New Zealand Permanent Mission Geneva, Switzerland

WTO Trade Policy Review of the European Union

WTO Trade Policy Review of the European Union  – New Zealand  Statement Delivered by Ambassador John Adank, Permanent Representative to WTO – June 2013

New Zealand welcomes this opportunity to comment on the eleventh Trade Policy Review of the European Union. 

New Zealand has a strong and broadly-based relationship with the EU. As our fourth largest trading partner, the European Union remains a significant and highly valued economic partner for New Zealand.  Accordingly, New Zealand takes an active interest in the European Union’s trade and investment policy. 

We note that with the entry into force of the Lisbon Treaty, the Commission now has competence for investment policy in addition to trade.  We look forward to understanding more around how this will be carried over into preferential trade agreements and in the longer term under the multilateral trading system.

A significant development in the EU’s trade policy since the last trade policy review, not only for the EU but indeed for all WTO Members, has been the launch of its negotiations towards preferential trade agreements with the United States and separately Japan.  We are now in a situation where three of the world’s top five economies are negotiating preferential deals between themselves. 

It is in this context that we particularly appreciate the EU’s public commitment that these agreements will serve as “building blocks” rather than “stumbling blocks” to the multilateral trading system.  In this regard, we look forward to hearing more about how this will be achieved in practice, including around what practical measures the EU will be seeking to introduce into both negotiations to ensure that both agreements support the WTO process.

As a general point, New Zealand would like to reiterate the importance of consultation and transparency in the development and introduction of trade-related measures.  It is critically important that the notification of regulations that may affect trading partners is conducted in a timely fashion and before implementation to allow partners the chance to understand them fully and to help industry adopt processes to ensure compliance.  Such consultation should occur at an appropriate and early stage so that the views of third countries such as New Zealand can not only be considered but also taken into account in policy development.

New Zealand considers that it is important to take into consideration the impact of regulations on third countries when looking at implementation and the phasing in of new requirements.  As a southern hemisphere agri-food exporter, New Zealand operates in a counter-seasonal environment to Europe and implementation plans tailored to European production seasons can have an adverse impact on producers such as New Zealand given our respective production cycles. 

In previous reviews, New Zealand has expressed concerns about aspects of the Common Agricultural Policy.  New Zealand recognises and commends the on-going efforts of the EU to reform the CAP and joins others in encouraging the EU in the direction of greater market orientation and reduction of distortions to international trade.  The reintroduction of coupled payments in the recently concluded CAP reform package was disappointing in this regard and lay contrary to the generally positive direction CAP reforms have been tracking over the past 10 years.   New Zealand has raised a number of questions around the reform of the CAP including how it sees the CAP evolving so as to improve competitiveness in the face of growing worldwide demand for food, as well as the “greening” of direct payments to farmers.

New Zealand is pleased to note that the EU's use of agricultural export subsidies has been much reduced since a spike in 2009.  New Zealand expects that this encouraging trend will continue and, recalling that export subsidies are the most damaging form of agricultural support, we encourage the EU to consider accelerating the process towards elimination of all such subsidies.  There also remains considerable scope for improvements in market access for agricultural products and it remains our assessment that the EU retains a significant number of prohibitive tariffs on highly traded products.  In this regard, we commend the OECD and WTO on their recent analytical work on trade in value-added and note in particular their findings in respect of the negative economic effects of agricultural tariff barriers on EU producers.

We also remain concerned about inconsistencies in relation to protection for geographical indications in the EU, particularly when comparing the process and treatment of terms protected through the EU Regulations with terms protected through bilateral agreements.  While interested parties have access to an objections process for terms to be protected under EU Regulations, such an objection process is not always in place for GIs that are protected in the EU via bilateral agreements.  Yet the effect on third parties' ability to use certain terms in the EU market is the same. We acknowledge the procedural improvements made in this regard in recent EU agreements and we urge the EU to continue in this direction to ensure that it provides for robust objections processes for all terms that it intends to protect in its territory, regardless of the means through which these terms receive protection.

Like the EU, we understand and find important the intersection between trade and the environment and the need to ensure that these are mutually reinforcing processes.  In this context, we are watching closely and with considerable interest the EU’s on-going work to develop a common methodology for the environmental footprint of products and organisations and the development of accompanying labelling standards.  We have appreciated the measured and careful way in which the Commission continues to involve third parties directly in the consultations – and would encourage it to continue that open dialogue.  We would also encourage other Members to be involved in this process.  All WTO Members fully understand the challenges the EU is grappling with in this regard, including striking the right balance between a transparent and non-discriminatory set of measures that does not become a de facto barrier to trade; while securing proven environmental benefits and the consumers’ right to be informed.

New Zealand has some concerns about elements of the reform of the Common Fisheries Policy, currently under negotiation, principally around the nature and level of subsidies provided to the European fishing industry.  Of particular note is the consideration being given to reinstating subsidies for vessel construction and purchasing, engine replacement, and temporary cessation of fishing.  We note that overfishing and overcapacity persist at high levels in EU fisheries, and that the EU fleet fishes the high seas around the world and in the EEZs of many other Members.  We therefore take this opportunity to recall the importance we attach to the on-going process underway in the WTO and UN on fisheries subsidies, including the call by world leaders last year at Rio+20 to refrain from introducing, extending or enhancing subsidies that contribute to overcapacity and overfishing.

I would conclude by noting that New Zealand recognises that the EU’s trade policy remains a broadly open and market-orientated one.  We would expect no less from the world’s largest economy, which, like New Zealand, depends on a well-functioning multilateral trading system. Like the rest of the world, we look to the EU to continue to play a central role in leading the way both in support of the swift conclusion of the Doha Round and, more generally in the continued liberalisation of international trade. Economies like ours understand that an export-led recovery represents an important tool in the ‘tool box’ we are all using to emerge from the Global Financial Crisis, particularly given the proven links between increased trade and job creation. 

More particularly, we work closely with the EU in the WTO context and elsewhere and appreciate the constructive engagement we enjoy with EU colleagues both here in Geneva and in Brussels.  We look forward to this cooperation continuing into the future.

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