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New Zealand and Australia freeing up trade

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Australia and New Zealand - sometimes testy neighbors - have agreed to begin a new era of trade relations next year.

Their ''Closer Economic Relations'' plan, hammered out after two years of negotiations, proposes to phase out tariffs over five years, remove New Zealand's import licensing and tariff quotas, and eliminate export subsidies and incentives in trans-Tasman Sea trade.

The knitting of closer ties stops there, however. Politicians on both sides of the Tasman see little or no prospect of an integrated political or economic system; they opt only for improved trade.

''A common market of 18 million people (15 million Australians, 3 million New Zealanders) is far better than separate markets of 15 million and 3 million,'' noted Chris Hurford, Australia's opposition Labor Party spokesman on trade, as he endorsed the plan in principle.

Then he added: ''It would have been better for New Zealand if they had come into some form of union with us in 1900. Foolishly they did not do so. Relatively, their standard of living has declined - until it is well below that of ours now. That is why we have the enormous problems across the Tasman.''

The comment speaks volumes about the delicate relationship between the two Commonwealth members, separated by more than 1,000 miles of ocean. Australians tend to take New Zealand for granted, an attitude that helps to persuade New Zealanders to resist fiercely any suggestions that there should be closer political ties between the two countries.

Public response to the new plan sheds more light on this relationship. A recent public opinion poll showed 62 percent of New Zealanders favored the proposal, while 18 percent opposed it. No one has taken a poll in Australia; in fact, there seems to be little awareness of the plan. The press has barely mentioned it, and even the deputy prime minister's announcement of government approval was brief.

The proposals will replace the 17-year-old New Zealand-Australia Free Trade Agreement. NAFTA, as it was known, involved an item-by-item approach and had reached the end of its useful life.

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