167 Telegram from Francis to Muldoon

Canberra, 30 April 1981

No 1355. CONFIDENTIAL IMMEDIATE

Australia/New Zealand Relations

The New Zealand Parliamentary delegation1 has had two very interesting and useful sessions with Malcolm Fraser and Doug Anthony. The session with Doug Anthony concentrated on CER and in his usual forthright and positive way, Doug impressed on them the importance of the CER exercise for both countries and the need to advance the economic relationship beyond the 'plateau' that NAFTA has reached. The New Zealand team was left in no doubt about his sense of commitment to the CER and the role it will play in securing greater strength for both economies.

  1. In response to question from the MPs about the extent to which others in Australia share his concept of CER, Doug explained the difficulties he has had in bringing his Cabinet colleagues around to his view that New Zealand is not able to dismantle import licensing rapidly. He also spoke very frankly about the way some dairy industry leaders had reacted-'as leader of the Country party that is the biggest single political problem I face'. Despite the fact that the Australian industry is destined to continue to decline, industry leaders remainĀ­ unjustifiably-'terribly frightened' about CER. He stressed the importance of preparing the way properly and ensuring that there was a broadly based political acceptance of the objectives of the exercise.
  2. Doug also referred to the 'unfortunate' coincidence of other events in the relationship which could affect the 'atmosphere' within which CER was being negotiated. He was talking here about passports and the Springbok tour-even though there is no connection between those issues and CER, he felt that they had 'not created a good atmosphere and we may have to wait until the atmosphere clears'. My overall impression was that he is somewhat unsure whether the timetable we had set ourselves for completion of the CER negotiations is a realistic one.
  3. This impression was reinforced in the session with Malcolm Fraser. He stressed that progress towards CER would be difficult to achieve unless each country fully understood the pressures at work in the other. He emphasised, however, that the work that had been done since his meeting with Mr Muldoon last year had yielded some very good results. However, he felt that from Australia's point of view it was important to ensure there were no pressure groups in either country concerned to make CER into a political issue. The forthcoming New Zealand elections2 seemed to be uppermost in his mind in this regard.
  4. Malcolm Fraser had brought Tony Street and Ian MacPhee to the meeting as well and invited them both to brief the MPs on the background to the recent Australian Government decision on TTTA. This in my experience of New Zealand Parliamentary visits to Australia other than Prime Minister and Ministers is quite unprecedented and indicates Prime Minister Fraser's uneasiness and sensitivity to strong Australian newspaper anti-passport editorials. For his own part, he said he looked at the decision from the point of view of the need to ensure we were protecting each other from the twin scourges of drugs and terrorism. He was only too conscious there were groups of people in Australia who were planning terrorist activities and these had to be watched very carefully.

[matter omitted]

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