Closer Economic Relations - Wikipedia
Australia-New Zealand: Aspects of a Relationship, Proceedings of the Stout . This suggests the economic linkage between the two countries was .. era of betting on slow commodity exports, and the slow British economy. The Australia – New Zealand Closer Economic Relations Trade Agreement ( known as ANZCERTA or the CER Agreement) is one of the most comprehensive . New Zealand and Australia's economic and trading relationship is Foreign direct investment between New Zealand and Australia was almost NZ$66 billion as.
Nor do New Zealanders show the same interest in Asia. I shall return to this issue. But before doing so, we need to offset this focus on export markets, by noting there are economic areas where New Zealand is closer to Australia. There is considerable common overseas investment: The labour markets of the two countries are linked through migration.
And then we should mention the commonality — considered elsewhere in this seminar — of social and cultural issues, of historical experience, and of social institutions such as the distinctive features of social welfare. These are not insignificant in their impact on the economy.
Nevertheless, the overall picture is that Australia and New Zealand are not too closely linked economies.
Economics and the Failure to Federate Let me for a few moments turn to one of the puzzles of the relationship between the two countries: Why did New Zealand not join the Australian federation at the turn of the century?
The Economic Relationship Between Australia & New Zealand
Sinclairtraces the change in the mind by New Zealanders, from a degree of popularity for joining Australia in the s to rejection at federation in in the belief they could go it alone. However he offers little explanation as to why the shift in the popular perception occurred.Under the Closer Economic Relationship between Australia & New Zealand
Let me conjecture an economic explanation for the shift. However in the s the Australian economy was in sharp contraction, while the New Zealand economy was still stagnating, and perhaps beginning to expand. Per capita Australian incomes appear to have been around 20 percent higher than New Zealand ones in the s, but by the time of federation in Australian incomes were below those of New Zealand.
I shall have more to say about this hypothesis later. The Australian federation was in part driven by demands to unify their economy. It is perhaps not accidental that exports from New Zealand to Australia fell further between andas Australians sourced from other states.
The effect is less for a free trade area. While New Zealand was left out, they were not entirely forgotten. In, and preferential trade arrangements between the two countries had been negotiated, although they do not seem to have markedly affected actual trade.
See Lloyd for a details of the two arrangements. Export Structures Part of the divergence in the contemporary economies, arises from their export structures.
We have to be careful here. It might seem likely that two economies with the same export structure would not trade with each other. However if those exports were manufactures rather than commoditiesthere would likely to be considerable intra-industry trade so that they would export and import similar products between them. As it happens, intraindustry trade is rising both internationally, and in the case of Australia and New Zealand see below.
However in both countries commodities unprocessed or semi-processed still playa greater exporting role than manufactures. Thus Australia is an exporter of wheat and other grains, wool and pastoral products, and minerals. Of this list New Zealand only exports the pastoral products in great quantities, with forestryhorticulture, and fishing more important.
UK singles out NZ as top priority for trade deals | RNZ News
Even the characteristics of the wool exports of the two countries differbecause Australian fine wools are more used for clothing, New Zealand cross bred wools for carpets. Commodities do not enter intra-industry trade as typically as manufactures except for seasonal supply of fresh foods. However there is a second effect. Commodities experience much wider swings in their world prices, which means that fluctuations in the terms of trade have a significant impact on the business cycle.
Secular shifts also are more important. Since the two countries have different commodity compositions, and since commodity prices do not move exactly together, this means that the two countries will experience different externally driven business cycles. That the two economies were at different stages in the business cycle in the late 19th century is not unique.
By the late s their cycles appeared to be moving lock step together. US or Japan or the world economy. But this pattern was broken in the mid s, probably as a result of the two economies embarking upon different economic strategies. An Evolving Trade Relationship It is evident that there has been greater trade between the two economies.
Although the 20 percent share of New Zealand imports from Australia has been relatively constant, the share of Australian imports to New Zealand has risen from 1. A quarter of a century ago Australia used to export three times the value of goods to New Zealand.
Today the trade balance is almost equal. This could be attributed to the NAFTA and CER trade agreements, but while I do not want to undervalue the role of such political factors, I suspect they represent an evolving response to world and domestic economic conditions, rather than being entirely exogenous to economic considerations. The industrialization strategy New Zealand embarked upon from the s was at first inward looking, concentrating on import substitution.
But the intention was — as one of its architects W.
Sutch explained — to move to manufactured exporting. The centre of the industrialization debate from the early s was not about the extent of manufacturing exporting, but about the extent and role of border protection and other interventions.
While in the due course the maturation of the manufacturing sector would have generated the exports, the process was forced upon New Zealand from the mid s, following the structural fall in the terms of trade that occurred then Easton The Agreement foreshadowed the establishment of a permanent Australia—New Zealand Secretariat, it provided for consultation in matters of common interest, it provided for the maintenance of separate military commands and for "the maximum degree of unity in the presentation This was partially a result of Britain joining the European Economic Community in the early s, thus restricting the access of both countries to their biggest export market.
The expedition was sent by Governor Bourke from Sydney and was subsequently criticised for use of excessive force by a British House of Commons report in Promised settlement on confiscated land, more than Australians were recruited. Other Australians became scouts in the Company of Forest Rangers. Independent of the sense of Empire or Commonwealthboth nations in the second half of the twentieth century otherwise provided contingents in support of United States strategic aims in the Korean WarVietnam Warand Gulf War.
Together Australia and New Zealand saw their first major military action in the Battle of Gallipoliin which both suffered major casualties. For many decades the battle was seen by both countries as the moment at which they came of age as nations. Canberra memorial World War II was a major turning point for both countries, as they realised that they could no longer rely on the protection of Britain. Subsequently, both countries sought closer ties with the United States.
Although no such attack occurred until, arguably, 11 SeptemberAustralia and New Zealand both contributed troops to the Korean and Vietnam Wars.
Australia's contribution to the Vietnam War in particular was much larger than New Zealand's ; while Australia introduced conscription New Zealand sent only a token force. An Australian flag flies atop the eastern pylon and a New Zealand flag flies atop the western pylon. A bronze memorial statue of a digger holding a Lee—Enfield rifle pointing down was placed on the western end of the bridge on Anzac Day in The memorial commemorates the shared effort to achieve common goals in both peace and war.
SinceAustralia, and sinceNew Zealand have been parties to the ABCA interoperability arrangement of national defence forces. The SEATO anti-communist defence organisation also extended membership to both countries for the duration of its existence from to Mawson's Huts at Cape Denison survive to the current day as habitations at the expedition's chosen base.