Friends with benefits: Stephen Jacobi comments on the vital economic relationship between Australia and New Zealand.

• Author: Jacobi, Stephen
• Position: Essay

Since 1983 New Zealand and Australia have pursued the goal of deeper economic integration. This 'trans-Tasman togetherness' has been driven by the CER agenda, which was revolutionary and achieved its immediate goals five years before schedule. CER developed into the Single Economic Market, which has also been pursued vigorously by both governments, although progress is becoming more difficult now the low hanging fruit has been picked. Business leadership will be vital in finding ways of moving forward. Australia and New Zealand are now partners in the TPP, many of whose key ideas have been trialled in CER, wholesaled in APEC and now retailed in the TPP.

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For some years now I have played a role, on behalf of Business-NZ, in helping co-ordinate the annual Australia New Zealand Leadership Forum, which brings together senior government, business and community representatives to foster and advance the relationship. The forum has been meeting for twelve years now and will do so again later this year. It has been described as a symbol of trans-Tasman 'togetherness'.

That 'togetherness' is not just a sentimental thing--although sentiment is certainly part of the Anzac relationship. It is also about business, about the economic value both countries derive from their integration with one another, and increasingly about the way in which both countries, together, can integrate with the rest of the world. That is why the relationship might also be described as 'friends with benefits'. In this article I will address some of these benefits by focusing on the pillars of that economic togetherness--CER, the Single Economic Market (SEM) and the Trans-Pacific Partnership.

CER or, to give its proper title, the Australia New Zealand Closer Economic Relations and Trade Agreement (ANZCERTA) is more than an acronym. Signed in 1983, it is quite simply the world's most comprehensive trade agreement. It is hard to remember what the world looked like then, but the trans-Tasman environment was certainly not the space for by and large free movement of goods, services, investment and people it has become today.

CER had a profound impact on New Zealand because it was the first step towards the liberalisation of what had become a fortress economy marked by absurd import licensing, high tariffs and even agricultural subsidies. Of course, not everything was achieved on day one, but the pace quickened notably over the years so that the deadline for the removal of quantitative restrictions and tariffs was achieved five years earlier than scheduled.

And for those who are--quite rightly--concerned that the TPP will not achieve complete free trade by the end of the implementation period, CER at the outset was no different with dairy products excluded at the beginning...