About ANZCERTA
The Australia – New Zealand Closer Economic Relations Trade Agreement (known as ANZCERTA or the CER Agreement) is one of the most comprehensive bilateral free trade agreements in existence. It covers substantially all trans-Tasman trade in goods, including agricultural products, and was the first to include free trade in services.
The Agreement's central provision is the creation of a World Trade Organization (WTO)-consistent Free Trade Area encompassing Australia and New Zealand.
Key interests and benefits
- All tariffs and quantitative import or export restrictions on trade in goods originating in the Free Trade Area are prohibited under ANZCERTA.
- Contains measures to minimise market distortions in trade in goods, including through domestic industry assistance and export subsidies and incentives.
- The harmonisation of Trans-Tasman food standards through the Australia New Zealand Food Authority (ANZFA) Agreement of 1995 means lower compliance costs for industry, fewer regulatory barriers, and more consumer choice.
- Mutual recognition of goods and occupations removes technical barriers to trade and impediments to the movement of skilled personnel between jurisdictions without the need for complete harmonisation of standards and professional qualifications.
- The Protocol on Investment to ANZCERTA entered into force on 1 March 2013. Under the Protocol investors in both countries benefit from lower compliance costs, higher screening thresholds and greater legal certainty when investing in their Trans-Tasman neighbour. Two-way investment between Australia and New Zealand is worth more than $130 billion (2014).
Australia's Deputy Prime Minister and Minister for Trade, Mr Lionel Bowen, and the New Zealand High Commissioner to Australia, Sir Laurie Francis, sign the Australia – New Zealand Closer Economic Relations (CER) Trade Agreement in Canberra on 28th March 1983.
Seated, Sir Laurie Francis, left, and Mr Lionel Bowen sign the agreement, watched by officials.
Photograph by BARRY LE LIEVRE
ANZCERTA—its genesis and the present
The first trade agreement between Australia and New Zealand dates back to 1922, and essentially stated that each party would trade with the other. This was followed by the Australia New Zealand Trade Agreement in 1933, by which the two countries gave each other preferences and some special rates of duty. A partial free trade treaty, the New Zealand Australia Free Trade Agreement (NAFTA), entered into force in 1966, leading to the removal of tariffs and quantitative restrictions on 80 per cent of trans-Tasman trade by the late-1970s. Because NAFTA was not structured to address the changing international economic environment and because it lacked an effective mechanism for removing remaining restrictions, Australia and New Zealand agreed to develop a more open bilateral trading system.
The objectives of ANZCERTA are to:
- strengthen the broader relationship between Australia and New Zealand
- develop closer economic relations between the Member States through a mutually beneficial expansion of free trade between New Zealand and Australia
- eliminate barriers to trade between Australia and New Zealand in a gradual and progressive manner under an agreed timetable and with a minimum of disruption
- develop trade between New Zealand and Australia under conditions of fair competition.
Since 1 July 1990, all goods meeting ANZCERTA Rules of Origin criteria can be traded across the Tasman free of duty and quantitative import restrictions.
The Trade in Services Protocol brought services into ANZCERTA from January 1989 allowing most services to be traded free of restriction across the Tasman with limited exclusions which were last reviewed 2014.
ANZCERTA has underpinned a strong growth in trade across the Tasman with an average growth in two-way trade of 6.6 per cent, and in 2014-15 total trade (goods and services) was valued at $A23.7 billion. New Zealand is currently Australia's eighth largest trading partner. The level of Australian investment in New Zealand was valued at $A99.93 billion and New Zealand investment in Australia (our twelfth largest source) was valued at $A38.52 billion at the end of 2014.
Over the 32 years of CER, the composition of trade between Australia and New Zealand has changed dramatically, reflecting changes in technology, competitiveness, domestic industry structure, trade liberalisation and consumer demand.
ANZCERTA forms the foundation of a broader economic and trade relationship with New Zealand. It is supplemented by more than 80 government-to-government bilateral treaties, protocols and other arrangements—covering trade and the movement of people, investment, aviation, business law coordination, mutual recognition of goods and professions, taxation, health care, social security, superannuation portability, food standards and government procurement.
With most of the trade goals having been met, the Australian and New Zealand Governments decided to take a Single Economic Market (SEM) approach to closer economic relations. SEM aims to harmonise the two economies to enable business, consumers and investors to conduct operations across the Tasman in a seamless regulatory environment.
Last updated February 2016