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International Trade and Investment Update – November 2017

Home Insights International Trade and Investment Update – November 2017

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Contributed by: Sarah Salmond

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Published on: November 29, 2017

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Public interest considerations now mandatory in trade remedy investigations

Stop the press: the Trade (Anti-dumping and Countervailing Duties) Amendment Act came into full effect today. Most significantly, the Act introduces a bounded public interest test to New Zealand's trade remedies regime. This requires the Government to evaluate the wider public interest before taking decisions on whether or not to impose anti-dumping or countervailing duties on dumped or subsidised products found to be entering the New Zealand market. A flowchart illustrating the new investigative procedure appears below.

For each public interest assessment, the Ministry of Business, Innovation and Employment must examine the effect that a punitive duty may have on the prices, choice, availability or quality of the goods subject to investigation, and any similar goods. It must also consider how duties may affect the financial performance and employment levels of the domestic manufacturing industry. Finally, the Ministry may consider any other factor essential to ensuring the existence of competition in the market.

The Act provides the Minister of Commerce and Consumer Affairs, currently Kris Faafoi, with ultimate discretion to determine whether duties are in the public interest and hence, whether they should be introduced. As per the former Minister, Jacqui Dean: "(b)y introducing a public interest test, the Government can now balance the benefits to downstream industries and consumers of lower prices, more choice, and greater availability and quality of goods, against the impact on competing domestic industries".

From a practical point of view, the introduction of this public interest test will provide foreign exporters and New Zealand-based importers and retailers with another avenue by which to challenge the imposition of duties requested by New Zealand-based manufacturers. It will also make New Zealand trade remedy investigations more technical, lengthy and political. Given the significant amount of discretion the Minister exercises under the new regime, we expect broader and more fulsome arguments to be presented to decision-makers going forward. In the absence of local precedent, the Government is likely to be particularly influenced by leading World Trade Organisation jurisprudence and the decisions of likeminded jurisdictions (especially Canada and the European Union) when assessing the public interest.

The new rules will not apply to the current investigations targeting imports of preserved peaches from China, and steel bar and coil from China and Malaysia.

From 29 May 2017, the Act extended the suspension of anti-dumping duties on a wide range of residential building materials until 30 June 2019.

The Act is available for viewing on the Parliament website, see here.

New investigative procedure for trade remedy investigations

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