Topics

1. Topics • Introduction to Standards New Zealand; Non-tariff Barriers; and standards and conformance? • How are standards issues recognised in current FTAs with Australia, Singapore and Thailand? • What particular standards issues need to be addressed in negotiations with China and ASEAN? • Is there a real threat of non complying merchandise being imported by new entrepreneurial importers as a consequence of FTAs? • Is there a need for new brands of electrical and gas appliances to be tested prior to importation under FTAs to ensure they meet New Zealand’s safety requirements?

2. What is Standards New Zealand? • 1931 Napier Earthquake • Crown entity • Trading arm of the Standards Council • Standards Act 1988 • NZ input into international standards development • Self Funded

3. Why Standards? “While we normally don’t think about standards unless their absence causes inconvenience, it would be extremely difficult to imagine daily life without standards. …. Standards in some form are helping to shape your day, make it easier, more comfortable, prosperous, safer and simply more convenient”

4. World Trade Trends & relevance of Standards • Global trade increasing faster than production • Real costs associated with non-tariff barriers to trade - more subtle than tariffs as a cost • International trade policy moving from tariffs and quotas to technical barriers & standards underpinning these • International institutions such as the WTO giving status to ‘international standards’ to foster trade • National standards increasingly based on international standards - & subject-matter widening

5. So What for New Zealand? • OECD - at least 80% of Trade affected by non-tariff barriers - 80% of USD 6 trillion • Est. costs between 5 - 8% of trade • Import & Export Issue - NZ 51% of top 100 exporters report problems, 33% incur costs through standards and conformance regulations - $10k - $50k p.a. • NZ Merchandise Exports est at NZD 30.9 billion in year to January 2005. Costs between 5-8% = $1.6 – 2.5 bn • NZ Merchandise Imports est. at NZD 35.2 billion in year to February 2005. Costs between 5-8% = $1.7 – 2.8 bn

6. What are Technical Barriers to Trade Regulations National Standards Conformance Market Exporter

7. Post 1995 (Implementation of Uruguay Round) New Zealand's overall simple applied tariff rate is 3.7% - APEC IAP 2003 Market 1 Market 2 Technical Technical Subsidies Subsidies Quotas Tariffs Quotas Structural Trade Tariffs Structural

8. Types of Problems Encountered

9. Standards and Conformance Infrastructure

11. Areas where standards support FTAs • Over 200 free trade agreements in operation in the world • One standard, one-test accepted everywhere • Support: - • Technical innovation • Health and safety - workplace • Consumer confidence • New security dimension • Quality & environmental management • Compliance with international obligations • Facilitate Global trade • Support Regulation • Enforcement through • Pre-market surveillance • Post-market surveillance

12. How standards issues are recognised in current FTA’s with Australia, Singapore and Thailand • International standards used wherever possible • WTO principles followed (e.g. Technical barriers to trade Agreement) • “Like” treatment - In sectors agreed, treatment no less favorable than that accorded to own like services & suppliers. • Joint review of technical standards where these affect specific obligations to align with the FTA • Where domestic regulation is prepared, adopted and applied in accordance with international standards applied by both Parties, presumed to comply with FTA • Joint standards with Australia

13. Standards assist in the following objectives of FTA’s • Confidence that each Country has in the other’s regulatory outcomes and conformity assessment systems • Implement the principles of mutual recognition, unilateral recognition or harmonisation that provide the most appropriate or cost-efficient approach to the removal or reduction of technical, sanitary and phytosanitary barriers to the movement of goods between the Countries

14. ………For example - Thailand FTA contains provisions aimed at • facilitating trade • reducing transaction costs through cooperation and information sharing • Coordinating monitoring of compliance with regulations Above achieved by regulators and officials working more effectively to resolve barriers to trade in: • regulations • customs procedures; • sanitary and phytosanitary measures; • standards and conformance; and • electronic commerce.

15. Closer Economic Relations (CER) (1983) Joint Accreditation System Australia New Zealand (JAS ANZ) (1991) Trans Tasman Mutual Recognition Arrangement (TTMRA) (1998) MoU between Standards New Zealand & Standards Australia (1991) Food Standards Australia and New Zealand (FSANZ) (2002 / 2005) Agreement on Standards, Accreditation and Quality (1990)

16. Standards and Australia • Agreement between Standards Australia (SAI) and Standards New Zealand (SNZ) since 1991 • Fosters trade – Closer Economic Relations and Trans-Tasman Mutual Recognition Agreement • 75% of SNZ catalogue are joint standards • Shares workload in standards development • Work together internationally in standards – e.g. capacity-building in Asia and Pacific

17. China – NZ FTA – Building a Relationship • Process est. Oct 2003 to discuss, cooperate and exchange information on regulatory approaches, technical regulations, standardisation and conformity assessment regimes for goods traded. • May 2004 began discussions on possibility of reducing barriers to trade on Electrical Equipment. • APEC efforts towards harmonisation or mutual recognition of standards and technical requirements in the region are relevant. • Opportunity in future FTA to consider: • improve info exchange / cooperation, particularly between regulators, including enhancing transparency in technical regulations and standards development; • encourage wider use of international standards in bilateral trade; • identify & eliminate technical barriers, promote bilateral trade; • strengthen mutual recognition of conformity assessment; • Assist understanding in technical regulations and standards (e.g. training programs / exchange of personnel) • cooperation in international organisations (e.g. ISO & IEC)

18. What particular standards issues need to be addressed in the current negotiations with China and ASEAN? • Objectives – reduce compliance costs – mechanism to achieve this secondary – immediate expectations not high • Assist confidence in Regulatory Compliance sharing • A Post Market, Performance based, Essential Safety-based system • Linkage to confidence in this • Supplier Declarations and Pre-market certification • Post-market surveillance - includes testing products taken from the marketplace against recognised Standards & verification of testing laboratory competence – linkage with Australia in sharing post-market surveillance information • Electrical appliances sector test / establish FTA principles • Size of infrastructure an issue

19. AQSIQ Organization Chart Various Provincial Government

20. Is there a real threat of non complying merchandise being imported by new entrepreneurial importers as a consequence of FTA’s? • Yes …. But happening now • Not unlimited (except Australia – almost) • Rely on mutual recognition of standards, test methods and certification for those goods and services that are in the agreements • Pre-market surveillance – limited • Post-market surveillance – also limited, rely on regulator being made aware – compliance around safety issues or fair trading issues • Generally – FTAs and the like aim to keep regulation as “light” as possible – market driven

21. Is there a need for new brands of electrical and gas appliances to be tested prior to importation under FTA’s to ensure they meet New Zealand’s safety requirements? • Generally “no” • Declared articles list (at a model level) • Australia – electrical “no” MRA in place for self- declaration; gas - transition • Singapore – NZ will accept Singapore tests re electrical appliances • Thailand – not part of current scope of agreement • China – Working group established (MED / AQSIQ) – at early stage – may be under FTA but may proceed earlier - electrical appliances “a starter” – APEC EEMRA also relevant • ASEAN – early days – general discussion at this stage about establishing working groups for cooperation

22. Call the technical infrastructure who can assist you • Government • Ministry of Foreign Affairs and Trade (MFAT) www.mfat.govt.nz • Ministry of Economic Development (MED) www.med.govt.nz • Ministry of Consumer Affairs (MoCA)www.consumeraffairs.govt.nz • Standards New Zealand (SNZ) www.standards.co.nz • International Accreditation New Zealand (IANZ) www.ianz.govt.nz • Joint Accreditation System of Australia and New Zealand (JAS-ANZ) www.jas-anz.com.au • Measurement Standards Laboratory (MSL)www.irl.cri.nz • Measurement and Product Safety Service (MPSS) www.med.govt.nz