WORLD TRADE ORGANIZATION
ORGANISATION MONDIALE DU COMMERCE
ORGANIZACIÓN MUNDIAL DEL COMERCIOWT/TPR/M/115/Add.1
17 June 2003
(03-3230)
Trade Policy Review Body
12 and 14 May 2003Original:  English/
                 anglais/
                 inglés
TRADE POLICY REVIEW
NEW ZEALAND
Minutes of Meeting
Addendum
Chairperson:  H.E. Mrs. Mary Whelan (Ireland)
This document contains the advance written questions, and replies provided by New Zealand.1
__________________________________________________________________________________
Organe d'examen des politiques commerciales
12 et 14 mai 2003
EXAMEN DES POLITIQUES COMMERCIALES
NOUVELLE-ZÉLANDE
Compte rendu de la réunion
Addendum
Présidente:  S.E.  Mme Mary Whelan (Irlande)
Le présent document contient les questions écrites communiquées à l'avance et les réponses
fournies par la Nouvelle-Zélande.1
__________________________________________________________________________________
Órgano de Examen de las Políticas Comerciales
12 y 14 de mayo de 2003
EXAMEN DE LAS POLÍTICAS COMERCIALES
NUEVA ZELANDIA
Acta de la reunión
Addendum
Presidente:  Excma. Sra. Mary Whelan (Irlanda)
En el presente documento figuran las preguntas presentadas anticipadamente por escrito,
junto con las respuestas facilitadas por Nueva Zelandia.1
                                                     
1 In English only./En anglais seulement./En inglés solamente.WT/TPR/M/115/Add.1
Page 3
ADVANCE WRITTEN QUESTIONS BY MEMBERS AND
REPLIES PROVIDED BY NEW ZELAND
ARGENTINA
Report by the Secretariat
III.  TRADE POLICIES AND PRACTICES BY  MEASURE;  (2)  MEASURES DIRECTLY
AFFECTING IMPORTS;  (vi)  Import prohibitions, restrictions and licensing, page 35,
paragraph 32;  and (3)  MEASURES DIRECTLY AFFECTING EXPORTS;  (iii) Exportprohibitions and restrictions, page 45, paragraph 65
Question 1:  Import and export restrictions
Would the Government of New Zealand please detail the restrictions on imports and exports which it
maintains for health, safety, sanitary and phytosanitary and other reasons.
Answer - The Secretariat’s report describes many of New Zealand’s SPS-related restrictions on
imported foods, animals, plants, and other agricultural products, in section 2(ix) of chapter 3
(paras 48-53).  Import health standards and legislation applying to agricultural produce are freely
available on these websites: www. maf.govt.nz and www.nzfsa.govt.nz.   In addition, New Zealand
maintains a variety of border controls relating to, for example, strategic goods, offensive weapons,
hazardous waste and endangered species. These enable New Zealand to implement a range ofinternational obligations and to achieve certain environmental, health and security objectives. New
Zealand notes finally that it, like other WTO Members, is considering the content of its biennial report
on quantitative restrictions to the Council for Trade in Goods.
III.  TRADE POLICIES AND PRACTICES BY  MEASURE;  (2)  MEASURES DIRECTLY
AFFECTING IMPORTS;  (ix)  Sanitary and phytosanitary measures, pages 40-42,
paragraphs 48-53
Question 2:  Sanitary and phytosanitary measures
Does the Government of New Zealand anticipate modifying its sanitary measures in a way that
ensures that they are not trade restrictive? (Page xi, (4), paragraph 22, of the Secretariat Report
states that "For some products (most non-pasteurized cheese, fresh eggs and poultry), there are
currently no imports").
Answer - Like other WTO Members, the New Zealand Government balances the health risks that
imported goods can pose with the benefits resulting from trade, such as lower costs and wider choice
for consumers.  New Zealand is a strong advocate of the SPS Agreement and is committed to setting
standards at a level that is reasonable and that are based on scientific principles.  All WTO Members
benefit from multilateral commitment to science-based standards developed through consistent and
transparent processes.  Further detail on the import requirements for the specific products mentionedis available from New Zealand’s SPS Contact Point.WT/TPR/M/115/Add.1
Page 4
III.  TRADE POLICIES AND PRACTICES BY  MEASURE;  (3)  MEASURES DIRECTLY
AFFECTING EXPORTS;  (vi) Export finan ce, insurance and guarantees, page 48,
paragraph 72
Question 3:  Exporter assistance
Would the Government of New Zealand please explain how the proactive policies implemented by the
Export Credit Office are consistent with the new disciplines related to export finance, insurance and
guarantees. Are the costs, products financed with credit and total volume of exports known? Whichsectors or businesses have benefited from the assistance provided under this Scheme? What changes
were made to the Export Credit Scheme as a result of the review?
Answer - The operation of the New Zealand Export Credit Office (ECO) is fully consistent with the
WTO Agreement on Subsidies and Countervailing Measures and the OECD Arrangement on
Guidelines for Officially Supported Export Credits, which means it prices to cover all costs, includingcapital costs, in accordance with WTO rules. 
The Export Credit Office has a mandate not to compete with the commercial sector - so it only
provides medium-long-term products (as they are not provided in NZ by the commercial sector), and
it does not provide direct financing - preferring instead to work with commercial financiers to provide
loans to buyers of NZ exports.  Accordingly, the Export Credit Office provides medium-long-termtrade credit insurance. i.e., insurance of payment by the buyer for transactions with a credit term
greater than one year, and where the (useful) life of the export in question is longer than the intended
repayment term (telecommunications, transport, heavy engineering).
The changes implemented as a result of the review were designed to:
-c r e a s e  awareness of the ECO scheme  with a focus on increasing marketing and
education initiatives to exporters and financiers;
-i m p r o v e  usability  of the ECO’s main products (medium-log-term trade credit
insurance) through changes that make the ECO scheme comparable to other export
credit agencies (duration of cover, increasing the level of cover, the provision of
cover in main foreign currencies, and risk-sharing arrangements); and
- increase the capacity of the commercial sector , rather than replace it and ensure that
the ECO meets its international regulatory obligations.  As the New Zealand short-term insurance market is well serviced, and reinsurance is available for most risks, it
was agreed that the ECO only provide short-term reinsurance for higher risk
transactions when the ECO can cover its costs.
To date no sectors have benefited as there have been no approved applications.
III.  TRADE POLICIES AND PRACTICES BY MEASURE;  (4)  OTHER MEASURES
AFFECTING PRODUCTION AND TRADE;  (v)  Competition policy, pages 55-58,
paragraphs 98-105
Question 4:  Competition regulator
Would the Government of New Zealand please state what measures were taken to bring agriculture
into the jurisdiction of the competition regulator.WT/TPR/M/115/Add.1
Page 5
Answer - The Commerce Act covers all sectors unless specifically excluded. Therefore, agriculture is
covered by the Commerce Act 1986 and Fair Trading Act 1986, as outlined in the Secretariat's report,except for the sector-specific legislation in relation to dairy.
IV.  TRADE POLICIES BY SECTOR;  (3)  MANUFACTURING, pages 76-77,
paragraphs 30-34
Question 5:  Industrial development policy measures
Which sectors have been prioritized under the initiative to maintain proactive industrial policies
through the creation of a more supportive business and regulatory environment? What does the
implementation of "increased gov ernment assistance" consist of?
Answer - The Government has prioritised sectors in which it believes New Zealand has a comparative
advantage: biotechnology, information and communication technologies (ICT), and creative
industries.
In a wider context, the Government has taken a more proactive role to create an efficient business and
regulatory environment. This will be achieved through minimising compliance costs, specifying and
protecting property rights (including intellectual property), harmonising local laws and regulations
with international best practice and norms, and ensuring sound mechanisms for winding up failing
businesses. A recent example is the Electronic Transactions Act that facilitates the use of electroniccommunications. These objectives apply to all industries without discrimination and form part of the
Government’s Growth and Innovation framework.
"Better official assistance" ("increased government assistance" p.52, para 88) also refers to the
creation of a more efficient business and regulato ry environment. Regulatory reform to date has
concentrated on infrastructure such as telecommunications and electricity (as stated in para 88).
Industry NZ programmes provide information to assist businesses to build capabilities in management
and other generic business skills, such as accessing sources of finance.
Government Report
II.  NEW ZEALAND ECONOMIC POLICY, page 6, paragraphs 11-12
Question 6:  Policy measures to increase productivity and growth
Would the Government of New Zealand please describe what the "more interventionist policies"
referred to in the Government Report will be and how these would affect access to the New Zealandmarket and exports.
Answer - The New Zealand Government Statement does not refer to "more interventionist policies" to
be taken by the Government, but rather the Government has assumed a "more active role in economic
development".  At this stage in the evolution of the Growth and Innovation Framework the focus is on
the strategic development of policy in a medium term context. This work is in its early stages. Theobjective is to create the conditions that will support New Zealand businesses in making a stronger
contribution to New Zealand's economic growth and prosperity. This will not be achieved by erecting
barriers to access into the New Zealand market, but rather by assisting New Zealand businesses to
reach their full potential through fostering growth and innovation.WT/TPR/M/115/Add.1
Page 6
BRAZIL
I.  ANTI-DUMPING AND COUNTERVAILING MEASURES
1. In paragraph 33, of document WT/TPR/S/115, it is mentioned that 'There have been minor
changes to New Zealand's legislation on anti-dumpi ng and countervailing measures during the period
under review, resulting from its bilateral agreement with Singapore'.  Could New Zealand elaborate
more on those minor changes?
Answer - The following changes have been made  to New Zealand's anti-dumping and countervailing
legislation as a result of our Closer Economic Partnership agreement with Singapore:
- The de minimis  margin of dumping, in terms of Article 5.8 of the Anti-Dumping
Agreement, in the case of goods of Singaporean origin, is a dumping margin of less
than 5 percent, expressed as a percentage of the export price. (Article 5.8 requires that
a dumping margin is de minimis  if it is less than 2 percent).
- The volume of dumped imports of Singaporean origin shall normally be regarded as
negligible in terms of Article 5.8 of the Anti-Dumping Agreement, if those imports
account for less than 5 percent of the imports of the like product into New Zealand.
(Article 5.8 requires that the volume of dumped imports shall normally be regarded as
negligible if the volume of dumped imports from a particular country is found toaccount for less than 3 percent of the imports of the like product). The existing
cumulation provisions of Article 5.8 continue to apply.
- In terms of Article 11.3 of the Anti-Dumping Agreement and Article 21.3 of the
Agreement on Subsidies and Countervailing Measures, the specified period that anti-
dumping and countervailing duties will ap ply to goods of Singaporean origin is
3 years, unless a review is initiated before the expiry of the 3 year period. (Articles
5.8 and 21.3 specify that anti-dumping and countervailing duties will expire 5 yearsafter they were imposed or last reviewed, unless a review is initiated before the expiry
of the 5 year period).
The effect of the changes is therefore to apply higher thresholds than are provided for in the Anti-
Dumping Agreement before New Zealand can apply anti-dumping duties on goods of Singaporean
origin and to reduce the period when duties on goods of Singaporean origin either expire or arereviewed.
2. Also in paragraph 33, it is mentioned that 'Final determinations of dumping or unfair
subsidization, according to the legislation, would be taken within 180 days of initiation of an
investigation'.  Could New Zealand explain the meaning of the expression 'unfair subsidization' and
its relationship with the categories of subsid ies referred in the Agreement on Subsidies and
Countervailing Measures?
Answer - Unfair subsidisation is a reference to any specific subsidies in terms of Part I of the
Agreement on Subsidies and Countervailing Measures and does not have any wider meaning.
3. In paragraph 33 it is mentioned that 'No measures may remain in force beyond a period of
five years from imposition of duty or undertaking, un less a review is initiated.  Any review must be
initiated before the expiry date of the original duty.  The procedures for a review are the same as
those for initial investigations'.  Considering the information provided in paragraph 35, that is,
13 anti-dumping investigations initiated since 1995 we re terminated with final measures, could NewWT/TPR/M/115/Add.1
Page 7
Zealand inform the current status of these cases?   Have some of these anti-dumping measures been
reviewed?  If it is the case, how many measures were rescinded after their review?
Answer - The following data sets out the current status of the 13 cases since 1995 where anti-dumping
duty was imposed:
- Duties still in place 8
- Duties terminated 5
Of the 13 cases, four have been reviewed, one of which resulted in the termination of the duty (one
other case is currently subject to a review which has yet to be completed). In four cases the duties
ceased 5 years after they were imposed because no interested party requested a review.
4. With regard to the countervailing measures adopted on the basis of investigations initiated
between 1995 and 1997, what is the current status of those measures?  Were they reviewed?  And if
so, how many of them were rescinded?
Answer - There have been four cases since 1995 where countervailing duty was imposed and their
current status is as follows:
- Duties still in place 1
- Duties terminated 3
Of the four cases, two have been reviewed and both cases resulted in the termination of the duty (one
other case is currently subject to a review which has yet to be completed). In one case the duties
ceased 5 years after they were imposed because no interested party requested a review.
5. Considering the data presented in Chart III.3 ('Anti-dumping cases, 1 January 1996-
20 December 2002;  By number of cases initiated').  Could New Zealand explain the meaning of the
expression 'pending cases' and conciliate the existence of 'pending cases' related to investigations
initiated in 2000 with the time-limit of 180 days of  initiation for final determinations of dumping be
taken, referred in paragraph 33?
Answer - Pending cases in Chart III.3 are those which were initiated, but not completed at the end of
the year. The chart shows that at the end of 2000 there was one case pending and that in 2001 there
was one case completed where no final measures were imposed. The one case pending at the end of
2000 is the same case that was completed in 2001 without the imposition of final measures.
6. In paragraph 34, it is mentioned that 'Article 15.8 of the ANZCERTA, moreover, allows one
member state to request the other to take action, consistent with its international obligations, against
alleged dumping by third country'.  Could New Zealand inform whether any action has been taken
against alleged dumping by a third country?  In case of a positive answer, please indicate them.
Answer - No duties have been imposed by New Zealand against alleged dumping by a third country.
II.  GOVERNMENT PROCUREMENT
7. Does New Zealand have any law to favour small business in gover nment procurements?
Answer - No. Guiding principles of the government  procurement policy approach include full and fair
opportunity for suppliers, including small business, to compete on the basis of value for money.
Agencies, however, are free, and motivated by tight budgetary controls to seek best value for moneyWT/TPR/M/115/Add.1
Page 8
in an open and competitive market without discriminating in favour of or against any group of
suppliers.  See also answer to Brazil question 14.
8. Are bidding processes of the Department of  Defence excluded from the coverage of the
Australia-New Zealand Government Procurem ent Agreement (ANZGPA) and other bilateral
agreements?
Answer - The Ministry of Defence and other defence agencies are subject to government procurement
policy that takes into account, inter alia, New Zealand's international trade obligations, includingunder the Agreement between New Zealand and Singapore on a Closer Economic Partnership
(ANZSCEP), the Australia - New Zealand Closer Economic Relations Trade Agreement
(ANZCERTA), and the Australia-New Zealand Government Procurement Agreement (ANZGPA).
We note that Article 55 (e) of ANZSCEP and Article 18(a) of ANZCERTA provide for exemption
from the non-discrimination provisions of the Agreement where national security is a consideration indefence procurement of a strategic nature.
Is there any other entity/agency excluded from the coverage in commercial agreements where New
Zealand is Party?
Answer - The government procurement agreements to which New Zealand is party (ANZGPA and
chapter 18 of the Singapore New Zealand Closer Ec onomic Partnership Agreement) cover only those
entities over which the government has direct c ontrol (i.e. government departments and statutory
agencies), and exclude entities which are bodies corporate contracting in their own right.
What kinds of restrictions exist in the Department of Defence procurements?
Answer - New Zealand’s defence procurement is normally conducted on an open and competitive
basis.  From time to time, however, there may be a need for Defence to acquire capability on a
Government-to-Government basis or through non-competitive means for inter-operability,
standardisation or security reasons.
9. Which are the offsets allowed in the New Zealand bidding process?
Answer - Under New Zealand’s informal voluntary offsets policy, purchasing agencies are free to
consider commercially viable offsets proposals which support their agency goals.  There is no
prescription as to types of offsets allowed.
10. Are concessions treated in the government procurement universe?  Are foreign companies
allowed to participate in bids concerned with concessions?
Answer - The government procurement policy has general application to acquisition of goods and
services by government agencies by purchase, hire, lease, rental, exchange and outsourcing
arrangements.  This would in principle include acquisition through grant of concessions by
government agencies, and the normal policy principles of transparency, competition and non-discrimination would apply.  There are no a priori  requirements to exclude foreign companies from
bidding.  See also answer to Brazil question 15.
11. Which classification system is employed for goods, services and public works in New
Zealand.WT/TPR/M/115/Add.1
Page 9
Answer - There is no system specific to government procurement.  The Australia New Zealand
Standard Industrial Classification (ANZSIC) system is used for statistics of industrial and economicactivity in general.  For international trade statistics, New Zealand subscribes to the Harmonised
System (Harmonised Commodity De scription and Coding System).
12. Regarding paragraph 57 of document WT/TPR/S/115, p. 43, is there a possibility for potential
foreign suppliers to be included in the lists of suppliers used by federal government agency entities?
If affirmative, how should those suppliers proceed to be included?  Which are the requirements to bequalified in those lists?  Is there preferential treatment in this regard for suppliers from any
region/country besides bilateral trades?
Answer - The Policy Guide for Purchasers (referred to in answer to Brazil question 14 below) states
that existing preferred suppliers lists should be open for application by new suppliers at any time, and
an invitation to apply should be advertised at reasonable intervals.  There is also, however, an onus onsuppliers, domestic or foreign, to take the initiative and apply to individual agencies which may be
interested in products or services they have to offer (there is no central qualification system).  In
accordance with the policy principle of non-discrimination, such lists are open to application by
foreign as well as domestic suppliers and qualification is on the basis of objective criteria without
preferential treatment based on nationality of suppliers.
13. Also regarding paragraph 57, it is mentioned that 'large and complex purchases are involved,
agencies may prefer to issue tenders selectively to certain companies or identify potential suppliers
through a staged process'.  In this situation, is the tender published and are the offers of other
companies other than the invited ones accepted?
Answer - In the situation referred to, provided that agencies have identified a reasonable range of
qualified and competitive suppliers through preliminary open invitation to register interest, or through
appropriate market research, the tender need not be published or offers accepted from othercompanies.  To do so would be to introduce unnecessary cost and inefficiencies in the procurement
process (for both suppliers and buyers).
14. Is there a consolidated and unique national legislation on guidelines and procedures on
government procurement or does each entity/agency/state/territory have its own?
Answer - There is no legislation specific to government procurement.  New Zealand has a
decentralised public sector management regime.  In this context, the overall government procurement
policy aim is to maintain an open and competitive market in which each agency is free to seek best
value for money in terms of its own requiremen ts, through its own procurement procedures and
market-based decisions.  For a full explanation of the policy approach, see Government Procurement
in New Zealand: Policy Guide for Purchasers (July 2002) http://www.med.govt.nz/irdev/
gov_pur/purchasers/index.html.  This is complemented by good practice guidance from the Office of
the Auditor-General in the publication, Procurement: a Statement of Good Practice  (June 2001)
http://www.oag.govt.nz/HomePageF olders/Publications/Procurement_Guide/Procurement_guide.htm
15. Does New Zealand use the Build Operate Trans fer (BOT) as a purchasing method?  Is the
Build Operate Transfer (BOT) included in the coverage of commercial agreements?
Answer - BOT-type arrangements are not very co mmon in public sector procurement in New Zealand,
but may occur from time to time e.g. in transpor t infrastructure development ("toll bridges/roads").
Existing government procurement agreements (ANZGPA and Chapter 18 of the SNZCEP Agreement)
cover non-corporatised central government departments and statutory agencies, which are unlikely toWT/TPR/M/115/Add.1
Page 10
be involved in such projects.  The Government would, however, encourage other agencies involved to
abide by the principles of the government procurement policy, including international non-discrimination commitments.
III.  MARKET ACCESS
16. Which authorities are in charge of issuing certificates of origin in New Zealand?
Answer - Chambers of Commerce issue certificates of origin in New Zealand.
17. What are the required procedures for availing oneself of customs' deferred payment system?
Answer - The New Zealand Customs Service Deferred Payment Scheme (DPS) is a scheme which
allows importers to defer the payment of Customs charges (including Goods and Services Tax)
accounted for on Customs import entries.
All importers can apply to be registered onto th e DPS by completing and submitting the following:
1. Application for Deferred Paym ent Registration form (NZCS 614);
2. Authority to Accept Direct Debits form (NZCS 615);
3. Guarantee for Payment of Sums Due to the New Zealand Customs Service form
(NZCS 609) / credit check application fee of $100 (payable by cheque);
4. Appropriate identification, for example, a Certificate of Incorporation for a company.
The credit check application fee enables Customs to obtain a review of the applicant by an approved
credit agency.  If this credit check is unsatisfactory,  the applicant will need to supply a security to
obtain approval to be admitted to the DPS.  However, Customs will discuss with the applicant the
reasons why a security is required.  It is also possible to appeal to the Customs Appeal Authority if the
applicant is unhappy with the decision.
No security for payment will be required unless the applicant is:
- An overseas registered company;  or
- A trust;  or- Has been cancelled off the scheme and is applying to be reinstated;  or
- Did not receive a satisfactory credit check.
The term overseas registered company includes a company registered as an overseas company
pursuant to Part XVIII of the Companies Act 1993.
The guarantor can only be a New Zealand based bank or insurance company.  Personal or company
guarantees are not acceptable.  The guarantor agrees to cover each and every sum deferred up to an
overall maximum amount, which may, at any time, be outstanding.  This amount is the credit limit.  It
must be enough to cover all liabilities at any one time.
Once admitted onto the DPS, the company must quote its Client Account Number on each import
entry form when clearing importations.
A Fact Sheet fully explaining operation of the Deferred Payment Scheme is available from the New
Zealand Customs Service website (www.customs.govt.nz), under Library – Fact Sheet 17.WT/TPR/M/115/Add.1
Page 11
CANADA
Secretariat Report (WT/TPR/S/115)
II.  TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES;  (3)  TRADE POLICY
OBJECTIVES;  para 10
1. This paragraph is one of several references to New Zealand's shift away from unilateral
tariff-cutting in the period since 1999.  There is now a government-commissioned independent review
of the earlier unilateral tariff-cutting approach which, among other things, recommends a resumptionof such cuts by 2005 in such a manner that there will be essentially no tariffs applicable on entry into
New Zealand by 2010 B the APEC target date for free trade and investment.  What is the
government's timetable for decisions about resuming (or not) the unilateral tariff-cutting approach?
Answer - A Tariff Review is currently underway and decisions on tariff policy beyond 1 July 2005 are
likely to be taken by the Government mid to late 2003.
II.  TRADE POLICE REGIME:  FRAMEWORK AND OBJECTIVES;  (5)  FOREIGN
INVESTMENT REGIME;  (ii)  Legislativ e framework and procedures;  para 32
2. Paragraph 32 outlines the criteria used to evaluate applications for investment.  These
include whether or not the overseas person has relevant business experience and acumen and if they
are of good character.  How are these criteria assessed and is that assessment available to theoverseas person for review?
Answer - All applications are assessed on a case by case basis taking into account all relevant
information and the extent to which Ministers are satisfied the criteria under the Act and Regulations
have been met.
A Guide to making an application under the Overseas Investment Regulations 1995 (available at
www.oic.govt.nz/guide/53545.pdf) provides a g ood summary of the information required.
The Commission provides applicants with a decision sheet that details the reason(s) for the decision
on the application.  Applicants are able to apply to the High Court of New Zealand to challenge
decisions relating to applications.
II.  TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES;  (5)  FOREIGN
INVESTMENT REGIME;  (ii)  Legislativ e framework and procedures;  para 35
3. Paragraph 35 describes the role of the Ov erseas Investment Commission in reviewing
investment applications.  What is the percentage of applications that are rejected each year and are
rejected applications accompanied by an explanation?  Is there an appeal mechanism for rejected
applicants?
Answer - The rejection rate is very low.
In the year to December 2002 there were 257 applications. Of these 248 were approved and 9 were
refused – this was approximately 3.5%.
In the year to December 2001 there were 241 applications. Of these 239 were approved and 2 were
refused – this was less than 1%.WT/TPR/M/115/Add.1
Page 12
As noted above the Commission makes available to the applicant a decision sheet that details the
reason(s) for the decision. Applicants are able to a pply to the High Court of New Zealand to challenge
decisions relating to applications.
III.  TRADE POLICIES AND PRACTICES BY  MEASURE;  (2)  MEASURES DIRECTLY
AFFECTING IMPORTS;  (vi)  Import prohibit ions, restrictions, and licensing;   para 32
4. The second sentence of this paragraph talks about import bans or restrictions being in place
for "health and safety reasons or in compliance with international conventions to which New Zealandis party."  This is not the case vis-à-vis the current 4-year prohibition on the import of trout.  What
policy justification does New Zealand advance for the trout import ban and what efforts are being
made during its current period of application to identify less trade restrictive means by which to meet
the policy objectives?
Answer - The Customs Import Prohibition (Trout) Or der 2001 restricts but does not ban the import of
a limited and specific list of trout species for 3 (not 4) years. The Order operates in conjunction with
the domestic statutory prohibition on the sale of trout contained in the Conservation Act
(Section 26ZQ).  The Order, which provides for the importation of non-commercial quantities of trout
for personal consumption, is set to expire in November 2004. The Order is subject to regular review.
III.  TRADE POLICIES AND PRACTICES BY  MEASURES;  (3)  MEASURES DIRECTLY
AFFECTING EXPORTS;  (v)  Export monopolies;  Table III.3 - State Trading Enterprises,
1995 and 2002
5. With reference to New Zealand Kiwifruit Marketing Board, please explain what is meant by
"an automatic, although not a sole right to export" for both Zespri Limited and Enza Limited?
Answer - The Kiwifruit Industry Restructuring Act was enacted in September 1999.  On 1 April 2000
the Act converted the New Zealand Kiwifruit Marke ting Board into a company, Zespri Group Limited
and distributed shares in Zespri Group Limited to kiwifruit growers.  Zespri Group Limited retains itsautomatic right to export, as provided to its predecessor the Kiwifruit Marketing Board.  Other
exporters of kiwifruit, other than for consumption in Australia, must be approved to implement a
collaborative marketing plan by Kiwifruit New Zeal and (a regulatory board) to market kiwifruit in
overseas markets other than Australia with Zespri Group Limited.  Currently any entity can export
kiwifruit for consumption in Australia.
The Government enacted legislation in September 2001 removing regulatory barriers to the export of
apples and pears from New Zealand.  ENZA’s specific export rights were terminated on
30 September 2001 and from that date is has been required to compete on equal legal grounds with
any other pipfruit exporter.
III.  TRADE POLICIES AND PRACTICES BY  MEASURE;  (3)  MEASURES DIRECTLY
AFFECTING EXPORTS;  (vi)  Export finance, insurance and guarantees;  para 72
6. Please provide details on the commodities eligible for coverage under the Export Credit
Scheme, and further information on how the te rms and conditions supported would compare with
what is commercially available.
Answer - The operation of the New Zealand Export Credit Office (ECO) is fully consistent with the
WTO Agreement on Subsidies and Countervailing Measures and the OECD Arrangement onWT/TPR/M/115/Add.1
Page 13
Guidelines for Officially Supported Export Credits, which means it prices to cover all costs, including
capital costs, in accordance with WTO rules.
The Export Credit Office has a mandate not to compete with the commercial sector - so it only
provides medium-long-term products (as they are not provided in NZ by the commercial sector), and
it does not provide direct financing - preferring instead to work with commercial financiers to provideloans to buyers of NZ exports.  Accordingly, the Export Credit Office provides medium-long-term
trade credit insurance. i.e., insurance of payment by the buyer for transactions with a credit term
greater than one year, and where the (useful) life of the export in question is longer than the intendedrepayment term.
As the life of the export must be longer than the repayment term, and the minimum repayment term is
one year, the Export Credit Office's key export sectors include heavy manufacturing and capital goods
and services (telecommunications, transport, heavy engineering).
III.  TRADE POLICIES AND PRACTICES BY  MEASURE;  (3)  MEASURES DIRECTLY
AFFECTING EXPORTS;  (vii)  Export prom otion and marketing assistance;  para 74
7. Please provide details on the nature of the "export promotion" activities of Trade New
Zealand, and the commodities eligible for support under this program.
Answer - Trade New Zealand provides a range of consultancy services, most of which are customised
to the individual company or network of companie s, and are part-funded by those companies.  The
services are available to all sectors.  The suite of services delivered by Trade New Zealand includes:
providing market intelligence and research; matching market opportunities to client export
capabilities; identifying prospective customers; delivering trade inquiries to appropriate exporters;running education, communications and marketing programmes to disseminate market intelligence
and promote Trade New Zealand services; facilitating  clients’ use of e-business; organising outward
missions, offshore events and other strategic in-market group activities; organising inward missions,
including trade media, prospective buyers and industry experts; arranging translation and
interpretation services; providing capability development services; advising on barriers to trade.
Trade New Zealand also provides a range of generic promotional services:
- Promoting the export capability of New Zealand companies to overseas buyers
through the media and through the internet channel i.e. MarketNewZealand.com.
- Promotion of New Zealand as a country of origin of quality products and services
across a range of sectors through offshore events, conferences and associatedpromotional activities.
- Publishing an electronic news service on Trade New Zealand's website, and
publishing a  magazine on a bi-monthly basis
- Highlighting export success and promoting the benefits of exporting through a range
of activities, including an ongoing programme of export awards.
IV.  TRADE POLICY BY SECTOR;  (2)  AGRICULTURE;  (iii)  Export policy;  para 12
8. Please provide further details on the "requirement that all other exporters must export in
collaboration with Zespri".
Answer - As answered above, Zespri Group Limited retains its automatic right to export, and other
exporters of kiwifruit, other than for consumption in Australia, must be approved to implement aWT/TPR/M/115/Add.1
Page 14
collaborative marketing plan by Kiwifruit New Zealand (a statutory regulatory board established
under the Kiwifruit Industry Regulations Act 1999) to market kiwifruit in overseas markets withZespri Group Limited.  Any entity can export kiwifruit for consumption in Australia.  Applications
from other prospective exporters, to export kiwifruit in collaboration with Zespri, are assessed and
decided on by Kiwifruit New Zealand.  Private trader s can export kiwifruit to Australia without prior
permission of Kiwifruit New Zealand and inde pendent of collaboration with Zespri.
IV.  TRADE POLICY BY SECTOR;  (4) SERVICES;  (i) Overview
9. According to paragraph 35, computer and information services represent one of New
Zealand’s two fastest growing services exports since 1996/77.  Please provide further background
regarding the success of your computer and information services sectors and please highlight your
experience with regards to liberalization in this area.
Answer - Exports of computer and education serv ices, and software have increased from NZ$127M in
1997 to NZ$486M in 2002 according to Statistics NZ survey results.  Communications services
exports are additional but statistics are not available for the years 2001 and 2002.  It is expected that
these have remained at about the same level as in the 1998 to 2000 period at around NZ$230M.
Further information for the period to 2001 are available at http://www.med.govt.nz/
pbt/infotech/itstats2002/part01/index.html.  New statistics including 2002 figures will be availableshortly.
Since the major telecommunication reforms of the 1980s, there has been no regulatory change of
relevance.  The IT hardware software and services sectors have all expanded steadily over this period.
The increased export figures represent a changing emphasis in the industry from domestic to
international commercial opportunities, especially in the educational services area.
IV.  TRADE POLICY BY SECTOR;  (4) SERVICES;  (ii) Financial Services
10. Please advise whether the government adminis ters a deposit insurance scheme for banking
customers. If so, how is it funded?
Answer - There is no deposit insurance in New Zealand.
11. Please give an indication of the level of foreign ownership or market share in the insurance
sector.  By how much has this level changed in the last decade?
Answer - In very general terms, the insurance sector  is dominated by insurers that are foreign-owned,
and has been over the last decade. These insurers write the majority (approximately 70% for life
insurance and 85% for general insurance) of both life and general insurance, calculated by net
premiums. This has changed little over the last decade.
A more specific answer is more difficult, however. The answer depends on the interpretation of the
phrase "foreign ownership or market share". Foreign ownership (in the sense that the ultimate parentis not NZ based) was easier to identify when life insurance companies were all mutuals a decade ago.
On the basis of premium income, the majority of insurers would have foreign owned.
Today, however, the position is complicated by the demutualisation of insurers. Companies such as
AXA, AMP and Tower are now public-listed companies with large and diversified shareholdings.
Tower, for example, is a NZ company listed on both the NZ and Australian stock exchanges. It hasWT/TPR/M/115/Add.1
Page 15
numerous shareholders from both countries, making it difficult to ascertain the exact proportion of the
insurer owned by New Zealanders.
Viewed from the perspective of where the ultimate parent company is domiciled, New Zealand’s
insurance market has not changed to any great degree over the last decade. The ultimate parents of the
large premium income earning life insurers and mo st of the large premium income earning general
insurers are based overseas, most commonly in Australia or the UK. Companies whose ultimate
parents are domiciled overseas earn the majority of the life insurance premiums. Betweenapproximately 80% and 90% of the general insurance premiums are earned by companies whose
ultimate parents are domiciled overseas.
IV.  TRADE POLICY BY SECTOR;  (4) SERVICES;  (ii) Financial Services;  para 46
12. Paragraph 46 states, "Financial institutions in New Zealand do not need to be registered to
provide banking services, but they do need to be registered to call themselves a bank.”
a) Please explain the scope of business of the unregistered banking services industry and its
relative size to the aggregate size of registered banks (i.e., how important are unregistered banking
services providers in the financial system).
Answer - Registered banks dominate the financial sector in New Zealand. They make up
approximately 94% of deposit taking financial institutions (measured on the basis of assets).
Legally there are no constraints on a non-bank financial institution’s ability to provide banking
products and virtually any product typically available from a bank is also available from a non-bank
financial institution.
b) Can these unregistered entities accept deposits?
Answer - Yes they can. (Note some, such as building societies, are registered under other legislation.)
c) Are these unregistered entities subject to any regulation, or is the scope of their commercial
activities limited?
Answer - Deposit takers and other issuers are subject to Securities Act requirements. Under this Act
non-bank deposit taking financial institutions are required to issue prospectuses and are required to be
supervised by independent trustee corporations and to register for public inspection purposes a trust
deed which sets out the basis on which that supervision is to be conducted. These deeds contain
financial covenants that must be met throughout the term of the investments being offered.  Sometypes of non-bank financial institution eg credit unions are also subject to additional regulatory
requirements administered by the Ministry of Economic Development.
d) Is it typical that an entity providing unregistered banking services would be registered to
provide other financial services (i.e., in the insurance or securities sectors)?
Answer - Some are required to register under other legislation e.g. building societies and credit
unions, while others such as finance companies are not required to be registered.
IV.  TRADE POLICY BY SECTOR;  (4)  SERVICES;  (ii) Financial Services;  para 47
13. Paragraph 47 states, "Kiwibank was created to take advantage of the existing New Zealand
Post network and in response to New Zealand Post’s wish to diversify into other business areas givenWT/TPR/M/115/Add.1
Page 16
the prospect of reduced volumes in its core mail delivery business."  The perception that Kiwibank
deposits might benefit from an implicit government guarantee could confer it with an advantage over
private banks, which do not enjoy such a guarantee.
a) Please advise whether this is an accurate representation of perceptions surrounding
Kiwibank.
Answer - The Government has made it clear that New Zealand Post is required to run Kiwibank as a
fully commercial operation and that the Government does not guarantee its operations (see answer to(b)).  In the past the Government has allowed some SOEs (state owned enterprises) to fail.
b) Is there an implicit government guarantee of Kiwibank’s operations?  If not, has New
Zealand attempted to dispel this myth?
Answer - Disclosure statements issued by Kiwibank include the following statement:  "The Crown
does not, expressly or impliedly, guarantee the obligations of Kiwibank."
Also, the Minister of Finance has gone on record as saying that (Kiwibank) "will have to stand or fall
on its commercial merits".
c) Please advise whether any market impact studies were conducted to assess the effect of a new
public bank on the operations of private competitors.
Answer - No such studies were conducted by public sector agencies. Under the bank registration
policy administered by the Reserve Bank,  there is relatively open access to the banking market,
subject to minimum prudential standards being met.  To quote from the Statement of Principles –
Bank Registration and Supervision, issued by the Reserve Bank:
"Bank registration policy is aimed at ensuring that only financial institutions of appropriate
standing and repute are able to become registered banks. Subject to this requirement,
impediments to the entry of new registered banks are kept to a minimum in order to
encourage competition in the banking system. This approach recognises that competition canbring significant benefits to users of the services provided by registered banks. There is no
upper limit on the number of registered banks."
d) Please indicate whether an effort was made to avoid a negative impact on the profitability of
private competitors when devising Kiwibank’s business strategy.
Answer - Banks in New Zealand are profitable and therefore well placed to withstand competition
from a new entrant to the banking market. In some cases they have adjusted their pricing to meet
competition from Kiwibank, but this does not appear to have had any material impact on their
profitability.
New Zealand Post approached the decision to enter the banking market purely on a normal
commercial basis.
e) Does Kiwibank enjoy any different or more beneficial treatment than other banks (e.g.,
lighter regulatory regime, special tax treatment, or reduced capital requirements)?
Answer - No. Kiwibank is subject to exactly the same requirements as every other bank.WT/TPR/M/115/Add.1
Page 17
IV.  TRADE POLICY BY SECTOR;  (4)  SERVICES;  (ii)  Financial Services;  para 54
14. Paragraph 54 states, "Up to 2000, a bank could choose to operate in New Zealand as a
branch of an overseas bank or as a locally incorporated subsidiary.  This position was reassessed by
the RBNZ in 1999 as part of a review of its bank failure management policies.  Following this review
and consultation with the industry, it was decided to require a bank to incorporate locally if it is
considered important in the system ", or if it has significant retail deposits (i.e. $NZ200 million) from
countries that do not provide equal treatment to creditors in a wind-up situation, or where disclosureis not comparable with New Zealand's requirements.
Please advise whether the new incorporation requirements have led to any foreign banks converting
from a branch to a subsidiary.
Answer - No existing banks have been required to convert from a branch to a subsidiary as a result of
the policy.
IV.  TRADE POLICY BY SECTOR;  (4)  SERVICES;  (ii)  Financial Services;  para 63
15. Paragraph 63 states, "The Registrar of Companies may inspect a company to assess its
financial standing.  The Insurance Council of New Zealand Inc. monitors the solvency of its own
members (i.e., general insurers).  Companies that are not members of the Insurance Council are
regulated under the general law."
a) Please indicate whether there is a process in force for the regular inspection of companies
that are not members of the In surance Council of New Zealand.
Answer - The CEO of the Ministry of Economic Development receives annual audited insurance
returns from all general insurance companies, whether or not they are members of the Insurance
Council. New Zealand, since 1994, has had in place a ratings regime where general insurers (with
some exceptions) are required to obtain annually a rating from an approved ratings agency, as
described in paragraph 62 of Ch IV. This is itself a process for regular inspection of insurers by thoseagencies.
The Registrar of Companies also has wider supervis ory powers for some insurers arising from his role
as a regulator of financial reporting and securities. Where an insurer is an issuer, the insurer must
annually file audited financial statements with the Registrar. Where debt or participatory securities are
offered by the insurer, the prudential supervisor is required to report to the Registrar where the issueris insolvent or likely to become insolvent.
The Insurance Companies (Ratings and Inspections) Act 1994 provides the Registrar of Companies
with inspection powers, but is used because of part icular circumstances, to carry out inspections to
determine whether an insurer is solvent, ra ther than to carry out regular inspections.
The Corporations (Investigation And Management) Act 1989 allows the Registrar of Companies to
request and obtain information and documents and carry out an investigation of the affairs of a
corporation for the purpose of determining whethe r to give notice to the corporation that it is
considered to be a corporation at risk or whether to  give directions to such a corporation or whether
the corporation should be placed in statutory management.WT/TPR/M/115/Add.1
Page 18
b) What proportion of general insurance companies belongs to the Council?
Answer - There are 65 general insurers operating in New Zealand. This includes health insurers and
life insurers transacting disability insurance, but excludes captive insurers. (The figure would be
significantly smaller if health and disability insurers are not calculated to be general insurers.) 21 are
members of the Council. These include the largest general insurers. Members of the Council transact
approximately 95% of the general insurance business in New Zealand, calculated by premiums.
c) Does the Registrar of Companies also inspect life insurance firms for solvency?
Answer - The CEO of the Ministry of Economic Development receives annual life insurance returns
that are required to be passed on to the Government Actuary for review. The comments in
paragraph a) apply in respect of life insurers as much as other insurers, with the exception of the first
subparagraph of a), dealing with returns and ratings.
III.  TRADE POLICIES AND PRACTICES BY MEASURE;  (3) MEASURES DIRETLY
AFFECTING EXPORTS;  (iii) Export prohibitions and restrictions;  para 65
16. Could the government of New Zealand expl ain the "marketing reasons" respecting the
maintenance of export restrictions for certain agricultural products?
Answer - The Government enacted legislation in September 2001 authorising the merger of New
Zealand’s two largest co-operative dairy companies (New Zealand Co-operative Company Ltd andKiwi Co-operative Dairies Ltd) and the New Zealand Dairy Board.  The legislative provisions
providing monopoly export status to the New Zealand Dairy Board were removed.  The remaining
marketing restrictions exist for some products including certain specified cheese, butter and some
milk powders for export to a small number of designated markets.  This is necessary to manage the
transition period after the removal of the Dairy Board’s export monopoly.  The designated markets are
those where certain import restrictions are in effect.  Other than in these circumstances any entity can
export dairy products from New Zealand.
In terms of horticultural products, the New Zealand Horticulture Export Authority (HEA) was
established in 1987 under the Horticulture Export Authority Act 1987.  The primary function of the
HEA is to promote the effective export marketing strategies of producers and exporters of
horticultural products.  This mechanism is available at the request of product groups, as representative
of growers and exporters of a product, and can revoke inclusion of their product group from the Act.Horticultural products, within the provisions of the HEA Act, include apricots, avocados,
blackcurrants, boysenberries, cherries, chestnuts, peaches, persimmons, plums, squash, table grapes,
tamarillos and truffles.
The marketing restrictions on kiwifruit (as described in answer to an earlier question from Canada)
were supported by growers at the time of their introduction.  The kiwifruit industry in recent times hasbeen innovative and forward-looking, and is al so showing a tendency to expand collaborative
marketing opportunities within the framework of the Kiwifruit Export Regulations 1999.  The New
Zealand Government is not considering deregulation of kiwifruit exporting at present.
CHILE
1. New Zealand has recently decided to freeze its unilateral tariff reduction programme.
Although we recognize that the overall average bound and applied tariffs are very low, there still are
some sensitive sectors that remain with high applied tariffs.  How does New Zealand plan to faceWT/TPR/M/115/Add.1
Page 19
tariff reductions in sensitive sectors such as clothing and textiles?  Are there strategies or policies
that will enable New Zealand to carry out reductions in these sectors?
Answer - The current tariff review covers all indust ries, including the clothing and textiles industries.
The review will include a wide-ranging assessment of the impacts of previous tariff reduction as well
as projected impacts of any further tariff reduction on all sectors of New Zealand, including the
textiles, clothing and footwear (TCF) sector. The re view will also include an analysis of social,
gender, ethnic and regional impacts as well as consider what is happening in the international context.
2. As an agricultural exporter, Chile is concerned about the fact that New Zealand's SPS
procedures and regulations seem to be more stringent than necessary.  What intentions does New
Zealand have in respect to fostering trade facilita tion through improvement of its SPS procedures and
regulations?
Answer - New Zealand does not accept that our SPS procedures and regulations are more stringent
than necessary.  New Zealand depends on the import and export of food, animals, plants, and other
agricultural goods for our prosperity.  We see trade and safety objectives as inextricably linked.  Like
other WTO Members, the New Zealand Government balances the health risks that imported goods
can pose with the benefits resulting from trade, such as lower costs and wider choice for consumers.
New Zealand is a strong advocate of the SPS Agreement.  All WTO Members benefit from
multilateral commitment to science-based standards developed through consistent and transparent
processes.  Further detail on the import requirements for specific products mentioned is available from
New Zealand’s SPS Contact Point.  New Zealand also implements the principle of "equivalence"
embodied in Article 4 of the SPS agreement and will consider alternative measures that achieve the
same level of protection
Oral questions
Are subsidies provided in the services area, including in land transport and tourism?  Are they
provided on a national treatment basis and what has been their impact?
Answer - Land transport:  Subsidies are provided on a non-discriminatory basis and have allowed for
more and better public transport services.  For more information please refer to
www.transfund.govt.nz.
Tourism:  Subsidies, in the form of joint venture marketing projects, are provided on a national
treatment basis and have enabled New Zealand to more effectively promote itself as a tourism
destination.  For more information please refe r to www.purenz.com;  www.tourisminfo.govt.nz.
For further background on Subsidies and the New Zealand Services Sector, please refer to the WPGR
Communication from New Zealand of 23 July 1997.  S/WPGR/W/16/Add.2, Doc# 97-3213.  (Note:
the programmes described in this paper have been subject to some administrative changes since1997).
COLOMBIA
After many years of applying a "passive" policy with regard to State intervention in productive
activity, the Government has adopted a "proactive" po licy with a view to encouraging certain higher-
value-added economic activities (WT/TPR/S/115, pages vii, paragraph 4; 2, paragraph 5; and 7,paragraph 19).  We would appreciate the following further information:WT/TPR/M/115/Add.1
Page 20
A. Which mechanisms and instruments are used by the Government to support 
biotechnology, information and communication technologies and creative industries?
Answer - Government has established sector taskfo rces of private sector individuals convened by
Ministers. There are four taskforces, covering biotechnology, ICT, design and screen production.
Over the past nine months each of these taskforces has considered how to realise the potential in their
sector, the contribution that the sector, individual firms and the public sector can make, and the
aspirations that will drive their growth.   Individual firms in these main sectors have the ability toaccess government industry development programmes if required.
The Taskforces are now reporting on their ideas on how to achieve growth in their respective
industries. The recommendations in these reports involve a number of actions by the industry and by
Government, working together or separately. The Government will respond to the recommendations
in the coming months.
B. Which other sectors does the Government intend to include under the policy known as
the "Growth and Innovation Framework"?
Answer - As the government’s financial and human resources are limited it is essential to focus them
on areas of maximum impact, with biotechnology, ICT and creative industries the initial choices.
While there are currently no plans to extend the list of growth and innovation "focus" sectors, theGovernment continues to pay attention to major sectors of the economy such as agriculture, forestry,
fisheries and tourism. Departments and delivery agencies in these areas support these sectors through
the provision of information and specific policy development. In general, this is delivered in
partnership with those in the sector.
Predating the Growth and Innovation Framework, th e government, the forestry industry, the regions
and unions have been working together under the Wood Processing Strategy to ensure that the best
value is obtained from the rapidly increasing supply of wood from New Zealand’s planted forests.The government is also working with interested pa rties on the future of the textiles, clothing and
footwear sector.
C. What trade policy instruments are employed by the Government in the new form of
intervention provided for in the "Growth and Innovation Framework"?
Answer - At this stage in the evolution of the Growth and Innovation Framework the focus is on the
strategic development of policy in a medium term context. This work is in its early stages. The
objective is to create the conditions that will support the development of internationally competitive
New Zealand businesses. This will not affect access to the New Zealand market but will help New
Zealand firms become better integrated into the global economy and access global markets.
D. What have been the initial results of this new Framework?
Answer - The Framework was announced only in February 2002 and it is too early to be able to
discern any noticeable impact from its implemen tation. However, the government is planning to
release two reports related to the Framework. The Growth and Innovation Implementation Report
provides an update on the Government’s efforts to  implement the Growth and Innovation Framework.
It complements the Growth and Innovation Indicators Report 2003 , which brings together baseline
information on a set of indicators intended to track  change in relation to growth and innovation (see
question E).WT/TPR/M/115/Add.1
Page 21
E Has a set of indicators or criteria for assessing the future outcome of this policy been
defined?
Answer - In late 2002 the New Zealand Cabinet approved a set of high level GIF indicators intended
to track progress towards promoting more effective innovation and achieving stronger economic
growth. Headed by real per capita GDP, the indicat ors also cover the key areas of the government’s
Growth and Innovation Framewor k – innovation, talent and skills and global connectedness .
Since the announcement of the Growth and Innovati on Framework, the government has also released
a set of sustainable development indicators that aim to measure progress towards the Government’s
wider goals and provide a broad view of New Zealanders’ wellbeing, to which growth is a significant
contributor.
EUROPEAN UNION
Report by the Government (WT/TPR/G/115)
III. NEW ZEALAND TRADE POLICY INITIATIVES
Multilateral Initiatives
The World Trade Organization
1. The report states New Zealand’s interest in  a strong rules-based global trading system. We
agree that better WTO rules are clearly of benefit to an open economy with a high trading volume likeNew Zealand. We appreciate New Zealand’s strong commitment to advancing the Doha Development
Agenda and take note that the DDA is the Governm ent’s top trade priority. It remains, however,
unclear to us why New Zealand misses to mention the Singapore issues in the rules section of its
report. The Singapore issues are a part of the DDA. Given the clear interest for New Zealand of basic
multilateral rules in particular on investment and competition, does the government agree that a more
active support from the side of New Zealand is needed on these issues in order to ensure an ambitious
result of the DDA negotiation overall?
Answer - New Zealand is indeed committed to a strong rules-based global trading system and to a
successful outcome to the Doha Round of negotiations. As is clear from the report itself, New Zealand
has found the application of competition law and policy to be a vital aspect of public policy armed at
securing net national welfare gains. In a similar way, in respect of investment the report notes at
page 23 that, "New Zealand maintains a relatively ope n and transparent foreign investment regime." A
recent APEC report on the Benefits of Trade and Investment Liberalisation and Facilitation concluded
that "the only economies where barriers are low across the board are Hong Kong (China), New
Zealand and the United States."
As far as these issues in the DDA are concerned, New Zealand inde ed remains committed to working
together with all WTO Members to discharge the terms of the DDA mandate. Like all WTO Memberswe do, of course, have our particular priorities. A nd the EU will be familiar enough with what these
are. But having priorities has never been at the exclusion of other issues not least because we are
conscious that the DDA is a collective undertaking where all Members are looking to outcomes that
meet their particular priorities. In any case, it may be said that on issues of investment and
competition - as indeed for all elements of the DDA - New Zealand is looking to maintain theambitions of that Doha mandate.WT/TPR/M/115/Add.1
Page 22
2. To what degree is improved access to the market of New Zealand being used as a political
strategy for helping to eradicate poverty in developing countries?
Answer - In July 2001, New Zealand granted tariff-free access for all goods from least developed
countries. This is one of a number or measures aimed at reducing poverty in least/developing
countries. New Zealand is a country committed to a more level playing field in international trade
matters, and urges other developed countries to take the initiative in providing tariff-free access to
least developed countries, including for processe d goods. Helping developing countries to harness
international trade to promote their development is  a key aim of the New Zealand Government in the
trade sphere.
However, providing tariff-free access is a part of the picture. New Zealand also recognises that
developing countries face supply-side constraints in taking advantage of such schemes. Many people
in developing countries are faced with inadequate infrastructure, poorly developed credit markets, and
have inadequate business and export skills. Consequently, New Zealand’s development agency,
NZAID, in conjunction with other government agencies, is providing a range of trade-related
development assistance to help developing countries overcome these challenges. Assistance amounts
to ca. NZ$5mn p.a., although this is likely to increase in the next few years.
3. Please explain whether and to what extent Fair  Trade (which takes account of sustainability)
is being promoted by the national trade policy.
Answer  - We will assume in this answer that this is a question about the "Fair Trade" movement and
"Fair Trade" branded products.  New Zealand recognises, from a trade and development perspective,
that Fair Trade branding has the potential to provide developing country producers with access to
higher prices by appealing to the values of a certain set of consumers. This is why NZAID has for
many years been providing financial support to the non-profit organisation known as Trade Aid as
part of its overall programmes in support of trade-related capacity building.  Trade Aid is analternative trading company in New Zealand, which buys and sells Fair Trade products through retail
outlets. It also runs various programmes, supporting the development of producer skills in developing
countries.  New Zealand support is not by way of core funding but is in the form of assistance to the
special projects designed to develop producer skills and thus to encourage exports from those
countries under the "Fair Trade" brand.
Trade and Labour
4. We consider that the protection of core labour rights, far from being a possible hindrance to
the full development of the competitive advantage in low labour costs that may be enjoyed by a
number of developing countries, can actually benefit the productivity of the national industry and
hence its competitiveness in the international market. This is often the direct result of creating adedicated labour force that has a stake in the future a firm; a process that is facilitated by the
recognition of minimum soci al standards.   Would New Zealand share this approach?
Answer - New Zealand also believes the maintenance and promotion of labour standards, such as
those reflected in the International Labour Organisation’s Fundamental Principles and Rights of
Work, are fully compatible with, and indeed contribute to, sustainable economic development.  Thisdraws support from sound empirical studies, for ex ample by the OECD, which find no basis for any
view that respect of core labour standards negative ly affects economic performance.  On the contrary,
the strongest findings of such studies are that there is a positive association of trade reform and
improvement in core standards.WT/TPR/M/115/Add.1
Page 23
5. How New Zealand sees the relationship between the promotion of social policy and the
conduct of trade policy both at bilateral and multilateral level?
Answer - New Zealand’s approach to the relationship between social policy in the area of labour
standards and trade policy is set out in the Govern ment’s Framework for Integrating Labour Standards
and Trade Agreements 2001, which seeks better integration between labour standards and trade
agreements.  This is based on the rationale that trade and labour objectives can be mutually
supportive.  Neither objective takes place in a vacuum.  Both contribute towards the public well-beingand living standards of society, in terms of generated income, as well as the conditions of work.
Countries should not be denied legitimate comparative advantage of lower labour costs.  However,
this advantage should not be secured by deliberately neglecting fundamental labour principles. A
well-balanced policy is necessary.
In both bilateral and multilateral contexts, New Zealand aims to take a consistent approach that
reflects its objective of promoting decent work in the global economy. By this it means opportunities
for work in which minimum standards are protected and adequate income is generated within an
infrastructure that ensures social protection.   At the same time, New Zealand recognises the
International Labour Organisation (ILO) as the body with the legitimate authority to set and monitor
labour standards.  New Zealand is mindful in trade agreements, whether bilateral or multilateral, ofthe need to avoid anything that could undermine the status of the ILO.
New Zealand believes the ILO’s Fundamental Principles and Rights of Work, as enshrined in the
1998 Declaration, and on which there is a high degree of international consensus, provide an
appropriate basis for the discussion of labour standards within the framework of trade agreements.
These principles are:
- Freedom of association and the effective recognition of the right to collective
bargaining;
- The elimination of all forms of forced or compulsory labour;
- The effective abolition of child labour;
- The elimination of discrimination in respect of employment and occupation.
Consistent with the approach taken in the ILO, each country would be free to implement those
fundamental principles according to its own laws and practices.  But, from New Zealand’sperspective, as a minimum, the outcomes of all trade agreements to which New Zealand is a party
must be generally consistent with and not undermine these core principles, the promotion of decent
work, and the promotion and protection of universal human rights standards.
In any provisions agreed in the context of negotiating a bilateral trade or economic agreement,
dialogue and consensus will be preferred to penalties or sanctions as a way of making progress onlabour standards issues.  The aim will be to focus di scussion of labour issues, and provide a forum for
action and progress to be made, by consensus and not coercion, in a bilateral context.  Whether this is
done in provisions in the agreements themselves, or in some other manner, is a matter on which the
Government has been, and is, willing to show flexibility .  It is interested in the content rather than the
form.
Finally, at the multilateral level, New Zealand is a supporter of genuine international dialogue on the
social dimension of globalisation.  In this context, we look forward to receiving the report of the
World Commission on the Social Dimension of Globalisation.WT/TPR/M/115/Add.1
Page 24
Report by the Secretariat (WT/TPR/S/115)
II.  TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES;  (4)  T RADE
AGREEMENTS AND ARRANGEMENTS ;  (iv)  Unilateral trade preference
6. How many tariff lines are covered by New Zealand's GSP? What is their share of total tariff
lines?
Answer - The New Zealand Tariff contains 7,432 se parate Tariff lines, of which 4,077 (54.86 percent)
are Tariff-free, regardless of origin.
Under the New Zealand Generalised System of Preferences, two levels of Tariff preference are
provided, namely – to Least Developed Countries (identified as "LLDC" in the New Zealand Tariff)
and to Less Developed Countries (LDCs).
All (100 percent) of the 3,355 dutiable lines in the Tariff allow for the tariff-free entry of LLDC
qualifying goods.  Whereas, LDCs are provided with margins of preference against 2,476(73.80 percent) of the 3,355 dutiable tariff lines.
7. What is the share (compared to total import s) and value of New Zealand's imports granted
preferential treatment under its GSP? How have these developed during the last five years?
Answer - Over the period July 2001 to June 2002, trade identifiable as entering under GSP amounted
to $NZ 799,957,405 representing 2.40 percent of trade from all sources.  This data, obtained fromCustoms entries, will differ from official trade statistics produced by Statistics New Zealand, which
are subject to editing and compiled according to international standards.
Comparable data back over the previous five years is not readily available.
8. What are the top ten beneficiaries of the New Zealand's GSP and what are their respective
shares in preferential imports?  How have their shares developed during the last five years?
Answer - Over the period July 2001 to June 2002, the top 10 countries of origin for trade identifiable
as entering under GSP was:
Top 10 GSP Sources (Jul/Jun 2002)
Country Imports under Preferences
VFD $NZ % of GSP % of Total Trade
China 292,311,497 36.84% 0.88%
Indonesia 76,976,206 9.70% 0.23%
Malaysia 66,877,245 8.43% 0.20%
Korea 43,425,202 5.47% 0.13%
India 30,175,155 3.80% 0.09%
Vietnam 25,685,383 3.24% 0.08%
Pakistan 24,278,674 3.06% 0.07%
Philippines 16,803,546 2.12% 0.05%
Table (cont'd)WT/TPR/M/115/Add.1
Page 25
Top 10 GSP Sources (Jul/Jun 2002)
Country Imports under Preferences
VFD $NZ % of GSP % of Total Trade
Mexico 11,205,713 1.41% 0.03%
Chile 6,154,916 0.78% 0.02%
593,893,537 74.86% 1.78%
Misc. LDCs 199,474,575 25.14% 0.60%
Total GSP 793,368,112 2.38%
Total Trade 33,378,655,976
This data, obtained from Customs entries, will differ from official trade statistics produced byStatistics New Zealand, which are subject to editing and compiled according to internationalstandards.
Comparable data back over the previous five years is not readily available.
9. Are additional preferences available for beneficiary countries for social or environmental
reasons?
Answer - Preferences are based on economic criteria only.10. How are the tariff preferences under GSP determined for different products?
Answer - The New Zealand GSP distinguishes between Less Developed Countries and Least
Developed Countries. Qualifying imports from Least Developed Countries have, since July 2001,
entered free of duty without exception. Qualifying imports from Less Developed Countries, on the
other hand, generally pay a tariff that is set at 80 percent of the Normal (MFN) tariff.
There are exceptions to this general policy. In many cases, a greater margin of preference applies, for
example Normal 5 percent; Less Developed Country Free. However, preferences do not apply in all
cases. The principal exclusions from these preferences are set out below:
- Clothing (other than accessories);
- Footwear (other than parts);
- Many steel products of Chapter 72;
- Motor vehicles, parts and accessories;  and- Ships and boats.
11. What countries have been graduated from the scheme since 1995? Can countries re-enter the
GSP if they do not meet the criteria any more?
Answer - No countries have been graduated sin ce 1995. However, there has been movement between
the categories of Less Developed and Least Developed Country. The Tariff (Less DevelopedCountries and Least Developed Countries) Order 2001 provided that, with effect from July 2001,
Angola, Liberia and Senegal would change from being Less Developed Countries to being Least
Developed Countries, while Botswana, the Federate d States of Micronesia and Namibia would change
from Least Developed Countries to Less Developed Countries. This regulation, available
electronically, contains a full listing of GSP beneficiaries by category. This information is alsoavailable through the New Zealand Customs' website (www.customs.govt.nz).WT/TPR/M/115/Add.1
Page 26
The New Zealand policy of Country Graduation pr ovides that Less Developed Countries will no
longer receive GSP preferences when their per capita GNP, expressed in US dollars, reaches70 percent of New Zealand's GNP. There is provision for reinstatement.
12. Does New Zealand's GSP have its own preferential rules of origin?
Answer - Yes. Full details are available on the New Zealand Customs website:  Part VI Determination
of Country of Produce or Manufacture . The basic origin-conferring criterion for partly-manufactured
goods is evidence of a minimum GSP/ New Zealand content of 50 percent of the factory or works cost.
Importantly, there is provision for cumulation within  each of the two categories of Less Developed
Countries and Least Developed Countries but not  between countries in different categories.
III.  TRADE POLICIES AND PRACTICES BY MEASURE;  (2)  M
EASURES DIRECTLY
AFFECTING IMPORTS ;  (viii)  Standards and conformity assessment
13. (para 44) The report states that there are mandatory standards in laws and regulations of NZ
and that around 29% to 35% of all standards are equivalent to international standards. The EU
would like to know whether any of the mandatory standards are equivalent with international
standards?
Answer - Of the approximately 2561 Standards New Zealand standards in place, 263 are mandatory
standards cited in domestic legislation (using 2002 figures).  Of these, two standards are equivalent tointernational standards.
14. It is also stated that NZ does not maintain  data on these mandatory standards. However, the
EU would like to know whether NZ could indica te in which sectors mandatory standards are used?
Answer - Standards cited in legislation that are mandatory range across the following sectors:
- Building and civil engineering;
- Electricity and electrical engineering;
- Health;- Consumer safety;
- Occupational safety;
- Transportation;
- Fire Protection; and
- Energy- Food standards (established by Food Standards Australia and New Zealand).
15. Furthermore, the EU would like NZ to explain the procedure upon and conditions under
which a standard becomes mandatory?
Answer - Standards become mandatory by being cited in legislation passed by the New Zealand
Parliament.  Accordingly Parliament has to determine that there is a legitimate national objective thatrequires a mandatory standard to be established.WT/TPR/M/115/Add.1
Page 27
(x) Government procurement
16. (para 22) What revisions of the government procurement provisions in the Australia and New
Zealand Closer Economic Relations Agreement (ANZCERTA) are envisaged?
Answer - The Australia New Zealand Government Pr ocurement Agreement, signed in August 1997, is
reviewed at five-yearly intervals.  The objectives of the Agreement are to create and maintain a single
Australia-New Zealand government procurement market to reduce the costs of doing business for
both government and industry.  The Agreement stipul ates that Australian and New Zealand suppliers
must be able to compete on an equal basis for government contracts.
The current review, conducted by officials, has endorsed the objectives and principles of the existing
Agreement.  The changes proposed for Ministerial approval are editorial, with a view to making the
text more concise and readable, and do not reflect any policy changes.
17. (para 54) How has the Government followed up on the April 2001 procurement policy
principle according to which New Zealand has trade policy interests in open and transparent
government procurement markets?
Answer - This question may be answered by refe rence to the publication "Government Procurement
in New Zealand: Policy Guide for Purchasers" issued by the Ministry of Economic Development in
July 2002 http://www.med.govt.nz/irdev/gov_pur/purchasers/index.html
In line with the freedom, and accountability of Chief Executives in New Zealand’s decentralised
public sector regime to manage for results within strict budgets, government agencies are responsible
for their own purchasing decisions, and each agen cy determines its own purchasing procedures,
including any value thresholds.  At the same time, the Government expects its departments, and
encourages other agencies, to be guided in their procurement by a number of stated principles, and has
endorsed the APEC Non-Binding pr inciples on Government Procurement, which include transparency
and non-discrimination.  The Policy Guide complements detailed good practice guidance offered inthe Auditor-General’s June 2001 publication "Procurement: a Statement of Good Practice"
http://www.oag.govt.nz/HomePageF olders/Publications/Procurement_Guide/Procurement_guide.htm
Generally there are no prescriptive rules or procedures.  The exceptions are ex-ante and post-award
notification requirements that are mandated for government departments.
http://www.med.govt.nz/irdev/gov_pur/industrynz-notif/index.htmlhttp://www.med.govt.nz/irdev/gov_pur/postaward.html
The April 2001 review confirmed New Zealand’s transparent and non-discriminatory procurement
approach consistent with our international obligations and trade policy interests.  The establishment of
the post-award notification requirement was a direct outcome, designed to improve transparency for
all suppliers, domestic and international.  Contract award notices are published on the website of theNew Zealand Industrial Supplies Office http://www.gets.govt.nz/index.php3?viewCat=215 or
alternatively on individual departments’ websites which may be accessed from the New Zealand
Government home page http://www.govt.nz/en/home/WT/TPR/M/115/Add.1
Page 28
18. Are the procurement guidelines on purchasing decisions issued by the Ministry of Economic
Development compulsory? Do the guidelines relate to market access for third country bidders?
Answer - Please refer to response to EU Question 17.  The Policy Guide for Purchasers is globally
non-preferential and does not require or suggest discrimination against third country suppliers in
favour of New Zealand, Australian or Singaporean suppliers.
19. When will the "Go Procure" system be set up?  Will third country bidders have access to this
website?
Answer - GoProcure – the Government Online Procurement system – is currently at the first stage of a
phased rollout, with operations in six agencies commencing in the period May – September 2003.
From December 2003, the system will be progressively rolled out to all government departments and
many large Crown entities (over 80 agencies in all).  For further information, see http://www.e-
government.govt.nz/docs/supplier-news-3/index.htm l  Suppliers contracted through normal tendering
procedures will have their product catalogues included in the system.  Scoping work is to commence
shortly on how best to develop a single point of access to bidding opportunities via an Internet-
website which will be open to all suppliers.
20. (para 55) Has the position of New Zealand in respect of joining the GPA evolved in light of
procurement and trade policy developments?
Answer - New Zealand keeps the issue of GPA membership under review in the light of procurement
and trade policy developments.  To date there has been no change to its position.
21. New Zealand considers its procurement regime to be already open and non-discriminatory.
Are the principles of non-discrimination and openness formally enshrined?
Answer - Please refer to response to EU Question 17.
22. (para 57) Are there any guidelines on the choice of the appropriate channel for the
publication of purchasing requirements by government agencies? What are the general rules ontransparency?
Answer - The Policy Guide for Purchasers, referred to above, states that to promote competition all
publicly available opportunities (e.g. invitations to tender or submit proposals, pre-qualify or register
interest) should be advertised in publicly accessible print and electronic media.  Examples of such
publications, including websites are given in the Policy Guide.  The Guide also states that existinglists of preferred suppliers should be open for application by new suppliers at any time, and an
invitation should be advertised at reasonable intervals.
23. How can prospective foreign bidders access information on tender notices, bidding
procedures and awarding criteria?
Answer - Please refer to response to EU Question 22.24. Is the Government Electronic Tenders Service (GETS) limited to the New Zealand and
Australia industry?
Answer - The New Zealand Industrial Supplies Offi ce (NZSIO) exists to facilitate opportunity for
New Zealand domestic suppliers to compete, and its information services target New Zealand (and
Australian suppliers).  Access to opportunity information on GETS and a "tenders alert" service isWT/TPR/M/115/Add.1
Page 29
accordingly limited to registered New Zealand (and Australian) suppliers.  Agencies are advised,
however, that all publicly available information provided to the NZISO should also be advertised inother publicly accessible media.  The development of an electronic tenders website to provide a single
point of access to all bidders, referred to in the previous answer, may be based on opening up of the
existing GETS.
25. (para 58) As regards routine supplies purchased through regular contracts, is it possible for
third country suppliers to be included on the established list of suppliers through registration ofinterest?
Answer - Please refer to response to EU Question 22.
26. What proportion of routine supplies is undertaken by GSB Supplycorp Ltd and Serco Supply?
Are such procurement opportunities open to competition?
Answer - GSB Supplycorp and Serco Supply are pr ivate companies and such information is not
readily available.  Suppliers have openly advertised opportunities to bid for supply under contracts
arranged by these companies.
27. (para 59) Are the post-award transparency guidelines compulsory? Where on the Internet are
contract awards published?
Answer - Please refer to response to EU Question 17.28. (para 60) Does the New Zealand Industrial Supplies Office offer information on procurement
opportunities only to local (New Zealand and Australian) suppliers?
Answer - Please refer to response to EU Question 24.
29. Is there any data on the extent of foreign procurement in New Zealand?
Answer - This information is not collected or readily available.
30. Procuring entities are expected to give full consideration to the "value for money advantages
of sourcing from domestic producers" and to the "potential commercial and practical advantages inpurchasing locally produced goods and services". Is this equivalent to a local preference rule?
Answer - The Policy Guide referred to above makes it clear that the procurement policy "does not
give preference or weighting to local content in itself".  In line with the responsibility of purchasing
agencies for their own decisions, "agencies should buy from the best source available, according to
their own judgement of all costs and benefits".  No prescriptive guidelines are applied.
31. Do procuring entities have to apply any guidelines to determine the "best source available"
for the award of contracts?
Answer - Please refer to response to EU Question 30.
(xi) Local content
32. (para 61) The report states that "New Zealand does not maintain any local-content
requirements". However, tariff concessions may be granted to importers and manufacturers if they
can demonstrate that the domestic content of the locally produced "suitable alternative" product isWT/TPR/M/115/Add.1
Page 30
not less than 25% of its ex-factory cost of production. Can New Zealand please explain the details of
this measure?
Answer - This provision relates to New Zealand manufacturers when considering their viability as
local suppliers in respect of any objections they raise to concession applications. Factory cost is the
sum of the following:
(a) the cost of imported materials;
(b) the cost of New Zealand produced materials;(c) manufacturing wages; and
(d) factory overhead expenses.
In order to meet the 25 percent requirement, the sum of the items (b, c and d) must represent a
minimum of 25 percent of the total factory cost of the goods.
(3)  M
EASURES DIRECTLY AFFECTING EXPORTS ;  (vii)  Export promotion and marketing
assistance
33. (para 74-75) To what extent are potential environmental and social impacts of investment
projects taken into consideration by the New Zealand Export Credit Office, Trade New Zealand and
Industry New Zealand?
Answer - Investment New Zeala nd, a division of Industry New Zealand, is the Government agency
responsible for attracting investment into New Zealand.  Trade NZ has no responsibility for
investment into or out of New Zealand.  In terms of social impacts, Investment NZ seeks to attract
investments into projects / activities that have the potential to create new high-paying jobs in New
Zealand, and will result in development of skills and addition to New Zealand's technological
capabilities.
Local government bodies address environmental issues when the company seeks approval for land
usage under the Resource Management Act.
IV.  TRADE POLICIES BY SECTOR;  (2)  A GRICULTURE ;  (v)  Fisheries
34. (para 23) The report states: "[…] The TAC is set in order to ensure that the greatest yield can
be achieved over time while maintaining the stock's productive capacity;  in addition, where non-
commercial users are involved (such as Maori or recreational fishers), a quantity of stock is set aside
for them before the commercial catch (TACC) is established. […] When a new species is introduced
to the QMS, 20% of the catch of all ITQs is allocated to Maori. The remaining quota is distributed
amongst people holding commercial fishing permits for each species, based on how much they caught
during the "qualifying years". Any remaining ITQ may be tendered off by the Crown."  According to
information available from the Ministry of Fisheries ( www.fish.govt.nz/ ) and "Te Ohu Kai Moana
(TOKM)", in English "Treaty of Waitangi Fisheries Commission" ( www.tokm.co.nz/ ), Maori are
involved in commercial fisheries in New Zealand. The web site of the TOKM states that “assets held
by the Fisheries Commission, Maori currently own or  control more than 33 percent of New Zealand’s
commercial fishing quota.”  This web site provides also information from which it appears that the
“Treaty of Waitangi Fisheries Commission” currently owns a substantial share in the New Zealand’s
companies active in commercial fisheries.
35. Could New Zealand confirm that the 20% allocation for Maori on new species entering the
QMS (Quota Management System) is made at no cost?WT/TPR/M/115/Add.1
Page 31
Answer - The 20% allocation to Maori is made at no cost. It is the result of the settlement of Maori
fisheries claims against the Crown in 1992, and the passing of the Treaty of Waitangi (Fisheries Claims)Settlement Act 1992.
36. Could New Zealand provide information on the value, in money terms, of the yearly quota
allocations to Maori for commercial fishing purposes, for the years 1998-2002?
Answer - The current value of the fishing quota allocations held by Maori is approximately
NZ$700 million.
37. Are commercial fisheries controlled by Maori subject to the same financial obligations as
other commercial fishermen? In this respect, do they participate in cost recovery programmes?
Answer - Commercial fisheries controlled by Maori are subject to the same obligations as other
commercial fishermen. They also participate in the cost recovery programmes.
(4)  S
ERVICES ;  (ii)  Financial Services;  (b)  Insurance
38. (para 56) The report states that the "regulation of the industry has proceeded through a
combination of rather loose government supervision coupled with a measure of self-regulation". Does
it mean that all insurance services can be provided on a cross-border basis to New Zealand?  Could
New Zealand please specify which insurance services are allowed to be provided on a cross-border
basis, and under which conditions?
Answer - All insurance services can be provided  on a cross-border basis to New Zealand (with the
exception of the particular arrangements in relation to the ACC and EQC noted in para 64 of Ch IV).
The majority of insurance services are provided by overseas-owned insurers (that is, overseas-
incorporated insurers, companies whose ultimate parent is an overseas insurer or branches of overseas
insurers). No additional conditions are imposed on overseas insurers.
(iii) Telecommunications
39. (para 68) How have the designated services been identified? Is there a review on regular
basis of the list of those services? How are the prices for those services determined ?
Answer - The designated services identified in the Telecommunications Act 2001 are:
- Interconnection with Telecom's fixed telephone network;
- Number portability;
- Wholesaling of Telecom's fixed network services (including residential lines); and- Fixed to mobile carrier pre-selection from Telecom's fixed network.
The purpose of the Telecommunications Act 2001 is  to promote competition in telecommunications
markets for the long-term benefit of end-users of telecommunications services. The initial list of
designated services was judged by the Government to meet this test (the purpose test).
The Telecommunications Act provides a process for the regulation of further telecommunications
services. Under this process, the regulator (the Commerce Commission) has the power to investigate
whether any further telecommunications services should be regulated, taking into account the purpose
test, and report its recommendation to the Government. The final decision rests with the Government.WT/TPR/M/115/Add.1
Page 32
The Telecommunications Act also requires the Commission to investigate whether the unbundled
elements of Telecom’s local loop network and its fixed Public Data Network, as well as access tointerconnection with that data network, should be regulated.
In making a determination on a designated service the Commission must have reference to the initial
and final pricing principles set out in the Telecommunications Act for each designated service (see
Schedule 1 of the Telecommunications Act 20 01 available at: http://www.legislation.govt.nz).
40. (para 69) Is the regulator in charge of identifying and implementing remedy to anti-
competitive practices (e.g. in case of anti-competitive cross-subsidisation or predatory pricing)? If
not, is there another authority in charge?
Answer - The Commerce Act 1986 prohibits anti-competitive conduct in New Zealand. The
Commerce Act 1986 provides for private action through the Courts to resolve competition issues. The
Commerce Commission also has the power to enforce the Act through the Courts.
41. (para 70) Which are the services which "may not otherwise be provided on a commercial
basis or at a price deemed affordable by the Minister of Communications"? Is Telecom compensated
for providing those services? Can any operator apply to provide those services?
Answer - The objective of the Telecommunications Service Obligations (TSO) mechanism in the
Telecommunications Act 2001 is to ensure that key telecommunications services will be provided,where necessary, to achieve the Government’s social objective. TSOs facilitate the supply of certain
telecommunications services to groups of end-users within New Zealand to whom those services may
not otherwise be supplied on a commercial basis or at a price affordable to those end-users.
Only one TSO has been established under the Telecommunications Act 2001. This TSO (previously
known as the Kiwi Share Obligation) is an agreement between Telecom New Zealand and the Crown
under which Telecom provides local residential telephone service (a copy of the TSO deed can be
found at http://www.med.govt.nz/pbt/telecom/deed/index.html).
This TSO provides residential users with access to a price capped local telephone service that includes
an unlimited number of non-chargeable local calls and includes commitments for:
- a local free-calling option for local residential telephone service being maintained for
all Telecom residential customers;
- Telecom charging no more than the standard residential rental for local residential
telephone service;
- standard residential rental not increasing in real terms provided that the overall
profitability of Telecom's fixed business is not unreasonably impaired; and
- the line rental for local residential teleph one service for Telecom customers in rural
areas being no higher than the standard residential rental.
The net cost of TSOs are cost-recovered by a levy on Telecom and all telephone service providers
whose telephone networks are interconnected with a fixed PSTN operated by Telecom, and who
provide a telecommunications service in New Zealand to end-users by means of some component of a
PSTN that is operated by the provider.
Telecom New Zealand is the only telecommunications  carrier that is providing the TSO for local
residential telephone service. A discussion paper on contestability of the TSO for local residential
telephone service is likely to be released in the near future. The Telecommunications Act requires theWT/TPR/M/115/Add.1
Page 33
Minister of Communications to assess whether contestability could reasonably be achieved if and
when a new TSO is established.
42. (para 71) Has Telecom reported on the cross-subsidy between urban and rural users and
between light and heavy users?
Answer - The Commerce Commission is required by the Telecommunications Act to annually
determine the cost of the TSO for local residential telephone service and how this cost is to be shared
between Telecom and other telephone service providers.
As an input to the Commission’s process, Telecom is required under the Act to provide the
Commission with its own net cost calculation – which includes information about ‘commercially non-
viable customers’. Telecom’s calculations will be considered by the Commission in making its
decision on the net cost figure to be used to apportion the cost of the TSO for local residential
telephone service across the industry.
43. (para 72) Has Telecom implemented any unbundling of its local loops?
Answer - Telecom has not implemented any unbundlin g of its local loops.  The Telecommunications
Act 2001 requires the Commission to investigate whether the unbundled elements of Telecom’s local
loop network and its fixed Public Data Network, as well as access to interconnection with that data
network, should be regulated. The Commission must deliver a final report on its investigation to theMinister of Communications no later than 20 December 2003.
44. (para 73) Are there any exclusive rights left for any service in the telecom sector?
Answer - No service provider has the exclusive right to provide a particular telecommunications
service.
(v) Transport;  a)  Air transport services
45. (para 84-85) The report mentions that New Zeal and has seven airports used for international
traffic, and refers to the ownership of airports. Can New Zealand please clarify the extent andconditions under which international providers of groundhandling services can offer their services -
and inform if such international providers are currently established in New Zealand's airport?
Answer - There are no industry-specific regulatory restrictions on the provision of ground-handling
services by foreign companies at New Zealand airports. Arrangements would need to be reached with
the airport company concerned.
Currently a UK-owned company, Menzies Aviation Group, provides ground-handling services at
Auckland International Airport.
(b) Maritime transport
46. (para  98) Mentions that all New Zealand-owned commercial ships over 24 meters in length
must be registered in New  Zealand. Does this imply that New Zealand nationals/companies do nothave the possibility to own (by majority) vessels not flying the flag of New Zealand flagged, and that
they cannot invest in shipping companies overseas?
Answer  - New Zealand has signed the 1982 United Nations Convention on Law of the Sea.
Article 91 of UNCLOS requires that there be a genuine link between a ship and the state whose flag itWT/TPR/M/115/Add.1
Page 34
flies.  We understand that many other countries have also signed UNCLOS, including those in the
European Union.
New Zealand’s ship registration obligations under UNCLOS are implemented through the Ship
Registration Act 1992.  Section 6 of this Act provides that all New Zealand-owned ships exceeding
24 metres length (with certain exceptions) are required to be registered in New Zealand.  Under the
Act, a ship is New Zealand-owned if it is majori ty owned by either New Zealand citizens or by a
company established in New Zealand (as an aside, we  note that there is no requirement in the Act for
such companies to be owned in New Zealand).
It would be possible, however, for a ship that is beneficially-owned in New Zealand to be registered
overseas.  For example, it could be registered overseas if the ship was legally owned by a company
established in that country (and subject, of course, to that state’s laws allowing such registrations).
Unless there was a clear link to a resident company, it would be hard to imagine any other UNCLOS-
compliant countries allowing registration of a ship owned in New Zealand, with the following
exception:
- the New Zealand-owned ship was demise chartered (leased without crew) to a
company in a foreign country; and also
- that foreign country allowed the registration of foreign-owned ships that are legally
under the control of a company established in that country.
The Ship Registration Act 1992 has similar provisions that allow registration in New Zealand of
foreign-owned ships that are demise chartered to New Zealand-based operators
The Ship Registration Act 1992 does not restrict New Zealand nationals from investing in overseas
shipping companies.
HONG KONG, CHINA
Tariffs;  (WT/TPR/S/115. P.26, Para. 2)
1. Note that New Zealand has suspended its tariff phasing-out programme until 2005, pending
an ongoing review.  Could New Zealand inform us of the progress of its review and the target
completion date?  Information on the possible framework of its further tariff reduction plan would be
useful.
Answer - Decisions on tariff policy beyond 1 July 2005 are expected to be taken by the Government
mid to late 2003.  The review will include a wide-ranging assessment of the impacts of previous tariff
reduction as well as projected impacts of any further tariff reduction on all sectors of the New Zealand
economy. The review will also consider what  is happening in the international context.
Anti-dumping;  (WT/TPR/S/115, P. 37, Para. 35)
2. According to the Secretariat Report, New Zealand has initiated 37 anti-dumping (AD)
investigations since 1995, 65% of which (or 24 cases) were terminated without any final measures
being taken.  Could New Zealand provide the re asons accounting for and its comments on the high
rate of termination?  In view that the mere initiation of investigation can result in significant trade-
stifling effects, what measures has New Zealand taken to weed out unsubstantiated/unjustified AD
cases and to prevent them from causing unne cessary disruption to trade activities?WT/TPR/M/115/Add.1
Page 35
Answer - New Zealand carries out anti-dumping investigations in a transparent manner, provides full
opportunities for all interested parties to particip ate, rigorously examines the evidence available to
establish if there is dumping causing injury and adheres strictly to the requirements of the Anti-
Dumping Agreement. Consequently, New Zealand imme diately terminates an investigation, in terms
of Article 5.8 of the Anti-Dumping Agreement, if there is insufficient evidence of dumping causing
injury.
New Zealand notes that in considering an application for an investigation, it is required to be satisfied
that there is evidence going beyond mere assertion and of a nature and extent that indicates a
likelihood of dumping and resultant material injury, and requiring investigation. New Zealand
scrutinises the evidence in an application with due scepticism, bearing in mind the commercial
context, and notes that it must be satisfied of the sufficiency of the evidence, not of dumping or
material injury. New Zealand therefore considers that the standard it applies to the sufficiency of theevidence in application fully conforms to the requirements of the Anti-Dumping Agreement.
Sanitary and Phytosanitary Measures;  (WT/TPR/S/115, P. 43, Para. 52)
3. Note that New Zealand has been developing a Biosecurity strategy and that public
consultation was held in 2001.  According to the Secretariat report, the final Biosecurity strategy is
expected to be launched in December 2002 and implemented during 2003.  Could New Zealandprovide the latest progress of the Biosecurity strategy and its implementation details?
Answer - A draft Biosecurity Strategy was released for public consultation in December 2002.  It is
available at www.biostrategy.govt.nz.  Currently, public submissions are being analysed.  It is
expected that the New Zealand Government will approve a final Biosecurity Strategy in 2003, andthat this strategy will be implemented progressively over the coming years.
Insurance;  
(WT/TPR/S/115, P. 84, Para. 64)
4. The Apple and Pear Marketing Board no longer has the power to organize compulsory hail
insurance on behalf of growers after the Apple and Pear Marketing Act 1971 was repealed in 2000.
Private insurers now provide hail insurance.  Could New Zealand provide more information about the
reason for the repeal, and whether private insurers can also benefit from the same reason to provide
workplace accident insurance, which has been solely provided by the Accident Compensation
Corporation since 1999?  Besides, does New Zealand have any plan to open the residential property
disaster insurance to competition?
Answer - The repeal was a necessary result of the restructuring of the apple and pear industry. The
compulsory provision of hail insurance reflected the fact that the Apple and Pear Marketing Board
used to exercise a monopoly on exports. The regime was changed (as discussed in para 11 of Ch IV)
to remove that monopoly and the Board was replaced  by a company, ENZA, which has only a part of
the export market. Since there is no longer on e body with a statutory monopoly, it is no longer
possible or appropriate for ENZA to arrange hail  insurance for the whole market, including for
produce it will not be buying. Hail insurance is now available on a commercial basis.
Different factors were relevant to the decision in respect of ACC. New Zealand’s accident
compensation scheme provides accident insurance for all New Zealand citizens, residents and
temporary visitors to New Zealand. In return people do not have the right to sue for personal injury,other than for exemplary damages. The decision to retain ACC as the sole provider of insurance was
taken against that background, both to reduce costs and to allow the system to focus more on injury
prevention, as was originally intended.WT/TPR/M/115/Add.1
Page 36
New Zealand does not have any plan to change the current position in respect of residential property
insurance against earthquakes, volcanic eruption, hydrothermal activity, tsunamis and naturallandslips through the Earthquake Commission.
INDIA
General Economic Scenario
1. New Zealand had embarked on a path of radica l macroeconomic and structural reforms
about 20 years back; there appears to be a rethinking on this as evident in a number of liberalizationmeasures like unilateral tariff liberalization, privatisation of state assets envisaged under the reforms
programme being frozen. The government has assumed for itself a more ‘proactive’ role. Does the
government of New Zealand perceive that economic reforms should not be left entirely to market
forces to unfold?  What are the main factors, wh ich led the New Zealand to shun the path of complete
laissez faire?
Answer - Since the mid 1980s the New Zealand econo my has been a very open one.  Recent policy
changes reflect an emphasis by this Government on inter alia, a high quality regulatory framework
and the proper role of government to positively enhance the public sector framework where it impacts
on the effective operation of the private sector.  As such it recognised that there is a central role for
government, especially in addressing areas the market is unable to address adequately itself.
But it is important to recognise what has remained constant as well as what has changed.  New
Zealand remains a very open economy as evidenced by the Secretariat's own report.
- The halting of tariff reductions is not going back on earlier tariff reductions.
- As for privatisation, it cannot be argued that there has been a major shift in the pattern
of government/private ownership or influence in the commercial and financial sector.
The Government has stated that is will not run a state assets sale program. Instead
boards of SOEs and other Crown owned co mmercial organisations are expected to
enhance their value and their ability to contribute to economic social growth and
development. SOEs are separate legal entities from the Crown, and have operational
freedom in pursuing their primary objective of being a successful business. In
addition, the return to partial or full government ownership of a very small number of
entities reflects either the need to overcome weaknesses in private markets or toensure the ongoing viability of key infrastructure.
Moreover, reform can continue, and the Governme nt continues to put considerable effort into
enhancing the domestic regulatory environment. For example the government has set up the
Commerce Commission as an independent body and has made changes to the competition framework.
The Prime Minister said in a recent speech '[the current Government's approach is] not to advocate noreform, but rather to argue for well designed and balanced policies'.
2. For allowing foreign direct investment in Ne w Zealand, the government applies the criteria of
"national interest". For FDI in farmland, the governm ent need to be satisfied that the proposed FDI is
not only in ‘national interest’ but will also result in "substantial and identifiable benefits".  We would
like to know how an assessment about the actual fulfil ment of these criteria is made before allowing
the entry of FDI?WT/TPR/M/115/Add.1
Page 37
Answer - Land applications need to include a business plan that quantifies the benefits and sets out a
likely timeframe.  Any independent professional reports verifying the rationale and viability of theinvestment should also be supplied if they are available.
The business plan should also address the following areas:
a. A quantified figure of how many new job opportunities will be created, and what
these roles are likely to encompass;
b. How will this acquisition increase production on the property. Will this be impacted
by capital injections, new technology?;
c. Specify market effect as a result of the investment;
d. Outline of the costs and timing for the "milestones" of establishing the investment;
and
e. Specific description of the actual technology or business skills that will be introduced
and when. This may be business skills such as corporate 'best practice standards' or
technical processes or operational systems.
f. Quantify the 'net' benefit of the investment.
In order to get a sense of the actual benefits of the particular investment, the Commission requires
information pertaining to the current operations of the properties in question. The informationrequired for the subject property should include:
a. Current persons employed on each property;
b. An indication of any revenue generated by the property (per annum);
c. An indication of the expenditure required to maintain the property (per annum); and
d. Stocking levels on the whole farm by reference to current and likely future stock
units.
In addition, we compare most farm applications against the Ministry of Agriculture and Forestry
"Farm Monitoring Reports".
3. Para. 17 of the Summary Observations of the Secretariat Report notes that as part of
government’s pro-active strategy, a new institution, New Zealand Export Credit Office (ECO) has
been established in March 2001 to provide assistance for insurance or guarantees to small and
medium sized exporters. Would the government of New Zealand elaborate on the functioning of theECO and confirm that the assistance provided to exporters is in accordance with the provisions of the
Agreement on Subsidies and Countervailing Measures (ASCM).
Answer - The operation of the New Zealand Export Credit Office (ECO) is fully consistent with the
WTO Agreement on Subsidies and Countervailing Measures and the OECD Arrangement on
Guidelines for Officially Supported Export Credits, which means it prices to cover all costs, includingcapital costs, in accordance with WTO rules.
The Export Credit Office has a mandate not to compete with the commercial sector - so it only
provides medium-long-term products (as they are not provided in NZ by the commercial sector), andit does not provide direct financing - preferring instead to work with commercial financiers to provide
loans to buyers of NZ exports.  Accordingly, the Export Credit Office provides medium-long-term
trade credit insurance. i.e., insurance of payment by the buyer for transactions with a credit term
greater than one year, and where the (useful) life of the export in question is longer than the intended
repayment term. WT/TPR/M/115/Add.1
Page 38
RTAS
4. As the Secretariat Report notes, the bilateral agreement with Singapore has resulted in
changes to the New Zealand’s legislation on anti- dumping and countervailing measures?  Would the
delegation of New Zealand elaborate on the changes made recently in its trade-remedy legislation?
We would like to know whether trade remedy rules applied to the preferential partner deviate from
the specific provisions contained in the WTO agreements on anti-dumping and countervailing
measures?  If so, details thereof may be given.
Answer - The changes made to New Zealand's legislation on anti-dumping and countervailing
measures as a result of our Closer Economic Partnership agreement with Singapore are as follows:
- The de minimis  margin of dumping, in terms of Article 5.8 of the Anti-Dumping
Agreement, in the case of goods of Singaporean origin, is a dumping margin of less
than 5 percent, expressed as a percentage of the export price. (Article 5.8 requires thata dumping margin is de minimis  if it is less than 2 percent).
- The volume of dumped imports of Singaporean origin shall normally be regarded as
negligible in terms of Article 5.8 of the Anti-Dumping Agreement, if those imports
account for less than 5 percent of the imports of the like product into New Zealand.
(Article 5.8 requires that the volume of dumped imports shall normally be regarded asnegligible if the volume of dumped imports from a particular country is found to
account for less than 3 percent of the imports of the like product). The existing
cumulation provisions of Article 5.8 continue to apply.
- In terms of Article 11.3 of the Anti-Dumping Agreement and Article 21.3 of the
Agreement on Subsidies and Countervailing Measures, the specified period that anti-
dumping and countervailing duties will ap ply to goods of Singaporean origin is
3 years, unless a review is initiated before the expiry of the 3 year period.(Articles 5.8 and 21.3 specify that anti-dumping and countervailing duties will expire
5 years after they were imposed or last reviewed, unless a review is initiated before
the expiry of the 5 year period).
The effect of the changes is therefore to apply higher thresholds than are provided for in the Anti-
Dumping Agreement before New Zealand can apply anti-dumping duties on goods of Singaporeanorigin.
SPS
5. New Zealand maintains a highly stringent sanitary and phyto-sanitary regime. Through its
bio-security policy, it has effectively banned the import of most non-pasteurised cheese, fresh eggs
and poultry. Would the government of New Zealand indicate the objectives sought to be achievedthrough its SPS policy.   How would the government justify pursuance of such a policy in the light of
multilateral disciplines prescribed in the WTO agreement on SPS measures?  Also how would such a
conservative and stringent quarantine policy fit into New Zealand’s overarching objective of
agriculture trade liberalization?
Answer - Like other WTO Members, the New Zealand Government balances the health risks that
imported goods can pose with the benefits resulting from trade, such as lower costs and wider choice
for consumers.  New Zealand is a strong advocate of the SPS Agreement and is committed to setting
standards at a level that is reasonable and that are based on scientific principles.  All WTO Members
benefit from multilateral commitment to science-based standards developed through consistent andWT/TPR/M/115/Add.1
Page 39
transparent processes.  Further detail on the import requirements for the specific products mentioned
is available from New Zealand’s SPS Contact Point.
Further detail on the import requirements for the specific products mentioned is available from New
Zealand’s SPS Contact Point.
TRIPS
6. Para 21 of the Summary observations in the Secretariat Report notes that the government has
enacted the GI Act; however it is not yet in force. Pending the enforcement of the GI Act, how has thegovernment been fulfilling its obligations under Section 3 of the WTO TRIPS Agreement?
Answer - New Zealand protects geographical indi cations through the Fair Trading Act 1986 and the
common law tort of passing off.
TARIFFS
7. Although the applied MFN tariff rate in New Zealand is 4.1%, considerably high tariff rate is
applicable to textiles, clothing and leather products, which are sectors of crucial export interest to
many developing countries. Tariff peaks and escalation are also very evident in these three sectors.
Does the government intend to reduce tariffs in thes e sectors and what are its plans to address tariff
peaks and escalation?
Answer - The current tariff review covers all indu stries, including the textiles, clothing and leather
industries. The review will include a wide-ranging assessment of the impacts of previous tariff
reduction as well as projected impacts of any further tariff reduction on all sectors of New Zealand,
including the textiles, clothing and footwear (TCF) sector. New Zealand would be pleased if the
maximum ad valorem  tariff it faced in its export markets was just 19%.  The review will also consider
the most appropriate tariff structure, including the structure for the textiles sector and the application
of alternative specific tariffs.
8. Clothing products are subject to "alternative specific tariff rates" i.e importers pay the higher
of the due amount under the ad-valorem duty rate and under the specific duty rate?  The use of such a
system not only unduly penalizes low value exports but also introduces a lot of complexity and
unpredictability to the system.   We would like to hear from the government about its plan to simplify
its tariff structure in the textiles sector.
Answer - The current tariff review covers all industries, including the textiles sector. The review will
include a wide-ranging assessment of the impacts of previous tariff reduction as well as projected
impacts of any further tariff reduction on all sectors of New Zealand, including the textiles sector. The
review will also consider the most appropriate tariff structure, including the structure for the textiles
sector and the application of alternative specific tariffs.
9. As per the existing taxation system prevalent in the clothing sector, in cases where importers
feel that the specific rate of duty they are required to pay is unreasonably high, they may apply for
‘concession’. In case concession is granted, the tariff could be paid at the ad-valorem component of
the alternative specific duty. What are the parameters, which guide the authorities in granting such
tariff concessions?  When can an importer deem  a specific rate as ‘unreasonably high’? Upon a
request being made, what is the normal time fram e within which authorities are supposed to decide
about the grant of tariff concessions? In the event of gr ant of tariff concessions, how is extra paymentWT/TPR/M/115/Add.1
Page 40
reimbursed to the importer?  Does the governm ent have any plans to make the system more
transparent and predictable?
Answer - Applications for tariff concessions are c onsidered for goods that are subject to alternative
specific rates of duty where the goods are of such low value that the resultant duty payable is
manifestly excessive.
The goods that are considered under this concession category are parts of apparel for use as
manufacturing inputs or disposable articles of apparel classified in the plastics/textile apparel chaptersof the Tariff. In all cases the goods must be identifiable as having an intrinsically low value for which
the specific rate of duty was not designed. Each application is considered on merit but applications are
not accepted under this policy in respect of low value "wardrobe" type garments or complete articles
which are not manufacturing inputs and which are designed [intended] to be worn more than once.
If a concession is approved under the above policy, the concessionary rate of duty is the alternative
ad valorem  rate applicable to the tariff item under which the article is classified, i.e. these concessions
only result in the removal of the specific tariff.
The normal time frame from the receipt of a tariff concession application through to the final decision
is about 5 weeks. This includes a three week public notification period of the concession application
during which local producers may notify the Ministry of Economic Development of their objection tothe granting of a concession.
Concessions are effective from the first day of the month in which the Ministry of Economic
Development receives the application. When a concession is issued after a product is imported, the
importer may apply for a refund of the tariff duty paid. Similarly, should an importer omit to claim a
pre-existing concession on import, a refund of duty based on that concession might be applied for.
The New Zealand Customs Service provides a binding ruling system that covers both tariff
classification and concession applicability against imported goods. Opinions issued under thisarrangement are designed to provide the importer with  certainty in the tariff treatment that their goods
encounter on importation.
The tariff concession system is continually being reviewed. Transparency and predictability is
achieved through a procedure of notifying all applications and decisions in the New Zealand Gazette
as well as on the Ministry's web site:  http://www.med.govt.nz/buslt/tariffs/reference_99/index.html.It is also achieved by having the Tariff Concession Policy and Procedures Manual freely available to
all.
10. Is there any mechanism to take into account the recent trend in the international prices to
regularly revise the specific duty component in "alternative specific tariff rates"?
Answer - There is no specific mechanism to revise specific tariffs on a regular basis, but specific
tariffs as a whole are being examined in the context of the current tariff review.
11. It has been noted that samples of spices cleared by laboratories elsewhere in the world fail
during testing in New Zealand. The methods of analysis are not disclosed to the exporters so the
results/test cannot be verified independently. Would the government of New Zealand furnish
justification for the same?WT/TPR/M/115/Add.1
Page 41
Answer - The New Zealand Food Safety Authorit y (NZFSA) manages the import entry of selected
spices.
The selected spices that are monitored on entry to New Zealand are - pepper, paprika cinnamon and
nutmeg.  These are monitored because these spices have been found to have a higher risk of
contamination than other imported spices.  All varieties and mixtures of other spices go directly into
the market place once they have cleared MAF biosecurity.
Details of negotiated arrangements with third countries and test methods are available of the website.
To check the high risk foods import procedure see the following website for details on high risk foods
– http://www.adhb.govt.nz/akphp/Services.htm (select "Imported Foods" and click on "GO", select
the "Food Commodity" you want details on click "GO" for more details).
Third party certification is not accepted unless specifically negotiated.  The test method is publicly
disclosed.
INDONESIA
1. Since the 1980, New Zealand has initiated its reform to a market oriented and resulting in
reducing most barriers to trade both in the form  of tariffs and non tariff.  However, while New
Zealand has successfully reduced tariff from 14,5% in 1988 to 4,1%in 2002, tariff peak is still in
place for those products on interest to Indonesia namely, textiles and clothing and leather products.Could New Zealand give clarification on this matter?
Answer - New Zealand’s tariff reduction programmes began in 1988 and were across-the-board
reductions. From 1988 until 2000, tariffs on all products were gradually reduced, with tariffs on
textiles, clothing, footwear and leather products initially reducing faster than other tariffs as they were
as high as 65%. Given the unique characteristics of  the textiles, clothing and footwear (TCF) sector,
tariffs continue to be higher on TCF products than for other sectors, with the highest ad valorem  rate
at 19%. New Zealand wishes the maximum tariff it faced in export markets was 19%.  The currenttariff review will consider the most appropriate tariff structure beyond 1 July 2005, including for
textiles, clothing and leather products.
2. In relation to question 1 above, New Zealand has also imposed "alternative specific" tariff
rate that could conceal tariff peaks and tariff escalation.  Se also footnote 10 which stated that New
Zealand uses "alternative specific rate", with a specific and an ad valorem component for 390 tarifflines or 195 tariff "pairs".  In this context, Indon esia wishes to have a detailed clarification on how
the Government of New Zealand determines the criteria to impose that kind of tariff instead of tariff
peak and/or tariff escalation.
Answer - New Zealand has a very small number of alternative specific tariffs which apply largely to
clothing imports. Alternative specific tariffs on clothing were last reviewed in 1991. Following thisreview a number were removed on the basis of low usage. The current tariff review will consider the
most appropriate tariff structure beyond 1 July 2005, including alternative specific tariffs.  Decisions
are likely to be taken in mid to late 2003.
3. In page 26 of the Secretariat Report, it is stated that minor changes have been made to the
antidumping, countervailing and safeguards legislat ion due to the Closer Economic Partnership with
Singapore and Australia.  Can New Zealand give justification on this statement?WT/TPR/M/115/Add.1
Page 42
Answer - The following changes have been made to New Zealand's anti-dumping, countervailing and
safeguards legislation as a result of our Closer Economic Relations/Partnership agreements withSingapore and Australia:
Singapore:
- The de minimis  margin of dumping, in terms of Article 5.8 of the Anti-Dumping
Agreement, in the case of goods of Singaporean origin, is a dumping margin of less
than 5 percent, expressed as a percentage of the export price. (Article 5.8 requires thata dumping margin is de minimis  if it is less than 2 percent).
- The volume of dumped imports of Singaporean origin shall normally be regarded as
negligible in terms of Article 5.8 of the Anti-Dumping Agreement, if those imports
account for less than 5 percent of the imports of the like product into New Zealand.
(Article 5.8 requires that the volume of dumped imports shall normally be regarded asnegligible if the volume of dumped imports from a particular country is found to
account for less than 3 percent of the imports of the like product). The existing
cumulation provisions of Article 5.8 continue to apply.
- In terms of Article 11.3 of the Anti-Dumping Agreement and Article 21.3 of the
Agreement on Subsidies and Countervailing Measures, the specified period that anti-dumping and countervailing duties will ap ply to goods of Singaporean origin is
3 years, unless a review is initiated before the expiry of the 3 year period. (Articles
5.8 and 21.3 specify that anti-dumping and countervailing duties will expire 5 years
after they were imposed or last reviewed, unless a review is initiated before the expiry
of the 5 year period).
- Neither New Zealand nor Singapore can take safeguard action against goods of the
other country's origin.
Australia:
- New Zealand cannot take anti-dumping action against goods of Australian origin.
Goods of Australian origin are those that qualify for preferential entry under the
Closer Economic Relations Agreement with Australia.
- Neither New Zealand nor Australia can take safeguard action against goods of the
other country's origin.
JAPAN
II.  TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES;  (5) FOREIGN
INVESTMENT REGIME
Investment
(p. viii, paragraph 10 of the summary observation and p. 24, paragraph 32 of the Secretariat
Report;  p. 7, paragraph 16 of the Government Report)
1. Under the Overseas Investment Regulations , 1995, consent by the Overseas Investment
Commission (OIC) must be sought for the acquisition by overseas persons of 25% or more of the
securities, or 25% or more of the voting power in th e company, if the value of the assets of the issuer
of the securities exceeds $NZ50 million.  Also, under this Regulation, consent by the OIC must be
sought, in principle, for the acquisition of land of more than 5 hectares by an overseas person.  Please
provide the reasons for requiring said consent.WT/TPR/M/115/Add.1
Page 43
Answer - New Zealand welcomes foreign investment to New Zealand as it recognises that it brings a
number of benefits to New Zealand. These benefits include:
a. bringing  an inflow of capital which is typically less liquid than debt or portfolio
investment and thus involves greater commitment to New Zealand;
b. allowing  development that cannot be fully funded domestically;
c. increasing competition and efficiency. This in turn stimulates local firms to become
more competitive and therefore increases the role of market mechanisms;
d. encouraging New Zealand exports through either multinational corporations or
linkages with domestic corporations;
e. bringing an inflow of knowledge,  skills and technology to the economy;
f. providing direct and indirect employment. Multinational corporations can generate
considerable employment through both forward and backward linkages withenterprises in New Zealand and the country in which the investor is based. An
example is the linkages through the purchasing of raw materials, parts, components
and services from subcontractors; and
g. developing offshore networks.
The screening regime is considered an important part of ensuring that New Zealand adequately
captures these benefits.
2. In the case of overseas investment in farmland, the land can be purchased by overseas
persons when, after making an offer on the open market, sellers cannot find purchasers who are not
overseas.  What is the rationale of this system?
Answer - The policy change was to ensure that potential domestic purchasers were provided with the
same opportunities as international investors to buy farm land.
New Zealand does not consider this a more restrictive practice as there is no requirement on the
vendor to sell to an interested domestic buyer before advertising internationally. The vendor is free to
wait and weigh up all offers, both domestic and international, on the property.
Ministers have discretion to waive the advertising requirement. This discretion can be (and has been)
used to ensure that shares in New Zealand publicl y listed companies, that own or control ‘farm land’
can continue to be freely traded.
III.  TRADE POLICIES AND PRACTICES BY  MEASURE;  (3)  MEASURES DIRECTLY
AFFECTING EXPORTS
(p. 45, paragraph 65 of the Secretariat Report)
Export prohibition and restrictions
According to the Report, export restrictions are maintained for marketing reasons in the case of some
agricultural products, including kiwifruit, dairy products, and horticultural products.  In this regard,
3. Please indicate what items are included in  "dairy products" and “horticultural products”.
Please also explain "marketing reasons" in a concrete manner.
Answer - The Government enacted legislation in September 2001 authorising the merger of New
Zealand’s two largest co-operative dairy companies (New Zealand Co-operative Company Ltd andWT/TPR/M/115/Add.1
Page 44
Kiwi Co-operative Dairies Ltd) and the New Zealand Dairy Board.  The legislative provisions
providing monopoly export status to the New Zealand Dairy Board were removed.  The remainingmarketing restrictions exist for some products including certain specified cheese, butter and some
milk powders for export to a small number of designated markets.  This is necessary to manage the
transition period after the removal of the Dairy Board’s export monopoly.  The designated markets are
those where certain import restrictions are in effect.  Other than in these circumstances any entity can
export dairy products from New Zealand.
In terms of horticultural products, the New Zealand Horticulture Export Authority (HEA) was
established in 1987 under the Horticulture Export Authority Act 1987.  The primary function of the
HEA is to promote the effective export marketing of prescribed horticultural products, for the
commercial benefit of producers.  This mechanism is available at the request of product groups, as
representative of growers and exporters of a product, and can revoke inclusion of their product groupfrom the Act.  Horticultural products, within the provisions of the HEA Act, include apricots,
avocados, blackcurrants, boysenberries, cherries, chestnuts, peaches, persimmons, plums, squash,
table grapes, tamarillos and truffles.
4. Please provide detailed information on the conditions to initiate this measure, procedures for
initiation, legislation that is the basis of this measure, and the governmental organizations which areinvolved when taking this measure.
Answer - For information on the conditions of these measures refer to the STE notifications by
New Zealand to the WTO (WTO documents G/STR/N/6/NZL and G/STR/N/7/NZL).  Note that a
further updating notification is currently under preparation.
5. Please provide detailed data on the initiation of this measure since 1996, item by item (i.e. the
year of initiation, the period, contents of measures, reason for initiation, the articles of WTO
Agreements which are the bases of respective items, and the Members with which NZ made aconsultation according to Article 12 of the Agreement on Agriculture).
Answer - With the exception of new products groups brought within the provisions of the HEA Act,
New Zealand has not instituted any new export prohibition or restriction on foodstuffs.
(4)  OTHER MEASURES AFFECTING PRODUCTION AND TRADE
Intellectual property rights
(p. 60, paragraph 111 of the Secretariat Report)
6. Does New Zealand have any intention to accede to the WCT and WPPT.  If yes, when? Please
also explain in detail which parts of the current legislation have to be amended in order to implement
these treaties.  Will the amendment cover the right of making available, and remedy measures on
obligations concerning the rights management info rmation and the technological measures, which
are prescribed in WCT and WPPT?
Answer - New Zealand is currently undertaking a revi ew of the implications of digital technology for
copyright. This review is also considering the implications of the WCT and WPPT. The Government
will be considering the outcome of the review later this year.WT/TPR/M/115/Add.1
Page 45
(p. 63, paragraph 122 of the Secretariat Report)
7. In recent years, there has been a tendency in western countries to extend the period for
protection of intellectual property rights to 70 years.  Does New Zealand intend to do this?
Answer - No.
(p. 63, paragraph 123 of the Secretariat Report)
8. Under the Copyright Amendment Act 1998, the Government removed the prohibition in the
Copyright Act 1994 on parallel imports of goods subject to copyright protection.  However, inDecember 2001, the Government announced that it would be introducing legislation to ban parallel
imports of films, videos and DVDs.  Please provide a detailed explanation on the background of
banning parallel imports of these products.  Why are the parallel imports of only these products
banned, whereas those of music recordings, books and software are not banned?  Please explain the
reason why the period to ban parallel imports of f ilms, videos and DVDs is for nine months from a
title’s first international release.
Answer - The ban on the parallel importation of films (including videos and DVDs) is to address
concerns expressed by representatives of the motion picture industry that parallel importing could
threaten the financial viability of widespread theatrical exhibition of films in New Zealand, in cases
where videos and DVDs of major films are imported into New Zealand ahead of the New Zealandtheatrical release date. The availability of copies of new release films for rental before or during the
release of those titles in New Zealand was considered to threaten the viability of cinemas and the
ability of local distributors to supply prints to cinemas for exhibition. This was seen as a concern
particularly for rural and provincial picture thea tres, with consequent detrimental effects on those
communities. The ban on the parallel importation of films seeks to manage these impacts, by
providing a sufficient period of time (9 months) to allow for theatrical release. The ban does not
extend to sound recordings and computer programs given the above comments regarding film-specificconcerns.
9. The Report states that the Government intends to introduce legislation to strengthen the onus
of proof in civil copyright infringement cases, making it easier for rights holders to take action
against copyright infringement in relation to certain imported copyright works.  In the Copyright Act,
are there any other measures which relax the onus of proof by right holders?  If any, please explainthem in detail.
Answer - There are no other measures in the Copyright Act 1994 of the kind introduced by the Bill.
In all other cases the onus of proof lies with the plaintiff.
10. In New Zealand, parallel imports on brand items are permitted, which creates a negative
effect on the New Zealand subsidiaries of foreign companies that hold such a brand.  Does theGovernment take any measures against this?  If any, please explain them in a concrete manner.
Answer - The government does not propose to make further changes in respect of parallel importing
at this time.  The effect of parallel importing on consumers is to create a more competitive supply of
products, with consequential benefits in terms of increased consumer choice and lower prices.WT/TPR/M/115/Add.1
Page 46
(p. 65, paragraphs 127-130 of the Secretariat Report)
11. The Report states that a lot of items which infringe intellectual property rights are being
seized by the New Zealand Customs Service.  Which are the major countries exporting piracy items?
Does New Zealand take any measures to restrain them?  Furthermore, does New Zealand take any
measures against the distribution of piracy items in the domestic market, in particular, infringement
on the Internet?
Answer - The major countries are China (approx 60%), Thailand (approx 15%) and Indonesia (approx
15%).
The Copyright Act 1994 provides a range of measures against copyright infringement including:
- If copyright has been infringed, the copyright owner can take legal action against the
infringer through the courts.  This can include suing the infringer for damages as
compensation; seeking an injunction to stop the infringer carrying out or continuingthe infringing activity or to seize the infr inging goods; or applying for an order to
have infringing goods delivered to the copy right owner, or to have the infringer pay
any profits made from the infringing activity to the copyright owner.
- Provision for copyright owners and licensed distributors to take legal action in
relation to making or commercial dealing in devices designed to circumvent or 'hack'copy-protected electronic works, and the publishing of information intended to assist
persons in undermining copy-protection measures.  Similar action can be taken in
relation to apparatus or devices designed or adapted to facilitate unauthorised
reception of subscription television services.
- Some types of copyright infringement that involve the making for sale or hire or other
commercial dealing in infringing copies, including importing, distribution and
offering for sale or hire can amount to criminal offences that can be prosecuted by thePolice.  Where criminal liability arises, copyright infringers can be fined or subject to
a period of imprisonment.
- The government recently passed the Trade Marks Act 2002, which will enter into
effect later this year, replacing the existing Trade Marks Act 1953.  The new Act
includes the existing civil remedies against trade mark infringement, but also createsnew offences (i.e. makes it a criminal matter) in relation to the counterfeiting of trade
marks. The new Act sets out stringent penalties on conviction of an offence.  This
includes substantial fines and a maximum term of imprisonment of five years.
IV.  TRADE POLICIES BY SECTOR;  (4)  SERVICES
Transport
(p. 92, paragraph 93 of the Secretariat Report)
12. The Report states that the discriminative practices that may have the effect of reducing
competition would be in need of independent investigation by the Commerce Commission. In this
regard, please provide information on concrete incidents during the past several years, including the
number of actual applications and the results of investigations, relating to port services and coastalshipping services.
Answer - Specific instances of competition issues about port companies are set out in Chapter 6,
Market Power Concerns, of the report "Port Companies and Market Power - A Qualitative Analysis"WT/TPR/M/115/Add.1
Page 47
prepared in the April 2002 by Charles Rivers Associates Ltd for the Ministries of Transport and of
Economic Development.  Copies of this report may be obtained through the Ministry of Transport’swebsite at:  http://www.mot.govt.nz/publications/index.shtml.
The Commerce Commission has not received formal complaints, or conducted investigations inrespect of anti-competitive practices in the coastal shipping market.  Shortly after section 198 of the
Maritime Transport Act 1994 came into effect in February 1995 (this section allowed overseas
shipping companies to carry coastal cargo as pa rt of an international voyage), the Commerce
Commission held discussions with a cartel of overseas shipping operators to advise them that
collusive practices in the coastal shipping market would be subject to investigation by the
Commission.  This informal intervention was successful in deterring anti-competitive practices in
coastal shipping at that time.
(p. 92, paragraph 96 of the Secretariat Report)
13. The Report mentions that the Shipping Act 1987 provides that the Ministry of Transport may
issue directions to any carrier that is found to  engage in practices unfairly harming any New Zealand
shipper. In this connection, Japan would like to kn ow whether the Government has ever issued said
directions. If the government has, please provide details, including when, to which country and what
kind of directions the government issued.
(p. 93, paragraph 97 of the Secretariat Report)
14. Regarding “outward shipping legs of multim odal transport”, the Report states that the
Shipping Act 1987 covers them. In this regard, please provide a descriptive explanation on this issue.
Answer to both 13 & 14 - The statement in paragraph 97 of the Trade Policy Review refers to
competition regulation of outwards shipping markets.  Other matters of regulation, for example
maritime safety and environmental requirements, are set out in other legislation, such as the Maritime
Transport Act 1994.
In respect of competition regulation, when overseas shipping operators are engaged in carrying goods
by sea from a place in New Zealand to a place outside New Zealand, they are not subject to those
parts of the Commerce Act 1986 dealing with restrictive trade practices.  They are instead subject to
the Shipping Act 1987, which seeks to promote fair dealing and safeguard competition in New
Zealand’s outward shipping services, and also to discourage discrimination against New Zealand
shipping and trading interests by foreign governments.
The Shipping Act 1987 recognises both that New Zealand is reliant on international shipping services
provided by overseas shipping companies, and that some overseas shipping companies chose to
provide such services through collusive arrangements such as cartels or conferences.  The Commerce
Commission would likely investigate these types of restrictive trade practices if outwards shippingservices were subject to the Commerce Act 1986.  Under the Shipping Act 1987, however, these
practices are not investigated unless the Minister of Transport believes on reasonable grounds that
anti-competitive practices by carriers have, or are likely to have, a detrimental effect on the interests
of a New Zealand shipper (such as a New Zealand exporter).  One way of characterising this
difference is that, while competition in outwards shipping services is preferred, contestability in
outwards shipping services through the entry of new carriers, and also the countervailing power of
New Zealand shippers, will act as constraints on anti-competitive practices in outwards shipping
services.WT/TPR/M/115/Add.1
Page 48
The Shipping Act 1987, section 7, allows the Minister of Transport to issue directions to carriers
following investigations of anti-competitive practices.  These directions are to do with disclosure ofinformation about the carrier’s outwards shipping services and its agreements with other carriers.  No
such formal investigations have ever been carried out, and no such directions have ever been issued.
The Shipping Act 1987, section 12, also allows the government of New Zealand to make regulations
controlling the carriage of goods in ships where the Minister of Transport is satisfied that a foreign
government has adopted, or proposes to adopt, any measure that damages or threatens to damage NewZealand shipping or trading interests by adversely affecting the access of New Zealand national flag
carriers to seaborne cargo or of New Zealand shippers to the services of carriers of their choice.  No
such regulations have ever been made.  On two occasions (once in 1994 and once in 2000), New
Zealand government officials needed to consider potential concerns in outwards shipping arising from
measures contemplated by a foreign government.  These concerns were resolved amicably throughdiplomatic channels.
(p. 93, paragraph 100 of the Secretariat Report)
15. With regard to "The Australia and New Zealand Closer Economic Relations Agreement
(ANZCERTA)", please explain the outline of the relevant parts of the Maritime Transport Services.
Answer - Coastal shipping is currently excluded from the Protocol in Trade in Services to the
ANZCERTA by both Australia and New Zealand.  Ne w Zealand’s inscription in the Annex of the
Protocol  on coastal shipping states:
‘The Maritime Transport Act 1994 allows cargo or passengers (coastal cargo) to be picked up from
one port in New Zealand and carried to another by three categories of ships.  These are:
- New Zealand ships
- Ships coming to New Zealand to load cargo for unloading overseas or to unload
cargo which was loaded overseas;
- Ships which the Minister of Transport authorises to trade on the coast when there are
no ships from either of the above two categories available to carry coastal cargo.
Authorisation to carry coastal cargo must be obtained from the Minister of Transport
well in advance of the intended carriage.
Authorisation to carry coastal cargo is subject to compliance with other relevant provisions of the
Maritime Transport Act and with other law, including the Resource Management Act, the
Immigration Act, and border control legislation.’
The inscription was amended in September 1995.  Prior to this, ships trading in coastal waters had to
comply with requirements applie d to coastal ships by the Shipping and Seamen Act 1952.  In the
absence of suitable New Zealand tonnage equipment, foreign ships were permitted – providedconvention certificates were in order, the equivalent of local wages were paid to crew, and manning
complied with flag state requirements.WT/TPR/M/115/Add.1
Page 49
REPUBLIC OF KOREA
III. TRADE POLICES AND PRACTICES BY MEASURES
P. 26 (para. 2)
1. It is stated by the Secretariat that, although average MFN tariff rates are low (4.1 % in
2002), the applied MFN rates for some items like clothing, textile and leather products are relatively
high.
- Does New Zealand have a plan to reduce the tariff rates for those items in the near
future?
Answer - The current tariff review covers all indu stries, including the textiles, clothing and leather
industries. The review will include a wide-ranging assessment of the impacts of previous tariff
reduction as well as projected impacts of any further tariff reduction on all sectors of New Zealand,
including the textiles, clothing and footwear (TCF) sector.  New Zealand would be pleased if themaximum ad valorem tariff it faced in its export markets was only 19%.
P. 30 (para. 19)
2. The report by the Secretariat states that New Zealand planned to reduce the simple average
tariff, based on the ad valorem part of the tariff and the AVEs provided by the authorities, to 3% by
2000, but the new Government elected in 1999 decided to freeze further tariff reductions until at leastJuly 2005. The average is reportedly 4.1% in 2002.
According to the authorities, the freeze was motivated by the view that unilateral tariff reductions
were no longer appropriate. The Government has initiated a review of post-2005 tariffs and decisions
are expected to be taken by mid 2003.
- Please explain the more detailed reasons for the decision to freeze further tariff
reductions.
- Please inform us of the details of the review. (including how and on what basis the
review is conducted)
Answer - The decision to freeze tariffs at 1999 levels was based on the policy position of the new
Coalition government elected in November 1999. New Zealand is currently conducting a domestic
tariff review to decide the shape of domestic tariff policy post 2005. The current policy still allows for
tariffs to be reduced or removed on a reciprocal basis. The current tariff review covers all industries,including the textiles, clothing and leather industries. The review will include a wide-ranging
assessment of the impacts of previous tariff reduction as well as projected impacts of any further tariff
reduction on all sectors of New Zealand, including th e textiles, clothing and footwear (TCF) sector.
NORWAY
1. Deregulation
Over the last two decades, New Zealand has unde rtaken a series of fundamental deregulation in
different economic sectors. The formidable economic growth in recent years is to a large extent
attributed to the deregulation/privatisation efforts. New Zealand claims to have "the third freest
economy in the world" (WT/TPR/G/115, para 1), and we see no indications in the governmental
report that any changes in the deregulation policy are occurring.WT/TPR/M/115/Add.1
Page 50
However, we learn from other sources that preparations are underway for the deprivatisation of parts
of the railway system, effectively reversing earlier policy in this sector. Also in the health sector,deregulation apparently is considered or already undertaken.
It would be of interest to have a general comment on the overall experience with deregulation and the
present reassessment and (possible) need for corrections to this policy.
Answer - Since the mid 1980s the New Zealand econo my has been a very open one.  Recent policy
changes reflect an emphasis by this Government on inter alia, a high quality regulatory frameworkand the proper role of government to positively enhance the public sector framework where it impacts
on the effective operation of the private sector.  As such it recognised that there is a central role for
government, especially in addressing areas the market is unable to address adequately itself.
But it is important to recognise what has remained constant as well as what has changed.  New
Zealand remains a very open economy as evidenced by the Secretariat's own report.
- The halting of tariff reductions is not going back on earlier tariff reductions.
- As for privatisation, it cannot be argued that there has been a major shift in the pattern
of government/private ownership or influence in the commercial and financial sector.
The Government has stated that is will not run a state assets sale program. Instead
boards of SOEs and other Crown owned co mmercial organisations are expected to
enhance their value and their ability to contribute to economic social growth and
development. SOEs are separate legal entities from the Crown, and have operational
freedom in pursuing their primary objective of being a successful business. In
addition, the return to partial or full government ownership of a very small number of
entities reflects either the need to overcome weaknesses in private markets or to
ensure the ongoing viability of key infrastructure.
Moreover, reform can continue, and the Governme nt continues to put considerable effort into
enhancing the domestic regulatory environment. For example the government has set up the
Commerce Commission as an independent body and has made changes to the competition framework.
The Prime Minister said in a recent speech "[the current Government's approach is] not to advocate no
reform, but rather to argue for well designed and balanced policies".
Beyond that government policy makers in New Zealand as in other economies are continually striving
to set the boundary between government and private sector in a sensible place.  In New Zealand the
rail operator was privatised in 1993. That privatisation included the track but not the underlying rail
corridor. The rail operator has encountered financial difficulties recently. The government intends that
the rail network will remain in place, and that there be a strong rail operator, so that New Zealanders
continue to have the option of using rail.  The Government is currently considering a range of optionsto facilitate this.
No plans are being considered or undertaken to de-privatise any part of the health sector.
2. Tariff and duty free imports from LDCs
In July 2001 New Zealand introduced tariff and du ty free access for goods from LDCs. Norway has
introduced this same policy without restrictions as of 1 July 2002. We wonder whether this measurehas resulted in a measurable import growth from the LDCs? If not, will you undertake any specific
measures to make it possible for the LDCs to profit from tariff and duty free access?WT/TPR/M/115/Add.1
Page 51
Answer - Imports from least developed countries in the year ending 30 June 2002 (the first year after
the introduction of tariff and quota free access for least developed countries imports) wereNZ$44.49 million.  This represented an increase of over one hundred percent on total least developed
country imports for the year ended 30 June 2001, which were NZ$21.97 million.
While improving market access is a good first step, New Zealand recognises that least developed
countries face numerous supply-side constraints wh ich prevent them from taking advantage of new
opportunities in New Zealand, for example: a limited range of goods and services to export; limitedaccess to credit; inadequate market information; and undeveloped business and export skills. High
transport costs to New Zealand and the fact that least developed countries’ products are in highly
competitive markets are further constraints.
So, providing tariff-free access is only a part of the picture. New Zealand also recognises that
developing countries need assistance in overcoming  these supply-side constraints. Consequently, New
Zealand’s development agency, NZAID, in conjunction with other government agencies, is providing
a range of trade-related development assistance to help developing countries tackle these challenges.
This includes assistance in rural and SME development, customs and phytosanitary matters. It will
also be scaling up its assistance in areas such  as trade promotion and community-based trading
partnerships where this has been identified as a need. Assistance currently amounts to ca.NZ$5mn p.a., although this is likely to increase in the next few years.
3. Genetic modification
Question - With a view to modifying the present legislation regulating genetic modification, New
Zealand undertook in September to December 2002 a public hearing. We would be pleased to know
what the main changes are expected to be and the reason behind them.
Answer - The public consultations held from September 2002 were on a series of proposals and
options for legislative change outlined in a discussion document " Improving the Operation of the
HSNO Act for New Organisms: Including Proposals in Response to Recommendations of the Royal
Commission on Genetic Modification" .  This document is available on the Ministry for the
Environment's website www.mfe.govt.nz.   The proposed changes form part of the Government's
response to recommendations made by a Royal Commission on Genetic Modification.  The Royal
Commission was established in 2000 to inquire into and report on the strategic options available toenable New Zealand to address GM now and in the future.  The Royal Commission was satisfied that
the basic regulatory framework was appropriate, but suggested a number of enhancements.
The Government announced on 12 February 2003 the changes it plans to make to the main legislation
covering GM.  The key decisions were to:
- Tighten the law relating to the regeneration of animals from tissue and to the
modification of human cell lines.
- Streamline the processes for approval of medicines that contain new organisms and
provide a fast-track system to be used to deal with a human or animal health or
biosecurity emergency.
- Provide for conditional release of new organisms.- Strengthen the machinery for compliance and enforcement where new organisms are
subject to controls, including providing for strict civil liability for harm caused by
non-complying activity and a civil penalty regime for certain breaches of the HSNO
Act.WT/TPR/M/115/Add.1
Page 52
- Improve the operability of the law through a number of provisions, including
clarifying the circumstances and procedures for protection of confidential supportinginformation.
Draft legislation encompassing these decisions is now being considered by the New Zealand
parliament.  It is expected to be passed by the end of October 2003. The changes proposed will ensure
that New Zealand's regulatory framework is pitched at the right level to allow genetic modification
developments to proceed cautiously while preserving opportunities.  Full details of the decisions takenby the government can be found at  www.mfe.govt.nz.
4. Labelling requirements
In December 2001 New Zealand introduced new labelling requirements for foods produced using
gene technology. This new legislation gives supermarkets and other traders technically the possibility
to refrain from presenting GM products to potential buyers. It would be of interest to hear more aboutyour experience with the new labelling system, and whether it has had any measurable effect on
consumers' buying patterns.
Answer - New Zealand has a content-based GM-food labelling system that is shared with Australia.
Labelling is required where novel DNA or protein is present in the final food, or the food has altered
characteristics.  There are some exemptions.  The GM food labelling requirements were introduced inDecember 2001 but had a one year transitional period of implementation provision.  The legislation
itself does not regulate non-GM labelling claims.  In New Zealand, this is covered by the Fair Trading
Act 1986 that requires that any claim must be accurate and not misleading.  There are only one or two
foods that have been labelled in New Zealand supermarkets since the new regulations came into full
force.  There are three possible reasons for this:
1. Many manufacturers are choosing to source non-GM ingredients.
2. Many products that contain ingredients derived from approved GM organisms are
highly processed, and therefore don’t necessarily contain novel DNA or protein; and
3. resh GM foods are sold in New Zealand (and these would be the most likely
candidates for labelling under the regime).
Due to the above and the short time the regulations have been in operation little can yet be said about
consumer buying patterns.  The compliance in New Zealand is assessed as being high.  Industry hastaken the requirements seriously and their documented assurances are generally of a high standard.
Audits of the regime have shown that in the main, instances of non-compliance are from accidental
presence and at very low levels (below 1%).  These have involved products on which "GM-free"
claims have been made.
SWITZERLAND
Report Secretariat (WT/TPR/S/115 )
II.  TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES;  (4)  TRADE
AGREEMENTS AND ARRANGEMENTS;  (iii)  Bilateral agreements
New Zealand's external economic policy emphasizes the crucial role played by multilateral trade
cooperation bodies such as the WTO. Regional and bilateral trade cooperation, the recent conclusionof the New Zealand-Singapore Closer Economic Pa rtnership being an example, represent a further
key aspect of this policy.WT/TPR/M/115/Add.1
Page 53
1. Could New Zealand say more on the strategy followed with regard to the selection of
potential bilateral or regional trade cooperation partners aiming at improving mutual opportunities
for trade in goods, services and investment? Is New Zealand already in a position to share withMembers first insights with regard to the comprehensive New Zealand-Singapore Closer Economic
Partnership Agreement?
Answer - The New Zealand Government has no formal list of potential FTA partners.  Nevertheless, it
recognizes that free trade agreements with key trading partners can open up new opportunities for its
exporters that complement gains made through the multilateral process. New Zealand is prepared to
consider free trade agreements with any economy, as long as they are of a comprehensive standardand are in New Zealand’s overall strategic and economic interest.
It is still too early to make definitive judgment s on the effects of the Singapore CEP, which has only
been in force for two years.
(5)  FOREIGN INVESTMENT REGIME;  (i)  Introduction
The Secretariat report's highlights the recent cr eation of the Investment Promotion Agency (IPA). The
main goal of such a body is straightforward. Init ial priorities are set in the information and
communication technology (ICT), creative, and biotechnology sectors.
2. Could New Zealand elaborates on the possible future or current need of setting up IPA
"antennas" in key markets abroad in order to come cl oser to potential investors? From the foreign
direct investment point of views, which are the current main prospective markets for New Zealand?
Answer - Investment New Zealand currently has a presence in North America through offices in New
York and Los Angeles. Through direct representation abroad we are able to work more closely with
potential investors and to offer them a single point of contact for advice and information about
investing in New Zealand. All this means we are better able to attract, retain and grow high quality
direct investment in New Zealand.  As part of this strategy of strengthening its presence in key
overseas markets, Investment NZ has recently ope ned offices in Singapore and Sydney to facilitate
foreign direct investment from the Asian countries and from Australia.
III.  TRADE POLICIES AND PRACTICES BY  MEASURE;  (2)  MEASURES DIRECTLY
AFFECTING IMPORTS
(viii)  Standards and conformity assessment3. According to the Trans-Tasman Mutual Recogn ition Arrangement  (TTMRA) mentioned in §
41, goods that are sold legally in Australia may be sold in New Zealand without having to meet the
New Zealand standard. Is the TTMRA only applicable to products originating in Australia and New
Zealand or does the TTMRA cover products irrespective of their origin? What is the product coverageof the TTMRA?
Answer - The TTMRA principle in relation to goods  means that goods need only comply with the
standards or regulations applying in the country in which they are produced or through which they are
imported before they can be sold in the other country. The TTMRA operates on a negative list system
that means that all products are covered unless they are specifically excluded.
At present the following goods are excluded from  the TTMRA: therapeutic goods, child seat car
restraints, motor vehicles, gas appliances, radio communication equipment, hazardous substances,WT/TPR/M/115/Add.1
Page 54
industrial chemicals and dangerous goods. These are dealt with under Special Exemption Co-
operation Programmes and apply in both countries.
In addition, New Zealand has recently taken out a temporary exemption for electrical water heaters
and lighting ballasts from Australia. This exemption will expire on 1 February 2004.
4. The secretariat’s report states that "Standards New Zealand" has accepted the Code of Good
Practice for the Preparation, Adoption and Application of Standards under Annex 3 of the WTO
Agreement on Technical Barriers to Trade. Point F of this Code obliges national standardization
bodies to use international standards as a basis for national standardization work. According to § 44of document  WT/TPR/S/115 only 29 to 35% of natio nal standards are equivalent to international
standards. What are the reasons for the relatively low level of harmonisation with international
standards? Are there any product sectors where the harmonisation level is especially low?
Answer - New Zealand is fully committed to the obligations flowing from the WTO TBT Agreement,
including the need to encourage the use of international standards. These agreements recognise that in
certain circumstances other standards may be preferable. In addition, the coverage of internationalstandards is incomplete and there may be no practical alternative to the use of national standards.
Standards New Zealand is the peak standards development body in New Zealand. International
alignment of standards increased from 31.2% to 35.0% in the year to 30 June 2002, an improvement
of 5%. This improvement was mainly in the areas of electrical appliance safety and usage. The rate is
relatively high compared with other national standards bodies in the region and is increasing as thestatistics show.
Areas where international alignment is lower relate to New Zealand's geography, especially seismic
issues associated with building. International alig nment is also lower in some areas of performance-
based regulation that are not mirrored elsewhere in the world. (In this respect New Zealand’s
approach responds to the exhortation in the TBT agreement that standards should be performance-
based rather than prescriptive where possible.)  New Zealand has a highly deregulated economy and
as such the use of international standards in some sectors is limited as a number of internationalstandards are more prescriptive than is required.
It should also be noted that there is high alignment with Australian standards (76.0% at 30 June 2002).
The Active Co-operation Agreement  between Standards New Zealand and Standards Australia
International facilitates the development of joint AS/NZS standards. Both countries are moving
towards the use of a greater number of international standards.
5. In the field of accreditation of certification and inspection services, New Zealand and
Australia operate one single Accreditation body, the JAS-ANZ. Is there a joint accreditation strategy
between Australia and New Zealand in the field of laboratory accreditation, e.g. by creating a singleaccreditation service for Australia and New Zealand in the field of testing and calibration?
Answer - JAS-ANZ was established by treaty between the Australian and New Zealand governments
and is the peak accreditation body in New Zealand responsible for the accreditation of certification
bodies. Accreditation by JAS-ANZ provides assura nce that third party certification bodies are
competent to carry out independent audits of management systems and to issue certificates ofcompliance for quality management systems (ISO 9001:2000), environmental management systems
(ISO 14000) or other management systems with specified criteria. JAS-ANZ also accredits the bodies
that certify products to the international standard ISO/IEC Guide 65: General requirements for bodies
operating product certification systems.WT/TPR/M/115/Add.1
Page 55
International Accreditation New Zealand (IANZ) is the operating arm of the Testing Laboratory
Registration Council, a statutory body of the New Zealand Government established by Act of
Parliament in 1972. It is responsible for the accreditation of testing and calibration laboratories and
inspection bodies against international standards ISO/IEC 17025 and ISO/IEC 17020 respectively.
IANZ is currently involved in Mutual Recognitio n Arrangements with 40 accreditation authorities in
29 of New Zealand’s major export markets, including  Europe, North America, Australia and a number
of developed Asia countries. MRA partner accreditation authorities will accept test, measurement andinspection reports from New Zealand if they bear the IANZ accreditation logo.
IANZ is a founding member of the International Laboratory Accreditation Co-operation (ILAC) and
the Asia Pacific Laboratory Accreditation Co-operation (APLAC). Australia is a member of both
these international groupings. In addition, IANZ maintains good working relations with its Australian
counterpart, National Association of Testing Authorities (NATA).
(ix)  Sanitary and phytosanitary measures
6. In footnote 47 on page 41, it is mentioned that a mandatory New Zealand standard for the
processing of milk and milk products is planned. Could you please inform on the progress of the
establishment of this standard and advise on when this standard is supposed to be effective. Further,
we would be grateful, if New Zealand could describe the main conditions that will have to be
respected for imported dairy products. Finally, would this standard be applied to domestic as well asto the imported dairy products?
Answer - The New Zealand (Milk and Milk Products Processing) Food Standards 2002 was issued on
18 November and came into effect on 20 December 2002.  It is available on the NZFSA website, atwww.nzfsa.govt.nz.  It applies to milk and milk products processed within New Zealand or imported
into New Zealand.  The Standard contains permitted methods of processing, which includepasteurisation, cheese treatment, ice cream treatment, and the method set out in the Ordinance on
Quality Assurance in the Dairy Industry of the Sw iss Federal Council of 18 October 1995.  It also
allows heat treatments that are as effective as pasteurisation in terms of bacterial reduction.
(x)  Government procurement
7. According to OECD figures up to 80 % of the international public procurement are covered
by the GPA, thus making a strong case for a participation of New Zealand in this plurilateral WTOagreement. Could New Zealand elaborate on its stance of not intending to become a member to the
GPA?
Answer - Like the New Zealand market in general, our government procurement market is already
open on a unilateral and decentralised basis, so that government agency buyers are free to make their
own market-based decisions and obtain best value for money through global competition. In terms ofNew Zealand export interests, exporter responses to surveys and analysis of relevant new market
opportunities that would be opened, have not to date indicated benefits sufficient to outweigh the
resource costs of negotiating accession and the administrative and transaction costs of meeting
membership obligations. Export interests in the important Australian government procurement market
are already secured by CER commitments, and the Singapore New Zealand CEP Agreement alsoincludes government procurement.  Developing countries’ government procurement markets are
generally outside the GPA, but New Zealand firms are competing and succeeding in these markets on
their merits.  Many development projects are covered by the competitive procurement rules of lending
institutions such as the World Bank.WT/TPR/M/115/Add.1
Page 56
8. Does the Australia –New Zealand Government Procurement Agreement  (ANZGPA) allow for
suppliers from other WTO member states to submit their offers? And if yes, which conditions must befulfilled in order to do so?
Answer - Individual ANZGPA members apply their own policies towards third country (non-ANZ)
suppliers.  New Zealand’s membership is on the basis of its own global no-preference policy, meaning
that it does not discriminate against other WTO members.
9. It seems that value thresholds would vary from agency to agency (§57); are there any rules or
principles applicable to all purchasing agencies in order to ensure transparency and accessibility of
the procuring system?
Answer - This question may be answered by refe rence to the publication "Government Procurement
in New Zealand: Policy Guide for Purchasers" issued by the Ministry of Economic Development in
July 2002 http://www.med.govt.nz/irdev/gov_pur/purchasers/index.html
In line with the freedom, and accountability of Chief Executives in New Zealand’s decentralised
public sector regime to manage for results within strict budgets, government agencies are responsible
for their own purchasing decisions, and each agen cy determines its own purchasing procedures,
including any value thresholds.  At the same time, the Government expects its departments, and
encourages other agencies, to be guided in their procurement by a number of stated principles, and hasendorsed the APEC Non-Binding pr inciples on Government Procurement, which include transparency
and non-discrimination.  The Policy Guide complements detailed good practice guidance offered in
the Auditor-General’s June 2001 publication "Procurement: a Statement of Good Practice"
http://www.oag.govt.nz/HomePageF olders/Publications/Procurement_Guide/Procurement_guide.htm
Generally there are no prescriptive rules or procedures.  The exceptions are ex-ante and post-award
notification requirements, which are mandated for government departments.
http://www.med.govt.nz/irdev/gov_pur/industrynz-notif/index.htmlhttp://www.med.govt.nz/irdev/gov_pur/postaward.html
The April 2001 review confirmed New Zealand’s transparent and non-discriminatory procurement
approach consistent with our international obligations and trade policy interests.  The establishment of
the post-award notification requirement was a direct outcome, designed to improve transparency for
all suppliers, domestic and international.  Contract award notices are published on the website of theNew Zealand Industrial Supplies Office http://www.gets.govt.nz/index.php3?viewCat=215 or
alternatively on individual departments’ websites which may be accessed from the New Zealand
Government home page http://www.govt.nz/en/home/
(4)  OTHER MEASURES AFFECTING PRODUCTION AND TRADE;  (vii)  Intellectual
property rights
10. In the report of the Secretariat it is mentioned that the Patent Act was amended recently to
allow manufacturers of generic drugs to commence chemical trials before a patent has expired. In
this context we would be interested to know what concrete measures your legislation provides to
ensure that undisclosed test data of pharmaceutical and agrochemical products submitted to
authorities in marketing approval procedures are protected against unfair commercial use(Article 39.3 of the TRIPS Agreement).WT/TPR/M/115/Add.1
Page 57
Answer - New Zealand protects confidential supporting information including undisclosed test data
through provisions in several pieces of legislation.  Specific protection is provided for confidentialinformation submitted as part of applications for regulatory approval of innovative agricultural
compounds or medicines under the Agriculture Co mpounds and Veterinary Medicines Act (ACVM)
1997 (as amended) and the Medicines Act 1981 (as amended) and, as applicable, the Hazardous
Substances and New Organisms Act 1996 (as amended) .  These Acts require the relevant Government
authority to ensure that confidential supporting information is kept confidential and not releasedexcept in accordance with the provisions of the Official Information Act 1982 (as amended), where
applicable.
Any information held by the Government may be released to the public under the Official Information
Act 1982, subject to exclusions for example in relation to national security.  The OIA aims to increase
the availability of official information to the people of New Zealand in order to enable their moreeffective participation in the making and administration of laws and policies and to promote the
accountability of Ministers and officials.  The provisions in the OIA on the release of information are,
however, balanced by specific protection for confidential supporting information.  If the authority
holding the information submitted as part of an ap plication for regulatory approval of an agriculture
compound or new medicine receives a request to release information under the OIA, the authority canwithhold that information "where the making available of the information would disclose a trade
secret or would be likely unreasonably to prej udice the commercial position of the person who
supplied or who is the subject of the information" (section 9(2)b of the OIA).  In addition the
Government has recently recommended that the legislation be amended in future so that the authority
must also "make all reasonable efforts” to contact the person or persons who supplied the information,
prior to responding to any request to release the information.
The recent amendment to the Patents Act did not affect the provisions in other legislation governing
the protection of confidential information.
11. More specifically, please explain how your legislation ensures that undisclosed and
confidential test data or other data submitted by an applicant to the responsible State agency in the
procedure for market authorization of a pharmaceu tical or of an agrochemical product is protected
against disclosure and against unfair commercial use by a competitor, for example by prohibiting asecond applicant from relying on, or from referring to  the original data of the first applicant, when
applying subsequently for market authorisation for his own product. Does your legislation provide for
a fixed term of protection for undisclosed inform ation / such test data of the first applicant?
Answer - Under the Medicines Act, confidential  information (including undisclosed test data)
submitted as part of an application for regulatory approval of a pharmaceutical product may not becross-referenced in another application for approval.  The initial term of protection is five years while
the new medicine is being developed.  If regulatory approval is obtained within that period, protection
is extended for another five years.  Once this period of protection has expired, and provided the patent
for a product has also expired, data may be cross-referenced in subsequent applications for approval
of equivalent generic products.  Similar provisions on cross-referencing exist in respect ofconfidential information submitted as part of an application for regulatory approval of an agricultural
compound under the ACVM Act.
12. Switzerland welcomes the plans of the Government of New Zealand to introduce legislation
strengthening the possibilities of the right holder to take action against copyright infringements in
civil cases regarding certain imported copyrighted works. In this context, we would welcome furtherinformation concerning this Draft and would be interested to know if the Government of New Zealand
plans to introduce similar legislation in the fields of patents and trademarks.WT/TPR/M/115/Add.1
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Answer - The measures to which this question refer are included in the Copyright (Parallel
Importation of Films and Onus of Proof) Amendment Bill 2002, which was recently introduced intoParliament.  The Bill proposes the following changes to the onus of proof in civil proceedings
concerning the importation of films, sound recordings and computer programs:
- the introduction of an objective knowledge requirement, requiring the plaintiff to
prove that the defendant knows or ought reasonably to know that the imported work
is an infringing copy.  The current test in the Act is that the defendant "knows or hasreason to believe".
- The burden of proof is placed on the defendant to rebut the presumption that the
imported work is an infringing copy.
The Government has no plans to make similar changes to other intellectual property statutes.
SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU
Unilateral Tariff Reduction Plan
(p. 9, para. 13;  p. 17, para. 10;  p. 26, para. 2;  p. 30, para. 19;  p. 67, para. 3)
We had previously welcomed New Zealand’s firm comm itment to future global trade liberalization. In
2000, the New Zealand Government decided to suspend, until at least July 2005, its continued
unilateral tariff liberalization that had originally been envisaged up to 2006.
1. Could New Zealand please confirm whether it still has a plan to carry out further tariff
concessions on a reciprocal basis under its WTO, APEC and regional trade agreements with various
trading partners. If so, we would appreciate bei ng provided with the timetable for such a plan.
Answer - New Zealand announced in April 2000 that further unilateral tariff reductions were to be
suspended until 1 July 2005. The current policy does, however, allow for tariffs to be reduced or
removed on a reciprocal basis.  In addition, NZ removed all tariffs on imports from least developed
countries in July 2001. Tariff policy beyond 1 July 2005 is subject to an ongoing review.New Zealand would be pleased if the maximum tariff it faced in its export markets was just 19%.
Tariff Rates for Textiles and Clothing Products
(p. 26, para. 2;  p. 32, paras. 20 & 21;  p. 67, para. 3;  p. 76, para. 31)
2. We notice that New Zealand’s average applied MFN tariff in 2002 was relatively low, at
4.1%. However, there are still some tariff peaks applied to textiles and clothing products. Tariff ratesfor clothing products are particularly high, averaging 18.6%, and show signs of significant tariff
escalation, adversely affecting imports of processe d products. Could New Zealand please advise us of
any plans it has to reduce the number of items subj ect to tariff peaks and moderate the conditions
causing tariff escalation?
Answer - The current tariff review covers all indust ries, including the textiles and clothing industries.
The review will include a wide-ranging assessment of the impacts of previous tariff reduction as well
as projected impacts of any further tariff reduction on all sectors of New Zealand, including the
textiles, clothing and footwear (TCF) sector. The review will also consider the most appropriate tariff
structure, including the structure for the textiles sector and the application of alternative specific
tariffs. Decisions are likely to be taken mid to late 2003 on tariff policy beyond 1 July 2005.WT/TPR/M/115/Add.1
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Export Monopoly
(p. 9, para. 16;  p.26, para. 5;  p. 47, paras. 70 & 71;  p. 67, para. 2;  p. 70, paras. 10 - 12)
3. We are delighted to see that export monopolies granted by the government to its state trading
enterprises for some agricultural products have gradually been removed over the past few years.
However, the private companies that were converted from state trading enterprises still tend to export
all or most of the products concerned. How does New Zealand ensure that end-users, both processors
and consumers, have the opportunity to purchase quality agricultural products at internationallycompetitive prices? Does New Zealand have plans for further liberalization in this area?
Answer - New Zealand companies export into inte rnational markets in competition not only with
other New Zealand exporters but also with exporters  from other countries.  New Zealand exporters
must be competitive on quality and price or they will not succeed commercially in this competitive
environment.  Deregulation has given producers a choice of exporters competing for the supply ofproducts involving the removal of certain export monopolies and has provided significant
improvement in the ability of the industry to respond to markets and reduce cost structures of
exporting.  With respect to plans for further liberalisation, the Hop Industry Restructuring Act 2003
recently passed by Parliament will remove the restrictions on exporting hops.
Free Trade Agreements
(p. 10 - 12, paras. 37 - 50;  pgs. 21 – 22, paras. 21 - 24)
New Zealand is of the view that "free trade agreements with key trading partners can open up
important new opportunities for exporters and in a shorter time frame than the multilateral process,"
and that "FTAs can make an important strategic co ntribution to moving the WTO process forward."
Furthermore, "It sees FTAs as an opportunity not only to remove tariff barriers on a bilateral basis,
but also to deepen economic integration with its trading partners across the wider trade and
investment relationship."
4. We would like to know what measures New Zealand adopts, in reality, to ensure that barriers
are not raised against non-participating countries. Does New Zealand have the intention of signing
new FTAs with other countries, and where does it stand currently in this respect?
Answer - Given that New Zealand has a very low MFN tariff as a result of substantial unilateral tariff
reductions, we do not consider that there would be significant barriers raised to non-participatingcountries as a result of third countries negotiating FTAs with New Zealand.  New Zealand is prepared
to consider free trade agreements with any economy, as long as they are of a comprehensive standard
and are in New Zealand’s overall strategic and economic interest.
The New Zealand Government has no formal list of potential FTA partners.  Nevertheless, it
recognizes that free trade agreements with key trading partners can open up new opportunities for itsexporters that complement gains made through the multilateral process. Details of our current
CEP/FTA initiatives are set out in the NZ Government's report on the Trade Policy Review of NZ.
(p. 10 - 12, paras. 37-50 ）
We note that New Zealand sees Free Trade Agreements (FTAs) as an opportunity to deepen economic
integration with its trading partners across the wider trade and investment relationship (NZ report,
para 38).  The same report also mentions that Ne w Zealand has made considerable progress towardsWT/TPR/M/115/Add.1
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the (APEC) Bogor goals through autonomous liberalization, and is willing to liberalize further on a
reciprocal basis (NZ report, para 54).
5. Would New Zealand please descri be its vision of liberalization and structural reform for the
East Asian region, in light of current regionalization developments. Moreover, considering its desire
to deepen relationships with its partners in the East Asia and even Pan-Pacific regions, will New
Zealand’s preference be to implement its libe ralization through a multilateral or a bilateral
approach?
Answer - New Zealand’s first priority for liberalization in the East Asian region is through
multilateral fora.  Its second priority is for achievement of the APEC Bogor Goals. In the short-term
New Zealand recognises that deeper and faster liberalisation may be gained from bilateral and
plurilateral trade agreements.  New Zealand also recognises that regional developments in relation to
trade agreements could have adverse effects on New Zealand.  For these reasons New Zealand seekscloser economic partnerships with a range of trading partners that will bring significant strategic and
economic benefits.
Service Sectors
(p. 18, para. 15;  p. 67, para. 4;  p. 77-78, para. 35-41)
6. We would like to commend New Zealand on its contribution to the WTO services negotiations.
We greatly appreciate New Zealand’s efforts in submitting many constructive negotiation proposals
in various sectors. We also welcome its recent efforts in trying to expand the sectoral coverage of its
commitments, improve its existing commitments and eliminate its MFN exemptions. We would
therefore appreciate being informed of any plans and ideas that New Zealand might have under the
current round of WTO negotiations on trade in services.
Answer - New Zealand intends to continue to engage actively in the current round of WTO services
negotiations, both in relation to the negotiation of sectoral commitments and in the ongoing work onrules.
Foreign Direct Investment
(p. 23-25, paras. 30-35)
7. Although New Zealand already maintains a relatively open and transparent Foreign Direct
Investment (FDI) regime, we have discovered in th e course of pursuing our own interest in making
further investments in New Zealand, that there are still some restrictions in the areas of forestry and
fisheries. The same applies in service sectors such as telecommunications, air transportation and
other state-owned enterprises. We would particularly like to see further relaxation of New Zealand’s
FDI regime in the future and we would like to know if  it plans to lift such restrictions in the new round
of negotiations?
Answer - New Zealand offers a very welcoming regulatory environment for foreign direct investment.
New Zealand's initial offer in the WTO services negotiations does not include any changes to New
Zealand's horizontal commitment relating to the Overseas Investment Commission.WT/TPR/M/115/Add.1
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Privatization of SOEs
(p. 27, para. 6;  p. 54, para 93)
8. Since the mid-1980s, a large number of New Zealand’s state-owned enterprises (SOEs) have
been corporatized or privatized, which has resulted in the transformation of its economy into one that
is more open and competitive, and it has establishe d a model for other countries. However, the
current Government of New Zealand has indicated th at there will be no further privatization of SOEs
during its term. We would like to know more abo ut New Zealand’s future policy on SOEs, over and
above the information already pr ovided in document WT/TPR/S/115.
Answer - The NZ Government has no intentions for either buying or selling any SOEs at this time.
Sanitary and Phytosanitary Measures
(p. 43, para. 53)
9. It is noted that Food Safety Australia New Zealand (FSANZ) is an independent statutory
authority for the development of joint food standards for both countries. However, we understand that
New Zealand still develops some of its own food safety standards, such as the maximum residue limits
(MRLs) of chemicals for food. We would appreciate  an explanation from New Zealand of its reasons
for not adopting the above-mentioned joint food standards in the case of MRLs.
Answer - New Zealand's MRLs are set at a level that reflects the safe and appropriate minimum use of
agricultural compounds in the New Zealand agricultural context.  This is known as Good Agricultural
Practice (GAP).
Safe levels of human exposure are dependent on the acceptable daily intake (ADI) of the compound in
question, which is the same throughout the wo rld.  However, GAP depends on the agricultural
practices, climate conditions and pest pressures, which are different in New Zealand from those in
Australia.
Accession to the Agreement on Government Procurement
(p. 43, para. 54; p. 45, para. 60)
10. New Zealand has clearly indicated that it does not intend to become a signatory to the
Agreement on Government Procurement (GPA). While we fully understand the rationale behind New
Zealand’s decision, we believe that, in view of its extensive experience in the field of government
procurement, by acceding, New Zealand would make a valuable contribution to the group of GPAParties. We would therefore like to encourage New Zealand to become a signatory to the GPA.
Answer - New Zealand thanks Taiwan for its comments and we can advise that we are keeping the
issue of GPA membership under review, in light of procurement and trade policies developments.  To
date there has been no change to New Zealand’s position on membership of the GPA.
Geographical Indications
(p. 65, para. 124)
11. New Zealand has negotiated with the EU for many years, and has made some tangible
progress in the area of geographical indications. We would appreciate being more informed of NewWT/TPR/M/115/Add.1
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Zealand’s current status in this respect, and also being provided with details of its border measures
and regulations relating to geographical indications.
Answer - NZ has not negotiated bilaterally with the EU on the question of geographical indications,
but has discussed GIs in the multilateral cont ext of the WTO TRIPS Council. (Geographical
indications were discussed in the context of negotiations toward a bilateral wine agreement: such
negotiations have been in abeyance for some years.)  NZ does not provide for ex officio enforcement
of GIs in the form of border measures, but provides the legal means for interested parties to preventthe inappropriate use of a GI.  For more information on New Zealand’s system of protection for GIs
please refer to our response to the Checklist of Questions under the Review of Article 24.2 of the
Application of the Provisions of the Section of the TRIPs Agreement on Geographical Indications
submitted to the TRIPs Council under document IP/C/W/117 and addenda.
Agriculture Export Policy
(p. 70, para. 11)
12. According to the New Zealand government’s report, the Apple and Pear Industry
Restructuring Act was enacted in September 1999. At the same time, a new non-trading regulatory
body, the Apple and Pear Export Permits Committee, was created to issue permits for the export of
apples and pears, except where the export is by ENZA. Please explain the necessity to maintain thispermit and its legitimacy under Article 11, GATT1994.
Answer - This question is no longer relevant because the Act was repealed and the committee
dissolved by the Apple and Pear Indus try Restructuring Act Repeal Act 2001.
Audiovisual Services
(p.77, para. 39)
13. According to Article II, Exemptions of GAT S, in principle, the period of MFN exemptions
should not exceed 10 years. New Zealand states that it will review its exemptions for audiovisualservices, interpretation services and maritime services during the current round of negotiations in the
WTO. Has New Zealand already taken this review into account in the preparation of its initial offer
Answer - New Zealand reviewed its existing MFN commitments very carefully in the process of
preparing its initial offer.  This is reflected in the inclusion within the initial offer of the proposed
removal of several such reservations.
Financial Services (Banking)
(P. 79, paras. 47-55 ）
Banking supervisors are faced with increasing challenges as financial products become diversified
and the scope of banking business extends globally with few barriers. The openness of New Zealand’s
banking system and the internationally known effectiveness of its banking supervisory authority havebeen highly praised throughout the world. We believe that one of the reasons for its success comes
from its considerable emphasis on the role of bank directors in overseeing and taking ultimate
responsibility for the operation and risk management in their banks.WT/TPR/M/115/Add.1
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14. We would therefore like to learn what methods and incentives New Zealand uses to
strengthen the responsibility of a bank’s board of directors, and which would appear to furtherenhance the efficacy of market discipline and corporate governance in the financial system.
Answer - The Reserve Bank of New Zealand’s banking supervision arrangements include a number of
policies designed to encourage sound corporate governance in the banking sector. These policies
include:
- Comprehensive quarterly disclosure requirements for banks.
- Directors’ attestations. In each quarterly disclosure statement directors are required to
sign attestations on certain key matters including an attestation on the adequacy of the
bank’s systems and controls, and that the bank is complying with all prudential
requirements.
- Directors’ liability. Each bank director is required to sign their bank’s disclosure
statements and to certify that disclosures made are not false or misleading.  If a
disclosure statement is found to be false or misleading, directors may face legal
penalties including imprisonment. In addition directors may face unlimited personal
liability for creditors’ losses where those losses have been sustained by creditors who
have placed reliance on false or misleading information contained in a disclosurestatement.
- Independent director requirements. Banks incorporated in New Zealand are required
to have a minimum of two independent directors and a non-executive chairperson.
The above requirements complement and reinforce the standard duties applicable to company
directors generally under New Zealand law.
(p. 80. para. 47)
15. As indicated in New Zealand’s TPR report, deposits in state-owned banks, e.g. Kiwibank,
might benefit from an implicit go vernment guarantee, while deposits in private banks do not enjoy
such a guarantee. We would be very interested in having New Zealand’s opinion on the deposit
insurance scheme and in learning whether there is any future plan for the aforementioned government
guarantee to be extended to banks.
Answer  - The Government has made it clear that New Zealand Post is required to run Kiwibank as a
fully commercial operation and that the Government does not guarantee its operations. Disclosure
statements issued by Kiwibank include the foll owing statement: "The Crown does not, expressly or
impliedly, guarantee the obligations of Kiwibank." Also, the Minister of Finance has gone on record
as saying that (Kiwibank) “will have to stand or fall on its commercial merits”.
A small proportion of the population may be under the impression that there is an implicit
Government guarantee of all bank deposits. But, we do not believe such a view is widespread.
Surveys of public opinion commissioned by the Rese rve Bank indicate that most people are aware
that the Government does not guarantee bank deposits and that, in the event of a failure, depositors
could lose money.
There are no plans to introduce a deposit insurance scheme or for a government guarantee of
Kiwibank and/or banks generally.WT/TPR/M/115/Add.1
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Financial Services (Insurance)
(p. 84, para. 64)
16. Accident insurance remains closed to competition. The Accident Compensation Corporation
(ACC) is the sole provider of accident insuran ce in New Zealand. Could New Zealand please advise
whether it has a plan to open the market to private insurers, and, if so, what is the timetable?
Answer - There are no plans to open the accident insurance market up to private insurers.
Electricity
(p. 86, paras. 74-81)
17. According to the WTO Secretariat report, New Zealand implemented reform  of the electricity
market in the mid-1980s.
a) Why did the New Zealand Government promulgate the Electricity Industry Reform
Amendment Act of 2001, and set up the independent Electricity Governance Board (EGB)?
Answer - The Electricity Industry Reform Amendment Act 2001 (EIRAA) amended the Electricity
Industry Reform Act 1998 (EIRA). The key feature of EIRA is that no person involved in (i.e. owning
greater than a 10% interest in, or having a material influence over) an electricity lines business may be
involved in an electricity supply business (i.e. selling or generating electricity). EIRAA introduced
two key changes to EIRA:
- First, it allowed an exception to the general prohibition against simultaneous
involvement where the generation involved is built after 2001, is embedded in a
distribution network, and is from (or mostly from) a "new renewable energy source".
A "new renewable energy source" is an energy source that occurs naturally and is
replenished by natural processes within 50 years or less of being used, but it does not
include hydro or geothermal generation plant greater than 5MW. Although this
exception allows simultaneous involvement in  a lines and a supply business, different
companies operating at arms length must still carry out the two businesses.
- Second, it amended the definition of "electricity supply business" so that anyone who
generates (and sells) a small amount of electricity from a generation plant embedded
in a local distribution network is not regarded as being an "electricity supply
business". This allows lines businesses to own a small amount of local generation("distributed generation") – the limit is the greater of 5MW and 2% of the maximum
demand of that distributor’s system.
The reason for these amendments was to reduce a barrier to investment in generation from new
renewable energy sources and small-scale distributed generation. Electricity lines businesses may be
in a good position to take advantage of opportunities arising from new renewable technologies.However, if an electricity lines business wants to take advantage of the exception to the simultaneous
interest prohibition in the first bullet point above (for generation from a new renewable energy
source), it must still keep those activities in a separate company operating at arms length from the
lines business. This addresses the concern that the electricity lines business might cross-subsidise or
otherwise favour its own generation business.WT/TPR/M/115/Add.1
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b) What is the current status of the electricity market mechanism in New Zealand?
Answer - New Zealand still operates a voluntary spot market administered through a multilateral
contract known as NZEM (New Zealand Electricity Market).  The majority of electricity is traded
through this market.  Bilateral trades outside the market are also possible.
The government is currently considering changes to  electricity market arrangements to improve the
security of New Zealand’s electricity supply.  An announcement will be made on the changes before
the end of May 2003.  The Prime Minister has already announced that there will continue to be amarket. However, a mechanism will be found alongside that market to see that there can be stand-by
generation brought into operation when a number of factors combine to produce a shortage.
c) Why does the New Zealand Government keep three large electricity industries (including
generators and retailers) as state-owned enterprises within a deregulated electricity industry? Please
elaborate on the reasons for this arrangement.
Answer - The Government has stated that it will not run a state assets sales program. This applies to
all State-owned Enterprises (SOEs), Crown companies and entities, including electricity generators.
Instead, boards of SOEs and other Crown owned co mmercial organisations are expected to enhance
their value and their ability to contribute to econom ic and social growth and development.  SOEs are
separate legal entities from the Crown, and have operational freedom in pursuing their primaryobjective of being a successful business.  The Government's influence over SOEs relates to high level
strategic and financial matters.
The Government separates its ownership interests from its regulatory interests in the electricity
industry.  Electricity SOEs are expected to compete amongst themselves and the private sector.  The
legal and regulatory frameworks applying to SOE electricity generators provide no competitive
advantage or disadvantage.
d) Can there occur some power price manipu lation under the current market mechanism
because each state-owned electricity generator/re tailer accounts for such a large share of power
generating capacity?
Answer - It is possible that some power price manipulation can occur under current market
arrangements and from time to time there are allegations to this effect.  NZEM’s Market Surveillance
Committee has the power to investigate and correct any situation that threatens fair, orderly or propertrading on NZEM (including manipulative activity).
The incentive on electricity generators to manipulate the market price is reduced by the high degree of
vertical integration with electricity retail businesses.  If a generator acts to increase the spot price,
their retail branch will also pay the higher price wh en purchasing electricity to sell to their fixed-price
customers.  In addition, generators usually hold a portfolio of hedge contracts (e.g. contracts fordifferences based on the NZEM spot price) that means that, if a generator manipulates the spot price,
that generator will also pay more under its financial hedge contracts.
Telecommunications
(p. 86, paras. 71 & 73 ）
18. According to the sections on competitive safeguards and interconnection in the Telecom
Reference Paper, appropriate measures shall be maintained for the purpose of preventing suppliersWT/TPR/M/115/Add.1
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from engaging in anti-competitive practices (e.g. cross-subsidy). Furthermore, under non-
discriminatory terms, conditions and rates, interconnection with a major supplier’s network should beensured.  However, the Telecom operator that dominates New Zealand’s telecommunications market
applies a cross-subsidy between urban and rural users and between light and heavy users. Moreover,
the interconnection charges offered by New Zealand’s Telecom operator to its competitors are very
high in comparison with world levels.
With respect to the fair competition principle, does New Zealand intend to reduce its telecom tariffs
and, if so, what is the timetable?
Answer - The GATS Basic Telecommunications Reference Paper provides the right for any Member
to define the kind of universal service obligation it wishes to maintain:
"3 Universal service
Any Member has the right to define the kind of universal service obligation it wishes to
maintain. Such obligations will not be regarded as anti-competitive per se, provided they are
administered in a transparent, non-discriminatory and competitively neutral manner and are
not more burdensome than necessary for the kind of universal service defined by the
Member."
In December 2001 the Government introduced the Telecommunications Act 2001. The
Telecommunications Act 2001 provides a process for the creation of Telecommunications Service
Obligations (TSO). The objective of the TSO mechanism in the Telecommunications Act is to ensure
that key telecommunications services will be provided, where necessary, to achieve the Government’s
social objective. TSOs facilitate the supply of certain telecommunications services to groups of end-
users within New Zealand to whom those services may not otherwise be supplied on a commercial
basis or at a price affordable to those end-users.
Only one TSO has been established under the Telecommunications Act 2001. This TSO (previously
known as the Kiwi Share Obligation) is an agreement between Telecom New Zealand and the Crown
under which Telecom provides local residential telephone service (a copy of the TSO deed can be
found at http://www.med.govt.nz/pbt/telecom/deed/index.html).
This TSO provides residential users with access to a price capped local telephone service that includes
an unlimited number of non-chargeable local calls and includes commitments for:
- a local free-calling option for local residential telephone service being maintained for
all Telecom residential customers;
- Telecom charging no more than the standard residential rental for local residential
telephone service;
- standard residential rental not increasing in real terms provided that the overall
profitability of Telecom's fixed business is not unreasonably impaired; and
- the line rental for local residential teleph one service for Telecom customers in rural
areas being no higher than the standard residential rental.
The WTO Secretariat’s Report has suggested that New Zealand’s interconnection rate is very high
and cites a source from 2000 to support its conclusion.
Since then, New Zealand has introduced the Telecommunications Act 2001. The Telecommunications
Act 2001 provides for the designation (regulation) of certain telecommunications services, includingWT/TPR/M/115/Add.1
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interconnection with Telecom’s fixed PSTN. Where commercial negotiations have failed, access
seekers may apply to the Telecommunications Commissioner for an access determination (includingpricing) for services designated under the Act.
TelstraClear made an application to the Commission for an access determination on interconnection
with Telecom’s fixed PSTN in mid-2002. On 5 November 2002 the Commerce Commission released
its initial pricing determination on TelstraClear’s Interconnection Application recommending that
TelstraClear pay 1.13 cents per minute for interconnection to Telecom’s fixed network(approximately half what Telecom previously required TelstraClear to pay). Both parties have since
applied under the Telecommunications Act for a pricing review of the determination using the
TSLRIC pricing formula.
UNITED STATES
TRADE POLICIES AND PRACTICES BY MEASURE
MEASURES DIRECTLY AFFECTING IMPORTS
Standards and conformity assessment
The United States has discussed concerns with the Government of New Zealand over New Zealand's
biotechnology policies, particularly over New Zealand's commercial release moratorium for
Genetically Modified Organisms (GMOs), field trial restrictions, GM food approvals and foodlabeling requirements.
1. The provisional moratorium on commercial planting of GMO crops, the release of GM
animals, and the commercial importation of GM seeds expires in October of this year.  New Zealand
has indicated it will not propose new legislat ion to extend the moratorium.  Can New Zealand
elaborate on its plans for addressing the commercial release of GMOs after October 2003?
Answer - After the restricted period expires on 29 October 2003, the Environmental Risk
Management authority will be able to consider any applications made to release GMOs into the NewZealand environment.
The New Organisms and Other Matters Bill was introduced to Parliament on 29 April 2003. This
legislation will enhance the regulation of new organisms (including GMOs).  Information about this
bill can be found on the Ministry for the Environment (MfE) website www.mfe.govt.nz
The bill is progressing and is expected to be enacted before 29 October 2003.
2. Can New Zealand confirm that regulatory requirements for the release of GMOs will be
science-based?
Answer - The release of GMOs into the New Zealand environment is regulated under the Hazardous
Substances and New Organisms (HSNO) Act, 1996. The HSNO Act provides a risk management
regime, it does this by focusing on the effects of hazardous substances and new organisms.  Thepurpose of the Act is to protect the environment and the health and safety of people and communities,
by preventing or managing the adverse effects of hazardous substances and new organisms, including
genetically modified organisms.  Information on HSNO can be found at www.hsno.govt.nz).
3. New Zealand adopted mandatory labeling requi rements for foods produced using gene
technology, which the United States is concerned will encourage New Zealand retailers to source onlyWT/TPR/M/115/Add.1
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products with GM-free ingredients.  What is the "legitimate objective" (per article 2.2 of the TBT
Agreement) of these requirements?
Answer - New Zealand has a content-based GM-food labelling system that is shared with Australia.
The requirements fall within a range of options for labelling of GM foods being considered by the
Codex Committee on Food Labelling.
Labelling is required where novel DNA or protein is present in the final food, or the food has altered
characteristics.  There are some exemptions.  Further information and details of GM foods approvedfor sale in New Zealand can be obtained at www.foodstandards.govt.nz
Only a few GM labelled foods have appeared in New Zealand supermarkets since the new regulations
came into full force in December 2002.  Possible reasons for this include:
Many manufacturers are choosing to source non-GM ingredients in response to the demands of their
customers.
Many products that contain ingredients derived fr om approved GM organisms are highly processed,
and therefore don’t necessarily contain novel DNA or protein; and
No whole GM foods are sold in New Zealand (a nd these would be the most likely candidates for
labelling under the regime).
A key objective of the labelling requirements is the provision of consumer information .
Local content
4. The United States would appreciate greater detail on New Zealand’s policy of granting tax
concessions to manufacturers if they can demonstr ate that the “domestic content of the locally
produced ‘suitable alternative’ product is not less than 25% of its ex-factory cost of production.”
Answer - Under this provision factor y cost is the sum of the following:
(a) the cost of imported materials;
(b) the cost of New Zealand produced materials;(c) manufacturing wages; and
(d) factory overhead expenses.
In order to meet the 25% requirement, the sum of the items (b, c, and d) must represent a minimum of
25 percent of the total factory cost of the goods.
MEASURES DIRECTLY AFFECTING EXPORTS
Duty and tax concessions
5. Under Section 117 of the Customs and Excise Act 1996, exporters are allowed a drawback on
duties paid for imported goods. Could you please provide further information on how this duty
drawback scheme operates?
Answer - Drawback is the New Zealand Customs pr ocedure, which provides for the refund of duty
when goods are re-exported.  The drawback provision covers any goods that were subject to duty onWT/TPR/M/115/Add.1
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importation and are being re-exported.  This includes goods for export, which have been produced in
New Zealand and subject to Excise duty.
The following duties may be refunded:
- Import Duties (other than anti-dumping and countervailing duties, unless permitted
by the Secretary of Commerce);
- Excise Duties;
- GST may be refunded, in certain circumstances, for exporters who are not registered
under the terms of the GST Act 1988.  In addition, Customs may also refund GST on
drawback to a registered person who exports goods that are not of a kind used in their
taxable activity.
Written notice of intention to ship goods for export under drawback should be given to the New
Zealand Customs Service at least 48 working hours before loading the goods.
The re-importation of goods shipped for export under drawback is permitted except for certain types
of motor vehicles (not be re-imported within a 12- month period following the date of exportation).
Duty has to be paid on re-importation of goods as if the goods were being imported for the first time.
Except for goods exported by private persons, the minimum amount of drawback that can be claimed
for commercial goods is NZ$ 50.
Any person who can provide and substantiate inform ation necessary to legally claim drawback may
do so.  Regular exporters who claim drawback can arrange with Customs to lodge periodic entries to
cover a period such as one month’s exports.  Export entries claiming drawback may be lodged
electronically.
A Fact Sheet fully explaining drawback arrangements is available from the New Zealand Customs
Service website: (www.customs.govt.nz), under Library – Fact Sheet 1.
OTHER MEASURES AFFECTING PRODUCTION AND TRADE
Export finance, insurance, and guarantees
6. The United States would be interested in further detail on how New Zealand’s export credit
scheme, The New Zealand Export Credit Office (ECO), complies with New Zealand’s obligations
under the Agreement on Subsidies and Countervailing Duties (SCM Agreement).  In particular, at
what rate are export credits offered to New Zealand’s industries through this program?  To whichindustries are export credits offered through this program?
Answer - The operation of the New Zealand Export Credit Office (ECO) is fully consistent with the
WTO Agreement on Subsidies and Countervailing Measures and the OECD Arrangement on
Guidelines for Officially Supported Export Credits. Accordingly, though the rates offered by the ECO
will depend on the transaction, every transaction is priced to ensure that the ECO covers all costs,including capital costs, which is in accordance with WTO rules.
The ECO provides medium-long-term trade credit in surance. i.e., insurance of payment by the buyer
for transactions with a credit term greater than one year, and where the (useful) life of the export in
question is longer than the intended repayment term.   The export credit facility is open to all sectors.WT/TPR/M/115/Add.1
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Intellectual Property Rights: general
7. Does New Zealand have any plans to join the WIPO “Internet” treaties (WIPO Copyright
Treaty and WIPO Performances and Phonograms Treaty)?
Answer - The Government is currently reviewing the implications of accession to these treaties in the
context of its review on the implications of dig ital technology for copyright.  The Government will
consider ratification of the Treaties once the review of the Copyright Act is complete.
8. Does New Zealand have any plans to join WIPO’s Madrid system for the international
registration of marks or its Hague system on the international deposit of industrial designs?
Answer - The Government will review the implications  of accession to these treaties following entry
into effect of the Trade Marks Act 2002.
9. Does New Zealand have any plans to join WIPO’s Trademark Law Treaty (TLT) or WIPO’s
Patent Law Treaty (PLT)?
Answer - The Government will review the implica tions of accession to the TLT and PLT following
entry into effect of the Trade Marks Act 2002 and passage of new patents legislation, consequent on
the current review of the Patents Act 1953, respectively.
IPR: Patents
10. New Zealand’s Patents Act was recently amended to allow manufacturers of generic
medicines to commence regulatory trials before a patent has expired.  Our pharmaceutical industry
has concern that this amendment will permit ge neric pharmaceutical companies within New Zealand
to produce a patented product for export to countries outside of New Zealand.  Could New Zealand
comment on any implementing regulations or safeguards that it has adopted or is considering to
prevent erosion of patent rights?
Answer- The exemption applies only to activities associated with obtaining marketing approvals.  It
does not permit the production, sale or export of goods that are still subject to a patent.
11. New Zealand has indicated that the 1953 Patent Act is currently under review to bring the Act
more in line with current international practices.  One of the areas being reviewed is exclusion from
patentability.  Could New Zealand comment specific ally on what exclusions are being considered?
Answer - Issues of patentability are set out in deta il in the discussion paper "Review of the Patents
Act 1953: Boundaries to Patentability" issued by the Ministry of Economic Development inMarch 2002, and accessible on the Ministry’s website (http://www.med.govt.nz). Possible exclusions
to patentability were canvassed in that document and included biotechnological inventions, methods
of medical treatment of human beings, computer software and business methods.
12. Can New Zealand confirm whether it will consider within the context of the Patents Act
Review providing extended patent life protection to pharmaceuticals?
Answer - The Government is considering this issue in the context of the Patents Act review.WT/TPR/M/115/Add.1
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IPR:  TRADEMARKS
13. We understand that the Trade Marks Act of 2002 has recently been adopted to replace theTrade Marks Act of 1953.  Could you comment on the progress of implementation of the new TradeMarks Act?
Answer - The Act has been passed by Parliament and will enter into effect once regulations are made
that implement many of the operational aspects of the Act. This process is due to be completed in the
latter half of 2003.
14. How does the new Trade Marks Act address protection for well-known marks?Answer - Section 25(1)(c) of the Trade Marks Act 2002 provides that the Commissioner of Trade
Marks must not register a trade mark in respect of any goods or services if it is, or an essential
element of it is, identical or similar to, or a translation of, a trade mark that is well known in New
Zealand, whether through advertising or otherwise, in respect of those goods or services or similar
goods or services or any other goods or services, if the use of trade mark for which registration issought would be taken as indicating a connection in  the course of trade between those other goods or
services and the owner of the well known trade ma rk, and would be likely to prejudice the interests of
the owner.
Section 89(1)(d) of the Act provides that a person infringes a registered trade mark if the person does
not have the right to use the registered trade mark, and uses in the course of trade a sign identical withor similar to the registered trade mark in relation to  any goods or services that are not similar to the
goods or services in respect of which the trade mark is registered, where the trade mark is well known
in New Zealand and the use of the sign takes unfair advantage of, or is detrimental to, the distinctive
character or the repute of the mark.
These provisions relate specifically to well-known marks: they are additional to the normal provisions
in the Act that allow for the protection of all registered trade marks against infringement.
15. Section 20 of the 2002 Act bars registration of trade marks containing protected geographical
indications.  Can New Zealand elaborate upon that restriction, and explain when trade marks
containing geographic terms would be registerable and when they would not be?  Would
geographical indications be registerable as certification marks?
Answer - Section 20 provides that the Commissioner must not register a trade mark that—
(a) contains a protected geographical indication in respect of specified goods; and
(b) relates to specified goods that do not originate from the place indicated in the
protected geographical indication.
The registration of a trade mark containing a geographical indication is precluded where the proposed
trade mark includes a geographical indication, prot ected under the Geographical Indications Act 1994
in relation to goods specified by way of a Schedule to that Act, and where the proposed trade markrelates to goods not originating in the locality to which the protected geographical indication pertains.
A trade mark that contains a geographical term, and relates to goods specified for a protected
geographical indication and derived from the locality pertaining to that geographical indication, may
be registerable provided it meets the other criteria for registerability specified in the Act.  In addition,
a trademark containing a geographical term that relates to a class of goods other than that specified fora protected geographical indication, may be registerable provided it meets the other criteria forWT/TPR/M/115/Add.1
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registerability specified in the Act.  Certification marks may also be registerable provided they meet
the conditions outlined above.
16. Under Section 83 of the 2002 Act, trade mark licenses may be recorded.  Is license
recordation required in order for the licensee or trademark owner to bring an infringement action
pursuant to the 2002 Act?  If the licensee brings suit independently of the trade mark owner, under
Section 104 of the 2002 Act, the trade mark owner automatically becomes a defendant in the action
(incurring no costs unless the action is defended).  Please explain this provision, and if there is anyperceived discouraging effect on licensing.
Answer - Registration of a licensee is a pre-requisite to the licensee bringing an infringement action
under section 103 of the Trade Marks Act 2002.  The trade mark owner may bring an infringement
action pursuant to section 101 of the Act, independent of whether or not any licensing arrangements
exist.  Section 104 of the Act is a longstanding pr ovision, carried over from section 37(3) of the Trade
Marks Act 1953.  It recognises the interests of a licensee by providing for the enforcement of rights in
the trade mark where, contrary to agreement between the licensee and the trade mark owner, the trade
mark owner has refused or neglected to bring proceedings in response to a request from the licensee.
IPR:  Copyrights and Related Rights
17. What is the current status of New Zealand’s review of the impact of parallel importation on
various industries, and how and to whom can fore ign copyright holders submit comments regarding
their positions on these issues?
Answer - This review was completed in 2001.  As  a result of the review, the Government announced
that it would introduce legislation to ban the parallel importation of motion picture films for a period
of 9 months from first release, and would make some changes to the onus of proof in civil
proceedings concerning the importation of sound recordings, films and computer programs.  The
Government introduced the Copyright (Parallel Importation of Film and Onus of Proof) AmendmentBill earlier this year to give effect to these decisions and the Bill is currently before a Parliamentary
Select Committee (the Commerce Committee). The Commerce Committee previously called for
public submissions on the Bill (note that this did not constitute a further review of parallel importing
per se).
IPR:  Geographical Indications
18. What are New Zealand’s plans regarding implementation of the geographical indications law
of 1994, which has not yet been implemented?
Answer - The Government has not decided when the Geographical Indications Act will be
implemented.
19. Can geographical indications be protected as certification marks in New Zealand?Answer - See the comments on certification marks in the reply to the question on the Trade Marks Act
above (US questions 13, 14, 15, 16)
20. It is established in the Trade Marks Act of 2002 that at least certain marks, including
protected geographical indications, cannot be registered.  Is the reciprocal case true, that a
geographical indication cannot be protected in New Zealand if it is pre-dated by a correspondingtrademark?WT/TPR/M/115/Add.1
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Answer - The Geographical Indications Act 1994 not yet having entered into force, any potential
conflict between pre-existing trademarks and a geographical indication would be dealt with under thecommon law tort of passing off, which provides the opportunity for right-holders to take proceedings
to prevent others trading on the good reputation of the mark, and the Fair Trading Act 1986, which
provides the opportunity for right-holders to take proceedings to prevent conduct in trade that is
deceptive or misleading or likely to deceive or mislead.  In addition, the Trade Marks Act 2002
provides further protection for registered and well-known trademarks, including the right to exclusiveuse of the sign, provisions relating to infringement of a registered or well-known trademark, and
provisions on the registerability of (inter alia) identical or similar trademarks.
21. New Zealand has indicated that it expects to complete a review of its Plant Variety Rights Act
during 2003 and that one of the major issues bei ng examined is whether New Zealand should ratify
the 1991 Act of the International Union for the Protection of New Varieties of Plants (“UPOV1991”).  The United States believes that UPOV 1991 provides better protection for plant varieties
than the 1971 Act of UPOV and that global harm onization of plant variety protection standards to
UPOV 1991 is important.  Can New Zealand comment on whether ratification of UPOV 1991 is
likely?
Answer - The Government has not yet taken decisi ons on the review, including in relation to UPOV
1991.
IPR:  Enforcement Measures
22. What is the status and expected date for the establishing of a Supreme Court in New Zealand?
Answer - The Supreme Court Bill was introduced to Parliament in December 2002 and has been
referred to a Parliamentary Select Committee, which is now hearing public submissions on the Bill.
The Bill, which is subject to change, proposes a commencement date 28 days after receiving the
Royal Assent.
23. In the process of establishing a Supreme Court as final appellate review, has the Government
of New Zealand considered establishing or designating a specialized trial and/or appellate court for
all intellectual property rights matters?
Answer - This bill, as drafted, would result in the Supreme Court replacing New Zealand’s current
final appellate Court – the Judicial Committee of the Privy Council.  In doing so it would widen thejurisdiction of the final appellate court so that the Supreme Court is capable of hearing appeals,
usually after an intermediate appeal to the Court of Appeal, from any jurisdiction.
The Supreme Court Bill focuses only on the structure of New Zealand’s final appellate Court.
The establishment of a specialist court for intellectual property rights matters is not part of the present
legislative proposal.
At the Government’s request the Law Commission is currently examining all state based adjudicative
bodies in New Zealand, below the Court of Appeal .  The Law Commission examination has involved
widespread public consultation and the Commission is due to present its final report to Government
later this year.
24. With regard to the potential statutory range of penalties that a court may impose in cases of
criminal copyright and trademark infringement proc eedings, are there any current legislative plans toWT/TPR/M/115/Add.1
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increase the maximum fines and/or terms of impris onment that can be imposed by a court beyond the
current maximums?
Answer - There are no current plans to make furthe r changes to the criminal penalties for trade mark
and copyright infringement.  The Government has only recently passed the Trade Marks Act 2002,
which substantially increased penalties in relation to copyright infringement and introduced new
offences and penalties for trade mark counterfeiting, including by increasing the maximum term of
imprisonment on conviction of an offence for copyright infringement from 3 months to 5 years.  Thesame penalty applies in the case of trade mark infringement.
TRADE POLICIES IN SELECTED SECTORS
Agriculture
25. Has New Zealand notified its Sustainable Farming Fund to the SCM Committee as stipulated
under Article 25 of the SCM Agreement?  If not, please discuss whether there are any plans in the
future to do so or why New Zealand believes it is not necessary to notify this program.
Answer - The Sustainable Farming Fund provides  grants for community-driven projects which
provide extension and advisory services, including through the transfer of results of research and
technology improvements, to farm communities.  The subsidy is not "specific" within the meaning of
Article 2 of the SCM Agreement, and therefore, under Article 25.2, need not be notified.  We invite
interested members to read the DS:2 notification provided to the Committee on Agriculture(G/AG/N/NZL/34), or to visit the Ministry  of Agriculture and Forestry website
(www.maf.govt.nz /sff) if they require further information.
Manufacturing
26. Can New Zealand provide more information regarding the government-run program
previously known as Industry New Zealand (now part of New Zealand Trade & Enterprise)?  In
particular, what is meant by the phrase “sector facilitation and support,” as it applies to the funding
provided to New Zealand’s high growth sectors through this program?
Answer - Industry NZ was established as the government's economic development agency in 2000.
The agency's purpose was to facilitate (in co-operation with industry, central and local government,
and relevant community groups) the development and implementation, of strategies, programmes, and
activities for industry and regional development.
Sector facilitation and support refers to Industry New Zealand's engagement with particular sectors to
identify constraints to sectoral growth and opportunities for potential growth. Industry NZ also
facilitates the removal of identified constraints by  working with relevant government departments and
key players within particular sectors to remove growth impediments and to encourage industries to
develop the capability required to realise their growth potential.
Industry NZ is currently being merged with Trade NZ to form New Zealand Trade and Enterprise, a
new economic and trade development agency.
Services
27. The Government of New Zealand has indicated th at it reserves the right to impose mandatory
quotas on local content for radio and broadcast television to meet its broadcasting objectives.  HowWT/TPR/M/115/Add.1
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do this right relate to New Zealand's GATS commitments?  What measures is the Government
currently considering to regulate local content?
Answer - New Zealand commercial radio has developed a voluntary code of practice.  The industry
set target of 13% New Zealand music was exceeded  by 2% in 2002.  The New Zealand Television
Industry has recently established a Television Local Content Group that will consider the issue of
local content on New Zealand television.  Ministers have expressed satisfaction with these industry
initiatives.
VENEZUELA
Oral questions
What is the scope of your Generalised System of Preference Scheme?  Is Venezuela covered by it?
Venezuelan imports are among those imports that receive preference under NZ's generalised system
of preferences (GSP).  For a complete list of the coverage of the GSP see the New Zealand Tariffonline (pp. vi, vii) at:
http:// www.customs.govt.nz /library/working+tariff+of+new+zealand/default.asp
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