European Union Free Trade Agreement Legislation Amendment Bill

2.1. Are there any publicly available inquiry, review or evaluation reports that have informed, or are relevant to, the policy to be given effect by this Bill?

YES

A National Interest Analysis (NIA) for the Agreement was prepared by MFAT and other departments and published on 30 June 2023. The NIA is available from: https://www.mfat.govt.nz/assets/Trade-agreements/EU-NZ-FTA/NZ-EU-FTA-National-Interest-Analysis.pdf

The Foreign Affairs, Defence and Trade Select Committee (FADTC) examined the Agreement in August 2023. FADTC’s report on the Agreement was published on 28 August 2023. Public submissions on the Agreement and FADTC’s final report are available from: https://selectcommittees.parliament.nz/v/6/717178f6-1d16-4b7a-c4ac-08dba75226f7

MFAT commissioned ACE consulting to prepare an independent report analysing the Agreement’s key outcomes with respect to Māori (after the conclusion of the negotiations for the Agreement). That report was published on 5 May 2023. A copy of the report is available from:

https://www.mfat.govt.nz/assets/Trade-agreements/EU-NZ-FTA/NZ-EU-FTA-An-Independent-Assessment-of-the-Impacts-for-Maori.pdf  

Te Taumata prepared separate analysis on the Agreement, which was published in May 2023. The report is available from:

https://tetaumata.com/nz-eu-fta-poised-to-deliver-for-maori/

Ngā Toki Whakarururanga also prepared a separate report on the NZ-EU FTA published in May 2023. The report is available from: https://static1.squarespace.com/static/62d0af606076367ebf83b878/t/6463471db83ddc54d78978dc/1684227873906/NZ+EU+FTA+ToW+Assessment.pdf

2.2. Does this Bill seek to give effect to New Zealand action in relation to an international treaty?

YES

This Bill seeks to give effect to the obligations in the Agreement that New Zealand is required to implement. The text of the Agreement can be found at:

https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-concluded-but-not-in-force/new-zealand-european-union-free-trade-agreement/nz-eu-free-trade-agreement-by-chapter/  

2.2.1. If so, was a National Interest Analysis report prepared to inform a Parliamentary examination of the proposed New Zealand action in relation to the treaty?

YES

As noted above, an NIA was prepared by MFAT in consultation with other relevant government agencies. It was presented to the House of Representatives on 20 July 2023 in accordance with the parliamentary treaty examination process. A copy of the NIA can be accessed through the Parliament’s website and at: https://www.mfat.govt.nz/assets/Trade-agreements/EU-NZ-FTA/NZ-EU-FTA-National-Interest-Analysis.pdf

2.3. Were any regulatory impact statements provided to inform the policy decisions that led to this Bill?

YES

The NIA is an extended NIA incorporating the regulatory impact statement requirements. The NIA was published on 30 June 2023 and a copy of the NIA can be accessed through the Parliament website and at https://www.mfat.govt.nz/assets/Trade-agreements/EU-NZ-FTA/NZ-EU-FTA-National-Interest-Analysis.pdf

2.3.1. If so, did the RIA Team in the Treasury provide an independent opinion on the quality of any of these regulatory impact statements?

YES

An extended NIA has been prepared in accordance with the necessary requirements for a regulatory impact analysis. The NIA sets out, amongst other things, the advantages and disadvantages of the Agreement, costs and benefits, as well as policy changes from the Agreement and what they mean for New Zealand. This includes a discrete impact analysis of the discretionary aspects of the legislative changes arising from the implementation of the GI obligations.

The Treasury's Regulatory Impact Analysis team determined that the proposal to implement New Zealand's obligations in relation to the Geographical Indications (Wine and Spirits) Registration Act 2006 (the GI Act) is exempt from the requirement to provide a Regulatory Impact Statement (RIS). This exemption is granted on the grounds that the government has limited statutory decision making discretion or responsibility for the content of the proposed delegated legislation (as it is the minimum necessary to comply with our new obligations).

The government has some flexibility as to how to implement the enhanced enforcement framework for geographical indications. The Treasury has exempted these changes from the need to provide a separate RIS on the grounds that the relevant issues have been addressed in the extended NIA.

2.3.2. Are there aspects of the policy to be given effect by this Bill that were not addressed by, or that now vary materially from, the policy options analysed in these regulatory impact statements?

NO

2.4. Has further impact analysis become available for any aspects of the policy to be given effect by this Bill?

YES

Prior to the conclusion of the NZ-EU FTA negotiations, the following modelling reports were also prepared:

·         “Impacts of the New Zealand – European Union Free Trade Agreement on the New Zealand Economy” prepared by ImpactECON (Economic Modelling Report), for MFAT, published April 2022, available here:  https://www.mfat.govt.nz/assets/Trade-agreements/EU-NZ-FTA/NZ-EU-FTA-Final-Report-Economic-Modelling.pdf

·         “Copyright term extension: cost benefit analysis prepared” by Sapere for the Ministry of Business, Innovation and Employment, published June 2020, available here: https://www.mfat.govt.nz/assets/Trade-agreements/EU-NZ-FTA/NZ-EU-FTA-2020-Modelling-of-Copyright-Extension-Costs.pdf

·         “Potential Impact of Protecting the European Union Geographical Indications List: Preliminary Analysis” prepared by Castalia Strategic Advisors for the Ministry of Business, Innovation and Employment, published June 2017, available here:  https://www.mfat.govt.nz/assets/Trade-agreements/EU-NZ-FTA/NZ-EU-FTA-2017-Modelling-of-GI-costs.pdf

2.5. For the policy to be given effect by this Bill, is there analysis available on:

(a)   the size of the potential costs and benefits?

YES

(b)   the potential for any group of persons to suffer a substantial unavoidable loss of income or wealth?

YES

A cost/benefit analysis of the NZ-EU FTA is included in sections 3, 4, 7 and 8 of the NIA, which is available from https://www.mfat.govt.nz/assets/Trade-agreements/EU-NZ-FTA/NZ-EU-FTA-National-Interest-Analysis.pdf

The NIA comprehensively assesses the impact on New Zealand of meeting the obligations in the NZ-EU FTA (including through implementing legislation). No group of persons is identified as likely to experience a substantial loss of income or wealth as a result of the NZ-EU FTA. The NZ-EU FTA is estimated to result in a net economic benefit for New Zealand. There may, however, be a degree of variance between different sectors of the economy (Section 1, NIA).

2.6. For the policy to be given effect by this Bill, are the potential costs or benefits likely to be impacted by:

(a)   the level of effective compliance or non-compliance with applicable obligations or standards?

NO

(b)   the nature and level of regulator effort put into encouraging or securing compliance?

NO

This question is not applicable to the implementation of an FTA.

3.1. What steps have been taken to determine whether the policy to be given effect by this Bill is consistent with New Zealand’s international obligations?

MFAT has worked with relevant departments to identify the necessary amendments to legislation and to prepare the Bill. The Bill makes the amendments to New Zealand law necessary for New Zealand to ratify the Agreement. MFAT considers that the policy to be given effect by the Bill is consistent with New Zealand’s international obligations, including under the Agreement (when it enters into force) and other international agreements.

MFAT also considered whether the Agreement triggered the most-favoured-nation (MFN) obligations in New Zealand’s existing free trade agreements. As a result, the Bill amends section 61A(1) of the Overseas Investment Act 2005, to provide the power to make regulations regarding an alternative monetary threshold for investment in New Zealand in significant business assets by certain investors from a party to the Pacific Agreement on Closer Economic Relations Plus (PACER Plus). Amendments to the Overseas Investment Regulations 2005 are currently being drafted to provide the alternative monetary threshold of $200 million for investment in New Zealand in significant business assets by certain investors from a party to PACER Plus.

3.2. What steps have been taken to determine whether the policy to be given effect by this Bill is consistent with the principles of the Treaty of Waitangi?

The Agreement preserves the unique status of te Tiriti o Waitangi/the Treaty of Waitangi. The EU recognised the importance of this to New Zealand and agreed to the inclusion of a Treaty of Waitangi exception to protect the capacity of the Crown to implement domestic policies that fulfil its obligations to Māori, including under the Treaty of Waitangi, without being obliged to offer equivalent treatment to the EU. This provision is consistent with all of New Zealand’s FTAs since 2001, including the Agreement.

In addition, though the Treaty of Waitangi exception applies across the Agreement as a whole, in response to the Waitangi Tribunal WAI 2522 decision, the Digital Trade Chapter explicitly provides additional safeguards such that the disciplines contained in the chapter will not apply to measures taken by New Zealand to protect or promote Māori rights, interests, duties, or responsibilities.

The NIA also includes analysis on effects of the Agreement on Māori in sections 7.4,10.2 and 10.3, which is available from: https://www.mfat.govt.nz/assets/Trade-agreements/EU-NZ-FTA/NZ-EU-FTA-National-Interest-Analysis.pdf

3.3. Has advice been provided to the Attorney-General on whether any provisions of this Bill appear to limit any of the rights and freedoms affirmed in the New Zealand Bill of Rights Act 1990?

YES

Advice is being prepared for the Attorney-General’s consideration by the Ministry of Justice and will available on the Ministry of Justice’s website upon introduction of the Bill at: https://www.justice.govt.nz/justice-sector-policy/constitutional-issues-and-human-rights/bill-of-rights-compliance-reports/advice/

3.4. Does this Bill create, amend, or remove:

(a)   offences or penalties (including infringement offences or penalties and civil pecuniary penalty regimes)?

YES

(b)   the jurisdiction of a court or tribunal (including rights to judicial review or rights of appeal)?

YES

The Bill creates:

·         a new infringement offence – for breaching a restriction on the use of a registered geographical indication (GI) and failing to comply with a notice of direction issued by an appointed GI officer (clause 84, new sections 120 – 127)

·         two new criminal offences - for hindering or obstructing a GI officer, and providing documents or information knowing them to be false or misleading (clause 84, new sections 128 and 129). 

The Bill provides the court with jurisdiction in relation to:

·         civil proceedings for a breach of a restriction on use of a registered GI (clause 84, new sections 106-119)

·         proceedings for an infringement offence (clause 84, new section 121)

·         proceedings relating to suspected infringing goods that have been detained by NZ Customs (clause 84, new sections 150 – 152)

With regard to rights of appeal, clause 84 includes new sections 164 to 168, which replace sections 48 to 52 of the GIs Act, and permits a person aggrieved with a decision of the Registrar of Geographical Indications to appeal to the High Court and the Court may confirm, modify or reverse the Registrar’s decision or any part of it and exercise any of the Registrar’s powers that could have been exercised by the Registrar in relation to the matter to which the appeal relates.

3.4.1. Was the Ministry of Justice consulted about these provisions?

YES

The infringement offence and the criminal offences referred to in the answer to question 3.4 were drafted in light of input from the Ministry of Justice.

3.5. Does this Bill create, amend or remove any provisions relating to the collection, storage, access to, correction of, use or disclosure of personal information?

YES

Clause 84, new sections 101 to 105 provide for the sharing of information between agencies in New Zealand and also between the chief executive and a person in an overseas country. The sharing of information between agencies in New Zealand must be necessary or desirable to promote the enforcement of the Bill or legislation administered by one of the agencies.

The sharing of information with an overseas person must be under an agreement with the chief executive of the New Zealand agency and the overseas person. The chief executive must be satisfied that the agreement is necessary for the purposes set out in new section 104(2)(b).

3.5.1. Was the Privacy Commissioner consulted about these provisions?

YES

The Office of Privacy Commissioner (OPC) was consulted about Clause 84, new sections 101 to 105. New sections 101 and 102 were drafted in light of input from the OPC.

3.6. Has there been any external consultation on the policy to be given effect by this Bill, or on a draft of this Bill?

YES

Please see Appendix One: Further Information Relating to Part Three.

3.7. Have the policy details to be given effect by this Bill been otherwise tested or assessed in any way to ensure the Bill’s provisions are workable and complete?

YES

MFAT worked with relevant agencies to assess the policy details to be given effect by this Bill and to ensure the Bill’s provisions are workable and complete. Although no specific testing has been undertaken of the Bill’s provisions, the negotiation of the obligations in the Agreement was conducted by an inter-agency team of subject matter experts led by MFAT. Many of the Bill’s provisions implementing new obligations, such as those related to the protection and enforcement of GIs, concern either adapting existing provisions and/or have been modelled upon existing procedures and provisions found under other closely related statutes.  For example, the provisions related to the civil enforcement of GIs replicate the existing civil enforcement provisions of the Trade Marks Act 2002. The provisions related to the administrative enforcement of GIs are modelled upon existing provisions of the Food Act 2014.

In addition, the Bill was prepared by the Parliamentary Counsel Office, MFAT and those agencies that administer the particular enactments which are the subject of the Bill.

4.1. Does this Bill contain any provisions that could result in the compulsory acquisition of private property?

NO

4.2. Does this Bill create or amend a power to impose a fee, levy or charge in the nature of a tax?

YES

Clause 98 amends the definition of “free trade agreement” in section 15A of the Tariff Act 1988 by adding the EU FTA to the list of free trade agreements under which the Minister may determine that there are grounds for applying a transitional safeguard measure (including a provisional safeguard measure), which may be in the form of a duty.

Clauses 102 to 106 amend the Tariff to provide for preferential tariff entry and concessionary entry of goods from the customs territory European Union.

4.3. Does this Bill affect rights, freedoms, or impose obligations, retrospectively?

NO

4.4. Does this Bill:

(a)   create or amend a strict or absolute liability offence?

NO

(b)   reverse or modify the usual burden of proof for an offence or a civil pecuniary penalty proceeding?

NO

4.5. Does this Bill create or amend a civil or criminal immunity for any person?

YES

Clause 84, new section 155 creates a civil and criminal immunity provision for a “specified person” that is defined in section 155(3) as:

·         a relevant chief executive of a relevant Ministry

·         an employee or agent of a relevant Ministry

·         a GI officer and a person lawfully assisting a GI officer

·         a Customs officer and a person lawfully assisting a Customs officer

4.6. Does this Bill create or amend a decision-making power to make a determination about a person’s rights, obligations, or interests protected or recognised by law, and that could have a significant impact on those rights, obligations, or interests?

YES

Clause 68 amends section 45 of the Geographical Indications (Wine and Spirits) Registration Act 2006 to provide the High Court with the authority to remove New Zealand and foreign registered wine and spirits GIs from the register of GIs, where it is satisfied that one or more of prescribed grounds for removing GIs from the register exists.

Clause 84, new sections 58 provides for the Registrar of GIs to determine whether a request from the EU, after entry into force of the Agreement, to either protect a new GI or amend an existing GI protected under Annex 18-B, section A should be agreed to under Article 18.33 of the Agreement.  The grounds for refusing such a request include where:

(a)   a person has a prior existing trade mark right to use the name of the EU GI;

(b)   the EU GI has already been registered, including in respect of a different geographical region or area;

(c)   protection of the EU GI would limit a person’s freedom to use common descriptive terms, including plant variety and animal breed names, for describing their products in trade;

(d)   protection of the EU GI is likely be offensive to a significant section of the community, including Māori.

Clause 84, new section 80 provides for the appointment of GI officers to exercise the enforcement powers in part 5, subparts 2 and 3 of the GIs Act. New section 84 provides that the chief executive may also exercise all the functions, duties, and powers of a GI officer under the Bill. New sections 85 to 105 set out enforcement powers. These include the power to:

·         question and require information to monitor compliance with restrictions on use or investigate a suspected breach of a restriction on use;

·         enter and inspect a place involved in the trading of the kinds of goods to which restrictions on use may apply;

·         apply for and execute a search warrant where the officer believes there is a breach of a restriction on use; and

·         issue a notice of direction where an officer is satisfied that a person has breached a restriction on use.

Clause 84, new sections 106 to 119 provide for civil proceedings in the High Court to enforce a restriction on use. The remedies include damages, account of profits, order for erasure of the offending geographical indication, and orders for disposal of infringing goods, infringing material, or an infringing object.

Clause 84, new sections 121 to 127 are provisions relating to the procedure for infringement offences under the GIs Act.

Clause 84, new sections 131 to 154 provide a regime administered by Customs that provides for goods that are suspected of being infringing goods to be temporarily detained at the border, by extending the existing border regime for registered trade marks to include registered geographical indications. Clause 152 provides that the court may order the destruction or disposal of infringing goods.

Clause 84, new sections 157 to 160 relate to the powers of the Registrar of Geographical Indications, and so replace existing powers prescribed under sections 34 to 35A, and 40 of the Geographical Indications (Wine and Spirits) Registration Act 2006.

4.7. Does this Bill create or amend a power to make delegated legislation that could amend an Act, define the meaning of a term in an Act, or grant an exemption from an Act or delegated legislation?

YES

Clause 4 of Schedule 1 allows regulations to be made for transitional or savings matters concerning the coming into force of the amendments to the Act. The regulations may override, or add, provisions in the Act. However, any transitional regulations made will be revoked 5 years after the clause comes into force.

4.8. Does this Bill create or amend any other powers to make delegated legislation?

YES

Clause 2 allows for the Act to come into force on a date set by an Order in Council. This power is necessary because the Act must come into force on the same date that the NZ-EU FTA comes into force, and New Zealand and the European Union will decide on an entry into force date for the FTA during the first half of 2024.

Clause 84, new section 156 empowers the making of regulations for the purposes of the amended Geographical Indications (Wine and Spirits) Registration Act.

Clause 88 amends the regulation-making power under section 61A of the Overseas Investment Act 2005. The amendment will allow for regulations to be made to provide for alternative monetary thresholds for overseas investments in significant business assets by non-government investors from the European Union and from Parties to the Pacific Agreement on Closer Economic Relations Plus.

4.9. Does this Bill contain any provisions (other than those noted above) that are unusual or call for special comment?

NO

Appendix One: Further Information Relating to Part Three

External consultation – question 3.6

MFAT organised and conducted a wide-ranging public outreach and consultation programme, including with relevant government agencies, Māori in their capacity as treaty partners and key stakeholders on negotiating objectives and FTA impacts from the initial scoping through to conclusion of negotiations. The priorities and issues raised in the course of those and subsequent consultations (outlined in the NIA), were used to inform negotiations.

In December 2015, MFAT formally sought stakeholder comment on proposed FTA negotiations between New Zealand and the EU (In advance of New Zealand reaching agreement on the scope of negotiations in 2017). A total of 24 written submissions were received during this process, with the majority of submissions from industry organisations and business councils, individual businesses, and civil society organisations.

Over 2017-2018 New Zealand officials held dozens of in-person engagements on the NZ-EU FTA across New Zealand to better understand the views of stakeholders, and Treaty partners, as mandates for the negotiations were being developed.

During August – October 2018, as part of the Government’s consultation on the Trade for All agenda, there was more detailed engagement with the public on the NZ-EU FTA. This included 10 meetings in which the NZ-EU FTA was a focus of engagement. Written submissions were also invited and more than 200 were received either direct to MFAT or via an online “have your say” webpage.

Public stakeholder sessions on the NZ-EU FTA were held regularly over the course of negotiations. Public summaries of each negotiation round were also made available on the MFAT website (including in Te Reo for the final year of discussions over 2021/22). Video-blogs of the New Zealand Chief Negotiator were also made available and MFAT’s NZ-EU FTA webpage provided other information related to the FTA. A stand-alone email address was set-up and monitored. Through the course of the negotiation period, and after negotiations concluded, MFAT and supporting agencies undertook extensive engagement with New Zealand exporters and other businesses (including importers) with an interest in New Zealand trade policy and a particular focus on the NZ-EU FTA.

This engagement included regular participation at board meetings and briefings on specific commercial issues to a range of New Zealand businesses and business representatives, including but not limited to: Dairy Companies Association of New Zealand (DCANZ), Beef + Lamb NZ, the Meat Industry Association, Zespri, Onions NZ, Horticulture  Export Authority, Fonterra, the International Business Forum (IBF), the Employers and Manufacturers Association, Export NZ, Seafood New Zealand, Chambers of Commerce and Business Associations, NZ Winegrowers, Mānuka Charitable Trust, and Apiculture NZ, amongst others.

In the specific area of meeting New Zealand’s obligations under the Agreement to protect EU geographical indications (GIs), the Government conducted public consultations at various stages of the negotiations. These included consultations on:

·         the EU’s initial list of over 2,000 GIs proposed for protection under the Agreement (from December 2018 to March 2019) and on amendments to that list in early 2022, and again on a subsequent list of amendments in late 2022;

·         the EU’s proposed legal framework for protection of GIs for inclusion in the Agreement from December 2019 to March 2020; and

·         possible changes to the Geographical Indications (Wine and Spirits) Registration Act 2006, especially in relation to the enforcement of New Zealand and foreign registered wine and spirits GIs and EU GIs to be protected under the Agreement  from November 2022 to March 2023).