The Australia–New Zealand Closer Economic Relations Trade Agreement, commonly known as Closer Economic Relations (CER), is a

free trade Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold ...

agreement between the governments of

New Zealand New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 List of islands of New Zealand, smaller islands. It is the ...

and Australia. It came into force on 1 January 1983, but the actual treaty was not signed until 28 March 1983 by the

Deputy Prime Minister of Australia The deputy prime minister of Australia is the deputy chief executive and the second highest ranking officer of the Australian Government. The office of deputy prime minister was officially created as a ministerial portfolio in 1968, altho ...

and Minister for Trade, Lionel Bowen and the New Zealand High Commissioner to Australia,

Laurie Francis Sir Laurie Justice Francis (30 August 1918 – 3 August 1993) was a New Zealand lawyer and diplomat. He served as the New Zealand High Commissioner to Australia from 1976 to 1984. Biography Born in Oamaru on 30 August 1918, Francis was educat ...

in Canberra, Australia. This was because Malcom Fraser and Robert Muldoon hated each other personally to such an extent that they refused to ratify the agreement if the other was there.

Overview

Malcolm_Fraser_&_Robert_Muldoon_(17473395099)

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. NAFTA had removed four-fifths of the

tariff A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and p ...

s between the two countries and quantitative restrictions on trade across the

Tasman Sea The Tasman Sea ( Māori: ''Te Tai-o-Rēhua'', ) is a marginal sea of the South Pacific Ocean, situated between Australia and New Zealand. It measures about across and about from north to south. The sea was named after the Dutch explorer ...

. However, it came to be seen as too complex and bureaucratic, and 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's wish for better access for its

dairy product Dairy products or milk products, also known as lacticinia, are food products made from (or containing) milk. The most common dairy animals are cow, water buffalo, nanny goat, and ewe. Dairy products include common grocery store food items in ...

s in Australia and Australia's wish for New Zealand to remove export incentives and quantitative restrictions. After the two hurdles were overcome, the Heads of Agreement was signed on 14 December 1982 and came into force on 1 January 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 in the total elimination of tariffs or quantitative restrictions between the two countries by 1 July 1990, 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. Anyone registered to practise an occupation in one country may practise in the other (with some exemptions including medical practitioners) *Service providers may provide services in either country (except 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 Economic integration is the unification of economic policies between different states, through the partial or full abolition of tariff and non-tariff restrictions on trade. The trade-stimulation effects intended by means of economic integrati ...

, the next step for the Australian and New Zealand governments is to create a

customs union A customs union is generally defined as a type of trade bloc which is composed of a free trade area with a common external tariff.GATTArticle 24 s. 8 (a) Customs unions are established through trade pacts where the participant countries set up ...

through a

common external tariff A common external tariff (CET) must be introduced when a group of countries forms a customs union. The same customs duties, import quotas, preferences or other non-tariff barriers to trade apply to all goods entering the area, regardless of whi ...

and a common competition policy. New Zealand and Australia already have a common competition policy but are unlikely to have a common external tariff. Addressing the New Zealand Parliament in February 2011, Australian Prime Minister

Julia Gillard Julia Eileen Gillard (born 29 September 1961) is an Australian former politician who served as the 27th prime minister of Australia from 2010 to 2013, holding office as leader of the Australian Labor Party (ALP). She is the first and only ...

said: There has been a call from within both the Australian and the New Zealand business communities to extend the CER to other Pacific Island nations, harmonising the CER and the Pacific Regional Trade Agreement (PARTA) so as to move toward a single market and allowing the free movement of people and goods. There have also been calls from organisations such as CANZUK International to extend the CER and the Trans-Tasman Travel Arrangement to the

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and

Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tota ...

, allowing free trade and free movement of people across four of the largest

Commonwealth realms A Commonwealth realm is a sovereign state in the Commonwealth of Nations whose monarch and head of state is shared among the other realms. Each realm functions as an independent state, equal with the other realms and nations of the Commonw ...

References

Full text of Australian PM's address to the Parliament of NZ
* ttps://web.archive.org/web/20050906142746/http://www.dfat.gov.au/geo/new_zealand/anz_cer_20years/index.html A Celebration of Trans-Tasman Relationsfrom the Australian

Department of Foreign Affairs and Trade The Department of Foreign Affairs and Trade (DFAT) is the department of the Australian federal government responsible for foreign policy and relations, international aid (using the branding Australian Aid), consular services and trade and i ...

.
The Australia New Zealand Closer Economic Relations (CER) Trade Agreement: 1983 – 2003 Backgrounder
from

New Zealand Ministry of Foreign Affairs and Trade The Ministry of Foreign Affairs and Trade (MFAT) (Māori: ''Manatū Aorere'') is the public service department of New Zealand charged with advising the government on foreign and trade policy, and promoting New Zealand's interests in trade and in ...

.
Closer Economic Relations (CER)
from StudyOz (Australian High Commission in New Zealand). {{Economy of New Zealand Trade blocs Economy of New Zealand Economy of Australia Free trade agreements of New Zealand Free trade agreements of Australia Treaties concluded in 1983 Treaties entered into force in 1983 Australia–New Zealand relations 1983 in Australia 1983 in New Zealand 1983 in New Zealand law

Overview

Future prospects

See also

References