EUROPEAN COMMUNITIES - MEASURES AFFECTING BUTTER PRODUCTS
Document: Request for Consultations by New Zealand
Date: 3 April 1997
Document codes: WT/DS72/1; G/L/157; G/TBT/D/12; G/LIC/D/4
Complainant: New Zealand
Respondent: EU
Third parties: U.S.
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. II:1(b), X:1, XI:1  GATT 1994Art. 3.3  Import LicensingArt. 2.2, 2.9, 2.11, 2.12  Technical Barriers to Trade (TBT)

EUROPEAN COMMUNITIES - MEASURES AFFECTING
BUTTER PRODUCTS
Request for Consultations by New Zealand
The following communication, dated 24 March 1997, from the Permanent Mission of
New Zealand to the Permanent Delegation of the European Commission and to the Dispute Settlement
Body, is circulated in accordance with Article 4.4 of the DSU.
My authorities have instructed me to request consultations with the European Communities
(EC) pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement
of Disputes (DSU), Article 14 of the Agreement on Technical Barriers to Trade (TBT Agreement),
Article 6 of the Agreement on Import Licensing Procedures and Article XXII:1 of the General Agreement
on Tariffs and Trade 1994 (GATT 1994) with regard to the recent decisions by the European Commission
and the United Kingdom’ s Customs and Excise Department (HMC&E) that New Zealand butter
manufactured by the AMMIX butter-making process and the spreadable butter-making process is not
“ manufactured directly from milk or cream” and with regard to their related actions excluding such
butter from eligibility for New Zealand’ s country-specific tariff quota (CSTQ) established by the EC’ s
WTO schedule. These decisions are contained, though not necessarily exclusively, in the following
documents1:
(i) a letter (dated 25 July 1996) from HMC&E to KPMG which attached correspondence
between the Director of DG VI of the European Commission and the Director of the
European Court of Auditors;
(ii) a letter (dated 23 January 1997) from Franz Fischler, the European Commissioner for
Agriculture,toDrLockwoodSmith, theNew Zealand Minister for InternationalTrade;
and
(iii) a letter (dated 24 January 1997) from Sir Leon Brittan, the Vice-President of the
European Commission, to Dr Lockwood Smith, the New Zealand Minister for
International Trade.
1Copies of which are available to any interested WTO Members from the Council Division of the
Secretariat.

New Zealand considers that these decisions and related actions by the European Commission
and HMC&E nullify or impair benefits accruing to New Zealand under its CSTQ for butter as contained
in the EC’ s WTO schedule (annexed to the Marrakesh Protocol to GATT 1994) and is of the view
that they are inconsistent, inter alia, with the GATT 1994, the TBT Agreement and the Agreement
on Import Licensing Procedures. The provisions of these agreements with which the decisions and
related actions would appear to be inconsistent include the following:
(i) Articles II, III, X and XI of the GATT 1994;
(ii) Article 2 of the TBT Agreement; and
(iii) Article 3 of the Agreement on Import Licensing Procedures.
New Zealand also considers that these decisions and related actions nul
lify or impair benefits accruing to New Zealand directly or indirectly under GATT 1994 within the
meaning of Article XXIII:1(b) of GATT 1994.
New Zealand reserves the right to raise additional factual matters and legal claims during the
course of consultations.
We look forward to receiving your reply to the present request and to setting a mutually
convenient date for the consultations. We would suggest that such consultations could be held some
time during the week beginning 21 April 1997.