"The first step in this process is to request dispute settlement consultations. We expect to lodge this request this week in Geneva," she said. The New Zealand move followed Australia's decision to seek a WTO hearing with the United States to justify the consistency of its restrictions on imports of Australian and New Zealand lamb, due to come into effect later this month.

Australian Prime Minister John Howard announced his country's plan for a challenge after a one-on-one meeting with President Bill Clinton on Monday. Clinton decided last week to place a penalty cap on lamb imports, based on 1998 levels, in response to complaints from U.S. ranchers who said surgingshipments of New Zealand and Australian lamb were driving them out of business.

Depending on the results of the initial WTO consultations, New Zealand officials said they can request the establishment of a disputes settlements panel to decide on the consistency of the U.S. measures, which the White House has said were made within the WTO's so-called "safeguarding" rules.

Under the U.S. tariff regime, all Australasian lamb allowed into the United States within the quota volume will be subject to a nine percent tariff for the first year, six percent in the second year and three percent in the third year. Australia and New Zealand, which produce about 95 percent of all lamb imported by the United States, expressed outrage at the decision, saying the move was unfair as neither of them subsidizes its lamb industry.