The World Trade Organisation disputes panel's final ruling in favour of New Zealand's case against tariffs on lamb imports into the United States was welcome, Trade Negotiations Minister Jim Sutton said today.

The United States outraged New Zealand farmers last year when it imposed tariffs on New Zealand lamb imports, after claims that increased imports were threatening the American domestic market.

Both New Zealand and Australia which was also affected by the tariffs, filed a complaint against the United States at the WTO in April.

A draft ruling, published in October, backed New Zealand and Australia.

Mr Sutton said that New Zealand had argued all along that there were long term systemic problems in the United States lamb meat industry and that it was these other factors, rather than imports, that were adversely affecting the industry.

"The fact that the panel has upheld New Zealand's reasoning on this important issue is a significant victory."

Mr Sutton said the lamb case demonstrated the benefits which a rules based world trading system brought for a small trading nation, such as New Zealand.

"There is no other way a country the size of ours could force the United States to change its policy."

However, Mr Sutton warned that the United States was to appeal the panel's ruling, so the final verdict on the case had not been heard yet.

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.

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