Temporary Safeguards
Temporary safeguards are short-term measures to remedy serious injury to a New Zealand industry caused by sudden increases in imports.
Legislation
The Temporary Safeguard Authorities Act 1987 provides for inquiries to be carried out into imported goods by Temporary Safeguard Authorities, and for recommendations to be made about urgent temporary safeguard measures to be taken to allow an industry to adjust to increased competition from imports.
This legislation is currently under review. See Review of the Temporary Safeguard Authorities Act 1987.
New Zealand Producers
An application for temporary safeguard action can only be made by or on behalf of a New Zealand industry.
The New Zealand producers making the application must a major proportion of New Zealand production of like goods and directly competitive goods.
Like Goods or Directly Competitive Goods
Like goods are goods that are identical to the imported goods or which have characteristics closely resembling those goods.
Directly competitive goods are goods that, as a matter of fact and commercial common sense, are substitutable for imported goods.
Serious Injury
Serious injury means significant overall impairment to the economic viability of a domestic industry. The areas that must be evaluated in relation to serious injury are:
- The rate or amount of the increase in the volume and value of the imports; and
- The economic impact of the increased importation of the goods on the industry; and
- Factors other than the imports which have injured or are injuring the industry.
Application
Any New Zealand industry may apply to the Minister of Commerce for a Temporary Safeguard Authority inquiry. However, only the Minister of Commerce may request that an inquiry be undertaken by a Temporary Safeguard Authority, and all referrals to an Authority are at the Minister's discretion.
The New Zealand industry must be able to show that imports are causing or will cause serious injury to the New Zealand industry. Evidence of actual or potential injury must be provided to support the request for temporary safeguard action.
Once an application is received by the Minister, it is assessed by the Trade Rules and Remedies Group to see if it meets the criteria and contains sufficient information to provide a basis for the Minister to decide whether or not to request that a Temporary Safeguard Authority undertake an inquiry.
The Trade Rules, Remedies and Tariffs Group provides secretarial and other services to Authorities.
Temporary Safeguard Authority Inquiry
An inquiry must be completed within 30 working days of the Authority receiving the Minister's request to undertake the inquiry.
The Minister may transmit to the Authority a statement of Government policy which must be taken into consideration. Any such statement is published in the New Zealand Gazette.
Inquiry Process
In an inquiry, an Authority gathers and considers information in order to determine whether imports are causing serious injury.
The Authority considers the application and other information provided by the industry, and also considers submissions from interested parties providing factual evidence and comments on issues relating to imports and injury.
Submissions should address the question of serious injury to the domestic industry, emphasising factual evidence rather than making statements which are general and unsubstantiated.
Submissions should also address the question of possible remedial action should serious injury to the domestic industry be found by the Authority.
The Report
A report on matters that are the subject of the inquiry is provided to the Minister. Urgent action may be recommended only if:
- The importation of the goods is causing or will cause serious injury to the industry, and serious injury is not attributable to factors other than the importation of the goods; and
- It is not practicable for the industry to reduce the injury from the importation by other means.
The report of the Authority's inquiry is published.
Remedies
The Authority can recommend a range of measures be taken to alleviate serious injury to the domestic industry. These may include:
- The imposition or variation of any Customs duty, or the creation or removal of any exemption from duty;
- The restriction of the importation of the goods;
- Any other action the Authority considers appropriate.
Safeguard measures may not be greater than is necessary to prevent or remedy serious injury and facilitate adjustment, and may not remain in force longer than necessary.
The final decision on whether to impose a remedy and the nature and extent of any remedy is made by the Minister of Commerce.
International Obligations
World Trade Organisation
The WTO Agreement on Safeguards (WTO SG Agreement) provides the international framework of rules and obligations on which the New Zealand legislation is based.
ANZCERTA
New Zealand and Australia have agreed to disperse with safeguard action in relation to goods orginating in either country. See ANZCERTA [link to MFAT website].
New Zealand-Singapore Closer Economic Partnership Agreement
New Zealand and Singapore have agreed to dispense with safeguard action in relation to goods originating in either country. See Agreement between New Zealand and Singapore on a Closer Economic Partnership [link to MFAT website].
New Zealand-Thailand Closer Economic Partnership Agreement
Existing WTO rights and obligations on global safeguard measures are maintained, but imports originating from Thailand may be excluded "if such imports are not a cause of serious injury or threat thereof". See Trade Remedies under the New Zealand-Thailand Closer Economic Partnership Agreement.
New Zealand - China Free Trade Agreement (due to come into effect on 1 October 2008)
Existing WTO rights and obligations on global safeguard measures are maintained but imports orginating from China may be excluded "if such imports are non-injurious". See Trade Remedies under the New Zealand - China Free Trade Agreement.
Trans-Pacific Strategic Economic Partnership Agreement
Existing WTO rights and obligations relating to safeguard actions are retained. See Trans-Pacific Strategic Economic Partnership Agreement [link to MFAT website].
Other Agreements
New Zealand has trade agreements with South Pacific Forum Island Countries, Canada and Malaysia, which contain provisions that relate to the measures that New Zealand may take to safeguard domestic industry from injurious imports from those countries.
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