One of the major achievements of the Uruguay Round of WTO negotiations was to set in place a binding procedure for resolving trade disputes arising between members. WTO members agree not to take unilateral action when they think their rights have been violated. Instead they put their grievance through the WTO dispute settlement system and agree to abide by its rules and findings.
The WTO system deals with all trade disputes arising from any of the agreements contained in the Final Act of the Uruguay Round including agreements on:
The WTO dispute settlement process involves three main stages:
This dispute settlement process takes between 12-18 months (depending on whether or not it goes to appeal) and sometimes longer in more complicated cases.
If a New Zealand business is encountering an obstacle to trade in a particular product, or feels the requirements being set by the importing country are unreasonable, it should raise the issue with the Ministry of Foreign Affairs and Trade.
In assessing whether an action should be taken, the Ministry considers:
The preferred option is to try to resolve the matter bilaterally (by a direct approach to the Government concerned) before going to the WTO. Many small, and a number of large, trade problems have been resolved this way. Only after all other options for resolving the dispute have been exhausted would the Government consider formal proceedings under the WTO.
More information about the WTO dispute settlement system, including detailed information on past and current disputes, can be found on the WTO website [external link].
On 18 March 2015, New Zealand submitted a request to the Chair of the World Trade Organisation’s (WTO) Dispute Settlement Body (DSB) in Geneva for the establishment of a panel to hear the Indonesia — Importation of Horticultural Products, Animals and Animal Products dispute. New Zealand’s Panel Request was made alongside an identical Panel Request by the United States, with whom we are co-complainants in this dispute.
Our decision to file a Panel Request in the WTO, challenging Indonesia’s agricultural import restrictions was made in response to New Zealand concerns about Indonesia’s restrictive import regime.
New Zealand and the United States held WTO dispute settlement consultations (the first phase of the WTO dispute settlement process) with Indonesia in relation to our concerns in 2013 and again in 2014 following changes in the Indonesian laws and regulations governing Indonesia’s import regime. Unfortunately, these consultations did not resolve the dispute and New Zealand has remained concerned about a number of import restrictions in Indonesia’s laws and regulations which affect trade across a range of agricultural products, including horticultural and animal products.
For more information on the WTO dispute settlement process itself please refer to the WTO website.
New Zealand continues to pursue its systemic interests in maintaining WTO disciplines through participation as a third party in a number of current WTO dispute settlement proceedings. To date, New Zealand has reserved its third party rights in over thirty disputes.
In October 2008 Mexico requested consultations regarding the United States’ refusal to allow Mexican tuna to be marketed in the US using domestic “dolphin-safe” labelling. New Zealand has both a systemic and commercial interest in the case; environmental labelling is a growing phenomenon in international trade and New Zealand expects that this case will therefore be an important one for the WTO system.
Mexico filed its request for the establishment of a Panel in March 2009 and the Panel was composed on 14 December 2009. New Zealand lodged it’s third party submission on 28 April 2010. The first Panel hearing was held on 18-20 October 2010. The Panel Report was circulated on 15 September 2011. The United States submitted their appeal on 20 January 2012 with Mexico submitting their cross appeal on 25 January 2012. New Zealand also participated in the appeal phase of the dispute, as a third party. The Appellate Bodyís report was circulated on 16 May 2012, and the United Statesí reasonable period of time for implementation expired on 13 July 2013, and Mexico has requested the establishment of a compliance panel. top of page
In late 2009, Canada and Mexico requested the establishment of a WTO panel to settle a dispute over United States’ measures requiring country of origin labelling in respect of certain products, including meat products, for sale in the US. Canada and Mexico argue that the measures at issue are inconsistent with US obligations under the GATT, the Technical Barriers to Trade Agreement (TBT) and the Agreement on Rules of Origin, including: national treatment; the requirement that technical regulations not create unnecessary obstacles to trade; the use of existing international standards as the basis for regulations; and the administration of laws and regulations in an uniform, impartial and reasonable manner.
As an export economy faced with an increasing number of mandatory and voluntary country of origin labelling measures in its export markets, New Zealand has a systemic interest in the development of WTO jurisprudence around the consistency of CoOL measures with the WTO agreements.
On 19 November 2009, the DSB established a single panel to examine Canada and Mexico’s complaints, pursuant to Article 9.1 of the DSU. The panel was composed on 10 May 2010. New Zealand lodged its third party submission on 18 August 2010. The Panel hearing took place from 14 - 16 September 2010 in Geneva. New Zealand delivered an oral statement at the session for third parties on 15 September. The Panel Report was circulated on 18 November 2011. The United States, Canada and Mexico all appealed the Panel Report, and the Appellate Body’s report was circulated to Members on 29 June 2012 and adopted by the DSB on 23 July 2012. New Zealand did not make 3rd party submissions in the appeal phase.
On 21 August 2012, the United States informed the DSB that it intended to implement the DSB recommendations and rulings in a manner that respects its WTO obligations and that they would need a reasonable period of time to do so. The reasonable period of time for implementation was determined through arbitration under Article 21.3 (c) of the Dispute Settlement Understanding, which was circulated to Members on 4 December 2012. The reasonable period of time expired on 24 May 2013, on which day the United States announced that the USDA had issued a final rule that made certain changes to the COOL labelling requirements that had been found to be inconsistent with Article 2.1 of the TBT Agreement. The United States considered that the final rule had brought it into compliance with the DSB recommendations and rulings. Canada and Mexico did not agree that the changes had brought the United States into full compliance and requested the establishment of a compliance panel which was established on 25 September 2013.
New Zealand reserved its third party rights for the compliance phase of this dispute on 25 September.
During 2012 and 2013, Ukraine, Honduras, Dominican Republic, Cuba and Indonesia separately commenced dispute settlement proceedings against Australia in respect of certain Australian laws and regulations that impose restrictions on trade marks and other plain packaging requirements on tobacco products and packaging. The complainants have challenged Australia's measures under three WTO agreements: the Agreement on Trade-Related Aspects of Intellectual Property Rights, the Agreement on Technical Barriers to Trade and the General Agreement on Tariffs and Trade.
Consultations between each of the complainants and Australia did not resolve the disputes.
On 5 May 2014, a WTO Panel was composed to jointly hear and determine the five complaints. New Zealand and a significant number of other WTO Members have reserved their third party rights in each of the five disputes. New Zealand is participating in the proceedings and it will make a submission during the panel hearings.
The Panel has announced that it "expects to issue its final report to the parties not before the first half of 2016".
New Zealand has reserved its third party rights in over thirty disputes to date. Information on New Zealand’s involvement in WTO dispute settlement can be found here.
Examples of third party submissions made by New Zealand in previous disputes are available below:
United States — Final Dumping Determination on Softwood Lumber from Canada (WT/DS 264)
United States – Subsidies on Upland Cotton (WT/DS 267)