From ANZAC to ANZETS: How kiwi apples show an ETS can work

What's not to like about kiwi apples?

ANZETS – to emissions trading what ANZCERTA is to free trade?

On a particularly memorable September day in 2008 I found myself being chauffeured down the cobbled backstreets of Prague in the company of Mike Moore, former director-general of the WTO and momentary Prime Minister of New Zealand.  While we inevitably ended up discussing the prospects of the All Blacks looming European tour, Mr Moore revealed two gleaming insights into the trans-Tasman relationship: firstly, how proud our two nations should be that the Australia and New Zealand Closer Economic Relations Trade Agreement (ANZCERTA – a.k.a CER) was a WTO-endorsed role-model for free trade agreements (FTAs) everywhere and secondly – judging by his steely glare when I brought it up – how serious a stumbling block Australia’s ninety year embargo on New Zealand’s apples was to further bilateral cooperation. Yet even that hurdle has now been lifted, on February 16 Julia Gillard informed the New Zealand parliament (to rapturous applause) that on the recommendation of the WTO, the fire blight embargo was no more. Whether Ms Gillard made this announcement under the duress of kiwi secret agents wielding sharpened wide-comb shears I do not know, but in the face of protests from Australia’s ‘big apple’ lobbyists it signalled a golden-delicious victory for the positive experience of CER and more broadly, good global citizenship.

As Australia painstakingly moves towards the introduction of an emissions trading scheme, with the eventual intention of joining a global carbon trading market, it is hard to think of a better policy ‘road-test’ than a CER inspired ‘Australia and New Zealand Emissions Trading Scheme’, hereby dubbed ‘ANZETS’. For despite a similarly inauspicious beginning, CER has proven itself so effective in boosting bilateral investment channels, trade in goods and services and in synchronizing our quarantine, customs, transport, regulatory and legal standards that DFAT estimates two-way trade has seen an average annual growth rate of 9% since 1983 and places the agreement’s collective worth at over A$22 billion in goods and services and over A$110 billion in investment flows.

Surprisingly (or unsurprisingly) CER was met with derision at the time of its introduction on the basis that nobody had attempted such a comprehensive policy before – sound familiar?

Thankfully, in what is now seen as a win for economic logic and good policy, the CER was ratified in 1983, a full twelve years before the christening of the WTO and some twenty years before Australia’s second-ever FTA with Singapore. Indeed CER is arguably the blueprint on which all of Australia’s subsequent FTAs have been designed and is an internationally recognised poster-child for the benefits of free trade – showing how valuable it can be to trial and refine a politically risky cross-country policy with a like-minded international partner before going global. An ANZETS scheme designed as well as CER will go a long way to dispelling the arguments made by those against pre-emptively adopting an ETS before the rest of the world.

Undoubtedly there exist a number of challenges in terms of harmonising New Zealand’s recently implemented ETS with Australia’s currently vague framework, but based on our experience in ANZCERTA, it is time to show once again just how influential our two countries can be as a policy laboratory for the rest of the world.

*I recently submitted this piece to an undisclosed event, so, while it hardly seems necessary, I wish to confirm that I am the same Hugh Jorgensen who wrote that piece as well.