150 Extracts from Report by Department of Trade and Resources on Permanent Heads Meeting

Canberra, 25 March 1981

Australia - New Zealand Closer Economic Relations

MEETING OF AUSTRALIAN AND NEW ZEALAND PERMANENT HEADS, WELLINGTON, 11 TO 12 MARCH 1981

Australian Permanent Heads conveyed the reactions of Australian Ministers to the Joint Report of 9-11 December 198[0].1 The outcome of the discussion on particular issues was as follows:

Tariffs

The understanding was that the formula of phasing our tariffs by 5 percentage points per year over a maximum of five years and after a one year grace period is satisfactory to both sides.

[matter omitted]2

Deferred Categry

Australian position was that satisfactory arrangements must be concluded in respect of the final version of the deferred list to facilitate the early removal of specific products from that list. It was suggested that in principle items under industry review should be removed from the deferred list and the general formulae applied one year after the industry advisory body report was received by the Government.

New Zealand indicated that removal after one year would not give some industries sufficient time to adjust and could require the New Zealand Government to depart from its current practice of accepting IDC recommendations.

Australia agreed to examine possible means of achieving greater flexibility in this sector.

It was agreed that a timetable was needed for removal of items under industry enquiry and that on other items on the deferred list there was a need for early indication of conditions for their removal on a case by case basis.

[matter omitted]

Intermediate goods problems

The understanding was that the measures outlined in the Permanent Heads report were satisfactory.

Finance

From the exchanges of information which had taken place already New Zealand officials saw the possibility of achieving a satisfactory solution on this issue.

Further Action

  • New Zealand proposed to examine the possibility of formulating a statement which would be satisfactory to both sides. This would be conveyed to Australia for comment.

[matter omitted]

Sugar

New Zealand regarded the Australian embargo on imports of sugar as an anomaly which could prevent New Zealand from exercising commercial judgements in terms of supplying refined or specially processed sugar to the Australian market. The possibility of intermediate goods problems was also flagged.

The Australian position was that the embargo was necessary to protect the Australian stabilisation scheme from world price fluctuations. There were some discretionary powers which could allow the import of sugar from New Zealand but Australia could not contemplate import of sugar from New Zealand on a toll refining basis.

If New Zealand wished to pursue the question of the sugar embargo then this also raised the question of New Zealand purchasing arrangements.

Industry Partecipation

The Australian position was that consideration should be given to greater participation by industry organisations in the negotiations. While this involves mainly dairy, other industries should not be ruled out. Ministers will decide as they review the situation which other industries should be brought in.

New Zealand proposed and Australia agreed that industry involvement in the negotiations should be closely controlled to avoid individual industries reaching solutions which were not compatible with the general principles of liberalisation.

[NAA: A1209, 19811508, i]