Talks over, let's wine down

Trade Negotiations Minister Jim Sutton and Australian Trade Minister Mark Vaile looked very laid back on Saturday night as they quaffed delightful Central Otago pinot noir in Queenstown.

It was time for the high-powered New Zealand and Australian contingents - Cabinet ministers, policy players, top bureaucrats and business people - to deepen and forge links after two days summiteering on transtasman issues.

A major dispute over tax rebates that the Australian Government dished out to its local wine producers in the pre-election Budget has basically been settled. New Zealand producers will be extended what Vaile calls national treatment and basically offered the same break in Treasurer Peter Costello's next Budget.

The trade ministers could indulge in a bit of self-congratulation.

The CER - Closer Economic Relations - breakthroughs are welcome, particularly here.

New Zealand strategists often talk about taking the thorn out of Aussies' paw when it comes to discussing the raft of issues that makes senior Australians - Government ministers, officials and business people - blanch about us.

This list of suspects is the usual and familiar one: Our minimalist defence budgets which lead New Zealand to piggbyback on Australia; our lack of commitment to the Western defence alliance (we no longer blindly follow the US); the Ansett Australia crash, which happily is receding into the distance; and our rather self-righteous approach to international fears.

But since the proposal for a transtasman single market went on the policy agenda, this has receded. The boot has been on the other foot, as the concessions made at the weekend's CER summit in Queenstown attest.

Most concessions - at least those made public so far - went in New Zealand's favour.

But the issue over CER rules of origin is being addressed by moving to the system Australia has used in free trade deals with the US and Thailand rather than the simpler CER system favoured in the recent report by Australia's Productivity Commission.

This summit has gone far beyond the remit of the annual trade ministers' meeting. Three ministers from each country were present.

The agenda has broadened - but a raft of other issues relating to the single market have yet to make serious progress.

Among them, issues put forward by the Australian New Zealand Business Council - taxation, superannuation, migration of people.

Council proponents such as Tony St Clair (NZ) and Ross Patterson (Australia) pushed for a "two countries, one system" approach for business harmonisation matters.

Backed by Auckland Regional Chamber of Commerce chief executive Michael Barnett, they also took issue with a lack of clear progress on work being done by teams set up by the Australia-New Zealand Leadership Forum.

This is where the game needs to move next, rather than simply dealing with closer economic issues relating to bilateral trade disputes.

CER BREAKTHROUGHS

Wine

New Zealand wine producers look set to be offered the same tax rebates as their Australian counterparts in Peter Costello's Budget.

Apples

Biosecurity Australia is studying the claimed threat to its apples from New Zealand fireblight and is expected to rule there is no danger.

Rules of origin

These will be reformed using a change of tariff classifications. A detailed proposal will be presented to ministers in March.

WHAT'S NEXT?

Australia NZ Leadership Forum

Pressure will go on the forum to ensure there is tangible progress to report on the Australasian single market by next May's meeting. Business players in Queenstown complained that the effort so far had been disorganised.

Taxation and superannuation

The Australia New Zealand Business Council has been asked for submissions on tax issues affecting areas such as dividend flows and non-resident contractor withholding payments, and onerous superannuation issues which inhibit the transfer of employees across the Tasman.

Immigration

Seamless migrations of citizens is critical to the formation of a true single market ringed by a common border. Business is urging both Governments to overcome their xenophobic responses and adopt new rules to allow transtasman citizens.