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PRESS/TPRB/43
15October 1996
NEW ZEALAND STARTS TOSEEBENEFITS FROM ITSBOLD REFORMS
Trade liberalization, privatization, anddomestic deregulation havetransformed NewZealand 's
economy from oneofthemostheavily protected andregulated intooneofthemostmarket-oriented
andopen intheworld. Since 1984, when itseconomy wasburdened withhigh inflation and
unemployment andafiscal deficit approaching 9percentofitsGDP, NewZealand haspersistently
carried outboldeconomic reforms. They arenowbeginning topaysubstantial dividends, including
anincrease intheeconomy 'ssustainable growth potential.
AnewWTO Secretariat report onNewZealand 'strade policies andpractices notes thatNew
Zealand 'sprocess ofunilateral reform isinlinewithitsbelief thatliberal trade policies areinthe
country 'sbestinterest, regardless ofthetrade policies ofother countries. Trade liberalization and
structural reforms havehelped toreduce unemployment from 11percentinthemid-1980s to6per
centin1993, tocutinflation inthelast10years from15percenttoaround 2percentandtoachieve
average, annual economic growth ratesof4percentsince 1993. Thereport states thattrade andother
structural reforms areestimated tohaveincreased NewZealand 'srealeconomic growth potential by
about 1percentayear.
TheWTO Secretariat report andoneprepared bythegovernment ofNewZealand willbethe
subject oftwodaysofdiscussion attheTrade Policy Review Body oftheWTO on21and22October.
TheWTO report notes thatNewZealand 'sreforms areaimed atimproving competition andmoving
resources towards theirmostefficient uses.NewZealand hasalready implemented twotariffreduction
andsimplification programmes. Although tariffs fortextiles andclothing, footwear andmotor vehicles
remain relatively highandlagbehind reductions made forother products, average tariffs willdrop
fromthecurrent levelof6percentto3percentby2000. Thereport notes thatsince NewZealand 's
average bound ratewillbenear12percentanditsapplied ratewillbearound 3percent, there is
broad scope forNewZealand toreduce thelevelofitsbindings andprovide exporters withgreater
assurance about future applied tariffs. Inregard toothermeasures, thereport notes thatimport licensing
requirements havebeeneliminated, ashavesubsidies andvirtually allforms ofgovernment assistance
toindustry andagriculture. Most state-owned enterprises havebeencommercialized orprivatized.
NewZealand applies noexport subsidies ortaxes andusesfewexport measures.
NewZealand 'sagricultural sector ishighly market-oriented. Agricultural subsidies asashare
ofGDP werereduced from 3.8percentofGDP in1983 to0.9percentin1994. Thereport notes,
however, thatmuch ofNewZealand 'sagricultural exports aresubject tocontrol bymarketing boards,
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amounting insome cases toexport monopolies. Forestry isamong NewZealand 'sfastest growing
industries. Production increased byover50percentfrom 1989 to1995 andisexpected toriseby
afurther 70percent. Merchandise exports rosebysome 18percentinvolume between 1990 and
1992. Overall, primary products account directly forabout 13percentofgoods andservices exports.
Services account forabout 62percentofNewZealand 'sGDP andnearly onequarter oftotaltrade.
Competition inservices istherule.There is,forexample, notelecommunications regulatory body
inNew Zealand. Foreign investment isencouraged andNew Zealand maintains aliberal foreign
investment régime withnational treatment asthegeneral rule.Thishelped toachieve asharp increase
ininvestment during theperiod 1992-1994.
Unlike mostcountries, whose Uruguay Round benefits stemprimarily fromtheirownreforms
agreed under theRound, thereport states thatmostofNewZealand 'sexpected benefits result from
policy changes inother countries. Because ofunilateral reform, changes required ofNewZealand
bytheUruguay Round arerelatively minor.
Trade withAustralia comprises some 20percentofNewZealand 'stotalmerchandise trade.
Other Asian Pacific Economic Cooperation (APEC) members account forhalfofNewZealand 'strade,
andtheEuropean Union accounts forsome 17percent.NewZealand isapartner toseveral regional
trade agreements. TheAustralia -NewZealand Closer Economic Relations Trade Agreement (CER)
isamong themostcomprehensive trading agreements intheworld. Itextends freebilateral trade to
allgoods andmostservices. TheCERiscomplemented byotherareasofeconomic cooperation between
thetwocountries, including freemovement oflabour, development ofjointfoodstandards, andnational
treatmentforgovernmentprocurement.Underthe1982AgreementonTradeandEconomicCooperation
withCanada, NewZealand grants tariffpreferences onabroad range ofimports. Amember ofAPEC,
NewZealand fullysupports APEC 's"open regionalism" approach, which NewZealand interprets to
mean thatmeasures agreed inAPEC willbeimplemented onanm.f.n. basisandthatAPEC membership
willbeopentoexpansion.
Thereport concludes thattheUruguay Round ledtosubstantial market-opening forproducts
ofexport interest toNewZealand, products thathavelongbeensubject tosignificant import restrictions
andexport subsidies byother countries. Inthisrespect, gains from theUruguay Round, forwhich
theWTO report citesestimates equivalent to1to3percentofNewZealand 'sannual GDP, reflect
theeconomic costsithasbeensuffering fromthedistortive trademeasures ofother countries. Whereas
theNewZealand economy washighly regulated andprotected untilthemid-1980s, itnowprovides
aclear, positive example ofliberalization. Growth instead ofaweak economy istheresult ofthis
conversion. Thereport notes thatNewZealand views multilateral freetradeasthebestpossible setting,
andworks tothisendintheWorld Trade Organization.
Notes toEditors:
TheWTOSecretariat'sreport,togetherwithareportpreparedbyNewZealand,willbediscussed
bytheWTO Trade Policy Review Body (TPRB) on21and22October 1996.
TheWTO 'sTPRB conducts acollective evaluation ofthefullrange oftradepolicies practices
ofeachWTO member atregular periodic intervals andmonitors significant trends anddevelopments
which mayhaveanimpact ontheglobal trading system.
Thetworeports,togetherwithareportoftheTPRB'sdiscussionandoftheChairman'ssumming
up,willbepublished induecourse asthecomplete Trade Policy Review ofNewZealand andwill
beavailablefromtheWTOSecretariat,CentreWilliamRappard,154ruedeLausanne,1211Geneva21.
Thereports cover thedevelopment ofallaspects ofNewZealand 'strade policies, including
domestic lawsandregulations, theinstitutional framework, trade policies bymeasure andbysector.
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Since theWTO cameintoforce, the"newareas" ofservices tradeandtrade-related aspects ofintellectual
property rights arealsocovered. Attached arethesummary observations from theSecretariat and
government reports. Fullreports willbeavailable forjournalists fromtheWTO Secretariat onrequest.
Since December 1989, thefollowing reports havebeencompleted: Argentina (1992), Australia
(1989 &1994), Austria (1992), Bangladesh (1992), Bolivia (1993), Brazil (1992), Cameroon (1995),
Canada (1990, 1992&1994), Chile (1991), Colombia (1990 &1996), Costa Rica(1995), Côted'Ivoire
(1995), Czech Republic (1996), Dominican Republic (1996), Egypt (1992), theEuropean Communities
(1991, 1993 &1995), Finland (1992), Ghana (1992), Hong Kong (1990 &1994), Hungary (1991),
Iceland (1994), India (1993), Indonesia (1991 and1994), Israel (1994), Japan (1990, 1992and1995),
Kenya(1993),Korea,Rep.of(1992&1996),Macau(1994),Malaysia(1993),Mauritius(1995),Mexico
(1993),Morocco(1989&1996),NewZealand(1990),Nigeria(1991),Norway(1991&1996),Pakistan
(1995), Peru(1994), thePhilippines (1993), Poland (1993), Romania (1992), Senegal (1994), Singapore
(1992 &1996), Slovak Republic (1995), South Africa (1993), SriLanka (1995), Sweden (1990 &
1994), Switzerland (1991 &1996), Thailand (1991 &1995), Tunisia (1994), Turkey (1994), theUnited
States (1989, 1992&1994), Uganda (1995), Uruguay (1992), Venezuela (1996), Zambia (1996) and
Zimbabwe (1994).
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TRADE POLICY REVIEW BODY
NEW ZEALAND
Report bytheSecretariat -Summary Observations
Inaneffort tobreak from ahistory ofpooreconomic performance, New Zealand hastransformed its
economy from among themost heavily protected andregulated tooneofthemost market-oriented andopen
intheworld. Theinstruments ofreform applied since 1984 have included trade andfinancial liberalization,
privatization, andlabour market andother domestic deregulation. Structural measures have been supported by
disciplined macroeconomic policies.
Anoteworthy aspect ofNewZealand 'sreform process isthatithasbeenlargely unilateral; NewZealand
hastaken theclear view thatlowering barriers isprimarily foritsownbenefit. Reform hasaimed atimproving
competition andthusmoving resources towards theirmost efficient uses. Inthisspirit, NewZealand hasalready
implemented twotariff reduction andsimplification programmes, andfurther unilateral reductions aretofollow.
Import licensing hasbeen eliminated, ashave subsidies andmost forms ofgovernment assistance toindustry
andagriculture. Most State-owned enterprises havebeencommercialized orprivatized; commercial functions
ofgovernmentdepartmentshavegenerallybeenseparatedfromregulatoryandadvisoryones;productandservice
markets havebeenderegulated andmostcabotage restrictions oncoastal shipping eliminated; theexchange rate
hasbeen floated andallforeign exchange restrictions removed; andthelabour market hasbeen reformed,
facilitating theresource mobility thathasproven vital tosuccess.
ThesereformshavebroughtaboutadramaticturnaroundintheNewZealandeconomy.Inthemid-1980s,
growth waslowandsluggish, thefiscal deficit approached 9percentofGDP, inflation wasnearly 15percent
ayear, unemployment wasrising toward itspeak of11percentandthebalance ofpayments wasindifficulty.
Since 1993, realannual growth hasaveraged near4percent, inflation hasgenerally beenbelow 2percent, the
budget isinsurplus andtaxes arebeing cut,unemployment hasfallen to6percentandexternal debtisbeing
reduced.TradeandotherstructuralreformsareestimatedtohaveincreasedNewZealand'srealeconomicgrowth
potential byabout 1percentage point ayear, withimportant benefits forthenation 'seconomic well-being.
TheNew Zealand Economy
Theimproved policy environment created theopportunity forasharp recovery, ledbyexports.
Merchandise exports rosebysome 18percentinvolume between 1990 and1992 andexports ofgoods andnon-
factor services increased from theequivalent of27to32percentofGDP. Growth thenquickly became more
broadly based. Producers moved toaugment capacity; investment wasupsharply in1992-94. Subsequently,
asemployment andconfidence grew, consumer demand increased. Growth nowappears sustainable, marking
adistinct change from theearlier experience when theimpetus forgrowth came typically from fiscal expansion
orapositive terms-of-trade shock.
Therapid increase ininvestment relative tosavings hashaditscounterpart inawidening current account
deficit,whichmovedfrom1.6to4.5percentofGDPfrom1993to1995.Concurrently,partlyreflectingrenewed
confidence, theNew Zealand dollar hasappreciated inrealterms, cutting intothecompetitiveness ofsome
industries. Thissituation mayactually becreating additional support forreform. Recognizing thattheorigins
oftheexternal imbalance lieinashortfall ofdomestic savings relative toinvestment, export industries support
maintaining substantial government budget surpluses asasource ofdomestic savings. Keygroups representing
export industries andunprotected import-competing industries, bothofwhich aredisadvantaged bytheremaining
import protection given some industries, advocate theneed toeliminate thisprotection, andpoint outthatthis
need ismagnified atatimewhen some exporters maybeunder stress.
Services account forabout 62percentofNewZealand 'sGDP, manufacturing for21percent, primary
industries for11percentandother branches for6percent. Driven byexport growth, sectors such asdairy
manufacturing, forestry andforest products, andnon-commodity-based manufactures haveexpanded rapidly in
recent years. Primary products account directly forabout 13percentofgoods andservices exports; butif
theprimary products embodied inmanufactures areincluded, thentheyaccount foroveronequarter ofexports.
Over halftheproduction ofmanufactured foodproducts isexported, including 90percentofdairy products.
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Theprincipal imports include transport equipment, non-electrical machinery, electrical machinery, andnon-fuel
crude materials.
Asaresult ofclose economic ties(including atrade agreement), geographic proximity andhistorical
links, trade withAustralia comprises some 20percentofNew Zealand 'stotalmerchandise trade. Other APEC
members account forhalfofNew Zealand 'strade, andtheEuropean Union accounts forsome 17percent.
Growth inexports toeastAsiaaccounted fornearly three fifths oftotalmerchandise export growth from 1990
to1995.
Trade Policy Framework
Trade policy, aspartofNew Zealand 'sbroader external strategy, attempts toexpand onandcomplement
theoutward orientation ofdomestic economic policies, andispursued onfourtracks: unilateral, multilateral,
regionalandbilateral.Tradeliberalizationhasbeenundertakenprimarilyontheunilateraltrack,intherecognition
thatliberal trade policies areinNew Zealand 'sbestinterest whatever thepolicies ofother countries. ButNew
Zealand views multilateral freetrade asthebestpossible policy setting, andworks tothisendintheWTO.
NewZealandisanoriginalWTOMember,havingratifiedtheMarrakeshAgreemen ton7Decemb er1994.
ItsWTO obligations aregiven force domestically through legislation, regulations, administrative provisions and
departmental policies. Substantial changes were made tolegislation inareas suchasintellectual property and
anti-dumping inorder tomeetobligations resulting from theUruguay Round. New Zealand grants atleastm.f.n.
treatment toalltrading partners.
TheUruguay Round results areexpected tobeofgreat benefit toNew Zealand. Unlike mostcountries,
whose Uruguay Round benefits stem primarily from their ownreforms agreed under theRound, most of
NewZealand'sexpectedbenefitsresultfrompolicychangesinothercountries.First,becauseofunilateralreform,
changes required ofNew Zealand bytheUruguay Round arerelatively minor. Second, domestic adjustment
hasmade theeconomy more flexible andbetter abletotakeadvantage ofnewtrading opportunities. Finally,
theUruguay Round ledtosubstantial market-opening forproducts ofexport interest toNew Zealand, products
thathave longbeen subject tosignificant import restrictions andexport subsidies byother countries. Inthis
respect, New Zealand 'sexpected significant Uruguay Round gains reflect theeconomic costs ithasbeensuffering
from distortive trade measures ofother countries.
TheAustralia-New Zealand Closer Economic Relations Trade Agreement (CER) isamong themost
comprehensive trading agreements intheworld. Itextends freebilateral trade toallgoods andmost services.
With effect from July1990, thetwocountries agreed nottoapply anti-dumping measures totheirbilateral trade,
noting thattheywere moving from a"managed trade environment, including anti-dumping policy, tofreetrade"
andreasoningthatanti-dumpingactionswereananomalyinthenewenvironment.Theextensionofeachcountry's
competition lawtocover trans-Tasman trade wasanimportant political-economy consideration thatfacilitated
theelimination oftrans-Tasman anti-dumping. Standards arebeing harmonized andtheTrans-Tasman Mutual
Recognition Agreement, expected toenter intoforce inmid-1997, willallow imported goods soldinonecountry
tobesoldintheother without having tocomply withadditional requirements; itwillalsoallow persons registered
topractice anoccupation inonecountry tocarry outthesame occupation intheother. TheCER iscomplemented
byother areas ofeconomic co-operation between thetwocountries, including thefreemovement oflabour, the
development ofjoint food standards, andnational treatment forgovernment procurement.
NewZealandgrantstariffpreferencestoCanadaonabroadrangeofimportsundertheir1982Agreemen t
onTrade andEconomic Co-operation. NewZealand extends unilateral preferences todeveloping countries under
itsGeneralized System ofPreferences (GSP) programme andtoForum Island Countries under theSouth Pacific
Regional Trade andEconomic Agreement (SPARTECA).
Amember oftheAsia-Pacific Economic Co-operation (APEC), New Zealand fully supports APEC 's
"open regionalism" approach, which New Zealand interprets tomean thatmeasures agreed inAPEC willbe
implemented onanm.f.n. basis andthatAPEC membership willbeopen toexpansion.
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New Zealand encourages foreign investment andmaintains aliberal foreign investment régime, with
national treatment thegeneral rule. Approval requirements exist onlyunder certain well-specified conditions,
andsectoral restrictions areuncommon. Inward foreign direct investment hasrisen rapidly since thelate1980s.
Trade Policy Features andTrends
Policy instruments
Tariffs areNew Zealand 'smain trade policy instrument. Thisreliance ontariffs isanimportant, positive
aspect ofNewZealand 'strade régime: notonlyaretariffs more transparent thanother types ofimport protection,
theyarealsoquantifiable andmore amenable toreduction andeventual elimination. New Zealand 'sapplied
tariff rates aremoderate anddeclining. New Zealand applies noexport subsidies ortaxes andusesfewexport
measures; agricultural marketing boards arethemain exception.
Substantial tariff reductions havebeen implemented overthepastdecade, including thatinJuly1996,
which resulted ina1percentage point drop intheaverage rate. Thestatutory m.f.n. tariff today averages
6percent, though rates forsome products, suchastextiles andclothing, footwear, andmotor vehicles, remain
relatively high. Thetariff average iseffectively much lower because 40percentormore ofmerchandise imports
enter dutyfreeunder tariff concessions, which apply toimports ofsome 23,000 narrowly defined products not
produced inNew Zealand andwhich would otherwise besubject toimport duty. These concessions, however,
increasetheunevennessofthetariffandresultingreatereffectiveprotectionforthosesectorsthatproduceprotected
goods.
NewZealand 'splanned programme offurther tariff reductions for1997-2000 isexpected toreduce such
unevenness. By2000, tariffs areprogrammed toaverage 3percentandtariff unevenness (measured bythe
standard deviation) willalsobehalved. Rates ontextiles, clothing, footwear, motor vehicles andother sensitive
products, cutsinwhich have inthepastlagged behind those ofother rates, aretobereduced from ashighas
30percentto15percentorless. Duties areagain tobereviewed in1998 to"determine howtomove toward
azeroend-point under aunilateral domestic tariff reduction programme." Intheframework ofAPEC, the
Government intends toeliminate alltariffs onanm.f.n. basis by2010.
IntheUruguay Round, NewZealand increased thecoverage ofitstariff bindings from 55toover99per
centoftariff lines andcommitted tosubstantial reductions forthose lines already covered bybindings prior to
theRound. When most ofNew Zealand 'stariff commitments have been implemented, in2000, theaverage
bound ratewillbenear12percent; applied tariffs atthattimearetoaverage onequarter ofthatlevel. Broad
scope thusexists forNew Zealand toreduce itsbound tariff rates andprovide traders withgreater assurance
about future applied tariffs.
Sectoral policy patterns
Theagricultural sector ishighly market-oriented, with very liberal domestic andimport régimes.
Agricultural subsidies asashare ofGDP were reduced from 3.8percentofGDP in1983 to0.9percentin
1987 and0.1percentin1994. Similarly, theproducer subsidy equivalent, ameasure ofsupport tofarmers,
fellduring thisperiod from itspeak of33percentto3percent, afigure much lower thanthatforanyother
OECD country.
Much ofNewZealand 'sagricultural exports aresubject tolicensing controls -amounting insome cases
toexportmonopolies-operatedbystatutorymarketingboards,whicharedirectlyorindirectlyproducercontrolled.
New Zealand haspromoted competition invirtually allother areas ofitseconomy, withremarkable results.
However, theexceptional character oftheboards isindicated bytheexemption ofsome oftheiractivities from
competition legislation; throughout therestoftheeconomy suchexemptions arerare. Theeffect ofcompetition
inother sectors hasbeen topromote innovation andefficiency; theauthorities thuskeep themarketing boards
under review withthese endsinmind. Agricultural -andeconomy wide -resource allocation could stillbenefit
from aneasing, even eventual elimination, ofsuch marketing restrictions.
Forestry isamong NewZealand 'sfastest growing industries; itsshare ofGDP hasmore thandoubled,
to2.5percent, inthepastdecade. Production increased byover50percentfrom 1989 to1995; itisexpected
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torisebyafurther 70percent, andexport volume toperhaps double, by2005. Theownership andcontrol
oftheindustry ischanging, withmuch privatization offorestry assets inrecent years. Tariffs onforestry and
logging products areverylow; duties onwood products andpaper, however, arerelatively high, ranging to
25percent.
Thecomposition ofNew Zealand 'smanufacturing sector anditsinternational trade inmanufactures
reflects theeconomy 'sstrength inprimary production. Onethirdofmanufacturing activity isinfoodprocessing,
andmanufactured foodproducts comprise twofifths ofmanufacturing exports. Inrecent years non-commodity-
based manufacturing output, stimulated byexport demand, hasgrown rapidly.
Themanufacturing sector washeavily protected byimport licensing andhightariffs untilthemid-1980s.
Withtheeliminationoflicensingandthelargereductionsintariffs,protectionhasbeengreatlyreduced.Production
patterns have come more intolinewithNew Zealand 'sapparent comparative advantage, contracting inareas
suchastextiles andclothing andbasic chemicals, andexpanding insectors suchasfoodmanufacturing. Tariff
reductions inareas suchastextiles andclothing, footwear, andmotor vehicles andcomponents havelagged those
inother areas. Theeffective protection accorded these industries maywellbeattheexpense ofactivities such
asfoodprocessing, printing andpublishing, petroleum refining, basic metals, andprofessional equipment. The
1997-2000 tariff reduction programme should substantially reduce thisprotection.
NewZealand 'sservices sector hasakeyrôleintheeconomy. Thesector accounts forsome twothirds
ofeconomic activity; hence itsefficiency andproductivity impact greatly oneconomic well-being. Trade in
services hasashare ofnearly onequarter oftotaltrade. Moreover, services areimportant inputs intoother parts
oftheeconomy, accounting, forexample, for40percentofdirect input costs infoodmanufacturing. Tothe
extent thatservice costs arebeing reduced, through open international competition andincreased productivity,
thecompetitiveness ofindustries such asfood manufactures isenhanced.
Given theircritical rôle, services were putinthevanguard ofNewZealand 'sstructural reform effort.
Competition isnowtheruleforthesector, anddirect regulation islargely absent; there is,forexample, no
telecommunications regulatory body. Virtually allkeyState-owned enterprises havebeenplaced onacommercial
footing, andmany havebeenprivatized. With therelatively small sizeoftheNew Zealand market, theopenness
ofservices markets tointernational competition hasbeen vitaltoestablishing thedesired levels ofcompetition.
Trade Policies andTrading Partners
TheNewZealandeconomywashighlyregulatedandprotecteduntilthemid-1980s.Theweakperformance
oftheeconomyshowstheshortcomingsofsuchanapproach.NewZealandnowprovidesaclear,positiveexample
ofliberalization. Itspersistence incarrying through boldreforms invirtually every aspect ofitseconomy has
begun topaysubstantial dividends, withanincrease intheeconomy 'ssustainable growth potential. Trade
liberalization hasbeen vital tothisachievement.
Theauthorities areaware thatremaining import tariffs impose acostontheNew Zealand economy
andthattheir removal could provide asustained increase inwelfare equivalent toover1percentofGDP.
Some other aspects ofthetrade régime, including theexport monopolies heldbymarketing boards, mayalso
place certain costs ontheeconomy. Thus, continuing trade reforms through totheirconclusion remains acritical
element ofthepolicy agenda.
New Zealand alsohasavital interest inthemultilateral system. Markets inother countries were
sufficiently opentoallow arapid expansion ofNewZealand 'sexports intheearly 1990s, which sparked renewed
economic growth. Subsequently, through theUruguay Round, withNew Zealand asanactive participant, the
multilateral system hasdelivered newmarket opening, which isexpected tobeofgreat value toNew Zealand.
Substantial restrictions stillremain onsome products ofexport interest toNew Zealand, however, lowering both
itswelfare andthatofitspartners. Itistherefore important thatNew Zealand continues towork through the
multilateral system tofurther open international trade andthatitbrings itsspecial perspective andexperience
tobearonmultilateral issues.
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TRADE POLICY REVIEW BODY
NEW ZEALAND
Report bytheGovernment -Summary Extracts
Introduction
New Zealand welcomes theopportunity toparticipate again inthetrade policy review process asthe
economybeingreviewed.TheWTOsTradePolicyReviewMechanism,particularlythroughthedetailedresearch
oftheSecretariat, provides valuable transparency intheevolution ofMember economies trade régimes and
their progress towards theWTO ideal offreeandopen trade ingoods andservices. Council discussion inthe
Review Body meeting alsoprovides auseful opportunity forpeerreview beyond theimmediate framework of
mutual rights andobligations which flow from WTO provisions andcommitments.
TradepolicyinNewZealandispartofabroaderexternalpolicystrategytofosteropennessofthedomestic
economy andstronger international economic linkages. Theunderlying policy objective istopromote
New Zealand seconomic growth through trade andthusimprove theliving standards ofNew Zealanders on
asustainable basis. Successive New Zealand Governments since theearly 1980s have followed thisstrategy.
FrombeingoneofthemostinsulatedandrestrictiveamongOECDeconomies,NewZealandhasbecome
oneofthemost open andcompetitive. Thereform process overthepast13years hasbeen described asthe
most comprehensive economic reform programme undertaken byanyOECD country inrecent decades. While
thebroad scope ofthereforms isbriefly outlined below, thisreport willconcentrate ontheperiod since thelast
multilateral review ofNew Zealand strade policy in1990. InthattimeNew Zealand hascontinued tomake
considerable progress towards thegoaloffreeandopentrade andinvestment which itadvocates foralleconomies
atthemultilateral level.
Thisreport begins bybriefly outlining New Zealand strade policy strategy. Elements ofeachaspect
ofthisstrategy arethenexamined inmore detail andtheir future evolution isconsidered.
Trade Policy Strategy
With apopulation oflittle more than3.5million, international trade isessential toNew Zealand s
prosperity. Exports ofgoods andservices comprise around 30percentofNew Zealand sGDP. Theoverall
goalofNew Zealand strade policy isstraightforward: toachieve sustainable economic growth through trade.
Thisobjective, directed atcomplete multilateral freetrade, issimultaneously pursued through fourinterrelated
policy tracks.
Domestic policy: theunilateral track
Open andoutward-looking domestic economic policies arethefoundation stone ofNew Zealand strade
strategy:
- reduction orelimination ofindustry assistance, protection andregulation overrecent years has
beenfundamentaltoenhancingtheefficiencyandinternationalcompetitivenessofNewZealands
economy;
- domestic reforms areconsistent withthedirection ofmultilateral reform butNew Zealand has
notwaited forinternational reform tomake decisions which areinitsownbestinterest.
Thebilateral track
TheGovernment works closely withindividual trading partners tosolve problems andseekmore open
trade andinvestment relationships:
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- theAustralia-New Zealand Closer Economic Relations Trade Agreement (CER) constitutes
oneofthemost farreaching bilateral freetrade arrangements intheworld covering asingle
market ofaround 20million people.
Theregional track
Regional economic groupings (including NAFTA, EU,AFTA andMERCOSUR) have agrowing influence on
New Zealand strade policy:
- within theoverall goalofcomplete multilateral freetrade New Zealand looks topromote and
build liberalized trade arrangements intheAsia-Pacific region;
- APEC (Asia-Pacific Economic Cooperation) provides themostcomprehensive forum fortrade
liberalization intheregion;
- theGovernment hasstated alsothatitwould beopen toexplore WTO-compatible sub-regional
free-trade options with anyofNew Zealand ssignificant trading partners onthebasis of
principles which reflect New Zealand sinterests asanoutward-looking economy intheAsia-
Pacific region;
- sucharrangementsmustbeoutward-looking,open-ended,trade-enhancing,Asia-Pacificfriendly,
comprehensiveinsectoralcoverageandnotcompromisingofNewZealandsunilateralreforms.
TheWTO: Themultilateral track
Forasmall country withglobal trading interests astrong multilateral trading system isvital:
- complete multilateral freetrade isthe“firstbest”outcome forNew Zealand; thesuccessful
outcome totheUruguay Round marked afurther solid stepinthatdirection;
- beyondsecuringfullandeffectiveimplementationofUruguayRoundcommitments,NewZealand
advocatesfurtherworkintheWTOtoremoveimpedimentstofreeandopentradeandinvestment
atthemultilateral level.
Inthefollowing material, aspects ofeachelement ofthisstrategy areexamined andtheirfuture evolution
isconsidered.
TheEconomic Reform Programme
Asnoted above, trade policy isonlyonepartofabroader external strategy concerned withinvestment,
transport andother external linkages. These factors areinturnlinked totheGovernment sbroader economic
policies, theaimofwhich issustainable economic growth andprosperity forallNew Zealanders.
Theeconomic reform programme hasinvolved thecreation ofmore open andcompetitive product and
factor markets inNew Zealand andalsoincreasing integration ofthese markets withregional andinternational
markets. There isthusagrowing convergence between New Zealand sdomestic economic policy andthevarious
elements ofitsexternal economic policy. Inconsidering itsinternational linkages New Zealand hasapolicy
framew orkbasedontheinternationalcontestabilityofmarkets;aframew orkwhichfocusesonopenandcompetitive
productandfactormarketsthroughconsiderationoftradeandinvestmentpoliciesattheborderandrelated“behind
theborder ”regulatory issues. Among themain areas ofreform were:
Public sector restructuring
Asgovernment expenditure accounts forover30percentofGDP, inefficiencies inthegovernment
sector impose significant costs onthebusiness sector. Reforms such ascorporatization, privatization and
introduction ofnewfinancial management systems haveledtomajor improvements. Thekeyguiding principles
inthese reforms havebeentransparency, consistency andwithdrawal oftheState from activities thatcanbemore
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efficiently andeffectively performed bythecommunity orprivate enterprise. Thecentral elements ofthereforms
included:
- transformationofgovernmentdepartmentsinvolvedincommer cialactivities(egpostalservices,
electricity networks) intoState-Owned Enterprises (SOEs) operating onprivate sector principles
andexposed togreater competitive pressures;
- privatization offormer government enterprises (egtelecommunications, aviation, railways,
forestry) tomaximize efficiency gains; more than25enterprises worth overNZ$14 billion have
been soldsince 1987;
- financial management reforms forremaining government departments including introduction
offullaccrual accounting andindividual performance contracts between Ministers andChief
Executives;
- liberalization anddecentralization ofgovernment procurement with individual managers
responsible forprocuring goods andservices onavalue-for-money basis against tightly
constrained departmental budgets;
- majorredesignofthepublicsocialservicessectorandreconstructionofretirementincomepolicy
toachieve greater efficiency andbetter targeted assistance.
Monetary andfiscal policy
Aconsistent policy framework isimportant forreducing uncertainty inthebusiness environment. Fiscal
policy isgeared toreducing theclaims theGovernment makes onresources intheeconomy andmonetary policy
isaimed atdelivering general price stability, akeyingredient inbusiness planning. Among thereforms inthese
areas were:
- fiscal policy reoriented tomedium-term objectives ofachieving surplus intheadjusted fiscal
balance, reducing debtlevels andreducing government expenditure asapercentage ofGDP;
- introduction oflegislation requiring regular accrual-based fiscal reporting andarticulation of
fiscal objectives andstrategies;
- monetary policy directed tothesingle economic objective ofmaintaining general price stability;
- formulation andimplementation ofmonetary policy devolved toanindependent authority, the
Reserve Bank ofNew Zealand, pursuant toapolicy targets agreement between Government
andtheReserveBankGovernor(currentagreemen trequiresunderlyinginflationtobemaintained
in0-2percentrange).
Financial liberalization
Thecostofcapital isanimportant constraint onbusiness activity. Removal ofgovernment imposed
barriers toentry inbanking andofregulatory distinctions between different institutional groups inthefinancial
sector increased linkages with international financial markets andimproved therange ofservices available.
Businesses gained access tomore flexible andcosteffective ways offinancing, bringing thecostofcapital closer
toworld levels. Included amongst thereforms were:
- removal ofcontrols onprices, interest rates, wages andtheexchange rate;
- abolition ofcontrols oncapital movements;
- sweeping deregulation offinancial markets including removal ofrestrictions onthenumber
ofbanks andonbank competition.
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Taxation
Distortions inthetaxsystem influence business andinvestment decisions. New Zealand hadavery
complextaxsystemwithhighmarginaltaxratesoffsetbyavarietyofconcessionsforparticulartypesofinvestment.
ReformshavecreatedamoreneutralinvestmentenvironmentbothinternallyandbetweenNewZealandandoffshore
taxjurisdictions. Included were:
- broadening ofthetaxbasethrough introduction ofacomprehensive value-added tax;
- simplification ofpersonal taxstructure toatwo-step scale withremoval ofspecific exemptions
andconcessions;
- substantial reductions inrates ofdirect taxation with thecompany ratereduced from 48to
33percentandthetoppersonal ratecutfrom 66to33percent.
Infrastructure deregulation
Inefficiencies ininfrastructure services imposed significant costs onthegoods sector. Privatization and
deregulation intelecommunications andinallmodes oftransport hasincreased therange ofservices available
andsubstantially reduced costs toindustry. Reforms included:
- substantial deregulation across most sectors oftheeconomy;
- removal ofgovernment imposed entry barriers inmajor infrastructure industries suchasroad,
rail,airandmaritime transport, telecommunications, broadcasting andelectricity distribution.
Labour market deregulation
Prior to1991 theNew Zealand industrial relations system wascentralized. Collective bargaining was
backed bycompulsory unionism andgovernment machinery tosettle collective documents. Thisledtobargaining
thatwasessentiallynationalincharacterandbasedonoccupationalstatus;asystemwhichproducedrigidoutcomes
compounding thedifficulties oflabour market adjustment toeconomic conditions. Reforms toencourage
decentralization ofdecision making haveallowed formore rapid adjustment inthelabour market where needed
andhascontributed toincreased competitiveness andeconomic andemployment growth. Thereforms included:
- deregulationanddecentralizationoflabourmarketsprovidingfreedomforindividualorcollective
bargaining between employers andemployees attheworkplace, firmorindustry levels;
- accompanyinglegislationspecifyingminimumstandardsofemployment(suchasminimumwages,
statutory sickleave provisions, annual andstatutory holidays) andaremedy forunjustified
dismissal applicable toallemployees.
Investment liberalization
New Zealand recognises thatforeign direct investment (FDI) isavital contributor toitseconomic
development andakeyelement inpromoting international economic linkages intheglobal economy. Aswell
asprovidingdevelopmentcapital,FDIprovidesaccesstotechnology,managementskillsanddistributionchannels
beyond thecapacity which canbegenerated bydomestic firms. New Zealand hastherefore created aliberal
foreign investment régime applicable toinvestment fromallcountries without discrimination. Investment reforms
included:
- liberalization andsimplification ofthescreening régime, applicable tocertain investments,
administered bytheOverseas Investment Commission;
- removal ofsector-specific restrictions oninvestment outside theareas offishing (restrictions
remain onownership offishing quota) andcivilaviation (foreign ownership ofNew Zealand
international airlines isrestricted inaccordance withstandard international practices).
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Trade liberalization
Tariffs andquotas toprovide protection from imports foroneindustry actasataxonother sectors of
theeconomy. New Zealand hasfollowed acomprehensive, consistent andcertain programme ofliberalization
toincrease theexposure ofdomestic consumers andproducers tointernational price signals. Included amongst
thereforms have been:
- elimination, completed in1992, ofallquantitative controls andnon-tariff measures onimports
maintained forindustry protection purposes;
- elimination ofallexport subsidies andtrade-distorting agricultural subsidies;
- changes toagricultural marketing, including removal ofdomestic monopoly powers, inline
withmarket conditions;
- comprehensive unilateral tariff reduction programmes designed toencourage international
competitiveness inthedomestic economy (tariffs were reduced byabout 50percentbetween
1988and1992andbyafurther33percentbetween1993and1996,resultinginasimpleaverage
m.f.n. rateforalltariff items ofaround 7percent).
Results
Results ofthereform process were notimmediate butoverthepastfourorfiveyears thebenefits have
been clear. Among thebenefits are:
- inthefiveyears since March 1991 theeconomy hasgrown, inrealterms, byabout 15percent;
- underlying inflation hasremained below 2percentformostoftheperiod since 1991, currently
standing at2.3percentfortheyearended June 1996;
- export earnings overthefiveyears toJune1996 haveincreased by33percentwithsignificant
growth inexports ofnon-commodity manufactures;
- overasimilar timeframe unemployment hasfallen from 10.3 percentinDecember 1991 to
6.1percentinJune 1996 while thetotalnumber ofpeople inemployment hasincreased by
more than234,000 (16.1 percent), with three quarters ofthisincrease being infulltime
employment; and
- netpublic debthasfallen from 50.5 percentofGDP inDecember 1991 to32.4 percentof
GDP inJune 1996.
Thereform process hasalsoattracted considerable international interest andrecognition. Forfour
successive years to1995, theWorld Competitiveness Report1rated New Zealand asthetopOECD country for
government policies andforlongterm competitiveness ofdomestic economic policies. Inthe1994 and1995
reports New Zealand wasrated topOECD country foroverall competitiveness intheExecutive Opinion Survey.
Thisyear, intheGlobal Competitiveness Report2,New Zealand wasranked astheworld sthirdmostcompetitive
economy after Singapore andHong Kong.
1World Competitiveness Report 1992-1995; jointly published onanannual basis byInstitute for
Management andDevelopment, Lausanne andWorld Economic Forum, Geneva.
2Global Competitiveness Report, 1996; World Economic Forum, Geneva.
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Future directions
Acrucialfeatureoftheeffectivenessofthereformprogramme hasbeenitscomprehensiveandco-ordinated
nature. Allaspects ofthereforms were directed toimproving thecontestability andfunctioning ofmarkets.
Trade liberalization played akeyrôleinthisprocess andinthesustainability oftheoutcomes through increasing
theexposure ofproducers andconsumers tointernational market signals.
Reform tomeet thechallenges andtakeadvantage oftheopportunities ofaglobalizing economy must
beanon-going process. New Zealand hastherefore already embarked onafurther unilateral tariff reduction
programme which bytheyear2000 willresult inmore thanhalfoftariff lines being atzerowhile themajority
ofthose lines inwhich tariffs arelevied willbeatarateof5percent. Bythattimenotariff willbehigher
than15percentandthesimple average m.f.n. tariff ratewillhave fallen toaround 3percent.
Afurther review ofremaining tariffs willbeheldin1998 withtheobjective ofdetermining howtomove
towards azeroendpoint foralltariffs under aunilateral domestic tariff reduction programme.
Australia-New Zealand Closer Economic Relations
TheAustralia-New Zealand Closer Economic Relations Trade Agreement (theCER Agreement) isthe
primary instrument governing theconduct oftrade between Australia andNew Zealand ingoods andservices.
Itisadynamic agreement which, since itsinception in1983, hasdeveloped intooneofthemost comprehensive
bilateral free-trade agreements inexistence.
Since theachievement offullfreetrade ingoods in1990, through theelimination ofalltariffs and
quantitative import orexport restrictions, theagreement hascontinued tobebroadened anddeepened inanumber
ofrespects including:
- elimination, upon achievement offreetrade ingoods, ofanti-dumping actions ontrans-Tasman
trade ingoods meeting CER origin rules coupled withadjustment tostandards, procedures and
enforcement ofdomestic competition lawstodealwithcertain anti-competitive behaviour by
firms inonecountry thathave market power intheother country orinthecombined CER
market;
- expansion ofthecoverage offreetrade inservices under the1988 CER Trade inServices
Protocol through reduction and/or removal ofinscriptions from theannexed listofservices
towhich thenational treatment obligation oftheProtocol does notapply;
- initiatives tofacilitate standards harmonization through recognition andharmonization of
conformity assessment systems pursuant totheformation in1991 ofatrans-Tasman Joint
Accreditation System (JAS-ANZ) andestablishment in1995 ofaframework forharmonization
offood standards;
- conclusionthisyearofatrans-TasmanMutualRecognitionArrangementprovidingforrecognition
ofgoods andprofessional qualifications under which agood which islegally abletobesold
inonecountry canbelegally soldintheother andaperson whoisregistered topractise an
occupation inonecountry isentitled topractise anequivalent occupation intheother country.
From itsinception CERhasbeenperceived byitsMembers asanoutward-looking agreement. Australia
andNew Zealand havetherefore eachcontinued toimplement unilateral tariff reductions onanm.f.n. basis and
toparticipate actively inregional andmultilateral trade liberalization processes. Consistent withtheemphasis
bybotheconomiesonopenregionalism,AustraliaandNewZealandareparticipatinginMinisterialleveldialogue
betweenCERandtheeconomiesoftheASEANFreeTradeArea(AFTA)andinamorerecentlyinitiateddialogue
between CER andtheeconomies ofMERCOSUR.
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Asia Pacific Economic Cooperation
New Zealand wasafounder Member ofAPEC (Asia Pacific Economic Cooperation) established in
Canberra, Australia in1989. Asagrouping which accounts formore than50percentofworld GDP, includes
eight ofNew Zealand stoptenexport markets andisthesource ofover70percentofNew Zealand strade,
APEC represents themost promising trade andinvestment forum forNew Zealand outside theWTO.
Atthe1994 APEC Leader sSummit inBogor, Indonesia, all18APEC Member economies committed
themselves tothegoaloffreeandopen trade andinvestment intheregion bytheyear2020. Along withthe
other industrialized Member economies ofAPEC, New Zealand iscommitted toachieving thisgoalbytheyear
2010.
In1995 APEC Leader sadopted theOsaka Action Agenda asameans togiveeffect toAPEC sgoals.
Thecomprehensiveness oftheBogor goalwasreaffirmed asoneoftheoverarching “General Principles ”agreed
asanintegral partoftheAPEC liberalization andfacilitation process. TheOsaka Action agenda contains an
extensiveworkprogramme coveringtradeandinvestmentliberalizationandfacilitation,andeconomicandtechnical
co-operation. Among thefifteen specific action areas3New Zealand isco-ordinating discussion oncompetition
policy andderegulation.
Following thisagenda New Zealand andother APEC Members areworking toprogressively implement
theBogor goalthrough:
- concerted unilateral actions asdetailed byeach economy inIndividual Action Plans; and
- co-ordinated actions asdetailed byeach economy inCollective Action Plans.
Ineach caseplans aretocover actions inall15specific action areas andaresubmitted totheannual
APEC Ministerial Meeting forassessment. Initial plans willbesubmitted thisyearattheMinisterial Meeting
inManila, ThePhilippines.
Theorigins oftheAPEC process lieprimarily intherealisation thatdynamic business-led growth in
theAsia-Pacific region iscreating growing economic interdependence andacommon interest insustaining that
dynamism. TheOsaka Action Agenda isdesigned tohelpthisprocess byfurther liberalizing theregulatory
environment inwhich trade andinvestment operate, andbypromoting other forms ofeconomic co-operation.
From itsinception APEC hashadtheobjective ofdeveloping andstrengthening theopen multilateral
tradingsystem.NewZealandrecognisestheneedforregionalandmultilateralapproachestotradeandinvestment
liberalization tosupport andreinforce eachother. Thisneedunderpinned therecent meeting ofAPEC Ministers
inChargeofTradeinChristchurch,NewZealandatwhichAPECMinistersrecognizedtheimportanceofensuring
thatthemultilateral trading system continues todevelop inresponse totheevolution oftheworld economy and
recognized thecontribution thateachAPEC Member economy, inimplementing theOsaka Action Agenda, is
making incontributing towards aprogressively more open world trading environment.
World Trade Organization
ForNew Zealand asasmall country withglobal trading interests theexistence ofastrong, open, rules-
basedandnon-discriminatorymultilateraltradingsystemisvital.NewZealandstradepolicystrategyemphasises
thatcomplete multilateral freetrade isthe“firstbest”outcome forNew Zealand. TheWTO iscentral tothe
achievement ofthisoutcome.
3Specific action areas aretariffs, non-tariff measures, services, investment, standards andconformance,
customs procedures, intellectual property rights, competition policy, government procurement, deregulation,
rules oforigin, dispute mediation, mobility ofbusiness people, implementation ofUruguay Round outcomes,
andinformation gathering andanalysis.
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Because ofthelong-standing absence ofeffective multilateral rules inNew Zealand smain areaof
trade,agriculture,itwaswidelyrecognisedthatfewcountrieshadahigherstakethanNewZealandinsuccessfully
concluding theUruguay Round. Estimates suggested thebenefit toNew Zealand oftheresults oftheRound
were equivalent tobetween 2and3percentofGDP.
ForNew Zealand, which hadalready benefited from itsownprogramme ofunilateral liberalization,
most ofthese gains stemmed from theopening ofexport opportunities inforeign markets. Reflecting theextent
ofthedomestic reform programme, New Zealand wasalsooneofthefewparticipants intheUruguay Round
toactively promote trade liberalizing outcomes inallnegotiating areas.
With theWTO approaching itssecond anniversary andthefirstofthebiennial meetings ofitsMinisterial
Conference inSingapore, thefirstandon-going priority forallMembers istoensure thefullandtimely
implementation ofthecommitments contained intheMarrakesh Agreement. New Zealand isdetermined toplay
itspartinthishaving accelerated theimplementation ofrules-based agreements suchasTrade Related Aspects
ofIntellectual Property (TRIPS) andTrade Related Investment Measures (TRIMS), having fully integrated its
textile sector under WTO rules andhaving implemented allcommitted tariff reductions other thanthose insectors
subject totariff elimination.
Globalizationandregionalismaretwinforcesshapingtheevolutionoftheworldeconomy.NewZealand
recognizes thatitisonlythrough trade andinvestment liberalization atthemultilateral level thatthechallenges
andopportunitiesofglobalizationcanberespondedtofullyforthebenefitofallpeoples.NewZealandistherefore
convinced thatMinisters meeting inSingapore need, through theirdeliberations onthework programme ofWTO,
toenergize themultilateral trading system. Thework programme must provide coherence intherules ofthe
system through addressing allliberalization issues relevant toaglobalizing world economy anditmust besuch
astoensure convergence between regional andmultilateral liberalization initiatives.
Theultimate success oftheUruguay Round layinthefactthatitaddressed issues ofinterest toall
participants. Theinitial steps agreed toliberalize world trade inagriculture would nothavebeenpossible without
outcomes inareas such asservices andintellectual property. Butneither would progress have been made in
thenewerareasofnegotiationunlesstheliberalizationprocesshadstartedinareas,suchasagricultureandtextiles,
ofsignificant residual protection inindustrialized countries.
TheUruguayRoundalsoanticipatedmuchofthewayahead.Itwasthefirstmultilateraltradenegotiation
tobeinclusive ofabroad spectrum ofcountries involved intheglobal economy andtoproduce meaningful
liberalization inareas ofinterest across thatspectrum. Significantly itsoutcome alsocontained theseeds offurther
progress inmost oftheareas ofnegotiation. Thebuilt-in agenda resulting from theUruguay Round agreements,
which covers future negotiations orreviews inawide range ofareas, constitutes asubstantive andbalanced work
programme totakethemultilateral trading system forward onatrade-liberalizing path.
Included, forinstance, isagriculture, where itwillbeessential tocontinue thereform process inorder
toeliminate thesubstantial distortions toagricultural trade which willstillexist bytheyear2000, andservices,
where itwillbeimportant tocontinue theprocess ofprogressive liberalization inexpanding thescope ofspecific
commitmentsonmarketaccessandnationaltreatmentundertheGeneralAgreemen tonTradeinServices(GATS).
Inaddition toother areas suchastextiles, rules oforigin andintellectual property, thebuilt-in agenda, through
theprovisions ofGATS andTRIMS, encompasses work oninvestment andcompetition and,again through the
provisions ofGATS, work ongovernment procurement ofservices.
TheSingapore Ministerial provides theopportunity toconstruct awork programme tocarry forward
thebuilt-in agenda inacoherent andco-ordinated manner. Insome cases work hasalready begun while inothers
detailed preparations willbenecessary before undertaking themandated negotiations andreviews. Insome areas,
suchasinvestment andcompetition policy, consideration might begiven tothemeans bywhich thenecessary
process ofinformation exchange andanalysis might bestbecarried out. Consideration should alsobegiven
toundertaking liberalization initiatives beyond those contained inthebuilt-in agenda, suchasfurther work on
improvement ofmarket access forindustrial products.
Inadvancingtheprocessoftradeliberalization,NewZealandconsidersitisimportantforthemultilateral
trading system, through thework oftheWTO Committee onTrade andEnvironment, tomake itsfullcontribution
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toensuring thattrade liberalization andmeasures toprotect theenvironment remain mutually supportive of
sustainable development.
New Zealand alsoconsiders itessential, ifconvergence between regional andmultilateral liberalization
initiatives istobeensured, fortheWTO toactively work towards thegoalofachieving freeandopen trade and
investment atthemultilateral level. Thework programme tobeagreed attheSingapore Ministerial should begin
tosetinplace themodalities forachieving thisgoalandMinisters should begin toreflect ontheurgency with
which itmust beattained.
Conclusion
Under thecurrent structure oftheWTO Trade Policy Review Mechanism, New Zealand isoneofthose
Members whose trade régimes arereviewed every sixyears. Thisreport hasbriefly described thefurther steps
whichNewZealandhastakenduringthepastsixyears,undereachofthefourelementsofitstradepolicystrategy,
toachieve sustainable economic growth through trade andtheprogress towards thisobjective which hasoccurred.
Asaresult ofacomprehensive, co-ordinated andongoing programme ofdomestic economic reform
andunilateral trade liberalization New Zealand iswellplaced tofurther benefit from theadditional export
opportunitieswhichareemergingasinternationalmarket-openinginitiativesinthebilateral,regionalandmultilateral
tracks begin tobearfruit. New Zealand strade policy strategy recognizes thatforNew Zealand tofullyrealise
itsgoalofsustainable economic growth through trade, international markets must becontestable through the
achievement offreeandopen trade atthemultilateral level.
New Zealand hasalready indicated thatitintends tocontinue itsunilateral programme tofoster openness
ofthedomestic economy andstronger international economic linkages. Through thisprogramme andthrough
further work inbilateral andregional foraandmultilaterally intheWTO, New Zealand expects thatbythetime
ofitsnextscheduled review intheyear2002 thegoaloffreeandopen trade andinvestment atthemultilateral
level willbeconsiderably closer tobeing achieved.
END