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CER rules change impacts $12 billion trade

Media statement
Monday, December 13th, 2004

CER rules change impacts $12 billion trade

The importance of the change in the Rules of Origin for goods traded between New Zealand and Australia under the CER agreement should not be underestimated, the Employers & Manufacturers Association (Northern) says.

"We endorse and welcome the RoO change agreed at the annual trans Tasman ministerial talks over the weekend," said Bruce Goldsworthy, EMA's Manager of Manufacturing Services.

"While the gains from the talks for wine and fruit are valuable and simply understood, the change agreed for CER's Rules of Origin is easily the most far reaching.

"The change which we advocated will facilitate the further growth of trans Tasman trade in goods worth over $12 billion each year by:

* reducing the compliance costs of calculating a product's content,

* removing uncertainty on whether a product has reached the content threshold at which goods gain preferential access, and

* introducing a rule that can be extended to all new FTA's so RoO treatment becomes uniform.

"The current rules have passed their use-by date. They stipulate goods qualifying for duty free access to either New Zealand or Australia must reach 50 per cent ex factory added value. This is holding back efficiency and productivity gains since to meet this threshold, components and materials often cannot be sourced at the most favourable prices.

"Moving to the change of tariff rule will overcome this constraint."


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