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Australia New Zealand closer economic relations ministerial meeting, Canberra



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AUSTRALIA NEW ZEALAND CLOSER ECONOMIC RELATIONS MINISTERIAL MEETING CANBERRA 15-16 AUGUST 1985

JOINT COMMUNIQUE

Australian and New Zealand Ministers met in Canberra on 15-16 August 1985 and discussed progress under the Australia New Zealand Closer Economic Relations - Trade Agreement, exchanged views on bilateral trade issues

currently of concern to both sides and considered the development of the Closer Economic Relationship in the period leading up to the 1988 Review of the Agreement.

The meeting was the first formal Ministerial Meeting held under the Agreement since it came into effect on 1 January 1983. Australia was represented by the Minister for

Trade, Hon. John Dawkins; the Minister for Industry, ' Technology and Commerce, Senator the Hon. John Button; and the (Minister for Primary Industry, Hon. John Kerin. New Zealand was represented by the Minister of Overseas Trade

and Marketing, Hon. Mike Moore; the Minister of Trade and .Industry, Hon. David Caygill; and the Minister of Consumer Affairs and Customs, Hon. Margaret Shields.

Ministers reaffirmed the commitment of both Governments to the Agreement, the attainment of a trans-Tasman free trade area by 1995 at the latest, and to the concept of ; · developing closer economic relations between the two ;

countries. Ministers agreed that the conclusion of the CER Agreement in 1983 and its successful operation over the subsequent two and a half years had further strengthened- ~~ and enhanced the special relationship between the two

countries. . · . · · ,··.·.· ;

An Outward-looking Agreement '

Ministers emphasised that the Agreement was outward-looking and established a basis from which the closer economic relationship could be further developed to the benefit of both countries and the region. They noted

in this respect that at the recent meeting in Rarotonga the South Pacific Foruti leaders had welcomed the offer of Australia and New Zealand to "enter into discussions,

without obligation, of' whether there would be an advantage for other Forum countries to enter a broadened ANZCER". Welcoming this development, Ministers confirmed that a joint Australia-New Zealand paper was to be produced to

explore the options. This would be presented to the South Pacific Regional Committee on Trade when it met in Wellington next year.

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Ministers agreed that a new round of Multilateral Trade Negotiations offers the best hope of producing urgently needed improvements in the multilateral trading system. To this end they will continue their co-operation giving

particular emphasis to the need to strengthen the current inadequate rules concerning agricultural trade in a way that will secure greater access for efficient producers and stronger disciplines on export subsidies and other

forms of protection.

Ministers also confirmed their commitment to continue to work for Asian-Pacific co-operation in approaching multilateral trade issues. In this way they will be giving practical expression to the outward-looking orientation of the Agreement. ■

Review of Operation of the Agreement A key feature of the Agreement is the program to complete removal of the remaining trade barriers between the two countries on a gradual and predictable basis within a

specified time frame. Ministers noted that the automatic provisions of the Agreement have been implemented smoothly and that industry on both sides of the Tasman is taking advantage of the increased trading opportunities being , opened up by this process, with moves being made by firms

to rationalise trans-Tasman production. .

Ministers were pleased that in the period the Agreement - has been in effect there had been a significant expansion of two-way trade. Each country's trade with the other rose faster through most of the period than its trade with

the rest of the world. New Zealand is Australia's largest single market for manufactured exports and vice versa. Australia has been New Zealand's largest trading partner over the period, while New Zealand is Australia's third

largest trading partner overall. Similarly there has been a notable increase in trans-Tasman investment activities.

In addition to the removal of trade barriers, significant progress has been made towards harmonisation of standards and other regulations which can· effect conditions of trade. . -

Ministers noted that the gradualism of the liberalisation process was designed to allow time for producers and firms to accommodate change and that the Agreement is a comprehensive package which has produced worthwhile benefits to both countries and reaffirmed their commitment

to tfhe objective of free trade across the Tasman under conditions of fair competition.

Details of progress on various aspects of the Agreement are set out in the first attachment to this Communique.

Modified Arrangements Ministers noted the significant progress which had been made since the Agreement entered into force in finalising modified liberalisation arrangements to apply to a number of products, and in particular that interim liberalisation

arrangements for motor vehicles and components had been put into place from 1 January 1985.

Ministers discussed the three major remaining product groups for which liberalisation arrangements remain to be determined namely steel subsidisation, tobacco and apparel. Australia will give consideration to a New

Zealand proposal to commence liberalisation of steel products presently produced in New Zealand from 1 January 1986. On steel and tobacco further discussions will be held later this year. "

In respect of apparel, officials are to commence discussions after receipt of the draft IAC Report (due in November 1985). Further discussions will take place following receipt of the final IAC Report due May 1986.

Assistance to Industry _

Ministers exchanged views on Government assistance measures to industry in both countries which can distort trade between them. In response to New Zealand Ministers' concerns Australian Ministers agreed that discussions

should take place at an early stage on the question of the application of bounties to exports in trans-Tasman trad^. Other aspects of bounties are to be further studied. "'~

Under the Agreement, designated performance based export incentives are to be phased out by 1987 at the latest, and Ministers expressed satisfaction that both countries had phased out some schemes in advance of this requirement.

Ministers also noted that the Agreement provides for both countries to work towards the removal of all export f incentives in trans-Tasman trade, and agreed that

officials should examine the incentives and other like mechanisms applied by both countries and consider ’ arrangements for removing their application in trans-Tasman trade. ■

Agriculture/Horti culture . Ministers discussed the concerns and sensitivities of the Australian agricultural industry, particularly those of the horticultural industries and the impact of New '

Zealand's Export Market Development Taxation Incentive and Australia's Export Market Development Grants Scheme.

Ministers urged the horticultural industry in both countries to co-operate where appropriate in developing the trans-Tasman trade in line with the objectives of the Agreement while avoiding, where possible, undesirable

market disruption in the other country. Industries might

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also co-operate in ways of developing common interests outside the region. Australia suggested such industry to industry co-operation might be facilitated if co-ordinated through an umbrella body representative of its industry.

New Zealand indi-cated that the development of an umbrella organisation for New Zealand horticulture was currently under consideration. -

Countervailing Ministers discussed the differing interpretation applied in each country to countervailing principles and in particular to the nature of the causal link between

subsidised goods and injury to domestic industry. Both countries agreed to study it further. ·

Government Purchasing Preferences Australian Ministers provided a briefing on progress they had made towards removing purchasing preferences in force in the States. New Zealand Ministers expressed their

willingness to assist in this process and reaffirmed that on the achievement of this objective, New Zealand would reciprocate fully and immediately. It was noted that New Zealand Ministers will be participating in the next meeting of the Australian Industry and Technology Council

in November 1985. .

Government Regulatory Measures Ministers noted that regulatory measures of either . Government or Australian State Governments can have an , impact on trans-Tasman trade. There was already ,

considerable involvement of New Zealand in discussions with Commonwealth and State authorities on such matters and Ministers considered this offered a productive approach to the fulfillment of the Agreement's objectives

in this area. Australian Ministers invited New Zealand's participation in current studies for the formulation of . engineering standards for major projects. - -Investment "% ‘ ' ' ■■>>·'“ / ■ ~ -r

In respect of investment, Australia and New Zealand have been holding discussions on facilitating investment flows across the Tasman. These discussions were designed to further the understanding by both countries of the

features and objectives of each country's foreign . investment policy and of the mutual benefits to be gained from the continued integration of Australian and New Zealand industry. : ,

The Australian Government has reaffirmed that, in the application of its foreign investment policy to investment proposals from New Zealand, the CER benefits of the proposals, such as rationalisation of industry and * opportunities for increased trade, would be taken fully

into account. New Zealand would take a similar view of these benefits in its assessment of proposals from Australia. Consultation arrangements between the two countries in respect of investment matters will also be

strengthened. Details are to be made available soon.

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Import Licensing Procedures Ministers discussed Exclusive Australian Licenses under New Zealand's import licensing procedures and New Zealand agreed to consider ways of simplifying and improving their

operation. Australian suggestions to make the procedures more effective would be considered.

Other Matters Ministers agreed to encourage the Australian and New Zealand industries to resolve differences on the early removal of export controls on trans-Tasman trade in copper

scrap, and decided that unless agreed beforehand, such controls will be removed in 1995.

Ministers discussed the outcome of Australia's recent review of the intermediate goods compensating charge applying to imports of New Zealand lawnmowers, and it was decided that further consultations will be held on this

matter.

Ministers discussed the high cost of transport across the Tasman and the significance of adequate airfreight capacity.

Industry/Union Consultations Representatives of Australian industry and union groups with an interest in the trans-Tasman relationship met Ministers and in their discussions expressed their'"broad

support for the Agreement and put forward views on ways'- closer economic relations should be developed.

Future Progress ; ;

Ministers applauded the Agreement as a significant landmark in the relationship between the two countries and agreed that it would be in both countries' interests to look to ways of strengthening it.

A dynamic approach.;is consistent with the nature of the Closer Economic Relations Trade Agreement, which includes provisions for its* further development. "

The most comprehensive of these is the commitment to a general review of the Agreement in 1988, five years after its entry into force. By that time tariff liberalisation will be virtually completed, there will be substantial

progress in the liberalisation of access, and sufficient time will have passed to test the effectiveness of the Agreement provisions as a whole.

Areas for possible closer co-operation or action which are flagged in varying degree in the Agreement include export subsidies, government purchasing, standards, labelling, trade practices legislation, taxation, company law,

foreign investment, movement of people, transport, tourism.

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Ministers noted that the signature by Ministers, during the course of the meeting, of a Memorandum of Understanding between the two Governments regarding mutual assistance between their customs agencies would facilitate

the harmonisation of customs procedures.

Ministers considered it inevitable that as the general and progressive removal of tariffs, import quotas and performance-based export incentives in trans-Tasman trade takes effect, the scope for such factors to influence the

development of bilateral trade would increase. They agreed therefore that in the lead up to the 1988 Review detailed consultations with private organisations and interested groups and individuals would be held in order

to identify by the end of 1986 specific ways in which trade is or is likely to be affected by differences in each Government's policies or practices or any other matters which might contribute further to the development of the closer economic relationship. The results of these

consultations would then form the agenda for further discussions between the two Governments with a view to developing a program of action.

Ministers agreed that by the time of the 1988 Review the two Governments would have given consideration to further initiatives to develop the relationship. These may take the form of developing a more comprehensive agreement or concluding comparable agreements to deal with non-trade aspects of the economic relationship. Such arrangements would have regard to the economic strategies of both ,

countries, the longstanding and closer economic relationship of the two countries, their role in the Asia/Pacific region and the desirability that any -development be consistent with the outward-looking

orientation of the trans-Tasman relationship and international trade obligations. : . . . . . ., , ■

In the interim, Ministers agreed that both Governments would encourage research into the implications of developing the closer economic relationship into a more comprehensive economic association. Ministers also noted

the useful research into CER by both branches of the Australia New Zealand Foundation and also that the Australia New Zealand Businessmen's Council will shortly be conducting a joint conference with the theme "CER : The

Next Stage" and urged them to continue such activities.

In drawing attention to the breadth of the Closer Economic Relations concept and the scope for its further development the Ministers stressed the considerable degree of co-operation which already existed in an extensive range of matters. These areas of co-operation are set out

in the second attachment to this Communique.