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3. Barriers to trade
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3.1 Tariff and tariff administrative measures
3.1.1 Tariff Peak

The overall tariff level in New Zealand is fairly low, with an average tariff rate around 2.6 percent. While Zero Tariff Rate is applied to about 95 percent of the imports, tariff peaks still exist in areas such as textiles, garments and accessories (made of leather, plastics, and man-made fiber), footwear and headwear, bedclothing, glass, mechanical and automotive vehicles, which are subject to high tariff rates between 12 percent and 19 percent. Footwear and articles of plastics (for garments and accessories) are subject to the highest tariff rate of 19 percent. As China mainly exports textiles, garments and accessories (made of leather, plastics and man-made fiber), footwear and headwear, and bedclothing, the high tariff rates have impeded the exportation of these goods to New Zealand.

3.1.2 Tariff Escalation

There is a tendency of tariff escalation in New Zealand. It is especially prominent in such areas as textiles and clothing, footwear where China enjoys an export advantage. Though raw materials of textiles including silk, cotton, hemp, and chemical fiber enjoy the Zero Tariff Rate, the average tariff for most of the fully processed textiles is maintained at the level between 7.5 percent and 12.5 percent. High tariff rates between 17.5 percent and 19 percent are imposed on some clothing, carpet, bedclothing, and footwear and headwear. Therefore, the Chinese side expresses concern over the high tariff rates for these products.

3.2 Technical barriers to trade

3.2.1 Issues regarding technical standards

Up till July 2005, New Zealand has adopted a total of 2,808 technical standards, among which 1133 are international standards and the rest are domestic standards. These domestic standards, great in both variety and number, have created an unnecessary obstacle to related exports to New Zealand.

Besides, notifications of changes made to these technical standards either lacked adequate information or didn't to come out in a timely manner. The WTO has only been notified of only a small number of ne w technical standards and regulations, which could hardly keep other countries informed. Furthermore, a review period of 45 to 60 days provided by the New Zealand Government is not enough for making a reasonable comment on a newly proposed standard.

3.2.2 Product safety standard regarding children's toys

In September 2005, the New Zealand Government put in place a new product safety standard regarding toys suitable for children under the age of three. The Standard stipulates that these toys can only be sold after passing the potential injury risk identification test and getting the relevant certification. The Standard came into force in September 2005 and would officially replace the 1992 regulation in September 2006. Compared with the old regulation, the new standard doesn't contain a prescriptive list of different types of toys. Instead, all toys are subject to the standard. Such practice has not only expanded the number of toys subject to examination as well as the responsibility of toy producers, distributors, and importers. Besides, whether the toy is suitable for children under 36 month age group is not at the discretion of the producer. Even though the producer deems the toy unsuitable for children under 36 month age group and claims so clearly on the tag of the toy, the producer cannot get away from potential responsibility. This has brought potential risks to toy producers, distributors, and importers, caused an unjustifiable expansion of their range of responsibilities, thereby exerting an extra burden on exporters. Up to now, the New Zealand Government hasn't announced the implementation guidelines, nor has it notified the WTO of the same, which has made it difficult for the Chinese toy exporters to gain further information about the new standard and to respond timely to the standard. As children's toys is one of the major exports of China to New Zealand, the Chinese side expresses concern over the matter.

3.2.3 Product safety standard regarding lighters

Based on the U.S. safety standard on lighters, New Zealand made its own safety standard in 1998. The standard requires all lighters valued under NZ$3.5 by the Customs be certified to have child-resistant measures before they are imported or sold. Associating product safety with price lacks credible scientific evidence. Besides, the practice does not conform to the relevant provisions of the TBT Agreement of the WTO, posing a distortion to trade. Therefore, the Chinese side hopes that the New Zealand Government will make reasonable amendments to the standard so as to comply with the Agreement on Technical Barriers to Trade.

3.3 Sanitary and phytosanitary measures

3.3.1 Wood packaging

In 2003 New Zealand announced the import phytosanitary standards on wood packaging, which were composed of the International Standard on Packaging Materials (ISPM15) and domestic quarantine requirements. Wood packaging from countries where ISPM15 hasn't been adopted is required to comply with the domestic standards of New Zealand by going through such processes as fumigation and chemical pressure impregnation (CPI) and obtaining the relevant certificates.

3.3.2 Pesticide Residue

In 2005, the New Zealand Government promulgated on a number of new standards on the maximum residue limits of agricultural compounds, affecting many categories of goods including food and fruits. The new standards provide for the maximum residue limits of 9 additional agricultural compounds. For instance, the maximum permitted residue level of Azoxystrobin in Sweetcorn is 10ìg/kg, while it is 15ìg/kg according to CAC standards. Besides, another 30 kinds of agricultural compounds have been added to the list in the domestic standards on maximum residue limits. These provisions have raised the limits of residue, posing an obstacle to China's agricultural export to New Zealand.

3.3.3 Fumigation on garlic

To ensure that imported garlic is free from pests, the New Zealand Government released a new draft standard in September 2005 regarding the importation of garlic from China. The draft standard stipulates that garlic from China can only be imported after going through Methyl Bromide (MB) treatment. Although MB treatment is an effective way of preventing the spread of pests and diseases, the requirement made by the New Zealand side not only creates difficulty in conducting the treatment but also increases the cost of the treatment. The ordinary MB treatment takes place in an environment where temperature is between 5 and 10 degrees Celsius, as it takes 3.8 degrees to have MB gasified. However, according to the new standard, garlic must go through a 3- hour MB treatment above the temperature of 10 degrees Celsius. Therefore, the standard has a direct adverse effect on China's exportation of garlic, especially garlic from Northern China where temperature in winter is below 10 degree Celsius. According to the New Zealand standard, chilled garlic can not go through the MB treatment. Therefore, the exportation of garlic from Northern China is restricted to a large extent. The Draft Standard came into effect in February 2006. The Chinese side hopes that New Zealand will come up with a more reasonable requirement regarding the fumigation of garlic based on the practical situation.

3.4 Discriminatory taxed and fees on imported goods

According to the Heavy Engineering Research Levy Act 1978, the Customs New Zealand imposes a fixed tax on heavy engineering machines and adopted a new rate effective as of 1 July 2005. However, no such tax is imposed on local products of the same kind. As machinery is one of the major exports from China to New Zealand, the tax, of the discriminatory nature, has weakened the competitiveness of Chinese products in the market of New Zealand. Therefore, the Chinese Government expresses close concern over the matter.

3.5 Barrier to Trade in Services

3.5.1 Telecommunications

According to relevant laws and regulations, aggregate foreign investment in a New Zealand business in the telecommunications sector is limited to 49.5 percent of the total shares of the said business.

3.5.2 Aviation

Foreign ownership of a New Zealand airline is limited to 49 percent.

3.6 Other Barriers

The New Zealand Government exercises strict control over the importation of labor. According to the Immigration Act of New Zealand, foreigners are not to be employed unless no substitutes can be found in New Zealand. Imported labor mainly consists of a few foreign experts and skilled workers that are in short supply, such as chefs for Chinese restaurants. There are rare chances for the importation of a large number of labor services. Such restrictive measures have made it difficult for foreign- invested enterprises to find an adequate number of skilled workers and labor within a short period of time, and at the same time created a barrier to the relevant Chinese personnel who want to work in New Zealand.

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