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In this edition:
On 9 August, the World Trade Organisation (WTO) dispute settlement Panel hearing the Australia-Apples case released its final report to the WTO Membership. The Panel report represents a solid win for New Zealand.
The Australian market has been closed to New Zealand apples since 1921, following the discovery in NewZealand of fire blight, a bacterial plant disease. Since 1986, New Zealand has sought formally to have the ban lifted, because studies have found no scientific evidence that fire blight can be transmitted through commercially traded apples. After consultations failed to resolve the matter, in December 2007 New Zealand requested the establishment of a WTO dispute settlement panel.
New Zealand has been successful on all key arguments in the case. The Panel held that all 16 of the Australian measures at issue in the dispute violate the requirements in the WTO Agreement on the Application of Sanitary and Phytosanitary Measures that such measures must be based on an appropriate risk assessment and must not be maintained without sufficient scientific evidence.
The Panel also found that there were other, reasonably available measures, that would achieve Australia’s appropriate level of protection and that were significantly less trade restrictive. The Panel found that restricting imports of New Zealand apples to mature, symptomless fruit, with straight-forward sample inspections at the border, would fully achieve Australia’s appropriate level of protection.
On 10 August, Australia announced its intention to appeal the decision. It will need to formally lodge an appeal by 31 August. Any appeal would be completed inside six months.
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Following on from the successful ‘Brazil Business Forum’ meetings held in New Zealand in October 2009, the New Zealand Embassy in Brasília, with assistance from NZTE in São Paulo, and in partnership with the Federation of Industries of the state of São Paulo (FIESP), will be hosting a ‘Business Encounter’ in Sao Paulo on 27 October 2010.
A selection of significant New Zealand enterprises will participate in the event which will comprise a morning seminar to familiarise these companies with the types of business opportunities opening up as a result of Brazil’s large and increasingly dynamic economy (GDP estimated at US$ 1.7 trillion in 2009). Minister of Trade, Hon Tim Groser will deliver the keynote address for New Zealand.
The Encounter will cover the agriculture sector and industry with a particular focus on infrastructure projects emerging from the preparations for the 2014 Football World Cup and the 2016 Olympic Games in Rio de Janeiro, and will also include a segment on commercialising innovative research.
The major purpose of the event is to facilitate New Zealand businesses in establishing or developing significant contacts with relevant and targeted Brazilian business counterparts. The afternoon session will be a series of business matchmaking sessions providing an opportunity for individual New Zealand participants to directly encounter individual Brazilian enterprises interested in developing business partnerships and commercial relationships.
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The UN Security Council approved the 4th round of sanctions against Iran by adopting UNSCR 1929 on 9 June 2010. The sanctions contain the following legally binding elements:
NewZealand, as a member of the United Nations, is legally obliged to comply with and implement Security Council resolutions. To that end, the United Nations Sanctions (Iran) Regulations 2010 are expected to enter into force on 2 September 2010.
Further information on the practical implications on trading with Iran, including the requirement for companies to exercise vigilance, will be communicated through forthcoming issues of Businesslink and directly with businesses, once the necessary legal processes have been completed. Information regarding the Regulations will be made available on the MFAT website: www.mfat.govt.nz.
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New Zealand is to help fund the construction of a solar power plant in Tonga. The contribution is a practical example of New Zealand supporting Tonga's drive to increase the use of renewable energy, and to reduce its reliance on diesel-generated power.
The plant will be built and operated by Meridian Energy, with the power sold to Tonga's state-owned power company, Tonga Power Limited, under a long-term purchase agreement.
Minister Murray McCully, who made the funding announcement while in Nuku’alofa on 7 July, said “The construction of the 1 mega watt plant will meet up to 5 percent of the electricity needs of the main island of Tongatapu. It also supports the Tongan Government's 10-year Energy Road Map strategy to move away from expensive, imported fuels towards renewable energy sources."
Meridian is currently undertaking a survey of the proposed site to determine its suitability. Over the next six months, there will be detailed design work, and negotiations between Meridian and Tonga Power Limited over the pricing under the power purchase agreement. The parties are hoping that construction can start early in 2011, with completion later the same year.
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The New Zealand – Malaysia Free Trade Agreement (FTA) entered into force on 1 August 2010. The FTA was concluded in May last year and signed in Kuala Lumpur in October by the Minister of Trade in the presence of the Prime Minister.
The FTA will eliminate tariffs on 99.5% of New Zealand’s current exports to Malaysia within seven years – five years earlier than provided for under the existing ASEAN-Australia-New Zealand Free Trade Agreement. On day one, a 15% tariff on kiwifruit was eliminated, as well as the elimination of in-quota tariff rates for liquid milk exports and an increase in overall volume. The FTA also provides new and enhanced market access for New Zealand’s services exporters to Malaysia, including in education, environmental, management consulting and veterinary services.
Malaysia is an important market for New Zealand. Our tenth largest trading partner, our exports were worth three-quarters of a billion dollars in the year-to-May 2010. The FTA is also further evidence of New Zealand’s strengthening economic integration with South East Asia.
Information on the FTA is available on this website
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The previous issue of BusinessLink announced the launch of the China FTA 2-year Joint Review. This includes outreach to obtain business perspectives on the impact of the FTA in its first two years of operation.
The online business survey is now live. We are very interested in your views on the FTA and would encourage any business trading with, or in, China to complete the survey. It can be accessed on the link: http://www.surveymonkey.com/s/chinaftasurvey2010. Please note only one response per business can be submitted.
The survey closes on Friday 3 September.
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New Zealand will showcase its clean energy expertise at the International Energy Week held 27 October – 4 November in Singapore . The New Zealand delegation will include Brian Cox, an expert in bio and solar energy, who will speak during the event. Mr Cox is Executive Officer for the Bioenergy Association of New Zealand and of the Solar Industries Association.
The International Energy Week will bring together over 5000 policy makers, business leaders and investors from Asia and the world, creating a platform to highlight New Zealand clean technology capability.
New Zealand is looking to partner with Southeast Asia and India to develop a range of world-changing technologies which harness renewable materials and energy sources or which dramatically reduce the use of natural resources and limit emissions and waste.
Currently more than 65 percent of New Zealand’s electricity is generated from renewable energy sources such as hydro, geothermal, wind and biomass. Beyond energy generation, the successful utilisation of clean technology consists of energy storage and infrastructure as well as transportation, water and waste treatment, smart materials, sustainable agriculture and more.
For the conference programme and to register online, visit: http://singapore.iew.com.sg/
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The Tariff (Hong Kong-New Zealand Closer Economic Partnership Agreement) Amendment Bill was passed in Parliament on Tuesday 24 August. The passing of this Bill means that New Zealand is now ready to put in place the preferential tariff rates agreed under the Closer Economic Partnership with Hong Kong. These rates will be the same for imports from Hong Kong as they are for China under the NZ-China FTA. The CEP itself will enter into force in early 2011, once each country has completed its domestic treaty process.
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The FTA was a major item for discussion during the Prime Minister's visit to Korea in July. Leaders reviewed progress to date, and agreed that discussions should continue at Ministerial level. Leaders will consider the outcome of these discussions when they meet again later this year.
MFAT has completed the first phase of new research looking at the characteristics of NZ commercial services exporters (i.e. services other than travel; transportation; insurance; and government services). The research has found that service exporters are bigger and more productive than firms that don’t export; a finding which is consistent with both New Zealand and international research on merchandise exporters. There also appears to be a high degree of foreign ownership among the top exporters. These findings lend weight to the important role international trade and investment has in lifting firm-level productivity performance.
The research has also found that New Zealand's top markets by value are Australia, the US and China; and the most important commercial service export sectors, by value, are merchanting, other telecommunication services and IT design and development services. As with merchandise exporters services trade is concentrated among a few service exporters (particularly those that also export goods) and the challenge, if we are going to meet the Government’s exports goals, is to lift the overall engagement of New Zealand service suppliers in international markets. For a full report see below:
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Prime Minister John Key today announced the appointment of Maxine Simmons as one of New Zealand's three representatives on APEC's Business Advisory Council (ABAC). Maxine Simmons joins New Zealand's current representatives, Tony Nowell and Gary Judd.
Link to Beehive site for full article.
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"The Forces Shaping World Trade" is the title for this year's forum and its theme will be to identify future steps for the WTO - "to assess its post-economic crisis agenda, to continue brainstorming on all aspects of WTO work, and to contribute to greater coherence across the issues of global governance".
Deadline for Registrations is 9 September 2010. Click here to register. Back to top
The second round of New Zealand’s FTA/CECA negotiations with India was held in New Delhi from 10-13 August.
Good progress was made at the second round with an encouraging measure of convergence around the shape of many of the chapters contemplated for inclusion in the FTA. Discussion was assisted through the tabling by one or both sides of draft chapter text which helped provide focus to the discussion around the broad shape of these various chapters. There was also discussion about each side's respective approach to the treatment of competition policy, intellectual property, Government procurement, trade and labour and trade and environment. A range of intersessional follow-up steps were agreed to help move forward various aspects of the negotiation.
A third round, to be held in New Zealand, is scheduled for the last week in October.
As negotiations progress, it is important for officials to have up to date information about any barriers to market entry that New Zealand firms are experiencing in India, so that we can seek to address these through the negotiations. We welcome input from stakeholders at any stage.
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New Zealand is taking part in negotiations under the Convention on Biological Diversity (CBD)regarding the establishment of an international regime on access to genetic resources (flora, fauna and micro-organisms), and the sharing of the benefits arising out of their utilisation i.e. international rules governing bioprospecting activities. The deadline for concluding the negotiations is this year’s Conference of the Parties to the CBD being held on 18-29 October in Nagoya, Japan.
The negotiations are important to New Zealand as they concern international transfers of genetic resources and our agriculture-based economy is dependent on foreign genetic resources for research and development (e.g. pasture, livestock,grapes, pinus radiata, biocontrol agents). New Zealand also has a rich store of indigenous genetic resources potentially of interest to both New Zealand and foreign researchers and biotechnology companies. Assuming that a regime enters into force, researchers and biotechnology companies world-wide working with plants, animals or micro-organisms will likely be affected.
If you attended the recent Forum held at The Langham Hotel, Auckland and would like to complete a quick survey online it can be accessed here.
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The new Pacific Business Mentoring Programme, which has previously been launched in the Cook Islands and Tonga, has now commenced in Samoa. As a result, businesses in Samoa will now have access to mentoring by highly experienced business volunteers through the initiative.
The programme was launched in Samoa on 5 July by the Honourable Deputy Prime Minister, Misa Telefoni, who gave his strong endorsement and encouraged Samoan businesses to take up the opportunity. He also indicated the programme aligned well with the Samoan Government's own goals: “The government's priority is the equitable distribution of income; pushing medium to small business activity is the key to achieving such an objective."
A team from Business Mentors New Zealand (BMNZ) has been in Samoa to work with the Samoa Chamber of Commerce to roll out the pilot initiative funded by the New Zealand Aid Programme. While in Samoa they will seek applications and select priority businesses that have real potential and then link these people to experienced and high calibre New Zealand mentors.
The programme aims to assist small and medium sized businesses in the Pacific to manage and grow their businesses in a way that supports sustained increases in production and employment over time.
The mentoring services will be strongly guided by Samoan business needs and will create a path by which Samoan businesses can access quality, professional business expertise from New Zealand and, increasingly, through locally trained business mentors.
It is hoped that these relationships will provide strategic advice that will enable Samoan business people who have good ideas and products to take the next step in developing their business, whether that be improving accounting practice, strengthening business planning, or linking to export markets.
The Pacific Business Mentoring Programme is managed by BMNZ. It will be rolled out in succession over the next three years to a further eight Pacific island countries.
For more information about the programme visit www.businessmentors.org.nz.
New Zealand Foreign Minister, Murray McCully, and the President of the Tongan Chamber of Commerce Commerce and Industry, Mr Paula Taumoepeau, have jointly announced the launch of a new Tonga Business Enterprise Centre (TBEC).
The TBEC is characterised as being a one-stop shop where businesses can come for advice, training or help with accessing finance for new investment.
"The new Business Enterprise Centre is needed to provide training and sound advice to a range of small businesses in Tonga. The global financial crisis has triggered a downturn in the Tongan economy, which has had an adverse impact on many small businesses. New Zealand has responded by providing practical support through funding for training in essential business skills such as financial management, staff management, and how to grow your business," Mr McCully said.
Banks in Tonga have revealed that there are funds to lend but not enough strong proposals coming through.
Mr McCully noted, “With New Zealand funding, Tonga already has in place a scheme to fund feasibility studies that can help to turn good business ideas into bankable proposals. We are also providing experienced business mentors from New Zealand who are working one on one with Tongan businesses to provide advice and map out plans for expansion. If the New Zealand mentors identify areas where a business in Tonga needs help, the new TBEC will be able to step in and provide that assistance.”
The TBEC initiative has been developed jointly with the Chamber of Commerce and the Ministry of Commerce, Labour and Industries, and the Ministry will be on the Advisory Committee for the Centre.
