Supercharging CER in the age of Trumpian policies

New Zealand Institute of Economic Research (Inc)
Media Release, 30 October 2024
For immediate release

CER is the world’s best trade policy practice 

Last year, CER turned 40. The trade agreement is worth celebrating. The WTO called CER “one of the world’s most comprehensive trading arrangements”.¹ “We should call it an outrageous success”, said Chris Nixon, Principal Economist at NZIER. It was so successful, so quickly, that it came into full force in 1990, five years ahead of schedule. 
The CER agreement had a major stabilising impact on New Zealand’s trade policy, developing a consistent approach to how New Zealand viewed the world. New Zealand became more “economically coherent and credible” at a critical time in New Zealand’s history, according to an Insight released today as part of NZIER’s Public Good Programme. 

We need to act now and build on CER’s success 

Nobody forecasted how successful CER would be when it came into force. Not only did it completely change our relationship with Australia, it changed our relationship with the rest of the world. “It was the cornerstone of New Zealand’s trade policy”, said Mr Nixon. It bought an economic coherency that had been lacking up until then.  
Despite the success of the CER, the Trans-Tasman Mutual Recognition Agreement (TTMRA), and the follow-on from CER, the Single Economic Market (SEM), the pace of reform has slowed. “We need to think of new ways to rev up our existing trade policy relationships as the United States withdraws from its leadership role in trade policy”, said Nixon.

More integration will help insulate us against the coming trade policy storm 

New Zealand faces strong trade policy headwinds as the chances of multilateral cooperation dwindle. We need to think creatively. The current approach to trade policy points the way: 

• Extracting more out of New Zealand’s existing trade agreements (through the application of technology in the form of paperless trade)
• Actively seek “coalitions of the willing” that have like-minded goals and objectives to further our productivity goals.     

By doing this, New Zealand can use the most attractive parts of CER and accompanying agreements to assist in creating higher-quality agreements with ASEAN, East Asia and beyond. This will maximise our chances of further integration that drives productivity.

For further information, please contact:
Chris Nixon
Principal Economist
021 633 127
chris.nixon@nzier.org.nz 

1. https://www.wto.org/english/tratop_e/tpr_e/tp44_e.htm