1) computer  application engineer;  2) senior test analyst;  
3) structural engineer;  4) veterinarian;  5) fitter and turner ;  6) registered nurse;  7) fitter welder;  8) university 
or higher education lectur er and/or tutor;  9) early childhood education teacher;  10) design engineers-
electronics/product engineer;  11) aud itor;  12) electronics technician;  13) medical diagnostic radiographer, 
medical radiation therapist, nuclear me dicine technologist;  14) boatbuilder;  15) film animator;  16) electrician;  
17) plumber;  18) automotive electrician;  19) diesel mechanic;  and 20) motor mechanic.  These occupations 
must meet certain requirements (e.g. qualification, educational degrees, or certification) specified in the side 
letter. 
25 Comparison made between the Parties' commitm ents under the GATS and the Agreement excludes 
mode 4 in this presentation. WT/REG266/1 
Page 28 
 
 
  the affected Party may refer the matter to the Agreement's Chapter on dispute settlement 
(Article 120.3). 
1. China 
(a) Horizontal commitments 
87. China's horizontal commitments in  the Agreement are in line w ith those under the GATS.  In 
both the GATS and the Agreement, foreign invested en terprises in China are: i) wholly foreign-owned 
enterprises;  and ii) joint venture enterprises whic h are either equity based or contractual.   
(b) Sector specific commitments 
88. For business services, China has added a new commitment for services related to 
management consulting in project management services other than for construction, under the form of 
joint ventures with foreign majority ownership.  New Zealand software implementation services, a 
sub-sector in which China's GATS commitments only guarantees joint ventures with foreign majority 
ownership under its GATS schedule, enjoy improve d mode 3 commitments under the Agreement in 
that wholly foreign-owned enterp rises are allowed to enter China. 
89. Under education services, China's commitments  in the Agreement match those under the 
GATS with respect to market access and nationa l treatment.  However, it has made additional 
commitments in that it agrees to list names of Ne w Zealand universities and educational institutions 
on its Ministry of Education "Study Abroad" website.  In addition, the Parties will jointly evaluate the 
quality assurance criteria for qualifications in cluding a distance delivery component.  
90. In environmental services (excluding environm ental quality monitoring and pollution source 
inspection), under mode 3, China has also permitte d wholly foreign-owned enterprises, compared to 
only joint ventures with foreign majority  ownership in its GATS commitments.  
91. For recreational, cultural and sporting services, a sector in which China has no 
GATS commitments, the provision of sports event promotion/organization services and sports facility 
operation services (excluding golf) by wholly fore ign-owned enterprises is permitted subject to 
economic needs tests.  
92. Under transport services, China will allow the pr ovision of maintenance and repair services of 
motor vehicles, a sub-sector in which it has no GATS commitments, by wholly foreign-owned 
subsidiaries.  China has relaxed requirements rega rding the form of establishment in mode 3 for 
computer reservation systems in air transport services  in that foreign service suppliers are permitted to 
establish joint venture enterprises with the Chinese Computer Reserv ation System in China ('unbound' 
in its GATS schedule). 
93. For i) communication services, ii) constr uction and related engineering services, 
iii) distribution services, iv) financial services, and v) tourism and travel related services, China's 
commitments in the Agreement match those under the GATS.   
94. Table IV.3 below summarizes China's sp ecific commitments under Annex 8 of the 
Agreement and compares them with its GATS schedul e excluding mode 4 commitments.  This table 
(as well as Table IV.4) is based on the services sectoral classification list.26  Improvements in existing 
GATS commitments are represented by a relaxation of the form of establishment under mode 3, 
further sub-sectors in which commitments are made  (see paragraphs 91-95 for a detailed description 
                                                      
26 MTN.GNS/W/120.  WT/REG266/1 
 Page 29 
 
 
  of the changes), or additional commitments.  Li ke in the GATS, China took no commitments in 
sectors such as: i) research and development servi ces;  ii) rental/leasing services without operators;  
iii) postal services;  iv) health related and social services;  v) tourist guide services;  vi) space 
services;  and vii) pipeline transport services. 
Table IV.3  
China: comparison between the GATS and the Agreement specif ic commitments in trade in services (excluding mode 4) 
Sectors GATS FTA 
1. BUSINESS SERVICES   
A. Professional services √ Same 
B. Computer and related services  √ Improved  
C. Research and development - - 
D. Real estate √ Same 
E. Rental/Leasing services without operators - - 
F. Other √ Improved  
2. COMMUNICATION SERVICES   
A. Postal - - 
B. Courier √ Same 
C. Telecommunication  √ Same 
D. Audiovisual √ Same 
E. Other - - 
3. CONSTRUCTION AND RELATED ENGINEERING 
SERVICES √ Same 
4. DISTRIBUTION SERVICES √ Same  
5. EDUCATION SERVICES √ Improved 
6. ENVIRONMENTAL SERVICES √ Improved  
7. FINANCIAL SERVICES   
A. All insurance and insurance-related services √ Same 
B. Banking and other financial services √ Same 
8. HEALTH RELATED AND SOCIAL SERVICES - - 
9. TOURISM AND TRAVEL RELATED SERVICES   
A. Hotels and restaurants √ Same 
B. Travel agencies and tour operators √ Same 
C. Tourist guides - - 
D. Other - - 
10. RECREATIONAL, CULTURAL AND SPORTING SERVICES - New 
11. TRANSPORT SERVICES   
A. Maritime √ Same 
B. Internal waterways √ Same 
C. Air  √ Improved  
D. Space - - 
E. Rail  √ Same 
F. Road √ Improved  
G. Pipeline - - 
H. Services auxiliary to all modes of transport √ Same 
I. Other - - 
12. OTHER SERVICES NOT INCLUDED ELSEWHERE - - 
Note: 
√: Commitments in the GATS schedule. 
-: No commitments either under the GATS or the Agreement. New: New commitments made under the Agreement. Improved: Improved commitments made under the Agreement compared to those under the GATS. Same: Same commitments made under th e Agreement as those under the GATS. 
 
Source :  China's Schedule of Specific Commitments under th e GATS (S/DCS/W/CHN) and Part A of Annex 8 under the 
Agreement.  The comparison only concerns modes 1-3,  market access and national treatment, and additional 
commitments, it does not concern the issues of mode 4. 
 
2. New Zealand 
(a) Horizontal commitments 
95. New Zealand's horizontal commitments in th e Agreement match those under the GATS, for 
example, with respect to the listed investments for which approval from the Overseas Investment 
Commission is required, and current and future measures at the central and sub-central levels WT/REG266/1 
Page 30 
 
 
  providing Maori persons or organi zations with more favourable treatment in relation to the 
acquisition, establishment or operation of any commercial or industrial undertaking. 
(b) Sector specific commitments 
96. For business services, New Zealand has undertaken  commitments in sectors not included in 
its GATS schedule: i) maintenance and repair of office machinery and equipment (including 
computers) services;  ii) other computer services;  iii) photographic services;  and iv) duplicating 
services with full commitments in modes 1-3.  The commitments for those sub-sectors that are 
inscribed both in the GATS and the Agreement are iden tical in that there are almost no limitations in 
modes 1-3 (there are only some limitations on national treatment in engineering services). 
97. Under construction and relate d engineering services, New Zealand has relaxed mode 1 
limitations for consultancy services in i) installa tion and assembly work;  and ii) building completion 
and finishing work. 
98. New Zealand has added three sub-sectors in education services for which it has taken full 
commitments in modes 1-3: i) training provided by private specialist language institutions;  ii) 
language assessment services provided by private Ch inese language testing centres;  and iii) tuition in 
subjects taught at the primary and secondary leve ls, provided by private specialist institutions 
operating outside the New Zealand compulsory school system. 
99. In environmental services, for which New Ze aland has no commitment in the GATS, it has 
made full commitments in modes 1-3 in: i) wast e water management;  ii) waste management;  
iii) protection of ambient air and climate,  iv) remedi ation and cleanup of soil and water;  v) noise and 
vibration abatement;  vi) protection of biodiversity and landscape;  and vii) other environmental and 
ancillary services.  Its commitments exclude the co llection, purification and distribution of water 
including for human use.  
100. For i) communication services;  ii) distribution services;  iii) financial services;  iv) tourism 
and travel related services;  and v) transport services, New Zealand's commitments in the Agreement 
match those under the GATS. 
101. Table IV.4 below summarizes New Zealand's specific commitments under Annex 8 of the 
Agreement and compares them with its GATS schedule excluding mode 4 commitments.  Improvements in its existing GATS commitments are mainly represented by new sectors/sub-sectors 
of services in addition to the relaxation of mode 1 limitations in construction and related engineering 
services (see paragraphs 99-102 for a detailed desc ription of the changes).  Like in the GATS, 
New Zealand took no specific commitments in area s such as i) research and development services;  
ii) postal services;  iii) courier services;  iv) health related and social services;  v) recreational, cultural 
and sporting services;  vi) internal waterw ays services;  vii) space services;  and viii)
 services 
auxiliary to all modes of transport.  China too has no commitments in i)-ii), iv), and vii).  
Table IV.4  
New Zealand: comparison between the GATS and the Agreement spec ific commitments in trade in services (excluding mode 4) 
Sectors GATS FTA 
1. BUSINESS SERVICES   
A. Professional services √ Same 
B. Computer and related services  √ Improved 
C. Research and development - - 
D. Real estate √ Same 
E. Rental/Leasing services without operators √ Same 
F. Other √ Improved 
2. COMMUNICATION SERVICES   
A. Postal - - 
Table IV.4 (Cont'd)  WT/REG266/1 
 Page 31 
 
 
  Sectors GATS FTA 
B. Courier - - 
C. Telecommunication  √ Same 
D. Audiovisual √ Same 
E. Other - - 
3. CONSTRUCTION AND RELATED ENGINEERING SERVICES √ Improved 
4. DISTRIBUTION SERVICES √ Same 
5. EDUCATION SERVICES √ Improved 
6. ENVIRONMENTAL SERVICES - New 
7. FINANCIAL SERVICES   
A. All insurance and insurance-related services √ Same 
B. Banking and other financial services √ Same 
8. HEALTH RELATED AND SOCIAL SERVICES - - 
9. TOURISM AND TRAVEL RELATED SERVICES   
A. Hotels and restaurants √ Same 
B. Travel agencies and tour operators √ Same 
C. Tourist guides √ Same 
D. Other - - 
10. RECREATIONAL, CULTURAL AND SPORTING SERVICES - - 
11. TRANSPORT SERVICES   
A. Maritime √ Same 
B. Internal waterways - - 
C. Air  √ Same 
D. Space - - 
E. Rail  √ Same 
F. Road √ Same 
G. Pipeline √ Same 
H. Services auxiliary to all modes of transport - - 
I. Other - - 
12. OTHER SERVICES NOT INCLUDED ELSEWHERE - - 
Note: 
√: Commitments in the GATS schedule. 
-: No commitments either under the GATS or the Agreement. New: New commitments made under the Agreement. Improved: Improved commitments made under the Agreement compared to those under the GATS. 
Same: Same commitments made under th e Agreement as those under the GATS. 
 
Source :  New Zealand's Schedule of Specific Commitments unde r the GATS (S/DCS/W/NZL) and Part B of Annex 8 under 
the Agreement.  The comparison only concerns modes 1- 3, market access and national treatment, and additional 
commitments, it does not concern the issues of mode 4 
 
E. REGULATORY PROVISIONS ON TRADE IN SERVICES AND INVESTMENT  
1. Domestic regulation 
102. Article 111 on domestic regulation is based on Ar ticle VI of the GATS.  It authorizes the 
Parties to ensure that all measures of general a pplication affecting trade in services are implemented 
in a reasonable, objective and impartial manner.  Th e Article goes beyond Article VI of the GATS, in 
that it further specifies requirements for the Parties'  competent authorities such as giving the applicant 
an opportunity to resubmit an application when its ap plication is terminated or  denied (Article 111.3).  
The Parties have committed to jointly review the resu lts of the negotiations under Article VI.4 of the 
GATS and aim at incorporating those into the Agreement (Article 111.4). 
2. Recognition 
103. Article 112 contains provisions on the recogniti on of standards and criteria for authorizing 
licensing, or certification of service suppliers  which essentially mirror the provisions of GATS 
Article VII.  In addition, under the Agreement the Parties not only may "recognize" as in the GATS, 
but also may "encourage their relevant competent bod ies to recognize" the standards or criteria above.  
The provision also clarifies that a Party's recogn ition of education or licences obtained in a non-Party 
shall not be construed as requiring the Party to accord the same recognition to the other Party 
(Article 112.2).  However, an adequate opportunity to the other Party shall be afforded for it to WT/REG266/1 
Page 32 
 
 
  demonstrate its eligibility to receive the same  recognition as that granted to the non-Party 
(Article 112.3).    
104. The work to date on the recognition of qualifi cations by the New Zealand-China Education 
Joint Working Group has been acknowledged and enc ouraged for further cooperation in academic 
degrees and qualifications.  Regarding vocational qua lifications, a joint working group is to be 
established.27  In addition, the Parties have also agreed to encourage the relevant authorities to explore 
the possibilities for recognition of other qualifi cations and professional and vocational licences 
(Article 113). 
3. Payments and transfers 
105. The Parties agree not to apply restrictions on in ternational transfers and payments for current 
transactions relating to their specific commitments  apart from balance-of-payments exceptions under 
Article 202.  They also agree not to impose restric tions on any capital transactio ns inconsistently with 
their specific commitments regard ing such transactions, apart from for balance-of-payments reasons, 
or at the request of the International Monetary Fund (Article 114).   
106. Each Party shall permit the free transfer of all payments relating to an investment of an 
investor of the other Party (Article 142.1).  In the case of China, the transfer of payments are subject 
to the relevant formalities under its laws and regulations relating to ex change control, provided that 
the formalities are not used to a void China's commitments and are affected in a period normally 
required for the completion of transfer formalities, th at MFN treatment is provided to the investments, 
that the formalities not be made more  restrictive than at the time of the original investment and that 
free transfer is permitted when the forma lities are no longer required (Article 142.3). 
4. Safeguard measures/subsidies 
107. Following a review by the Parties, the Agre ement will incorporate any disciplines agreed 
under Articles X (emergency safeguard measures) XV (subsidies) of the GATS.  If a Party considers 
that it is adversely affected by a subsidy of the ot her Party, the affected Party can request and enter 
into consultations with the ot her Party (Article 119.2).   
5. Monopolies and exclusive service suppliers 
108. Provisions on monopolies and exclusive service suppliers are based on the provisions of 
Article VIII of the GATS, except that the Article under the Agreement does not refer to 
MFN provisions but specific commitments only (Article 123).  
6. Expropriation 
109. Expropriation, nationalization or other equivale nt measures against investments of investors 
of the other Party is not allowed unless such measures are carried out under the criteria in 
Article 145.1, such as in accordance with applicable dom estic law, or undertaking given by the Party.  
Annex 13 clarifies that expropriation may be either direct or indirect.  In particular, indirect 
expropriation must be either severe or for an inde finite period and disproportionate to the public 
purpose (paragraph 3 of Annex 13), and shall not be constituted the protection of the public welfare, 
including public health, safety and the environment (Article 5 of Annex 13).  The compensation is 
established under Article 145.   
                                                      
27 According to the Parties, a meeting was held in November 2009 to discuss the establishment process 
and terms of reference for the Joint Working Group on vo cational qualifications.  This has led to a process of 
information-sharing which will provide the found ation for the establishment of the Group.  WT/REG266/1 
 Page 33 
 
 
  V. GENERAL PROVISIONS OF THE AGREEMENT 
A. TRANSPARENCY  
110. Chapter 13 sets out provisions on transparency fo r the Agreement.  The Parties must promptly 
publish their laws, regulations, procedures, and admi nistrative rulings of general application with 
respect to any matter covered by the Agreement, no later than 90 days after their implementation or 
enforcement (Article 168.1).  Provisions are al so made for public comment on proposed measures 
(Article 168.2.(b)), administrative proceedings (Artic le 169), review and appeal  (Article 170), contact 
points (Article 171), and notification and provisio n of information (Article 172).  A notification 
already submitted to the WTO on proposed or actual measures which might also materially affect the 
operation of the Agreement or substantially affect the other Party's interests under the Agreement, is 
exempted from the Agreement's notification obligati ons (Article 172.4).  In addition to Chapter 13 
other Chapters contain relevant transparency provi sions, such as: Article 69 of the Chapter on trade 
remedies;  Article 98 in the Chapter on technical barri ers to trade;  Article 116 in the Chapter on trade 
in services;  Article 131 in the Chapter on movement  of natural persons;  and Article 146 in the 
Chapter on investment.   
B. EXCEPTIONS  
111. Chapter 17 sets out provisions on exceptions.  General exceptions for goods and services are 
maintained by incorporating into the Agreement mutatis mutandis  Article XX of the GATT 1994 and 
Article XIV of the GATS.  In addition, Article XX(b) of the GATT 1994 and Article XIV(b) of the 
GATS can include environmental measures, a nd Article XX(g) of the GATT 1994 applies to 
measures relating to the conservation of living an d non-living exhaustible natural resources.  The 
Parties have also broadened Article XX(f) of the GAT T 1994 in that they can take necessary measures 
to support creative arts of national value (Article 200.3).  Further, necessary measures to restrict the 
illicit import of cultural property from the other Pa rty under the framework of the United Nations 
Educational, Scientific and Cultural Organiza tion Convention on the Means of Prohibiting and 
Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property are permitted 
(Article 200.4).   
112. The Parties can take measures for balance-o f-payments purposes for: trade in goods in 
accordance with GATT 1994 and the WTO Unders tanding on the Balance-of-Payments of 
GATT 1994;  trade in services in accordance with  GATS;  and investments (Article 202.1). 
113. Other exceptions provisions are also made fo r prudential measures (Article 203), taxation 
measures (Article 204), obligations under the Treat y of Waitangi (Article 205), and disclosure of 
information (Article 206). 
C. ACCESSION AND TERMINATION  
114. There are no accession provisions in the Agreement.   The Agreement can be terminated after 
180 days have elapsed since either Party's written notification of its intention to the other Party 
(Article 213.3).   
D. INSTITUTIONAL FRAMEWORK  
115. A Joint Commission was established to, inter alia , consider matters relating to the 
implementation of the Agreement;  review within  two years from the entry into force of the 
Agreement and thereafter at least every three years;   and explore measures for the further expansion 
of bilateral trade and investment (Ar ticle 180.1).  Additional committees and ad hoc  working groups 
can be established (Article 180.2).  In addition, the Parties reaffirm the roles of the Joint Ministerial WT/REG266/1 
Page 34 
 
 
  Commission and Joint Trade and Economic Comm ission under the Trade a nd Economic Cooperation 
Framework between the Parties (entered into force on 28 May 2004) that these Commissions may 
consider matters arising under the Agreement (Artic le 182).  Amendments to the Agreement can be 
made through written notification certifying that th e Parties have completed the necessary internal 
procedures and will come into force 60 days af ter the Parties' notification (Article 212). 
E. DISPUTE SETTLEMENT  
116. Chapter 16 sets out procedures for the avoidance and settlement of disputes relating to the 
Parties' rights and obligations under the Ag reement except for Chapter 14 on cooperation 
(Articles 184.1).  The Agreement permits the Par ties to utilize dispute settlement procedures under 
other agreements to which they are both parties (Article 185.1).  The complaining Party may select a 
forum where a dispute shall be settled when the di spute is related to any matter arising under the 
Agreement and under another agreement to which both Parties are parties (Article 185.2).  The 
selected forum shall be exclus ively used (Article 185.3). 
117. A complaining Party must request consultations in writing and the Party requested shall reply 
within ten days and enter into c onsultations within 30 days (15 da ys for perishable goods) of receipt 
of the written request (Articles 186.2 and 186.3).  If the Party requested does not respond or enter into 
consultations within the period of time indicated abov e, the complaining Party can proceed directly to 
request the establishment of an arbitral tribunal (Article 186.4).    
118. If the matter is not resolved through consultati ons within 60 days (30 days for perishable 
goods) after the date of receipt of the request, th e complaining Party may request in writing the 
establishment of an arbitral tribunal (Article 188. 1).  The panel is composed of three members 
(Article 189.1).  If there is no designation or appointment of a member of the arbitral tribunal, either 
Party may request the Director-General of the WT O to designate a member within 30 days of the 
request (Article 189.4).  If the panel decides that a measure in question is inconsistent with the 
Agreement, then the non-conforming measure shall be eliminated (Article 195.2).  The arbitral 
tribunal can be suspended at any time for a maxi mum period of 12 months through an agreement 
between the Parties (Article 193.1) and the proceed ings can be terminated upon reaching a mutually 
satisfactory solution to the dispute (Article 193.2). 
119. When the Party complained against fails to comp ly with the findings of the arbitral tribunal 
within the reasonable period of time or if the Party complained against will not implement the 
findings, upon request that Party shall enter into  negotiations with the complaining Party on any 
necessary compensation (Article 198.1).  If an ag reement cannot be reached, the complaining Party 
may suspend the application of concessions and obliga tions of equivalent effect to the other Party 
(Article 198.2).  The conditions for suspensions listed in Article 198.4 are similar to Article 22 of the 
WTO Understanding on Rules and Procedures Govern ing the Settlement of Disputes (DSU) in that 
the suspension should be first sought in the same sect or(s) affected, following which benefits in other 
sectors may be suspended if the complaining Party considers suspension in the same sector is not 
practical or effective (Article 198.4.(b)).  If the r esponding Party considers that it has eliminated the 
non-conformity that the arbitral tribunal has found, it may provide written notice to the complaining 
Party with a description of how the non-conformity has been removed.  If the complaining Party disagrees, the matter can be referred to the original  arbitral tribunal.  Otherwise, the complaining 
Party shall promptly stop the suspension of  concessions and obliga tions (Article 199.1). 
120. The major steps to be taken in the dispute se ttlement process are described below.  During the 
process, the Parties may proceed with good offices,  conciliation or mediation while an arbitral 
tribunal is underway if both Parties agree (Articles 187.1 and 187.2).  WT/REG266/1 
 Page 35 
 
 
  Table V.1 - Synopsis of Dispute Settlement Provisions under the Agreement 
15 days (Art.189.2) 
10 days (Art.194.3) 20 days (5 days for perishable goods) 
(Art.186.3) 
60 days 
(Art.196.2) 
20 days 
(Art.97.2) 20 days 
(Art.191.6) 14 days 
(Art.191.1) 60 days  
(Art.197.2)  
(a)  
within 10 days (Art.186.3) Written request for 
consultations (Art. 186) 
Consultations  
(Art.186.3) 
Written request for the 
establishment of arbitral 
tribunal (Art.188)  
Appointment of arbitrators 
by each Party/Composition of 
arbitral tribunal (Art. 189)   
Issuance of arbitral 
tribunal's draft report to the 
Parties (Art.194.2)   
Issuance of arbitral 
tribunal's final report  
(Art. 194.3)  Publication of the final arbitral tribunal 
report (Art.194.3)
Agreement on the reasonable 
period of time to solve  
the dispute 
(Art.196.2) 
Failure to agree on the 
reasonable period of time – 
refer to the original arbitral 
tribunal (Art.196.1) 
Negotiations on mutually 
acceptable compensation 
(Art.198)
Parties' submission of 
written comments on the 
draft (Art.194.3) 10 days (Art. 194.3) Agreement on the 
existence or consistency 
with the measure taken 
with the 
recommendations of the 
arbitral tribunal 
(Art.197 )
Failure to agree – refer to 
the original arbitral 
tribunal 
(Art.197.1) 
30 days (Art.198.2) 
No agreement 
(Art.198.2) 
Complaining Party to 
suspend the application 
of concessions and 
obligations of equivalent 
effect to the Party 
complained against 
(Art.198.2 )
Issuance of 
arbitral tribunal's 
report 
(Art.198.7) Response to the written 
request (Art.186.3) 
Determination of the 
reasonable period of time 
by the arbitral tribunal 
(Art.196.2) 30 days (15 for perishable goods) 
(Art. 188.1) 
Terms of 
reference  
(Art. 191.6)   Rules of 
Procedure 
(Art. 191)   45 days 
(Art.196.1) 
Determination by the arbitral 
tribunal (Art.197.2) 
60 days (Art. 198.7)3
0
 
da
y
s no 
compliance 
Determination on the 
appropriate level of 
concessions and 
obligations by the 
original arbitral 
tribunal (Article 198.6)  no 
compliance 
compliance 
(Art.199.1) 
If 
disagreements 
by the 
complaining 
Party, referral 
to the original arbitral 
tribunal 
(Art.199 )
60 days (Art. 199.2)
Issuance of 
arbitral tribunal's 
report 
(Art.199.2) 90
 
da
y
s
 
 WT/REG266/1 
Page 36 
 
 
  F. RELATIONSHIP WITH OTHER AGREEMENTS CONCLUDED BY THE PARTIES  
121. The Agreement's relationship with other agreemen ts concluded by the Parties is defined in 
Article 3, where the Agreement does not derogate the existing rights and obligations of the Parties 
under the WTO or any other multilateral or bilateral agre ements to which they are party.  In the case 
that there are inconsistencies between the Agreem ent and any other agreements, the Article does not 
define the hierarchy, but obliges the Parties to i mmediately have consultations to find a mutually 
satisfactory solution in accordance with  customary rules of interpretati on of public international law. 
122. Table V.2 lists all other regional trade agreem ents (RTAs) notified to the GATT/WTO and in 
force to which China and New Zealand are party.  The Parties do not have any RTAs that are not 
notified to the GATT/WTO. 
Table V.2 - China and New Zealand:  Participation in other RT As (notified and non-notified in force), as of September 2010  
GATT/WTO Notification 
Partner / Agreement Date of 
entry  
into force Type of 
agreement Year WTO Provision 
CHINA  
Peru 01.03.10 Goods & Services 2010 GATT Art. XXIV & GATS Art. V 
Pakistan 10.10.09 Services 2010 GATS Art. V 
Singapore 01.01.09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
ASEAN 01.07.07 Services 2008 GATS Art. V 
Pakistan 01.07.07 Goods 2008 GATT Art. XXIV 
Chile 01.10.06 Goods 2007 GATT Art. XXIV 
Hong Kong, China 01.01.04 Goods & Services  2003 GATT Art. XXIV & GATS Art. V 
Macao, China 01.01.04 Goods & Services 2003 GATT Art. XXIV & GATS Art. V 
ASEAN 01.07.03 Goods 2004 Enabling Clause 
APTA (Accession) 01.01.02 Goods 2004 Enabling Clause 
NEW ZEALAND  
ASEAN-Australia-New Zealand 01.01.10 Goods & Se rvices 2010 GATT Art. XXIV & GATS Art. V 
Brunei, Chile, New Zealand  
(Trans-Pacific SEP) 28.05.06 Goods & Services 2007 GATT Art. XXIV & GATS Art. V 
Thailand 01.07.05 Goods & Services 2005 GATT Art. XXIV & GATS Art. V 
Singapore 01.01.01 Goods & Services 2001 GATT Art. XXIV & GATS Art. V 
Australia (ANZCERTA) 01.01.89 Services 1995 GATS Art. V 
Australia (ANZCERTA)  01.01.83 Goods 1983 GATT Art. XXIV 
SPARTECA 01.01.81 Goods 1981 Enabling Clause 
 
ASEAN: Association of Southeast Asian Nations. 
SPARTECA: South Pacific Regional Trad e and Economic Cooperation Agreement. 
 
Source: WTO Secretariat. 
 
 
G. GOVERNMENT PROCUREMENT  
123. There are no government procurement provisions per se  explicitly stated in the Agreement.  
The Parties are observers to the WTO Government Procurement Agreement (GPA).  WT/REG266/1 
 Page 37 
 
 
  H. INTELLECTUAL PROPERTY RIGHTS  
124. The Parties reaffirm their commitments to th e WTO TRIPS Agreement incorporating into the 
Agreement mutatis mutandis , and any other multilateral agreemen ts relating to the intellectual 
property to which both are parties (Article 161).  Intellectual property is defined by Chapter 12 as: 
i) copyright and related rights;  ii) rights in trade marks;  iii) geographical indications;  iv) industrial 
designs;  v) patents;  vi) layout designs of integrat ed circuits;  and vii) rights in plant varieties as 
defined in the WTO TRIPS Agreement (Article 159).  In addition, subject to each Party's international 
obligation, the Parties may establish appropriate measures to protect genetic resources, traditional 
knowledge and folklore (Article 165).   
125. Notifications on new intellectual property la ws and information exchanges regarding 
developments in intellectual property policy shall be channelled through the Parties' contact points 
(Article 163).  Through the contact points, the Par ties may request consultations on any issues within 
the scope of the Chapter to the other Party altho ugh a Party may deny the request (Articles 166.1, 
166.2 and 166.5).28  Once initiated, if a Party considers that the consultation fails to resolve the issue, 
it may invoke Chapter 16 on dispute settlement after notification to the other Party of the decision 
(Articles 166.3 and 166.4).  
126. Expropriation provisions in the Chapter on investment do not apply to the issuance of 
compulsory licences granted in relation to inte llectual property rights in accordance with the 
WTO TRIPS Agreement (Article 145.5). 
I. COOPERATION  
127. Chapter 14 supplements the bilateral cooperati on and cooperative activities set out in other 
Chapters of the Agreement (Article 174.2) through, inter alia , policy dialogue and regular exchange 
of information and views on ways to promote an d expand bilateral trade and investment;  and 
assistance and facilities to business persons (Article 175.2).  In particular, the Chapter specifies 
cooperation on small and medium-sized enterpris es (Article 76) and labour and environment 
(Article 177).29  Each Party designates a contact point to facilitate communication on possible 
cooperation activities for working with government  agencies, private sector representatives and 
educational and research institutions (Article 178). 
128. Subject to a future joint review, the Parties ha ve established a reciprocal three year Doctoral 
Research Scholarships Programme that each Party will fund for up to ten new students from the other 
Party to study in its territory (Side Letters on Doctoral Research Scholarship Programme).  
 
                                                      
28 A Party may deny the request if the other Party ha s taken actions pursuant to Chapter 16 (dispute 
settlement) of the Agreement or the WTO DSU (Article 166.5). 
29 As part of the overall outcome of negotiations, alongside the Agreement, the Parties have entered 
into an Environment Cooperation Agreement and signed a Memorandum of Understanding on Labour 
Cooperation. WT/REG266/1 
Page 38 
 
 
  ANNEX 
 
Indicators of Tariff and Trade Liberalization under the Agreement  
 
 
1. A comparison between preferential tariff rates as part of the scheduled programme of 
elimination of tariffs applied to the Parties' mutu al imports and the MFN rates applied by China and 
New Zealand is shown in Tables A.1 (China) and A.2 (New Zealand) below, by total products, 
agricultural products and non-agricultural products. 
Table A.1 
China: Indicators of MFN tariff rates and pr eferential rates for imports from New Zealand 
ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin of 
goods Year 
Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) 
MFN 2008 9.8 10.7 8.4 15.3 16.4 6.9 8.9 9.7 8.6 
New  2008 7.3 9.7 24.1 12.1 14.1 13.9 6.6 8.9 25.8 
Zealand 2009 5.7 7.5 24.1 9.8 11.4 13.9 5.0 6.8 25.8 
 2010 4.0 5.3 24.1 7.5 8.7 13.9 3.5 4.7 25.8 
 2011 2.4 3.1 24.1 5.1 6.0 13.9 1.9 2.6 25.8 
 2012 0.7 7.9 90.8 2.8 13.0 78.6 0.4 5.4 92.8 
 2013 0.5 13.9 96.5 2.2 24.6 91.0 0.2 7.8 97.4 
 2014 0.5 13.7 96.5 2.2 23.9 91.0 0.2 7.8 97.4 
 2015 0.5 13.4 96.5 2.1 23.3 91.0 0.2 7.7 97.4 
 2016 0.5 14.9 96.9 2.1 31.8 93.6 0.2 7.9 97.5 
 2017 0.5 15.3 97.0 2.0 35.3 94.2 0.2 7.9 97.5 
 2018 0.5 15.3 97.0 2.0 35.2 94.2 0.2 7.9 97.5 
 2019 0.5 15.6 97.1 2.0 37.6 94.6 0.2 7.9 97.5 
 a  WTO Definition.  
Note:  Tariff lines subject to TRQs only the out-of-quota duty is included in the tariff-related calculations;  for tariff line s with 
 non ad valorem  components, only the ad valorem  part of alternate rates are included in the calculation. 
 Based on the HS 2007 nomenclature.  
Source: WTO Secretariat estimates based on data provided by China and the WTO-IDB. 
 
2. China's average applied MFN rate in 2008 was 9.8%.  Tariffs on agricultural products are 
higher than for non-agricultural products with the av erage applied MFN tariff on agricultural products 
roughly two times higher than that applied to non- agricultural products.  Duty-free tariff lines account 
for 8.4% of all tariff lines.  As a result of the Ag reement, New Zealand exporters enjoyed an absolute 
margin of preference of 3.2% for agricultural goods vis-à-vis  the prevailing average MFN tariff in 
2008, and 2.3% for non-agricultural goods.  Overall,  New Zealand exporters enjoyed an absolute 
margin of preference of 2.5% vis-à-vis  the prevailing average applied MFN tariff;  the share of duty-
free lines applicable to imports from New Zealand also rose from 8.4% on an MFN basis to 24.1% in 
2008.  Following ten years of implem entation 97% of the tariff will be duty free.  By the end of 
implementation in 2019, 97.1% of all tariff lines are due to become duty-free for New Zealand 
exporters to China overall, with 97.5% of non- agricultural products and 94.6% of agricultural 
products becoming duty-free. 
 
 
  
 
   WT/REG266/1 
 Page 39 
 
 
  Table A.2 
New Zealand: Indicators of MFN tariff rates and preferential rates for imports from China 
ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin of 
goods Year 
Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) 
MFN 2008 2.5 6.0 57.6 1.8 5.0 63.6 2.6 6.1 56.5 
China 2008 2.2 6.1 63.3 1.1 5.0 77.6 2.4 6.2 61.0 
 2009 2.0 5.5 63.3 0.9 4.0 77.6 2.2 5.7 61.0 
 2010 1.5 4.2 63.3 0.6 2.7 77.6 1.7 4.4 61.0 
 2011 1.0 2.8 63.3 0.3 1.3 77.6 1.1 2.9 61.0 
 2012 0.4 4.5 90.4 0.0 0.0 100.0 0.5 4.5 88.8 
 2013 0.2 2.8 91.6 0.0 0.0 100.0 0.3 2.8 90.2 
 2014 0.1 3.9 98.0 0.0 0.0 100.0 0.1 3.9 97.7 
 2015 0.0 1.9 98.0 0.0 0.0 100.0 0.0 1.9 97.7 
 2016 0.0 0.0 100.0 0.0 0.0 100.0 0.0 0.0 100.0 
 a WTO Definition.  Note: Based on the HS 2007 nomenclature. 
 
Source:  WTO Secretariat estimates based on data provided by New Zealand and the WTO-IDB. 
 
3. New Zealand's average applied MFN rate in 2008 was 2.5%.  Tariffs on agricultural products 
are lower than for non-agricultural products with  the average applied MFN tariff on non-agricultural 
products roughly 1.5 times higher than that applied to agricultural products.  Duty-free tariff lines 
account for 57.6% of all tariff lines.  As a result of the Agreement, Chinese exporters enjoyed an 
absolute margin of preferences 0.7% for agricultural goods, vis-à-vis  the prevailing average MFN 
tariff in 2008, and 0.2% for non-ag ricultural goods.  Overall, Chinese exporters enjoyed an absolute 
margin of preference of 0.3% vis-à-vis  the prevailing average applied MFN tariff;  the share of 
duty-free lines applicable to import from China also  rose from 57.6% on an MFN basis to 63.3% in 
2008.  By the end of implementation in 2016, the share of duty-free lines for imports from China is 
expected to rise to 100% overall, with 100% of non-agricultural products and 100% of agricultural 
products becoming duty-free. 
Table A.3 – China: Market access opportunities un der the Agreement for New Zealand's top 25 exports 
Access Conditions to China's import markets  
MFN (2008)  New Zealand's top export products in 2005-2007  
No. of tariff lines  Duty-free in  
HS number and description of the product  Share in 
global 
exports MFN 
average  Duty-
free Dutiable 
2008 
2012 2013 2016 2017 2019 
Remain 
dutiable 
040221 -- Not containing added sugar or 
other sweetening matter 6.6 10.0  1      1  
020230 - Boneless 4.0 12.0  1    1    
020442 -- Other cuts with bone in 3.7 12.0  1    1    
760110 - Aluminium, not alloyed 3.0 5.0  2 2       
040210 - In powder, granules or other 
solid forms, of a fat content, by weight, not exceeding 1.5% 2.9 10.0  1      1  
040690 - Other cheese 2.5 12.0  1     1   
081050 - Kiwifruit 2.2 20.0  1    1    
270900 Petroleum oils and oils obtained 
from bituminous minerals, crude. 2.2 0.0 1         
440710 - Coniferous 2.2 0.0 5         
040510 - Butter 2.0 10.0  1     1   
220421 -- In containers holding 2 l or less 1.7 14.0  1  1      
440320 - Other, coniferous 1.6 0.0 5         
040490 - Milk products of natural milk 
constituents, whether/not 
sweetened, n.e.s. 1.4 20.0  1  1      
020422 -- Other cuts with bone in 1.3 15.0  1    1    
Table A.3 (Cont'd)  WT/REG266/1 
Page 40 
 
 
  Access Conditions to China's import markets  
MFN (2008)  New Zealand's top export products in 2005-2007  
No. of tariff lines  Duty-free in  
HS number and description of the product  Share in 
global 
exports MFN 
average  Duty-
free Dutiable 
2008 
2012 2013 2016 2017 2019 
Remain 
dutiable 
020443 -- Boneless 1.3 15.0  1    1    
210690 - Food preparations, n.e.s. 1.3 19.6  5 1 3 1     
350110 - Casein 1.3 10.0  1  1      
510121 -- Shorn wool 1.3 38.0  1       1 
040590 - Fats & oils derived from milk, 
other than butter & dairy spreads 1.1 10.0  1     1   
080810 - Apples 1.1 10.0  1  1      
190190 - Malt extract; food preparations 
of flour/groats/meal/starch/malt extact,not containing cocoa/containing less than 40% 
by weight of cocoa calculated on 
a totally defatted basis, not elsewhere specified/incld.; food preparations of goods of headings 04.01 to 04.04,not containing 
cocoa/containing less than 5% by 
weight of cocoa calculated on a totally defatted basis, not elsewhere specified/incld. 0.9 10.0  1  1      
350190 - Caseinates & other casein 
derivatives; casein glues 0.9 10.0  1  1      
470321 -- Coniferous 0.8 0.0 1         
710812 -- Gold (incl. gold plated with 
platinum), in unwrought forms 
(excl. powder) 0.8 0.0 1         
880240 - Aeroplanes and other aircraft, of 
an unladen weight exceeding 15,000 kg 0.7 3.0  2 2        
Total of the above 48.9  13 26 5 9 1 5 3 2 1 
 
Note: Based on HS 2007 nomenclature. 
 
Source:  WTO estimates based on data provided by Ch ina, WTO-IDB and UNSD,  Comtrade database. 
 
4. Table A.3 shows the market access conditions in  China for New Zealand's top 25 exports, 
which in 2005-2007 accounted for 48.9% of its global exports.  Thirteen tariff lines (at the HS 8-digit 
level) were already duty-free on an MFN basis.  Ou t of 26 tariff lines which were dutiable, five lines 
became duty-free upon the entry into force of the Agreement;  a further 20 lines are to become 
duty-free in 2012, 2013, 2016, 2017, and 2019.  One tariff line which remains dutiable among 
New Zealand's top 25 exports is related to wool  which is subject to TRQs under the Agreement 
(see paragraphs 29-30). 
Table A.4 – New Zealand: Market access opportuniti es under the Agreement for China's top 25 exports 
Access Conditions to New Zealand's import markets  
MFN (2008)  China's top export products in 2005-2007  
No. of tariff lines  Duty-free in  
HS number and description of the product  Share in 
global 
exports MFN 
average  Duty-
free Dutiable 
2008 
2012 
2016 
847130 Portable automatic data processing machines, 
weighing not more than 10 kg, consisting of a least 
a central processing unit, a keyboard and a display 4.1 0.0 1     
851770 Parts of telephone sets, incl. telephones for cellular 
networks/for other wireless networks; other 
apparatus for the transmission/reception of voice, images/other data, incl. apparatus for communication in a wired/wireless network 2.0 1.7 4 2  2  
Table A.4 (Cont'd)   WT/REG266/1 
 Page 41 
 
 
  Access Conditions to New Zealand's import markets  
MFN (2008)  China's top export products in 2005-2007  
No. of tariff lines  Duty-free in  
HS number and description of the product  Share in 
global 
exports MFN 
average  Duty-
free Dutiable 
2008 
2012 
2016 
851712 Telephones for cellular networks or for other 
wireless networks 1.7 0.0 1     
847330 Parts and accessories of the machines of 
heading 84.71 1.6 0.0 1     
852990 Other parts suitable for use solely/principally with 
the apparatus of headings 85.25 to 85.28., other than aerials & aerial reflectors of all kinds 1.5 2.8 4 5  5  
901380 Other devices, appliances a nd instruments 1.5 0.0 1     
851762 Machines for the reception, conversion and 
transmission or regeneration of voice, images or 
other data, including sw itching and routing 
apparatus 1.4 0.6 7 1  1  
847170 Storage units 1.1 0.0 1     
844399 Other parts & accessories for printing machinery 
excl. 8443.91 0.9 1.7 2 1  1  
852580 Television cameras, di gital cameras and video 
camera recorders 0.9 0.0 1     
852851 Other monitors, of a kind solely/principally used 
in an automatic data pro cessing system of heading 
84.71 0.9 0.0 1     
851761 Base stations for tran smission/reception of voice, 
images/other data, incl. apparatus for 
communication in a wired/wireless network (such as a local/wide area network) 0.8 2.5 1 1  1  
852190 Video recording/repr. apparatus other than 
magnetic tape-type, whether/not incorporating a video tuner 0.8 0.0 1     
853400 Printed circuits. 0.8 0.0 1     
847141 Comprising in the same housing at least a central 
processing unit and an input and output unit, 
whether or not combined 0.7 0.0 1     
850440 Static converters 0.7 2.5 2 2 1 1  
854231 Processors and controllers, whether or not 
combined with memories, converters, logic circuits, amplifiers, clock and timing circuits, or other circuits 0.7 0.0 1     
860900 Containers (including c ontainers for the transport 
of fluids) specially de signed and equipped for 
carriage by one or more modes of transport. 0.7 2.5 1 1  1  
950300 Tricycles, scooters, pedal cars and similar wheeled 
toys; dolls' carriages; do lls; other toys; reduced-
size ("scale") models and similar recreational models, working or not; puzzles of all kinds. 0.7 1.7 2 1  1  
611030 Jerseys, pullovers, cardigans, waist-coats & 
similar articles, knitted/cr ocheted, of man-made 
fibres 0.6 12.5  1   1 
640399 Other footwear without out er soles of  leather, not 
covering the ankle. 0.6 8.3 1 2   2 
844331 Machines which perform two or more of the 
functions of printing, copying or facsimile 
transmission, capable of connecting to an automatic data processing machine or to a network 0.6 2.5 1 1  1  
844332 Other, capable of connec ting to an automatic data 
processing machine or to a network 0.6 1.0 4 1  1  
852872 Other colour reception apparatus for television, 
whether/not incorporating radio-broadcast 
receivers/sound/video r ecording/reproducing 
apparatus 0.6 0.0 1     
854232 Electronic integrated circuits, memories 0.6 0.0 1     
Total of above  27.0  42 19 1 15 3 
 
Note: Based on HS 2007 nomenclature. 
 
Source:  WTO estimates based on data provided by New Z ealand, WTO-IDB and UNSD,  Comtrade database. WT/REG266/1 
Page 42 
 
 
  5. Table A.4 shows the market access conditions in  New Zealand for China's top 25 exports, 
which in 2005-2007 accounted for 27% of its global e xports.  Forty-two tariff lines (at the HS 8-digit 
level) were already duty-free on an MFN basis.  Out of 19 tariff lines which were dutiable, no line became duty-free upon the entry into force of the Agreement.  However, a further one, 15, and 
three lines are to become duty-free in 2008, 20 12 and 2016, respectively.  At the end of 
implementation none of China's top 25 exports will remain dutiable.  
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