Closer_Economic_Relations

Closer Economic Relations

Closer Economic Relations (CER) is a free trade agreement between the governments of New Zealand and Australia. It is also known as the Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA). It came into force on 1 January 1983, although the actual treaty was not signed until 28 March 1983 by Deputy Prime Minister of Australia and Minister for Trade, Lionel Bowen and New Zealand High Commissioner to Australia, Laurie Francis in Canberra, Australia.

CER built on the earlier New Zealand Australia Free Trade Agreement (NAFTA) which was signed on 31 August 1965 and came into force on 1 January 1966. However although NAFTA had removed 80% of the tariffs and quantitative restrictions on trade across the Tasman Sea, it was seen as too complex and bureaucratic. As such in March 1980, a joint Prime Ministerial communiqué was released that called for "closer economic relations".

The two major sticking points in the negotiations were New Zealand wanting better access for its dairy products in Australia and Australia wanting New Zealand to remove export incentives and quantitative restrictions. After these two hurdles were overcome the Heads of Agreement was signed on 14 December 1982 and it came into force on January 1 of the following year.

One of the most important results of CER was the Protocol on the Acceleration of Free Trade in Goods, which resulted into the total elimination of tariffs or quantitative restrictions between the two countries by 1 July 1990. This was five years ahead of schedule.

Other parts of CER include:

  • A good that can be legally sold in one country can also be legally sold in the other. Persons registered to practise an occupation in one country, can practise in the other. (There are some exemptions to this though, including medical practitioners)
  • Service providers can provide services in either country (there are some restrictions to this in certain areas such as airway services)

The CER is complementary to the Trans-Tasman Travel Arrangement.

Future Prospects

Continuing down the path of economic integration the next step for the Australian and New Zealand governments is to create a Customs union through a common external tariff and a common competition policy.

There has been a call from within both the Australian and New Zealand business communities to extend the CER to other Pacific Island nations. Moving towards a single market and allowing the free movement of people and goods. Harmonisation with both the CER and the Pacific Regional Trade Agreement (PARTA).

Creating a supranational structure similar to that of the European Union is also seen as a way to stablise the region, decreasing security threats, and political unrest. One possibility is to create a Political Union composed of the member-states of the Pacific Islands Forum, but with a common charter, institutions and currency. See Pacific Union.

See also

Australia-New Zealand relations

References

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