United Kingdom Free Trade Agreement Legislation 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

The NZ-UK FTA National Interest Analysis (NIA) was prepared by the Ministry of Foreign Affairs and Trade and published on 1 March 2022. The NIA is available from https://www.mfat.govt.nz/assets/Trade-agreements/UK-NZ-FTA/NZ-UK-FTA-National-Interest-Analysis.pdf.

The Foreign Affairs, Defence and Trade Select Committee (FADTC) examined the NZ-UK FTA and NIA in March and April 2022. FADTC’s report on the FTA was published on 12 April 2022. Public submissions on the FTA and FADTC’s final report are available from International treaty examination of the UK-NZ Free Trade Agreement - New Zealand Parliament (www.parliament.nz).

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

YES

The Bill seeks to give effect to the Free Trade Agreement between New Zealand and the United Kingdom of Great Britain and Northern Ireland (the FTA), done on 28 February 2022 (1 March New Zealand time) at London, England. The Agreement text can be found at NZ-UK Free Trade Agreement by chapter | New Zealand Ministry of Foreign Affairs and Trade (mfat.govt.nz).

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

The NZ-UK FTA National Interest Analysis was prepared by the Ministry of Foreign Affairs and Trade and published on 1 March 2022. The NIA is available from https://www.mfat.govt.nz/assets/Trade-agreements/UK-NZ-FTA/NZ-UK-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 prepared by the Ministry of Foreign Affairs and Trade in consultation with other relevant government agencies and incorporates the regulatory impact statement requirements. The NIA was published on 1 March 2022 and can be found athttps://www.mfat.govt.nz/assets/Trade-agreements/UK-NZ-FTA/NZ-UK-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?

NO

Treasury (including the International Team and Regulatory Strategy team) was consulted during the NIA drafting process, as is normal practice.  

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

The Foreign Affairs, Defence and Trade Select Committee (FADTC) examined the NZ-UK FTA and NIA in March and April 2022. FADTC’s report on the FTA was published on 12 April 2022. Public submissions on the FTA and FADTC’s final report are available from International treaty examination of the UK-NZ Free Trade Agreement - New Zealand Parliament (www.parliament.nz).

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

2.5 (a)

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

2.5 (b)

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

Overall, the Government considers that obligations in the Intellectual Property chapter would involve minor short term costs for New Zealand, with potentially higher longer term costs after the commitment to extend the term of protection for copyright and related rights by 20 years is implemented. An artist’s resale right scheme may impost costs on the government, and would impose compliance costs on the secondary art market. Any such costs must also be considered in the context of the benefits provided across the Agreement as a whole (Section 4).

The NIA also notes that without an FTA with the UK, New Zealand goods exporters would face increasing deterioration of comparative market access opportunities relative to other trading partners, which either already enjoy preferential access into the UK or will in the future as the UK expands its free trade coverage post-Brexit (Section 4).

As noted above, the more specific cost-benefit analysis is contained within the NIA in sections 3, 4, 7 and 8.

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

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?

The Bill makes the amendments to New Zealand law necessary for it to ratify the Agreement. MFAT has worked with relevant domestic agencies in order to identify those amendments, and prepare the Bill. MFAT considers that the policy given effect to by the Bill is consistent with New Zealand’s international obligations.

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 NZ-UK FTA contains the same protections for the Treaty of Waitangi as all New Zealand Free Trade Agreements since 2001. The Treaty of Waitangi exception, along with other provisions in the Agreement, combine 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 UK. New Zealand’s approach of including the Treaty of Waitangi exception in its free trade agreements is unique, and reflects the constitutional significance of the Treaty of Waitangi to New Zealand.

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

The Ministry of Justice is considering whether the Bill is consistent with the rights and freedoms affirmed in the New Zealand Bill of Rights Act 1990 and will provide advice on this to the Attorney-General. The Advice provided to the Attorney-General, or a section 7 report of the Attorney-General, is generally expected to be available on the Ministry of Justice's website upon introduction of the Bill. Such advice and reports are accessible on the Ministry's website at: http://www.justice.govt.nz/policy/constitutional-law-and-human-rights/human-rights/bill-of-rights/

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

Part 5, Apples, creates new strict liability offences for exporting not in compliance with the quota system. The offences may result in a fine not exceeding $10,000. There is a defence available if the defendant proves the contravention was due to an event or cause beyond their control and they took all reasonable steps to prevent the contravention.

The Act also empowers the NZAPI to take certain actions if an exporter exports not in compliance with the quota system. The NZAPI may suspend an export certificate, refuse to issue and export certificate, or cancel an export certificate (all no longer than 12 months from issuing the notice of action). A person has the right of review and also the right of appeal to the High Court.

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

Part 5, Apples, empowers NZAPI to request information from applicants and exporters for the purpose of operating the system and to provide information to Customs NZ or MPI. This could include personal contact details. The Act requires NZAPI, MPI and Customs NZ to ensure appropriate protections are in place to maintain the confidentiality of information collected. Applicants may provide personal contact details when applying for allocation and export certificates. The Privacy Act applies to personal information so the Act does not include specific provision to cover this.

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

Refer to Appendix One.

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

While no specific testing or assessment has been completed, the Bill is based on previous models successfully used for implementing other New Zealand free trade agreements, including with Malaysia, China, Hong Kong, Korea and the ASEAN-Australia-New Zealand FTA.

Part 5, Apples, Part is based on the existing Meat Board Act, which includes a similar quota system arrangement administered by the Meat Board. MPI has also consulted NZAPI on a draft version of the Bill to ensure that the regime is workable.

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

The Bill enables the application of preferential tariff rates under the Agreement to goods traded between the Parties. Part 5 (Apples) also authorises NZAPI to recover its costs relating to performing its functions and duties under Part 5 by way of fees payable by quota applicants and quota holders.

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?

YES

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

NO

Part 5 (Apples) creates strict liability offences for exporting not in compliance with the quota system requirements. There is a defence available if the defendant proves the contravention was due to an event or cause beyond their control and they took all reasonable steps to prevent the contravention.

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

YES

Part 5 (Apples), protects the Crown and NZAPI from being liable to any person for loss or damage as a result of reductions in total quota access to the UK or other such limits or conditions on access under the FTA.

The Apples Part also protects authorised persons (who undertake investigations) from civil or criminal liability in respect of any act or omission while exercising a power under the Part, unless done in bad faith or without reasonable cause.

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

Part 5 (Apples) authorises the NZ API to

• Design and operate a quota allocation mechanism
• Make decisions on who should receive a quota allocation in accordance with the allocation mechanism
• Issue export certificates, suspend, cancel or refuse to issue certificates.
• Take enforcement action if a person commits an offence under the Act

These powers are all necessary to implement a quota system in compliance with the UK FTA.

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?

NO

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

YES

The Bill provides that the Governor General will set the Bill’s commencement date by Order in Council. Part 5 (Apples) empowers the NZAPI to design a quota system and set fees to cover the costs of performing its functions and duties. The Part also provides the Governor General may appoint a replacement to NZAPI via Order in Council if NZAPI ceases to operate. These are secondary legislation and must comply with the publication, presentation and disallowance requirements under the Legislation Act 2019.

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

        YES

Part 5 (Apples) requires NZAPI to report directly to the relevant UK authority about quota allocation volumes and export certificate issuances; and publish information about export volumes and quota. This is an obligation on NZ under the FTA, which will be carried out by NZAPI on behalf of NZ.