Calendar: The ERC replaced the 1965 Australian Free Trade Agreement (NAFTA) in New Zealand. Discussions began in the late 1970s and a new agreement was reached in December 1982. The ERC came into force in January 1983. Australia is one of our major economic partners. New Zealand and Australia have made good progress in removing trade barriers. Although the ERC is constantly reviewed and developed by the New Zealand and Australian authorities, this is the first review by the Joint Committee on Foreign Affairs, Defence and Trade. The Committee has an interest in reviewing Australia`s free trade agreements after reviewing codecision with Singapore, Thailand and the United States in 2005 (2). Australia is our largest trading partner in services. 21% of our services exports go to Australia ($NZ $3.8 billion) and services imports from Australia account for 29.4% ($5.1 billion) of all our services imports. The next step for the Australian and New Zealand authorities is to create a customs union through a common external tariff and a common competition policy.

New Zealand and Australia already have a common competition policy, but it is unlikely that there will be a common external tariff. [Citation required] It is New Zealand`s oldest trade agreement still in force. In response to the Committee`s interests, on March 1, 2006, Trade Minister Von Hon. Mark Vaile referred an inquiry into the Australia-New Zealand trade agreement to the Commission. The Minister agreed with the Committee that the investigation was timely and relevant to Australia`s commercial interests and noted that there had been a number of amendments and additions to the agreement over the past two decades. The Minister concluded that the survey would raise public awareness of the benefits of RETs and EMS and “discuss opportunities to further develop trans-Tasman trade and investment relations.” 24 ERC was based on the former New Zealand Free Trade Agreement (NAFTA), signed on August 31, 1965 and entered into force on January 1, 1966. NAFTA had lifted four-fifths of tariffs between the two countries and quantitative restrictions on trade in the Tasmanian Sea. But it was deemed too complex and bureaucratic, and in March 1980 a joint statement by the Prime Minister was issued calling for “closer economic relations.”