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Disputes with New Zealand as a Principal Complainant
Indonesia — Importation of Horticultural Products, Animals and Animal Products
Our decision to challenge Indonesia’s agricultural trade restrictions through WTO dispute settlement was made in response to their significant impact on New Zealand exports. New Zealand beef exports, for instance, have fallen by over 80 percent into what was previously our second-largest beef export market by volume, worth $180 million in trade per year. The accumulated trade impact to our beef sector alone is now estimated at between $0.5 and 1 billion. Certain New Zealand horticultural exports are also affected.
The case covers a range of inter-related trade barriers imposed by Indonesia on agricultural imports since 2011. There are over a dozen separate measures. These include:
- A prohibition on all imports of beef secondary cuts and offal.
- Restrictions limiting the sale of imported prime beef to hotels, restaurants and caterers. Thus, imported beef cannot be sold directly to consumers through key retail outlets (such as supermarkets and traditional markets).
- A requirement to purchase a certain percentage of domestic beef in order to import from overseas (a “domestic purchase requirement”).
- Restrictions on importing more or different products than specified on import licences (“fixed licence terms”).
- Incentives to be conservative in requesting import volumes or risk of having the ability to import revoked (an “80% import requirement”).
- Prohibitions on importing certain horticultural products during the Indonesian domestic harvest season, when the domestic price is above a certain level, or when harvested earlier than a certain period before importation.
- An import licensing regime that effectively closes the Indonesian market to imports for several months per year. This is due to rigid import licence application windows at the beginning of licensing semesters that don’t account for the time it takes to prepare and ship product to Indonesia.
New Zealand held WTO dispute settlement consultations (the first phase of the WTO dispute settlement process) with Indonesia in relation to our concerns in 2013 and 2014. Unfortunately, those consultations did not resolve the dispute.
On 18 March 2015, New Zealand requested the WTO Dispute Settlement Body to establish a panel to hear this dispute. New Zealand’s Panel Request was made alongside a Panel Request by the United States, with whom we are co-complainants. The following 14 WTO Members are third parties in the dispute: Argentina, Australia, Brazil, Canada, China, Chinese Taipei, the EU, India, Japan, Korea, Norway, Paraguay, Singapore and Thailand.
On 13 November 2015, New Zealand filed its first written submission to the WTO Panel. The first oral hearing with the Panel was held in Geneva from 1-3 February 2016. A second written submission was then filed on 2 March with a second oral hearing with the Panel held from 13-14 April. In the course of the litigation, New Zealand has responded to 120 questions from the Panel.
On 22 December 2016 the WTO Panel ruled in New Zealand's favour in respect of all 18 measures challenged by New Zealand. The WTO panel concluded that each of the measures at issue are inconsistent with Article XI:1 of the GATT 1994, which prohibits measures that prohibit or restrict imports of goods.
Indonesia appealed the Panel decision to the WTO Appellate Body on 17 February 2017. New Zealand filed its response submission on 7 March 2017 and subsequently made oral submissions before the Appellate Body in Geneva. On 9 November 2017, the Appellate Body upheld the key findings of the WTO Panel, confirming that all 18 of the challenged measures are inconsistent with Article XI:1 of the GATT 1994.
Disputes with New Zealand as a Third Party
Canada - Measures Governing the Sale of Wine
New Zealand is participating as a third party in a case brought by Australia challenging a number of Canadian laws that favour domestic wine over imported wine. New Zealand has a direct trade interest in this dispute. Canada is New Zealand’s fourth largest export market and accounts for around 7.5% of New Zealand annual export wine revenue. New Zealand also has a systemic interest in the proper interpretation of the provisions at the centre of the dispute, notably Article III of the General Agreement on Tariffs and Trade. The Panel proceedings are ongoing.
Canada - Measures Governing the Sale of Wine in Grocery Stores
New Zealand is a third party in dispute brought by the US against Canada regarding its wine measures. This case focuses on a sub-set of the measures challenged in the Australian case (DS537). The United States suspended this case after Canada agreed to remove the measures challenged in a side letter to the United States–Mexico–Canada Agreement (‘USMCA’). The case remains suspended indefinitely.
Korea – Import Bans, and Testing and Certification Requirements for Radionuclides
New Zealand is participating as a third party in WTO dispute settlement proceedings brought by Japan which challenge Korea’s import bans and additional testing and certification requirements on certain food products from Japan. These sanitary and phytosanitary measures were adopted in 2011 in response to food safety concerns following the Fukushima nuclear disaster. New Zealand presented an oral statement at both the Panel and Appellate Body stages. The Appellate Body decision was released in April 2019.
Indonesia – Chicken Meat and Products
On 3 December 2015, a WTO dispute settlement panel was established to hear Brazil's complaint challenging Indonesia’s restrictions on the importation of chicken products. Some of the measures challenged by Brazil, while focused on chicken meat, are similar to those regarding agricultural imports raised by New Zealand and the United States in the WTO dispute Indonesia – Importation of Horticultural Products, Animals and Animal Products. New Zealand has made submissions to the Panel in writing and orally at the third party hearing held in July 2016.
Australia – Tobacco Plain Packaging
WT/DS434(external link), WT/DS435(external link), WT/DS441(external link), WT/DS458(external link) and WT/DS467(external link)
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.
In June 2018, the Panel found that the plain packaging measures are not inconsistent with Australia’s WTO obligations. Honduras and the Dominican Republic have appealed this decision to the Appellate Body. The Appellate Body proceeding is ongoing.
United States - Tuna II (Mexico)
In October 2008 Mexico requested consultations regarding the United States’ refusal to allow Mexican tuna to be marketed in the United States using domestic “dolphin-safe” labelling. New Zealand had both a systemic and commercial interest in the dispute due to our interest in eco-labelling and fisheries.
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 its 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 Body’s report was circulated on 16 May 2012. The United States’ reasonable period of time for implementation expired on 13 July 2013, and Mexico requested the establishment of a compliance panel under Article 21.5 of the DSU. The compliance panel’s report was issued on 14 April 2015 and subsequently appealed by both Mexico and the United States. New Zealand made written submissions and an oral statement to the Appellate Body.