120 Memorandum from Ministry of Foreign Affairs to New Zealand High Commission in Canberra

Wellington, 30 April 1980

NZ Bureau of Importers and Exporters Seminar on A/NZ Economic Relations Auckland 2 April 1980

'I believe the [Communique], despite its vagueness and generality, represents an irreversible political commitment to greater economic cooperation. In that sense, progress is assured' -Mr F Turnovsky, Outgoing President NZ Manufacturers' Federation.

  1. As reported in our telegram No. 1086 of 3 April 1980, a representative of the Ministry attended the above seminar on A/NZ economic relations. Since the NZ Manufacturers Federation was well represented at the seminar (Turnovsky and Stevens), it afforded a good opportunity to test the reaction of the NZ business community to the Prime Ministers' Communique and Annex.1
  2. That reaction, at least to judge from the proceedings of the seminar itself, was extremely positive. It soon became evident in the open discussion that followed the set speeches that the meeting should convey a clear signal of its views to the Government. Accordingly, the following motion was carried unanimously: 'That this meeting commend the initiatives being taken by private enterprise and Governments in both countries to foster closer economic ties between the two countries and urge those involved to pursue the objectives laid down as quickly as possible.'
  3. Media comment on the seminar concentrated exclusively on Sir Max Dillon's unfortunate choice of words about 'blood being spilt on the floor'. Our earlier message attempted to put this into context. It was picked up again in two subsequent news reports, the transcripts of which we attach for your information.
  4. We also attach, for your consideration, copies of the three keynote speeches. Sir Max and Sir Frank [Holmes] covered fairly familiar ground. The broad endorsement of the communique by the President of the Confederation of Australian Industry - 'for our part we would have been most disappointed if the current Government initiative had come to nothing' - is, of course, significant.
  5. Tumovsky's speech struck us as particularly interesting. We commend it to your attention. Some of the salient observations made by Tumovsky were:
    • the meeting creates an irreversible political commitment to closer economic integration (see quote above)
    • the arrangement does not prevent (or commit) the two countries moving subsequently to a customs union
    • the close similarity between the discussions at Prime Ministerial level and the October 1979 Quadrilateral meeting (i.e. the identification of intermediate goods as the key problem for the Australians and the 'three category' proposal for free trade)
    • the recognition that meaningful change cannot take place without some dislocation
    • the possible use of changing area content requirements to overcome the intermediate goods problem but a clear statement of the New Zealand viewpoint that this is essentially a problem 'for Australian industry to resolve in the context of its own industrial restructuring plans'
    • a recognition that the 10% formula could be a workable proposition though the question of the base 'is one of the many intriguing issues left for future determination'
    • the expansion of trade should not be impeded on 'frivolous grounds', as in the past. Any products put on the 'deferred list' (our emphasis) should be subject to examination by a bi-national mechanism to determine the justification for their exclusion
    • that the 'structured inclusion' of agricultural products should not, as with manufacturing, give rise to any insuperable difficulties.
    • the 'future of New Zealand's economy is based on a wide range of options. Trade with Australia is an important, but not an overriding element of our economic strategy'
    • the present low wage structure relative to Australia cannot be viewed as anything more than a temporary advantage for New Zealand. Trans-Tasman trade should result from the best use of our resources and skilful management, rather than acceptance of depressed living standards
    • an endorsement of the outward-looking approach: 'A new agreement that merely looked across the Tasman at each other would be quite out of tune with global realities.'

[ABHS 950/Boxes1221-1226, 40/411 Part 27 Archives New Zealand/Te Whare Tohu Tuhituhinga 0 Aotearoa, Head Office, Wellington]