EU Proposes to Suspend New Zealand Butter Trade

Trade Minister Phil Goff has responded strongly to a statement from the European Commission (EC) that it intends to adopt a regulation suspending New Zealand butter imports with effect from 12 July 2006.

“I am aware that the Commission has to respond to the European Court of Justice decision this week that ruled invalid certain parts of the European Union (EU) regulation governing New Zealand’s butter imports”, said Mr Goff. “But this is not an appropriate response.

“Trade ought to continue while the Commission considers – in consultation with New Zealand – what needs to be done to respond to the court judgment.

"On 11 July 2006 the European Court of Justice issued its decision on a case concerning New Zealand’s dairy trade with Europe that had been brought against the EC by a German dairy trader.

"The trader, Egenberger GmbH, had initially brought proceedings in a Frankfurt court to challenge the EU regulation that governs the New Zealand butter quota. One of the challenges was against the requirement that import licences are to be issued only in the United Kingdom. The Frankfurt court referred several questions to the European Court of Justice concerning the dairy regulation’s consistency with Community law.

“Obviously the EC has to consider carefully how the court's judgement should be given effect. Stopping New Zealand’s trade in butter while the Commission thinks about what to do breaches their WTO obligations to New Zealand. That is unacceptable.

“New Zealand and the EU have a good relationship and a history of consulting closely whenever issues arise in the trading relationship.

“The EU and New Zealand together negotiated the current market access opportunities for New Zealand butter in the EU market.

"Given the EU’s international commitments they should review their proposed action immediately and find a way for the trade to continue while the legal problem is solved.

“I have written to Mariann Fischer Boel, the European Agriculture Commissioner to express our concerns at the serious implications of this decision for New Zealand. New Zealand officials are in urgent discussions with the EC to determine how this matter can be resolved as quickly as possible," Mr Goff said.

ENDS

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