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Joint Ministerial Statement On CER

The annual Australia/New Zealand Closer Economic Relations Trade Ministers’ meeting took place in Auckland on 30-31 August 2000. The Hon Jim Sutton and the Hon Mark Vaile issued the following statement at the conclusion of their meeting:

“As Australian and New Zealand Trade Ministers do every year, we have over the last day had the opportunity to review progress of CER, and to discuss how we might wish to develop it in the future. We agreed in March that we would talk about how we might lift CER to a new level. We reaffirmed today the great value that our two Governments attach to the trans-Tasman partnership and to the strong tradition of consultation, cooperation and progress that sustains it. We had stimulating and fruitful discussions on how we might take a fresh look at the economic relationship between our two countries, in order to continue to reap the gains that have been made over the last 17 years, since the Australia New Zealand Closer Economic Relations Agreement was signed in 1983.

On the first afternoon of the meeting we discussed regional and multilateral issues.

We agreed that current discussions on freer trade between AFTA and CER were a priority for us both. We renewed our commitments to engage with ASEAN countries with the objective of securing agreement to commence negotiations on a free trade area of mutual benefit for all parties. We agreed to cooperate closely in the run-up to the Chiang Mai meeting and beyond, taking into account the recent and forthcoming visits to the region by us both.

We also agreed to keep in close touch on any further opportunities for CER to discuss possible free trade agreements with third parties. We discussed the agreement between Singapore and New Zealand for a closer economic partnership initialled on 18 August, acknowledging the importance of keeping each other fully informed of such discussions with third parties in the context of the CER relationship.

We looked forward to continuing to make progress in APEC this year under the leadership of Brunei. We noted the worthwhile outcomes from the APEC Trade Ministers’ meeting in Darwin in June and our expectation that these could be built on further.

On the WTO, we reaffirmed our desire to see a new Round launched at the earliest opportunity, and renewed our commitment to work towards this end. We also emphasised our joint commitment to the objective of the Cairns Group of countries working for the liberalisation of world trade in agricultural products, and expressed the hope that the forthcoming meeting in Banff would consolidate progress of Cairns Group work in the WTO negotiations on agriculture.

We discussed two specific issues in the WTO context, and how we might make progress on them – the administration of the access provisions for Australian and New Zealand wool to China, and continued close cooperation on our dispute with the United States on our lamb exports as the mid-term review of the US safeguard measure approaches.

For the first time in several years our meeting included wide-ranging discussions with the trans-Tasman business community. We met with business people from both sides of the Tasman for an hour and a half at the beginning of this morning’s talks. We welcome this dialogue with business and found the direct interaction this morning was valuable to our subsequent discussions. We hope to continue the practice of business involvement at these meetings in future years.

As we had earlier agreed, we had a good preliminary look at ways of deepening and enhancing our CER cooperation. We noted recent developments in global and regional trade and how these impacted on our economies. We had a stimulating exchange of views on taking forward our existing trans-Tasman cooperation, noted ways in which our cooperation might be strengthened and looked ahead at how we might build on our joint efforts to further integrate our two economies and their potential to enhance efforts to improve the regional and multilateral trading environment.

We noted that such further integration could lead to increased cost efficiencies, to greater critical mass, to improved trans-Tasman trade facilitation and to stronger regulatory structures. These developments will contribute to strengthening our economies and maximising international competitiveness. There is some exciting work currently being undertaken by officials in the areas of therapeutic goods and the wider field of public health and safety which is building on the first ventures into regulatory integration embarked on a few years ago.

We welcomed the announcement on 29 August by our respective Treasurers that Australia and New Zealand have agreed to examine the tax treatment of trans-Tasman investments. We noted that there will be an assessment of the costs and benefits of ‘triangular taxation’ which occurs where Australian shareholders in a New Zealand company operating in Australia are unable to access Australian sourced franking credits, with the same problem applying for New Zealand shareholders in Australian companies operating in New Zealand. As our Treasurers have indicated, the examination of triangular taxation is a worthwhile step in addressing possible barriers to trans-Tasman investment. Examination of this issue, a priority for business, has the potential to strengthen CER through improving the ease of capital flows. Officials have been tasked to report back on this issue by 30 June 2001.

We also welcomed the finalisation of a revised Memorandum of Understanding on the Coordination of Business Law. Today we signed the MOU with the New Zealand Minister of Commerce, the Hon Paul Swain, whose counterpart, the Hon Joe Hockey, signed it in Canberra last week. This Arrangement will provide an excellent framework within which we hoped a number of outcomes can be achieved in the area of alignment of business law in order to increase ease of capital flows and trans-Tasman business integration. The possible merger of the Australian and New Zealand Stock Exchange is an instance of a trans-Tasman commercial development with the potential to add impetus to broadening and deepening the CER relationship.

We had a good discussion on rules of origin, including the changing nature of the production and distribution system and the issue of valuing intellectual input into product in the new “knowledge economies”. We noted the provisions in New Zealand’s Closer Economic Partnership Agreement with Singapore and the discussions currently under way in the AFTA/CER. We asked officials to study, and report to us around the end of the year, on the implications for CER rules of origin.

We reaffirmed our Governments’ intention to negotiate an open skies agreement between our two countries, and noted that negotiations are scheduled to be held shortly. We welcomed in the context of the wider development of CER the free trade in air services between us that such an agreement would make possible.

We noted with interest our respective trade promotion agencies’ plans to consider joint promotion of CER countries as an investment destination in the region. We agreed that such an initiative would be in tune with a new, more strategic approach to CER and asked officials to carry out further work on refining a proposal.

We welcome the progress made in the high-level biosecurity dialogue since our last meeting. We reviewed several outstanding bilateral quarantine issues, expressed our expectation that these would be resolved within a reasonable timeframe, and reaffirmed our commitment to continuing to uphold our international commitments in this area.

Lastly, we had a productive exchange on industry policy, noting the recent increased alignment of our Governments’ perspectives. We noted that officials have in train plans to deepen the trans-Tasman dialogue on this issue.

Ends

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