NZ-Australia Closer Economic Relations (CER)
New Zealand and Australia’s economic and trading relationship is recognised as one of the closest, broadest and mutually compatible in the world.
The CER agreement has been built on and modernised since it came into force in 1983, and is now made up of more than 80 treaties, protocols and arrangements. It goes well beyond achieving free trade in goods and services, and includes measures to unify policy, laws and regulatory regimes in both countries.
Since 1983 trade between New Zealand and Australia has increased steadily. In 2014, Trans-Tasman trade in goods was NZ$14.7 billion, just under 15% of our total trade. Our goods exports to Australia that year were NZ$8.7 billion, making up 17.5% of our total exports.
Australia is our biggest services trade partner. Just under 23% of all our services exports are to Australia ($NZ 3.8 billion) and services imports from Australia make up just under 33% (NZ$5 billion) of all our service imports.
Foreign direct investment between New Zealand and Australia was NZ$67 billion at September 2014. Australia is our top destination for overseas investment. New Zealand had direct investment stocks of NZ$13 billion in Australia in September 2014. Australia is the largest source of foreign direct investment in New Zealand, at NZ$53 billion.
Single Economic Market
New Zealand and Australia have committed to creating a seamless trans-Tasman business environment, making it as easy for New Zealanders to do business in Australia as it is to do business in and around New Zealand. This is known as the Single Economic Market (SEM).
CER ministerial discussions
The Australian and New Zealand Trade Ministers hold regular CER meetings as a forum to oversee the CER and to provide direction for the SEM agenda.
Australia Population: 24 million
Australia GDP: US$1.44 trillion (2014)
Timeline: CER replaced the 1965 New Zealand Australia Free Trade Agreement (NAFTA). Talks began in the late 1970s and a new agreement was reached in December 1982. CER came into force in January 1983.
- all tariffs and quotas were eliminated by 1990, five years ahead of the CER schedule
- most goods that can be legally sold in one country can also be legally sold in the other
- the 1989 Trade in Services Protocol (external link) allows for most services to be traded across the Tasman free of restriction
- the Trans Tasman Mutual Recognition Arrangement (TTMRA (external link)) allows for anyone who is registered to practice an occupation in one country to practice in the other
- New Zealanders and Australians are free to visit, live and work in each other’s country under the Trans-Tasman Travel Arrangement.
- it is easier to invest in each other’s countries under the March 2013 Investment Protocol [PDF, 88 KB]
- lower compliance costs for food exporters and more consumer choice under the 1991 Food Standards Treaty (external link) which created common rules for food standards
- lower withholding taxes on certain payments made between New Zealand and Australia, through the Double Taxation Agreement (external link)
Businesses trading in goods
All goods which meet CER Rules of Origin can be traded free of tariffs between New Zealand and Australia.
New Zealand has a second FTA with Australia – AANZFTA – which is between New Zealand, Australia and the Association of South East Asian Nations (ASEAN). In most instances you’ll be better off using the CER to export goods to Australia.
Service sector businesses
The 1988 CER Services Protocol (external link) achieved free trade in nearly all services, allowing New Zealand and Australian service provider’s comprehensive access to each other’s market.
The Services Protocol contains some exclusions (areas where full access is not provided) which are regularly reviewed and have been substantially reduced over time.
Australia has the following exclusions:
- Broadcasting and television (shortwave and satellite broadcasting)
- Compulsory third-party motor vehicle insurance
- Specified postal services
- Coastal shipping cabotage policy.
New Zealand has the following exclusions:
- Air services
- Coastal shipping
The 2013 CER Investment Protocol is an ambitious investment agreement, and maintains CER’s status as one of the world’s most comprehensive free trade agreements. The Protocol reduces compliance costs and provides greater legal certainty for trans-Tasman investors by providing higher thresholds at which foreign investments are screened.
New Zealand private investors undertaking business acquisitions now benefit from the higher screening threshold of A$1,078 million (indexed annually), up from A$248 million. In exchange, the screening threshold for Australian private investors in New Zealand is now NZ$477 million (around A$442 million, and indexed annually), up from NZ$100 million (around A$93 million).
Read the New Zealand Australia CER Investment Protocol factsheet [PDF, 478 KB] to find out how the CER helps investors.
The Australia New Zealand Leadership Forum (ANZLF) is a business-led initiative designed to further develop both the Australian and New Zealand bilateral relationship, and our joint relations in the region. The ANZLF brings together Ministers and leaders of business, government and academia to create an independent public platform for discussing the Australia New Zealand relationship. In February 2015 the ANZLF celebrated its tenth anniversary.
The ANZLF has been influential in setting the trans-Tasman agenda in the past, particularly in the economic space, such as supporting the acceleration of the SEM initiative and advancing the concept of ‘net trans-Tasman benefit’.
The ANZLF has a policy steering group, made up of a group of business leaders from both sides of the Tasman. The New Zealand side of the group is supported by BusinessNZ, currently with funding from MFAT. In the period between meetings, the policy steering group addresses priority issues for the business community. These are based on the outcomes of discussions at each forum, and the recommendations from co-chairs following the event.
Tariff schedules in HS2012
Tariff schedule HS2012 - New Zealand [PDF, 3.4 MB]
Tariff schedule HS2012 - Australia [PDF, 2.8 MB]
CER Investment Protocol
New Zealand Australia CER Investment Protocol: National Interest Analysis (NIA) [PDF, 517 KB] tabled in Parliament 16 February 2011
- Annex 1: Schedule of New Zealand [PDF, 143 KB]
- Annex 2: Schedule of Australia [PDF, 123 KB]
- Side Letter concerning New Zealand's Reservation with Respect to Water [PDF, 16 KB]
- Side Letter concerning Clarification of Australian Non-conforming Measures at Regional Level of Government [PDF, 17 KB]
- Side Letter concerning the New Zealand Most Favoured Nation (MFN) Reservation [PDF, 15 KB]
Regulatory environment for businesses
Memorandum of Understanding on the Coordination of Business Law (external link) (Ministry of Business Innovation and Employment)
Joint Food Standards Agreement (external link) (NZ Food Safety Authority))
Double Tax Agreement (external link) (Inland Revenue)
Australian Government information