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Although we have tried to use plain English content on the site, you may come across specialist terms and acronyms. Find out what they mean in our glossary of terms.
If you come across a term that isn't included in the Glossary please send us an email.
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. Chile, Chinese Taipei, the European Communities, Japan, Pakistan and the United States have 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.
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 | Oct – Dec 2008 |
| Second written submissions of the parties | 4 February 2009 |
| Second panel hearing | 4-5 March 2009 |
| Panel report issued to the parties | July 2009 |
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 three 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 interim 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. The EC is still working towards implementation with the affected parties.
This is an anti-dumping case brought by Japan against the United States practice in calculating dumping margins in its anti-dumping investigations. New Zealand is concerned to protect a particular type of methodology that is referred to in the WTO Anti-Dumping Agreement and which we are one of the few countries to use. Because it is likely that the US-Softwood Lumber case (see below) will be heard by the Appellate Body before the US-Zeroing case, New Zealand made only a brief oral statement on systemic issues at the first panel hearing in June 2005. The Panel report was circulated to Members 20 September 2006. The Panel rejected Japan’s claims that zeroing was prohibited in proceedings other than original investigations. Japan appealed in October 2006 and the Appellate Body report was released on 9 January 2007. Japan has now requested the establishment of an Article 21.5 Panel to assess compliance by the United States.
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 hearing took place in July 2008. New Zealand participated as a Third Party. The Appellate Body report is expected to be available before the end of 2009.
This is part of a long-running dispute between Canada and the US over the imposition of anti-dumping duties on imports of Canadian softwood lumber. In recalculating anti-dumping duties following its loss to Canada in a WTO case, the United States used a methodology which New Zealand also uses. We therefore had an interest in ensuring the continued use and proper application of this methodology. New Zealand made a submission to the panel in July 2005 and attended the oral hearing on 16 November 2005. The panel found in favour of the United States. In the ensuring appeal, the Appellate Body did not uphold the panel’s reasoning. The United States is now to bring its measure into conformity with the Appellate Body’s decision.
The Japan – Import Quotas on Dried Lavar and Seasoned Lavar case is being taken by Korea against Japan concerning the import restrictions (quotas) that Japan has on certain fish products, including dried lavar (seaweed). It has had these quota restrictions for over 50 years. Korea claims that the quotas constitute illegal restrictions and that as quotas on “agricultural products” they should have been converted into ordinary customs duties. While New Zealand does not export lavar, we do export fish products on which Japan has quotas. The lifting of these fish quotas would bring real benefits to New Zealand. A submission was made in the case and the parties heard in August 2005. However, Japan and Korea reached a mutually satisfactory resolution of the case during the panel process.
This case was brought by the US and Australia over the EC system of protection for trademarks and geographical indications (GIs) for agricultural products and foodstuffs. In March 2005 the panel ruled that the EC system was discriminatory in its application to foreign nationals. The EC did not appeal.
New Zealand was a third party in the dispute between Brazil and the United States over US subsidies to upland cotton. The dispute raised systemic issues relating to WTO disciplines on prohibited export subsidies and domestic support in the context of agriculture. New Zealand joined the dispute as a third party to ensure that our views on the nature and application of those disciplines were properly presented to the WTO Panel. The Panel ruled that US cotton subsidies contravened WTO rules on export subsidies and domestic support. The Panel ruling was upheld by the Appellate Body in March 2005. In September 2006 Brazil sought the establishment of a compliance panel to examine whether the US has brought its measures into compliance with the Appellate Body ruling. The compliance panel report was circulated in 18 December 2007 and found that the United States had failed to comply with the DSB recommendations and rulings. The United States appealed, and the appellate body report upholding the Panel’s findings was circulated on 2 June 2008.
This challenge by Australia, along with Brazil and Thailand, was to the substantial export subsidies provided by the EC to its sugar producers. New Zealand joined this dispute as a third party because it raised important systemic issues relating to the WTO disciplines on export subsidies that are central to New Zealand’s trade interests. The Panel found that the EC sugar subsidies were in breach of its WTO reduction commitments. This ruling was upheld by the Appellate Body in April 2005. The EC is still working towards implementation.
New Zealand was a third party in the Japan – Apples dispute brought by the US against Japanese measures to control fireblight. In November 2003 the Appellate Body ruled that Japan’s restrictions on apple imports breached WTO rules as they were not based on scientific evidence. The key scientific finding of the Panel was that the risk of introduction of fireblight from mature apples in commercial trade was “negligible”. Japan was given until 30 June 2004 to implement the decision and reissued its import restrictions with some minor changes. In mid-2004 the US challenged Japan’s compliance with the ruling before a compliance panel. Japan sought to introduce “new scientific evidence” before the compliance panel, but New Zealand introduced further evidence to debunk the Japanese theories. The final report of the compliance panel was released to WO Members in June 2005 and concluded that the revised Japanese measures were not in conformity with the WTO Agreement. Japan is now implementing this decision. New Zealand is in discussions with Japan over its quarantine measures on apples.
New Zealand has also been involved in other disputes, summaries of which are available on the site:
