For all its comfortable friendliness, the Trans-Tasman relationship has become stagnant. But in today’s rapidly changing world, is ‘comfortably stagnant’ good enough?
As a German-born Kiwi who has previously lived in Australia, I have long been puzzled by Australia-New Zealand relations. Not least because they are so different from neighbourly relations in Europe.
You see, many Germans could casually name-drop the Danish Prime Minister, many French will know about the recent change of government in Poland, and many Italians would be familiar with the politics of Spain. Which is to say there is a degree of interest in what happens beyond one’s borders.
Not so here. Despite being close cultural and geographic neighbours, Aussies and Kiwis often seem oblivious to what is happening on the other side of the Tasman. Australian affairs hardly feature in New Zealand’s newspapers, and it is the same story the other way around.
Maybe it is mutual disinterest, or maybe it is just taking one another for granted. In any case, it is strange given that Australia and New Zealand are more alike than any pair of countries in our corner of the world.
The question is whether our comfortable, stagnant indifference is a luxury we can still afford in today’s geopolitical climate.
Neither Australia nor New Zealand can think of themselves as being in a benign security environment anymore. The 1990s, when the world seemed to move in the direction of deeper economic cooperation, liberal democracy and peace, are now a distant memory.
In today’s world, countries like ours should move closer together – not least because our shared values are under greater threat than at any time since 1989.
Such moving together is exactly what happened in Europe after World War II. The threat of Soviet communism galvanised Western European integration, through both the European Economic Community and NATO. The creation of the world’s largest common market was driven by a geopolitical threat, rather than just the idea of European reconciliation.
Australia and New Zealand today could learn from this historical experience. In this new era of great power competition, the need for greater integration of Australia and New Zealand is just as urgent as it was for Western Europe during the Cold War.
Indeed, it should be easier for Australia and New Zealand to start the process of deeper economic integration because we already have a solid and comprehensive free trade arrangement.
Since 1983, the Closer Economic Relations Trade Agreement has served both nations well, eliminating tariffs and quantitative restrictions on trade in goods and liberalising services. Building on this success, in 2004, both governments launched the Single Economic Market (SEM) initiative, aiming to create an even more seamless business environment.
Ironically, CER came into being at a time when the two countries’ Prime Ministers, Australia’s Malcolm Fraser and New Zealand’s Robert Muldoon, disliked each other with a passion. Yet they left their nations one of the world’s most comprehensive trade agreements.
If two leaders who could scarcely stand each other’s company managed to achieve such a landmark agreement, surely today’s more cordial Trans-Tasman relationship could yield even greater results?
While CER and the SEM have served us well for four decades, the rapidly changing geopolitical landscape calls for us to be even more ambitious in our economic partnership. Australia and New Zealand could aspire to build on CER and SEM to form a genuine common market. That would offer significant advantages over the current free trade agreement.
First, it would create a truly unified economic space, eliminating remaining non-tariff barriers and regulatory differences that still hinder seamless trade and investment.
Deeper integration would allow businesses to operate more efficiently across both countries, reducing compliance costs and increasing productivity. For consumers, it would mean access to a wider range of goods and services at potentially lower prices due to increased competition and economies of scale.
Second, a common market would facilitate the free movement of labour, capital, and services in addition to goods. This would create a more dynamic and flexible economy, allowing resources to flow to where they are most needed and valued.
Third, an Australia-New Zealand common market would increase both Australia’s and New Zealand’s scale and economic clout. An integrated market of nearly 31 million people might help attract more foreign investment and give local companies a stronger base from which to expand internationally.
Of course, sceptics will question the merits of such ambitious integration. Australians might argue that the benefits would disproportionately favour New Zealand, given Australia’s larger economy. New Zealanders might fear that Australia would dominate rulemaking in the common market.
And both could also point out that the EU’s common market created more regulation in the name of harmonisation – and they would be right, in part. Certainly not every aspect of the EU’s integration drive should be copied.
But a genuine common market between Australia and New Zealand should avoid those EU excesses of regulation. Instead, it should focus on removing obstacles to freedom of movement for people, goods, services and capital. Such freedoms would benefit both countries involved, Australia and New Zealand, irrespective of their different sizes.
In fact, if a common market between Australia and New Zealand became an international success story, it could well become a beacon of open, liberal economic cooperation in the Pacific. And if Australians and New Zealanders want to counter other powers’ lure in our region, would we not want to be such a beacon?
Which brings me back to my opening point: the move towards closer cooperation between Australia and New Zealand is not just about boosting our economic fortunes. It is about defending our security as much as it is about promoting prosperity.
In a world in which liberal economic principles are increasingly under threat, Australia and New Zealand could set a shining example of openness, cooperation and free exchange. That is what an ANZAC common market could be all about.
Dr Oliver Hartwich is the Executive Director of The New Zealand Initiative think tank. This article was first published HERE.
You see, many Germans could casually name-drop the Danish Prime Minister, many French will know about the recent change of government in Poland, and many Italians would be familiar with the politics of Spain. Which is to say there is a degree of interest in what happens beyond one’s borders.
Not so here. Despite being close cultural and geographic neighbours, Aussies and Kiwis often seem oblivious to what is happening on the other side of the Tasman. Australian affairs hardly feature in New Zealand’s newspapers, and it is the same story the other way around.
Maybe it is mutual disinterest, or maybe it is just taking one another for granted. In any case, it is strange given that Australia and New Zealand are more alike than any pair of countries in our corner of the world.
The question is whether our comfortable, stagnant indifference is a luxury we can still afford in today’s geopolitical climate.
Neither Australia nor New Zealand can think of themselves as being in a benign security environment anymore. The 1990s, when the world seemed to move in the direction of deeper economic cooperation, liberal democracy and peace, are now a distant memory.
In today’s world, countries like ours should move closer together – not least because our shared values are under greater threat than at any time since 1989.
Such moving together is exactly what happened in Europe after World War II. The threat of Soviet communism galvanised Western European integration, through both the European Economic Community and NATO. The creation of the world’s largest common market was driven by a geopolitical threat, rather than just the idea of European reconciliation.
Australia and New Zealand today could learn from this historical experience. In this new era of great power competition, the need for greater integration of Australia and New Zealand is just as urgent as it was for Western Europe during the Cold War.
Indeed, it should be easier for Australia and New Zealand to start the process of deeper economic integration because we already have a solid and comprehensive free trade arrangement.
Since 1983, the Closer Economic Relations Trade Agreement has served both nations well, eliminating tariffs and quantitative restrictions on trade in goods and liberalising services. Building on this success, in 2004, both governments launched the Single Economic Market (SEM) initiative, aiming to create an even more seamless business environment.
Ironically, CER came into being at a time when the two countries’ Prime Ministers, Australia’s Malcolm Fraser and New Zealand’s Robert Muldoon, disliked each other with a passion. Yet they left their nations one of the world’s most comprehensive trade agreements.
If two leaders who could scarcely stand each other’s company managed to achieve such a landmark agreement, surely today’s more cordial Trans-Tasman relationship could yield even greater results?
While CER and the SEM have served us well for four decades, the rapidly changing geopolitical landscape calls for us to be even more ambitious in our economic partnership. Australia and New Zealand could aspire to build on CER and SEM to form a genuine common market. That would offer significant advantages over the current free trade agreement.
First, it would create a truly unified economic space, eliminating remaining non-tariff barriers and regulatory differences that still hinder seamless trade and investment.
Deeper integration would allow businesses to operate more efficiently across both countries, reducing compliance costs and increasing productivity. For consumers, it would mean access to a wider range of goods and services at potentially lower prices due to increased competition and economies of scale.
Second, a common market would facilitate the free movement of labour, capital, and services in addition to goods. This would create a more dynamic and flexible economy, allowing resources to flow to where they are most needed and valued.
Third, an Australia-New Zealand common market would increase both Australia’s and New Zealand’s scale and economic clout. An integrated market of nearly 31 million people might help attract more foreign investment and give local companies a stronger base from which to expand internationally.
Of course, sceptics will question the merits of such ambitious integration. Australians might argue that the benefits would disproportionately favour New Zealand, given Australia’s larger economy. New Zealanders might fear that Australia would dominate rulemaking in the common market.
And both could also point out that the EU’s common market created more regulation in the name of harmonisation – and they would be right, in part. Certainly not every aspect of the EU’s integration drive should be copied.
But a genuine common market between Australia and New Zealand should avoid those EU excesses of regulation. Instead, it should focus on removing obstacles to freedom of movement for people, goods, services and capital. Such freedoms would benefit both countries involved, Australia and New Zealand, irrespective of their different sizes.
In fact, if a common market between Australia and New Zealand became an international success story, it could well become a beacon of open, liberal economic cooperation in the Pacific. And if Australians and New Zealanders want to counter other powers’ lure in our region, would we not want to be such a beacon?
Which brings me back to my opening point: the move towards closer cooperation between Australia and New Zealand is not just about boosting our economic fortunes. It is about defending our security as much as it is about promoting prosperity.
In a world in which liberal economic principles are increasingly under threat, Australia and New Zealand could set a shining example of openness, cooperation and free exchange. That is what an ANZAC common market could be all about.
Dr Oliver Hartwich is the Executive Director of The New Zealand Initiative think tank. This article was first published HERE.
No comments:
Post a Comment