PRIME MINISTER
FOR MEDIA 2 JULY 1990
JOINT PRIME MINT TERTAL STATEMENT
Joint Statement by the Prime Minister of Australia, the
Honourable Bob Hawke and the Prime Minister of New Zealand,
the Right Honourable Geoffrey Palmer.
THE ACHIEVEMENTS
We are meeting today to mark a milestone in the development
of the CER Agreement.
This Agreement plays a major role in ensuring that our two
economies are well placed to compete in the most dynamic
economic region in the world. It has contributed to the
progress made in restructuring our economies. Over 21
million consumers benefit through access to a wider range of
goods in a more competitive market.
1 July 1990 is an occasion therefore both for celebration
and for looking ahead. From now on there will be no
barriers to free trade in goods between Australia and New
Zealand. This is some achievement. That it comes five years earlier
than we envisaged when we signed the CER Treaty in 1983
demonstrates the success and strength of the Agreement.
Both countries are benefiting. Since 1983 total bilateral
trade has grown from A$ 1.99 billion ( NZS 2.5 billion) to
billion ( NZ$ 5.6 billion). This is an average annual
growth rate of about 15%. It is faster than the growth in
either country's trade with the rest of the world.
Today, New Zealand is Australia's fourth-largest trading
partner. Australia is New Zealand's largest. Both
countries are significant markets for each other's
manufactured goods. We have become major markets for each
other's services. The balance of trade is roughly equal.
Total trans-Tasman investment has grown from approximately
billion ( NZS2 billion) when the CER Agreement came
into force to over A$ 10 billion ( NZ$ l3 billion) in 1989.
The steps taken under the CER Agreement contribute to the
ability of both countries to compete in the global market.
Our economies are inextricably linked to the international
economy. Our business communities are taking increasing
advantage of export opportunities in the world market,
particularly in the Asia-Pacific region.
Under CER both countries have always had more than a
bilateral economic focus. The freeing up of trans-Tasman
trade underpins both countries' efforts in working towards
free and fair trade internationally. our achievements
confirm the determination of both countries to pursue these
multilateral goals.
Our own trading practices clearly demonstrate the benefits
that will be gained through the achievement of that goal in
the Uruguay Round of multilateral trade negotiations. Our
cooperative approach is demonstrated in the constructive and
positive approach both Governments have taken in the Asia
Pacific Economic Cooperation process.
PROGRESS SINCE 1988
We are today in a position to mark a number of agreements
reached during the 1988 Review of CER. specifically as of 1
July: there are no longer border restrictions to trade in
goods across the Tasman; tariffs, quantitative import
and export restrictions, tariff quotas and import
licensing have been removed;
neither Australia nor New Zealand pays export
incentives aimed at stimulating exports to the other at
the expense of domestic industry or production bounties
on exports to the other country;
both countries no longer provide for anti-dumping
measures in respect of goods originating in the other
member state; competition law now applies to relevant
anti-competitive conduct affecting trans-Tasman trade
in goods.
Since the 1988 review and as a result of the arrangements
agreed to in 1988, we have continued to develop CER in a
number of noteworthy ways, aimed at reducing impediments to
trade and at improving our business environment:
we have had free trade for a wide range of trans-Tasman
service exports since 1 January 1989;
New Zealand is now a full member of the National
Preference Agreement, bidding on an equal basis for
Commonwealth and State Government purchasing; Australia
similarly has equal access to the New Zealand
Government purchasing market;
both Governments are taking into account CER
considerations in the formulation of industry
assistance policies in line with the requirements of
the Agreed Minute on Industry Assistance;
a comprehensive review of the scope for business law
harmonisation has identified a number of areas where
harmonisation would be beneficial to our business
communities. As a result of changes made to the
application of our competition laws, it is now possible
for Australian and New Zealand courts to sit and take
evidence in the other's jurisdiction in some
competition law matters;
good progress has been made in aligning standards in
both countries, particularly through the development of
joint standards. The agreement of all the Australian
States to exempt New Zealand food imports from carrying
an Australian address will also help to reduce
technical barriers to trans-Tasman trade;
closer cooperation between the customs agencies of both
countries now makes barrier control more efficient and
has contributed to a harmonisation of policies in this
important area for business;
quarantine authorities have reported on harmonisation
of administrative procedures and have resolved a number
of outstanding bilateral issues;
there has been substantial liberalisation in trans-
Tasman air freight;
New Zealand now attends 22 meetings of
Commonwealth/ State forums.
DECISIONS FOR 1990
We have agreed to take advantage of present opportunities to
extend and underpin the liberal trans-Tasman economic
environment created by the present CER Agreements. The
Tasman will not be a legal, administrative or financial
barrier to the free flow of commerce. our businesses must
be able to operate freely in the other's market place and
under conditions of fair competition. We want Australians
and New Zealanders each to be able to regard the other
economy as an extension of their own.
The CER Trade in Services Protocol is to be reviewed before
31 December 1990. In New Zealand's case, major decisions
have already been taken on deregulation of major service
sectors and these will lead to items being removed from the
New Zealand exemptions list in the context of the Review.
In Australia's case, important service sectors excluded from
the operation of the Protocol, including aviation, shipping
and telecommunications, are now being considered in the
context of micro-economic reform. Australia affirms its
commitment to such reform, and to taking full account of CER
provisions in addressing individual micro-economic reform
issues. We reaffirm that we are committed to the further
liberalisation of trade in services in accordance with the
provisions of the Protocol, including national treatment.
We agree that all services that are regarded, mutually, as
possible to include within the operation of the protocol
shall be included by 1 July 1995; and we have decided that
the scheduled review in December 1990 be developed
accordingly. We have both acknowledged that an Australasian market in air
Rprndpe warrants serious consideration. To this end, both
Governments are participating in a joint study of the
implications for the consumers, airlines and economies of
Australia and New Zealand of a single aviation market. The
results of the study will shortly be available for our
consideration, and will be the focus of consultations later
this year to chart a course for future progress.
In this context we agree that an appropriate investment
regime is an integral consideration. On the question of
allowable investment levels in Australian domestic carriers
by individual foreign international carriers operating into
and out of Australia, the Australian Government will review
the limit for these foreign airline operators of 15 per cent
in the context of wider aviation policy issues, including
the programme of micro-economic reform of aviation.
In the area of trans-Tasman air freight, both Governments
now accept the multiple designation of pure freight
operators to fly the Tasman without any constraint on the
capacity to be operated. New Zealand has already designated
Pacific Air Freight and for its part Australia will be
designating two new carriers in the first instance.
We have also agreed that our respective officials should
report to us by 1 October 1990 on the feasibility of
achieving trans-Tasman passenger pre-clearance.
We also discussed the maritime t7rangpnrt sector, noting the
positive trends in recent years arising from waterfront and
shipping reforms as well as market initiatives. At the same
time, most CER commerce continues to be reserved, under a
Maritime Union Accord, to Australian and New Zealand crewed
ships.
0 Our Governments regard competitive shipping services as
vital to the trade between Australia and New Zealand. We
expect that the benefits of shipping and waterfront reform
programs and initiatives in both countries should produce
further significant reductions in costs in the trans-Tasman
trade and consider it is important that the benefits flow
through to exporters and consumers. Reducing shipping costs
on the Tasman to at least OECD levels by mid-1992 is a
common objective of our respective reform programs.
Meanwhile, if necessary, New Zealand will take steps to
provide shippers and carriers with legal remedies
complementary to those already provided under the Australian
Trade Practices Act.
There will be consultations at Ministerial level with
Australian and New Zealand trade union leaders as we address
the development of trans-Tasman shipping.
Governments will continue to assess costs, freight rates and
levels of service of trans-Tasman shipping to determine what
further measures may be necessary to improve efficiency and
competition in the trade. Trans-Tasman shipping policy will
be reviewed in parallel with the full review of CER in 1992.
It is expected that the reviews relating to the development
of telecommunicatin policy which are before the Australian
Government and the review of the three carriers will result
in opportunities for increased competition. New Zealand
will have the opportunity to make an input to the review
process. A common commercial environment is a vital ingredient of a
free trade area. The continuing program of business law
harmnnigation has an important role to play in working
towards this objective. We have now received the report
called for under the 1988 Memorandum of Understanding on the
harmonisation of business law. This report identifies ways
in which harmonisation would be beneficial. Cross
recognition of companies and enforcement of court orders are
two areas in which we can envisage early action on the
matters identified in the report. Harmonising our business
laws would mean that in those areas we would no longer treat
each other as foreigners. This same principle would apply
when areas of potential harmonisation such as fund-raising
and registration of company charges are further examined.
We have agreed that the harmonisation process should be
pursued vigorously. The dynamic nature of international
business practice and our ongoing law reform programs
underline the need for increased exchanges between us. To
this end the existing consultations between our Government
and with our respective business communities will be
extended to cover the implementation of the harmonisation
opportunities identified in the report. Progress on
harmnonisation will be reviewed in the course of 1992 CER
review.
6.
On quarantiñ ne we have received the reports called for under
the Protocol on Harmonisation of Quarantine Administrative
Procedures. Both Governments have established high-level
consultative structures to ensure appropriate quarantine
safeguards, while minimising technical barriers to trans-
Tasman trade.
Considerable progress has been made towards harmonisation,
including resolving access for particular products. Both
our countries have devoted substantial technical and
administrative resources to this end. There is concern in
some industry groups that the harmonisation program may
lower agricultural quarantine security. Such concern is
unfounded. Measures in place provide a sound technical
basis for quarantine decision-making.
On futurp global tariff levAls, both Australia and New
Zealand have clearly demonstrated their commitment to
overall reductions in protection, with a view to creating
more internationally competitive economies. New Zealand has
decided on further reductions in global tariff rates for the
period to 1996 and Australia will be taking decisions on its
post-1992 global tariff arrangements shortly. The
Australian Government will take New Zealand's alreadyannounced
plans into account in reaching its decision on
post-1992 arrangements, keeping in mind the advantage of
both countries taking a broadly similar approach to tariff
reductions.
We have discussed certain industry assist-anrce measures which
have caused concern about their impact on fair competition
between Australia and New Zealand manufacturers. We have
agreed on a timetable to address the issue of export
facilitation on motor vehicle exports to New Zealand. This
will be dealt with early in 1991 in the context of
Australia's review of future motor vehicle policy.
Discussions will continue about other industry assistance
measures. On the question of trans-Tasman investment few practical
impediments to our bilateral investment remain in either
country. We note that the total level of trans-Tasman
investment has grown by over A$ 8.5 billion [ NZ$ 11.3 billion]
since the CER Agreement was signed, an increase of 680 per
cent since 1983. We both affirm the importance of free
investment flows in supporting the significant benefits
resulting from the liberalisation we have undertaken in the
area of goods and foresee in regard to the services trade.
The Governments have consulted on ways of ensuring that
investment flows are subject to minimum constraint, now and
in the future. We have reviewed our practices and agreed we
will continue to have full regard for CER benefits as an
important national interest consideration in evaluating each
other's investment applications.
7.
Both Governments are committed to fostering the current
favourable climate for trans-Tasman investment. We will
continue to consult to this end and in any event have agreed
to consult as necessary about any difficulties that might
arise regarding investment.
LONG TERM ISSUES
We are committed to the continued deepening and broadening
of the trans-Tasman relationship in both its economic and
wider dimensions.
The-next-major review of the CER Agreement is due in 1992.
We agree that this review holds some exciting prospects, as
the further integration of our economies proceeds. This has
implications beyond the purely economic. The two
Governments will take a leading role in considering future.
developments, against a background of informed public
discussion about the bilateral relationship and its
institutions. We have therefore nominated Ministers to oversee
preparations for the review. By 31 March 1991 they will
bring forward recommendations to Governments so that
substantive bilateral negotiations can begin in the middle
of the year. We will tap the skills, experience and views
of people active in the relationship, including business
people, unions and professional associations. The aim of
the exercise will be to identify and analyse the issues and
to narrow the field down to an agreed agenda of items for
the review.
With the extent of consultation at all relevant policy
levels now substantial, we agree this deepening process of
consultation and cooperation could be further developed
across the range of the bilateral relationship and in
conjunction with the Australian State Governments.
Commonwealth Government ministers will discuss with their
State counterparts in meetings over the next year of
Commonwealth and State sectoral ministers how Australia-New
Zealand cooperation might be further enhanced in their
respective areas. Since there are already arrangements for
New Zealand participation in most of these forums, there
will be ample and welcome opportunity for New Zealand to
contribute. Our commercial future lies in open economies trading with
each other in a free and fair way. We have demonstrated the
benefits that free trade can bring. We intend to build on
that example, on our successes since 1983 and through
concrete action, so that we continue along the path of
liberalisation and integration of our economies. We share
the southern border of the dynamic Asia-Pacific region. Our
bilateral relationship has the strength and durability to
accept the diverse challenges facing us. The challenge
which we now accept is to build on CER's past successes and
to ensure that the Agreement remains both contemporary and
dynamic as we enter the 21st century.