Connected Asia Pacific is intended to assist exporters, importers and investors from or to New Zealand to make the most of the rules which increasingly regulate their cross-border activities. We hope you find it helpful and would appreciate any feedback which would help us to target it toward your needs and interests.
If you are interested in obtaining further advice – or in simply finding out if you might benefit from an informal discussion – please contact Principal Daniel Kalderimis.
FEATURE – The trade and climate change debate - considering the US Clean Energy Bill
There has been significant domestic attention focused on the Select Committee reviewing New Zealand’s Emissions Trading Scheme, which is yet to report back to Parliament after hearing submissions in May 2009. At the same time, international attention has been focused on the multilateral discussions (in August 2009 in Bonn and December 2009 in Copenhagen) on a potential successor agreement to the Kyoto Protocol to the UN Framework Convention on Climate Change, setting targets through to 2020.
While it remains far from clear what these processes will deliver, other countries’ domestic developments have been continuing apace. The most important new development is the emissions trading legislation passed at the end of June by the US House of Representatives, which President Obama has called an “extraordinary step” and urged the Senate also to approve. Should it become US law, it will be relevant for New Zealand’s own policy on both climate change (part of our Select Committee’s terms of reference require it to consider the position of the US, at least with respect to timing and implementation issues) and also on trade issues.
RECENT DEVELOPMENTS IN BRIEF
WTO NZ Trade Policy Review
WTO officials met with representatives of the New Zealand Government on 10 and 12 June 2009 as part of the WTO’s latest review of New Zealand’s trade policies and practices. Prior to the meeting, the WTO Secretariat published a comprehensive report which describes New Zealand as “among the more open economies in the world”. It says that New Zealand “has no barriers to exports except for those maintained for health or safety reasons or those necessary to comply with international obligations”. However the WTO does note New Zealand’s “declining productivity growth” and the persistence of macro-economic imbalances as reflected in the current account deficit and the level of external debt. The previous WTO review of New Zealand was conducted in 2003.
WTO Apples case update
From 30 June to 2 July 2009, New Zealand and Australia appeared before a four-member WTO Panel in Geneva in the second and final hearing in the ongoing Apples dispute. In a relatively novel development for WTO procedures, and based upon the agreement of both parties, the hearing was open to the public. As stated previously, the Panel’s report is expected in January 2010.
New NSW procurement policy
The New South Wales Treasurer announced in its June 2009 state budget a measure which would subsidise local public procurement bids by up to 20% over non-local rivals. This measure is not endorsed by the Australian Federal Government and, if implemented, would appear to risk breaching Australia’s commitments under the WTO, its FTAs (including with the US and other parties) and the CER Agreement with New Zealand.
New Australia-NZ Double Tax Agreement signed
On 27 June 2009, Australia and New Zealand signed a new double tax agreement to replace the existing 1995 DTA. The agreement is not merely an instrument of "negative harmonisation" – the elimination of double taxation in specified circumstances – but has some "positive harmonisation" features enhanced from the 1995 DTA, including ceilings for the rate of withholding tax on specified dividend (Article 10), interest (Article 11) and royalty (Article 12) payments made between the two countries. One new feature is that the new DTA would make pensions that are tax-free in one country exempt in the other when recipients move across the Tasman (Article 18), thus facilitating pension portability. The new DTA will come into force once both countries have given legal effect to it. More information is available here, or contact Chapman Tripp tax specialist Graeme Olding.
Privacy (Cross Border Information) Amendment Bill
The Privacy (Cross Border Information) Amendment Bill is currently before the Justice and Electoral Select Committee. The Bill seeks to amend the Privacy Act 1993 to introduce new rules to govern the cross-border transfer of personal data, and to facilitate the cross-border enforcement of privacy laws.
Anti-Money Laundering Bill
The Anti-Money Laundering and Countering Financing of Terrorism Bill is now before the Foreign Affairs, Defence and Trade Select Committee with submissions due by 6 August 2009.
Russia informally suspends WTO negotiations in favour of trading bloc talks
News reports suggest the Russian Federation has informally advised the WTO that it is suspending the accession negotiations in which it has been engaged for the last 16 years. That is not to say that the Russian Federation is no longer interested in WTO membership. Instead, it appears to be seeking to form a regional customs union with Belarus and Kazakhstan by January 2010 and is exploring the possibility of eventually acceding to the WTO through this union, rather than individually. No customs union has acceded to the WTO before, although the EU members (which all acceded individually) are represented in the WTO as a single body by the European Commission. No official documents relating to Russia’s alleged suspension request have yet been received by the WTO.