Following is text of note prepared by Lough after his call on Carmody today, on those parts of the discussion which related to ANZ trade and Mr Talboys' visit:
- Sir Alan Carmody recalled the ideals and intentions of the initial NAFTA negotiations in which he led the Australian delegation, in particular the expectation that over time there would be a rationalisation of industrial development between the two countries to their mutual benefit.
- Since then we had drifted away from these ideas. This was not only the fault of governments and manufacturers, officials also had to take some responsibility. They had become bogged down in trade-offs and minor detail.
- With the problems ahead faced by both countries and structural changes needed in industry in both countries it was desirable that the original concepts of NAFTA be revived and development proceed in knowledge that the barriers to trade between Australia and New Zealand will be lowered.
- His view was that we should move in the direction of the customs union concept although a complete coverage might be a long way off.
- The Prime Minister had been briefed to respond favourably to any suggestion by Mr Talboys that it be the intention to move to freer trade between the two countries.
- Plimmer said Mr Talboys was likely to make such suggestions at Nareen. One option was to work towards liberalisation and free trade for most goods traded between the two countries in a fixed period of say one decade or more. Carmody said that his Prime Minister was briefed and would certainly be prepared to respond favourably. Plimmer asked about a reference to this in the joint statement. Carmody said it should be stated publicly. But officials in the Prime Minister's Department had not been briefed about such a reference in the draft statement as the subject had not yet been discussed in these terms between the two Ministers.
- He asked whether Mr Talboys would have authority to commit his Government without Cabinet approval to work with Australia towards freeing up trade between the two countries within a finite period. Plimmer said that this had been the subject of discussion with Mr Talboys and his delegation before he left Canberra and it had been agreed that we should seek a reference in the draft statement. From this he thought that Mr Talboys would not have to refer such a reference back to Cabinet. Cannody thought that provided the statement was not too specific, he thought his Prime Minister could buy them.
- Plimmer suggested that it might be helpful if the thoughts which Cannody expressed could be conveyed to whoever from the Prime Minister's Department was to be around near 'Nareen' who might be called on to tidy up or amend the draft statement after the talks.
- Cannody later made a further reference to the possible need (on both sides) to refer the question to Cabinets before it could be announced in specific terms. Plimmer said that if that were so any reference in the draft statement might be made more specific at the forthcoming NAFTA Ministerial Consultations. This would give time for any approvals necessary by Cabinet in both countries. Cannody agreed.
Cannody's attitude throughout took the longer term view and was helpful and encouraging. He made it quite clear that the nature of the advice from his Department was that Australia and New Zealand should work together into the future more closely so that the directions taken by industrial development on both sides of the Tasman should be in the knowledge that the markets of both countries would eventually be available to industry.
[ABHS 950/Boxes1221-1226, 40/411 Part 13 Archives New Zealand/Te Whare Tohu Tuhituhinga 0 Aotearoa, Head Office, Wellington]