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The World Trade Organisation (WTO) had ruled in favour of New Zealand's case against tariffs on lamb imports into the United States, Trade Negotiations Minister Jim Sutton said today.
New Zealand and Australia have both been fighting the tariffs that the United States slapped on lamb imports last year to protect its own domestic market.
Sutton welcomed the final ruling which was delivered by the organisation's dispute panel to representatives from the countries concerned in Geneva.
"The fact that the panel has upheld New Zealand's reasoning on this important issue is a significant victory," he said.
The first 14,500 tonnes of lamb imported from New Zealand at present has a tariff of nine per cent, as does the first 17,500 tonnes from Australia.
Imports above those amounts face a 40 per cent staggered tariff.
Before the tariff was introduced, the $NZ160-million ($US66.5 million)-a-year trade had been expected to double by 2002.
An interim ruling from the organisation, leaked in October, also backed Australia and New Zealand.
The case demonstrated the benefits of having a rules-based world trading system, Sutton said.
"There is no other way a country the size of ours could force the United States to change its policy."
But he warned the United States had yet to appeal the decision.
"The hearing of the United States' appeal is likely to take place in the first quarter of next year, with a final result expected before June."
If its appeal is rejected, the US will have to remove the tariff and compensate New Zealand to the tune of $20 million.
Compensation might be made by giving an equivalent value in tariff reductions to exporters in other sectors.
The major benefit would be for sheep farmers who would have unrestricted access to the affluent US market, where there is huge growth potential.
AFP:
