NZ Companies To Benefit From CER Boost
13 December 2004
NZ companies to benefit from CER boost
CER got a boost over the weekend and New Zealand companies will benefit, says Phil O'Reilly, Chief Executive of Business NZ.
Mr O'Reilly took part in the Queenstown Ministerial meeting headed by trade, commerce and agriculture Ministers from both New Zealand and Australia.
The meeting agreed to simplify CER rules of origin that apply to manufactured goods with imported components, using the same system as in the US-Australia trade agreement.
"Rules of origin are used to differentiate between a manufacturer who 'substantially transforms' a product for export and a manufacturer who might simply make small changes to an existing product before exporting it. Rules of origin are obviously useful for that purpose, but the downside is that they can become very prescriptive.
"The Queenstown meeting agreed to change the rules of origin- moving from a prescriptive 'percentage' regime, to a definition relating to whether the goods have been 'substantially transformed' in the exporting country, with no calculations required for most goods. This will remove much of the hassle and discrimination against manufacturers who increasingly source their components globally," Mr O'Reilly said.
The Australian Ministers also agreed in principle to small New Zealand wine producers getting the same tax rebates as small Australian producers.
"A rebate of 29% on wine sales up to $1 million a year would be welcomed by New Zealand wine exporters. This agreement in principle is a significant gain for New Zealand," Mr O'Reilly said.
"New Zealand concerns about stone fruit access and Australian concerns about tropical fruit access were also acknowledged, with further work to be done.
"Overall, New Zealand made heartening gains from the meeting for which the Ministers, the Australia-New Zealand Business Councils and others involved should be congratulated."