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Saturday 19 Aug 2017 | 06:43 | SYDNEY
Saturday 19 Aug 2017 | 06:43 | SYDNEY

NZ: Embracing and resisting Australia

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COMMENTS

3 March 2009 13:19

The Australians are our best friends, whether we like them or not.

- Former New Zealand Prime Minister, Mike Moore.

The Oz-Kiwi relationship has slowly shifted beyond partnership to a form of marriage where large elements of integration are locked in place. Australia sometimes doesn’t notice. New Zealand knows deeply but doesn’t talk too loudly about the sacrifices involved in the process. Familiarity and the size disparity make for a certain understated style. This is a long-term, almost subterranean affair, but sometimes bits of the process pop to the surface, as they have over the last few days.

The joining of Australia and New Zealand in a free trade agreement with ASEAN is one such moment. Another was the annual bilateral meeting between the Prime Ministers of Australia and New Zealand. It is a summit free of much summit hype.  

The new King Kiwi, John Key, slipped across ‘the ditch’ (the Tasman) to spend Sunday and Monday in Sydney with Kevin Rudd. This qualifies as a regular commute as much as a state visit. (Nearly half a million Kiwis live in Australia; about 60,000 Australians in New Zealand.)

Although there is little fanfare, it is the annual bilateral summit between the two Prime Ministers, now an established part of Australia’s diplomatic calendar. The Trade and Defence Ministers have their equivalent annual meeting. The Oz and Kiwi Foreign Ministers do even better; they schedule bilateral meetings every six months.

All this is a happy result of constant New Zealand effort which plays to clear Australian interests. Not much has changed in this dance since an Australian diplomatic mandarin, Sir Keith Waller, observed in the 1970s:

The New Zealand Government has traditionally wanted to know all that Australia knows, although they have not always been equally frank in telling Canberra what they propose to do.

The Key-Rudd summit is a window on the integration already achieved and the steps in prospect. Ahead are the creation of a single economic market and the reclassification of flights between Australia and New Zealand as domestic routes. In the harder basket is the effort to harmonise ‘to the greatest extent possible the emissions reduction regimes’ of Australia and New Zealand in achieving a post-Kyoto international climate change framework beyond 2012.

Key said that harmonising emissions reduction schemes is fundamental to the ambition of joining the two economies: ‘Developing climate change policies which are at odds with those in Australia would seek to separate a single economic market rather than bring it together.’ No sheep jokes, please, but agriculture is the problem in harmonisation, as Key noted: "If you think of New Zealand, half of our emissions come from agriculture. I think it is about a quarter of the Australian economy.’

Climate change and the push for a single economic market are a natural evolution of the 25-year-old structure known as CER — the Closer Economic Relations Agreement. Most Australians wouldn’t have a clue what the letters CER stand for, whereas a sizable number of Kiwis know its significance. On the Australian side, it’s as though the common market crept up on Europe but nobody noticed. Or — a kinder interpretation — perhaps Australians long ago accorded New Zealand a unique status and the closest of relationships is taken as a given.

CER is proof that sometimes good news doesn’t get much notice, especially when it’s a free trade structure well into its third decade. In WTO speak, it is comprehensive and clean, and since 1983 has lifted trans-Tasman merchandise trade by 10.6 percent annually.

The integration trend line is clear and long standing. How, then, to explain that the Kiwis will never activate the provision in the Australian constitution which would allow New Zealand to become the seventh state of the Australian federation?

A legion of Oz-Kiwi jokes provide part of the answer. And the flavour of the Kiwi perspective is wonderfully captured by the sharp comment from long ago by another Kiwi leader, Robert Muldoon, who opined that every New Zealander who migrated to Australia raised the IQ on both sides of the Tasman.

So far, New Zealand has managed the trick of integration without giving up symbols of sovereignty. Beyond the single market, though, lies a tough perennial: a single currency for a single economy. This is another subject that can galvanise Kiwis and pass relatively unnoticed in Australia.

The reason is that New Zealand is the state that must embrace a single currency. When the issue was making headlines in New Zealand a few years ago, the then Australian Treasurer, Peter Costello, summed up the Oz position in a few sentences. A single currency would be easy. All the New Zealand Government would need to do is surrender control of its currency  to Australia’s Reserve Bank.

So a single currency is simple — just adopt the Aussie dollar. That day may be a long way off. When (if) it arrives, the moment will be driven by Wellington. Australia is the major partner, but the pace of integration — read surrender of the symbols of sovereignty — is driven by New Zealand.

Photo (of a statue of Captain James Cook) by Flickr user tricky, used under a Creative Commons license.

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