Trade regulatory system

System description and objectives

System description

The legislation gathered under this heading is not a true ‘regulatory system’ in line with other systems in this Stewardship Strategy are, as the components do not seek to collectively achieve or promote a common set of behaviours or outcomes as other systems do. It does not therefore lend itself to a fitness-for-purpose assessment in the same way as other systems. Nevertheless, we maintain it as part of our regulatory stewardship programme to help ensure legislation is periodically scrutinised for relevance and consistency with best practice.

This system regulates aspects of New Zealand’s trade and sets out the rules for its administration. The aspects covered here are:

• Trade remedies
• Tariffs
• Restriction of trade in dangerous and hazardous goods
• Trans-Tasman Mutual Recognition Arrangement

Objectives

Trade remedies

The Trade Remedies system in New Zealand ensures fair competition for local manufacturers against imports. Duties can be imposed on dumped or subsidised imported goods that harm local producers, following a formal investigation under the Trade Remedies framework. This framework, administered by the Ministry of Business, Innovation and Employment (MBIE), includes the Trade (Anti-dumping and Countervailing Duties) Act 1988 and the Trade (Safeguard Measures) Act 2014, reflecting New Zealand’s obligations under the World Trade Organisation Agreements. MBIE determines anti-dumping duties, countervailing duties, and safeguard measures after a formal investigation and final determination by the Minister of Commerce and Consumer Affairs.

Tariffs

Tariffs are a tax charged on imported goods paid by importers or consumers. Traditionally, tariffs play an important role in protecting the domestic industry. However, as New Zealand has been opening up to global integration, with the majority of trade now being covered by free trade agreements, domestic businesses have largely navigated and adjusted to the impacts of a more global, open and free trade economy. New Zealand’s tariffs are therefore relatively low, set at five percent, ten percent, or no tariff depending on the type and origin of the good being imported.

Tariffs are part of the trade regulatory system, which regulates aspects of New Zealand’s trade and sets out the rules for its administration. The Tariff Act 1988 governs the tariff system, providing for the administration of the Tariff and the authority to levy, collect and pay import duties in accordance with the rates specified in the Tariff.  MBIE is responsible for the Act, and for general tariff policy including work to improve tariff settings to align with wider government economic and development policy to increase economic efficiency and reduce costs for consumers and businesses, and to facilitate the efficient flow of goods.

Restriction of trade in dangerous and hazardous goods

The Imports and Exports (Restrictions) Act 1988 provides for prohibiting or restricting imports and exports that are contrary to New Zealand’s public interest.  This includes dangerous goods or hazardous waste, and to uphold our international obligations in this area, which are mainly established through United Nations Conventions, including but not limited to:

• Stockholm Convention on Persistent Organic Pollutants(external link) — United Nations Industrial Development Organization
• Rotterdam Convention(external link) — pic.int
• Basel Convention (controlling transboundary movements of hazardous wastes and their disposal)(external link) – basel.int

Trans-Tasman Mutual Recognition Arrangement

The Trans-Tasman Mutual Recognition Arrangement (TTMRA) is a non-treaty arrangement between New Zealand and Australia’s Commonwealth, state and territory governments. It is a cornerstone of the single economic market and a powerful driver of regulatory co-ordination and integration.

The main principles of the TTMRA are:

• People who are registered to practise an occupation in New Zealand can register to practise the equivalent occupation in Australia, and vice versa.
• Goods that can legally be sold in New Zealand can be sold in Australia, and vice versa.

The TTMRA aims to provide:

• lower business costs
• greater competition and consumer choice
• greater co-operation between regulatory authorities.

The arrangement took effect on 1 May 1998. It is implemented in New Zealand by the Trans-Tasman Mutual Recognition Act 1997 (TTMR Act). All domestic laws are subject to the TTMR Act unless specifically excluded or exempt. There is mirror legislation in Australia.

Ministerial portfolio and key statutes

Commerce and Consumer Affairs

• Trade (Anti-dumping and Countervailing Duties) Act 1988
• Imports and Exports (Restrictions) Act 1988
• Tariff Act 1988
• Trade (Safeguard Measures) Act 2014
• Trans-Tasman Mutual Recognition Act 1997
• The WTO Agreement on Implementation of Article VI (Anti-dumping) of GATT 1994
• The WTO Agreement on Subsidies and Countervailing Measures and Agreement
• The WTO Agreement on Safeguards

Read more about the Commerce and Consumer Affairs portfolio at the Department of the Prime Minister and Cabinet website.

Commerce and Consumer Affairs(external link) — Department of the Prime Minister and Cabinet

Regulatory agencies and their roles

MBIE

MBIE advises the Minister for Commence and Consumer Affairs about the administration of the various parts of the trade regulatory system described here.

Trade Remedies

MBIE is primarily responsible for conducting investigations and determining outcomes for allegations of unfair trade, collaborates with stakeholders for policy negotiations, monitoring, and enforcing duties.

Trans-Tasman Mutual Recognition Arrangement

• Administers the TTMR Act and provides oversight of the TTMRA.
• Provides advice to domestic agencies on TTMRA issues that may arise in the development or implementation of regulation.
• Monitors and considers ways of facilitating the operation of the TTMRA.
• Promotes the operation of TTMRA mutual recognition principles domestically.
• Maintains contact with counterpart agencies in Australia who are responsible for the operation of the TTMRA. 

Tariff

• Administers the Tariff Act 1988 which governs the tariff system. 
• Provides advice to domestic regulators on general tariff policy.

Imports and Exports

• Administers the Imports and Exports (prohibition) Act 1988.
• Provides advise to domestic agencies on general imports and exports policy.

Occupational regulators and policy agencies

Facilitate the operation of the TTMRA by registering Australian TTMRA applicants, carrying out the statutory requirements of the TTMR Act. Considering TTMRA issues in regulatory and operational changes.  Under the TTMRA, the Trans-Tasman Occupations Tribunal considers applications to review decisions by occupational regulators on TTMRA issues.

Agencies responsible for the regulation of goods

Play a role in facilitating the operation of the TTMRA in respect of goods.

Regulated parties and main non-government stakeholders

Trade Remedies

The New Zealand Trade Remedies system engages with various parties, including:

• Domestic industry
• Overseas importers
• Foreign exporters and manufacturers
• Foreign governments and WTO members
• New Zealand consumers and downstream industries

Standards for consultation and notification are set by international agreements and domestic legislation.

Trans-Tasman Mutual Recognition Arrangement

The TTMR Act’s cross-cutting nature affects the operation of laws that regulate goods and occupations. It therefore indirectly affects parties regulated by those laws, Australian businesses looking to import goods into New Zealand under the TTMRA, and those registered to practise an occupation in Australia that wish to register in New Zealand under the TTMRA.

Restriction of trade in dangerous and hazardous goods

MBIE is responsible for the Imports and Exports (Restrictions) Act and works closely with other government agencies including the Ministry for the Environment and the Environmental Protection Authority, to update and maintain the system when new dangerous or hazardous goods are identified.

Reviews and assessments of the system

Trade remedies

In December 2020, MBIE’s Economic Development and Regulatory Stewardship Committee (EDRSC) initiated a programme of maturity assessments for MBIE’s regulatory systems. The Trade Remedies system is the second assessment to be carried out within this programme. The objectives of the assessment were to:

• Provide an assessment of the stewardship maturity of the system, considering the critical challenges faced by the system and its ability to respond to those challenges.
• Consider what the available information reveals about the performance of the system.
• Identify any gaps in information relating to the performance of the system.
• Identify and prioritise opportunities for stewardship improvements.
• Highlight examples of best regulatory practice and good stewardship that could be beneficially shared across MBIE.

The assessment focused on the trade remedies component of the trade regulatory system, which provides the legal infrastructure for fair import competition for New Zealand businesses. This infrastructure includes domestic legislation, international treaties, and free trade agreements (FTAs).

This infrastructure, encompassing domestic legislation, international treaties, and free trade agreements (FTAs), operates under the Trade (Anti-dumping and Countervailing Duties) Act 1988 and the Trade (Safeguard Measures) Act 2014, reflecting New Zealand’s WTO obligations.

Tariffs

In the late 1980s, New Zealand announced a tariff reduction programme that was informed by the shift in economic policy to an open economy. In 2003, all tariffs were unilaterally reduced to either 5 or 10 per cent. Subsequent Cabinet decisions were made in 2006, 2009, 2013, and 2017, leaving tariff rates unchanged from their current levels, except when reduced through the negotiation of free trade agreements and multilateral initiatives.

Restriction of trade in dangerous and hazardous goods

While there has been a recent and comprehensive review of the system, an assessment of the Restriction of trade in dangerous and hazardous goods is not currently required.

Trans-Tasman Mutual Recognition Arrangement

The arrangement provides for regular reviews of the operation of the TTMRA in conjunction with Australia’s Mutual Recognition Arrangement. The reviews assess the effectiveness of the arrangement in fostering and enhancing trade and workforce mobility between Australia and New Zealand, and consider changes to the arrangement or related legislation as required to improve the coverage and operation of the arrangement.

Past reviews of the TTMRA have been undertaken by the Australian Productivity Commission (APC).

The APC completed its most recent evaluation of the mutual recognition schemes in 2015. As part of its review, the APC used open and transparent public consultation processes. It received submissions from a wide range of stakeholders in the public and private sector, including the New Zealand Government, that were considered as part of the review.

Key findings of the review

Trade Remedies

The regulatory system’s pillars, including governance, strategy, culture, resourcing, insights, foresights, review, design, delivery, decision-making, and performance, are highly rated. These well-developed aspects meet the system’s needs, thanks to its narrow scope, limited agencies, and the Trade Remedies team’s continuous improvement efforts.

Resourcing is the area with the most potential for stewardship enhancement, reflecting the system’s small size, workload forecasting challenges, and reliance on key individuals. The panel deemed the risk of serious regulatory failure in the trade remedies system as low.

• System’s effectiveness: The system is achieving its objectives and is internationally respected. No investigation or decision was legally challenged or overturned in the past 12 months.
• System’s efficiency: The system is efficient, with investigations typically completed faster than in other jurisdictions due to shorter, routinely met statutory timelines. The Trade Remedies team continually improves standard processes, easing system use and access. Adherence to statutory timelines provides for an efficient system but can place pressure on the team. In this context, investigative effectiveness is balanced through mechanisms such as the Trade Remedies team’s risk management focus, and with the involvement of the Trade Remedies Oversights Group (TROG) and the MBIE Legal team in the investigation process. However, the need for robust, timely investigations takes precedence over non-investigative work.
• Durability and resilience: Despite meeting current investigation demand, resources for improvement and other regulatory activities are limited. The most significant risk to system performance is capacity and knowledge retention. The system has shown adaptability, such as conducting virtual investigations due to COVID-19 travel restrictions.
• Fairness and accountability: The process-driven, transparent system ensures fairness through robust quality assurance processes. Participation is voluntary, and investigators cannot compel information provision. Existing industry users engage and provide feedback on issues and legislative changes.

Trans-Tasman Mutual Recognition Arrangement

The APC’s review found the TTMRA is generally working well. The APC did however provide recommendations aimed at strengthening governance arrangements and the operation of the scheme more generally. The report also identified the TTMRA’s vulnerability to schemes and permanent exemptions which can erode the benefits of the TTMRA.

Mutual Recognition Scheme research report(external link) — Productivity Commission

Joint work with Australia is underway on a focused review to address several discrete issues, including some identified by business at a Joint trans-Tasman Industry Forum held in early June 2024. The outcome of this work could support the option of a formal review in due course.

Planned regulatory amendments

There are currently no planned regulatory amendments for the Tariff Act 1988 and Trans-Tasman Mutual Recognition Act 1997.

Key service design and operational changes

Trade Remedies

MBIE is actively enhancing the accessibility of pertinent information during ongoing investigations. As per Article 6.4 of the WTO Anti-dumping Agreement, all interested parties should have timely access to non-confidential information relevant to their cases. To meet this requirement, most Trade Remedies authorities maintain a “Public File” that provides access to non-confidential information during investigations.

The Regulatory Stewardship Maturity Assessment conducted by MBIE recommends the exploration of an online ‘public file’. This digital approach would offer interested parties direct, self-service access to non-confidential documents, thereby streamlining the process and reducing the workload for the Trade Remedies team.

To action this recommendation, MBIE is preparing to initiate a comprehensive change process, which includes public consultation. Further details regarding this proposed change will be made available on the MBIE website in the future.

Tariffs

We intend to update information and materials for the public and government agencies as resources allow.

Trans-Tasman Mutual Recognition Arrangement

MBIE is working with our Australian counterparts on a workplan to jointly address discrete areas within the TTMRA context known to be in need of attention and capable of tangible/ practical impact.

Following feedback from the trans-Tasman industry forum, we are working on providing accessible and user-friendly information on the TTMRA for businesses, regulators, and the public. We intend to have the refreshed information available on the MBIE website by mid-2025 and looking to organise sessions with policy agencies and regulators to raise awareness and increase understanding of the TTMRA, particularly as it applies to the regulation of the sale of goods.

Restriction of trade in dangerous and hazardous goods

We intend to update information and materials for the public and government agencies as resources allow.