Clark: 25th Anniversary of CER
EMBARGOED UNTIL DELIVERY
7.45 THURSDAY 27 MARCH 2008
Rt Hon Helen Clark
Address at Event
CLOSER ECONOMIC RELATIONS WITH AUSTRALIA
Trans-Tasman Business Circle
Thursday 27 March 2008
Tonight's event marks a very significant anniversary in trans-Tasman co-operation: the 25th anniversary of the Closer Economic Relations agreement between New Zealand and Australia.
Twenty five years ago an earlier generation of leaders signed off on the framework for an agreement which the WTO has termed "the world's most comprehensive, effective, and mutually compatible free trade agreement".
It is still by far the most extensive and the deepest trade agreement New Zealand has with any bilateral partner, and internationally it sets a benchmark for high quality FTAs.
Our closer economic relationship with Australia was not developed in a vacuum. Rather it sits on the context of a special relationship – one which Prime Minister Kevin Rudd and I agreed last month is “as close as it gets”. That's because it rests on firm foundations of common values; on extensive trade and economic links; on close and effective co-operation across many areas, including defence; on many family links; and of course on sporting and cultural ties.
New Zealand and Australia do so much together, and we have for so long. Ours is a deep and enduring relationship; and it's a relationship of the future as well as of the past and present.
Over 25 years, the impact of CER on the movement of goods and services across the Tasman has been profound.
Trans-Tasman trade has grown at an average of nine per cent a year since 1983. That’s a greater rate of growth than that of both our GDP growth rates put together over the same period.
Free trade in goods and in nearly all services was achieved in 1990, five years ahead of schedule, with the removal of all tariffs and quantitative restrictions.
Today, CER creates a market of over 24 million people. It increases the effective size of New Zealand’s domestic market six-fold, and provides Australia with access to another domestic market roughly the size of Queensland.
Australia is still New Zealand’s largest market; New Zealand is Australia’s sixth largest. More Australian businesses export to New Zealand than to any other country. Many New Zealand companies get their start in exporting in Australia.
In tourism, we are each other’s largest source of international visitors. Almost two million short trips are made by New Zealanders and Australians across the Tasman each year. That’s a lot of business done, many relationships forged, and family ties strengthened.
The links between our business communities are deep and extensive. Australian and New Zealand companies have nearly $100 billion directly invested in each other. The relationship is a win-win for both countries.
There is solid support in the private sector for the deepening of trans-Tasman co-operation. The Trans-Tasman Leadership Forum, which John Allen will talk about later tonight, is a good example of private sector commitment to the relationship, and we look forward to another successful forum in New Zealand this year.
From those beginnings 25 years ago, the closer economic relationship has widened far beyond that of a traditional trade agreement.
Take the Trans-Tasman Mutual Recognition Arrangement, for example, which allows goods to be sold on either side of the Tasman without having to meet any additional sale requirements. As well, those who are registered to practise an occupation in either Australia or New Zealand can register to practise an equivalent occupation in the other country.
With the barriers at our borders almost entirely cleared away, our governments have been looking behind the border to do away with the unnecessary transaction costs companies can face in doing business across the Tasman.
We want to reach a point where a company based in Auckland can do business in Melbourne as easily as it can in Christchurch.
A big work
programme has been underway to achieve this, driven by our
Finance Minister, Michael Cullen, and the former Australian
Treasurer, Peter Costello. The work includes looking at how
- make it easier to register companies and offer securities in both countries;
- simplify cross-border insolvency proceedings; and
- negotiate an Investment Protocol to CER.
These practical steps clearly stand to remove unnecessary friction from trans-Tasman commerce. Each such initiative is subject to a hard-headed assessment of the benefits, in our case for New Zealand and for New Zealand firms.
The work will go on with Australia's new Labor Government. In Canberra last month, Prime Minister Kevin Rudd and I reaffirmed that the single economic market agenda is ‘core business’ for both our governments.
Our government sees CER as a living and dynamic agreement.
We believe more can be done to explore the full potential of the common Australasian market. That doesn’t mean just selling more to each other – although that's obviously a desirable objective.
It also means using our strengths and complementarities to take on the world together. We are, for example, negotiating a free trade agreement between ASEAN and CER.
We also work closely together in the WTO, including as founding members of the Cairns Group of agricultural exporters. Not only are the Australian and New Zealand missions to the WTO in Geneva located in the same building, but also our positions in the Doha Round negotiations are very close. We co-operate at a technical level in key areas of the negotiations like agricultural market access, export subsidies, and market access for services.
That close co-operation has also continued with the new Australian government. Earlier this month, our Trade Minister Phil Goff and Australian Trade Minister Simon Crean, met in Melbourne, and agreed that our WTO negotiators should continue to work closely together to progress our shared critical interests.
New Zealand and Australian positions on the international challenge of climate change are also becoming more closely aligned. There is mutual benefit in being able to work together in the intense global negotiations for the post 2012 period which are currently in train.
One practical aspect of our new co-operation in this area is the work on emissions trading. Achieving a level of compatibility between emissions trading schemes developed on each side of the Tasman will be a positive thing for business, the environment, and the trans-Tasman relationship.
Australia will soon be joining New Zealand in the International Carbon Action Partnership, which is working on the design of the carbon trading markets of the future. Working together, we can increase Australasian influence on how these markets develop.
Twenty five years ago, the governments of New Zealand and Australia recognised that we can be stronger economically by moving closer together than by staying apart. That philosophy now underpins a far wider economic agenda than could have been envisaged in 1983. That's been good for New Zealand, and long may it continue.