WORLD TRADE ORGANIZATION ORGANISATION MONDIALE DU COMMERCE WT/TPR/M/216/Add.1 ORGANIZACIÓN MUNDIAL DEL COMERCIO 28 July 2009 (09-3670) Trade Policy Review Body Original: English/ 10 and 12 June 2009 anglais/ inglés

TRADE POLICY REVIEW NEW ZEALAND Record of Meeting Addendum Chairperson: H.E. Mr. István Major (Hungary)

This document contains the advance written questions, and replies provided by New Zealand.1 ______Organe d'examen des politiques commerciales 10 et 12 juin 2009

EXAMEN DES POLITIQUES COMMERCIALES NOUVELLE-ZÉLANDE Compte rendu de la réunion Addendum Président: H.E. M. István Major (Hongrie)

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 10 y 12 de junio de 2009

EXAMEN DE LAS POLÍTICAS COMERCIALES NUEVA ZELANDIA Acta de la reunión Addendum Presidente: Excmo. Sr. István Major (Hungría)

En el presente documento figuran las preguntas presentadas anticipadamente por escrito, junto con las respuestas facilitadas por la Nueva Zelandia.1

1 In English only./En anglais seulement./En inglés solamente.

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REPLIES PROVIDED BY NEW ZEALAND (FIRST SESSION)

BRAZIL

Q1 The Government Report affirms that the Agreement establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) will include as benefit for New Zealand exporters "the phased elimination of trade barriers, greater certainty and transparency, and reductions in associated transaction costs". Will the mentioned elimination of trade barriers encompass trade defence measures such as anti-dumping and countervailing duties as well as safeguards"? If so, please explain how their application within the AANZFTA will be phased out.

Answer: There is no phased elimination of trade defence measures such as anti-dumping, countervailing and safeguards under the agreement. Each Party to the agreement therefore retains its rights and obligations under the relevant WTO trade remedy agreements. The agreement does include a transitional safeguard mechanism which can be used in certain circumstances over a transition period which, for each particular good, is the period from entry into force of the agreement until 3 years after the customs duty on that good is to be eliminated or reduced to its final commitment.

CHINA

Q1 Would the Delegation of New Zealand please share its views on New Zealand's economic prospect in the background of global financial crisis? What are the effects of these measures taken by the previous Government and new Government on New Zealand's economy? Would New Zealand take further steps to counter the effects of the current crisis in the future?

Answer: In the 2009 Budget (released 28 May) the New Zealand economy is forecast to contract by 0.9% in the year to March 2009 and by 1.7% in the following March year. In the year to March 2011 growth is expected to return to 1.8% as the world economy recovers and as the economy responds to monetary and fiscal stimulus.

New Zealand has responded to the global economic crisis with both monetary and fiscal policy. New Zealand was in a relatively strong position to respond as there was considerable scope to loosen monetary policy and the Government's gross debt was less than 20% of GDP at 30 June 2008, following more than a decade of fiscal surpluses.

In the 2009 Budget, the Government announced a number of measures to curb expenditure growth and control net debt. The Government has reduced its allowance for new operating spending to a maximum of $1.1 billion in 2010/11, increasing by 2% per annum, down from $1.75 billion previously. With these changes, gross government debt is projected to peak at 43% of GDP in 2016/17 and to decline after that as the Government's accounts return to surplus.

The New Zealand Government has $5.8 billion of new spending planned over the next five years to help maintain economic activity and to support jobs. Over the next year, the focus will be on rebuilding business confidence and ensuring that young people remain connected with the workforce and improve their skills. In the medium term, however, the focus is on reducing debt. This is viewed as essential if the Government is to maintain public services and preserve family assistance, superannuation and welfare entitlements at their current levels.

Q2 Would the Delegation of New Zealand please clarify whether the Grants or the help by the NZTE are available to both domestic and foreign companies?

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Answer: We can confirm that grants are available to foreign companies, as long as the company or one of its subsidiaries has a presence in New Zealand and meets other standard grant requirements that apply equally to domestic companies.

Q3 Would the Delegation of New Zealand please elaborate how the NZTE helps to promote and increase business and exports in the three targeted sectors, for example the creative industries?

Answer: NZTE uses its onshore and offshore networks to provide advice and expertise to firms working in those sectors. NZTE also works to provide marketing and networking opportunities for its clients through sponsoring trade shows, conferences, and in trade delegation visits. Specific information regarding NZTE's activities can be found at: http://www.nzte.govt.nz/About-NZTE/Documents/NZTE-Annual-Report-complete-2008.pdf.

Q4 Would the Delegation of New Zealand please explain the specific policies concerning the finance and tax concessions under the Film Co-production Agreement or Arrangements, which have been indicated in New Zealand’s MFN exemptions for audio-visual services?

Answer: A key provision of Film Co-production Agreements or Arrangements is that co-production films – defined widely to include, inter alia, videos, documentaries, mini-series or television dramas - will be considered to be national films entitled to all the benefits provided to such films by the legislation of each country. In New Zealand the main benefit accruing to national films is qualification to apply for financial assistance pursuant to section 18 of the New Zealand Film Commission Act 1978. Partner countries will likewise make any film subsidies, tax breaks, or other financial incentives open to a co-production film.

Q5 Would the Delegation of New Zealand please explain the main methods and relevant programs through which the New Zealand Tourism Board and its operational entity, Tourism New Zealand promote New Zealand internationally?

Answer: Tourism New Zealand (TNZ) is the trading name for the New Zealand Tourism Board (a Crown Entity). Its role is to market New Zealand as a visitor destination overseas. TNZ has nine overseas offices, including an office in Shanghai, which opened in 2000.

TNZ promotes New Zealand worldwide using a number of different methods. These include marketing and promotional work, such as advertising and public relations activity. It works with the local travel trade, who sell New Zealand holidays, to develop better tourism products and to provide them with more information about New Zealand. It also works with local media and celebrities, encouraging them to visit New Zealand and then to write or broadcast stories about their experience.

TNZ also provides information to tourists thinking of visiting New Zealand through its website www.newzealand.com.

Q6 Would the Delegation of New Zealand please specify the main international standards which have been applied in New Zealand's private services sector?

Answer: The reference to "international standards" in the Report was intended to highlight the liberal nature of New Zealand's services market compared to the extent of liberalization in markets in other countries. It did not mean that we apply international standards to foreign services suppliers.

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TURKEY

Q1 Could New Zealand elaborate on the reasons behind the low labour and capital productivity?

Answer: The answers regarding labour and capital productivity are best taken separately.

Labour productivity

It is important to distinguish between the level of labour productivity and its rate of growth. New Zealand has a relatively low level of labour productivity (measured by GDP per hour worked); according to the OECD, New Zealand's labour productivity level in 2007 was 22nd among OECD countries and was over 40% below U.S. labour productivity and around 30% below Australian labour productivity.

Estimates of New Zealand's labour productivity growth vary depending on whether GDP per hour is used (e.g. as by the OECD) or more narrow, but more accurate figures based on the "measured" part of the economy are used. New Zealand's GDP per hour worked grew at an annual average rate of 1.1% between 1995 and 2006 compared to the OECD average of 1.9%. However, its labour productivity for the "measured" part of the economy grew over the same period at an annual average rate of 1.9%.

The reasons for New Zealand's low level and moderately low growth rate of labour productivity include:

- New Zealand's geographical characteristics of distant location from markets and small size. These make trade more costly, reduce the intensity of competition and reduce flows of investment and knowledge. The OECD has estimated that distance from markets reduces New Zealand's GDP per capita by around 10% and explains around three quarters of its gap compared to the OECD average. - The strong rise in labour utilisation by about 1% per year from 2001 to 2006 could have depressed average annual labour productivity growth by as much as 0.4 percentage points over this period (OECD Economic Survey of New Zealand, 2009). While growth in labour utilisation is a good thing (and raises GDP per capita) it needs to be recognised that many of the new entrants to employment have below- average skills and hence exert a downward influence on the growth of labour productivity. - New Zealand has low capital intensity (capital per hour worked) and this explains some of its low level of labour productivity. Low capital intensity reflects lower investment over time. New Zealand's lower investment levels in turn probably reflect a combination of a high cost of capital and an insufficient number of attractive business investment opportunities. - However, as the OECD noted in its 2009 survey of New Zealand, more recently from 2001 to 2006 the country has had one of the largest contributions to labour productivity growth from capital deepening compared to other OECD countries. Rather, what stands out is a low contribution from MFP growth compared to other countries. It must be remembered however that capital intensity and MFP interact with each other in various complex ways. - Possible causes of low MFP growth are low levels of business innovation, some less- than-optimal regulatory settings, skill shortages, and skill losses to Australia and other countries.

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- It is also likely that a deficit in investment in some areas of transport, energy and communications infrastructure has held back labour productivity growth in New Zealand.

Capital productivity

Capital productivity is output per unit of capital, and like labour productivity it is a partial measure. However, in general we are more interested in investing in capital to raise the productivity of each person working rather than adding more people to raise the productivity of each machine or other piece of capital. Put another way, a high figure for capital productivity can reflect efficient use of capital or low investment. This ambiguity makes capital productivity a less useful partial measure than labour productivity. For this reason we think that little should be read into New Zealand's figures on capital productivity. And they do not stand out as low compared to other countries.

Q2 On the productivity issue, the Secretariat's report mentions at para 11, page 7 (Fiscal Policy) the increased spending focused on improving productivity capacity by addressing infrastructure bottlenecks, could New Zealand give details on this spending program?

Answer: In December, the Government increased the capital allowance for Budget 2009 from the $900 million set by the previous government, to $1.45 billion. The capital allowance for Budgets 2010 to 2012 will also be $1.45 billion, and from Budget 2013 will increase to $1.65 billion.

The 2009 Budget provides funding for the following major projects:

- $245 million for health capital spending – this provides funding to enable the consideration of a number of capital pressures and opportunities that have been identified including Auckland regional demographic growth, hospital upgrades, and dedicated elective theatres; - $250 million capital funding for telecommunications infrastructure – this includes $200 million as the Government's first contribution toward a new ultra-fast broadband network, $34 million to support schools to be broadband ready (which was previously announced as part of the Infrastructure Stimulus package earlier this year), and $16 million for the continuation of the Kiwi Advanced Research and Education Network (or KAREN), our high speed network for the tertiary education and research sectors that allows our researchers to conduct research to international standards; - $170 million capital funding consisting of $146 million to increase prison capacity and another $24 million to plan for further additional capacity, to ensure that there is a sufficient number of prison beds to meet demand in the North Island, in particular; - $325.6 million capital funding for the 21st Century School Building Programme, which will fund new schools and provide for the upgrading and maintenance of existing schools. Of this $172 million has been previously announced as part of the fiscal stimulus package. In addition the Government will provide an additional $197.7m of operating funding over the next four years for operating expenses in school property (largely depreciation); and - $90 million of operating subsidy for KiwiRail.

Except where noted the expenditure in Budget 2009 is additional to the infrastructure spending included in the government’s fiscal stimulus package announced earlier this year. The Government's infrastructure programme of initiatives has to date included:

- Fiscal stimulus expenditure announced in February 2009 comprising: - Housing $124 million

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- Education $28 million in the current year and a further $172 million which is being funded as part of Budget 2009. - Transport $142 million to bring forward five large projects and a number of small roading projects. - $258 million for funding of metro rail and rolling stock in Wellington. - A new loan facility for KiwiRail of $140 million of which $75 million has been provided for the purchase of new locomotives. This funding is in addition to funding already announced for rail network improvements totalling $138 million over three years (2008/09-2010/11).

The Government has also announced that it will increase funding for State Highways by $961 million over the next 3 years. This expenditure is supported through a mixture of reallocation of funding from other transport projects and increasing user charges (Announced in March 2009).

Q3 Could New Zealand kindly explain the reasons behind the fluctuations in the inward FDI in the period between 2003-2008?

Answer: Foreign direct investment in New Zealand in the year ended March 2007 of $12.5 billion was significantly higher than in the March 2006 year ($2.4 billion) and the March 2008 year ($4.2 billion). It is not unusual for FDI into New Zealand to fluctuate from year to year. New Zealand is a relatively small economy and the acquisition of large value New Zealand entities by non-resident direct investors can have a significant impact on the statistics.

The main features of the relatively large net inflow of FDI in the March 2007 year were:

1. Significant merger and acquisition activity. A number of large and relatively small value New Zealand entities were acquired by non-resident direct investors; 2. During the year a number of foreign direct investors injected additional capital into their New Zealand subsidiaries; and 3. Retained earnings continued to contribute to the overall inflow of FDI.

Q4 Concerning the ANZCERTA, the Secretariat's report mentions that "as MFN tariffs in both countries are relatively low and have declined steadily, preferential access has continued to be eroded".

Is there any plan or thought to address the preference erosion issue with regard to the ANZCERTA?

Answer: While ANZCERTA has established between New Zealand and Australia one of the most liberal trading relationships that exists between any two countries, it was from the outset of the agreement always envisaged that both countries would continue to liberalise trade unilaterally, multilaterally through the WTO, and through Free Trade Agreements with other trade partners. Preference erosion has, accordingly, never been an issue of concern. In keeping with this New Zealand (and Australia) continue to improve the bilateral trading environment through ongoing work toward the establishment of a Single Economic Market (SEM), to pursue systemic improvements in free trade through the WTO and to seek improved trading relations with other trade partners through free trade agreements.

Q5 Could New Zealand kindly elaborate on the impact of the free trade agreement with China on its bilateral trade and its trade creating effect?

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Answer: The China-New Zealand FTA liberalises bilateral trade in goods and services, as well as facilitating investment and the movement of natural persons involved in business between the two economies.

Goods trade is liberalised through reduced tariff rates. 96% of the tariffs applied to New Zealand's exports to China will be progressively eliminated with final reductions made in 2019, and 100% of tariffs on China's exports to New Zealand will be progressively eliminated with all exports becoming duty-free by 2016.

Though it is still early days in terms of the FTA, which entered into force on 1 October 2008, bilateral trade appears to be holding up in the difficult economic times, and even increasing. In the year to April 2009, total trade between NZ and China increased by 24.67% compared with the year to April 2008. Exports to China increased 52.12% in the period, while imports increased 14.99%. The figures are as follows:

Year to April 2008 Year to April 2009 % change (NZ$ millions) (NZ$ millions)

Exports to China 2,033.96 3,094.07 52.12 Imports from China 5,769.28 6,634.20 14.99 Total trade 7,803.24 9,728.27 24.67

Q6 What is the current status of the negotiations for the free trade agreements to be concluded with India, Korea, Japan?

Answer: New Zealand Trade Minister Tim Groser and India's then-Commerce and Industry Minister Kamal Nath announced in February this year that, subject to the approval processes of both governments, FTA negotiations would commence as soon as possible. The New Zealand Cabinet has now agreed (30 March 2009) to enter into FTA negotiations with India, subject to India’s own approval processes. If the Indian Cabinet also approves entry into negotiations, it is hoped that these will commence sometime in the latter half of this year.

New Zealand and Korea will hold a first round of talks in Seoul from 8-12 June 2009. New Zealand's long term objective remains to conclude a bilateral FTA with Japan. A joint Officials Group has been established to examine policy options to enhance the Japan-New Zealand trade and economic relationship. It is New Zealand's expectation that the Officials Group process will provide both governments with the information they need to decide whether to move to EPA negotiations in the future.

Q7 The Secretariat's Report states that "the authorities are developing plans for the progressive implementation of the single procurement policy across the state sector…" Could New Zealand explain the recent developments concerning these plans and progressive implementation of the single procurement policy?

Answer: There have been no recent developments with regard to the single procurement policy across the state sector since the change of government at the end of 2008.

Q8 Could New Zealand provide some information on the reasons behind the policy reversal in 1999 with regard to the privatization as mentioned at the Secretariat's Report?

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Answer: In 1999 a Labour Government was elected. Changes of policy in relation to privatisation likely reflect the differing approach of the new Government.

Q9 What is New Zealand's experience with regard to performance of the enterprises bought back since their re-acquisition by the Government?

Answer: The Crown has owned KiwiRail (that is, the rail operator business, rather than the track infrastructure) for less than a year now, so it is too soon to make statements about its performance under Crown ownership. Having said that, KiwiRail's revenues have suffered because of the economic downturn, due mainly to lower volumes in bulk commodities and the import-export container business.

Air NZ was recapitalised by the Crown in 2001 and today the Crown retains a 75% ownership – the remainder being owned by the private sector and listed on the NZ and Australian exchanges. The best indicator of Air NZ's financial performance is the listed share price. The following share price graph is taken from Air NZ's website.

The performance of the company has suffered over the last two years because of the global economic downturn and periods of excessively high fuel prices. However, many investment analysts remain positive about the company and its ability to withstand the global economic headwinds.

Q10 What is New Zealand's policy towards the ACTA negotiations?

Answer: New Zealand is participating in the development of ACTA because it shares other participants' interests in addressing the growing global problem of trade in counterfeit goods and pirated copyright works.

Q11 What is New Zealand's approach towards possible inclusion of patents into a possible ACTA?

Answer: At this point in time, ACTA participants are still discussing various proposals for different elements that may ultimately be included in the agreement, including in relation to scope. While negotiations are ongoing, New Zealand is not prepared to disclose its approach on specific issues.

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Q12 The Secretariat's report states that during the period under review, "all statutory marketing boards have been disestablished and, their participation in commercial aspects such as marketing and export rights have been deregulated".

Could New Zealand kindly clarify this statement on:

- whether these marketing boards no longer exist (as stated at the page 76, para. 16), if not; - what current responsibilities do they have?

Answer: The statement is correct; New Zealand no longer has statutory marketing boards. Previously, entities such as the Hop Marketing Board and ENZA (for pipfruit) were involved in commercial aspects such as marketing and export of products. However, since the last Trade Policy Review, all such powers have been removed. Some other boards, such as the and the then stopped their export marketing activities in the early 1990s. While statutory marketing boards no longer exist in New Zealand, note that one entity, ZESPRI, has almost exclusive rights, under Kiwifruit Export Regulations 1999, for exports of kiwifruit to markets other than to Australia.

Q13 Does the word "deregulated" implies that their sole right over trade of certain products was removed, but they may still be involved in trade along with other private enterprises?

Answer: No, the word "deregulate" refers to the fact that their statutory powers to engage in commercial activities like export marketing have been removed entirely. The Government has disestablished the former statutory bodies of these industries, and the industries have established new entities under New Zealand corporate law to engage only in industry-good activities like funding and managing research and development. Note that, in the case of ZESPRI the deregulation is partial and ZESPRI continues to trade as a cooperative company.

Q14 Could New Zealand kindly provide a list of industry good boards?

Answer: New Zealand provides a list of industry good bodies below: Foundation for Arable Research New Zealand Asparagus Council New Zealand Avocado Growers Association Blackcurrants NZ Limited Egg Producers Federation of New Zealand New Zealand Feijoa Growers Association Meat and Wool New Zealand Limited DairyNZ New Zealand Nash Asian Pear Growers Association New Zealand Citrus Growers Incorporated – Navel Orange Product Group Federated Farmers of New Zealand – Herbage Seed Subsection The NZ Passionfruit Growers Association Pipfruit New Zealand New Zealand Citrus Growers Incorporated – Satsuma Mandarin Product Group Summerfruit New Zealand New Zealand Tamarillo Growers Association Horticulture New Zealand

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United Wheatgrowers Limited New Zealand Grape Growers Council Wine Institute of New Zealand Fruit Wine & Cider Makers Association of New Zealand New Zealand Pork Industry Board [a statutory entity] Deer Industry New Zealand [a statutory entity]

MEXICO

We would be grateful if New Zealand could reply to the following questions which pertain to document WT/TPR/S/216 of 6 May 2009.

Q1 Paragraph 41 states that New Zealand has Article II (MFN) exemptions for audiovisual services (Film Co-Production Agreements). Does it intend to eliminate these exemptions in the near future?

Answer: At this stage, the New Zealand Government is not actively considering the removal of the MFN exemption for audiovisual services (Film Co-Production Agreements).

Q2 According to paragraph 50, other recent measures include changes in prudential regulations regarding liquidity and liquidity risk, and a change in outsourcing policy which requires banks to ensure that they would be capable of providing core banking functions, such as settlements, if any service provider they employ were to fail. These measures are expected to be implemented over the next few years. Is there any planned date for implementing them in the near future?

Answer: The outsourcing policy has already been implemented by the Reserve Bank. Banks are now working towards compliance with the policy. The policy can be found at: http://www.rbnz.govt.nz/finstab/banking/regulation/bs11.pdf.

The liquidity policy of the Reserve bank is currently being prepared for implementation. The final policy will be available on the Bank's website www.rbnz.govt.nz shortly. It will be part of the BS series and will be numbered BS 13. The current consultation paper on the policy can be found at: http://www.rbnz.govt.nz/finstab/banking/.

Q3 Paragraph 59 points out that the Telecommunications Amendment Act, which took effect on 22 December 2006, is administered by the Commerce Commission, and that the telecommunications legislative framework was changed considerably under the amendment. What were the main changes in the telecommunications legislative framework, particularly as regards the participation of foreign service providers.

Answer: There are no restrictions on the participation of foreign service providers in the New Zealand telecommunications market (the market was fully opened to competition on 1 April 1989). As such, it was not necessary to make any changes to the legislative framework in this regard through the introduction of the Telecommunications Amendment Act (2006).

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Key features of the Amendment Act include: - A requirement for the responsible Minister to settle a robust operational separation plan with Telecom that requires the business operation to be separated to support transparency, non-discrimination, and equivalence of supply of particular services; - Requirements for local loop unbundling, subloop unbundling, and unrestricted bitstream unbundling; and - A range of supporting measures to enhance the effectiveness of the Act, such as information disclosure through accounting separation, enforcement provisions, market monitoring and information dissemination.

The Amendment Act also extended the Telecommunications Commissioner's powers and functions to initiate regulated services determinations, monitor and provide public information on telecommunications service market performance such as pricing relative to other OECD countries, enforce Telecom's Separation Undertakings, set up an accounting disclosure regime; and also strengthened the enforcement provisions.

To ensure that access terms and conditions are set in a timely and effective manner, the Amendment Act introduced a standard terms determination (STD) process. This enables the Commission to make a determination on how a designated (price and non-price regulated) or specified (non-price only regulated) service must be supplied with reference to all access seekers and providers of the service.

The Amendment Act also provides for a formal undertakings process that allows the Commission to accept and enforce voluntary supply commitments from access providers in lieu of regulation.

Under the Amendment Act, the Commission must have regard to economic policies of the government that are transmitted in writing to the Commission by the Minister.

Further information on the regulation of the New Zealand telecommunications sector is available at the following website: http://www.med.govt.nz/templates/StandardSummary____38607.aspx.

Q4 According to paragraph 67, negotiations are also underway to remove restrictions in other air services arrangements, including those with South Africa, Canada, and the European Communities. New Zealand is also seeking to open negotiations with Japan, and negotiations are taking place with a view to establishing ASAs with Peru and Turkey. Do you plan to negotiate the removal of restrictions in air services arrangements with countries other than those mentioned?

Answer: Progress has been made on a number of the relationships listed in paragraph 67 (for example, negotiations with South Africa, Canada and Turkey have since been successfully concluded, and negotiations with Peru are largely complete). With air services relationships in place with all of New Zealand's major and medium-sized air services markets, in the current economic climate and with other demands on its negotiating resources, apart from those listed in paragraph 67 New Zealand is not actively seeking to establish additional or remove restrictions from existing relationships at this time, although approaches from two countries are currently under consideration. An open air rights exchange can potentially be secured with New Zealand by countries becoming a party to the Multilateral Agreement on the Liberalization of International Air Transportation referred to in footnote 69 (see http://www.maliat.govt.nz/).

Q5 Paragraph 72 states that port access, related services, and inland transport must be negotiated on a commercial basis between carriers and service providers. Is the same treatment given to foreign providers of such services as to New Zealand providers?

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Answer: Subject to approval under New Zealand's overseas investment regime, foreign providers of such services in New Zealand are subject to the same regulatory treatment as New Zealand providers of the same services. No regulatory distinction is made between foreign shipping and domestic shipping in terms of port access and the provision of related services and inland transport services.

Q6 According to paragraph 77, foreign investment in the tourism sector is subject to the Overseas Investment Act 2005 and the Overseas Investment Regulations 2005. The sector is also subject to competition policy and the Commerce Act. Are there any restrictions to foreign investment in the tourism sector?

Answer: There are no specific investment restrictions in the tourism sector. Investments in the tourism sector may be screened under the Overseas Investment Act 2005 if they come within the thresholds specified in that Act.

EC

Q1 On 1 May 2009, changes were announced to NZAID's structure, mandate and objectives: http://www.beehive.govt.nz/release/cabinet+material+changes+nzaid. To what degree may this recent announcement impact on NZAID's position vis-à-vis the relevant provisions of the December 2005 WTO Ministerial Declaration?

Answer: The new mission statement for NZ's official development assistance (ODA) programme is to "support sustainable development in developing countries, in order to reduce poverty and to contribute to a more secure, equitable and prosperous world". A core focus within the ODA programme is the pursuit of sustainable economic development.

This change places a greater emphasis on sustainable economic development. As such, it is completely consistent with the relevant provisions of the December 2005 WTO Ministerial Declaration which reaffirms the importance of trade-related technical assistance and Aid for Trade "to help developing countries build the supply-side capacity and trade-related infrastructure that they need to assist them to implement and benefit from WTO Agreements and more broadly to expand their trade".

Reducing poverty is inherently linked to economic growth and trade. The increased focus within NZAID's programmes on broad-based sustainable economic development will include support for activities that help enable developing countries to expand their trade – by improving infrastructure and related services, increasing support for the private sector, and improving market analysis and support.

Q2 Does New Zealand intend any further operational changes to its ODA and if so, how will they affect Aid for Trade?

Answer: There have been changes to NZAID's status that bring NZAID into line with the standard management and accountability arrangements for the Ministry of Foreign Affairs and Trade. These are largely technical changes and any changes that the Secretary of Foreign Affairs and Trade may make to the management and other arrangements for NZAID will ensure that there is no undue risk to the capability to deliver a still-expanding New Zealand Government ODA programme.

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As noted previously, the change in NZAID's mandate is expected to see an even greater focus through our programming on activities that support sustainable economic development, including Aid for Trade.

Q3 What impact will NZAID's new direction have on its general budget support (GBS) in the Pacific and other countries where it has provided GBS?

Answer: NZAID is committed to ensure the most effective use of our ODA resources to achieve improved outcomes for poor people in developing countries, particularly in the Pacific. We shall look to use the most appropriate mechanisms to achieve this, including general budget support where appropriate, in keeping with the Principles of Aid Effectiveness. Any changes to NZAID programmes to reflect the increased focus on broad-based sustainable economic development will be introduced as existing activities are completed or are reviewed.

Q4 Is the Government of New Zealand intending to make any quantitative pledges/undertake any commitments as regards Aid for Trade?

Answer: New Zealand's funding for trade-related activities has increased since December 2005 and we had signalled continuing growth, even prior to the recent announcement of an increased emphasis on sustainable economic development. There will be significant increases in the amount and proportion of New Zealand ODA that is devoted to supporting economic development in partner countries, including Aid for Trade. We are not, however, planning to make any specific quantitative pledges with respect to Aid for Trade.

Q5 By what indicators will NZAID judge the success of its trade and development policy?

Answer: The New Zealand Government has publicly signalled its desire to see improved merchandise trade balances and increased tourism in Pacific Island economies, and to have a much more tangible impact on our developing partners' economic growth indicators, such as Gross National Income per capita. Measuring the impact of NZAID's increased engagement on sustainable economic development in the Pacific will be fully integrated into NZAID's Programme and Activity management systems. Specific indicators will be developed as we look for concrete, measurable results for businesses and individuals. The OECD and WTO's work to date on Aid for Trade indicators are useful inputs to this process.

Q6 When does New Zealand think the roadmap for PACER+ negotiations will be finalised and what will the negotiating structure be?

Answer: Leaders at last year's Pacific Forum in Niue requested that the roadmap for PACER Plus be developed with a view to agreeing to the commencement of negotiations at the August 2009 Forum. New Zealand will be working closely with Forum Members to give effect to the Leaders' directive. The negotiating structure has yet to be agreed but we envisage that it is likely to consist of four (and not necessarily mutually exclusive) phases e.g informal consultations, national consultations and research (the process of determining national impact and consulting with stakeholders), formal consultations (where coverage, schedule and modalities of negotiations are settled), and formal negotiations (including the elaboration of legal texts).

Q7 What specific outcomes does New Zealand desire from these negotiations?

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Answer: New Zealand's vision for PACER Plus is an agreement which will be genuinely supportive of Forum Island countries' (FICs') sustainable economic development. New Zealand will be working towards an agreement that will contribute to the development of robust economies in the Pacific, equipping them better to withstand external shocks, to increase jobs and export capacity in the PICs and address the trade imbalance between FICs and New Zealand.

Economic cooperation, capacity development, and trade facilitation should be core components of PACER Plus to ensure FICs have the tools necessary to take advantage of trade liberalisation and manage the challenges it can present. PACER Plus should be comprehensive in scope and contain core common components. To meet the needs of all members, however, the agreement will need to be flexible and take account of individual countries' circumstances, sizes and stage of development.

Q8 Could New Zealand provide an update on the last developments regarding future adhesion of Australia, Peru and the United States to the P4?

Answer: Since the announcements referred to in the Secretariat's report, it has been agreed that Viet Nam will also participate in the TPSEPA negotiations as an associate member for the first three rounds of negotiations, after which it will decide whether to join the negotiations as a full participant. The first round of negotiations involving the existing P4 members, the United States, Australia, Peru and Viet Nam was scheduled to take place in March 2009. This first round was postponed to allow the new United States Administration time to conduct a general review of its trade policy. No dates have yet been set for the first round of negotiations.

Q9 What specific outcomes does New Zealand desire from these negotiations?

Answer: New Zealand's objective for the expanded TPSEPA negotiations is for an agreement that is comprehensive (covering all the main components of trade) and of a high standard, and consistent with the WTO requirement that it cover "substantially all trade". New Zealand also hopes that the TPSEPA will become a building block for greater economic integration in the Asia-Pacific region.

Q10 Could New Zealand describe the coverage in both trade and tariff lines of the China-New Zealand FTA? How many tariff lines have been excluded from the agreement?

Answer: The FTA provides for the removal over time of tariffs on 96% of traded goods, which will equate to an annual duty saving of NZD115.5 million, based on current trade. Tariff reductions are made on an annual, linear basis with final reductions to be made in 2019.

The China-New Zealand FTA covers: - 100% of New Zealand tariff lines - 96% of China's tariff lines

214 of China's tariff lines are excluded from the agreement. These include certain paper products and processed wood products. These tariff lines constitute approximately 4% of NZ exports to China.

A number of these lines have exerts. For more details please refer to lines 4411.12.20, 4411.13.20, 4411.14.20, 4411.93.00, 4414.00.00, 4415.20.00 in the annex of the agreement.

Q11 Could New Zealand describe in detail the coverage in both trade and tariff lines of the AANZFTA?

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Answer: The key features of the agreement are shown by country in the table below.

Country Specific Outcomes of AANZFTA Country Coverage of NZ Imports Coverage of NZ Exports Tariff Lines Subject to 3 on Eliminated Lines on Eliminated Lines Elimination

1 Brunei Darussalam 100% 100% 99% Cambodia 100% 86% 88% Indonesia 100% 99% 93% Laos 100% 2 88% Malaysia 100% 99% 96% Myanmar 100% 99% 85% Singapore 100% 100% 100% Thailand 100% 100% 100% The Philippines 100% 99% 95% Viet Nam 100% 99% 90%

1 The agreement covers all of Brunei Darussalam's tariffs except for a short list of products (alcohol, tobacco, and firearms) that are exempted on moral, human health, and security grounds 2 Recent import data from Laos is not available and a matching of export data to Laos' tariff data has not been performed. 3 Either immediately or via phasing.

Q12 Could New Zealand explain how this agreement has built in former agreements among the Parties?

Answer: The AANZFTA agreement sits alongside the outcomes of these FTAs and adds further value. The region-wide nature of the agreement delivers benefits not achievable in New Zealand's other bilateral FTAs. For instance, the agreement provides for regional Rules of Origin that encourage greater integration of production into regional and global supply chains. The FTA also creates new opportunities for regional cooperation in a range of areas.

Q13 Has this agreement improved the trade preferences provided by former agreements amongst the Parties, and if so, how?

Answer: New Zealand's previous agreements with Australia, Singapore, Thailand, and Brunei Darussalam were comprehensive agreements (except with Brunei Darussalam where a limited number of lines were excluded on moral, human health and security grounds). AANZFTA brings forward the elimination date on a number of New Zealand tariff lines (particularly with regard to Thailand).

Q14 Could New Zealand further elaborate on if and how they intend to include social and labour issues in their regional/plurilateral agreements (South Pacific Regional Trade and Economic Agreement SPARTECA, Asia Pacific Economic Cooperation APEC, Pacific Agreement on Closer Economic Relations (PACER), The Trans-Pacific Strategic Economic Partnership Agreement (TPSEPA or TransPac or P4)), in the bilateral agreements (Australia and New Zealand Closer Economic Relations Trade Agreement (ANZCERTA) New Zealand–Singapore Closer Economic Partnership (NZSCEP) New Zealand–Thailand Closer Economic Partnership (NZTCEP or TNZCEP) New Zealand and China FTA)) as well as agreements under negotiation (ASEAN-Australia/NZ Free Trade Agreement (AANZFTA) New Zealand and Malaysia Free Trade Agreement; New Zealand- Gulf Cooperation Council Free Trade Agreement)?

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Answer: New Zealand believes that pursuing labour and environment objectives in the context of FTAs can contribute to sustainable development. Sustainable development is about an integrated and mutually supportive approach to the goals of economic, social, environmental and cultural development. FTAs contribute across all of these components.

New Zealand's approach to including labour and environment in trade agreements is based on mutual respect, common commitments, cooperation and consultation. We seek to address these issues with flexibility and sensitivity, in a way suitable to the Parties concerned. We will continue to pursue appropriate outcomes in our trade agreements.

New Zealand has concluded agreements on labour and environment in the context of our FTAs with Thailand (through the CEP); Brunei Darussalam, Chile and Singapore (under the framework of the Trans-Pacific SEP); China (in the China-New Zealand FTA); and the Philippines (in the broad context of the ASEAN-Australia-New Zealand FTA). We have recently concluded negotiation of a bilateral FTA with Malaysia, which includes labour and environment provisions. We are also in the process of negotiations with the GCC, where we seek appropriate provisions on labour and environment.

New Zealand supports addressing labour and environment issues in regional and plurilateral frameworks, and has been a key proponent of projects in APEC, such as draft model measures on environment and labour, environmental goods and services and human resources development. We believe activity on these matters at all levels of engagement – bilateral, plurilateral, regional and multilateral – is important and integral to promoting the achievement of sustainable economic development.

Q15 What percentage of tariff lines is covered by New Zealand's DFQF market access treatment for LDCs? Which products, if any, are excluded (or only get tariff reduction)?

Answer: Originating goods from least developed countries qualify for duty free entry on 100% of dutiable tariff lines. No LLDC originating products are excluded from duty free entry.

Q16 What degree of preference margin is granted under New Zealand's GSP scheme for "less developed countries"? What is the coverage of this GSP arrangement and are any sectors or products excluded? Could New Zealand provide details on the amount of trade covered by the GSP regime?

Answer: As at 1 July 2008, the GSP scheme applied to only 327 tariff lines. The margin of preference, as a percentage of the MFN applied rate, was 20% on almost all tariff lines (325), 40% on 1 tariff line and 60% on 1 tariff line. The GSP scheme now applies to only 4.5% of tariff lines (10.6% of dutiable tariff lines) for the reasons explained in paragraph III.27 of the Secretariat's report. The GSP scheme never applied to clothing or footwear and in practice no longer applies to most tariff lines.

Q17 Foreign investment legislation in New Zealand was amended in 2005 and also in 2008. A review of the Overseas Investment Act is ongoing according to a recent press release with Finance Minister Bill English stating that the current overseas investment regime is "cumbersome" and that the rules are "often difficult to interpret" (see: http://www.beehive.govt.nz/release/government+ simplify+foreign+investment+rules). New Zealand continues to screen investment in a few areas of "critical" interest, namely certain sensitive types of land, strategic infrastructure projects on sensitive land, "significant business assets" other than land, and fishing quotas. Consequently, an amendment

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to the Overseas Investment Act in March 2008 resulted in the failure of a bid by foreign investors to acquire shares in the Auckland airport in April 2008.

Q17-1 What are the main changes that New Zealand is planning to implement to its Overseas Investment Act in the context of the current review?

Answer: The objective of the review is to create an overseas investment screening regime that promotes and encourages the flow of investment into New Zealand, while addressing valid concerns about foreign investment. Further information including the Terms of Reference for the Review are available from: http://www.beehive.govt.nz/release/government+simplify+foreign+investment+rules.

Q17-2 Will the changes imply lower costs for foreign investors?

Answer: The review aims to make foreign investment in New Zealand simpler and more attractive. In the past it has taken too long to process some overseas investment proposals - as a result of the complexity of the legislation - which has added to the costs for foreign investors. Simplifying the foreign investment rules will help to reduce costs for investors.

Q17-3 Will the screening process time be significantly reduced?

Answer: Some progress has already been made in reducing screening times and the Government wishes to reduce it further.

Q17-4 Are you considering changes to the current screening thresholds? If so, what would the new thresholds be?

Answer: This issue is included in the terms of reference for the review. No decisions on whether to change the thresholds have been taken.

Q17-5 Are you considering changes to the definition of "sensitive land" as defined under the Act?

Answer: The Terms of Reference note that the review will consider how the type and scope of land defined as sensitive under the Act can be refined to ensure that only land of particular significance or importance to New Zealand is screened.

Q17-6 Will the regulation of 4 March 2008 enabling the Overseas Investment Office (OIO) to take into account "whether the overseas investment will, or is likely to, assist New Zealand to maintain New Zealand control of strategically important infrastructure on sensitive land" be maintained under the Act review?

Answer: The review will consider how the tests that initial and ongoing investments must meet for consent to be granted under the Act, and the factors for determining benefit to New Zealand, can be altered to avoid deterring valuable investments and to minimise compliance costs.

Q17-7 To what extent is it anticipated that the review will encourage an increase in FDI?

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Answer: Reducing the complexity of the screening regime is expected to make the process for investing in New Zealand more straightforward. There are very few investments declined under the current screening regime so the changes are focused on simplifying the screening process for investors rather than creating any significant jump in FDI.

Q17-8 Does New Zealand intend to set any targets per annum concerning the level and type of new FDI that it desires?

Answer: No.

Q18 Could New Zealand describe what are the exact criteria applied for determining the origin of fish products in the context of preferential trade arrangements and regimes?

Answer: New Zealand's overall framework for determining the origin of goods is that a good will be considered originating if it is: (a) Wholly obtained; or (b) Produced entirely in the territory from goods originating in the territories of the Parties; or (c) Able to meet specific rules if non-originating materials are used in the production of the final good.

For the purposes of (c) above, New Zealand generally operates under a change to tariff classification approach when negotiating rules of origin in Free Trade Agreements/Closer Economic Partnerships. There are some exceptions to this approach depending on the negotiating party (e.g. AANZFTA has an optional regional value content (RVC) criteria). An outline of the rules across New Zealand's agreements for fish products is provided below; with links to websites displaying the specific rules of origin New Zealand has negotiated with our respective parties: - Headings 0301-0303: The rule is generally a change of chapter rule of origin for these headings. - Headings 0304-0305: The rule is generally a change of heading rule of origin for these headings. - Headings 0306- 0307: The rule is generally a change of chapter rule of origin for these headings.

Websites for New Zealand FTA/CEP rules of origin:

NZ-Singapore: http://www.mfat.govt.nz/Trade-and-Economic-Relations/0--Trade-archive/0--Trade- agreements/Singapore/0-cep-part1.php ANZCERTA:http://www.med.govt.nz/templates/MultipageDocumentTOC____25083.aspx P4: http://www.mfat.govt.nz/Trade-and-Economic-Relations/0--Trade-archive/0--Trade-agreements/ Trans-Pacific/0-sep-index.php NZ-Thailand: http://www.mfat.govt.nz/Trade-and-Economic-Relations/0--Trade-archive/0--Trade- agreements/Thailand/0-cep-index.php NZ-China: http://chinafta.govt.nz/1-The-agreement/2-Text-of-the-agreement/index.php AANZFTA: http://www.asean.fta.govt.nz/preamble/

Q19 Recently MAF Biosecurity New Zealand has approved the importation of frozen and filleted Vietnamese catfish (basa) into New Zealand. Could New Zealand explain why the importation of such products was not allowed until now?

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Answer: Under New Zealand legislation (Biosecurity Act 1993), risk goods2 cannot be imported into New Zealand unless an import health standard is in place. An import health standard is based on an analysis of the risks of introducing pests and diseases associated with importing a risk good.

An import health standard is developed on the request of a prospective importer, if no present standard, or standard for a closely-related product, allows the risk goods in question to be imported. Until recently no market access requests had been received for importing frozen and filleted Vietnamese catfish (basa) into New Zealand.

Two prospective importers requested MAF develop an import health standard for frozen, skinless, boneless basa fillets in 2006-2007. As no appropriate risk analysis was available as a basis for developing an import health standard, a formal risk analysis was undertaken and completed on 28 September 2008. An import health standard was then drafted, publicly consulted and subsequently issued for trade on 20 March 2009.

Q20 "According to paragraph 38 under Article 4 of the ANZCERTA Protocol, signed by New Zealand and Australia, as of 1 July 1990 anti-dumping actions may not be taken on goods covered by the agreement. The Protocol extended each country's competition law prohibitions on the misuse of market power to the market of the other." The EC would like to learn more about the extension of each country's competition law. Could New Zealand explain how this is applied in practice, in particular which competition authority can be called on in case of a misuse of market power and what kind of unfair competition is covered by the ANZCERTA Protocol (e.g. antitrust; abuse of a dominant position; agreements between undertakings and concerted practices which may affect trade between Australia and New Zealand)?

Answer: In 1990, New Zealand and Australia's domestic competition laws were extended to prohibit certain anti-competitive behaviour by firms in one country that have market power in the other country, or in a combined Australian/New Zealand market.

Specifically, New Zealand extended the abuse of market power provisions in the Commerce Act (section 36) by prohibiting parties with a substantial degree of power in a market in either New Zealand, Australia, or both countries from taking advantage of that position by restricting entry into, preventing or deterring competitive conduct in, or eliminating anyone from a market. However, a market may not be one exclusively for services (section 36A).

The purpose of extending the definition of a market to include a trans-Tasman one was to provide remedies with respect to monopolistic behaviour such as predatory pricing between the two countries, although non-price conduct is covered as well. Therefore all sorts of unilateral exclusionary practices are covered e.g. refusals to deal, the use of buying power or lobbying power to increase rivals' costs, and actions which amount to abuse of legal, judicial or governmental administrative processes to disrupt the competitive process.

Market definition plays a large part in giving effect to the provisions. Section 4(2) of the Commerce Act singles out section 36(A) which "extends to the engaging in conduct outside New Zealand by any

2 Risk goods means any organism, organic material, or other thing, or substance, that (by reason of its nature, origin, or other relevant factors) it is reasonable to suspect constitutes, harbours, or contains an organism that may – - (a) Cause unwanted harm to natural and physical resources or human health in New Zealand; or - (b) Interfere with the diagnosis, management, or treatment, in New Zealand, of pests or unwanted organisms.

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person resident or carrying on business in Australia to the extent that such conduct affects a market, not being a market exclusively for services, in New Zealand".

The Commerce Commission has not had to apply section 36A in practice. It has received occasional queries and complaints since the amendment was made, although none have warranted opening an investigation and therefore no cases have been taken to Court. However, as well as the Commerce Commission, a section 36(A) action, relating to relevant conduct in a New Zealand market, could also be taken by various legal persons: - by a New Zealand firm against an Australian firm with substantial market power in either Australia, New Zealand or a combined market. - by an Australian firm operating in a New Zealand market against another Australian firm with substantial market power in any of those markets. - by a New Zealand firm against another New Zealand firm with market dominance in any of those markets, where the second firm also operates in Australia and engages in relevant conduct there which affects a market in New Zealand.

Q21 Could New Zealand also indicate why each country's state aid law is not extended to the market of the other?

Answer: New Zealand does not have a state aid law.

Q22 A review of New Zealand's countervailing duties against the imports of canned peaches from the EC is currently underway, having been initiated by a request from New Zealand's industry to extend the duration of the current measures. (See: http://www.med.govt.nz/templates/StandardSummary____39919.aspx and http://www.med. govt.nz/templates/StandardSummary____39918.aspx)

What is the market share in New Zealand of canned peaches from domestic production compared to imported peaches and what has been the trend over the past ten years?

Answer: The market share held by the New Zealand industry cannot be released as to do so would allow its confidential sales volume figures to be calculated. The New Zealand industry has, however, suffered an overall loss of market share over the last 10 years.

Q23 In view that a mere initiation of an investigation can result in trade-restrictive effects, how is New Zealand making sure that unjustified countervailing cases are avoided and do not cause unnecessary trade disruption?

Answer: New Zealand strictly applies the criteria in Article 11 of the WTO Agreement on Subsidies and Countervailing Measures in assessing whether to initiate a countervailing investigation. It should be noted that New Zealand has not initiated a new countervailing investigation since 1997.

In addition, New Zealand undertakes a thorough review of the need to maintain countervailing duties either every 5 years if requested to do so by a domestic industry that provides sufficient evidence to warrant such a review, or more frequently if requested to do so by an interested party that substantiates the need for a review, in terms of Article 21 of the SCM Agreement.

Q24 The EC and NZ have been negotiating amendments to their 1999 mutual recognition agreement since 2006. When does New Zealand expect to finalize the current draft of the agreement?

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Answer: We are aiming to provide the EC with the finalised draft text for the amendment to the 1999 Mutual Recognition Agreement this month.

Q25 New Zealand maintains a highly stringent sanitary and phytosanitary regime. Through its bio-security policy, it has effectively restricted the import of most non-pasteurised cheese, fresh eggs and live poultry.

Q25-1 Would New Zealand explain the objectives pursued through its SPS policy?

Answer: The objectives of New Zealand's SPS policy are to ensure that any risks to human, animal and plant health associated with importing risk goods or food products are managed to an acceptable level. As noted in the report of the Secretariat, some products may not be imported until their risk to human, animal and plant health is assessed (WT/PR/S/216, page ix, paragraph 12).

For example, New Zealand is free from many OIE listed diseases that are common throughout much of the world. New Zealand is free of infectious bursal disease, notifiable avian influenza, and paramyxovirus I with an intracerebral pathogenicity index greater than 0.16. Unrestricted importation of live poultry and fresh eggs from countries in which these diseases occur would present a significant risk to maintenance of New Zealand's current animal health status – in other words, zoosanitary measures for poultry, fresh eggs (and poultry meat) are justified.

Q25-2 How would the Government justify pursuance of the above-mentioned policy in the light of multilateral disciplines under the WTO agreement on SPS measures?

Answer: New Zealand is committed to applying the multilateral disciplines under the WTO agreement on SPS measures when implementing its SPS policy. A pre-import assessment of risk allows New Zealand to identify what, if any, measures are scientifically justified to manage to an acceptable level any risks associated with importing risk goods or food products.

Q25-3 If all New Zealand SPS authorities share the view that "the pursuit of a "zero risk" policy is not realistic", what levels of risk are considered acceptable to New Zealand?

Answer: New Zealand, like many other countries, has not attempted to quantify what its appropriate level of protection (acceptable level of risk is) in precise terms. New Zealand's appropriate level of protection can be inferred over time from the total picture of decisions that have been made on SPS measures.

Q25-4 How many requests for the development of import health standards have been received by MAFBNZ and how many import health standards have been published during the period under review?

Answer MAFBNZ began recording the number of requests for developing import health standards in 2006. For the first two years, 2006 and 2007, requests were collated annually. MAFBNZ then moved to a two-yearly process so the next collation was 2009. The number of requests are: 2006 267 2007 278 2009 226

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MAFBNZ counts the number of import health standards published in years from 1 July to 30 June. The numbers are:

From 1 July To New and Revised Standards issued

2006 30 June 2007 26 2007 30 June 2008 24 2008 29 May 2009 21

New import health standards commonly address multiple country and commodity market access requests.

Q25-5 What is the average length of time it takes to develop an import health standard? What efforts are being made to speed up procedures?

Answer: MAFBNZ does not routinely measure how long it takes to develop an import health standard. Attempts to measure an average length of time are complicated because many risk analyses may be used to develop a single import health standard, or one risk analysis may be used for several import heath standards, over several years. Additionally, the complexity of, and priority for, completing individual risk analyses also varies further complicating attempts to calculate an average length of time to develop an import health standard.

A programme of work has been initiated to improve border risk systems and processes. Effective and timely development of import health standards is within the scope of this programme.

Q25-6 According to clause 4.1 of the document "Importing Pig Meat for Human Consumption from the European Union released by Biosecurity New Zealand (http://www.biosecurity.govt.nz/ihs/ meaporic.eec), "a permit to import is not required for 'Prosciutto di Parma' or 'Parma ham type' products or products that have either a) "been heat treated to a core temperature of one of the following core temperature/time parameters… "; b) "during processing been subjected to a procedure which ensured the meat achieved a pH of 5 or below" or "achieved a pH 7 or above"; c) "qualified for official certification as Prosciutto di Parma"; or "have undergone an equivalent 12 month curing process"; or "are free of bone and have been heat treated to achieve a core temperature of 70°C or higher for a minimum of 25 minutes". The EC would appreciate clarification of the pH requirement mentioned in the above-quoted clause 4.1 b). In particular, could New Zealand specify the meaning of "during processing"?

Answer: Rapidly changing pH of the meat is a well-known sanitary treatment for manufacturing salami and other meat products. This is what New Zealand means by "during processing" – the manufacture of salami and other meat products.

The pH treatments cited are designed to inactivate the virus that causes Porcine Reproductive and Respiratory Syndrome. It is generally recognised that the infectivity of the virus is reduced by over 90% at a pH of less than 5 or greater than 73.

Q26 Are the principles of non-discrimination and openness regulated?

3 EFSA. 2005. Scientific Opinion on “The probability of transmission of Porcine Reproductive and Respiratory Syndrome virus (PRRSv) to naïve pigs via fresh meat” EFSA Journal 239: p 10.

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Answer: Under the Land Transport Management Act 2003, the NZ Transport Agency prescribes open and non- discriminatory competitive procedures for central and local government procurement of transport infrastructure and services. Otherwise, there are no government procurement regulations, but the Cabinet has directed central government departments to give effect to the principles of non- discrimination and openness through Mandatory Rules for Procurement by Departments (2006).

Q27 Does New Zealand plan to introduce a general legislation on public procurement in the future or to issue guidelines also for sub-central agencies?

Answer: There are no plans to introduce general legislation on public procurement. Sub-central agencies (local government authorities) are encouraged (but not mandated) to follow the general Policy Guide for Purchasers (2007) and the Mandatory Rules for Procurement by Departments (2007). Guidelines issued by the Office of the Auditor-General in its publication Procurement Guidance for Public Entities (2008) are written to assist all public entities, including local authorities.

Q28 The EC welcomes New Zealand as an observer to the WTO plurilateral agreement on Government Procurement (GPA) since December 2008. Does New Zealand intend to become a full signatory to the GPA?

Answer: New Zealand became an observer on the GPA committee without commitment as to GPA membership. This matter is however under continuing review in the light of domestic and international developments.

Q29 What is the evolution in recent years of Fonterra's share in the allocation of export licences for the EC dairy quotas? How many other companies export under these quotas and what is their share? Could New Zealand provide information as to the share of export licences under other dairy quotas such as to Canada, Japan, the US and the Dominican Republic?

Answer:

2008 Quota Allocation table

Dominican EU Cheese for 2008 Quota allocation EU Butter EU Cheddar Republic Milk Processing Powder

Fonterra Co-operative Group Limited 98.7% 99.2% 99.2% 94.9%

Westland Cooperative Dairy Company Ltd 0.8% 0.8% 0.8% 3.2% Tatua Cooperative Dairy Company Ltd 0.2% 0% 0% 1.0%

Open Country Cheese Company Ltd 0.2% 0% 0% 0.9%

2009 Quota Allocation table

EU Cheese Dominican EU Butter EU Cheddar US Low Fat US Cheddar 2009 Quota allocation for Processing Republic 2009 2009 Cheese 2009 Cheese 2009 2009 Milk Powder

Fonterra Co-operative Group Limited 97.0% 97.4% 97.8% 94.3% 96.6% 94.3% Westland Cooperative Dairy Company Ltd 1.7% 1.7% 1.7% 3.3% 3.6% 3.3%

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Tatua Cooperative Dairy Company Ltd 0.5% 0.5% 0% 0.9% 0% 0.9% Open Country Cheese Company Ltd 0.5% 0.5% 0.6% 1.0% 0% 1.0% Synlait Ltd 0.1% 0% 0% 0% 0% 0% New Zealand Dairies Ltd 0.2% 0% 0% 0.5% 0% 0.5%

Q30 How much of the exports in the 11 designated markets (TRQs for dairy products in EC, Canada, Japan...) are not done by Fonterra? In other words, does the change in the DIRA regulation to allow access to other dairy companies to use part of these TRQs have any effect as compared to the old practice in which Fonterra had exclusive rights to use these TRQs?

Answer: See table above.

Q31 Are there any plans to alter Zespri's status as a state trading enterprise?

Answer: There are no plans to alter Zespri's current status.

Q32 How frequently do allocation assessments occur to determine companies' dairy access rights to export certain dairy products subject to tariff quotas or other restrictions in overseas markets?

Answer: Annually in September for the following quota year (1 January to 31 December).

Q33 To what extent are the smaller dairy processors expected to be allocated more dairy access rights in the next five years? How is their share of access rights expected to grow?

Answer: Over the next five years quota for all quota markets will be allocated according to the share of raw milk dairy companies collect from dairy farmers in New Zealand.

The Ministry of Agriculture and Forestry estimates that over the next five years, based on current trends, other dairy companies will increase their share of raw milk collected from dairy farmers in New Zealand to around 16%. Therefore independent dairy companies would be allocated around 16% of quota for each quota market. However, the accuracy of this estimate will depend on how the economy performs in this current economic climate, including the ability for new ventures to get access to capital at reasonable cost.

Q34 The WTO Secretariat Report states that GIs are currently protected under consumer protection legislation (the Fair Trading Act 1986) and the common law tort of passing-off. Are those two mechanisms the sole available or do other mechanisms exist for the protection of GIs?

Answer: There are other mechanisms available to producers to protect their GI, these including: - The use of registered and unregistered certification and collective marks and in this regard a number of German wine GIs, such as FRANKEN, RHEINGAU, NAHE, and WURTTEMBERG have been registered as certification marks in New Zealand by German wine producers; - The application of various food standards established by the Food Standards Australia New Zealand to food products (http://www.foodstandards.gov.au/ thecode/foodstandardscode/index.cfm, in particular, the Spirits Standard 2.7.5.; and

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- Specific regulation governing labels for various foodstuffs, such as the Wine Specification Notice 2006 issued under the Wine Act 2003.

Q35 Are wines and spirits currently protected via specific mechanisms compared to other products?

Answer: All products are protected under the same general framework, but specific provisions apply in some circumstances for wines and spirits (see FSANZ Standard 2.7.5 for spirits: www.foodstandards.gov.au/_srcfiles/Standard_2_7_5_Spirits_v101.pdf and Wine Specification Notice 2006 issued under the Wine Act 2003 Wine Act 2003 for wines http://www.nzfsa.govt.nz/ wine/legislation/wine-notice-2006.pdf).

Q36 Article 23 of TRIPS provides for an additional protection for geographical indications for wines and spirits. More specifically, Articles 23.1 and 23.2 of TRIPS provide for protection of the latter irrespective of any "subjective" criteria, i.e. irrespective of whether the public would be misled as to the true place of origin or whether the use of the GI would constitute an act of unfair competition. The relevant provisions of the Fair trading Act and the common law tort of passing-off rely on those subjective criteria. At the same time, the Geographical indications Act of 1994 has been repealed while the Geographical indications (Wine and Spirits) Registration Act of 2006 has not yet come into force. In this context, could New Zealand explain whether there is currently a registration system for geographical indications?

Answer: The Geographical Indications (Wine and Spirits) Registration Act 2006 provides a specific registration system for geographical indications in relation to wines and spirits. This Act has not yet entered into force. The geographical terms relating to other products can be registered under the Trade Marks Act 2002 as certification or collective marks.

Q37 Could New Zealand explain more specifically by which means it is implementing: a) Article 23.1 of TRIPS as regards wines on the one hand and spirits on the other hand;

Answer: New Zealand case-law clearly establishes that the Fair Trading Act 1986 and the common law tort of passing off fulfils the requirements of Article 23.1. For example, the Comite Interprofessionnel du Vin de Champagne v Wineworths Group Limited [1991 2 NZLR 432] case found that the word "champagne" was distinctive in New Zealand for the French product and was not used generically to describe any white sparkling wine. As a result, the court ruled that word "champagne" could not be used in New Zealand to describe sparkling wine made outside the Champagne region in France, even when the true origin of the goods was indicated. In addition, as set out above in our response to Question 34, producers of wines and spirits could choose to protect their GIs through registration of certification marks. b) Article 23.2 of TRIPS as regards wines on the one hand and spirits on the other hand?

Answer: Sections 17(1)(a) and (1)(b)(i) of the Trade Marks Act provides for the Commissioner of Trade Marks to refuse to register a trade mark or part of a trade mark: - Any matter the use of which would be likely to deceive or cause confusion4; and

4 The Trade Marks Examination Guide instructs an examiner to object to a trade mark application when the examiner is faced with information demonstrating that the geographical reference in a trade mark application

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- When its use is contrary to New Zealand law or would otherwise be disentitled to protection in any court5.

Sections 47 to 49 provide for any person to oppose the registration of a trade mark on any the grounds upon which the registration can be refused by the Commissioner of Trade Marks.

Section 73 provides for an aggrieved person to apply for declaration of invalidity to cancel a register trade mark on the grounds that the mark was not registrable at its deemed date of registration.

Q38 Once implemented, in what ways is the Geographical Indications (Wine and Spirits) Registration Act 2006 expected to "complement" the existing level of GI protection?

Answer: Sections 21 to 24 of the Geographical Indications (Wine and Spirits) Registration Act 2006 specify the conditions under which a New Zealand registered geographical indication be used and any person who contravenes these conditions of use contravenes section 9 of the Fair Trading Act 1986 and the remedies under that Act accordingly apply.

Registration of geographical indication under the Geographical Indications (Wine and Spirits) Registration Act 2006 would, therefore, effectively be equivalent to establishing reputation and goodwill necessary for taking action against misleading and deceptive use of a geographical indication under the Fair Trading Act.

Q39 The WTO Secretariat report notes that "The Geographical Indications (Wine and Spirits) Registration Act 2006 (…) is intended to replace the Geographical Indications Act 1994". What are the implementation issues to be addressed to bring the 2006 Act into force and what is the expected timeframe for those issues to be addressed?

Answer: Current impediments include: - Securing the necessary additional resources to develop and implement the procedures and systems required by the Intellectual Property Office of New Zealand (IPONZ) to administer the register. - The development and approval of suitable regulations governing the administrative procedures concerning the register. - The development, approval and implementation of an appropriate fees regime for the recovery of the costs to IPONZ for administering the register. - New government restrictions concerning the implementation of new regulations with regulatory and compliances costs impacts for businesses. In the current economic climate it is difficult to speculate when these impediments will be overcome.

Q40 The Geographical Indications (Wine and Spirits) Registration Act 2006 will only apply to geographical indications for wines and spirits. Does New Zealand law provide for a definition of "geographical indications" for GI products other than wines and spirits?

Answer: No. is inaccurate, such that consumers might believe that the goods or services originate from that geographical place, and where it is clear that the goods or services in respect of which the application has been made do not actually originate from that geographical place. 5 For example where a court decision has been issued finding that the use of the geographical indications contravenes the Fair Trading Act 1986.

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Q41 Following the entry into force of the Geographical Indications (Wine and Spirits) Registration Act 2006, does New Zealand intend to provide for such a definition?

Answer: No.

Q42 Irrespective of such a definition, does New Zealand intend - in light of Article 22 of TRIPS - to amend its Trademark Act to enshrine specific provisions related to the relationships between trademarks and geographical indications for products other than wines and spirits?

Answer: No. The relationship between geographical indications and trade marks for products is already sufficiently addressed in the Trade Marks Act and an amendment is not considered appropriate or necessary.

Q43 Does New Zealand intend to provide for a registration system of geographical indications for GI products other than wines and spirits?

Answer: There is no intention to provide a sui generis registration regime for geographical indications other than wines and spirits. As noted above, the Trade Marks Act 2002 provides for geographical terms relating to all products to be registered as certification or collective marks. Furthermore, New Zealand's policy development framework requires the identification of a problem of sufficient nature and magnitude to warrant regulatory intervention by the Government. Presently there is no evidence that the is any issue or problem with New Zealand's existing regime for the protection of geographical indications that would necessitate the development of a registration regime specifically for geographical indications for products other than wines and spirits.

Q44 Paragraph 12 of the Secretariat's report states that Zespri has the "automatic, but not the sole right to export kiwi fruit". Could New Zealand please inform us whether this is the same as a statutory monopoly and if not, what is the difference?

Answer: ZESPRI Group Limited is not a statutory monopoly because it is not established by any company- specific legislation. It is a company incorporated under generic New Zealand corporate law (the Companies Act 1993), and kiwifuit suppliers to ZESPRI are its shareholders. ZESPRI, however, has almost exclusive rights, under Kiwifruit Export Regulations 1999, for exports of kiwifruit to markets other than to Australia. That right is "automatic, but sole" due to the fact that there is a provision under the Kiwifruit Export Regulations 1999 for other exporters to also export to markets other than to Australia under a collaborative marketing arrangement.

Q45 To what extent do independent New Zealand processors have access to milk, by region?

In the 2007/08 season other dairy companies collected from dairy farmers approximately 6% of New Zealand's raw milk production, of which, one third came from the North Island and two thirds from the South Island. In addition, in the 2007/08 season other dairy processors accessed 410 million litres of raw milk from Fonterra under the Dairy Industry Restructuring (Raw Milk) Regulations 2001, equivalent to approximately three percent of New Zealand’s raw milk production. So, 9% in total.

The Ministry of Agriculture and Forestry (MAF) estimates that in the 2008/09 season other dairy companies will collect from dairy farmers approximately 8% of New Zealand's raw milk production,

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including 2.5% of national raw milk production in the North Island and 5.5% in the South Island. In addition, MAF estimates that in the 2008/09 season other dairy companies will access approximately 500 million litres of raw milk from Fonterra under the Dairy Industry Restructuring (Raw Milk) Regulations, equivalent to approximately three percent of New Zealand raw milk production. So, 11% in total.

Q46 How many independent dairy processing plants have opened and closed since 2001?

Answer: Since 2001, 7 new milk processing plants have commenced operations and of those 1 has subsequently closed down. Another plant established pre-2001 has also closed trading.

Q47 Does New Zealand have targets regarding the reduction of Fonterra's size in order to constrain its domestic domination?

Answer: New Zealand does not have targets regarding the reduction of Fonterra's size in order to constrain its domestic dominance; however, we do have specific pro-competition elements which fall away when the competitive pressure on Fonterra has increased to significant levels. An example of such pro-competition elements is provided by the Dairy Industry Restructuring Act 2001, sections 4(f) and Subpart 5, section 70.

Q48 Paragraph 21 mentions that "The total allowable commercial catch (TACC), a subset of the TAC, is determined after taking into account non-commercial fishing interests and other fishing induced mortality."

Q48-1 Could New Zealand clarify the meaning of "non-commercial fishing interest"? Is the allocation made under this concept the same as what it is called "customary fishing"?

Answer: Section 21 of the New Zealand Fisheries Act defines "non-commercial fishing interest" as being Maori customary non-commercial fishing interests and recreational interests.

Q48-2 Who are the beneficiaries of this allocation? A particular group or particular individuals?

Answer: The allowance is not a commercial allocation to a particular group of beneficiaries. In setting a sustainable total allowable commercial catch the Minister must allow for: a) the customary non-commercial fishing of Maori tribes (iwi) and sub-tribes (hapu); b) the recreational catch of all recreational fishers; and c) all other mortality to that stock caused by fishing.

Q48-3 Under what economic terms is this allocation made? Are the allocations made at no cost for the beneficiaries? Are they tradable?

Answer: The allowances are made, by definition, to account for non-commercial resource users taking fish to meet their requirements, therefore there are no associated economic terms or costs.

These allowances are not tradable, nor can the catch made under these allowances be used in any form of barter or trade.

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Q48-4 Can products harvested under this allocation be exported? Could the fishing operations carried out under this allocation be considered as "artisanal", or "small scale" or "subsistence" fisheries?

Answer: Under Section 21 of the New Zealand Fisheries Act, products harvested under this allowance may not be sold or subsequently traded. Only fish, aquatic life, or seaweed taken by commercial fishers may be sold, and subsequently purchased by a licensed fish receiver. Fish can be exported as a gift, but cannot be sold. Regulations limit the amount any person can take overseas to twice the recreational daily bag limit for that fish stock.

Fishing operations carried out under this allowance are not considered as "artisanal", or "small scale" or "subsistence" fisheries. Customary non-commercial fishing is fishing carried out under the authority of an authorisation or permit issued under the Fisheries (South Island Customary Fishing) regulations 1999, the Fisheries (Kaimoana Customary Fishing) Regulations 1999 or regulation 27 and 27A of the Fisheries (Amateur Fishing) Regulations 1986. In the case of the two sets of customary regulations customary food gathering is defined as:

"the traditional rights confirmed by the Treaty of Waitangi and the Treaty of Waitangi (Fisheries Claims) Settlement Act 1992, being the taking of fish, aquatic life, or seaweed or managing of fisheries resources, for a purpose authorised by Tangata Kaitiaki/Tiaki, including koha, to the extent that such purpose is consistent with Tikanga Maori and is neither commercial in any way nor for pecuniary gain or trade:"

The main customary purposes are hui (tribal meetings, often involving external visitors) and tangi (funerals), for which occasions the provision of local food (especially seafood) is an essential cultural protocol.

Q49 In paragraph 24 it is mentioned that "Fishing quotas and ACE may only be held by nationals of New Zealand or by majority-owned domestic companies; permission may be granted, under certain circumstances, by the Minister of Fisheries and the Minister of Finance, for an overseas person to hold a fishing quota in New Zealand (Chapter II(5))." Footnote 76 of Chapter II (page 32) mentions increased export receipts for New Zealand exporters among the factors for determining whether overseas investment in fishing quota is in the national interest. However the Fisheries Act 1996 in 4: Quota management system, 57.(4).(b) (C) mentions "the development of new export markets or increased export" as a factor for determining whether foreign investment is in the national interest. Does this imply that New Zealand would allow purchase of fishing quota by an overseas investor in exchange for trade concessions (e.g. import duty reductions) by the country to which the foreign investor belongs?

Answer: No. Trade concessions by the Government of the country of a potential foreign investor would not be relevant to a determination by Ministers to allow the purchase of fishing quota by an overseas investor.

Q50 In paragraph 26 it is mentioned that New Zealand introduced in September 2008 an emission trading scheme. According to publicly available information the fisheries sector is being treated differently than other sectors as will receive a free allocation of emission units covering 50% of the total of all eligible parties' 2005 emissions from the consumption of fuel. This free allocation will be provided each year from 2011 to 2013. Furthermore, the official webpage explaining the functioning of the emission trading scheme mentions (see text hereunder) that this measure is a subsidy, for which one of the main raisons d'être is the fact that this sector is exposed to trade.

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"Free allocation is being provided to various groups under the emissions trading scheme for a range of reasons. It's technically a subsidy, but it's a transitional measure only available to some emitters." "The rationale for free allocation of emissions units to forestry and fishing is more that asset values are affected by introducing the emissions trading scheme, so allocation aims to achieve equity rather than deal with economic regrets. Having said this, there is an element of trade-exposure underpinning the rationale of providing free allocation to the fishing sector." (http://www.climatechange.govt.nz/ emissions-trading-scheme/questions-and-answers.html#fishing)

Could New Zealand confirm the above information?

Answer: New Zealand can confirm that an amendment to the Climate Change Response Act 2002, passed in September 2008, introduced an emissions trading scheme. This scheme was designed as a key instrument to introduce, over time, a price on carbon across the New Zealand economy. The scheme covers all sectors and the six main greenhouse gases, and, as such, is one of the most comprehensive schemes of its kind in the world.

The current legislation contains provision for free allocation as a transitional measure to some sectors of the economy whose competitiveness may be at risk, due to uneven coverage and pricing of carbon across economies in the short term, resulting in carbon leakage. Partial and transitional free allocation is envisaged for some sectors, including forestry, industry, agriculture and fishing, to adapt to this domestic policy measure of emissions pricing in the New Zealand emissions trading scheme (ETS).

We note that other emissions trading schemes, including the EU ETS, also involve the use of free allocation.

The legislation is currently being reviewed by a special Parliamentary select committee, the Emissions Trading Scheme Review Select Committee.

Some of the information contained in the website quoted was incorrect, and does not reflect the official view of the New Zealand Government.

Q51 Given that most of New Zealand's fish production is intended for export, such subsidy can be considered a "de facto" export subsidy.

Answer: We disagree. There remains considerable uncertainty internationally about the application of WTO rules to measures such as free allocation under an emissions trading scheme, which is designed explicitly to enable countries to meet multilateral climate change objectives. These provisions simply level the playing field to avoid a distortion from the application of domestic policy to meet multilateral objectives. This is consistent with emerging international practice to provide a level of transitional assistance under an ETS.

Q52 Has New Zealand carried out an analysis demonstrating that the cost of the emissions trading scheme cannot be passed to customers (most of them third country importers) of New Zealand's fishing industry?

Answer: New Zealand is a price taker on international markets: the Emissions Trading Scheme will not change this.

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Q53 Has New Zealand quantified the financial benefit for New Zealand's exporters of the aforementioned subsidy?

Answer: There will be no net financial benefit to New Zealand's fishing industry resulting from this transitional measure. The industry will face higher fuel costs given the inclusion of liquid fuels in the ETS. The free allocation will offset only a portion of those costs for a limited period of time.

KOREA

Q1 The Government report states that New Zealand (NZ) is "pursuing a number of initiatives aimed at improving the country's economic performance," and in this context mentions two policies, the "Growth and Innovation Framework", and the "Economic Transformation Agenda". Could New Zealand elaborate on these two policies? In particular;

Q1-1 For both the "Growth and Innovation Framework" policy and the "Economic Transformation Agenda" policy, could NZ further elaborate on the detailed features of each policy, and an assessment on the results of each?

Answer: The Growth and Innovation Framework (GIF) aimed to increase productivity by investing in improved innovation systems, workforce skills and international connections, and developing clusters of firms in four key sectors: 1) Biotechnology 2) Information and communications technology 3) Design 4) Screen production

Further detail on the policy measures developed as part of GIF are archived on the Ministry of Economic Development website at: http://www.med.govt.nz/templates/StandardSummary____ 38194.aspx. Progress reports discussing some results of GIF are available at: http://www.med. govt.nz/templates/ContentTopicSummary____38419.aspx.

The Economic Transformation Agenda (ETA) focused on improving the general climate for economic growth rather than developing certain sectors. It sought to raise productivity and catalyze the growth of high-value-added New Zealand firms. To do so, the Government invested in five areas: 1) Infrastructure investment in land transport and broadband; 2) Skills and productivity; 3) Developing globally competitive firms; 4) Supporting Auckland as a world city; and 5) New Zealand leadership in environmental sustainability.

Several of the initiatives introduced under the Economic Transformation Agenda will continue under the current Government. Measures such as the $160 million Venture Investment Fund, the Capital Markets Development Taskforce, and free trade agreements with key nations continue to play a role. Other initiatives, such as investments in broadband networks and road infrastructure, are being expanded.

Further detail on the policy measures developed as part of ETA are archived on the Ministry of Economic Development website at: http://www.med.govt.nz/templates/StandardSummary____ 22996.aspx. Progress reports are available at: http://www.med.govt.nz/templates/ ContentTopicSummary____23388.aspx.

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Q1-2 It appears that the "Economic Transformation Agenda" policy was put into effect between the years 2006~8. If so, is there another policy/program in the pipelines? If yes, could NZ explain the salient features of the new policy/program?

Answer: As discussed in the Government Report, the current Government's activity is concentrated in the following areas: 1) Improving productivity and value for money in the public sector; 2) Lowering personal taxes, making regulation simpler and more transparent, and enhancing competition policy; 3) Increasing investment in infrastructure including road and electricity networks and broadband; 4) Lifting education standards and workers’ skills through the introduction of National Standards in literacy and numeracy, support for apprenticeships, and voluntary bonding schemes; and 5) Reforming the 1991 Resource Management Act (RMA) to streamline the consent process for new infrastructure and construction.

Ministers are presently considering further options for lifting productivity and economic growth beyond these 'foundation' measures.

Q2 According to the Government report, since taking office in Nov. 2008, the present Government has established 5 main priorities, and "action is under way".

Q2-1 Could NZ further elaborate on the "action under way?"

Answer: The New Zealand government has implemented a number of measures in its 5 main priority areas:

1. Improved Public Service: Clear messages have been sent to the public service that there is a strong government focus on delivering high-quality services in a time of limited resources. The May 2009 budget provided a $3 billion boost to health services over four years and 600 more police and 246 more probation workers to improve public safety.

2. Lowering Personal Taxes: $1 billion worth of tax cuts were legislated for that took effect on 1 April, affecting more than 1.5 million New Zealand workers and making a New Zealander on the average wage $18 a week better off.

3. Increasing Investment in Infrastructure: The May 2009 budget delivered a multi-billion dollar boost to infrastructure investment. This included: an extra $1 billion over three years for the state highway network; $323.3 million on home insulation and clean heating; and $124.5 million for the construction and upgrade of state houses.

4. Lifting Education Standards and Workers' Skills: The 2009 budget provided $1.68 billion spending on education to raise student achievement, $1 billion of which was new spending. This funding will go towards building new schools, increasing students’ literacy and numeracy skills, and expanding the Early Childhood Education Scheme. The February Job Summit led to the introduction of a nine day fortnight to retain jobs in the short term by reducing wages, while up-skilling workers in the long term. The time that industry training organisations are funded for industry trainees who have lost their job has been extended from 6 weeks to 12 weeks. Other initiatives to support apprentices and training are ongoing.

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5. Reform of the Resource Management Act has been initiated and the government is also looking at other areas that may constitute obstacles to economic growth, such as the Overseas Investment Act, the Building Act and electricity market regulation.

Q2-2 Also, could NZ further elaborate on the "Job Summit convened by the PM in February, 2009?" What were the issues discussed, and what were the conclusions that were derived? Is the government contemplating any follow-up policy measure as a consequence of the "Job Summit"?

Answer: The Job Summit held in February contributed valuable ideas for preserving jobs through the present economic crisis and creating best possible conditions for business to step up as economic conditions improve. There was positive engagement from approximately two hundred of New Zealand's top business, government, and community and union leaders.

During the Summit, delegates were divided into six work streams: core workplace and employment issues; workers skills and transition; local and regional government, and Maori economy; helping firms survive; business investment; and firm funding.

From these groups a wide-range of ideas to solve the expected rise in unemployment emerged. Some of these have already been taken forward by the government: - A nine day fortnight - a job support scheme was introduced for firms with more than 100 employees in March and extended to cover firms with more than 50 employees in April. - Enhance utilisation of Iwi assets – the Maori Trustee Amendment Act was enacted in May 2009; proposals for improving Systems for Valuation and Rating of Maori Land are being finalised; and a survey of 600 Marae around the country to gather information on marae infrastructure requirements. - Reduce regulatory compliance costs and impediments – a programme of reviews has been launched (see details on Treasury's website http://www.treasury.govt.nz/ economy/regulation/programme); a Regulatory Improvement Bill has been introduced; and a Regulatory Responsibility Task Force set up. - Nationwide cycleway – Advisory Group established and $50 million of Government funding allocated over the next three years.

The May 2009 budget delivered a multi-billion dollar boost to infrastructure investment and spending on public services. An extra $1 billion will be spent over three years on the state highway network; $323.3 million will be spent on home insulation and a clean heating campaign; and $1.68 billion will be spent on education to raise student achievement. These initiatives will increase employment and create work for businesses throughout the regions.

Q3 Paragraphs 13 through 16 describe the inbound FDI regime in place in NZ. For this issue, we would appreciate detailed responses to the following:

Q3-1 Para 13 and 14 refers to NZ's 'investment screening regime'. Could NZ explain if this 'investment screening regime' is in fact a "national interest test" or "national security test" in effect in other countries? If different, could NZ detail the difference of this regime to that of Australia, its neighbour, for example?

Answer: New Zealand screens investments in significant business assets, sensitive land and fishing quota. A full description of the screening regime can be found in the Overseas Investment Act 2005 and the Fisheries Act 1996. However in broad terms, for investments in significant business assets the investor must show that they have business experience and acumen, financial commitment to the

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investment, that they are of good character, and is not a person who would not be eligible for a permit or exemption under New Zealand's immigration legislation ("investor test"). For investments in sensitive land, the investor must also show that the investment will benefit New Zealand based on a number of factors set out in the Overseas Investment Act 2005. For investments in fishing quota the investor must, in addition to meeting the "investor test", show that the investment will be in the national interest, based on a number of factors set out in the Fisheries Act 1996.

Australia would be better placed to provide a description of its screening regime.

Q3-2 Para 14 states that "Sensitive land" includes "non-urban land exceeding 5 hectares, any land on most off-shore islands, any land containing foreshore or seabed, specified islands or land including or adjoining reserves, parks, historic or heritage areas in excess of 0.4 hectares, and land adjoining the foreshore in excess of 0.2 hectares". The definition of "sensitive land" in para 14 seems to be non-exhaustive, and therefore one has to wonder if there is any land other than in urban areas that are not subject to screening by the authorities. What is NZ's view on this comment?

Answer: The types of land considered sensitive are clearly outlined in the Overseas Investment Act 2005. The description in paragraph 14 is a general summary only. In relation to non-urban land, it is considered sensitive if it exceeds 5 hectares.

Q3-3 Para 16 states that in March 2008, the Government introduced a new criteria with regards to "strategic infrastructure assets". This could be construed to be an extra layer of screening that the NZ government has unilaterally introduced to its inbound FDI regime. In this context, what assurances do foreign investors in NZ have that such occurrences (i.e., the Government unilaterally introducing new restrictions post-factum) will not happen again in the future?

Answer: In the current review of the Overseas Investment Act the Government is considering whether it is appropriate to retain the ability to add to the factors considered when assessing the benefit of an investment in sensitive land. Decisions on this issue will be announced when the review is completed (approximately July 2009).

Q4-1 In regards to the stimulus package announced by the new Government, could NZ further elaborate on the details of the package? (Currently it is only referred in general terms such as 'housing, transport, and education sectors')

Answer: The projects that will be fast-tracked under this programme have been chosen because they are of high-quality, they will make a lasting contribution to New Zealand's economy, and they are ready to be implemented. They will lead to increased employment and work for business, and their benefits will flow through communities.

The $483.7 million worth of publicly funded projects to contribute to the Government's stimulus programme includes: - Education: $216.7 million of spending, including five new schools, school refurbishments and maintenance and ICT infrastructure improvements. - Transport - $142.5 million of spending, spanning five large state highway projects and a programme of smaller, regional roading improvement projects. - Housing - $124.5 million of spending, allowing Housing New Zealand to upgrade and renovate 10,000 more state houses, and build 69 new state houses over the next six months.

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About $100 million worth of accelerated projects will start before June 30 this year. $115 million of spending on new carriages and locomotives for KiwiRail has already been approved.

The May 2009 budget delivered a multi-billion dollar boost to infrastructure investment. This included: $1 billion over three years for the state highway network; $323.3 million on home insulation and clean heating; and $1.68 billion on education. The spending announced in February is included in the 2009 budget.

A small unit within Treasury to manage the next stages of the infrastructure programme has been established. This unit will improve the way public sector agencies manage their existing infrastructure assets and lead to a stronger forward planning on infrastructure needs. A National Infrastructure Advisory Board, to include representatives from the private sector and local government, will also be set up to advise the infrastructure unit and the Infrastructure Minister. The infrastructure unit and the advisory board will develop a national infrastructure plan by the end of this year. The plan will be updated every three years.

Q4-2 Could NZ confirm that there are no 'potentially trade restricting or distorting' measures in the stimulus package referred to in para 28, and the assistance to the financial sector detailed in paras 25 through 27?

Answer: New Zealand reported the measures referred to in paragraphs 25-27 (Retail Deposit Guarantee Scheme; Wholesale Funding Guarantee Facility; RBNZ temporary additional measures to enable banks to access liquidity; temporary change to the mandate of the NZECO to provide short-term trade credit insurance at market rates on a temporary basis), and in paragraph 28 (stimulus package of NZ$500 million for publicly funded housing, transport and education projects), to the WTO in March 2009. These were included in the Director-General's March Report to the TPRB on the Financial and Economic Crisis and Trade-Related Developments.

None of these measures are potentially trade restricting or distorting.

These measures were taken in order to guarantee the continued functioning of financial institutions, access to regular foreign markets, and the availability of trade credit necessary to ensure the continued flow of trade in goods and services, in the context of the current global financial crisis.

Details of New Zealand's stimulus package for publicly-funded projects in housing, transport and education have recently become available following the 2009/2010 Budget announcement. These projects, like all publicly-funded projects, will be implemented in a manner consistent with New Zealand's commitment to international trade rules that seek to avoid distortion or restriction of trade. Fair and free-flowing global trade is vital to New Zealand.

New Zealand's commitment to open trade and its eschewing of trade protectionism, particularly during such a difficult time for the multilateral trading system, meant that we were pleased to recently co-sponsor the 'standstill' proposal communicated in WT/GC/W/604 (endorsed by the Republic of Korea). New Zealand fully endorses the message of the G20's November and April declarations, and considers all WTO Members should also.

Q5 In regards to the export of dairy and meat (two of NZ's key exports), what are the greatest barriers faced by NZ exporters in accessing the dairy and meat markets of Japan, China, the US, and the EC?

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Answer: Agriculture products (including dairy and meat) often face significant barriers in international markets in terms of high tariffs, use of tariff quotas and safeguard measures. In some markets technical and SPS requirements also act as significant unjustified barriers for trade in agricultural products.

For this reason New Zealand places a strong emphasis on achieving a successful conclusion to the Doha Round as soon as possible. New Zealand strongly supports members taking actions which lower or removes barriers for trade in agricultural products. New Zealand also welcomes and shares the commitment made by a large number of countries to resist imposing protectionist measures as a response to the current global economic downturn.

Q6-1 Please elaborate on the proposed new Trade (Safeguard measures) bill under consideration in the NZ Parliament (would appreciate greater specificity, more than the brief description in para 41, pg 47 of the Secretariat report).

Answer: Paragraph 41 of the Secretariat's report outlines the main changes proposed in the Bill. Authorising the Minister of Commerce to impose a provisional safeguard duty is intended to allow for the quick imposition of a provisional duty, if the relevant criteria are met, and recognises that the proposed extension of the investigation timeframe from 30 to 75 or 85 working days may require the imposition of a provisional duty to protect a domestic industry while an investigation is being completed.

Authorising the Minister to impose a final safeguard duty is intended to provide a quicker and more efficient means of imposing a safeguard measure in the form of a duty than the present system which requires Cabinet approval and an Order-in-Council process to increase the normal tariff. The inclusion of criteria for determining whether a safeguard measure is in the public interest is intended to bring greater transparency and certainty to this process as no such guidelines exist under the present safeguard regime.

The undertaking of safeguard investigations by the Ministry of Economic Development rather than by independent Temporary Safeguard Authorities is intended to more fully utilise the skills and experience of the Ministry, which conducts dumping and subsidy investigations, in the undertaking of safeguard investigations.

Extending the timeframe for the completion of an investigation is intended to ensure there is sufficient time available to cover all of the issues and complete the level of analysis that WTO jurisprudence indicates is required in an investigation.

Q6-2 (Follow-up to 6-1:) How will the changes "ensure NZ's SG regime promotes efficient, transparent, and objective investigative and decision-making processes?"

Answer: This is covered by the explanations given in response to the above question.

Q6-3 (Follow-up to 6-1:) What propelled the need for this change in legislation?

Answer: The primary impetus for the review was the recognition that the 30 working day timeframe for the completion of an investigation under the present regime was unlikely to provide sufficient time. The other changes proposed in the review largely arose out of issues identified during the review process.

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Q7-1 Could NZ elaborate on the ROO that is implemented in association with the DFQF that NZ provides for LDCs? In particular, for items of export interest of LDCs?

Answer: New Zealand's ROO regime for LDCs requires the LDC to meet an added value threshold of 50% based on an ex-factory cost calculation. The exporting LDC may cumulate this added value threshold from inputs from other LDCs. This criteria is set for all product lines regardless of any specific LDC export interest.

Q7-2 Has NZ received any request from LDCs to change its existing ROO in effect in association with its DFQF regime? If so, what was NZ's response?

Answer: To our knowledge no formal request has been made from LDCs to change this regime.

Q8 The CERs concluded and implemented under the aegis of the "Australia/NZ Closer Economic Relationship" are quite extensive; paragraphs 82~84 detail the numerous sub-agreements in force or soon to be implemented.

Q8-1 In this context, is the Australia/NZ example the model through which NZ envisions closer regional ties? That is, does NZ envision adopting arrangements similar to the TTMRA (1998), MoUs of 1998 and 2000 for business law, etc., as future steps in its bilateral relations with Thailand, P4 countries, China, and ASEAN countries in due course now that FTAs have been concluded?

Answer: The relationship between Australia and New Zealand has special qualities which extend well beyond the trade and economic sphere. The close historical and political ties have allowed the two countries to move towards deep economic integration within the framework provided by the CER agreement. New Zealand would welcome a trading relationship with other partners, involving agreements with a comparable depth of commitments, if this could be done on a reciprocal basis. Additionally it should be noted that other countries can accede to CER under Article 24 of ANZCERTA.

Q8-2 In this relation, are there talks to introduce MRAs (similar in scope to TTMRA) with Thailand and/or China?

Answer: The TTMRA is a comprehensive equivalence arrangement, covering all goods and occupations with very few exceptions. Such an arrangement is only possible where there are very similar regulatory systems in each party. We have no plans at present for this type of arrangement with any other country.

Q8-3 Only recently have NZ and Australia begun work on an investment protocol. Could NZ further elaborate on the issues being discussed? Will it include investor-state dispute settlement procedures? If not, why not?

Answer: New Zealand and Australia have been negotiating an Investment Protocol to CER since 2005. The issues being discussed include core investment disciplines and obligations, investor protection and market access. These matters, including the question of whether the Protocol will include investor- state dispute settlement procedures, are still under negotiation.

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Q9-1 Regarding the China-NZ FTA in para 87~88, could NZ clarify whether the Investment chapter in the China-NZ FTA incorporates investor-state dispute settlement procedures? If so, could NZ elaborate on the main features of those provisions?

Answer: The NZ-China FTA does contain investor-state dispute settlement procedures, which provide that if the dispute can not be settled within six months through consultation and negotiation, and unless the parties to the agreement agree otherwise, investors can submit issues for conciliation or arbitration by ICSID or for arbitration under the rules of UNCITRAL. There are requirements for notice to be provided; a requirement that domestic remedies have to be exhausted prior to the dispute being submitted to international arbitration; and provisions that clarify the scope of expropriation. There are also a range of other related safeguards. See www.chinafta.govt.nz for more details, in particular pp. 36-7 of the National Interest Analysis.

Q9-2 (Follow up to 9-1) If the investor-state dispute settlement procedures were not included, could NZ clarify why it was not so? Are there plans to incorporate them in the future?

Answer: N/A.

Q9-3 Could NZ elaborate on what it means by "Services commitments made in the FTA are substantial, and cover modes 1~4" in para 88? Was the substantial commitments made by NZ or China or both?

Answer: Both NZ and China made substantial services commitments in the FTA, including by China on: computer and related services, services related to management consulting, education, environmental services, air and transport services and NZ on: other education services, environmental services, computer services and construction services. NZ and China also each committed to facilitate the entry of businesses people in those services sectors in which they made commitments. For more information see www.chinafta.govt.nz for more details, in particular p.37-42 of the Guide to the Agreement.

Q9-4 (Follow up to 9-3) Could NZ elaborate on areas in which both China and NZ committed above and beyond their respective GATS commitments?

Answer: Please see the above answer.

Q10-1 Regarding the ASEAN-Australia-NZ FTA, Para 89 states that "There are new GATS-plus commitments in services sectors in areas of interest to NZ." Could NZ elaborate which are these areas and to what extent these new commitment are GATS-plus?

Answer: The ASEAN/NZ/Australia FTA contains GATS-plus services commitments in a number of sectors including, in terms of commitments by ASEAN countries: various business services in particular, computer and related services, construction, education and environmental services. See www.asean.fta.govt.nz for more details, in particular pp. 4-7 of the Key Outcomes of the FTA document.

Q10-2 Para 89 also states that "there is an investment chapter which adds new protection for NZ investors and investments in the region." Could NZ elaborate what these 'new protection' are? Is the investor-state dispute settlement procedure one of such 'new protections'?

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Answer: The ASEAN/Australia/NZ FTA contains a number of provisions providing protection for investments, of which recourse to binding investor state dispute settlement in certain defined circumstances is one. See www.asean.fta.govt.nz for more details, in particular p. 8 of the Key Outcomes of the FTA Document.

CHILE

Q1 As the Secretariat report rightly states, New Zealand ranks high in terms of the quality of its domestic regulatory regimes and institutions. However, measures are still being adopted with a view to further improvement in this area, in particular to identify and remove inefficient and superfluous regulation. We would like to know in greater detail the objectives and parameters of this policy of further improving the regulatory framework.

Answer: The New Zealand Government's regulatory reform programme aims to identify and remove inefficient and superfluous regulation through:

- A programme of higher level microeconomic reforms and full regulatory reviews as set out in the table below:

Review is underway or in implementation Review in 2009 (most already commenced) Proposed review in 2010 stage

Climate Change Response Act Building Act Financial Market Regulation Raw milk regulations Election commitments on Employment Relations Local government regulations Resource Management Act Act amendments Occupational licensing Foreshore and Seabed Act (RMA) (Phase 1) Holidays Act Overseas Investment Act and Regulations Resource Management Act (RMA) (Phase 2) Telecommunications Act Weather Tight Homes Resolution Services Act Electricity institutional arrangements Food Safety Rule review Also work on Hazardous Substances and New Organisms Act (HSNO)

- Solutions for discrete regulatory issues. These are smaller issues that do not require full reviews but cumulatively do impose cost or unnecessary duplication on businesses. The New Zealand government has agreed to have a regular legislative vehicle for addressing these issues.

Q2 What type of criteria are applied in responding positively to a foreign investment application? Can a refusal of application be challenged before a higher body?

Answer: The factors considered when assessing investments in significant business assets, sensitive land and fishing quota are set out in the Overseas Investment Act 2005 and the Fisheries Act 1996.

Q3 Paragraph 37 mentions the sunset review, but does not specify the maximum time-periods for the imposition of measures once the review has been initiated. What would be the maximum period

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for imposing measures in such cases? Is there a maximum number of times that a new review can be initiated?

Answer: Anti-dumping or countervailing duty remains in place pending the outcome of the review. Under the Dumping and Countervailing Duties Act 1988 a review must be completed within 180 days of its initiation. If the review finds that the duty should remain in place, a reassessment of the rate of the duty is initiated immediately following the completion of the review and a new rate of duty is determined based on information gathered in the review. The "sunset" expiry date of the duty then becomes 5 years from the date the new rate of duty was determined. If the review finds the duty is no longer necessary, a recommendation is made to the Minister of Commerce to terminate the duty. In this situation, the duty would normally cease from the date the Minister makes a decision to terminate it, but the Minister can retrospectively terminate the duty if this is warranted by the circumstances of the case.

Q4-1 Paragraph 96 states that "New Zealand does not appear to provide direct subsidies for any sector-specific economic activities." What does this mean? Are subsidies provided or not? Is there a register of "possible subsidies" provided by New Zealand? Does the New Zealand Government have any information on this respect?

Answer For more detail on the agricultural support provided by the New Zealand Government, please see New Zealand's most recent domestic support notification provided to the WTO Committee on Agriculture WT/AG/NZL/52. All agriculture support provided by New Zealand is outlined in our ongoing domestic support notifications. We can confirm that, as per New Zealand's notifications, all domestic support provided by New Zealand is Green Box consistent and covers, for example, programmes relating to pest and disease control, inspection services, extension and advisory services and payments for relief from natural disasters. Consistent with Annex 2 of the Agreement on Agriculture, such support meets the fundamental requirement that it has no, or at most a minimal, trade-distorting effect or effect on production.

Q4-2 The same paragraph also states that "[a]ccording to the OECD, market price supports appear to be maintained for eggs and poultry." Once again: "appear" to be maintained? Are they maintained, or is this simply a hypothesis? What does the New Zealand Government say in this respect?

Answer: As a result of a blanket import ban on uncooked poultry and eggs which has been imposed to protect local poultry and some native bird species from exotic diseases and pests, domestic prices tend to be higher then international prices for poultry and eggs. The resulting "price supports" are therefore by accident rather than design as the intention of the policy is to protect poultry and some native birds from exotic diseases and pests not to provide market support.

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ECUADOR

Q1 Paragraph 10 states that prior to Parliamentary examination of any preferential trade agreement a National Interest Analysis is conducted on the effects of such an agreement and that it provides a good basis for public consultations during Parliament's consideration of the agreement. What elements are taken into consideration in preparing the National Interest Analysis?

Answer: A National Interest Analysis (NIA) is a summary of why becoming party to a treaty is in New Zealand's national interest. NIAs are a key working document used by Parliamentary Select Committees to scrutinise New Zealand treaty actions.

The NIA considers the following elements: - Reasons for New Zealand Becoming a Party to the Treaty; - Advantages and Disadvantage to New Zealand of the Treaties Entering into Force; - Legal Obligations which would be imposed on New Zealand by the Treaty Action; - Measures which the Government Could or Should Adopt to Implement the Treaty Actions; - Economic, Social, Cultural and Environmental Costs and Effects of the Treaty; - Costs to New Zealand of Compliance with the Treaty; and - Subsequent Protocols and/or Amendments to the Treaties and their Likely Effects.

New Zealand's trade related NIAs are available on the New Zealand Ministry of Foreign Affairs and Trade's website at www.mfat.govt.nz.

Q2 According to paragraph 4, imports of animal and plant products are regulated by New Zealand's relatively strict sanitary and phytosanitary laws; in the area of food safety, institutional changes have been undertaken and provisions are being reviewed. Ecuador would like to know in detail, with particular regard to bananas, mangos, pineapples and vegetables, as these products accounted for more than 97% of total exports to New Zealand in 2008, the type of sanitary and phytosanitary provisions that are being revised, on the basis of the principle of transparency laid down in the WTO.

Answer: At this stage, there is no specific intention to revise phytosanitary provisions for mangos, pineapple and vegetables imported into New Zealand. A recent assessment has been undertaken by MAF Biosecurity New Zealand (MAFBNZ) on organisms associated with imported bananas. The findings of this assessment are presently being reviewed. For administration purposes, New Zealand requires all persons/companies who import food into New Zealand to be listed with the New Zealand Food Safety Authority. Additionally, food importers are required to ensure that the food they import for sale in New Zealand meets the domestic standards for safe and suitable food. Importers can demonstrate this through obtaining appropriate assurance documents or records from their supplier. Further information on the New Zealand import system can be found at http://www.nzfsa.govt.nz/imported-food/index.htm.

Q3 According to paragraph 29, "reference 99" concessions may be granted for various reasons. Could New Zealand specify the reasons for which "reference 99" concessions may be granted?

Answer: The reasons for which Reference 99 concessions may be granted are mentioned in the text of para 29, namely "In addition to the general concessions for products not manufactured or produced in New Zealand, specific concessions may be approved for: shortfalls of inputs to manufacturing; woven fabrics containing wool for use in the manufacture of apparel; and certain capital equipment".

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Q4 Paragraph 55 states that on receipt of a request from an exporting country, the Ministry of Agriculture and Forestry Biosecurity New Zealand (MAFBNZ) works with that country bilaterally to establish a country- and/or commodity-specific import health standard that mitigates the risk associated with importing that product.

Q4-1 Could New Zealand provide further information on how the above-mentioned body works bilaterally with the country concerned to establish a health standard that mitigates the risk associated with importing a given product?

Answer: The development of an HIS for an imported commodity is typically comprised of two distinct activities. In the first instance, a risk assessment is undertaken to identify biosecurity hazards associated with the commodity and/or pathway. During this assessment, each identified hazard organism is assessed to determine what, if any, phytosanitary measures may need to be considered to mitigate the respective risks. Dependent upon the nature and complexity of the risk assessment, the exporting country may be requested to provide comments on a draft of the document. Upon the completion of the risk assessment, an Import Health Standard (IHS) is developed. The IHS incorporates as appropriate, mitigation measures for the identified biosecurity risks. Prior to the issuance of the IHS, the exporting country and other interested stakeholders are provided an opportunity to comment on the proposed import measures.

Q4-2 Are there any requirements to be met by the exporting country in submitting the request?

Answer: Formal requests for new import health standards are to be made via the New Zealand Ministry of Foreign Affairs and Trade. If several requests are received from one exporting country, each request must be prioritised. Upon receipt of the request(s) by MAFBNZ, pest/production information may be sought as required. Note - MAFBNZ operates a biennial IHS prioritisation/work programme.

AUSTRALIA

Q1 The Secretariat's Report (paragraph 4, page 3) notes that the slowdown in economic growth in New Zealand has been compounded by the recent global economic crisis. Have any changes have been made to New Zealand's domestic policy settings or trade policies to help local exporters or industry cope with the economic downturn?

Answer: New Zealand has responded to the global economic crisis with both monetary and fiscal policy. New Zealand was in a relatively strong position to respond as there was considerable scope to loosen monetary policy and the government’s gross debt was less than 20% of GDP at 30 June 2008, following more than a decade of fiscal surpluses.

On 4 February, the New Zealand Government unveiled a small-business relief package to assist small and medium-sized enterprises (SMEs). The package has five parts: a suite of 11 tax changes costing $480 million; an expansion to the export credit scheme; extended jurisdiction for the Disputes Tribunal to reduce the time SMEs are tied up in district court processes; expansion of business advice services; and a prompt-payment requirement for government agencies. The package is aimed at urgently improving the business environment by reducing the impact of taxes on firms' cash-flows, improving firms' access to credit, and reducing business compliance costs.

The Job Summit held in February contributed valuable ideas for preserving jobs through the present economic crisis and creating best possible conditions for business to step up as economic conditions

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improve. Some ideas that emerged from Job Summit included: a nine-day fortnight; the reduction of regulatory compliance costs and impediments and a freeze on rule-making; and revised procurement guidelines to prevent discrimination against smaller domestic firms. Banks have issued a statement of commitment to provide capital to New Zealand firms.

Q2 Australia notes that the New Zealand Government is currently reviewing its aid policies. How are New Zealand's aid policies (which are mostly aimed at the Pacific region) assisting the recipient countries' trading capacities?

Answer: New Zealand is supporting our donor partners, including those in the Pacific, to increase their capacity to trade through a range of bilateral, regional and multilateral activities.

NZAID supports measures that assist developing countries to formulate appropriate trade policy and implement it effectively. This includes activities to facilitate trade such as efforts to streamline customs procedures and to enable developing country producers (particularly in the agricultural and food sectors) to meet quarantine requirements in export markets.

NZAID also supports a range of programmes to strengthen the ability of producers to supply and link to markets. These can include efforts to improve the competitiveness of businesses and farms in partner countries, their ability to add-value to their products, to access market information, to meet importers' and customers' demands regarding quality and consistency of supply; and to promote trade. Recognising that the general environment for business in our partner countries can constrain the ability of local businesses to grow and be competitive, as can the quality of infrastructure, NZAID also works to address these issues.

More information including examples can be found at www.nzaid.govt.nz/what-we-do/trade-and- development.html.

Q3 The Secretariat's Report (paragraph 24, page 40) notes that, although this has not been the case during the period under review, differences between bound and applied tariff rates may provide the New Zealand Government with scope to raise applied tariffs, especially in sensitive sectors. How does the New Zealand Government plan to address the average gap of 9.1% between applied and bound MFN rates?

Answer: New Zealand's existing bound rates were agreed in the Uruguay Round of multilateral trade negotiations. The WTO Doha Development Agenda of multilateral trade negotiations is the forum that will provide for further reductions of New Zealand's bound tariffs.

SWITZERLAND

Q1 In paras 2 and 6, the Secretariat's report indicates that low productivity is an important structural challenge for New Zealand's economy. Could the New Zealand authorities indicate the specific measures, if any, they are taking to tackle this problem in order to ensure that the goal of achieving higher incomes for the population can be reached ?

Answer: The New Zealand government accepts that increases in productivity are needed, with a focus on international competitiveness, to permanently raise New Zealanders' living standards and create jobs.

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While fiscal management and getting through the current global financial and economic crisis is the major current focus of the Government it is also taking initial steps in a longer-term programme to raise productivity.

The tax cuts the Government introduced on 1 April 2009 will reward hard work, and help encourage people to invest in their own skills to earn and keep more of the money they earn.

Looking forward, government initiatives to lift productivity fall into four broad areas: - Increasing the government's investment in much-needed infrastructure - Removing roadblocks to growth by improving the regulatory environment under which businesses operate - Lifting the literacy and numeracy skills of young people, and - Improving the productivity of the public sector.

The Government is committed to reducing unnecessary compliance costs. It has initiated a number of first-round changes to the Resource Management Act (1991) and is actively reviewing the Overseas Investment Act (2005), the Building Act (2004) and electricity market regulation. These regulatory reviews, amongst others, will result in changes to legislation that help lighten the load the Government places on businesses.

The Government is focused on addressing the problem of educational underachievement. It has legislated for national standards in literacy and numeracy and is working with schools to implement them. Budget 2009 provides funding specifically to help students meet national standards, as well as funding to build new schools, modernize existing schools and expand capacity.

The Government also has an ongoing focus on value for money in the public sector. It will shift resources from the back office to the front line and find ways to deliver better, smarter public services for less.

Q2 With respect to paras 11, 12 (registration and documentation) and 17 of the Secretariat's report, could the New Zealand authorities provide answers to the following questions: Does NZCS provide for a Web-based platform that enables importers and exporters to transmit their import and/or export declarations directly to the customs system without interaction of a customs broker ? If NZCS provides for this type of e-Government service, how does the system work: does the importer/exporter fill declarations online or does the trader have the possibility to send import/export declarations generated by its system directly via the Web to the customs system ?

Answer: Yes, NZCS provides this type of e-Government service. Importers/Exporters can choose to submit their declarations using either a web based platform or by installing appropriate EDI software on its system. An importer or exporter that chooses to use the web based platform is able to complete the declaration online. The data is then transmitted through the EDI gateway to the Customs system.

Q3 In relation to para. 66 of the Secretariat's report: According to para. 63, New Zealand's procurement regime aims at providing "full and fair opportunity for domestic suppliers" and in light of para. 72, New Zealand is also committed not to discriminate between suppliers of goods and services in New Zealand, Australia, Brunei Darussalam, Chile, and Singapore. Under these circumstances, Switzerland warmly welcomes the decision of the Members of the GPA of the end of 2008 to grant New Zealand the observer status in the WTO-Committee of government procurement. What are the prospects of New Zealand joining the GPA in light of the advantages which would result for a sustainable growth of New Zealand's economy from a membership in the GPA and for New Zealand's further integration in the world economy ?

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Answer: New Zealand became an observer on the GPA committee without commitment as to GPA membership. This matter is however under continuing review in the light of domestic and international developments.

Q4 In para. 103, the Secretariat's report indicates that Zespri, a state-trading enterprise, i.e. the sole kiwifruit exporter in New Zealand, must fully comply with the Commerce Act which aims to "promote competition in markets for the long term benefit of consumers within New Zealand". Could the New Zealand authorities explain how in practice they can ensure that a state-trading enterprise such as Zespri, which has an export monopoly for kiwifruit, can be forced to behave as if competitive conditions existed in the kiwifruit export market? In particular, how do the authorities determine that the level of the purchase price by Zespri of kiwifruit from domestic farmers is consistent with the price that would be obtained if competitive conditions existed on that market?

Answer: The New Zealand competition law concerns itself with competition in markets in the territory of New Zealand. Within New Zealand there are no restrictions on either the buying of kiwifruit from growers or the wholesale marketing of kiwifruit to retailers for sale and consumption on the domestic market.

The special rights ZESPRI enjoys relating to the export of kiwifruit also have consequences on the buying side. ZESPRI buys kiwifruit from growers and arguably enjoys a high degree of market power in that market. As far as pricing of kiwifruit purchased from growers is concerned, it is important to note that ZESPRI is a company owned and controlled by grower suppliers and the Board of directors is elected directly by the grower shareholders. Any measure of monopsony enjoyed by ZESPRI is counterveiled by the fact that the company is owned by the growers. There is no incentive on the company to underprice or overprice fruit purchased from growers or marketed on behalf of growers. In that sense the price paid to growers is a competitive price but it embodies part of what would otherwise be the trading profit of the company minus any funds withheld for capital investment. The company's policies in this regard are subject to approval by shareholders.

Note that ZESPRI is not the sole kiwifruit exporter in New Zealand as exports to Australia are not regulated.

HONG KONG CHINA

Q1 We note from the Secretariat Report that under the Australia and New Zealand Closer Economic Relations Trade Agreement (ANZCERTA), anti-dumping actions may not be taken on goods covered by the Agreement. Further, no safeguard measures are permitted for goods under the ANZCERTA and the New Zealand-Singapore Closer Economic Partnership Agreement. We are interested to know New Zealand's major considerations on deciding whether or not trade remedies could be used under its free trade agreements. Is it envisaged that similar provisions would be introduced in New Zealand's future free trade agreements?

Answer: The New Zealand Australia relationship is such that we have been able to move towards very deep economic integration. The CER should be seen in that context. The provisions in Singapore should be seen in the light of the deep and comprehensive commitments in that agreement.

New Zealand generally prefers to retain the right to use all trade remedy instruments in relation to trade with a free trade partner. Whether there will be exceptions to this general rule in future will depend on the circumstances of each negotiation and will include matters such as the trade profiles of

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each country and the extent to which they are complementary, the history of trade remedy cases taken against the FTA partner and the overall outcome of the negotiation on goods market access.

Q2 According to the Secretariat and Government Reports, New Zealand has reviewed its safeguard legislation. A bill, which is to repeal and replace the present safeguard regime, was introduced into the House of Representatives in September 2008. We would appreciate it if New Zealand would share with us the latest progress of the bill, the expected timeframe for the completion of the legislative exercise, and when the bill will come into force.

Answer: The Bill has been referred to a Select Committee for consideration and the Committee is required to report back to parliament by September 2009. If the Bill is passed into law, it is expected this will occur by December 2009. As drafted, the Bill will come into effect on the date it is passed into law.

Q3 We appreciate New Zealand's plan to remove four of the five MFN exemptions as indicated in its initial and revised services offers. We note that the remaining one on audio-visual services is of an indefinite intended duration. In line with provisions in the Annex on Article II Exemptions to the GATS which require that all MFN exemptions maintained by Members should be reviewed from time to time and be in principle not more than 10 years in duration, we would like to know if New Zealand has any plan to remove the exemption.

Answer: At this stage, the New Zealand Government is not actively considering the removal of the MFN exemption for audiovisual services (Film Co-Production Agreements).

COLOMBIA

Q1 According to paragraph 3 of the report by the Secretariat, New Zealand has maintained its open stance towards foreign investment, its legislative framework and procedures. Colombia is interested in knowing whether New Zealand's legislation makes provision for national mechanisms for the settlement of investor State disputes or whether it is necessary to go straight to international bodies.

Answer: New Zealand encourages investors to first seek resolution of issues through domestic avenues. Investors may have recourse to arbitration in New Zealand as domestic laws and procedures allow. In a number of its FTAs and Bilateral Investment Treaties New Zealand has agreed provisions on investor state dispute settlement. Only the China NZ FTA and AANZFTA allow for compulsory investor state dispute settlement.

Q2 Paragraph 7. "Under its bilateral and plurilateral agreements, New Zealand, an observer to the WTO Agreement on Procurement since end 2008, is committed not to discriminate between suppliers of goods and services; nevertheless, government departments have been instructed to require origin and local content information on all offers to supply goods". Has New Zealand established a local content ceiling for acceptance of local or foreign offers for the supply of goods to government departments? If so, what is that ceiling?

Answer: The statement that "government departments have been instructed to require origin and local content information on all offers to supply goods" comes from the superseded 2002 edition of "Government Procurement in NZ: Policy Guide for Purchasers".

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The current edition of the Policy Guide (revised August 2007) sets out a requirement for departments to include in their documentation of consideration of tenders (at or above $100,000} reasons for the rejection of any "New Zealand" tender, and advises that in order to identify substantial or significant New Zealand content, departments will need to ask tenderers to provide sufficient information to give a broad indication of the place of origin of goods or services offered. Documentation of the reasons for rejection of any "New Zealand" tenders is intended to ensure that departments have given full and fair opportunity and considered any value for money advantages of competitive local supply, and to be a useful source of data to inform the government's supplier capability development programmes to help New Zealand suppliers address shortcomings in their tendering practices.

There is however no local content "ceiling" or benchmark for acceptance of local or foreign offers to supply departments. As stated in the Policy Guide (both the superseded and the current versions) the Government's procurement policy does not give preference or weighting to local content in itself. Having given domestic suppliers full and fair opportunity and assessed any commercial and practical value for money advantages associated with local supply, agencies should buy from the best source available, according to their own judgement of all costs and benefits. Q3 Bearing in mind that New Zealand is a pioneer in the development of procedures for customs clearance and trade facilitation, could it share its experience of preventing, detecting and combating customs fraud?

Answer: New Zealand Customs would be pleased to share its experiences of preventing, detecting and combating customs fraud with WTO Members in accordance with any bilateral request received.

Q4 According to (e) Tariff concessions, paragraph 29, "Over the years, the policies for granting concessions have changed so that in certain circumstances, concessions may now be granted even if there is a suitable alternative New Zealand production." What are the current policies used for granting concessions and in what circumstances are they granted?

Answer: While there have been changes to Reference 99 tariff concession policy over the years, the issue of whether there is New Zealand production of similar goods remains the key one. If there is no New Zealand production of commercially available goods and the goods can be described in a legally enforceable way, then a 'general' tariff concession is likely to be granted. The criterion used to assess the suitability of a tariff concession is whether there is New Zealand production of "suitable alternative" goods which have a domestic content of not less than 25% of their total factory production cost.

Suitable alternative goods are defined as those which perform the same or a similar function to the imported goods for which a concession is sought; and where the imported goods would compete directly in the same market. Price and quality are not normally taken into consideration.

Other circumstances under which Reference 99 concessions may be granted are mentioned in the text of paragraph 29, namely "In addition to the general concessions for products not manufactured or produced in New Zealand, specific concessions may be approved for: shortfalls of inputs to manufacturing; woven fabrics containing wool for use in the manufacture of apparel; and certain capital equipment".

Q5 According to footnote (a) to Table III.4 "New Zealand standards, 2002-08", the New Zealand authorities do not keep statistics on the percentage of standards that are mandatory. Has New Zealand considered the possibility of drawing up an inventory of mandatory standards? Are there different bodies dealing with mandatory standards?

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Answer: Like most countries, New Zealand has a range of regulatory regimes, each focused on a different set of risks or products, that each include mandatory standards. No single authority maintains an inventory of the number of mandatory standards across these regimes, and there are no plans to do so.

Q6 In both paragraph 17 of the section on measures directly affecting imports and in paragraph 75 of the section on measures directly affecting exports, reference is made to a performance agreement between the Government and the New Zealand Customs Service whereby import and export applications lodged and cleared electronically through the Electronic Data Interchange must be processed within 30 minutes. We would be grateful if New Zealand would share its experience of this software since it went into operation, particularly in the light of the private sector's readiness to contribute to the efficient running of the system.

Answer: In New Zealand, the EDI gateway is managed by a third party. The EDI process allows importers and exporters to submit their entry declarations electronically and they can utilise the process via the internet or by installing appropriate EDI software on their own systems.

Electronic lodgement for import and export entries is a requirement under the Customs and Excise Act 1996.

Q7 In paragraph 4 of the Secretariat's Report, it is stated that "The share of manufactures in total merchandise exports declined from 31.5% in 2003 to 27.7% in 2007. The Government is committed to developing New Zealand into a high value, high wage and export-led economy. With a view to pursuing these objectives, the Government has taken various measures, such as increased budgetary funding for skills development, market development and international marketing … ". What strategies and actions has the New Zealand Government envisaged for the skills development, market development and international marketing referred to in this paragraph?

Answer: The Government's primary mechanism for delivering support for business capability building and market development activities is through its trade and economic development agency, New Zealand Trade and Enterprise (NZTE). In early 2009 the Government announced the consolidation of NZTE's existing business assistance grant schemes into the existing Growth Services Fund (GSF). The Fund will support firms to develop skills and resources to implement their growth strategy. Overall spending on grant schemes is being reduced from $63.042m in 2008/09 to approximately $30.000m by 2010/11. Funding is also provided to NZTE and other agencies for a range of international marketing and brand development initiatives aimed at building New Zealand’s profile internationally.

The new Government is still in the process of developing its overall strategy for skill development in the economy. The previous Government developed the NZ Skills Strategy in collaboration with business and industry groups and unions with the objectives to explore the link between skills and productivity, respond to skills shortages, and to make the most of the Government's investment in skills by encouraging a coordinated and unified approach to policy development and delivery.

Q8 In paragraph 7, the Secretariat states that economic reforms in the 1980s and 1990s have increased efficiency in the agriculture sector in New Zealand. Could New Zealand indicate the main policies which allowed this increase in efficiency?

Answer: The fundamental aim of the economic reforms of the 1980s was to generate sustained economic growth and to promote efficiency in the New Zealand economy by creating a 'level playing field' on

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which economic actors (including farmers) would compete equally and market forces would determine success. The fundamental policy tool to achieving this objective was deregulation, particularly the removal of government interventions that distorted the market and isolated parties from the impacts of their decisions. A summary of the key economic reforms is set out below.

Specific agricultural reforms All trade-distorting subsidies were withdrawn from 1985. Price supports were abolished, farm loans were moved to market rates, capital and input (e.g. fertiliser) subsidies were removed, exit packages for uneconomic farms were provided, advisory services changed to being 'user pays', and tax concessions for farmers were withdrawn.

Generic reforms - Exchange controls removed – the was floated in 1985, which provided clearer signals of the relative price of productive inputs and outputs. - Deregulation of the financial sector – controls on all lending and deposit rates were removed. - Inflation-focused monetary policy – the central bank was required to set a clear single monetary policy with the aim of achieving and maintaining price stability to reduce the persistently high levels of inflation. - Deregulation of the labour market – individual employment contracts were introduced to allow employers and their staff more choice in determining terms of employment. - Expansion of trade liberalisation – tariffs were lowered, the extensive import licensing system was removed, and the trade relationship with Australia was enhanced through the Closer Economic Partnership. - Taxation reforms – reforms were introduced to reduce the government deficit and create one of the least distorting tax systems in the OECD (e.g. through introduction of a uniform Goods and Services Tax). - Commercialisation/Privatisation – for example, previous government functions were transferred to state-owned enterprises which were made accountable on a profit and loss basis. - Effects-based environmental regulation – new environmental legislation was introduced to encourage resource users to take into account third party effects of their actions and to promote sustainable practices.

Q9 According to paragraph 10, New Zealand has a Commodity Levies Act. Could New Zealand indicate which commodities are identified, providing more detail of the benefits or restrictions established by this Act?

Answer: Commodities under the Commodity Levies Act 1990: Arable Crops (wheat, barley, etc), asparagus, avocado, blackcurrants, eggs, feijoa, meat, milk, nash asian pear, navel oranges, herbage seed, passionfruit, apples and pears, satsuma mandarin, summerfruit (peaches, plums, cherries, etc), tamarillo, all fruits and vegetables, grapes for wine making, grape wine, non-grape wine (i.e. other fruit wine), wool. Please note that all levies are imposed only on New Zealand production, not on imported commodities.

Benefits of the Commodity Levies Act 1990: - Industry groups can prioritise their spending and focus on activities that will provide maximum benefits. - Industry groups are able to use their levy funds to leverage research funding from other sources, and this also ensures that research is more focused on industry requirements.

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- The producers themselves decide collectively whether there is to be a levy on their commodity and each levy order lasts six years, after which there is a vote on whether or not to continue for another six years. This means that if levy payers are not convinced that benefits exceed costs of the levy then they can vote to discontinue with the levy. This imposes strong accountability on the levying organisation to maximise benefits of levy spend. - There are annual consultation requirements, giving levy payers the opportunity to decide the levy rate and what the levy is to be spent on. - This framework removes the free-rider problem of a voluntary levy, and the forced- rider problem is minimised by the manner in which referendum support is measured.

Restrictions under the Commodity Levies Act 1990: - Levies are not used for commercial or trading activities, for example, levies collected on avocadoes cannot be used to purchase avocadoes for sale or export.

Q10 Paragraph 15 refers to single commodity transfers (SCT), which reflect the difference between world and domestic prices. Why does this instrument apply only to eggs and poultry? Could New Zealand indicate what support is granted for the meat and dairy sector?

Answer: As a result of a blanket import ban on uncooked poultry and eggs which has been imposed to protect the local poultry industry and some native bird species from exotic diseases and pests domestic prices tend to be higher then international prices for poultry and eggs. This measured market support is by accident rather than design as the intention of the policy is to protect the poultry industry and some native birds from exotic diseases and pests not to provide market support.

Q11 Could New Zealand indicate the financial instruments it grants to its agricultural sector? What are the conditions of eligibility for such support? For what products is such support granted?

Answer: Budgetary support is provided for basic research on pest and diseases control, border control inspections, disaster relief for adverse events and for projects to encourage sustainable farming practices.

Please see New Zealand's latest Domestic Support notification (G/AG/N/NZL/52) for more information.

Q12 According to paragraph 16, at present two producer organizations have statutory powers to collect levies from producers and they operate as marketing boards. Could New Zealand enlarge on the way these boards operate? Why have all the others been abolished? How does the receipt of the levies by producers operate? Do the levies have to be remitted to the State? What is the purpose or destination of the levy?

Answer: While the Pork Industry Board and Deer Industry New Zealand may use the levies for market development and promotion work, they do not purchase or sell their respective commodities, i.e., they are NOT marketing boards.

These boards are operated and funded by the industries themselves. They elect boards of directors to provide overall governance of the organisation. They have their own staff. They have annual levy payer consultations to identify key industry issues and priorities. They sometimes contract other parties to deliver services such as research outputs.

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Producer boards in other industries have been disestablished as industries have decided to operate under generic corporate legislation such Companies Act 1993 and under the Commodity Levies Act 1990 as that legislation has strong accountability measures.

Pork levies are collected by processors, who forward that to the Ministry of Agriculture and Forestry (MAF), and MAF passes the full levy on to the industry organisation. For the deer industry levy, processors pay the levy direct to their industry organisation. Both industry organisations have board of directors elected by levy payers and they decide on the levy spending on behalf of growers and farmers. Growers and farmers are consulted every year to gauge issues and priorities for levy spending.

The types of activities they spend their levies on are mostly around product research and development (R&D), production R&D, market R&D, technology transfer, establishing quality assurance programmes, training and education, and promoting their products and their industries.

Q13 The Secretariat report states in paragraph 57 that "Foreign-owned insurers can operate as branches in New Zealand, provided all licensing, monitoring, and other prudential requirements are met. However, if foreign insurers are fully compliant with their home-country regulator's prudential requirements, the RBNZ will have discretion to accept compliance with these requirements and exempt these insurers from certain aspects of New Zealand's requirements." What are the aspects of New Zealand's requirements from which the RBNZ may exempt insurers that are fully compliant with their home country regulator's prudential requirements?

Answer: The Insurance regulations are still being finalised – for more detail please go to http://www.rbnz. govt.nz/finstab/nbdt/insurance/.

THAILAND

Q1 On page 33 of the report by the Secretariat, it is mentioned that, during August 2002 - August 2008, 1,609 investment applications were screened and only 33 applications related to sensitive land were rejected. Furthermore, the processing time for applications seem to be lengthy.

Q1-1 What is the usual length of time for processing an investment application?

Answer: The median turnaround time for all applications that were decided between 1 October 2008 and 31 May 2009 was 19 working days. Q1-2 Will the investor be notified in writing if the application is rejected? If yes, will the reason for rejection be provided?

Answer: Yes and yes.

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THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU

Q1 We note from the Report that, in July 2007, the New Zealand Government introduced the KiwiSaver scheme to supplement the State pension system. We would be grateful for further information on the following aspects:

Q1-1 What are the alternative approved saving schemes available to participants? How have these schemes been approved? Is there a guaranteed rate of return under the schemes provided? Q1-2 Does the provider of a scheme have the right to refuse an application from any worker? Can a scheme be restricted to members of a particular trade union or industry only? Q1-3 Can participants transfer their contributions from one scheme to another if they find one that is better-performing? Q1-4 The report indicates that savings are locked in until the age of 65. Are there any conditions under which pension reimbursement may be claimed earlier, such as long-term unemployment, disability, death or unexpected severe incidents?

Answer: Joining KiwiSaver is not compulsory, and there are multiple providers for the scheme. Furthermore, people can also join more traditional superannuation schemes. There are no guaranteed rates of return for any KiwiSaver scheme, and in some instances negative returns have occurred. Schemes can have their own rules about who can apply to be members, and membership can be transferred from one scheme to another. There are situations under which savings may be accessible prior to 65.

Please see the following link for more detail http://www.kiwisaver.govt.nz/.

Q2 We note from the Report that responsibility for regulatory impact analysis (RIA) shifted to the Regulatory Impact Analysis Team (RIAT) from November 2008. Could New Zealand please describe RIAT's functions, its role and the scope of its responsibilities in the regulatory management system?

Answer: In June 2008, the Government took decisions to strengthen the regulatory management system, and put in place a more strategic approach to managing the impact of regulation on economic performance.

To give effect to these decisions, the Treasury was assigned responsibility for New Zealand's regulatory management system, expanding its role into three areas. These are: - Regulatory impact analysis. This work was previously undertaken by the Regulatory Impact Analysis Unit in the Ministry of Economic Development, but from 3 November 2008 sits with Treasury's Regulatory Impact Analysis Team (RIAT). - Responsibility for setting a prioritised regulatory review work programme and co-ordinating across government agencies to deliver on this programme. - Strategic co-ordination of the regulatory quality system, including recommending improvements to the system and handling Cabinet and Parliamentary processes related to regulations and regulatory reform.

These functions complement Treasury's role as the Government's primary economic and fiscal advisor.

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RIAT's role

RIAT is an independent unit located within the Treasury. RIAT is required to formally assess the regulatory impact analysis (RIA) and regulatory impact statement (RIS) for any regulatory proposal that is likely to have a significant impact on economic growth.

This role comprises: - Commenting on discussion document to ensure that the design of the document is likely to enable the agency to undertake adequate RIA after stakeholder feedback has been received; - Reviewing the RIA to determine whether it is adequate; and - Reviewing the RIS to determine whether it is adequate.

Agencies are responsible for determining whether their proposal meets the significance criteria. For proposals that do not meet the significance criteria, the authoring agency is responsible for certifying whether they have met the adequacy criteria.

RIAT's adequacy assessment is included in the RIS and the accompanying Cabinet paper. If RIAT deems the RIA and/or RIS for a proposal to be inadequate, they have a mandate to brief the Minister of Finance and the Minister for Regulatory Reform.

More information can be found at: http://www.treasury.govt.nz/publications/guidance/regulatory/impactanalysis/04.htm#04htmpara25.

Q3 The Report states that the P4 agreement, which contains an open clause, is considered as a potential driver for a large trans-Pacific arrangement. Could New Zealand please further elaborate its position and strategy for the enlargement of the P4 agreement?

Answer: The TPSEPA is "open to accession on terms to be agreed among the Parties, by any APEC Economy or other State" (Article 20.6.1). Decisions on new participants in the TPSEPA are made by consensus.

The current phase of negotiations will involve eight participants. New Zealand hopes that this will be followed by further expansion to include others in the region also committed to high-quality economic integration in the Asia-Pacific region, consistent with WTO and APEC goals.

Q4 We note that New Zealand maintains some of the most advanced customs and trade facilitation procedures aimed at speeding up the processing of international trade transactions, and we commend New Zealand on its efforts to facilitate trade. We are aware also of the importance of the AEO programme in this respect.

Q4-1 We are interested in knowing whether New Zealand implements the AEO programme. If yes, what kind of preferential clearance measures does its Customs offer importers and exporters?

Answer: New Zealand operates an AEO programme known as the Secure Exports Scheme (SES). SES partners qualify for preferential status that provides maximum facilitation and minimum intervention for their exports. All other exporters have a higher potential for intervention because the security of their goods cannot be assured. New Zealand provides maximum facilitation (such as deferred payment of duty) to all importers – unless there is evidence that they are non-compliant.

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Q4-2 We know also that New Zealand has signed Customs Mutual Assistance Agreements with America and Japan. We would appreciate knowing what kind of preferential measures New Zealand can obtain through these Agreements.

Answer: New Zealand has signed both mutual assistance and mutual recognition arrangements with Japan and the US. Mutual recognition arrangements provide enhanced border clearance benefits for AEO members. The mutual assistance arrangements are also focused on the exchange of information.

Q5 New Zealand government departments are required to include in their internal documentation basic reasons for justifying the rejection of any New Zealand tender for contracts at or above NZ$ 100,000. Since New Zealand opens its Government Electronic Tenders Service (GETS) system to companies from all over the world to promote open, fair competition in the New Zealand government market, has the above regulation led to discrimination between domestic and foreign suppliers?

Answer: The Policy Guide for Purchasers (2007) states that this Cabinet direction is not to be interpreted as requiring preferential short-listing or final selection of New Zealand tenders, and that the aim is to ensure full and fair consideration of the objective merits of New Zealand as well as other tenders in a whole-of-life value for money context, in accordance with the existing policy, and to provide data to inform supplier development programmes. Departments continue to be bound by the Mandatory Rules for Procurement by Departments (2006), which require non-discrimination (Rules clauses 16 and 17).

Q6 We note that all exporters are required under Section 49 of the Customs and Excise Act 1996 to lodge an export document with the New Zealand Customs Service. As of 1 March 2004, all export entries have been required to be lodged and cleared electronically prior to the goods being loaded for export. We would appreciate further information as follows:

Q6-1 Is there any time limitation in this programme?

Answer The Customs & Excise Regulations 1996 (Reg 28) requires that an export entry must be lodged '…not less than 48 hours before the goods are shipped for export'.

Q6-2 What is the detailed information that exporters are required to declare?

Answer An export entry provides full details of the consignment to be exported. A summary of the information required can be found in Fact Sheet 6A: Completing an Electronic Export Entry accessible at www.customs.govt.nz.

Q6-3 Are exporters required to make a supplementary declaration about the information that they have not declared earlier?

Answer No, an export entry must be completed in full before clearance will be given.

Q7 Several SOEs were privatized in the mid-1980s, but since 1999 there has been a policy reversal. During the period under review, no further privatization of State assets has taken place, and New Zealand proceeded with the buy-back of Air New Zealand, the railways and ferries, etc. We are interested in the following aspects:

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Q7-1 Will the buy-back & re-nationalization interfere with free trade?

Answer: No.

Q7-2 Is there any privatization plan for the SOEs now?

Answer: No.

Q7-3 Will there be any limitations placed on foreign investors during the privatization process?

Answer: N/A.

Q8 As indicated in the Report, power distribution businesses are subject to economic regulation, information disclosure and price-quality regulation, and the Commerce Commission is to set "default" price and quality paths from April 2009. However, individual businesses may apply for customized terms and propose alternative price and/or quality paths.

Q8-1 Have any business proposed alternative price and/or quality paths so far?

Answer: No regulated service provider has applied for a customised price quality path as we have not yet set the input methodologies that are a pre-requisite for these applications (see S53(2)(A) of the Commerce Act). The deadline for the setting of the input methodologies is 30 June 2010.

Q8-2 What are the criteria and concerns regarding the examination of alternative paths by the Commission?

Answer: The Commission is going through the process of setting the methodologies for customised price quality paths under s52T of the Commerce Act. The legislation signals specific matters that must be included in input methodologies for customised price quality paths.

(1) The input methodologies relating to particular goods or services must include, to the extent applicable to the type of regulation under consideration: (d) matters relating to proposals by a regulated supplier for a customised price-quality path, including - (i) requirements that must be met by the regulated supplied, including the scope and specificity of information required, the extent of the independent audit, the extent of consultation and agreement with consumers ; and (ii) the criteria that the Commission will use to evaluate any proposal

Initial consultation was undertaken by the Commission in December on the approach that the Commission intended to undertake on Input Methodologies ("Regulatory Provisions of the Commerce Act 1986: Discussion Paper"). The Discussion paper is available on the Commission's website, as are copies of the submissions received from interested parties. The Commission is expecting to consult on its preliminary views in the near future.

Q9 It would be appreciated if New Zealand could provide further details as follows:

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Q9-1 Do the New Zealand port authorities collect the port security charge? If yes, are the charge rates for national ships and foreign ships the same?

Answer: There is no port security charge as such. Maritime New Zealand's work in relation to the Maritime Security Act is funded by the Crown.

As described in paragraph 74, much of Maritime New Zealand's safety regulatory work, including port state control, is funded by a Marine Safety Charge which is collected by Maritime New Zealand from all commercial shipping. The rates for different types of shipping (international, domestic, passenger, freight etc) differ according to the amount of regulatory effort and risk involved with each shipping type and whether they trade constantly in New Zealand, in which case most pay an annual charge, or visit from time to time, in which case charges are typically per port call. The different rates are clearly set out in the Marine Safety Charges Regulations, available online from www.legislation.govt.nz

Q9-2 What are the policy strategies for New Zealand coastal shipping? What do authorities do to expand the market share?

Answer : In 2008, the New Zealand Government published a strategy, Sea Change, for domestic sea freight, available from the Ministry of Transport's website at http://www.transport.govt.nz/seachange/

Since the change of Government in November 2008, the funding described in paragraph 71 has been discontinued, but work on the information-gathering and workforce elements of the strategy is continuing. The emphasis is on non-monetary interventions, removing unnecessary regulatory constraints on the sector and working with the sector to overcome hurdles and blockages.

Q10 We note that during the period of review, besides launching the International Education Agenda in August 2007, New Zealand had also implemented some changes in the education sector, including introduction of the Export Education Levy (EEL) in 2003 to fund sector development. We should be grateful for further clarification as follows:

Q10-1 Since the EEL is a new and different measure from the standpoint of our domestic educational system, what legal provisions or administrative measures does it originate from? That is to say, what is its legal basis?

Answer: The Export Education Levy was introduced as part of the Education Amendment Act 2002, which modified the provisions of the Education Act 1989. In particular, the Export Education Levy is authorised according to sections 238H and 238I of the Education Act 1989. Following passage of the Education Amendment Act 2002, the Export Education Levy was implemented from 10 January 2003. Annual reports are provided to Parliament on the funding and expenditures from the Export Education Levy, and these can also be found (as PDF texts) on the website of the Ministry of Education (www.minedu.govt.nz).

Q10-2 What are its purposes and functions in accordance with the above provisions?

Answer: Section 238I of the Education Act 1989 sets out the permitted purposes of the Export Education Levy. These are: Purpose and administration of export education levy (1) The purposes to which the funds of the levy may be put are as follows:

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(a) the development, promotion, and quality assurance of the export education sector, which may include (without limitation)— (i) professional and institutional development; and (ii) marketing; and (iii) implementation of scholarship schemes; and (iv) research, and resource development; and (v) support (financial or otherwise) of other bodies engaged in the development, promotion, or quality assurance of the export education sector: (ab) the making of payments as set out in subsections (1A) and (1B): (b) the administration and audit of the code: (c) the general administration of the levy and associated purposes.

Q10-3 What practical experiences has New Zealand gained from implementing the EEL, e.g. difficulties in promoting or carrying out the EEL?

Answer: The initial difficulties in implementing the Export Education Levy related to establishing an on-line payment system for the 1000+ education providers active in enrolling international students. This project was put in place by the Finance Team of the Ministry of Education. There have been minor on-going issues re pursuing unpaid levies, particularly by providers which have left the industry. The process for this is the standard debt collection system.

Q11 New Zealand maintains an open framework for foreign investment and its largest sources of FDI are Australia, the United States and the United Kingdom.

Q11-1 Has New Zealand signed bilateral investment agreements (BITs) or FTAs that include the Chapter of Investment, with Australia, the United States, the United Kingdom and other countries?

Answer: NZ has yet to conclude bilateral agreements covering investment with the US, Australia or the UK, although we have concluded FTAs that include investment chapters with Thailand, Singapore, China, ASEAN and Malaysia. See answer to the next question for information on negotiations currently underway.

Q11-2 Does New Zealand currently have any plans to sign new BITs or FTAs that include the Chapter of Investment, with any other countries in order to continue to maintain the stable growth of foreign investment?

Answer: NZ is already in negotiation with Australia towards conclusion of a bilateral agreement on investment. New Zealand is also seeking provisions on investment in its FTA negotiations with the GCC, Korea and Hong Kong, China.

In addition the four members of the Trans-Pacific Strategic Economic Partnership Agreement (Brunei, Chile, New Zealand and Singapore) began negotiations on a TPSEPA investment chapter in 2008. The United States also participated in those negotiations while it considered whether to enter into comprehensive negotiations to join the TPSEPA. Investment negotiations are expected to continue as part of negotiations for the United States, Australia and Peru to join the TPSEPA as full participants.

Q12 As the Report states, when facing the global financial crisis, the Prime Minister convened a Jobs Summit to test ideas and find workable solutions to maintaining high levels of employment. Could the New Zealand Government please elaborate further on any ideas or workable solutions to

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maintaining high levels of employment proposed by business, unions and the Government both during and after the Jobs Summit?

Answer: The Job Summit held in February contributed valuable ideas for preserving jobs through the present economic crisis and creating best possible conditions for business to step up as economic conditions improve. There was positive engagement from approximately two hundred of New Zealand's top business, government, and community and union leaders.

During the Summit delegates were divided into six work streams: core workplace and employment issues; workers skills and transition; local and regional government, and Maori economy; helping firms survive; business investment; and firm funding.

From these groups a wide-range of ideas to solve the expected rise in unemployment emerged. Some of these ideas have already been taken forward by the Government: - A nine day fortnight: a job support scheme was introduced for firms with more than 100 employees in March and extended to cover firms with more than 50 employees in April. - Enhance utilisation of Iwi assets: the Maori Trustee Amendment Act was enacted in May 2009; proposals for improving Systems for Valuation and Rating of Maori Land are being finalised; and a survey of 600 Marae around the country to gather information on Marae infrastructure requirements. - Reduce regulatory compliance costs and impediments: a programme of reviews has been launched (see details on Treasury's website http://www.treasury.govt.nz/ economy/regulation/programme); a Regulatory Improvement Bill has been introduced; and a Regulatory Responsibility Task Force set up. - Nationwide cycleway – Advisory Group established and $50 million of Government funding allocated over the next three years.

The May 2009 budget delivered a multi-billion dollar boost to infrastructure investment and spending on public services. An extra $1 billion will be spent over the next three years on the state highway network; $323.3 million will be spent on home insulation and a clean heating campaign; and $1.68 billion will be spent on education to raise student achievement. These initiatives will employ New Zealanders and create work for businesses throughout the regions.

CANADA

Q1 The Secretariat notes that "[i]n 2006, Cabinet endorsed the Mandatory Rules for Procurement by Departments, which apply to central government departments, the New Zealand Police, and the New Zealand Defence Force for purchases at or above NZ$100,000 for goods and services, and at or above NZ$10 million for construction services".

Q1-1 Could New Zealand please clarify if all foreign suppliers have access to these bidding opportunities?

Answer: Yes, all foreign suppliers have access. As stated in the Introduction (clause 1), the Rules reflect and reinforce New Zealand's established policy of openness and transparency in government procurement. They are to be applied by departments in their procurement globally to facilitate competitive participation by domestic and foreign suppliers in New Zealand's government procurement market. The Rules (clauses 16-17) specifically require that departments accord all potential suppliers equal opportunity and equitable treatment and that procurement decisions be

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made on the basis of value for money, not place of origin or degree of foreign ownership or affiliation of the supplier.

Q1-2 Could New Zealand please indicate whether or not foreign suppliers are permitted to compete on procurement opportunities below the thresholds?

Answer: Yes, in New Zealand's open government procurement market, agencies are encouraged to seek best value for money in procurement at any level by affording competitive opportunity where practicable to all interested suppliers, domestic or foreign.

Q2 The Secretariat notes that New Zealand has been an observer to the WTO plurilateral agreement on Government Procurement (GPA) since December 2008. Could New Zealand please confirm when it plans to begin its accession to the GPA?

Answer: New Zealand became an observer on the GPA committee without commitment as to GPA membership. This matter is however under continuing review in the light of domestic and international developments.

Q3 In paragraph 58 of the Secretariat Report, the Secretariat provides statistics on fixed line penetration as well as mobile phone penetration.

Q3-1 Could New Zealand provide additional statistics and a further description of the competitive landscape in its telecommunications market?

Answer: Additional statistics are available at the following link, which provides New Zealand ICT related statistics: http://www.stats.govt.nz/economy/industry/information-communication-technology.htm. In particular, please see the 'Internet Service Provider Survey'. The Commerce Commissions' sector monitoring reports also provide useful information regarding the competitive landscape of the telecommunications market, and are available at: http://www.comcom.govt.nz/IndustryRegulation/ Telecommunications/MonitoringandReporting/DecisionsList.aspx. The 2008 Telecommunications Market Monitoring Report is particularly relevant, and is available on this website.

Q3-2 Could New Zealand describe, for example, the largest three service providers in each of the fixed-line telephone, mobile telephone, broadband internet, and television distribution segments by indicating each participant's market share, its transmission facilities, and whether they are owned or leased?

Answer: Given the relatively small size of the New Zealand telecommunications market, much of the requested information is commercially confidential and therefore not publicly available. We set out below the information that is publicly available.

Fixed-line telephony Telecom New Zealand and TelstraClear are the two largest operators and there are a small number of 3rd tier players in the market (with a very low combined market share). Telecom's market share (in terms of revenue from fixed telephone services) for 2006/07 was 83%. Telecom (the incumbent operator) owns the only nationwide fixed (copper access) network in New Zealand. TelstraClear owns a cable (HFC) network in three regions (Kapiti, Wellington, and Christchurch), and also provides services using Telecom’s network on a nationwide basis.

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Mobile telephony There are currently two mobile operators in New Zealand (Vodafone and Telecom), with a new entrant (2degrees) expected to launch a third network in August this year. In terms of mobile phone connections, Vodafone's market share as at March 2009 was 53% (Telecom 47%). However this statistic is confused by the fact that mobile penetration is over 110% in New Zealand (as it is common for users to have a phone from each network). It is generally accepted that Vodafone has at least 60% market share in terms of revenue from mobile services. Vodafone and Telecom own their transmission facilities. 2degrees will operate with a combination of its own transmission facilities in city centres and through a roaming agreement with Vodafone outside of these areas.

Broadband internet The three largest ISPs in New Zealand are Telecom, TelstraClear and Vodafone. The only official market share data available is Telecom's share of broadband connections (68% for 2006/07). Rough estimates indicate that TelstraClear's share of connections is under 20% and Vodafone's is under 15%. Telecom provides its services over its copper access network. TelstraClear provides its services over its cable network where available and elsewhere leases capacity from Telecom. Vodafone provides services over its cellular network and also leases capacity from Telecom to provide fixed broadband services.

Television Distribution The largest broadcasting service providers are: - Television New Zealand Ltd: Two channels; free to air; largest terrestrial population coverage. Distribution and broadcasting of programming is via contract with Kordia Ltd (a state owned enterprise). Transmission and distribution equipment is owned by Kordia Ltd. - Mediaworks Ltd: Two channels; free to air; second largest terrestrial population coverage. Distribution of programming is via contract with Telecom Ltd. Transmission is via a mixture of sites operated by Kordia Ltd and Mediaworks. Transmission equipment is owned by Mediaworks. - Sky Television NZ Ltd: One channel free to air; multiple channels as pay TV service; four channels via terrestrial delivery; all channels via digital satellite. Distribution of satellite programmes is via SingTel-Optus satellite. Distribution of terrestrial programmes is via contract with Kordia Ltd. Terrestrial transmission equipment owned by Kordia Ltd.

COMMENTS FROM THE GOVERNMENT OF CANADA

Comment 1: Canada would like to note that Canada, Australia and New Zealand signed a competition agency-to-competition agency cooperation arrangement, not a state-to-state cooperation agreement. If the Secretariat prefers, the wording in the report, "…has cooperation agreements…" could be changed to "…has cooperation instruments...".

For more information please refer to: http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/ 01595.html

Comment 2: Canada would also like to note that the arrangement was signed by the Australian Competition and Consumer Commission, not the Government of Australia. For greater accuracy, Canada would suggest the following language for the report: "The Commerce Commission also has cooperation agreements with the Commissioner of Competition in Canada (also signed by the Australian Competition and Consumer Commission)…".

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New Zealand comments: We are happy to accept Canada's suggested wording. Perhaps for consistency, the second reference to Australia should also be changed to the ACCC so the sentence would read:

"The Commerce Commission also has cooperation instruments with the Commissioner of Competition in Canada (also signed by the Australian Competition and Consumer Commission), and the Chinese Taipei Fair Trade Commission (also signed with the ACCC)."

UNITED STATES

Q1 The Secretariat's Report states, "Regulatory review has proceeded on an ad hoc basis across the various sectors and ministries. However, in its post-election plan, the new Government signalled its intention to begin a regulatory review programme to identify and remove inefficient and superfluous regulation." What is the status of the Government's "regulatory review"?

Answer: Initiatives that have already been put in place to improve the quality of regulation include: - Setting up the Regulatory Review Programme for major and pervasive regulation for 2009 and 2010 , comprising:

Review is underway or in implementation Review in 2009 (most already commenced) Proposed review in 2010 stage

Climate Change Response Act Building Act Financial Market Regulation Raw milk regulations Election commitments on Employment Local government regulations Resource Management Act (RMA) (Phase 1) Relations Act amendments Occupational licensing Foreshore and Seabed Act Holidays Act Overseas Investment Act and Regulations Resource Management Act (RMA) (Phase 2) Telecommunications Act Weather Tight Homes Resolution Services Act Electricity institutional arrangements Food Safety Rule review Also work on Hazardous Substances and New Organisms Act (HSNO)

- Identifying the first tranche of inefficient and superfluous regulations for immediate removal; this will be an ongoing process resulting in regular Regulatory Reform Bills; and - Establishment of a Regulatory Task Force to progress a Regulatory Responsibility Bill, aimed to increase transparency around the principles of responsible regulatory management that apply to Government policies and accountability against those principles.

Consideration is currently being given to the Government making some explicit commitments about regulation and strengthening the existing arrangements for assuring the quality of regulation. The aim would be to change the state sector's attitude and approach to regulation, and ultimately reduce the amount of poor quality regulation, reduce the flow of regulation (primary, secondary and tertiary) and reduce regulatory costs.

Q2 According to the Secretariat, the Government decided in June 2008 to strengthen the regulatory management system and establish "a more strategic approach to managing the impact of

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regulation on economic performance." In so doing, Departments "also consult domestic business stakeholders at an early stage on potential policy proposals." At what point are all business stakeholders consulted on such proposals? How does the government define "domestic business stakeholders"? What is the status of the Government's undertaking?

Answer: There are no specific requirements about the point at which businesses should be consulted. The Code of good Regulatory Practice which was endorsed by Cabinet in 2007 includes the following statement about consultation:

"Public consultation should occur as widely as possible, given the circumstances, in the policy development process. A well-designed and implemented consultation programme can contribute to better quality regulations, identification of the more effective alternatives, lower costs to business and administration, ensure better compliance, and promote faster regulatory responses to changing conditions."

'Domestic business stakeholders' are simply businesses with operations and interests in New Zealand that are affected by proposals. Consultation with them occurs through peak bodies, industry associations or sometimes directly with individual businesses.

Q3 According to the Secretariat's report, "Although a comparison between the bound and applied tariffs is not possible because of differences in nomenclature and in types of duty in certain lines (e.g. binding in alternative specific or compound duty and applied rate ad valorem) mainly in textile and clothing…" How, then, does New Zealand ensure that applied rates do not exceed bound rates? Why did the Government change the duty type with respect to these lines?

Answer: In New Zealand's unilateral review of post-2005 tariffs, of the 7450 Tariff items then in the New Zealand Tariff, 195 tariff items carried alternative specific rates. This meant that the duty paid was calculated either by way of the alternative specific rate (expressed in dollars and cents per unit) or the associated ad valorem rate - whichever rate returned the highest level of duty. Government decided that these alternative specific rates should be removed with effect from 1 July 2005 and the ad valorem rates remained the same, although subject to tariff reduction from 2006 to 2009. No compound or alternative specific tariffs now exist and this will ensure that our applied rates do not exceed bound rates.

A report to the Minister of Commerce (available at: http://www.med.govt.nz/templates/Multipage DocumentPage____14580.aspx#P1191_130263) provided the following reasons for removing alternative specific tariffs, namely: - Specific tariffs (including alternative specific tariffs) are an inefficient and non- transparent means of protection; - The present alternative specifics regime encourages capital to be retained in low value-added products. Maintaining alternative specifics for remaining manufacturers who benefit from the regime acts as a disincentive to these firms to move up the value chain; - The New Zealand apparel industry has undergone major transformation over the last 15 years. Removal of alternative specifics would therefore impact on fewer manufacturers. The dumping concerns of the early 1990s appear to be of less importance to the apparel industry given the industry's move away from production which competes directly with low cost imports; and - The removal of alternative specific tariffs would result in approximately 20% of low-cost garments paying less duty which should flow through to price reductions for consumers. Removal would be of particular benefit to lower socioeconomic groups

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who disproportionately bear the cost of the specific tariff - a higher percentage of the price paid for a clothing garment is the duty proportion.

Q4 According to the Secretariat, "Major reviews of provisions affecting domestic and imported foods were initiated in 2003. The two reviews have largely been completed and recommendations have been made to the Government. The outcomes of both reviews will be developed into legislation that will put in place a food regulatory programme for the whole domestic food industry that takes a risk-based approach, provides for the comprehensive and targeted regulation of imported food, and ensures the delivery of safe and "suitable" food in New Zealand."

Q4-1(a) What did these two reviews (of imported and domestic foods) find?

Answer: The reports on both reviews were substantive and have been published on the NZFSA website. Specifically for the domestic food regime there is confusion about the role of the regulators involved in food safety (central and local government) and the need for regulatory intervention; there is inconsistent controls in some areas and an inconsistent regulatory impact on food businesses.

For domestic food the policy proposals can be found at: http://www.nzfsa.govt.nz/policy-law/ projects/domestic-food-review/dfr-position-paper/index.htm.

For the imported food review the report can be found at: http://www.nzfsa.govt.nz/imported-food/ imports-portfolio/ifr-web-plan-april07-reports.htm.

Q4-1(b) What aspects of the Government's findings require legislation in order for a food regulatory program "for the whole domestic food industry" to be put in place?

Answer: This relates to steps to harmonise the existing food legislation within New Zealand, including the Animal Products Act 1999 and the Food Act 1981 to remove duplication and improve the interface between them. The above reports provide further information on this.

Q4-1(c) Why is imported food highlighted for "comprehensive and targeted regulation"?

Answer: As identified in the Imported Food Report (refer link above) the current arrangements are not responsive enough and need improving.

Q4-1(d) Does the New Zealand Government plan to subject imported food and domestic to the same risk-based analysis?

Answer: Yes. All food sold in New Zealand, whether it is produced domestically or imported, will need to meet the New Zealand standard to ensure it is safe and suitable.

In doing so NZFSA is progressively toward further removing traditional barriers to trade with more emphasis being placed on exporting country assurances (trust and confidence in the exporting party). Ultimately NZFSA see mutual recognition of food production systems with trusted trading partners as the ultimate recognition of this trust and mutual confidence. For example shellfish export to New Zealand from the US need only to prove origin US for import clearance (public health).

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Q4-1(e) We are also interested in the Government's goal to ensure the delivery of safe and "suitable" food in New Zealand. How does the Government define "suitable" in this context? What, in the Government's view, constitutes a "suitable" food?

Answer: Suitability includes the composition, labelling, identification and condition of food but does not include matters that are directly related to food safety, or matters that are related to the food's quality requirements for commercial reasons. It may include matters relating to the composition, such as the presence of a substance that would be unexpected or unreasonable. A suitable food is one that meets New Zealand's applicable food standards.

Q4-2 The Secretariat Report states that "MAFBNZ, inter alia: delivers economic, environmental, and social analysis underpinning biosecurity interventions; designs the interventions and develops the standards to best manage risks at the border; clears incoming cargo from overseas; and designs interventions and develops standards for the management of post-border biosecurity risks".

The United States understands the importance of assessing biosecurity risks, and appreciates New Zealand's use of science-based analysis in developing standards to manage those risks. Please explain what the "social analysis" underpinning biosecurity interventions entails.

Answer: Social analysis underpinning biosecurity interventions refers to the work undertaken to measure efficiency and effectiveness of communication of biosecurity interventions and standards, and public compliance with those standards. In New Zealand's experience, this type of social analysis of biosecurity interventions is important in refining how the various tools available to us are used most efficiently to achieve the biosecurity outcomes sought.

Q5 The Secretariat's report states, "According to New Zealand's latest notification to the WTO, since 2004, Zespri Group Limited has been the only state-trading enterprise (STE) in operation in New Zealand; this entity has special export authority, i.e. not accorded to other exporters of kiwifruit destined for markets other than Australia... None of the other state-trading enterprises notified in New Zealand's previous notification (in 2001) are now STEs due to legislative changes." We request that New Zealand promptly notify this and any other STEs in accordance with Article XVII of GATT 1994 and the Understanding to the Working Party on State Trading Enterprises, as it appears that New Zealand has not submitted a new and full notification on its STEs since 2004. Can New Zealand please indicate when its 2006 and 2008 new and full notifications will be submitted to the Working Party for Member review?

Answer: New and full notifications for STEs for 2006 and 2008 were submitted by New Zealand to the Working Party for Member review on 6 May 2009. These notifications were circulated to members on 12 May 2009. The document references are G/STR/N/11/NZL and G/STR/N/12/NZL. New Zealand is up to date with its notifications for STEs.

Q6 According to the 2003 Secretariat report (WT/TPR/S/115), exclusions from patentability is one of the issues considered under a 2003 review of the Patent Act 1953 prior to the introduction of the Patents Bill to replace the 1953 Act. Could New Zealand comment specifically on what exclusions, if any, are being considered as part of the pending legislation?

Answer: The Patents Bill, which has recently received its first reading in Parliament and has been referred to a Parliamentary Select Committee, provides for the following exclusions from patentability:

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- Inventions, the commercial exploitation of which, would be contrary to public order or morality; - Human beings, and biological processes for their generation; - Methods of medical treatment of human beings, and methods of diagnosis practiced on human beings; - Plant varieties. Further detail on the reasoning behind these exclusions can be found on the Ministry of Economic Development website at this address: http://www.med.govt.nz/templates/ContentTopic Summary____1317.aspx.

Q7 In its 2003 TPR, New Zealand indicated that patent term restoration for pharmaceutical products due to regulatory delays was an area under review. Is there such a provision in the Patent Bill and if not, what was the reason for not including this provision?

Answer: The Patents Bill does not include a provision for patent term restoration for pharmaceutical products – the patent term is twenty years from the date of filing of a patent application, with no provision for extension. The question of patent term restoration for pharmaceutical products was reviewed in 2003. A discussion document was released and submissions from interested parties were sought. The discussion document can be found here: http://www.med.govt.nz/templates/MultipageDocumentTOC ____1451.aspx. After considering the submissions, the government concluded that the likely costs would exceed the likely benefits and decided that no further work be carried out on this issue.

Q8 According to the Secretariat's report, compulsory licenses in New Zealand are "not necessarily exclusive." Does this mean that a compulsory license could be exclusive?

Answer: Section 46(4)(a) of the Patents Act 1953, provides that any compulsory license issued under this section is not exclusive.

Q9 The Secretariat report indicates that a review of the Plant Variety Rights Act was completed in 2003 and that a draft Plant Variety Rights Amendment Bill was prepared for public consultation in 2005. However, introduction of the Bill has been deferred until the Waitangi Tribunal has completed its report on the "WAI 262" Treaty of Waitangi Claim. Can New Zealand indicate when this report is expected to be complete? When does New Zealand expect the Plant Variety Rights Amendment Bill to be passed?

Answer: At this stage it is not possible to say when the Waitangi Tribunal will complete its report on the WAI262 claims; consequently it is not possible to give any indication of when the Plant Variety Rights Amendment Bill will be introduced.

Q10 The Secretariat report indicates that when passed, the Plant Variety Rights Amendment Bill will provide for enhanced rights for plant variety rights owners, comparable with those provided under the 1991 revision of the UPOV Convention. Can New Zealand comment on whether ratification of UPOV 1991 will occur once the Plant Variety Rights Amendment Bill has been enacted?

Answer: Ratification of UPOV 1991 is likely to be considered once the Plant Variety Rights Amendment Bill has been passed.

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Q11 The Secretariat report indicates that compulsory licenses for use of a design may be issued at any time after registration if an application is made because the design is not applied in New Zealand. How does New Zealand ensure that protection is provided for industrial designs that are new or original?

Answer: New and original designs may be registered under the Designs Act 1953. Registration gives the proprietor of the registered design the exclusive right to exploit the design. New Zealand does not provide for an unregistered design right. Section 14 of the Designs Act 1953 provides for the issue of compulsory licenses over registered Designs. The grounds for issue of a compulsory license are that the design is not being applied (used) in New Zealand. Compulsory licenses cannot be issued over designs which have not been registered in New Zealand. Few, if any compulsory licenses have been issued under section 14 of the Designs Act 1953.

Q12 According to the Secretariat, "The authorities may also use the design either free of any royalty payments or upon agreed terms with the design holder." How does New Zealand ensure adequate remuneration for any unauthorized use of a patent?

Answer: Section 16 of the Designs Act deals with the issue of Crown use of designs. Section 16(2) gives the Crown the right to use the design free of royalties if: i) The use occurs before the date of registration of the design; and ii) The Crown has become aware of the design other than through communication of the design from the registered proprietor.

Once a design has been registered, or if, prior to registration, the design was communicated to the Crown by the proprietor, the Crown may only use the design on terms agreed with the proprietor. Any disputes will be decided through the Courts.

Q13 According to the Secretariat's report (paragraph 117), New Zealand has decided to ratify a number of IPR related treaties since the last TPR. Now that amendments to the Copyright Act have been implemented, does New Zealand have any plans to join the WIPO "Internet Treaties" (WIPO Copyright Treaty and WIPO Performances and Phonograms Treaty)?

Answer: The Government has not yet considered the question of whether New Zealand should join the WIPO "Internet Treaties".

Q14 What is the status of New Zealand's multi-year effort to try to regulate mobile termination rates? When does New Zealand expect that these rates will reach cost-oriented levels?

Answer: In New Zealand, the Commerce Commission is the national telecommunications regulator with responsibility for undertaking investigations and making recommendations to the Government if it considers that regulation of a given telecommunications service is necessary. The Minister responsible for telecommunications matters can then accept, reject or seek Commission reconsideration of the recommendations.

In the period 2004-2006, the Commerce Commission studied the issue of fixed-to-mobile termination services (voice only), and in April 2006 recommended that the Government regulate this form of mobile termination in a manner that would have been cost-based (TSLRIC). Under delegation from the Minister for Communications, the Minister of Economic Development rejected the Commission's

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recommendation in favour of Deeds Poll entered into by the then existing mobile network operators, Telecom NZ and Vodafone. These Deeds are legally binding commitments to reduce fixed-to-mobile termination rates and pass through the reductions to retail customers. The New Zealand Government considers that its actions were fully compliant with its international commitments, notably because the fixed-to-mobile rates agreed in the Deeds Poll accorded with the Commerce Commission's assessment, at the time, of the likely evolution of fixed-to-mobile termination costs.

In the period 2008-2009, the Commission has been studying the issue of mobile termination generally, including both fixed-to-mobile and mobile-to-mobile termination, and voice and SMS. The Commission is due to make recommendations to the Government on each of these matters in December 2009. Early indications are that the Commission will recommend cost-based regulation of all these forms of mobile termination, with immediate effect (i.e. without a glide-path). Any such recommendations, if made, would then be subject to the agreement of the Minister for Communications, pursuant to Clause 6 of Schedule 3 of the Telecommunications Act, and then require a "standard terms determination process" through which the Commission will define the precise terms of the regulation, including the exact price that apply.

In this context, if the Commission recommends, and the Minister accepts, cost-oriented mobile termination rates, we do not anticipate them entering into force before mid-2010.

JAPAN

Q1 The Secretariat reports describes the Overseas Investment Act 2005 which will be reviewed in 2009. Please explain in which specific sector the Government of NZ expects the Overseas Investment Act to further promote overseas investment. In addition, please indicate specific improvement to be made by the Government in the sector concerned.

Answer: There is no specific sector in which the New Zealand government wishes to promote overseas investment. The review of the Overseas Investment Act has a general aim of making foreign investment in New Zealand simpler and more attractive.

Q2 With regard to fish caught by NZ flag vessel in foreign waters, please indicate which country is regarded as the origin of such fish according to the Customs Act in NZ. In addition, please provide information on article of the Customs Act as the basis of this decision.

Answer: Fish caught in foreign waters by New Zealand flagged vessels are deemed to originate in the relevant foreign country for the purposes of determining preferential or non-preferential rules of origin.

Q3 Paragraph 55 in page 89 of the Secretariat report explains under the new regulation, in order to be licensed in New Zealand insurers (domestic and foreign owned) will: require minimum capital of NZ$2 million; have to meet New Zealand actuarial standards, etc. Paragraph 57 in page 89 of the Secretariat report, however, notes that if foreign insurers are fully compliant with their home-country regulator's prudential requirements, the RBNZ will have discretion to accept compliance with these requirements and exempt these insurers from certain aspects of New Zealand's requirements. In this regard, could NZ clarify whether requirements by new insurance regulation are not applied to foreign insurers which are fully compliant with their home-country regulator’s prudential requirements?

Answer: The Insurance regulations are still being finalised – for more detail please go to http://www.rbnz.govt.nz/finstab/nbdt/insurance/.

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ADDITIONAL WRITTEN QUESTIONS RECEIVED

KOREA

Q1 According to paragraph 69, New Zealand has been active in developing and promoting APEC's Regional Economic Integration agenda and the concept of a Free Trade Area of the Asia-Pacific (FTAAP).

Q1-1 What has been New Zealand's previous efforts to promote the FTAAP?

Answer: Since the FTAAP concept was first broached by the APEC Business Advisory Council and then by APEC Ministers and Leaders in 2006, New Zealand has worked with other APEC economies to develop the FTAAP concept and build a consensus about exploring it further.

It has done this primarily by contributing to the various workstreams agreed by Ministers at the end of 2007 and implemented since then These include a study of the convergences and divergences among current FTAs and RTAs in the region, an inventory of issues that would need to be considered before an FTAAP negotiation could be launched, a study of current literature on the FTAAP concept, analysis of the benefits of an FTAAP and discussion about the alternative modalities for achieving an FTAAP including docking, merging or enlarging current FTAs or RTAs in the region.

Q1-2 Does the New Zealand Government have specific plans to further promote the FTAAP? If so, how?

Answer: New Zealand will continue to cooperate with other APEC members to implement the FTAAP work programme and explore how this work programme might be further developed to deepen analysis of a possible FTAAP.

Q2 According to the Secretariat Report, inward FDI exceeded outward FDI between 2003/04 and 2006/07. However, New Zealand recorded a net outflow in 2007/08 due to a sharp increase in outward FDI and drastic decrease in inward FDI. Could New Zealand further elaborate on the specific reasons for this net outflow in 2007/08?

Answer: New Zealand is a relatively small economy and individual instances of high value merger and acquisition activity can have significant impacts on the statistics. This is the case for both foreign direct investment (FDI) into New Zealand, and New Zealand direct investment abroad (NZDIA). In the year ended March 2008, there were a number of significant value acquisitions of overseas located enterprises by resident New Zealand direct investors, resulting in the relatively large outflow of NZDIA that year. The $4.2 billion inflow of FDI in 2008 followed the $12.5 billion inflow in 2007, the fluctuation reflecting relatively high levels of merger and acquisition and other activity by foreign direct investors in the 2007 year.

Comparing the main features of the $4.5 billion outflow of NZDIA in the year ended March 2008, with the NZDIA of $2.2 billion in the March 2007 year: - 2008 saw significant merger and acquisition activity. A number of large value overseas located enterprises were acquired by New Zealand resident direct investors. There was a lower level of this type of activity in the 2007 year.

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- During the 2008 year a number of resident direct investors injected additional capital (equity and debt) into their overseas subsidiaries, preceded by a lower level of this type of direct investment abroad activity in the 2007 year. - Retained earnings accruing to New Zealand resident direct investors from their overseas direct investees were higher in the 2008 year than in the 2007 year.

Comparing the main features of the $12.5 billion inflow of FDI in the March 2007 year with the $4.2 billion inflow in the March 2008 year: - 2007 saw significant merger and acquisition activity. A number of large and relatively small value New Zealand entities were acquired by non-resident direct investors. The 2008 year saw lower levels of this type of activity. - During the 2007 year a number of foreign direct investors injected additional capital into their New Zealand subsidiaries, followed by a lower level of this type of activity in the 2008 year. - Retained earnings fell in the 2008 year compared with 2007, reflecting higher distributions of dividends to foreign direct investors in 2008.

Q3 It is stated that "all New Zealand legislation must be published and on sale at a reasonable price". Furthermore, the related footnote states that it may be downloaded free of charge from the website www.legislation.govt.nz. In relation to the above, could New Zealand further elaborate on the scope of "all New Zealand legislation"? Does it only encompass legislation enacted by the legislature (Parliament), or includes any/all administrative orders issued by the executive government?

Answer : The www.legislation.govt.nz website includes the following legislation: - Acts of Parliament - Regulations - Bills (Government Bills, Members' Bills, Local Bills, and Private Bills) - Supplementary Order Papers (SOPs)

The website does not have: - Certain types of regulations (including some rules, codes, and other legislative instruments). Most of these are available free of charge on other websites. - Some types of decisions made under Acts (eg rulings, designations, or appointments) that are published in the Gazette or in other ways by government organisations - Decisions of courts - International treaties and conventions (unless the text is set out in an Act or Regulation) - Local authority bylaws These are usually available on other websites.

Q4 In regards to the "investor test",

Q4-1 Could New Zealand further elaborate on what is the purpose of the "investor test"?

Answer: The purpose of the investor test is to determine whether the investor has business experience and acumen, financial commitment to the investment, is of good character and is not a person who would not be eligible for a permit or exemption under New Zealand's immigration legislation.

Q4-2 In judging "character, business acumen, level of financial commitment", what is the benchmark used?

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Answer: The Overseas Investment Office publishes detailed guidance for investors about the criteria they have to satisfy to meet these tests. This is available from www.linz.govt.nz/overseas-investment. In addition, section 19 of the Overseas Investment Act 2005 and section 57I of the Fisheries Act 1996 set out the factors to be taken into account in assessing whether a person is of good character, and states circumstances when a person will be deemed to be eligible for a permit or exemption under New Zealand's immigration legislation

Q4-3 What measures are taken to ensure that the test is conducted in an impartial manner?

Answer: The test is based on information provided by investors. The Overseas Investment Office or relevant Ministers then make an assessment as to whether the investor meets the investor test in accordance with the guidance and legislation referred to in the previous question.

Q4-4 During the past 3 years, how many 'investors' were deemed 'inappropriate' investors? What were the main reasons?

Answer: One application for consent was withdrawn by the investor when the Overseas Investment Office discovered that the investor had a significant criminal record.

Q4-5 What is the assessment on the benefits of this test? Has it produced positive results in weeding out inappropriate investors?

Answer: As noted above, this test ensures that investors in sensitive New Zealand assets are of good character, do not have significant criminal records or terrorist connections, have the necessary experience to manage any business and have the financial means to carry out the business.

Q5 In regards to investment including "sensitive land", there is an additional requirement in the name of "significant benefits" for New Zealand. As for fishing quota investments, there is a "national interest test".

Q5-1 Could New Zealand further elaborate on what constitutes "significant benefits" and "national interest"?

Answer: The factors for showing substantial and identifiable benefits and national interest are set out in the Overseas Investment Act 2005 and the Fisheries Act 1996.

Q5-2 Is there a benchmark used to determine "significant benefits" and "national interest"?

Answer: Each application is considered on its own merits, according to the factors set out in legislation.

Q5-3 What, in general terms, is the ratio of "Number of applications to rejection"?

Answer: Since 2001, 1993 applications have been decided under the Overseas Investment Act. 98% of these applications have been approved. No investments in significant business assets have been declined since 1984.

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Q6 According to the Secretariat Report, the New Zealand government added a new regulation to its 2005 Overseas Investment Act (OIA), enabling the OIO to maintain control of strategically important infrastructure on sensitive land.

Q6-1 What is the definition of "strategically important infrastructure"?

Answer: Strategically important infrastructure has not been defined.

Q6-2 What are the specific criteria for determining 'strategically important infrastructure on sensitive land'? What kinds of infrastructure do these standards apply to?

Answer: See above.

Q6-3 Since its introduction, how many applications have been rejected under the "strategically important infrastructure on sensitive land" criteria?

Answer: None.

Q7-1 Could New Zealand explain the rationale for performing pre-shipment inspections overseas for Japanese cars?

Answer: New Zealand seeks to mitigate the biosecurity risk associated with imported commodities offshore, where-ever possible. Risk analysis has identified imported vehicles as a pathway for entry of a number of high impact organisms which are not established in New Zealand. Most vehicles imported into New Zealand come from Japan and this has made it practical for us to develop off-shore systems in Japan.

Q7-2 Does New Zealand have plans to expand pre-shipment inspections on automobiles in the future? If so, what would be the criteria under which such decision is taken?

Answer: New Zealand will seek the most effective and efficient ways to implement biosecurity risk mitigation measures for the pathway. Efficiency will be determined in part by the number of vehicles from a particular source. There are currently no proposals to expand the pre-shipment inspection programme.

Q8-1 In light of the tariff preference provided under several bilateral trade agreements, and unilateral tariff preferences granted to many developing countries and LDCs, how many trading partners of New Zealand are subject to MFN tariffs? Could New Zealand provide a list of trading partners subject to MFN tariffs?

Answer: In respect of trading partners exporting to New Zealand in the calendar year 2008, 77 trading partners were not treated as less developed countries nor least developed countries nor were subject to a free trade agreement with New Zealand. Those trading partners are: American Samoa; Andorra; Antarctica; Armenia; Aruba; Austria; Azerbaijan; Bahamas; Bahrain; Barbados; Belarus; Belgium; Bermuda; Canada; Cayman Islands; Chinese Taipei; Cyprus; Czech Republic; Denmark; Estonia; Faroe Islands; Finland; France; French Guiana; French Polynesia; Georgia; Germany; Greece; Guadeloupe; Guam; Hong Kong, China; Hungary;

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Iceland; Ireland; Israel; Italy; Japan; Kazakhstan; Republic of Korea; Kuwait; Latvia; Liechtenstein; Lithuania; Luxembourg; Macau, China; Malta; Martinique; Moldova; Monaco; Montenegro; Netherlands; Netherlands Antilles; New Caledonia; Northern Mariana Islands; Norway; Poland; Portugal; Puerto Rico; Qatar; Reunion; Russia; San Marino; Serbia; Slovakia; Slovenia; South Africa; Spain; St Pierre & Miquelon; Sweden; Switzerland; Tajikistan; Ukraine; United Arab Emirates; United Kingdom; United States; Uzbekistan; Virgin Islands (U.S).

Q8-2 Could New Zealand provide further detail about the agreements with Canada and the United Kingdom referred to in paragraph 26? Are these agreements in compliance with GATT Art. 24?

Answer: The preferences in both agreements were grandfathered by virtue of Article I.2(a) of GATT as they were in force prior to GATT 1947 and are between GATT Annex A territories.

The Trade Agreement between the Government of New Zealand and the Government of Great Britain and Northern Ireland, with Appendix signed 12/08/1959 and entered into force (retrospectively) from 25/11/1958. (This Agreement was terminated on 01/01/1999. It superseded the Tariff Agreement between the United Kingdom and New Zealand, which entered into force on 20/08/1932 and was modified and supplemented by the Trade Agreement between the Government of New Zealand and the Government of the United Kingdom, which was signed and entered into force on 28/05/1957. The Trade Agreement between New Zealand and Canada entered into force on 24 May 1932 (superseded by the Agreement on Trade and Economic Cooperation between the Government of New Zealand and the Government of Canada of 25 September 1981).

The aim of the Agreement on Trade and Economic Cooperation between the Government of New Zealand and the Government of Canada was to contribute to "the development and expansion of international trade through the removal or reduction of barriers to trade' (preamble). The Agreement contains Articles covering: tariffs, rules of origin, dumping and subsidies, non-tariff measures, and agricultural, horticultural and fishery products. However, Article II confirms that nothing in the Agreement shall prejudice the rights and obligations of either Party under the GATT. The Agreement also provides for consultations on matters covered by the Agreement to take place between the parties at the request of either. The last such trade consultations took place in 2001.

The Trade Agreement between the Government of New Zealand and the Government of Great Britain and Northern Ireland aimed to "maintain mutually advantageous tariff preferences and... facilitate and extend commercial relations" between the UK and NZ (Article 1). It covered duty on goods from NZ to the UK and margins of preference for NZ goods; types of NZ goods to be imported without restriction into the UK until 31/05/1967; margins of preference for UK goods imported into NZ; consultation processes on any reductions in margins of preference by either party; consultation processes with the UK if NZ remitted, reduced or temporarily suspended duty on imports from other countries; full consultation at government level on agricultural production and marketing and on the UK's food import policies. The Agreement also covers its application or non-application to NZ dependencies and to then UK colonies etc.

Q9 The report states that "New Zealand has moved from using the RVC method to primarily the CTC method" since 2003. In this regard,

Q9-1 Could New Zealand elaborate on why this decision was taken? Q9-2 What were the major considerations in making this shift? Q9-3 As of today, what is the assessment of New Zealand on the shift from RVC to CTC?

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Answer: New Zealand's moved to the Change of Tariff Classification (CTC) approach to rules of origin because such approach has a number of distinct economic and trade-facilitation benefits; particularly in the context of increasingly globalised manufacturing models. These advantages include: - The ability to continually modify manufacturing practice in the face of changing cost structures and production efficiencies. - Predictability of outcome. - Lower transaction costs for business. - Lower administrative costs for governments. - The rules are fully transparent, and there is far less scope for differences of opinion between business and officials administering the ROO. - CTC is increasingly becoming the international norm under FTAs.

It is New Zealand's experience that the CTC approach has reduced the administrative burdens of both the government and business and business feedback has certainly endorsed this approach.

Q10 The report states that for unilateral preferences, ROO require that at least 50% of value addition takes place in New Zealand or the exporting country. On this item, is this rule applicable for all the unilateral preferences granted by New Zealand?

Answer: Assuming that "unilateral preferences" is referring to GSP and SPARTECA, i.e. non-reciprocal agreements then yes the rate is 50% based on an ex-factory cost calculation. Under SPARTECA Forum Island Countries may use Australian content to help achieve the 50%. If Australian content is used then there must be a Forum Island Country content of at least 25%. The apparel sector has a reduced threshold of 45%.

Q11 Para 45 illustrates the MRAs concluded by New Zealand. In this regard,

Q11-1 Could New Zealand elaborate whether there is a particular criteria that it uses to select its MRA partner countries? If not, how are MRA partner countries selected? Q11-2 As a follow up question, is there a criteria that it uses to select the areas(fields) for MRAs?

Answer: As New Zealand is highly reliant on trade, we are open to considering a wide range of trade facilitation arrangements with our trading partners, embodying principles from regulatory cooperation through to mutual recognition or equivalence. We consider these arrangements where they are appropriate to the bilateral trade and where there would be mutual benefit to both parties.

Typically, we seek to achieve greater certainty of market access and reduced transaction costs for traders, as well as improved regulatory outcomes: in particular, consumer safety. In recent years, our approach has evolved to embrace a wide range of arrangements that provide both trade facilitation and enhanced regulatory compliance outcomes, including some with asymmetric arrangements that best reflect and build on the strengths of trading partners' differing regulatory regimes.

Q12 Could New Zealand further elaborate on the "marketing reasons" that has necessitated the need for export prohibitions/restrictions for some horticulture products and kiwifruit?

Answer: The perishable nature of unprocessed horticultural produce and New Zealand's long distance from its key export markets necessitated the passing of the New Zealand Horticulture Export Authority Act 1987 (the NZHEA Act) in 1987 to enable growers and exporters of horticultural produce to

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co-ordinate their marketing activities so that export products met the minimum quality standards set by the industries themselves and/or met importing country requirements. No quantitative restrictions can be placed, in terms of number of exporters or the volume of exports, under the NZHEA Act. The kiwifruit industry was regulated for similar reasons.

Q13 In the view of New Zealand, what is the reason for the sudden surge in drawback and refund on duties between 2003/4 and 2007/8? More exports in certain products such as knitted apparel and clothing, tobacco, etc.?

Answer: The increase in drawback and refund on duties between 2003/04 and 2007/08 reflects an increase in the FOB value of exports in certain products.

Q14-1 Could New Zealand comment on the "policy reversal" with regards to SOEs? What considerations propelled this policy reversal?

Answer: Changes of policy in relation to privatisation likely reflect the differing approach brought in by a new Government at the time.

Q14-2 Are there plans to privatize the re-nationalized SOEs?

Answer: No.

Q14-3 With regards to para 99, could New Zealand elaborate on what concrete measures it has taken to ensure that SOEs operate as successful businesses? It is easy to say it should operate as a successful business; taking concrete steps to ensure that they do is another. In this context, acquaintance with the New Zealand experience would be helpful.

Answer: There are three main components to help ensure SOEs do operate as successful businesses: - Structure: SOEs have been set up as limited liability companies subject to the same legislation as private sector companies (the Companies Act). - Accountability: boards of directors are held responsible for the operating decisions affecting the performance of the SOEs and are directly accountable to the shareholding Ministers for SOE performance. - Monitoring: apart from the internal monitoring by officials there is a two stage performance reporting process involving two publically available documents – the Statement of Corporate Intent (SCI) and the Annual Report. In particular, the SCI serves as a public performance contract between the SOE board of directors and shareholding Ministers. It specifies the performance expected of the SOE for which the directors will be held accountable.

Q15 Paragraphs 59 and 62 refer to the requirement of Telecom New Zealand to unbundle the local loop. In this regard, has the unbundling begun? If so, could New Zealand provide detailed information on the procedures that were implemented to unbundle the local loop? If not, what is the time-frame for initiation of this process? What will the procedure be?

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Answer: Local Loop Unbundling6 (LLU) has been implemented in New Zealand. At the end of the September 2008 quarter there were over 12,000 unbundled lines in New Zealand, mostly in Auckland (New Zealand’s largest city).

The 2006 Telecommunications Amendment Act introduced a number of regulated services including LLU, Sub-Loop Unbundling7 (SLU), and Unbundled Bitstream Access8 (UBA). Final determinations outlining the price and non-price terms at which Telecom New Zealand must make LLU and UBA services available were made in late 2007. A draft SLU determination was released in September 2008 and is expected to be finalised by the end of this year.

Links to documents outlining the processes followed for making the LLU and UBA determinations are available on the following websites: http://www.comcom.govt.nz//IndustryRegulation/ Telecommunications/StandardTermsDeterminations/UnbundledLocalLoopService/ContentFiles/ Documents/STD%20timeline0.pdf http://www.comcom.govt.nz//IndustryRegulation/Telecommunications/StandardTermsDeterminations/ UnbundledLocalLoopBackhaulService/ContentFiles/Documents/Backhaul%20STD%20timeline.pdf

An overview of the general process for making determinations on regulated services is available at: http://www.comcom.govt.nz//IndustryRegulation/Telecommunications/StandardTermsDeterminations/ ContentFiles/Documents/Overview%20of%20STD%20process0.pdf

Further information on unbundled services in New Zealand is available at the following websites:

Local Loop Unbundling Standard Access Service http://www.comcom.govt.nz/IndustryRegulation/Telecommunications/StandardTermsDeterminations/ UnbundledLocalLoopService/DecisionsList1.aspx Co-location Service http://www.comcom.govt.nz/IndustryRegulation/Telecommunications/StandardTermsDeterminations/ UnbundledLocalLoopCoLocationService/DecisionsList.aspx Backhaul Service http://www.comcom.govt.nz/IndustryRegulation/Telecommunications/StandardTermsDeterminations/ UnbundledLocalLoopBackhaulService/DecisionsList.aspx

Unbundled Bitstream Access Standard Access Service http://www.comcom.govt.nz/IndustryRegulation/Telecommunications/StandardTermsDeterminations/ UnbundledLocalLoopService/DecisionsList.aspx Backhaul Service http://www.comcom.govt.nz/IndustryRegulation/Telecommunications/StandardTermsDeterminations/ UnbundledBitstreamBackhaulService/DecisionsList.aspx

Sub-loop Unbundling http://www.comcom.govt.nz/IndustryRegulation/Telecommunications/StandardTermsDeterminations/ SubloopUCLLservice/DecisionsList.aspx

6 LLU allows companies to provide services to their customers from Telecom's exchanges. 7 SLU allows companies to provide services to their customers from Telecom's distribution cabinets. 8 UBA allows companies to offer own-branded broadband services to their customers over Telecom's Digital Subscriber Line (DSL) access lines.

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THAILAND

Q1 Referring to paragraph 73 on page 55 of the report by the secretariat, it is mentioned that tariff concessions may be granted to importers and manufacturers if they can demonstrate that the domestic content of the locally produced "suitable alternative" product is not less than 25% of its ex-factory cost of production. Please kindly explain in more detail about this measure?

Answer: In respect of reference 99 concessions (see paragraph 29 on page 45 of the WTO Secretariat's TPR report), we confirm that concessions are granted where the domestic content of locally produced goods is less than 25% of its ex-factory cost of production. There are typographical errors in paragraph 10 on page ix, paragraph 28 on page 44 and paragraph 73 on page 57 of the WTO TPR report, where references to "not less than 25%" of a good's ex-factory cost of production should refer to "less than 25%". There are some additional words in paragraph 73 on page 57. The second sentence should read: "However, tariff concessions may be granted to importers if the domestic content of the locally produced "suitable alternative" product is less than 25% of its ex-factory cost of production (section (2)(iii)(e)) above.

Q2 Referring to paragraph 76 on page 56 of the report by the Secretariat, it is mentioned that export prohibitions and restrictions are maintained for several reasons which are related to health and safety, compliance with international obligations under various agreements, management of trading partners' import requirements, and marketing. Please kindly explain in more detail about "the marketing reasons" and give examples of horticulture products which have been prohibited or restricted to export with these reasons?

Answer: The perishable nature of unprocessed horticultural produce and New Zealand's long distance from its key export markets necessitated the passing of the New Zealand Horticulture Export Authority Act 1987 (the NZHEA Act) in 1987 to enable growers and exporters of horticultural produce to co-ordinate their marketing activities so that export products met the minimum quality standards set by the industries themselves and/or met importing country requirements. No quantitative restrictions can be placed, in terms of number of exporters or the volume of exports, under the NZHEA Act. The kiwifruit industry was regulated for similar reasons.

Horticulture products which are regulated by the Horticulture Export Authority include: avocado, blackcurrant, boysenberry, chestnut, kiwifruit (to Australia), nashi asian pear, persimmon, buttercup squash, summerfruit, tamarillo and truffles.

Q3 Referring to paragraph 12 on page 75 of the report by the secretariat, it is mentioned that the Zespri Group Limited which is owned by kiwifruit growers, has been authorized by the New Zealand Kiwifruit Board, to have the automatic, but not sole, right to export New Zealand grown kiwifruit to all markets (except Australia). However, all other exporters must seek approval from the Board to be able to export kiwifruit in collaboration with Zespri, which effectively means that Zespri has a near monopoly on exports (for markets other than Australia).

Q3-1 Please kindly explain how to ensure that end-users, both processors and consumers, have the opportunity to purchase kiwifruit at international competitive prices?

Answer: ZESPRI is a commercial entity and operates as such. End-users (processors and consumers) all have an equal opportunity to purchase fruit from ZESPRI, or its competitors, in world markets. Sales are limited by the seasonal supply window, and will depend on prices and quantities available for sale in any given season.

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Within New Zealand there are no restrictions on either the buying of kiwifruit from growers or the wholesale marketing of kiwifruit to retailers for sale and consumption on the domestic market. As far as pricing of kiwifruit purchased from growers is concerned, it is important to note that ZESPRI is a company owned and controlled by grower suppliers and the Board of directors is elected directly by the grower shareholders. ZESPRI is limited in its ability to leverage its monopsony power in the domestic market because it is owned by the growers. There is no incentive on the company to underprice or overprice fruit purchased from growers or marketed on behalf of growers. There are no tariff restrictions on the import of kiwifruit into New Zealand, and New Zealand consumers have the opportunity to purchase non-New Zealand kiwifruit.

Q3-2 Please kindly explain how to ensure that the operation of Zespri does not create trade distortions to the world agricultural market.

Answer: ZESPRI receives no government payments nor any other form of financial assistance from government. It sells kiwifuit in international markets in competition with other countries. There are no tariffs on kiwifruit and ZESPRI does not have a monopoly on the domestic market - it cannot therefore, use any instrument to distort export markets.

BRAZIL

Q1 Although New Zealand has one of the lowest average MFN applied tariff rates in the OECD, at just 2.4% on the industrial products, a considerably high tariff rate is applicable to textiles, clothing and leather products, sectors of crucial export interest to many developing countries. Tariff peaks and escalation are also evident in these three sectors. Does the government intend to reduce tariffs in these sectors, and what are the plans to address tariff peaks and escalation?

Answer: Tariffs of 12.5% currently apply to carpet, clothing, certain footwear, ambulances and motor homes. Tariffs for these goods are subject to a unilateral tariff reduction programme and under that programme the 12.5% tariff will reduce to 10% on 1 July 2009. At this stage no decisions have been made about when or whether there should be a further unilateral tariff review.

Q2 Could New Zealand please describe its vision of liberalization and structural reform for the East Asia region, in light of the current regionalization development. Considering its desire to deepen the relationship with its partners in the East Asia and even Pan-Pacific regions, New Zealand's preference to implement its liberalization will be through a multilateral or a bilateral approach?

Answer: New Zealand attaches top priority to multilateral approaches to trade liberalisation including removal of non-tariff barriers.

At the same time we realise that regional bilateral or plurilateral building blocks can contribute to a freer trading regime if they are comprehensive, WTO-plus and are committed to open regionalism. The AANZFTA is an example of the latter.

New Zealand is working with others to advance A Comprehensive Economic Partnership in East Asia (CEPEA), the Free Trade Agreement of the Asia Pacific (FTAAP), as well as the Trans Pacific Partnership Agreement as models of open regionalism.

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Q3 The Free Trade Agreement between New Zealand and China was signed on 7 April 2008 and entered in force on 1 October 2008. Which goods are included in import-sensitive manufacturing sectors? When will those goods be phased out entirely?

Answer: The New Zealand-China FTA provides China with improved access to the New Zealand market but at the same time provides time for New Zealand's sensitive sectors to adjust to tariff reductions.

The FTA tariff cuts are broadly consistent with phase outs under other FTAs. All of China's exports to New Zealand will eventually be duty-free. Specific outcomes include:

- Tariffs on the most highly traded clothing and footwear products and some textile products will be phased out on a linear basis by 2016; - Tariffs on carpet, the remaining clothing, footwear products and certain highly traded textile products will be phased out on a linear basis by 2014; - The FTA provides for phase outs for tariffs in the range of 6-12.5 percent by 2012. This includes products such as whiteware, steel, plastics and furniture. Some less sensitive textile and clothing products are also included in this category. New Zealand has retained a slower initial tariff phase out profile for particular steel and whiteware products to ensure that tariff reductions under the FTA go no faster than under the unilateral tariff reduction programme through to 2009.

The following table provides a summary of New Zealand’s elimination of tariffs.

Summary of New Zealand's Elimination of Tariffs Date for Tariff Elimination Percentage of Current Key Import Products Imports 2008* 38.5 37% of trade is already duty free 2012/2013 35.5 Steel, whiteware, plastics, furniture, tyres, plasterboard 2014 4.5 Clothing, footwear, carpets and some textiles 2016 21.5 Clothing and footwear

For more information on tariff reduction rates, please refer to pp.16-25 of the Guide to the New Zealand-China Free Trade Agreement.

Q4-1 How many tariff lines are covered by New Zealand's GSP? What is their share in total tariff lines?

Answer: All tariff lines are duty free for imports from least developed countries. As at 1 July 2008, the GSP scheme for less developed countries applied to 327 tariff lines, which represented 4% of tariff lines (10.6% of dutiable tariff lines) for the reasons explained in paragraph lll.27 of the Secretariat's report.

Q4-2 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: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q5 It is stated that Article 15.8 of the ANZCERTA allows one member state to request the other to take action against alleged dumping by a third country. Has a member state of ANZCERTA ever requested another member state to examine the possibility of taking such action? Please, indicate

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what kind of evidence should be presented by the requesting member state and the procedure that should be followed in this kind of exam.

Answer: Australia has requested that New Zealand examine the possibility of taking action on 4 occasions. New Zealand has never requested that Australia examine the possibility of taking action. New Zealand legislation relating to dumping and countervailing, the Dumping and Countervailing Duties Act 1988, requires that the evidence to be provided in a third country dumping application is, with all necessary modifications, the same as that for a normal dumping application by an industry located in New Zealand. The evidence relating to dumping, material injury and causal link is therefore examined in the same manner as for a normal dumping application.

Q6 As mentioned in the document above, "between 2002/03 and 2007/08, the services sector grew at an average annual rate of 3.9%, slightly faster than GDP growth. Consequently, the share of services in GDP remained static (at around 70% between 2002/03 and 2004/05), while its share of total employment increased (from 69.4% in 2003/04 to 70.5% in 2006/07). Within services, finance, insurance, and business services, and wholesale and retail trade are the two largest categories, accounting for 14.4% and 12.9% of GDP, respectively, in 2004/05 (Table I.2). Between 2003/04 and 2007/08, services exports grew to NZ$12.7 billion (approximately 26% of total exports of goods and services (Table I.4), while imports grew at an average annual rate of approximately 4.6% to NZ$12.5 billion, resulting in a decrease in the services surplus to NZ$0.5 billion. Travel, education, transport and business services have been the main services exports, but the range of exported services has diversified in recent years." Could New Zealand provide further information regarding the main imported services? What are those sectors and most important suppliers? Regarding the importing sectors, has New Zealand made full and comprehensive commitments on market access and national treatment to all four GATS modes of supply?

Answer: The main imported services are travel and transportation. The growth in total imports of services from 2003/04 to 2007/08 was driven by increases in these two categories, with travel being the most prominent. Travel services, which measures spending by New Zealand residents abroad, was up 46% from $2,900m in 2003/04 to $4,227m in 2007/08. Transportation services was up 17% from $3,470m in 2003/04 to $4,057m in 2007/08. There is no country information available for these two services categories.

Of the other services categories, the main increases from 2003/04 to 2007/08 were in computer and information services, construction, and management consultancy services and management fees. Growth in these categories has been driven by imports from Australia and the USA. Please see table 13 of the Balance of Payments and International Investment Position: Year ended 31 March 2008 release for a fuller picture.

New Zealand has an open economy and imports a range of services across a variety of sectors. New Zealand has strong existing UR commitments across key service sectors, (eg. travel - incorporating tourism/education related travel, transportation, construction and business services). In addition, our current revised offer includes improved commitments in a range of business services (including management consultancy and computer & related services), construction and transport. These commitments are offered with no limitations across modes 1-3, and in conjunction with an improved mode 4 offer.

Q7 Regarding the Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA), both countries are working toward the development of a Single Economic Market (SEM). What are the most recent achievements? How does the SEM affect New Zealand's trade negotiations?

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Answer: New Zealand and Australia share the long-term goal of a trans-Tasman Single Economic Market (SEM) to reduce the impact of borders on the flow of goods, services, capital, and people; to improve the business environment; and to enhance regulatory effectiveness. Recent achievements of the SEM include the signing of a treaty on Court proceedings and regulatory enforcement, the entry into effect of a world-leading regime on the mutual recognition of securities offerings, and an ambitious work programme under the Memorandum of Understanding on the Coordination of Business Law aimed at tackling business regulation in both countries. New Zealand and Australia are also currently engaged in work in the following areas, with a view to early conclusion: a Double Taxation Agreement, a Memorandum of Understanding on the Portability of Retirement Savings, a review of the trans-Tasman Mutual Recognition Arrangement, streamlining insolvency regulations in both countries, and a CER Investment Protocol.

With both CER and now the SEM, it was always intended that both Australia and New Zealand would continue to liberalise trade unilaterally, multilaterally through the WTO, and through Free Trade Agreements with other trade partners. To that end, while the SEM remains an important plank in New Zealand's work toward an improved trading environment, New Zealand's other trade negotiations, both multilaterally through the WTO and bilaterally through FTAs continue unaffected, and will continue to do so.

Q8 Could New Zealand indicate the coverage in both trade value and tariff lines of the ASEAN- Australia-New Zealand Free Trade Agreement (AANZFTA)? Could New Zealand describe the schedules of concessions by percentage levels?

Answer: The percentage of New Zealand's exports to other AANZFTA Parties, subject to tariff elimination, as well as the percentage of tariff lines eliminated by each Party under the AANZFTA is outlined in the table below.

New Zealand and Australia have committed to the elimination of 100% of tariffs under the AANZFTA.

3 Country Coverage of NZ Exports on Eliminated Lines Tariff Lines Subject to Elimination

1 Brunei Darussalam 100% 99% Cambodia 86% 88% Indonesia 99% 93% Laos 2 88% Malaysia 99% 96% Myanmar 99% 85% Singapore 100% 100% Thailand 100% 100% The Philippines 99% 95% Viet Nam 99% 90%

1 The agreement covers all of Brunei Darussalam's tariffs except for a short list of products (alcohol, tobacco, and firearms) that are exempted on moral, human health, and security grounds. 2 Recent import data from Laos is not available and a matching of export data to Laos' tariff data has not been performed. 3 Either immediately or via phasing.

Q9 According to the WTO Secretariat Report, trade negotiations are underway between New Zealand and the Gulf Cooperation Council (GCC). Could New Zealand elaborate more on the main elements of the agreement and indicate its coverage and schedules of concessions?

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Answer: New Zealand commenced negotiations with the Gulf Cooperation Council in July 2007. Five rounds of negotiations have been held to date. In accordance with New Zealand's usual approach to FTA negotiations, New Zealand is seeking a high-quality and comprehensive outcome covering goods, technical barriers to trade, rules of origin, customs procedures and cooperation, SPS, services, investment, government procurement, intellectual property, competition policy, trade and labour, and trade and environment.

Q10 Have the FTA negotiations that were being considered between New Zealand and Korea, New Zealand and Japan, New Zealand and India been launched? What is the current status of each one of them?

Answer: New Zealand Trade Minister Tim Groser and India's then-Commerce and Industry Minister Kamal Nath announced in February this year that, subject to the approval processes of both governments, FTA negotiations would commence as soon as possible. The New Zealand Cabinet has now agreed (30 March 2009) to enter into FTA negotiations with India, subject to India's own approval processes. If the Indian Cabinet also approves entry into negotiations, it is hoped that these will commence sometime in the latter half of this year.

New Zealand and Korea will hold a first round of talks in Seoul from 8-12 June 2009.

New Zealand's long term objective remains to conclude a bilateral FTA with Japan. Former Prime Ministers Clark and Fukuda met in May 2008 and agreed to undertake an authoritative joint study into a bilateral EPA. A joint Officials Group has been established to examine the Japan-New Zealand bilateral trade and economic relationship. It is New Zealand’s expectation that the Officials Group process will provide both governments with the information they need to decide whether to move to EPA negotiations in the future.

Q11 The TPR mentions that New Zealand has reduced its specific rates from 165 to only 6, and that it has extinguished the alternative specific tariff. Could New Zealand elaborate on the rationale behind this process (changes to ad valorem rates)? Is there any intent to totally eliminate the specific tariffs? The applied tariffs on "parts and components of machinery, appliance or equipment for which they have been designed" (Page 38, Paragraph 21, WT/TPR/216) do not seem to be clear, considering that its ad valorem rates seems to vary too much (32 levels of rates ).

Answer: In New Zealand's unilateral review of post-2005 tariffs, of the 7450 Tariff items then in the New Zealand Tariff, 195 tariff items carried alternative specific rates. The Government decided that these alternative specific rates should be removed with effect from 1 July 2005 and the ad valorem rates remained the same, although subject to tariff reduction from 2006 to 2009. No compound or alternative specific tariffs now exist.

A report to the Minister of Commerce (available at: http://www.med.govt.nz/templates/Multipage DocumentPage____14580.aspx#P1191_130263) provided the following reasons for removing alternative specific tariffs, namely: - Specific tariffs (including alternative specific tariffs) are an inefficient and non-transparent means of protection; - An alternative specifics regime could encourage capital to be retained in low value-added products. Maintaining alternative specifics for remaining manufacturers who benefit from the regime acts as a disincentive to these firms to move up the value chain;

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- The New Zealand apparel industry has undergone major transformation over the last 15 years. Removal of alternative specifics would therefore impact on fewer manufacturers. The dumping concerns of the early 1990s appear to be of less importance to the apparel industry given the industry's move away from production which competes directly with low cost imports; and - The removal of alternative specific tariffs would result in approximately 20% of low-cost garments paying less duty which should flow through to price reductions for consumers. Removal would be of particular benefit to lower socioeconomic groups who disproportionately bear the cost of the specific tariff – a higher percentage of the price paid for a clothing garment is the duty proportion.

At this time there is no intent to remove the remaining 6 specific tariffs although the specific tariffs on 6309.00.01 (Worn clothing) and 6309.00.11 (Worn Footwear) will reduce on 1 July 2009, under the current unilateral tariff reduction programme.

There are 32 tariff lines (not 32 levels of rates) which apply 'the rate applicable to the appliance or apparatus for which the parts have been designed'. If the (parent) appliance or apparatus has a rate of duty of Free, it is only fair that the parts attract the same rate. Similarly, if the (parent) appliance or apparatus has a rate of duty of 5%, it is only fair that the parts attract the same rate. We believe that this is a fair and consistent approach.

Q12 What percentage of imports of New Zealand is covered by goods and services from Less and Least developed countries supported on preferential trade tariffs?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

CHINA

Q1 According to the report, "No import restrictions, prohibitions or licensing requirements are in place.……"; "New Zealand has no barriers to exports…….". However, in Para. 11, "Details required for clearance of goods include: …permits for goods subject to import restrictions". Could New Zealand please clarify the scope and coverage of permits for goods subject to import restrictions?

Answer: Information on import prohibitions and restrictions that the New Zealand Customs service enforces at the border is contained in Customs Fact Sheet Number 5, available from www.customs.govt.nz/ library.

Q2 According to the Report, "New Zealand Customs Service makes extensive use of electronic data interchange (EDI) to speed up clearance times, promotes "tomorrow cargo logistics" by working with companies, and participates in single window initiatives aimed at developing and implementing single windows. The NZCS has a performance agreement with the New Zealand Government requiring compliant EDI applications for import and export to be processed within 30 minutes; manual applications are processed within 24 hours. According to the authorities, this target is achieved in around 99.5% cases (99.3% in March 2008), with an average turnaround of 7 (previously 12) minutes. All of New Zealand's import and export entries appear to be handled by EDI."

Q2-1 Could New Zealand please clarify whether electronic documents are legally binding in the extensive use of EDI to speed up clearance times?

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Answer: It is an offence against the Customs and Excise Act 1996 to submit an entry declaration that is erroneous in a material particular.

Q2-2 For Goods subject to import and export restrictions, are paper licenses also required? How long is the time needed for the clearance of import and export goods subject to licensing?

Answer: Customs' enforcement of import and export prohibitions is largely intelligence driven, using alerts on its computer system for specific goods covered by import or export prohibitions. For the majority of goods covered by import and export prohibitions, the alert triggers a requirement for the importer or exporter to enter a code and approval number on the entry declaration. In a limited number of cases (for example firearms, explosives, hazardous waste and ozone depleting substances) a hard copy of the approval to import or export will be required.

Q3 According to the Report, "Tariff concessions are granted whenever suitable alternative goods are not available from local producers and manufacturers or the domestic content of the locally produced item is not less than 25% of its ex-factory cost of production." Could New Zealand please clarify what is the relevance in granting tariff concessions with regard to suitable alternative goods not locally available and how to define the relevance between the two? Please provide more up-to-date information with regard to the real experiences in granting tariff concessions in this area and please use examples to illustrate.

Answer: We confirm that tariff concessions are granted where the domestic content of locally produced goods is less than 25% of its ex-factory cost of production. There are typographical errors in paragraph 10 on page ix, paragraph 28 on page 44 and paragraph 73 on page 57 of the WTO TPR report, where references to "not less than 25%" of a good's ex-factory cost of production should refer to "less than 25%".

Suitable alternative goods are defined as those which perform the same or a similar function to the imported goods for which a concession is sought; and where the imported goods would compete directly in the same market. Price and quality are not normally taken into consideration.

As an example, an imported glass melting furnace could be granted a tariff concession if glass melting furnaces are not available from New Zealand manufacturers. Similarly, a glass melting furnace could be granted a tariff concession if glass melting furnaces were to be manufactured in New Zealand but they had less than 25% local content (represented by New Zealand sourced materials, wages and factory overheads). An imported glass melting furnace would not, however, be granted if glass furnaces were manufactured in New Zealand with 25% or more New Zealand content.

Q4 According to the Report, "certificates of origin, although not a prerequisite to entry under preferential agreements, may form part of the importer's evidence presented to Customs if claim of preferential entry is challenged". Could New Zealand please clarify the criteria by which goods entitled for preferential entry are determined and what are the procedures?

Answer: The criteria and procedures by which goods are entitled for preferential entry are laid out in the relevant sections of New Zealand's preferential trade agreements. Preference can be claimed via self-declaration on an import entry. A claim for preference may then be verified during a post-entry audit process.

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Q5 According to the Report, "Telecom New Zealand was required to divide its operations into at least three different units: a network business that sells access to the copper network on an equal basis to Telecom New Zealand and other operators; a regulated wholesale business that sells wholesale broadband access services on the same conditions to Telecom New Zealand's retail subsidiaries and other competitors; and one or more retail business units". Could New Zealand please indicate the rationale of this division requirement?

Answer: The operational separation of Telecom was required by Parliament via the 2006 amendment to the Telecommunications Act 2001, which sets out the purposes of operational separation: - To promote competition in telecommunications markets for the long-term benefits of end-users of telecommunication services in New Zealand; - To require transparency, non-discrimination, and equivalence of supply in relation to certain telecommunications services; and - To facilitate efficient investment in telecommunications infrastructure and services.

Separation will increase the transparency of Telecom's business operations, and remove or limit the incentives and ability of Telecom to engage in discriminatory behaviours that lessen, damage or exclude competition in downstream markets.

Further information on the operational separation of Telecom is available at the following website: http://www.med.govt.nz/templates/ContentTopicSummary____26310.aspx.

Q6 Could New Zealand please indicate the relationship between these three units? Are they separate subsidiaries, branches or other business forms?

Answer: The Access Network Services unit must operate as a stand-alone (separately branded) arms-length unit. This unit has subsequently been branded "Chorus" by the Telecom Group (www.chorus.co.nz). Chorus controls all of Telecom's present and future access network assets, including fibre and wireless access assets, and must make these network assets available for other telecommunications providers to use on an Equivalence of Inputs (EOI) basis9.

The Wholesale unit must operate at arms-length from the Retail unit (i.e. it must provide relevant regulated services on an EOI basis), and the Retail unit must operate at arms length from any fixed network business.

9 EOI is one of the cornerstones of operational separation as it removes the ability of Telecom to discriminate in favour of itself. It means that Telecom has to provide relevant regulated services at the same price, on the same technical and commercial terms, using the same operational support systems and process, to all market participants including itself. Telecom does not have to provide relevant non-regulated services to other providers other than on a voluntary basis, but if it chooses to do so it must be on a non-discriminatory basis.

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The diagram below illustrates the new operating model:

Further information on the operational separation of Telecom is available at the following website: http://www.med.govt.nz/templates/ContentTopicSummary____26310.aspx.

Q7 According to the Report, "the cost of mobile usage in New Zealand remains higher than the OECD average, which is due in part to high mobile-to-mobile termination rates. Another factor that inhibits competition is that the two incumbent market operators use different technologies so that switching operators entail the extra cost of a hand set." Could New Zealand please indicate whether it has any plan to allow more competition in the mobile business operation?

Answer: New Zealand mobile telecommunications market is fully open to competition. The Government expects competition in the mobile telephony sector to increase in the coming months, for the following reasons: - A third mobile network operator, branded “2degrees”, has indicated that it will enter the market in August 2009. - The mobile network operator using the less popular CDMA technology, Telecom New Zealand, launched a W-CDMA / HSDPA network in May 2009, and intends to switch off its CDMA network by 2012: all three operators will thus be using the same technology.

The telecommunications regulator is due to make recommendations to the Minister for Communications in December 2009 in respect of mobile termination; depending on the nature of these recommendations, and the Minister's decision thereon, mobile termination rates may fall, and retail price reductions may follow.

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Q8 According to the Report, "fixed-line prices in New Zealand are high compared with other OECD countries due to high line rentals and fixed-to-mobile calling charges through lack of competition". Could New Zealand please indicate whether it has any plan to allow more competition in the fixed-line business operation?

Answer: Due to New Zealand's different service structure for fixed-line services (e.g. requirements to offer free local calling), comparisons with other OECD countries have always been particularly difficult to make, and alternative analyses would rank New Zealand better if these unique features were taken into account. Nevertheless, in recent years the New Zealand government has introduced measures to promote competition in the fixed-line market.

New Zealand’s fixed-line telecommunications market was fully opened to competition on 1 April 1989. However due to the dominance of the incumbent operator (Telecom New Zealand) competition in the fixed-line market was slow to develop. The introduction of the Telecommunications Act 2001 and the Telecommunications Amendment Act 2006 sought to introduce measures to limit Telecom's ability to act anti-competitively and therefore encourage competition in the fixed-line market. Such measures included local loop unbundling and the operational separation of Telecom.

There are encouraging signs that competition in the fixed-line market is developing, with over 19% of fixed access lines being retailed by providers other than Telecom for the 2007/08 financial year (up from 11% the previous financial year).

Q9 According to the Report, "foreign investments are not screened unless they would result in the acquisition of 25% or more ownership of, or a controlling interest in, significant business assets (or the establishment of a significant business asset), sensitive land or fishing quota. "Significant business assets" are shares or assets valued at more than NZ$100 million". It is read that the definition of "significant business assets" is partly based on the value of shares. Could New Zealand clarify whether this definition takes into account the fluctuation of the value of shares? If so, how is it done?

Answer: The definition applies where the value of the securities or consideration provided, or the value of the assets of A or A and its 25% or more subsidiaries, exceeds $100 million. Hence changes in the value of shares, in relation to a particular transaction involving the acquisition of shares, could affect whether that investment is screened.

Q10 Could New Zealand please describe the definition of "controlling interest"?

Answer: The Overseas Investment Act 2005 uses the concept of "25% ownership or control interest". A person (A) has a 25% or more ownership or control interest in another person (B) if A has— (a) a beneficial entitlement to, or a beneficial interest in, 25% or more of B's securities; or (b) the power to control the composition of 25% or more of the governing body of B; or (c) the right to exercise or control the exercise of 25% or more of the voting power at a meeting of B.

Q11 According to the Report, "In March 2008, the Government made a change to the Overseas Investment Regulations 2005 that allowed Ministers to consider control of "strategic infrastructure assets" when determining whether an investment in sensitive New Zealand land will provide a benefit to New Zealand". Could New Zealand please identify exactly which Ministers are referred to here?

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Answer: The Ministers of Finance and Land Information are the Ministers which take decisions on investments in sensitive land.

Q12 Could New Zealand please describe the definition of "strategic infrastructure assets"?

Answer: The change to the regulations made in March 2008 added another factor that Ministers may take into account in assessing whether an overseas investment in sensitive land will, or is likely to, benefit New Zealand. The new factor was whether the overseas investment will, or is likely to assist New Zealand to maintain New Zealand control of strategically important infrastructure on sensitive land. The term "strategically important infrastructure" has not been defined.

Q13 Could New Zealand please explain in greater detail the concept of "benefit" in this context?

Answer: One of the criteria for consent for overseas investments in sensitive land is that the investment will, or is likely to, benefit New Zealand: section 16(1)(e)(ii) of the Overseas Investment Act 2005. If the land is non-urban and more than 5 hectares in area, the benefits must be, or must be likely to be "substantial and identifiable": section 16(1)(e)(iii). The factors for assessing the benefit of an investment in sensitive land are set out in section 17 of the Overseas Investment Act 2005 and the Regulations.

Q14 Has this change been notified to the WTO? If so, please indicate the document reference of the notification; if not, is there any plan to make the notification?

Answer: No, this change is consistent with our WTO obligations.

Q15 Could New Zealand please provide the rationale for this change?

Answer: The additional factor was introduced by the previous Government to allow Ministers to consider whether an investment in sensitive land will or is likely to assist New Zealand to maintain New Zealand control of strategically important infrastructure on sensitive land.

Q16 Please provide information on the policies and measures New Zealand has adopted in recent years to promote employment, including financial, taxation and monetary policies.

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q17 Are there any specific regulations with regard to advanced technologies and related products? If yes, please provide a list of the regulations and indicate how they could be accessed including via website.

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

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Q18 In aviation sector, New Zealand has set three qualifications for foreign investment, which are ownership, equity and cap on all foreign investment. Please clarify the three qualifications and provide relevant details.

Answer: There are two limitations in regard to the ownership of Air New Zealand shares: - Limitation on Airline Ownership: No person that owns or operates an airline business may hold or have an Interest in an Air New Zealand Equity Security unless the prior written consent of the Crown (in its capacity as Kiwi Shareholder) has been given to such holding. - Limitation on Ownership by Non-New Zealand Nationals: No person who is not a New Zealand National may hold or have an Interest in Air New Zealand Equity Securities which confer 10 percent or more of the total Voting Rights for the time being unless the prior written consent of the Crown (in its capacity as Kiwi Shareholder) has been given to such holding or Interest.

THAILAND – Add 2

Q1 Referring to paragraph 31 on page 15 of the report by the Secretariat, it is mentioned that budgetary funding for training and education has been increased, as have tax incentives, while budgetary expenditure is focused on projects aimed at removing infrastructure bottlenecks and capacity constraints.

Q1-1 Can foreign investors do training and education business in New Zealand? Are tax incentives also given to investors in this business?

Answer: It is possible for foreign investors to invest in training and education businesses in New Zealand, and to set up private training establishments, as long as they meet the quality assurance criteria specified by the NZ Qualifications Authority. The investment would be subject to screening under the Overseas Investment Act, if it is a significant business asset or includes sensitive land. There are no tax incentives for investing in such businesses.

Q1-2 Are tax incentives equally given to domestic and foreign-owned companies in any business categories? If not, please explain.

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q2 Referring to paragraph 55 on page 32 of the report by the secretariat, it is mentioned that Overseas persons are expected to pass an investor test that considers character, business acumen, and level of financial commitment. Furthermore, they must also show that the investment will provide significant benefits for New Zealand if it includes sensitive land.

Q2-1 Please explain in more detail the "investor test".

Answer: The investor test is set out in sections 16(1)(a to (d) [sensitive land], section 18(1)(a) to (d) [significant business assets] of the Overseas Investment Act 2005 and section 57G(1)(b) to (e) of the Fisheries Act 1996.

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Q2-2 Please clarify the term "significant benefits". What are the criteria for determining whether overseas investment will provide significant benefits for New Zealand?

Answer: The criteria are set out in section 16 of the Overseas Investment Act and Regulations 2005.

Q3 Referring to footnote 72 on page 32 of the report by the secretariat, it is mentioned that overseas investments in sensitive assets are required to meet criteria for consent and conditions on such investments are imposed. In addition, screening requirements may be used to limit investments for non-economic reasons.

Q3-1 Please explain in more detail the above-mentioned "criteria for consent and conditions".

Answer: The criteria for consent are set out in section 16 [sensitive land] and section 18 [significant business assets] of the Overseas Investment Act 2005 and section 57G of the Fisheries Act 1996. Consent may be unconditional, or subject to such conditions as the Ministers consider appropriate

Q3-2 Please explain in more detail and give examples of "economic and non-economic reasons".

Answer: The relevant factors are set out in section 17 of the Overseas Investment Act and Regulations 2005.

Q3-3 Could foreign investors be able to own land and what are the criteria?

Answer: Yes. However, where the land is sensitive land, overseas persons must seek consent to purchase this land. "Sensitive Land" is defined in part 1 of Schedule 1 of the Overseas Investment Act 2005. The relevant criteria that must be met for consent to be granted is found in section 16 of the Overseas Investment Act 2005.

Q4 Referring to paragraph 73 on page 55 of the report by the secretariat concerning local content requirements, please explain the definition as well as give examples of "suitable alternative" products.

Answer: We confirm that tariff concessions are granted where the domestic content of locally produced goods is less than 25% of its ex-factory cost of production. There are typographical errors in paragraph 10 on page ix, paragraph 28 on page 44 and paragraph 73 on page 57 of the WTO TPR report, where references to "not less than 25%" of a good's ex-factory cost of production should refer to "less than 25%".

Suitable alternative goods are defined as those which perform the same or a similar function to the imported goods for which a concession is sought; and where the imported goods would compete directly in the same market. Price and quality are not normally taken into consideration. For example, a New Zealand made metal bucket would be a suitable alternative product to an imported plastic bucket. Similarly, a New Zealand made nylon bag would be a suitable alternative to an imported cotton bag. In both these examples, because there are suitable alternatives manufactured locally the concession applications would be turned down.

As a further illustration using both the suitable alternative test and the 25% local content requirement, an imported glass melting furnace could be granted a tariff concession if glass melting furnaces are not available from New Zealand manufacturers. Similarly, a glass melting furnace could be granted a tariff concession if glass melting furnaces were to be manufactured in

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New Zealand but they had less than 25% local content (represented by New Zealand sourced materials, wages and factory overheads). An imported glass melting furnace would not, however, be granted if glass furnaces were manufactured in New Zealand with 25% or more New Zealand content.

Q5 Referring to paragraph 96 on page 62 of the report by the secretariat, it is mentioned that New Zealand does not appear to provide direct subsidies for any sector-specific economic activities. Does New Zealand provide any indirect subsidies for the above-mentioned activities? If yes, please explain how such subsidies are provided and for which activities?

Answer: New Zealand does not provide any direct subsidies for sector-specific economic activities and does not, therefore, keep any register of "possible" direct subsidies provided. For more detail on the agricultural support provided by the New Zealand Government, please see New Zealand's most recent domestic support notification provided to the WTO Committee on Agriculture WT/AG/NZL/52. All agriculture support provided by New Zealand is outlined in our ongoing domestic support notifications. As per New Zealand's notifications, all domestic support provided by New Zealand is Green Box consistent and covers, for example, programmes relating to pest and disease control, inspection services, extension and advisory services and payments for relief from natural disasters. Consistent with Annex 2 of the Agreement on Agriculture, such support meets the fundamental requirement that it has no, or at most a minimal, trade-distorting effect or effect on production.

MEXICO Regarding the amendments to the Copyright Act introduced in 2008:

Q1 How is the neutrality of the right of communication to the public guaranteed or provided for with respect to technology?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q2 How has the liability of Internet service providers (ISPs) been delimited in copyright infringement cases?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q3 What acts have been permitted for fair dealing?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q4 Does the Copyright Act provide for the protection of titles, names, appellations, distinctive physical and psychological characteristics, or original operating characteristics, applied to any of the following categories in accordance with their nature?

Q4-1 Periodical publications: published in successive parts with a variety of content, with a view to indefinite continuation;

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Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q4-2 Periodic broadcasts: emitted in successive parts with a variety of content and capable of further transmission;

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q4-3 Character based, fictional or symbolic human personalities;

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q4-4 Persons or groups engaged in artistic activities; and

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q4-5 Promotional advertising: involving a novel and unprotected mechanism for the purpose of promoting or offering a good or a service with the additional incentive of giving the general public the chance to obtain another good or service on more favourable conditions than are available in the ordinary course of trade.

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q4-6 If this is the case, under what legal provision are they protected?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q5-1 Does the Copyright Act of 1994 provide for the protection of expressions of folklore?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q5-2 If so, how extensive is the protection of such expressions?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q6 What is the duration of the protection of related rights in New Zealand?

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Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q7 Regarding enforcement measures:

Q7-1 Does the New Zealand Police act at the request of a party, or does it initiate criminal proceedings ex officio?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q7-2 Does the suspension by the Customs Service of the release into circulation of the goods necessarily involve the initiation of infringement proceedings by the holder of the right in question?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q7-3 How does the communication between the Customs Service and the companies affected by the infringement of their intellectual property rights work?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q7-4 If customs clearance of goods has been suspended ex officio and the goods are found to be legal, who covers the storage and other costs and/or prejudice to the importer?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q7-5 Does the suspension of customs clearance not apply in the case of infringement of inventions?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q8 What other measures may the court order for adoption by the Customs Service?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q9 Regarding geographical indications:

Q9-1 Who can be the holder of a geographical indication in New Zealand?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

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Q9-2 Does New Zealand have protected geographical indications, and if so, for what products?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q9-3 What protection is granted to a foreign geographical indication?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q10 Regarding patents:

Q10-1 Could you please provide more information regarding the Patent Bill calling for new measures that will assist in protecting traditional knowledge and indigenous plants and animals?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q10-2 Can patents be granted on business or commercial methods?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

INDIA

Q1 It has been reported that New Zealand is insisting on risk analysis and quoting a timeframe of 2-3 years for allowing export of mangoes from India. It has also been learnt that mangoes from some other countries have been allowed without this requirement. India would appreciate response of New Zealand in this regard.

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q2 It has been reported that New Zealand does not give India 'Comparable Labour Market Status' even though New Zealand has graded Indian Universities into A, B, C categories, work experience is still not counted. We would like to know if certain exceptions have been made in granting this status to other countries and on what grounds so that India could also benefit from movement of its professionals.

Answer: The grading of universities does not relate to comparable labour market status. Comparable labour market status does not apply to temporary entry for employment, but only to skilled permanent residence applications. It is therefore not relevant to the temporary movement of skilled professionals.

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CANADA

The Secretariat Report states that, "on 4 March 2008, the Government added a new regulation to the OIA 2005 enabling the OIO to take into account "whether the overseas investment will, or is likely to, assist New Zealand to maintain New Zealand control of strategically important infrastructure on sensitive land"."

Q1 Could New Zealand please clarify what it means by "strategically important infrastructure" (SII)?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

Q2 Could New Zealand please explain whether the onus rests on the foreign investor to prove that his investment will, or is likely to, assist New Zealand to maintain its control of SII or rather rests on the Government to prove that said investment will not, or is not likely to, assist it in maintaining its control of SII?

Answer: Due to the late receipt of this question, it has not been possible to provide a response today. We will provide a response as soon as possible.

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REPLIES PROVIDED BY NEW ZEALAND (SECOND SESSION)

CHINA – Add 1

Q17 Are there any specific regulations with regard to advanced technologies and related products? If yes, please provide a list of the regulations and indicate how they could be accessed including via website.

Answer: New Zealand controls the export of strategic goods and technologies to ensure that such exports are consistent with broader strategic and security policy objectives. The system is an essential part of our non-proliferation and disarmament policy. New Zealand, as a member of the Wassenaar Arrangement, controls the export of dual-use items which may have a military application. Generally speaking, not all high tech products are considered dual-use.

Under the Customs and Excise Act 1996 and the Customs Export Prohibition Order 2008 the export of strategic goods, software and technology is prohibited without the consent of the Secretary of Foreign Affairs and Trade. Exporters submit an application to the Ministry of Foreign Affairs and Trade and are encouraged to provide as much information as possible about the technical specifications of the item, the end-user and the destination country. Applications are then forwarded to the relevant technical advisor for advice. Where it is determined the goods are controlled, the application is assessed against standing assessment criteria agreed by Ministers. These criteria are consistent with export control regime guidelines. Both the assessment criteria and the New Zealand Strategic Goods List (which lists controlled items) can be found on the Ministry of Foreign Affairs and Trade's website – www.mfat.govt.nz

As provided for in the Customs and Export prohibition Order 2008, New Zealand has extended the control on the export of strategic goods to cover unlisted goods and technologies intended for a military or weapons of mass destruction end-use, and the electronic export of controlled software and technologies. These controls are known as "catch-alls" or end-use controls.

MEXICO

Regarding the amendments to the Copyright Act introduced in 2008:

Q1 How is the neutrality of the right of communication to the public guaranteed or provided for with respect to technology?

Answer: The definitions of communicate and communication work are not confined to any specific types of broadcasting technology and telecommunications system.

Q2 How has the liability of Internet service providers (ISPs) been delimited in copyright infringement cases?

Answer: Several sections in the Copyright Act limit ISPs’ liability in copyright infringement cases:

Section 92B provides that merely because a person uses the Internet services of the Internet service provider in infringing the copyright, the Internet service provider, without more, - Does not infringe the copyright in the work:

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- Must not be taken to have authorised that persons infringement of copyright in the work; and - must not be subject to any civil remedy or criminal sanction (other than injunction relief in relation to the infringement).

Section 92C provides that an ISP who stores material provided by a user does not infringe copyright provided that ISP deletes or prevents access to the material, as soon as possible, after it knows or has reason to believe that the material it is hosting infringes copyright.

Section 92E states that an ISP does not infringe copyright by caching infringing material provided it follows certain procedures.

Q3 What acts have been permitted for fair dealing?

Answer: New Zealand's Copyright Act does not contain fair dealing provisions per se, rather it provides for a variety of specific and limited permitted acts that do not amount to copyright infringement. Such permitted acts include, for example, incidental copying of a work in an artistic work, sound recording, film or broadcast; and for the purposes of criticism, review, new reporting, research or private study.

The Copyright (New Technologies) Amendment Act 2008 introduced a number of new permitted acts and these included: - Transient or incidental copying of a work especially when it is an integral or essential part of a technological process for making and receiving communication that does not infringe copyright or enabling the lawful use or, or lawful dealing in the work; and provide that copying has no independent economic significance; - The caching of webpages by educational establishments for educational purposes under limited conditions; - The communication of a digital work by libraries and archives to authenticated users where copy of the digital work is a lawful copy under limited circumstances; - The supply of copies of works in digital format by libraries and archives under limited circumstances; - The copying; backing up; decompilation; adaptation; observing, studying and testing of computer programmes under limited circumstances; and - The format shifting of lawfully acquired sound recordings for personal use under limited circumstances.

Q4 Does the Copyright Act provide for the protection of titles, names, appellations, distinctive physical and psychological characteristics, or original operating characteristics, applied to any of the following categories in accordance with their nature?

Answer: Titles, names, and appellations will usually not qualify for copyright protection as they are not generally considered not to be original literary works. Distinctive physical and psychological characteristics and original operating characteristics are not protected, because the Copyright Act only protects original expressions.

Q4-1 Periodical publications: published in successive parts with a variety of content, with a view to indefinite continuation;

Answer: Individual editions of a periodical would be protected, but only upon actual publication of each edition.

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Q4-2 Periodic broadcasts: emitted in successive parts with a variety of content and capable of further transmission;

Answer: Broadcasts, when made, are protected as communication works.

Q4-3 Character based, fictional or symbolic human personalities;

Answer: No.

Q4-4 Persons or groups engaged in artistic activities; and

Answer: No - individual persons and groups of persons do not qualify for copyright protection per se, rather it is the original expression of their creative ideas that would be protected. A person or groups giving performance is given protection against the unauthorised copying of their performance through the provisions of the Copyright Act concerning performers' rights.

Q4-5 Promotional advertising: involving a novel and unprotected mechanism for the purpose of promoting or offering a good or a service with the additional incentive of giving the general public the chance to obtain another good or service on more favourable conditions than are available in the ordinary course of trade.

Answer: Promotional advertisements may be protected by copyright as, for example, original literary and/or artistic works. The particular use of promotional schemes, especially those offering additional incentives, however is not regulated under copyright law. Such schemes are, instead, regulated under trade practices legislation, such as the Fair Trading Act 1986.

If this is the case, under what legal provision are they protected?

Q5 Does the Copyright Act of 1994 provide for the protection of expressions of folklore? If so, how extensive is the protection of such expressions?

Answer: Yes – but only to the extent that the expression of folklore meets the criteria of being an original literary, dramatic, musical or artistic work to qualify for copyright protection.

Q6 What is the duration of the protection of related rights in New Zealand?

Answer: Protection of performers' rights last for a period of 50 years from the end of the calendar year in which the performance in question took place. Note, however, that broadcasters, and the producers of cable programme services are considered to be authors for the purpose of the copyright protection.

Q7 Regarding enforcement measures:

Q7-1 Does the New Zealand Police act at the request of a party, or does it initiate criminal proceedings ex officio?

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Answer: In regards to enforcement of the criminal offences for trade mark counterfeiting and copyright piracy the New Zealand Police will usually only act at the request of an aggrieved person (normally a trade mark or copyright owner), although there is no legislative barrier to them acting ex officio.

Q7-2 Does the suspension by the Customs Service of the release into circulation of the goods necessarily involve the initiation of infringement proceedings by the holder of the right in question?

Answer: Yes. Under the border protection measures specified under the Trade Marks Act 2002 and Copyright Act 1994, the Customs Service may only suspend the release into circulation of suspected infringing goods after first having received a notice from the trade mark or copyright owner (or their agent), and then for an initial period of 10 working days (extendable upon request to 20 days). At the end of the initial 10 day period the Customs Service must release the goods to the importer unless: - The importer forfeits the goods to the State or right holder; - The Customs Service is served with a court order for continued detention of the goods until the court makes a determination as to whether the goods are infringing (i.e. the right holder has initiated infringement proceedings); or - The Customs Service is served with a court order that the notice be discharged or the goods be released to the importer.

Q7-3 How does the communication between the Customs Service and the companies affected by the infringement of their intellectual property rights work?

Answer: Border protection notices seeking the detention of suspected infringing goods must be made in writing to the Customs Service. Should the Customs Service detain any suspected infringing goods written notice must be provided by the Customs Service to both the right holder and the importer of this action. Furthermore, in regards to an investigation by the Customs Service to establish whether or not the goods may be suspected of being infringing goods to which a notice relates, the Customs Service may require the right holder or any other person to provide, within ten working days of being required to do so, any information that is reasonably necessary to the Customs Service for the purpose of the investigation. Both the importer and the right holder may make a request to the Customs Service to inspect the goods in question.

A right holder in giving a notice under the border protection measures to the Custom Service must provide a New Zealand address for service for all communication

Q7-4 If customs clearance of goods has been suspended ex officio and the goods are found to be legal, who covers the storage and other costs and/or prejudice to the importer?

Answer: Not applicable, because under New Zealand's border protection measures the Customs Service do have ex officio powers to detain suspected infringing goods.

However, as a condition of the Customs Service accepting a border protection notice from a right holder, the right holder must provide the Customs Service with a letter of indemnity for any and all cost incurred by the Customs Service during the enforcement of a border notice. Ultimately, therefore, the right holder is legally responsible for covering Customs Services costs arising from storage (and destruction) of suspected infringing goods.

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If the outcome of infringement proceedings is that the court determines that the suspected infringing goods are legally able to be imported into New Zealand, the courts may order the right holder to cover the importer's costs arising from the legal proceedings.

Q7-5 Does the suspension of customs clearance not apply in the case of infringement of inventions?

Answer: No, New Zealand's border protection measures cover only goods suspected of infringing a registered trade mark or copyright.

Q8 What other measures may the court order for adoption by the Customs Service?

Answer: None.

Q9 Regarding geographical indications:

Q9-1 Who can be the holder of a geographical indication in New Zealand?

Answer: There are a several different mechanisms by which geographical indications can be protected in New Zealand, and these include: the tort of "passing off"; the Fair Trading 1986; and registration under the Trade Marks Act 2002 as collective or certification marks. There are no specific rules or regulations specifying precisely who may be the holder of a geographical indication in New Zealand. In general, a person would need to show that they are an "interested" person, such as an individual producer or bodies or organisations representing producers, to have standing in any of the above mechanisms for the protection of geographical indications.

Q9-2 Does New Zealand have protected geographical indications, and if so, for what products?

Answer: As noted above, New Zealand provides protection for geographical indications through a variety of mechanisms. These mechanisms do not currently include a sui generis GIs register so it is not possible to definitively list all products that benefit from GIs protection.

Q9-3 What protection is granted to a foreign geographical indication?

Answer: Protection is available to foreign geographical indications in the same manner as protection is available to local geographical indications.

Q10 Regarding patents:

Q10-1 Could you please provide more information regarding the Patent Bill calling for new measures that will assist in protecting traditional knowledge and indigenous plants and animals?

Answer: The Patents Bill will, when enacted, establish a Maori Advisory Committee to advise the Commissioner of Patents on patent applications involving traditional knowledge or indigenous plants and animals. The Committee will advise whether the inventions claimed in such applications are novel or involve an inventive step, and whether commercial exploitation of the invention might be contrary to Maori values.

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Q10-2 Can patents be granted on business or commercial methods?

Answer: There is no specific prohibition in New Zealand's current patent legislation (or in the Patents Bill) that specifically prohibits the patenting of business or commercial methods. To be granted a valid patent, such methods must be a "manner of manufacture", new, non-obvious, and useful. The term "manner of manufacture" has been interpreted by the courts as excluding from patent protection such things as mathematical algorithms, and mere schemes or plans. Some business or commercial methods which are considered to be algorithms or mere schemes or plans may therefore be refused patent protection.

INDIA

Q1 It has been reported that New Zealand is insisting on risk analysis and quoting a timeframe of 2-3 years for allowing export of mangoes from India. It has also been learnt that mangoes from some other countries have been allowed without this requirement. India would appreciate response of New Zealand in this regard.

Answer: MAF Biosecurity New Zealand (MAFBNZ) requires that all new import health standards (IHS) must be based on scientific principles and risk analysis processes in line with International Standards for Phytosanitary Measures, with particular reference to (ISPM 2) "Framework for pest risk analysis."

New market access requests from all countries that require the development of a new import health standard are subject to the same process. A risk analysis is undertaken to identify biosecurity hazards associated with the commodity and or pathway and to assess what if any phytosanitary measures are required to mitigate respective risks. The time for completing individual risk analyses varies with the complexity of the required analysis. Upon the completion of the risk assessment, an IHS is developed.

As per our letter of 13 March 2009, from Tim Knox (Director Border Standards) to Joint Secretary Mr Pankaj Kumar, MAFBNZ would like to reaffirm that mangoes from India are being considered in the prioritisation process to determine the import health standard development work programme for 2009-2011.

For more information on the prioritisation process and the development of an import health standard please refer to the following website: http://www.biosecurity.govt.nz/regs/imports/ihs/request. We will inform you of the outcome of this process as soon as possible.

CANADA

The Secretariat Report states that, "on 4 March 2008, the Government added a new regulation to the OIA 2005 enabling the OIO to take into account "whether the overseas investment will, or is likely to, assist New Zealand to maintain New Zealand control of strategically important infrastructure on sensitive land"."

Q1 Could New Zealand please clarify what it means by "strategically important infrastructure" (SII)?

Answer: Strategically important infrastructure has not been defined.

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Q2 Could New Zealand please explain whether the onus rests on the foreign investor to prove that his investment will, or is likely to, assist New Zealand to maintain its control of SII or rather rests on the government to prove that said investment will not, or is not likely to, assist it in maintaining its control of SII?

Answer: In the case of investments in sensitive land, Ministers, or the regulator (where delegated) determine whether the investment will or is likely to benefit New Zealand. One of the factors for assessing this benefit is whether the investment will assist New Zealand to maintain New Zealand control of strategically important infrastructure on sensitive land. This decision is based on information provided by the investor.

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ADDITIONAL REPLIES PROVIDED BY NEW ZEALAND

CHINA – Add 1

Q16 Please provide information on the policies and measures New Zealand has adopted in recent years to promote employment, including financial, taxation and monetary policies.

Answer: The New Zealand Government has taken a productivity focussed approach to driving employment growth over the last few years. As the full impacts of the global economic crisis become evident, the Government has focussed in the recently announced 2009 Budget on three main areas: - Helping New Zealanders through the recession and supporting jobs; - Lifting productivity and raising New Zealand’s international competitiveness; and - Taking steps to keep future government debt under control.

Further or more detailed information on the actual policies implemented can be found at http://www.treasury.govt.nz/budget/2009. Information is also available on this site relating to all Budgets delivered since 1997.

THAILAND – Add 2

Q1 Referring to paragraph 31 on page 15 of the report by the secretariat, it is mentioned that budgetary funding for training and education has been increased, as have tax incentives, while budgetary expenditure is focused on projects aimed at removing infrastructure bottlenecks and capacity constraints.

Q1-2 Are tax incentives equally given to domestic and foreign-owned companies in any business categories? If not, please explain.

Answer: New Zealand has a broad tax base and very few measures that could be described as business tax incentives. Those that are available such as a depreciation loading for plant and equipment are equally available to both domestic and foreign firms.

ARGENTINA – Late Questions

Q1 Paragraph 13 of the Secretariat Report states that although New Zealand does not recognize any preshipment inspection of exports, the Ministry of Agriculture and Forestry does perform some preshipment inspection overseas for bio-security purposes. In addition to the products and origins indicated in the Report, are there other products and origins that are concerned by these inspections? What is the basis for deciding what inspections to conduct?

Answer: We provide details of pre-shipment programs below:

Japan Car Programme New Zealand MAF inspectors have been pre-inspecting used vehicles out to Japan for the past 10 years

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MAFBNZ Quarantine Inspectors are contracted to 4 different Operators at various ports in Japan, who provide cleaning services of used vehicles destined for New Zealand. Vehicles are visually inspected after steam-cleaning & vacuuming to remove biosecurity risk material.

Pre-inspection keeps the biosecurity risk offshore including insect pests such as; Lymantria dispar (Asian Gypsy Moth), Attagenus spp (carpet beetles), Trogoderma spp(Grain beetles), spiders including Latrodectus hasselti (Red back spider)and ants. Other contaminants of concern include soil, fresh plant material including pine needles and weed seeds.

MAF pre-inspected vehicles are loaded onto car carrier vessels and shipped to New Zealand. No further biosecurity intervention is required on arrival.

Australian Table Grape Programme MAFBNZ has been sending Quarantine Inspectors to Mildura, Australia since 1990 to pre-inspect grapes in; Victoria, South Australia & New South Wales for export to New Zealand.

Grapes fumigated with sulphur dioxide are inspected and passed by AQIS prior to the New Zealand pre-inspection being performed. Grapes meeting requirements are then loaded for airfreight or into containers and bolt sealed for shipment to New Zealand. These seals are checked on arrival in New Zealand.

Consignments of grapes rejected for live insects, such as Latrodectus hasselti (Red back spider), snails or for excess weed seed contaminant such as Chondrilla spp (skeleton weed seed), are not shipped to New Zealand, thus keeping the Biosecurity risk offshore and reducing Industry costs in not having to fumigate or reship produce.

U.S.A Table Grape Programme MAFBNZ has been sending Quarantine Inspectors to Bakersfield, California since 1989 to pre-inspect grapes for export to New Zealand. This came about from excessive weed seeds being found during inspection activities in New Zealand, resulting in some consignments being reshipped because there is no effective treatment available for weed seed contaminants on grapes. Following on from the weed seed contaminants, MAF started finding Black widow spiders, and then California had an infestation of Glassey winged sharpshooter a known vector or pierces disease which could cause considerable harm to the NZ wine industry

Grapes fumigated with sulphur dioxide are inspected and passed by USDA prior to the New Zealand pre-inspection being performed. Grapes meeting requirements are then loaded for airfreight or into containers and bolt sealed for shipment to New Zealand. These seals are checked on arrival in New Zealand.

Consignments of grapes rejected for live insects e.g. Latrodectus mactans, (black widow spider) Metaphidippus spp (jumping spiders), Drosophila spp (Pomace fly), or for excess weed seed contaminant are not shipped to New Zealand, thus keeping the Biosecurity risk offshore and reducing Industry costs in not having to fumigate grapes with methyl bromide, or reship produce.

Mexico Table Grape Programme MAFBNZ has been sending Quarantine Inspectors to Nogales, Arizona to pre-inspect grapes from Hermosillo, Sonora region in Mexico for export to New Zealand for the past 2 years.

Grapes are inspected and passed by SAGARPA/SENASICA in Mexico prior to the New Zealand pre-inspection being performed at Nogales on the Arizona side of the Mexican border. Grapes are

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loaded into containers under MAFBNZ supervision and bolt sealed for shipment to New Zealand. These seals are checked on arrival in New Zealand.

Consignments of grapes rejected for live insects such as; Cheiracanthium inclusum (Yellow Sac spider) Nysius spp (wheat bug) or for excess weed seed contaminant are not shipped to New Zealand, thus keeping the Biosecurity risk offshore and reducing Industry costs in not having to fumigate or reship produce.

Pre-Inspection of Cargo At the request of Industry MAFBNZ is able to deploy Quarantine inspectors globally to pre-inspect any cargo from; circus equipment, to oil rigs, to sawmill equipment, or racing cars destined for New Zealand. This pre-inspection option keeps the biosecurity risk offshore and allows the importer less intervention by MAFBNZ on arrival. Interceptions might include; ants, mosquitoes, spiders, Giant African Snail, plant material, weed seed contamination as well as soil.

The freight is cleaned by the contracting company and pre-inspected offshore by MAFBNZ Quarantine Inspectors prior to being packed into containers or sighted onto vessels for export to New Zealand.

If the freight is shipped bulk- break on a vessel this is sighted by MAFBNZ Quarantine Inspectors at the port of arrival to ensure no cross contaminant in shipping. Bolted containers are seal checked on arrival.

All pre-shipment programmes conducted offshore by MAFBNZ are fully cost recovered from Industry.

Q2 According to paragraphs 28 and 29 of the Secretariat Report, New Zealand may grant tariff concessions if producers cannot supply suitable alternative goods or if the domestic content of the locally-produced "suitable alternative" is not less than 25% of its ex-factory cost. There are currently 16 "concession references" and, for example, "Reference 99" concessions may be granted for various reasons. - Could you please provide more details on how this system operates? - Could you please provide a list of all of the concession references and the reasons why they are granted?

Answer: We confirm that Reference 99 tariff concessions are granted where the domestic content of locally produced goods is less than 25% of its ex-factory cost of production. There are typographical errors in paragraph 10 on page ix, paragraph 28 on page 44 and paragraph 73 on page 57 of the WTO TPR report, where references to "not less than 25%" of a good's ex-factory cost of production should refer to "less than 25%".

The reference 99 tariff concession system operates on the basis of whether or not suitable alternative goods are available from New Zealand manufacturers or producers. Suitable alternative goods are defined as those which perform the same or a similar function to the imported goods for which a concession is sought; and where the imported goods would compete directly in the same market. Price and quality are not normally taken into consideration. For example, a New Zealand made metal bucket would be a suitable alternative product to an imported plastic bucket. Similarly, a New Zealand made nylon bag would be a suitable alternative to an imported cotton bag. In both these examples, because there are suitable alternatives manufactured locally the concession applications would not be granted.

As a further illustration using both the suitable alternative test and the 25% local content requirement, an imported glass melting furnace could be granted a tariff concession if glass melting

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furnaces are not available from New Zealand manufacturers. Similarly, a glass melting furnace could be granted a tariff concession if glass melting furnaces were to be manufactured in New Zealand but they had less than 25% local content (represented by New Zealand sourced materials, wages and factory overheads). An imported glass melting furnace would not, however, be granted if glass furnaces were manufactured in New Zealand with 25% or more New Zealand content.

The sixteen concession references provide duty free entry for a number of reasons including social/humanitarian purposes, Customs facilitation e.g, passengers' baggage, trade policy and industry assistance purposes.

The following is a list of all the tariff concession references.

26 Medicaments and pharmaceutical goods 30 Goods included in certain Annexes to the UNESCO Agreement 35 Handmade goods from developing countries 40 Goods for the promotion of international touring 45 Goods used for disaster relief 55 Temporary imports 60 Goods in respect of which a duty variation is required to fulfil a GATT commitment 66 Goods re-entered into New Zealand after repair or alteration 70 Heirlooms 75 Certain gifts 80 Passengers Baggage 81 Passengers Baggage 82 Passengers Baggage 90 Religious goods 91 Goods partially manufactured in New Zealand 99 Other goods

Full details of all sixteen concession references can be seen at: http://www.customs.govt.nz/ nr/rdonlyres/04829833-5e70-460c-b8a0-7ba36aafe4e8/0/02concessions.pdf

Q3 According to paragraph 37 of the Secretariat Report, during the period under review, New Zealand introduced a number of changes to its legislation on anti-dumping and countervailing measures. What, exactly, are these changes and what were the reasons for introducing them?

Answer: In November 2006, the New Zealand Parliament passed the Dumping and Countervailing Duties Amendment Act 2006 which resulted in a minor amendment to the Dumping and Countervailing Duties Act 1988 (the principal Act). The amendments were to the following sections of the Act:

Section 3. Interpretation Section 3(1) of the Act is the section that provides definitions for technical and specific terms used within the Act. This section of the principal Act was amended by inserting the following definition in its appropriate alphabetical order: "day", except in sections 14(2), 17 and 17B(4), means any day of the week other than a day in the period beginning with 25 December in any year and ending with 15 January the following year.

Section 14. Anti-dumping and countervailing duties Section 14(1) of the Act was amended by omitting "section 17 of this Act" and substituting "section 17, 17A, or 17B".

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Section 17. Retrospective measures Section 17 of the Act was repealed and sections 17, 17A and 17B were substituted:

Purpose of the Amendments

The purpose of these amendments was to: - Allow the Minister of Commerce to specify the date from which new and reassessed rates of anti-dumping and countervailing duty will apply; - Correct an anomaly in the principal Act that to apply reassessed rates after the Minister’s decision to change a rate, the clumsy technical mechanism to terminate the original duties in whole or in part for the period since the duties were originally imposed was replaced; and - Exclude the period from 25 December to 15 January from the statutory timeframe for the completion of dumping and subsidy investigations.

Full notification of these changes was made to the Committee on Anti-Dumping Practices and the Committee on Subsidies and Countervailing Measures at their April 2007 meetings. The relevant WTO documents are: G/ADP/N/1/NZL/2/Suppl.3 and G/SCM/N/1/NZL/2/Suppl.3.

Q4 Paragraph 58 of the Secretariat Report states that in October 2008, New Zealand issued a standard under the Food Act requiring importers to be listed with the New Zealand Food Safety Authority (NZFSA) for the purpose of ensuring that importers received relevant information and advice relating to food safety in the event of a food recall.

Q4-1 What is the registration procedure and how much does it cost?

Answer: The importer is listed not registered. There is no approval process and therefore no fee (no cost) to be listed. An importer must provide NZFSA with a contact person in New Zealand. This contact person must be able to provide NZFSA with documents relating to consignments of goods for traceability purposes when requested to do so.

If an importer is resident overseas, contact details must be provided for a person in New Zealand who deals with day-to-day enquiries. Customs agents may be provided as the New Zealand contact person (if they are willing to be the contact person) under clause 6 of the Listing Standard particularly if they complete and store documentation related to the consignment on behalf of the importer. Importers who list 'on-line' can change their listing details as appropriate.

Q4-2 What does the Report mean by food "recall"?

Answer: Section 40 of the Food Act 1981 allows food to be 'recalled from sale' (i.e. the Minister issues an order stating that the food cannot be sold) for the protection of the public. This 'Ministerial order' is only ever used in cases of a serious public health threat. Voluntary recalls are far more commonly used by food businesses where minor concerns or quality defects have been identified or where immediate action is taken on serious issues without the need for an order.

Q5 According to paragraph 95 of the Secretariat Report, since 2006 New Zealand has been implementing an initiative known as "Buy Kiwi Made" under which funding is provided for sectoral initiatives to raise the profile of domestic products. The report also mentions that in January 2009, the programme was being reviewed. We would be grateful for further details in addition to what was provided in document G/SCM/N/155/NZL on the nature of this programme and on the results of the January review.

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Answer: The Buy Kiwi Made programme was a product of a co-operation agreement between the previous Government and the Green Party following the 2005 election.

The nature of the program was to provide support for sector and regional initiatives that are consistent with the policy framework for Buy Kiwi Made, which was intended to help raise the profile of New Zealand-made products.

The total amount of funding for the Buy Kiwi Made Programme was $11.5m over three years, split between two operational components: the Sectoral and Regional Initiative Fund ($3m) and the Buy Kiwi Made media campaign ($8.5m). Following a substantial under-spend in the first two funding rounds, the Sectoral and Regional Initiative Fund was capped at $0.975 million, with the remaining money transferred to extend the media campaign.

Following an evaluation of the Buy Kiwi Made Programme in early 2009, the programme was disestablished on 30 June 2009.

Q6 Paragraph 26 of the Secretariat Report states that in September 2008, New Zealand introduced an emissions-trading scheme that puts a price on greenhouse gases and provides an incentive to reduce emissions and increase forest areas.

Q6-1 What are these incentives?

Answer: The incentive is in the form of a price on greenhouse gas emissions and removals. The New Zealand Emissions Trading Scheme (NZ ETS) will place a price on greenhouse gas emissions and removals for all sectors covered by the scheme. The forestry sector is covered by the scheme.

Q6-2 How are the prices on greenhouse gases fixed?

Answer: The price of emissions within the New Zealand economy will be set by the supply and demand for emission units that are acceptable for surrender under the NZ ETS.

Q6-3 What is the legal basis for this programme?

Answer: The NZETS was legally established under the Climate Change Response Act 2002 as amended in September 2008.

CHINA – Add 2

Q1 Would New Zealand please indicate the specific measures, if these exist, which have been taken since 2003 to promote the exports of agricultural products, especially that of dairy products?

Answer: The New Zealand Government does not take any specific measures to promote the export of agricultural products. Promotional activities are carried out by the exporters themselves. No subsidies are supplied for dairy exports.

Q2 Would New Zealand please introduce the policies and provisions on the cross-border merger and acquisition by financial institutions and also other types of business? Is there a higher threshold

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for certain sectors, such as energy, high-tech, and etc.? Are there any differential requirements applied to the investment by enterprises of different ownership structures, such as state-owned ones and private ones?

Answer: Investments such as cross border mergers and acquisitions may need to seek consent under the Overseas Investment Act 2005, if the investment includes significant business assets, sensitive land or fishing quota (as defined in the Act). The thresholds are the same across all sectors. The requirements apply equally to overseas investments from private companies and state owned.

Q3 Would New Zealand please share with us the information, if these exist, on the regime of taxes and fees on ships and vessels, including their rates, responsible authorities, laws or regulations and how these taxes and fees are levied?

Answer: We provide details below on the various regimes of taxes and fees:

Ship registration To register a vessel as a New Zealand ship under the Ship Registration Act 1992 an application must be made to Maritime New Zealand. This incurs an application fee. The different rates are set out in the Marine Safety Charges Regulations, available online from www.legislation.govt.nz.

All vessels that are used to take fish, aquatic life, or seaweed for sale from New Zealand waters must be registered as New Zealand fishing vessels under the Fisheries Act 1996. An application fee applies to register a fishing vessel. The different rates are set out at http://www.fishserve.co.nz/information/ fees/.

Marine Safety Charge Maritime safety regulatory work, including port state control, is largely funded by a Marine Safety Charge which is collected by Maritime New Zealand (www.maritimenz.govt.nz) from all commercial shipping. The rates for different types of shipping (international, domestic, passenger, freight etc) vary according to the amount of regulatory effort and risk involved with each shipping type and whether they trade constantly in New Zealand, in which case most pay an annual charge, or visit from time to time, in which case charges are typically per port call. The different rates are set out in the Marine Safety Charges Regulations, available online from www.legislation.govt.nz.

Oil pollution levy The cost of maintaining New Zealand's marine oil spill response system is funded by the Oil Pollution Levy, which applies to all ships carrying oil as fuel or cargo and is collected by Maritime New Zealand. All ships pay a levy based on the size of the ship. Ships carrying oil as cargo pay an additional levy on the amount of oil on board. Ships operating domestically are levied annually. Other ships are levied per port call. The different rates are set out in the Oil Pollution Levies Order, at www.legislation.govt.nz.

GST Goods and Services Tax (GST) is payable for the supply of all goods (whether consumer or capital) and services. Any ship (like any other piece of large capital equipment such as tractors, airplanes and trains) imported into New Zealand is subject to GST.

The tax does not apply to vessels passing through New Zealand waters in the course of international trade with New Zealand. Refer to the Goods and Services Tax Act, at www.legislation.govt.nz.

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Biosecurity New Zealand's biosecurity is the responsibility of the Ministry of Agriculture and Forestry (www.biosecurity.govt.nz). There are two sets of regulations under the Biosecurity Act 1993 that impose relevant charges; the Biosecurity (Costs) Regulations 2006 and Biosecurity (Shipping Container Levy) Order 2006). Refer to www.legislation.govt.nz.

USA – Follow-up Questions

U.S. Q4-1(e): We are also interested in the Government's goal to ensure the delivery of safe and "suitable" food in New Zealand. How does the Government define "suitable" in this context? What, in the Government's view, constitutes a "suitable" food?

NZ Answer: Suitability includes the composition, labelling, identification and condition of food but does not include matters that are directly related to food safety, or matters that are related to the food's quality requirements for commercial reasons. It may contain matters relating to the composition, such as the presence of a substance that would be unexpected or unreasonable. A suitable food is one that meets New Zealand's applicable food standards.

U.S Follow-up Q: Please provide an example or explain further what is meant by "a substance that would be unexpected or unreasonable" in this context?

Answer: An example of food that is unsuitable is food that is: (a) In a condition that is offensive or is so perished as to affect its intended use; or (b) Contains, has attached to it or enclosed with it, or is in contact with any thing that is offensive or is so perished as to affect its intended use; or (c) The presence of which would be unexpected and unreasonable in food of that description.

An example would be finding a snail or slug inside a bottle of ginger beer.

EC – Follow-up Questions

As regards replies given on Geographical Indications, we have two follow-up questions:

Reply to Q. 37. In particular, we note that the case referred by New Zealand was based on passing-off, and it was notably found that a substantial proportion of the New Zealand public would be misled by use of the terms Champagne or Australian Champagne. It was also found that there was a breach of Section 9 of the Fair Trading Act, which provided that no person shall, in trade, engage in conduct that is misleading or deceptive or is likely to deceive or mislead. Those findings are based on subjective test, i.e. assessment of whether the public would be misled or deceived.

It is also important to note that this case was issued prior to the entry into force of the TRIPS Agreement.

In light of these remarks, could New Zealand provide other examples in New Zealand case-law applying the objective criteria of Article 23.1 TRIPS?

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Answer: The Comite Interprofessionnel du Vin de Champagne v Wineworths Group Limited [1991 2 NZLR 432] case is the most recently reported case in New Zealand concerning misleading or deceptive conduct in regards to a geographical indication.

Reply to Q.38: In its answer, New Zealand notes that "Registration of geographical indication under the Geographical Indications (Wine and Spirits) Registration Act 2006 would, therefore, effectively be equivalent to establishing reputation and goodwill necessary for taking action against misleading and deceptive use of a geographical indication under the Fair Trading Act."

Could New Zealand explain whether any action against the illegitimate use of a GI registered pursuant to the Geographical Indications (Wine and Spirits) Registration Act 2006 will need to be taken under the Fair trading Act? Will it still be necessary to bring evidence of misleading or deceptive use of the GI?

Answer: There is no requirement under the Geographical Indications (wines and Spirits) Registration Act 2006 (the "GI Registration Act") for an aggrieved party to also bring action under the Fair Trading Act for misuse of a registered GI. Action against misuse of a registered GI under the GI Registration Act would not require the aggrieved party to bring evidence of misleading or deceptive use of the registered GI, rather evidence that accused person’s use of the registered geographical indication in trade was contrary to provisions under sections 21 to 24 that set out when a registered GI may be used.

Furthermore, it should be noted that there is no provision in the GI Registration Act that would prevent an aggrieved party seeking simultaneous relief from the courts under both the GI Registration Act and the Fair Trading Act to remedy misuse use of a registered GI.

As regards replies on agricultural sector, we have one follow question:

Replies to question Q.29-30: We note that the replies seem to be incomplete. As noted in Question 30, there are 11 designated markets for dairy quotas, but the replies only refer to the EU, US and Dominican Republic market.

Could New Zealand confirm the market share of Fonterra in the other designated markets?

Answer: Access to the following tariff quotas have been completely deregulated: Canada butter, Japan cheese, and US cheddar cheese, NSPF cheese and American-type cheese where NZ cannot designate the importer. From the 2010 quota year, quota for prepared edible fat to Japan will be entirely reallocated to dairy processors based on their share of raw milk collected from dairy farmers. Out of quota trade will be restricted until quota is filled. There are no export restrictions on any other dairy products to any other markets.

BRAZIL – Add 1

Q4-2 What are the top ten beneficiaries of New Zealand's GSP, and what are their respective shares in preferential imports? How have their shares developed during the last five years?

Answer: The top ten beneficiaries of New Zealand's GSP (based on the average value of imports for the five- year period 2004-2008) are China, Malaysia, Thailand, Indonesia, Morocco, Saudi Arabia, India,

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Mexico, Brazil and the Philippines. Please refer to the sheet labeled "Top 10 Value" for further details. For details of their respective shares in preferential imports, please refer to the sheet labeled "Value Qualified for Pref".

For details of how these shares have developed during the last five years, please refer to the sheet labeled "Estimated Shares for 2004 and 2006". Please note that these figures are estimates only, and have been calculated by estimating the Value of Imports for Least Developed Countries and Less Developed Countries qualified for preference, and the growth rate relating to the value of imports qualified for preference.

Q12 What percentage of imports of New Zealand is covered by goods and services from Less and Least developed countries supported on preferential trade tariffs?

Answer: We assume that this question is intended to address goods trade only (as services trade is not subject to tariffs). In 2008 the figure was 8% (please refer to the sheet labelled 'Value Qualified for Pref').

VALUE OF IMPORTS QUALIFIED FOR PREFERENTIAL DUTY, 2004-2008 % Shares in Beneficiaries 2004 2005 2006 2007 2008 Preferential imports

Brazil 25,171,864 29,591,727 49,508,069 67,373,316 27,573,983 1 Indonesia 133,663,720 137,027,810 174,202,102 176,280,879 177,201,578 5 India 75,566,419 86,237,211 96,263,140 105,625,965 107,846,505 3 Morocco 142,550 233,393 68,855 29,607,188 163,510,664 5 Mexico 6,550,414 6,338,913 8,277,973 6,826,789 6,744,802 0 Malaysia 137,326,416 153,612,855 198,880,426 230,936,233 297,868,718 9 Saudi Arabia 9,914,208 9,457,199 14,189,948 91,284,586 175,545,940 5 Thailand 204,874,366 281,499,334 436,196,094 460,795,006 633,325,730 18 China 751,421,306 980,692,862 1,398,948,748 1,663,133,846 1,586,197,442 46 Philippines 31,774,860 53,833,491 62,783,216 61,216,266 38,522,684 1 Total 1,376,406,123 1,738,524,795 2,439,318,571 2,893,080,074 3,214,338,046 93 Growth rate 26 40 19 11 Value of Imports 1,489,605,251 1,876,902,617 2,627,663,665 3,126,919,762 3,470,880,936 100 Qualified for Pref Duty from all Least and Less Developed Countries (2008) 38,527,993,071 40,697,935,505 44,804,882,417.00 Value of Total Imports (2008)

Percentage of 8 imports from Less and Least Developed Countries (2208)

Note: "This data will differ from official trade statistics produced by Statistics NZ which are subject to editing and compiled according to international standards."

ECUADOR – Add. 1

Q1 According to the Report of the Secretariat, for the recognition of most-favoured-nation status, New Zealand requires an eight-digit tariff disaggregation. However, the Harmonized System to which it refers only provides for six.

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Could New Zealand please clarify this apparent contradiction?

Answer: The New Zealand tariff is applied at the HS 8-digit level. That means countries exporting to NZ are asked to use an 8-digit code so tha the most accurate match to the NZ tariff can be made. The International Convention on the Harmonized Commodity Description and Coding System states that contracting parties are not prevented from establishing "subdivisions classifying goods beyond the level of the Harmonized System, provided that any such subdivision is added and coded at a level beyond that of the six-digit numerical code set out in the Annex to this Convention". New Zealand's 8-digit tariff structure complies with this provision.

Q2 The purpose of the preferential schemes recognized by New Zealand is to promote exports of products with a high value-added content from developing countries. However, at the same time New Zealand maintains its tendency towards tariff escalation for processed goods.

We would appreciate a more detailed explanation of what would appear to be a contradiction between preferential schemes which promote exports of products with a high value-added content from developing countries, and the tariff escalation that New Zealand maintains with regard to the more processed products. According to the Secretariat Report, this is an impediment to industrialization in the developing countries which export to New Zealand.

Answer: The Secretariat Report notes that "overall, the tariff shows a slight tendency to escalate" and "the textiles and clothing sector shows more significant tariff escalation, although the degree of escalation has declined since 2002" [Emphasis added]. The average applied rate in manufacturing across all tariff lines in 2002 was 4.3% and by 2008 had declined to 2.7%, indicating that the impact of any tariff escalation has declined significantly. New Zealand's average tariffs on processed goods are relatively low. In addition, 50 least developed (developing) countries benefit from duty free entry of all originating goods into New Zealand, while 89 less developed countries benefit from preferential entry under New Zealand's Generalized System of Preferences scheme under 462 tariff lines (15% of dutiable tariff lines). New Zealand has also negotiated free trade agreements with several less developed (developing) counties, which will lead to tariff elimination on all originating goods from those countries.

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