189 Minute from Mcnamara to Fraser

Canberra, 16 April 1982

Closer Economic Relations with New Zealand (CER)

Australian and NZ Permanent Heads met in Canberra this week to prepare for the forthcoming meeting between Mr Anthony and NZ Ministers in Wellington on 20 April.

A good deal of progress occurred but the issues which have been outstanding for some time remain unresolved. In particular, NZ officials were not authorised to offer views on the major matters of concern to Australia:

  • a terminal date for import licensing;
    • we presented the Cabinet view that this was an essential prerequisite for any CER and that the terminal date should be 'before the presently envisaged date of 1995' (Decision No. 17679 of 15 March 1982)
  • the elimination of performance-based export incentives in trans-Tasman trade;
    • Cabinet agreed to 1987 as the terminal date, but we argued for 1985, the date which Mr Templeton had inadvertently referred to in discussion with MrAnthony
  • the immediate removal of performance-based export incentives in horticulture;
    • we formed the view from officials that this is not a particular difficulty in NZ in relation to unprocessed goods
  • the conditions for treatment of the proposed expansion of the steel industry underCER;
    • we were unwilling to accept the imposition of import licensing which would result in a loss of trade. There is also the question of NZ Government assistance to its steel industry, which would be inconsistent with the 'fair go' principles of CER.

New Zealand officials stated (and we agree) that these are matters which can only be resolved at the Ministerial level.

The outcome of next week's Ministerial meeting cannot be predicted with confidence-while our position is clear, NZ has not demonstrated that it is willing to come to grips with those issues. Our (tentative) assessment is that NZ will accept our position, but the degree of acceptance cannot be predicted.

It is also possible that the meeting may not produce a clear-cut outcome and there are presentational reasons for this in both countries. In NZ, the Government's position is quite precarious-its majority of one seat is subject to legal challenge, and two Senior Ministers have suffered heart attacks recently. On our side, the unresolved issues on horticulture could pose difficulties in the Tasmanian context.

Mr Anthony is to discuss a possible 'exposure draft' with NZ Ministers. This document, subject to its endorsement by both Cabinets, would be the vehicle for public comment on the details of the proposed CER. However, as a result of those presentational issues, it is likely that the exposure draft may not appear for some time.

We shall keep you informed on developments.1

[NAA: A1209, 1981/508, vii]