WORLD TRADE
ORGANIZATIONWT/REG111/R/B/1
G/L/406
9 November 2000
(00-4750)
Original:  English
AUSTRALIA AND NEW ZEALAND CLOSER ECONOMIC RELATIONS
TRADE AGREEMENT (ANZCERTA)
FREE TRADE AGREEMENT BETWEEN AUSTRALIA AND NEW ZEALAND
Biennial Report on the Operation of the Agreement
Communication from the Parties to the Agreement
The report below presents the information received from the Permanent Delegations of
Australia and New Zealand, dated 9 October 2000.  It is organized in accordance to the StandardFormat for Information on Regional Trade Agreements (WT/REG/W/6).
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I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Membership and dates of signature,  ratification and entry into force
The Parties to the Agreement are New Zealand and Australia.  The Free Trade Agreement
between Australia and New Zealand is defined in Article 2 of the Agreement to include the territory
of Australia excluding its offshore territories, and territory of New Zealand, excluding theCook Islands, Niue and Tokelau.  The Agreem ent is commonly known as the CER Agreement.
The Free Trade Agreement was signed on 14 December 1982 and entered into force on
1 January 1983.
2. Type of Agreement
The Agreement creates a free-trade area in conformity with the definition set out in
Article XXIV: 8(b) of GATT 1994.
3. Scope
The free-trade area established by the Agreement provides the framework for trade relations
between Australia and New Zealand.
The CER Agreement covers trade in all goods (Chapters 1-97 of the Harmonized
System, HS).  The products covered by the CER Agreement must originate in Australia or
New Zealand according to the  rules of origin laid out in Article 3 of the Agreement, and clarified in
Exchange of Letters  1988, 1992, and the Joint Understanding on Harmonisation of Customs
Procedures.WT/REG111/R/B/1
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The Agreement was expanded in 1988 with the signing of the Protocol on Trade in Services.1
The Agreement also contains provisions, inter alia , on competition, government purchasing,
and dumping.
4. Trade Data
Total trade coverage of the Agreement is as follows:
New Zealand: Imports from Australia (NZ$000)
Year Total Trade Trade Covered % of Trade Covered
1997 5,515,990 5,515,990 100%
1998 5,130,181 5,130,181 100%
1999 6,543,698 6,543,698 100%
Australia: Imports from New Zealand (NZ$000)
Year Total Trade Trade Covered % of Trade Covered
1997 4,108,854 4,108,854 100%
1998 4,393,806 4,393,806 100%
1999 4,765,720 4,765,720 100%
More detailed trade data can be found in Annex 1.
II. TRADE PROVISIONS
1. Import Restrictions
1.1 Duties and Charges
All tariffs and other duties and charges have been removed under the CER Agreement (with
the exception of goods subject to excise).  This provision is contained in Articles 4 and 5 of the 1983
CER Agreement and Articles 1 and 2 of the 1988 CE R Protocol on the Acceleration of Free Trade in
Goods under which all transitional arrangements and temporary exceptions to the basic free trade rulewere eliminated as of 1 July 1990.
1.2 Quantitative RestrictionsAll quantitative import restrictions are prohibited under the CER Agreement.  This provision
is contained in Article 5 of the 1983 CER Agreement and Article 2 of the 1988 CER Protocol on the
Acceleration of Free Trade in Goods under which all transitional arrangements and temporary
exceptions to the basic free trade rule were eliminated as of 1 July 1990.
1.3 Common External TariffNot applicable to the CER Agreement.
                                                     
1 Notified to the WTO on 21 October 1997 (WT/REG40/2).  Documents relevant to this Protocol are
distributed in the WT/REG40/- series.WT/REG111/R/B/1
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2. Export Restrictions
2.1 Duties and Charges
No export duties or charges are imposed on trade between Parties to the CER Agreement.
2.2 Quantitative RestrictionsAll quantitative export restrictions are prohibited under the CER Agreement.  This provision
is contained in Article 8 of the 1983 CER Agreement in conjunction with the 1988 CER Protocol on
the Acceleration of Free Trade in Goods under which all transitional arrangements and temporaryexceptions to the basic free trade rule were eliminated as of 1 July 1990.
3. Rules of Origin
The rules of origin are defined in a series of provisions/documents comprising Article 3 of
ANZCERTA and subsequent clarification of, or amendment to, Article 3 in the 1988 Exchange of
Letters and Joint Understanding on Harmonisation of Customs Polices and Procedures, and
Exchanges of Letters dated 6 October 1992.
The minimum requirements for goods to be considered to originate in the free-trade area are:
- the last process of manufacture should have occurred in Australia or New Zealand;
and
- at least one half of the factory or work costs of the goods should be made up from
expenditure on any of:
- materials originating in the free-trade area;- labour and factory overheads incurred in the free-trade area;  and- inner containers originating in the free-trade area.
These elements have been defined in the 1992 Exchange of Letters referred to above.
All unmanufactured raw products of Australia and New Zealand are considered to originate in
the free-trade area, as are products wholly manufactured in either country from any of:
unmanufactured raw products, materials wholly manufactured in the free-trade area, or importedmaterials that have been deemed or “determined” to be of free-trade area origin.  Procedures for
"determining" a raw material to be of local or igin are set out in the 1988 Joint Understanding on
Harmonisation of Customs Policies and Procedures.
4. Standards
Under Article 12 of CER, Australia and New Zealand undertook to "examine the scope for
taking action to harmonise requirements relating to such matters as standards, technical specifications
and testing procedures, domestic labelling and restrictive trade practices".  A number of agreements
and arrangements have been negotiated pursuant to this Article.  They are outlined below.WT/REG111/R/B/1
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4.1 Technical barriers to trade
As part of the 1988 Review of CER, Aust ralia and New Zealand concluded a Memorandum
of Understanding on Technical Barriers to Trade  (MOU on TBT).  In the MOU, both Governments
reaffirmed their commitment to wo rk towards the harmonization of standards, technical specifications
and testing procedures.  Following Australia’s acceptance of the plurilateral GATT Agreement on
Technical Barriers to Trade (the Standards Code),2 undertakings which New Zealand and Australia
entered into in the MOU on TBT are governed by the provisions of the Agreement.
The MOU on TBT has been reinforced by the development of the Agreement on Standards,
Accreditation and Quality  (ASAQ), which was entered into by the Australian Commonwealth and
State Governments and the New Zealand Government on 26 October 1990.  The ASAQ ties the
participating Parties firmly to the principles of standards harmonization and mutual acceptance of
certification and accreditation, goals specifically encouraged by the WTO and TBT Agreement.
The Joint Accreditation System  (JAS-ANZ) was concluded on 30 October 1991.  The
agreement was established to accredit quality systems conformity assessment bodies in order to
remove the need for multiple audits in the New Zealand/Australian market.  It was also designed to
assist exports of goods and services to third countries by gaining international recognition of
certificates of conformity issued by the conformity assessment bodies.  A revised JAS-ANZ Treaty
concluded in 1998 provides for a modified governance structure and enhanced accountability andreporting procedures.  This system meets the terms encouraged in Article 6.3 of the WTO TBT
Agreement to conclude mutual recognition agreements on conformity assessment.
The Agreement Between the Government of Ne w Zealand and the Government of Australia
Establishing a System for the Development of Joint Food Standards was established in 1995 to
harmonise trans-Tasman food standards.  The object ive is to develop a Joint Food Standards Code by
end 2000.  The Agreement sets out principles for the development of food standards characterised by
transparency, timeliness and accountability, including a commitment to consultation and public
involvement.  Both countries are represented at all levels of the standards setting process, including on
the Board of the Australia New Zealand Food Authority and on the Ministerial Australia New Zealand
Food Standards Council.
Complementing the Joint Food Standards Agreement is the Arrangement on Food Inspection
Measures  (AFIM) which came into operation on 1 December 1997, following an Exchange of Letters
on 27 June 1996 by New Zealand and Australian Trade Ministers.  Under AFIM, non-risk categorized
food (low risk foods) produced or manufactured in  New Zealand can enter Australia without the need
to be re-examined other than for quarantine reasons, and vice-versa, as a result of both countrieshaving agreed not to inspect non-risk classified foods at the border.
The Trans-Tasman Mutual Recognition Arrangement (TTMRA) came into effect on
1 May 1998.  Under TTMRA, a good which is legally able to be sold in one CER country can be
legally sold in the other and a person who is registered to practise an occupation in one CER countryis entitled to practise an equivalent occupation in the other country.  Goods need only comply with the
standards or regulation for the sale of goods applying in the jurisdiction in which they are produced or
through which they are imported.  Certain areas are excluded from trans-Tasman mutual recognition
as they are not standards-related barriers to trade.  These include the international obligations of each
country’s intellectual property laws, customs controls and taxation.  There are also five product areaswhich are not currently covered by TTMRA and are currently the subject of work programmes aimed
                                                     
2 Now superseded by the WTO Agreement on Technical Barriers to Trade.WT/REG111/R/B/1
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at arriving at one of three possible outcomes;   mutual recognition, harmonization, or permanent
exemption from the coverage of the TTMRA.
4.2 Sanitary and phytosanitary measuresArticle 18 of the CER Agreement specifically allows New Zealand and Australia to adopt
measures necessary to protect human, animal or plant life or health, including the protection of
indigenous or endangered animal or plant life.  Article 18 allows each country to impose quarantine
requirements on imports.  But such requirements must not be used as a means of arbitrary or
unjustified discrimination or a disguised restri ction on trade.  Under the 1988 Protocol on the
Harmonisation of Quarantine Administrative Procedures, Australia and New Zealand reaffirmed theircommitment to the principle that quarantine requirements should not be deliberately used as a means
of creating a technical barrier to trade where this is not scientifically justified.
5. Safeguards
Article 17 contained provisions for temporary safeguards measures for goods covered by
CER during a transition period, which ended in 1990.  Thus, no safeguard measures are applicable for
goods covered by CER.  Both Australia and New Zealand have notified the Safeguard Committee of
this.
However, paragraph 11 of Article 17 continues to allow a Member State to initiate
consultations in the event of severe material injury or demonstrable threat thereof arising from the
operation of CER in respect of goods.  Such consultation would be held pursuant to paragraph 2 of
Article 22, the General Consultation and Review Article.
6. Anti-dumping and Countervailing Measures
Article 4 of the ANZCERTA Protocol on Acceleration of Free Trade in Goods eliminated ,
from 1 July 1990, the availability of anti-dumping actions on goods covered by CER.  In parallel,
Parties to the Agreement extended the application of  their competition law prohibitions on the misuse
of market power to trans-Tasman markets.
There is continuing provision under Articl e 15.8 of the ANZCERTA for a Member State to
request the other to take action, consistent with its international obligations, against dumped imports
from a third country.  The procedures for handling third country anti-dumping (and countervailing)
cases under CER were clarified in an Exchange of Letters in August 1992.
Article 16 of the Agreement provides that Parties to the Agreement shall only levy
countervailing duties  in accordance with the relevant provisions of the GATT.
7. Subsidies and State-aid
Article 11 of the ANZCERTA established that the Member States agreed to work towards the
elimination of all export subsidies and export incentives on goods traded in the area.  Performance-
based export incentives specified in Annex D to the Agreement were phased out by 1987 in respect of
goods traded in the area.   In the 1988 Agreed Minute on Industry Assistance it was agreed that from
1 July 1990 neither country would pay export incentives or like measures aimed at stimulating exportsto the other at the expense of industry in that country.  Australia and New Zealand also agreed that
from the same date they would not pay production bounties or like measures on goods which are
exported to the other country.  They further undertook to try to avoid adoption of industry specific
measures (bounties, subsidies and other financial support) which have adverse effects on competitionWT/REG111/R/B/1
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between industries in the free-trade area.  If either Party considers that such a measure must be
adopted, notification and consultation commitments apply.  These notification and consultation
commitments were clarified as part of the 1992 Review of CER, during which it was also agreed that
each Government would give due consideration to representations from the other on the effectindustry-specific non-financial measures may have on competition between industries in the free-trade
area.
8. Sector-specific Provisions
The sector-specific provisions contained in the Agreement are no longer operative.
9. Other
Customs Cooperation
Article 21 of the Agreement and the Joint Understanding on Harmonisation of Customs
Policies and Procedures (1988) establishes a framework for cooperation in customs administration.
The main objective is that Customs Agencies will develop the closest possible working relationship
by maintaining common approaches to the greatest extent possible and pursue harmonisation
opportunities where possible.
Government Procurement
The Australia (Commonwealth and State Governments) and New Zealand Government
Procurement Agreement (revised in 1997) provides the framework for a single ANZ government
procurement market.  The Agreement seeks to ensure the absence of inter-state and trans-Tasmanapplication of preference schemes and other forms of discrimination in government procurement,
based on the place of origin of goods and services.  Each party is to provide, to services, goods and
suppliers of the other party, equal opportunity and treatment no less favourable than that accorded to
domestic services, goods and suppliers.  The Parties also agree to promote opportunities for ANZ
suppliers to compete for government business on the basis of value for money and avoid purchasing
practices which are biased in favour of foreign goods and suppliers.
Exemptions include defense procurement of a strategic nature and urgent procurement in the
event of emergencies.
Coordination of Business Law
The 2000 Memorandum of Understanding on Business Law Coordination between
New Zealand and Australia reflects the two countries’ common understanding of coordination in
business law and provides a framework for future cooperation on business law integration.  A work
programme has been agreed.
Objectives include driving business costs down through removing differences in laws and
administrative systems, improving the effectiveness of the law, and reducing the cost of capital to
business.WT/REG111/R/B/1
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III. GENERAL PROVISIONS OF THE  AGREEMENT
1. Exceptions and Reservations
CER, through Article 18, allows standard exceptions from its provisions, for specified
purposes, provided they are not used "as a means of arbitrary or unjustified discrimination or as a
disguised restriction on trade".  The specified purposes are:
• protection of essential security interests;
• protection of public morals and prevention of disorder or crime;
• protection of human, animal or plant life or health, including the protection of
indigenous or endangered animal or plant life;
• protection of intellectual or industrial property rights or to prevent unfair, deceptive,
or misleading practices ;
• protection of national treasures or artistic, historical, anthropological, archaeological,
palaeontological or geological value;
• to prevent or relieve critical shortages of foodstuffs or other essential goods;
• to conserve limited natural resources;
• in pursuance of obligations under international commodity agreements;
• to secure compliance with laws and regula tions relating to customs enforcement, to
tax avoidance or evasion and to foreign exchange control;
• to regulate the importation or exportation of gold or silver;
• the application of standards or regulations for the classification, grading or marketing
of goods;  and
• in connection with the products of prison labour.
2. Accession
Article 24 of CER enables Australia and New Zealand to agree to the association of any other
State.  To this point in time Australia and New Zealand are the only acceding Parties and no other
State has sought association to the Agreement.
3. Dispute Settlement Procedures
There are no specific dispute settlement procedures under the CER Agreement.  However,
Article 22 of the CER Agreement sets out the consultation and review mechanism which is aimed at
ensuring that both New Zealand and Australia are happy with the functioning of the Agreement.  If
either New Zealand or Australia has a grievance concerning adherence to any part of the Agreement,
the other country is obliged to enter into consultati ons to seek an equitable and mutually satisfactory
solution.
4. Relations with Other Trade Agreements
The Agreement is the main instrument governing economic relations between Australia and
New Zealand.  Supporting the Agreement is a comprehensive framework of instruments that  focuseson removal of administrative impediments to tr ade (MOU on Business Law Coordination and DoubleWT/REG111/R/B/1
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Taxation Agreement), and standards harmonization to minimise non-tariff and access restrictions to
trade (Joint Food Standards Agreement, Arrangement on Food Inspection Measures and the Trans
Tasman Mutual Recognition Arrangement).  As well the Agreement was expanded in 1988 with the
signing of the Protocol on Trade in Services.3  The Single Aviation Market Arrangements (1996) also
form part of the supporting framework of CER instruments.
New Zealand and Australia are willing to consider free trade agreements with other
significant individual economies or regional group ings, where they would deliver faster and deeper
liberalization than the multilateral process, with the objective of gaining better market access for our
exporters, faster economic growth and stronger em ployment growth.  Such arrangements would need
to demonstrate comprehensive sectoral coverage and reflect the principles underpinning CER,including WTO consistency.
Annex 2 lists the amending documents to the CER Agreement.
5. Institutional Framework
Article 22 of the Agreement commits Ministers of both countries to meet annually or
otherwise as appropriate to review the operation of the Agreement.  Australia and New Zealand hold
annual trade and economic talks at senior official levels, to precede annual Trade Ministers’ meetings.
                                                     
3 Currently being examined in the Committee on Regional Trade Agreements.WT/REG111/R/B/1
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ANNEX 1
Top Ten New Zealand Exports to Australia
HS Code 1994 (NZ$)
4407 Timber 258,218,166
7108 Gold 238,359,109
2709 Crude oil 221,192,351
4801 Newsprint 149,719,276
0101 Horses, asses, mules and hinnies; live 70,786,556
4703 Chemical wood pulp 65,216,040
8418 Refrigerators, freezers 64,882,561
0406 Cheese and curd 64,684,043
4104 Leather of bovine or equine animals 62,599,611
4411 Fibreboard 62,500,304
Top 10 NZ Exports to Australia 1,258,158,017
Total NZ Exports to Australia 4,064,188,764
Total NZ Exports 19,820,796,423
1999
2709 Crude oil 308,072,000
4407 Timber 201,594,000
7108 Gold 156,228,000
406 Cheese and Curd 122,741,000
101 Horses, asses, mules and hinnies; live 155,732,000
4801 Newsprint 111,368,000
3808 Insecticides, pesticides etc 108,788,000
4703 Chemical wood pulp 70,261,000
3402 Organic surface-active agents 68,019,000
5703 Carpets 66,969,000
Top 10 NZ Exports to Australia 1,369,772,000
Total NZ Exports to Australia 4,765,720,000
Total NZ Exports 22,495,557,000WT/REG111/R/B/1
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Top Ten Australian Exports to New Zealand
HS Code 1994 (A$)
9999 Commodities not classified 304,309,000
8473 Parts and accessories suitable for office machines 296,463,000
8703 Motor cars and other motor vehicles 271,785,000
3004 Medicaments 159,225,000
2710 Petroleum oils and oils obtained from bituminous
minerals, other than crude135,666,000
2709 Crude oil 70,893,000
8708 Parts and accessories of motor vehicles 68,450,000
8803 Parts of aircraft balloons or gliders 67,770,000
7606 Aluminium plates, sheets and strips 51,317,000
7210 Flat rolled products of iron or non-alloy  steel 46,041,000
Top 10 Australian Exports to NZ 1,471,919,000
Total Australian Exports to NZ 4,389,587,000
Total Australian Exports 64,775,683,000
1999
8906 War ships and life boats 501,453,000
2710 Petroleum oils and oils obtained from bituminous
minerals, other than crude373,203,000
8703 Motor cars and other motor vehicles 345,496,000
9999 Commodities not classified 329,014,000
8473 Parts and accessories suitable for office machines 261,290,000
3004 Medicaments 195,900,000
9809 Special transactions and commodities 195,283,000
8471 Automatic data processing machines 89,056,000
2709 Crude oil 74,356,000
9018 Instruments and appliances used in medical,
surgical, dental or veterinary sciences73,194,000
Top 10 Australian Exports to NZ 2,438,245,000
Total Australian Exports to NZ 6,674,004,000
Total Australian Exports 86,889,830,000WT/REG111/R/B/1
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ANNEX 2
Australia-New Zealand CER and Amending Documents
Australia-New Zealand Closer Economic  Relations Trade Agreement (1983)
Annexes A-F and attachments (no longer operative)
Exchange of Letters on Fruit Juice Products (no longer operative)
Trade in Goods
Protocol on Acceleration of Free Trade in  Goods (1988) (fully implemented on 1.7.1990)
Exchange of Letters on Trans Tasman Trade in Dairy Products (1988) (no longer operative)Mutual Determination on Quantitative Export Restrictions (1988) (fully implemented on 1.7.90)
Exchange of Letters on Annex F (1992)
Mutual Determination on Liberalisation Under Spec ific Industry Plans (1988) (no longer operative)
Exchange of Letters and Joint Understanding on Harmonisation of Customs
   Policies and Procedures (1988)Protocol and Agree Minu tes on Harmonisation of Quarantine Administrative Procedures (1988)
Amendments to Article 3 - Rules of Origin
Exchange of Letters on Rules of Origin (1992)
Exchange of Letters on Direct Shipment Rule (1992)
Trade in Services
Protocol on Trade in Services (1988)
- Annex:  Services Inscribed by New Zealand and Australia
- As of 1988
- 1992 Review (Exchange of Letters)- Annex as of 1992
- 1995 Review (Exchange of Letters)
- Annex as of 1995
The Regulatory Environment for Business
Memorandum of Understanding on Ha rmonisation of Business Law (1988)
Memorandum of Understanding on Technical Barriers to Trade (1988)
- Exchange of Letters Amending the Memorandum of Understanding on Technical
Barriers to Trade (1992)
Exchange of Letters on Third Country Dumping
- Agreed Procedures for Handling Third Country Anti-Dumping Complaints
Government Assistance
Agreed Minute on Industry Assistance (1988)
- Letters amending the Agreed Minute on Industry Assistance (1989)
- Notification and Consultation Provisions
- Letters on the Agreed Minute on Industry Assistance (1992)
Government Purchasing
Agreed Minute on State Government Purchasing Preferences
   (New Zealand is now a Party to the Commonwealth /State Government Procurement Agreement)
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