Moves To Strengthen Trans-Tasman Trade

by Mary Swire, Tax-News.com, Hong Kong

24 June 2010

New Zealand and Australia have concluded their review of the rules of origin under the Australia New Zealand Closer Economic Relations Trade Agreement (CER), while the governments have also signed a revised memorandum of understanding (MOU) on the coordination of business law.

The rules of origin establish the local product content requirements which must be met for products to count as "Australian" or "New Zealand" goods, and therefore determine which are able to be exported between the two countries duty free under the CER. New Zealand’s Trade Minister, Tim Groser, and its Commerce Minister, Simon Power, said their review will help streamline the export process for a number of industries.

"The agreed changes simplify the current rules of origin considerably, meaning that New Zealand and Australian companies will have greater certainty in meeting export requirements and therefore face reduced compliance costs,” Groser said. "The revisions also bring the CER rules of origin into line with other free trade agreements concluded since 2007 by both Australia and New Zealand with other trading partners, and in particular with the ASEAN Australia New Zealand Free Trade Area signed last year."

The changes will provide for the removal of most of the supplementary added value requirements currently imposed across a range of products, and in particular those imposed on the textile, clothing, and carpet sectors.

Power said the agreement shows the CER continues to work for both countries. "The CER is widely recognized as one of the world's benchmark and most liberal free trade agreements,” he added. “An important aspect of it and its success is that both countries have continued to work at it to ensure it remains a living agreement. These changes to the rules of origin mean the CER continues to be a world-class agreement."

The new rules will take effect upon completion of domestic processes in both Australia and New Zealand, but are expected to come into force later this year. They were immediately tabled in the Australian parliament.

At the CER meeting, the MOU on the coordination of business law was signed by Simon Power and the Australian Minister for Corporate Law, Chris Bowen. It was revised in accordance with the commitment to review the MOU every five years.

Power said: "The revised MOU deepens the already close relationship between our two countries and takes another step towards achieving the ultimate goal of a truly single economic market."

"Working towards a single economic market will reduce and remove barriers for businesses, consumers and investors, as well as increasing productivity and innovation," Bowen continued.

The Ministers also took the opportunity to discuss the progress achieved across the agenda for a single economic market since the countries’ Prime Ministerial joint statement of intent and release of 27 short-and-medium-term outcome proposals in August last year. "We welcome the substantial progress achieved across the outcomes framework to date and look forward to making further progress over time," they said.

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