Sex- selection, by analyzing an embryo's genetic make-up, is prohibited in New Zealand, Britain and most of Europe, but not in the States.
The report further urges that parents be given the option of selecting embryos harboring their genetic impairments, such as deafness, to be passed on to their children, if they regard these impairments as "life-enhancing".
The study titled 'Choosing the Genes for Future Children' was commissioned by the New Zealand Law Foundation and is an offshoot of the Human Genome Research Project headed by Mark Henaghan, dean of. Otago University law school.
The study looks closely at the ethical issues posed by pre-implantation genetic diagnosis (PGD), which enables the weeding out of impaired genes before an embryo is implanted into a prospective mother.
PGD is permitted under the Human Assisted Reproductive Technology Act 2004 and this year, the Government allocated $500,000 for dozens of couples to benefit from the procedure.
The law, however, prevents "non-medical sex- selection" and does not allow parents the choice to pass on genetic mutations.
The report was launched at a Parliament function on Tuesday, and was attended by several ministers, including Ruth Dyson, Disability Issues Minister, who did not comment on the report.
Health Minister Pete Hodgson has received a copy of the report for reviewing.
"There will be a response from the Minister back to the co-authors, but it will be a while yet," a spokesman for the health ministry remarked.
The report pointed out the inconsistencies in the ban on selecting embryos for genetic impairment seen in a parent.
Public discussion on the legislation will be held before October next year.