Treaties for which NZ is DepositaryTrade law and free trade agreementsFree trade agreementsNZ involvement in trade disputesWorld Trade Organisation lawTreaty making processLaw of the Sea and FisheriesInternational Humanitarian LawInternational Courts and TribunalsPrivate International LawDiplomatic Privileges and ImmunitiesUnited Nations Security Council SanctionsInternational Law Events
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:
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 can be found on the WTO website [external link].
Australia Apples
The Australian market has been closed to New Zealand apples since 1921, when the disease fire blight was discovered in New Zealand. Since 1986, New Zealand has sought actively to have the ban lifted, because studies have found no scientific evidence that fire blight can be transmitted through commercially traded apples.
In November 2006, Biosecurity Australia responded to New Zealand’s fourth request for access, issuing the Final Import Risk Analysis Report for Apples from New Zealand (‘Final IRA’). The Final IRA recommended that imports of apples from New Zealand be permitted, subject to a range of conditions (known as ‘phytosanitary measures’ or ‘risk management measures’) which Australia deemed necessary to reduce the risks of various pests and diseases associated with New Zealand apples. On 27 March 2007, Australia’s Director of Animal and Plant Quarantine issued a policy determination confirming the conditions in the Final IRA. New Zealand considers that many of the risk management measures imposed by Australia in the Final IRA are not justified by science, in particular those relating to two diseases of apples (fire blight and European canker) and one insect pest (apple leafcurling midge). Consequently, New Zealand considers these measures to be inconsistent with Australia’s obligations under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (‘SPS Agreement’). On 31 August 2007, New Zealand requested consultations with Australia under Article 11 of the SPS Agreement and Article 4 of the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (‘DSU’). The consultations took place in Geneva on 4 October 2007, but failed to resolve the dispute. On 6 December 2007 New Zealand requested the establishment of a WTO panel. The Panel was established at the meeting of the WTO Dispute Settlement Body on 21 January 2008, and was composed on 12 March 2008, comprising Mr J P A (Attie) Swart (Chair), Mr William Ehlers and Ms Kirsten Hillman. Six WTO members - Chile, Chinese Taipei, the European Communities, Japan, Pakistan and the United States - reserved the right to participate as third parties in the dispute.
On 13 March 2008, Australia lodged a request for a preliminary procedural ruling from the Panel, claiming that New Zealand’s request for the establishment of a panel was inconsistent with Article 6.2 of the DSU. Australia alleges that New Zealand’s panel request does not identify the specific measures at issue, and does not provide a brief summary of the legal basis of New Zealand’s complaint sufficient to present the problem clearly. New Zealand filed a response to these claims on 7 April 2008. Australia lodged a second submission on the procedural issue on 14 April 2008. In response, on 16 April New Zealand submitted a letter to the Chair of the Panel. New Zealand also took the opportunity to respond to third party submissions filed by Chile and the European Communities on 9 May 2008.
On 6 June 2008, the Panel released its Preliminary Ruling on the procedural issue, ruling that “the Panel will allow this proceeding to continue with respect to the 17 measures specifically identified in New Zealand's panel request and to the alleged inconsistency of such measures with the provisions of the SPS Agreement cited therein”.
On 20 June 2008, New Zealand lodged its first written submission in the dispute. Australia then lodged its first submission on 18 July 2008. The parties presented their first oral submissions at the panel hearing in Geneva on 2-3 September 2008. New Zealand and Australia's second written submissions were tabled on 21 April 2009, with the second panel hearing taking place in Geneva on 30 June - 2 July 2009. The Panel is expected to make its findings in the case in early 2010. top of page
Key stages in the indicative timetable for the dispute are as follows:
| New Zealand’s First written submission | 20 June 2008 |
| Australia’s first written submission | 18 July 2008 |
| Third parties’ written submissions | 23 July 2008 |
| First panel hearing | 2-3 September 2008 |
| Solicitation of expert advice | October 2008 - February 2009 |
| Second written submissions of the parties | 21 April 2009 |
| Second panel hearing | 30 June - 2 July 2009 |
| Panel report issued to the parties | Early 2010 |
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.
New Zealand is involved as a third party in several disputes:
New Zealand reserved its rights to participate as a third party in the WTO dispute brought by the US, Canada and Argentina in relation to EC GM approvals (EC – Measures Affecting the Approval and Marketing of Biotech Products). We have a systemic interest in ensuring the proper application of the relevant WTO rules which underline the importance of decision-making based on objective risk assessment and scientific principles. New Zealand submitted its third party submission in May 2004.
The Panel’s final report was circulated to Members on 29 September 2006 and found that the EC had applied a general moratorium on the approval of biotech products, inconsistent with its obligations under the SPS agreement.
The parties involved settled on a reasonable period of time for implementation, which has since been amended by mutual agreement. In July 2009, the EC and Canada reached a mutually agreed solution to their dispute. The EC is still working towards implementation with the US and Argentina.
top of page
These are two parallel cases brought by the EC against the US and Canada. The dispute concerns the US and Canada’s ongoing suspension of concessions (sanctions) against the EC following the EC’s loss in the earlier Beef Hormones case. The EC alleges that it has brought its beef hormones measures into compliance with the WTO ruling. We are interested from a systemic viewpoint in the “post retaliation” aspects of the case – ie what procedures apply where there are DSB authorisations to retaliate in place and the Member concerned claims it has brought itself into compliance. There are also SPS aspects (do the new EC measures comply with the SPS Agreement) that we did not address directly. Our submission was made in August 2005. The first panel hearing took place on 12-15 September 2005. Due to the complexity of the dispute, the panel report was not circulated to Members until 31 March 2008. The Panel held both sides to be in breach of certain obligations under the DSU. On 29 May 2008, the EC notified its decision to request the Appellate Body to review certain issues of law. The Appellate Body decision was released in late 2008. It addresses the procedures that apply in a situation where: WTO-authorised retaliation has been taken; the Member being retaliated against claims subsequently to have brought itself into compliance; however, the Member/s taking the retaliatory action do not consider this to be the case. The Appellate Body’s findings make clear that, in such a situation, the duty to cease retaliatory action is not triggered until substantive compliance is determined through multilateral dispute settlement proceedings. On the substantive question of the EC's compliance with the SPS Agreement, the Appellate Body recommended that the Parties initiate compliance proceedings to address that issue. On 6 January 2009, in response to the Appellate Body decision, the EC requested consultations with the US and Canada to determine its substantive compliance with the SPS Agreement. New Zealand has joined as a Third Party to this latest phase of the dispute.
Mexico is challenging 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 we expect that this case will therefore be an important one for the WTO system.
