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Australia - apples
Measures Affecting the Importation of Apples from New Zealand WT/DS367(external link)
In 2010 the WTO Appellate Body found in favour of New Zealand in our case challenging Australia's apple quarantine measures.
Hungary - agricultural subsidies
Export Subsidies in Respect of Agricultural Products - WT/DS35 (external link)
The 1995 Hungarian budget provided for export subsidies to over 300 agricultural products, with an allocation of 35 billion florints (US$280 million). This allocation put Hungary in breach of its Uruguay Round commitments on export subsidies, which limit export subsidies to 16 agricultural products, at levels falling from 21.0 billion florints in 1995 to 14.3 billion florints in 2000. Hungary’s budgeted export subsidies for 1996 again exceeded these levels.
New Zealand and a number of other WTO Member countries had been actively involved for almost 20 months in seeking ways for Hungary to bring its export subsidy practices back into WTO‑conformity. Together with Argentina, Australia, Canada, Thailand and the United States (with Japan as a third party), New Zealand participated in four formal rounds of consultations with Hungary under the Dispute Settlement Understanding in 1996. These consultations did not resolve the issue and New Zealand, together with Argentina, Australia and the United States sought the establishment of a WTO panel in January of 1997.
A Panel was established in February 1997, however it did not have to convene to hear the dispute, since the parties reached a settlement of the dispute which was notified to the Dispute Settlement Body in July of 1997.
European Communities - butter tariffs
Measures Affecting Butter Products - WT/DS72(external link)
In June 1996, the European Communities ruled that New Zealand butter manufactured by the AMMIX and spreadable butter‑making processes was not eligible for New Zealand’s country-specific tariff quota (CSTQ) for butter established by the EC’s WTO Schedule because it believed that these butter products were not “manufactured directly from milk or cream” (one of the conditions of the CSTQ).
The practical effect of the decision was that these two products would be levied by the EC at the much higher out-of-quota tariff rate. New Zealand disagreed with the EC ruling. After extensive bilateral discussions on this issue the EC confirmed that it would not alter its position. This left New Zealand with no avenue for redress other than WTO dispute settlement.
New Zealand requested WTO consultations in March 1997. When consultations failed to resolve the dispute, New Zealand requested an adjudicative panel which was established in November of that year. The parties to the dispute (New Zealand and the EC) made written and oral submissions to the Panel during 1998. Before the Panel’s Report was made public, New Zealand agreed to an EC proposal to explore a settlement of the dispute. In February 1999, New Zealand requested a suspension of the panel proceedings in order to allow settlement negotiations to take place.
Settlement negotiations were eventually successful, and in November 1999, New Zealand notified the WTO that a mutually agreed solution to the dispute had been reached. As part of the settlement, the EC has passed a regulation which clarifies that New Zealand exports of spreadable and AMMIX butter do qualify for entry under New Zealand’s CSTQ for butter.
India - quotas
Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products - WT/DS93(external link)
For a number of years, India had maintained quantitative import restrictions on a wide range of agricultural, textile and industrial products (over 2,700 different types of products). India claimed it was entitled to maintain these restrictions for balance of payments reasons. In 1997, New Zealand, the European Union, the United States, Australia, Switzerland and Canada were all of the view that India could no longer justify these restrictions under the WTO rules. In July of 1997, each requested consultations with India under the WTO Dispute Settlement Understanding.
As a result of extensive consultations, New Zealand, the EU, Switzerland, Canada and Australia were able to reach a mutually agreed solution to the dispute with India, which was duly notified to the WTO (New Zealand’s notification - WT/DS93/8 - is dated 14 September 1998). As part of the solution to the dispute, India has agreed to a programme phasing out the quantitative import restrictions by 31 March 2003 at the latest.
Canada - dairy subsidies
Measures Affecting the Importation of Milk and the Exportation of Dairy Products WT/DS113(external link)
In 1995, Canada introduced a new pricing system for dairy exports, called the "Special Milk Classes" scheme. This scheme ensures that Canadian exporters have access to milk at considerably lower prices than otherwise available on Canada's domestic market. New Zealand and the United States shared the view that the scheme provides export subsidies for the purposes of the WTO Agreement on Agriculture, and as such these exports must be limited by Canada's export subsidy volume commitments for dairy products. New Zealand and the United States argued that because Canada’s exports under the “Special Milk Classes” scheme were running at around double Canada’s export subsidy commitment levels, Canada was therefore in breach of the Agriculture Agreement.
In November 1997, the Government agreed to New Zealand invoking the dispute settlement provisions of the WTO against Canada in respect of its "Special Milk Classes" regime. New Zealand requested consultations under the Dispute Settlement Understanding in December 1997. As the consultations did not resolve the dispute, New Zealand requested a WTO adjudicative panel in March 1998. The United States had also requested a panel in respect of the “Special Milk Classes” scheme. The Panel that was established heard both cases together.
The parties to the case (New Zealand, the United States and Canada) all made written and oral submissions to the Panel in the latter part of 1998. The Panel issued its report in May 1999. The Panel found that Canada's "Special Milk Classes" scheme did provide export subsidies, and that Canada had therefore exceeded its export subsidy commitment levels in breach of the WTO Agriculture Agreement.
Canada unsuccessfully appealed the Panel’s Report - in its Report in October 1999, the WTO Appellate Body upheld the Panel's key findings. The WTO Dispute Settlement Body (made up of all WTO Member countries) adopted these findings, and recommended that Canada bring its measures into conformity with the WTO rules.
New Zealand and the United States then reached an agreement with Canada in December 1999 on the time-frame for Canada's implementation of the outcome of the case. This agreement provided for a "phased" implementation over the 2000 calendar year. As part of its implementation, Canada would continue to make use of the "Special Milk Classes" scheme for dairy exports, but agreed to limit export volumes under the scheme to within its commitment levels.
However as part of its implementation, Canada introduced a number of new dairy export mechanisms on a province-by-province basis. Canada claimed that the new schemes did not provide export subsidies, and it would not therefore limit the volume of exports under them to within its export subsidy commitment levels. New Zealand and United States officials considered that the new schemes continued to provide export subsidies and that Canada had therefore failed to comply with the Dispute Settlement Body's recommendations.
In February 2001, New Zealand, the United States and Canada held consultations on this issue, but failed to resolve New Zealand's and the United State's concerns. Consequently, later in February, New Zealand and the United States formally requested that the WTO reconvene the original dispute settlement Panel to examine Canada's replacement schemes. The Panel received written and oral submissions from the parties in May 2001. The EU, Mexico and Australia also participated as third parties and made written and oral submissions to the Panel. The Panel issued its decision in July 2001. The Panel found that Canada's replacement schemes continued to provide export subsidies in breach of its WTO commitments.
Canada subsequently appealed this decision and in December 2001 the Appellate Body held that the Panel had applied the wrong legal test to determine whether export subsidies had been provided. The Appellate Body also determined that it was unable to make any determination as to whether the Canadian measures were export subsidies since further factual information was required before the correct legal test could be applied.
Following the December 2001 Appellate Body ruling, New Zealand and the United States requested, for a second time, the reconvening of the original dispute settlement Panel to examine Canada's replacement measures against the legal test outlined by the Appellate Body. The Panel received written and oral submissions from the parties in March and April 2002. The EU, Argentina and Australia also participated as third parties and made written and oral submissions to the Panel. The Panel issued its decision in July 2002. The Panel, once again, found that Canada's replacement schemes continued to provide export subsidies in breach of its WTO commitments.
On 23 September 2002, Canada notified its decision to appeal the Panel decision. Following receipt of written submissions of the parties, the Appellate Body heard the appeal in Geneva on 31 October 2002. In its report of 20 December 2002 [external link to WTO website] the Appellate Body upheld the Panel's finding that Canada was providing export subsidies in breach of its WTO commitments. The Appellate Body found that Canada's replacement scheme was contrary to Canada's obligations under Article 3.3 and Article 8 of the Agreement on Agriculture. The Appellate Body's decision was adopted by the Dispute Settlement Body on 17 January 2003.
At the same time as initiating the dispute settlement process to investigate Canada's compliance with the original panel's finding, NZ also lodged a request seeking authorisation from the Dispute Settlement Body to take retaliatory action against Canada by suspending tariff concessions up to the value of US$35 million a year, which is the damage calculated to be caused to New Zealand by Canada's illegal dairy export subsidy regime (the US also made a similar request to the Dispute Settlement Body). The requests of New Zealand and the US were referred to arbitration. A mutually agreed solution [external link to WTO website] between Canada and New Zealand (and separately between the United States and Canada) was notified to the WTO on 9 May 2003.
United States - lamb safeguards
Safeguard Measures on Imports of Fresh, Chilled and Frozen Lamb from New Zealand WT/DS177(external link)
In October 1998 United States’ lamb and sheep producers filed a petition under Section 201 of the US Trade Act 1974 seeking a remedy for their claim of serious injury caused by increased lamb imports from New Zealand and Australia. The United States International Trade Commission (USITC) concluded that while no actual serious injury had been caused by increasing lamb imports, those imports did cause a threat of serious injury to the domestic industry. The USITC majority recommended that trade restrictions be imposed on New Zealand and Australian lamb imports.
In July 1999 President Clinton announced the imposition of a trade-restrictive safeguard measure against imports of lamb from New Zealand and Australia with effect from 22 July 1999. The safeguard measure imposed consisted of a tariff quota set for three years and one day initially, although the duration of the safeguard measure could be extended for up to a total of eight years. Quota levels were set at approximately 1998 trading levels for the first year, increasing slightly in the following years, and tariff rates of 9% in-quota and 40% out of quota for the first year, 6% in-quota and 32% out-of-quota for the second year, and 3% in-quota and 24% out-of-quota for the third and final year.
New Zealand, Australia and the United States held consultations under the Safeguards Agreement in Geneva in April and May 1999 and in Washington in July 1999. Those consultations reached an unsatisfactory conclusion from New Zealand’s point of view. Accordingly, on 16 July 1999 New Zealand requested consultations with the United States under the Dispute Settlement Understanding (DSU), claiming that the safeguard measure was in breach of Articles 2, 3, 4, 5, 11, and 12 of the Safeguards Agreement, and Articles I, II, and XIX of the GATT 1994. At about the same time Australia also requested DSU consultations with the United States.
New Zealand and Australia held consultations with the United States under the DSU in Geneva in August 1999. Unfortunately, these consultations did not lead to a resolution of differences. Accordingly, on 27 October 1999 New Zealand requested the establishment of an adjudicative panel of the WTO to rule on the matter of the consistency of the safeguard measure with the United States WTO obligations. A panel was established pursuant to this request on 19 November 1999. Australia also requested a panel at the same time, and a single panel has heard both New Zealand and Australian arguments in the case. Canada, the EC, Japan, and Iceland participated as third parties. Panel hearings were held in Geneva on 25 and 26 May 2000, and on 26 and 27 July 2000.
In December 2000, the WTO Panel issued its decision, which was overwhelmingly in New Zealand's and Australia's favour, although there were some decisions on certain aspects which were not completely satisfactory in New Zealand's view. The United States appealed the Panel's ruling to the WTO's Appellate Body in January 2001. In response, New Zealand cross-appealed certain adverse aspects of the Panel's decision.
The Appellate Body heard the appeal in March 2001. The Appellate Body ruled comprehensively in New Zealand's and Australia's favour. It upheld all the findings of the Panel, as well as finding in New Zealand's favour on most of the issues that were cross-appealed. The ruling meant that the tariffs and quotas imposed by the United States on lamb meat were deemed inconsistent with WTO rules. The Appellate Body's report was adopted by the Dispute Settlement Body on 16 May 2001.
After considering its options, on 31 August 2001, the United States announced it would implement the recommendations and rulings of the Dispute Settlement Body by removing the safeguard measure on New Zealand and Australian lamb meat, effective from 15 November 2001.
United States - steel tariffs
Definitive Safeguard Measures on Imports of Certain Steel Products - WT/DS258(external link)
Following a safeguards investigation initiated in June 2001, the United States imposed safeguard measures on a broad range of imported steel products effective from 20 March 2002. This included products in the 'certain carbon flat-rolled steel' (CCFRS) category which are exported by New Zealand to the United States. Thus, an initial tariff of 30% was imposed on plate, hot-rolled steel, cold-rolled steel and coated steel, reducing to 18% in the third and final year of the measure. Slabs were subjected to a tariff rate quota of 30% on imports exceeding 5.4 million short tons, decreasing to 18% in the third year on imports exceeding 6.4 million short tons.
Certain types of CCFRS and other steel products, narrowly defined technically but amounting to a large percentage of total import volumes, were excluded from the measure at the time it was imposed and also subsequently pursuant to an exclusions application process which is ongoing. No New Zealand exports benefited from product exclusions.
On 7 March 2002, New Zealand requested consultations with the United States under Article 12.3 of the WTO Agreement on Safeguards. These took place in Geneva on 19 March 2002. On 21 May 2002, New Zealand requested dispute settlement consultations with the United States which took place in Geneva on 13 June 2002. These failed to resolve the dispute, so on 28 June 2002 New Zealand requested the establishment of a WTO panel. This was achieved on 8 July 2002 and the case brought by all eight principal complainants (Brazil, China, the European Communities, Japan, Korea, New Zealand, Norway and Switzerland) referred to a single panel. The members of this Panel were appointed by the WTO Director-General on 25 July 2002.
New Zealand, along with most of the other complainants, claimed that the United States had breached the GATT 1994 Article XIX, and Articles 2, 3, 4, and 5 of the Agreement on Safeguards. Canada, Chinese Taipei, Cuba, Mexico, Thailand, Turkey and Venezuela participated as third parties.
The first substantive hearing of the Panel took place in Geneva from 29-31 October 2002. The second substantive hearing of the Panel took place in Geneva from 10-12 December 2002. Complainants coordinated their oral statements to the Panel at both hearings, dividing the heads of claim between them. The Panel, which estimated that it received over 3,500 pages of submissions and 3,000 pages of exhibits, issued its final report on 11 July 2003. It found that the United States had acted inconsistently with its obligations under the GATT 1994 Article XIX, and with Articles 2.1, 3.1, and 4.2 of the Agreement on Safeguards. It also exercised “judicial economy” (i.e. did not rule) on a number of claims made by the complainants, including the claims that the United States had not complied with its obligation under Articles 2.1 and 4.1 to define correctly the “domestic industry” allegedly injured by increased imports; its obligation to demonstrate serious injury to that industry; and its obligation to apply safeguard measures proportionate to that serious injury as required by Article 5.1.
The United States appealed the Panel’s ruling to the WTO Appellate Body, filing its Notice of Appeal on 11 August and its Appellant Submission on 21 August. New Zealand and the other complainants filed their Other Appellant’s Submissions on 26 August, and all complainants and the United States filed Appellee submissions on 5 September. The Appellate Body held oral hearings in Geneva on 29 and 30 September, and issued its decision on 10 November 2003. It upheld the Panel's conclusions that the United States had acted inconsistently with its obligations under the GATT 1994 Article XIX, and under Articles 2.1, 3.1 and 4.2 of the Agreement on Safeguards. On 4 December 2003, the United States President announced that the safeguard measures would be removed, effective from 5 December. On 10 December, the WTO Dispute Settlement Body adopted the Panel Report as modified by the Appellate Body.
Previous WTO disputes with New Zealand as a Third Party
New Zealand has reserved its third party rights in 40 disputes to date. Third party submissions made by New Zealand in previous disputes include:
United States — Final Dumping Determination on Softwood Lumber from Canada - WT/DS 264(external link)
United States – Subsidies on Upland Cotton - WT/DS 267(external link)
United States – Country of Origin Labelling
Between 2009 and 2015 New Zealand participated as a third party in both the original proceedings and the compliance proceedings of the WTO dispute bought by Canada and Mexico challenging the United States’ mandatory country of origin labelling (COOL) measures on various food products, including beef.
New Zealand has a systemic interest in the development of WTO jurisprudence around the consistency of COOL measures with WTO obligations.
On 19 November 2009, the Dispute Settlement Body established a single panel to examine Canada and Mexico’s complaints. The United States, Canada and Mexico all appealed the Panel Report and following appeal proceedings the Appellate Body’s report was adopted by the Dispute Settlement Body on 23 July 2012.
Following the Appellate Body’s findings the United States made a number of changes to its mandatory COOL regime. However, on 25 September 2013 Canada and Mexico requested the establishment of a WTO compliance panel challenging those new measures as inconsistent with WTO obligations. The United States, Canada and Mexico all then appealed the compliance panel’s report.
On 18 May 2015, the Appellate Body ruled that the United States mandatory COOL rules were inconsistent with WTO obligations. On 7 December an Arbitrator concluded that Mexico may request authorization from the DSB to suspend concessions and related obligations in the goods sector under the GATT 1994 at a level not exceeding USD 227 million annually.