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The Hon Doug Anthony, Ministers, Ladies and gentlemen: It is always a pleasure for New Zealanders to be in Sydney. It is such a pleasure that some of us New Zealanders have never left.
We have the occasional joke about the number of New Zealanders living in Sydney, as we do about a number of things we share. You may be surprised to learn, however, that Australians make up a larger percentage of the New Zealand population than Kiwis do of the Australian population.
We have a smaller population of course and in recent years a strong economy in New Zealand with good employment possibilities - in fact a skills shortage - has meant a number of Kiwis in Australia have returned home.
Those that remain here, however, make a substantial contribution. In fact Kiwis have a higher rate of participation in the work force than any other immigrant group, even higher than native-born Australians.
I mention this fact - provided to us by the Australian Bureau of Statistics - in part to dispel any myths, but more particularly to emphasise how important we are to each other’s economy.
New Zealand has for many years been a steady importer of Australian product. But until the establishment of the CER Agreement, we tended to bypass Australia and send everything to Europe, or more specifically the UK.
After 20 years of CER, we now have a much healthier spread of export markets, with Australia at the top taking around 20 percent and the EU, the US and Japan each sitting around the 15 percent mark depending on exchange rates.
For both of us - Australia and New Zealand - the growth in our bilateral trade has tended to exceed the growth in trade with other markets. In fact, of Australia’s top five markets in the 2001/02 year, only China exceeded New Zealand in terms of export growth. And we remain - with the United States - one of your two most important markets for elaborately transformed manufactured goods.
Looking back over 20 years the agreement is still one of the most comprehensive in the world and there is no doubt that it has been of considerable benefit to both of us. It has provided many of the aspects of a single market, without the bureaucratic overlay of more complex structures, in a uniquely Australian/New Zealand manner.
As Doug Anthony said over 20 years ago, “if our two countries can’t get it together, which two can?”
This meeting today is especially significant because the portfolios of the Ministers present go beyond trade to domestic economic policies. And those policies are increasingly being synchronised across the Tasman.
We already have a joint regulatory agency in Food Standards Australia and New Zealand. We hope that it will prove possible to conclude this year a second treaty establishing a Joint Therapeutic Products Agency.
Establishing this agency will remove one of the few remaining exceptions to the Trans Tasman Mutual Recognition Arrangement - or TTMRA - by effectively leap-frogging mutual recognition and going straight to joint standards.
The TTMRA came into effect in 1998, and is now under review. The review is looking at how the arrangement is working and at prospects for extending its scope. A final report is scheduled for October.
What of the future?
Earlier this year your Treasurer and our Finance Minister made some progress in recognising tax paid on the other side of the Tasman for imputation purposes. More work is planned in the taxation area, and a second area where we want to make progress with is competition policy.
And there continues to be close and increasing cooperation on business law coordination. For example, discussions on detailed proposals for mutual recognition of securities offerings are well advanced. Where it makes sense to eliminate the requirement of needing to comply with two sets of regulations and thereby enhance access to each others’ markets, we should go for it.
Ladies and gentlemen, we also have many interests beyond our two countries that we pursue together.
One such interest is the Doha Round of multilateral trade negotiations.
Right now we are at a crossroads. Progress has been slow - Just as it was in the early stages of other Rounds - but I remain convinced that the target we agreed on at Doha - ‘substantial reform’ - is very much intact.
For New Zealand, and Australia, and the Cairns Group generally, there is simply no alternative to pressing for a significant package in all three areas of concern to us: in agriculture export subsidies, domestic support and market access.
The other big issue for Australia and New Zealand is market access for non-agriculture goods. This is 90 percent of world trade in goods. We need to deal with tariff peaks in the developed countries. But the real prize here is the extent to which we can encourage further participation in the international trading system by developing countries.
I do not want to appear unsympathetic to developing countries, but I would like them to make a more careful calculation of their own interests.
At the launch of the Uruguay Round in 1986 some 76 percent of developing country exports went to the developed world.
But today developing countries are paying more than twice as much tariff revenue on their exports to each other than they are paying to the developed world.
This time around, it is in the interest of all members of the WTO - developed and developing - to work together to lower tariffs, reduce barriers to trade and provide a healthy open global economy.
Because New Zealand and Australia bit the bullet some years ago we are well placed to show the way. Let’s keep our own trading arrangement at the cutting edge of how we should eventually like to see the rest of the world.
Successive governments on both sides of the Tasman have invested a lot of effort and, let it be said, political determination, into the CER agreement to achieve what has been achieved.
Twenty years on it is still a model to which other countries look.
28 August 2003
