The Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA or CER) | Trade Samaritan

The Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA or CER)

Closer Economic Relations (CER) is a free trade agreement entered into by governments of Australia and New Zealand on 28th March, 1983.

The two major striking points behind this trade block were New Zealand’s desire to access diary products of Australia and Australia’s wish for New Zealand to remove export incentives and quantitative restrictions.

Goals

  • Total elimination of tariffs or quantitative restrictions
  • Acceleration of free trade in goods
  • Minimize market distortions

ANZCERTA or CER  is one of the worlds most open and successful free trade agreements. Based on trade in goods and services in 2011-12, New Zealand was Australia’s seventh largest market, taking 3.4 per cent of exports and providing the ninth largest source of imports. Australia was New Zealand’s principle trading partner in 2011, providing 16.0 per cent of its merchandise imports and taking 22.4 per cent of its exports. Two-way trade between Australia and New Zealand was AUS$ 21.6 billion in 2011. The countries are close investment partners – Australia has AUS$ 74 billion invested in New Zealand and New Zealand has A$30 billion invested in Australia.  New Zealand is currently Australia’s seventh largest trading partner, eighth largest source of foreign investment and third most important destination for Australian investment abroad.

Over the 30 years of CER, the composition of trade between Australia and New Zealand has changed dramatically, reflecting changes in technology, competitiveness, domestic industry structure, trade liberalization and consumer demand. . Relations between Australia and New Zealand, also sometimes referred to as Trans-Tasman relations due to the countries being on opposite sides of the Tasman sea.

  1. Monthly value of Australian merchandise exports to New Zealand
  2. Monthly value of New Zealand merchandise exports to Australia

 

CER

ANZCERTA

The New Zealand economy contracted by 1.6 percent after the 2008 recession but has re-surged with three consecutive growth quarters and the New Zealand Treasury has projected growth of 3 percent per annul for the next four years. New Zealand also recently signed a free trade agreement with China, which may give Australian businesses the opportunity to leverage access to the Chinese market.

With most of the trade goals now met, the CER work program focuses on “third generation” trade facilitation issues aimed at fostering closer economic integration through regulatory harmonization and the creation of a more favorable climate for trans-Tasman business collaboration Australian and New Zealand Governments now are taking a strategic approach to shaping and guiding a Single Economic Market (SEM) to enable business, consumers and investors to conduct operations across the Tasman in a seamless regulatory environment. Discussion to create a single economic market comprising of Australia and New Zealand is ongoing since 2009. Outcomes will include closer cooperation between the Australian Competition and Consumer Commission and New Zealand’s Commerce Commission to allow sharing of information and mutual decision-making for mergers affecting both markets. New Zealand though a smaller market compared to Australia is a very sophisticated market.

References

Australian Government Department of Foreign Affairs and Trade
Wikipedia

 

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