Australia-New Zealand Closer Economic Relations Trade Agreement

Australia and New Zealand Closer Economic Relations (CER) Ministerial Communique

CER Ministerial

Joint Communique: 11 December 2004

Trade and Economic Ministers from Australia and New Zealand met in Queenstown on 10 and 11 December 2004. The annual Ministerial meeting was hosted by the New Zealand Minister for Trade Negotiations and Agriculture, the Hon Jim Sutton, with his colleagues Economic Development Minister, the Hon Jim Anderton, Attorney General and Commerce Minister, the Hon Margaret Wilson and the Parliamentary Private Secretary to the Minister for Trade, Luamanuvao Winnie Laban. The Australian Delegation was led by the Minister for Trade, the Hon Mark Vaile, with his colleagues the Minister for Industry, Tourism and Resources, the Hon Ian Macfarlane and the Minister for Agriculture, Fisheries and Forestry, the Hon Warren Truss.

The 2004 CER Ministerial Forum was the largest gathering of CER Ministers in New Zealand since the Agreement was signed in 1983.

The discussions built on the very successful meeting in August 2003 in Sydney, Australia, which marked the 20th Anniversary of the CER. The CER, which commenced in 1983, is undoubtedly the world's best example of a comprehensive free trade agreement and a model for both countries in their negotiation of newer free trade agreements. In 2003/04 trans-Tasman trade amounted to A$17.3 billion (including A$4.2 billion in services). New Zealand is Australia's fifth-largest market, taking 7.4 per cent of its exports, and is Australia's seventh-largest source of imports. Australia is New Zealand's principal trading partner, taking 22 per cent of its exports and providing 22 per cent of its imports.

Both Governments re-iterated their commitment to build two-way trade and to develop a seamless business environment under the single economic market. Ministers acknowledged the good progress being made on business law. Industry Ministers agreed to work jointly to build industry capacity to compete in the global marketplace. They will instruct their respective departments to develop an agenda for working closely together on industry development issues.

Ministers agreed to reform the Rules of Origin under CER. A Change of Tariff Classification (CTC) approach will be adopted, subject to final agreement on sensitive sectors. Ministers are committed to the liberalisation of all tariff lines over time. A detailed proposal will be developed by the end of March 2005 for submission to Ministers.

Adopting a CTC approach will bring significant benefits to business on both sides of the Tasman. To meet the rules of origin requirement for preferential access under CER, only a change of tariff classification will be required for most tariff lines. This is straightforward and simple to administer. No calculations will be required for most goods. Adopting a CTC approach for rules of origin will bring CER into line with international trends. The tariff category change required to confer origin will be negotiated between Australia and New Zealand. Good progress has already been made on most tariff lines, including agriculture. Further negotiations are required on some sensitive tariff lines, primarily in the textiles and clothing sectors.

Ministers discussed a number of outstanding bilateral trade issues, making good progress on most matters. In regard to the Wine Equalisation Tax (WET) rebate, Australian Ministers agreed, in principle, to extend national treatment to New Zealand wine producers selling into the Australian market. Officials from the Australian Department of Foreign Affairs and Trade and Treasury are closely examining the options and are working on the matter. New Zealand will be consulted prior to a decision on the mechanism. Given budgetary and legislative implications, the implementation date would be 1 July 2005.

Useful discussions were also held on biosecurity and quarantine market access issues. Australia provided an update on the establishment of Biosecurity Australia as a prescribed agency which would now allow for the early release of revised draft risk analyses. Australian Ministers reaffirmed Australia's commitment to sound science as the basis for all quarantine decisions.

Australia expressed concern that the Hazardous Substances and New Organisms Act has unintended consequences, unnecessarily limiting Australian exports of tropical fruit to New Zealand. New Zealand acknowledged these concerns and undertook to work towards early resolution.

Australia acknowledged New Zealand concerns about stone fruit access to Western Australia and undertook to work towards early resolution.

Ministers from both Australia and New Zealand welcomed the good progress which has been made in the establishment of the Joint Therapeutic Products Agency, which is expected to commence on 1 July 2005. This is a significant step in the further development of a single economic market.

Ministers noted the effectiveness of the Trans Tasman Mutual Recognition Arrangement as a driver in achieving a single economic market and agreed to accelerate consideration of remaining exemptions and certification issues in the food area.

The strong commitment of Ministers to achieving a positive outcome in the Doha round of trade negotiations was emphasised. The two countries share a common goal of reducing trade distorting subsidies and improving market access, particularly in agriculture.

Ministers agreed to maintain close consultation and dialogue about FTA negotiations with third countries.

The meeting also heard from the Australia New Zealand Business Councils and from industry groups and major companies in the wood and forest products sector, which held parallel dialogues during the meeting. Ministers responded to the matters raised and will work towards further trans-Tasman collaboration in this area.

QUEENSTOWN

11 December 2004