RESTRICTED
WORLD TRADE G/SCM/Q2/NZL/4
12September 1996
ORGANIZATION(96-3537)
Original: English Committee onSubsidies andCountervailing Measures
SUBSIDIES
Replies toQuestions from theEUROPEAN COMMUNITY Regarding theNew
andFullNotification ofNEW ZEALAND1
Thefollowing communication, dated 27August 1996, hasbeenreceived fromthePermanent
Mission ofNewZealand.
_______________
TheEuropean Community hasposed questions astothebasis onwhich NewZealand has
determined eachofthefollowing programmes failstomeetthenotification requirements:
(a) Technology Advance Incentive
(b) Business Development Programme
- theBusiness Development Investigation Grant;
- theExport Assistance Scheme; and
- theEnterprise Growth Development Scheme
(c) Trade Development Board Assistance.
Technology Advance Incentive
TheFoundation forResearch, Science andTechnology hasnever heard ofaprogramme called
the“Technology Advance Incentive ”.However, theFoundation does administer anumber of
programmes including thePromotion ofTechnology forBusiness Growth.
TheNew Zealand Government hasdetermined thattheprogrammes administered bythe
Foundation donotfallwithin thenotification requirements. Theyarenotspecific noraretheycontingent
onexport performance. Article 2.1oftheSCM Agreement provides thatwhere asubsidy isgoverned
byneutral eligibility criteria, “specificity shallnotexist”andanalysis ofother factors ispermissible
onlyif“there arereasons tobelieve thatthesubsidy mayinfactbespecific ”.Theeligibility criteria
foralloftheprogrammes administered bytheFoundation areneutral, objective andautomatic and
arestrictly adhered to.
1G/SCM/N/3/NZL.G/SCM/Q2/NZL/4
Page2
Business Development Programme
Thethreeschemes referred tobytheEUhavebeenterminated. Anewprogramme waslaunched
inDecember 1995 andinvolves afundamental change. Where previously assistance wasdirected at
one-off projects, theProgramme nowhasanintegrated sequence ofinitiatives aimed atassisting
businesses togaintheskills theyneedtobemore competitive. Itcomprises:
- provision ofinformation, e.g.onNew Zealand ’soverall economic andregulatory
environment, trading activity andregional economies;
- business capability improvement. Inaddition toagrant scheme, thisinvolves business
appraisal, business training andeducation, andbusiness bestpractice education and
recognition initiatives.
Grants aredirected atimproving business capability andskills andarenotavailable tosubsidise
theexport ofgoods orservices.
Theavailability ofgrants islimited toorganisations which:
- arebased inNewZealand forthepurposes oftax;
- employ nomore thanfiftyfull-time orfull-time equivalent employees;
- produce goods orservices which already compete, orshow potential tocompete, in
either domestic orinternational markets;
- areatastage where agrant isappropriate, iethattheapplicants wishtotestorapply
skillsthattheyhaveacquiredorhaveaccesstothroughtheProgramme’strainingpackage
orthrough some other means.
Target groups areMaori, Pacific Island people andwomen.
Theappropriated budget forthisoutput for1996/97 is$NZ19.84 million. From theProgramme
launch on11December 1995 to31May1996 atotalof1,165 grants were approved toatotalof
$NZ3.96 million. Atthatstage only$NZ129,000 hadbeenpaidout.
Themaximum totalofgrants foranyoneapplicant is
- $NZ20,000 peryear; and
- $NZ50,000 foralltime
TheNewZealand Government hasdetermined thattheprogrammes administered under the
Business Development Programme donotfallwithin thenotification requirements. Theyarenotspecific
noraretheycontingent onexport performance. Article 2.1oftheSCM Agreement provides thatwhere
asubsidy isgoverned byneutral eligibility criteria, “specificity shallnotexist”andanalysis ofother
factors ispermissible onlyif“there arereasons tobelieve thatthesubsidy mayinfactbespecific ”.
Theeligibility criteria foralloftheprogrammes administered under theBusiness Development
Programme areneutral, objective andautomatic andarestrictly adhered to.G/SCM/Q2/NZL/4
Page3
Trade Development Board Assistance
TheNewZealand Trade Development Board “(TRADENZ ”)isaCrown Entity established
on1December 1988 under theprovisions oftheNewZealand Trade Development Board Act1988.
TRADENZ provides arange ofservices onacost-recovery basis toNewZealand companies. The
companies neednotbeexporters.
TRADENZ doesnotadminister aprogramme providing cashdisbursements toindividual
exportingcompanies.NewZealandauthoritieswerenotabletodeterminetheoriginoftheCommunity’s
reference to2,700 companies receiving suchbenefits. Thisseems tobeerroneous. Wecanonlyassume
thateither theCommunity isreferring totheIndividual Exporter Programme which wasterminated
in1991, ortheyareusing astatistic about thenumber ofcompanies TRADENZ works withovera
year.
ThemainbasisofTRADENZ ’soperation istoworkwithcompanies within collective groupings
(Joint Action Groups) orindividually. Companies arecharged forthose services which benefit them
individually. Services provided byTRADENZ areavailable toallcompanies based inNewZealand
andarenotcontingent upon export capability.
Most ofTRADENZ ’scostsareadministrative although asmall amount ($NZ1.55 million in
1994/95 outofatotalexpenditure of$NZ54.326 million) wasprovided toassist companies toparticipate
inselected trade missions andtrade fairswhere NewZealand participation hasbeencoordinated by
TRADENZ.
Inaddition some funding wasprovided tosupport projects developed byJointAction Groups
(JAGs). These collective projects must besupported bycompanies involved toatleast50percent
ofthecostbefore TRADENZ provides itssupport.
Eligibility forassistance inbothinstances isnotcontingent onexport performance.
TheNewZealand Government hasdetermined thattheservices provided byTRADENZ do
notfallwithin thenotification requirements. Theprogrammes arenotspecific andarenotcontingent
onexports ofanyproduct from NewZealand, nordotheyacttoreduce imports ofanyproduct into
NewZealand.