190 Agreed Minutes of Joint Permanent Heads Meetings

[22 April 1982]1

Agreed Minutes of Meetings of Australian and New Zealand Permanent Heads

In their discussions on closer economic relations held 14-15 and 21-22 April 1982, Permanent Heads agreed that the following points should be placed on the record.

Proposal for a Terminal Date: Interpretation of 'by 1995'

Permanent Heads noted that the term 'by 1995' could be variously interpreted. It could, for instance, be construed to mean 'before the commencement of 1995'. Noting that New Zealand's import licensing system operated on the basis of a 1 July/30 June year, Permanent Heads agreed that reference to 1995 in this context should be interpreted as meaning 'by 30 June 1995'.

Export Incentives

Permanent Heads agreed that export incentives applied to trans-Tasman trade are not in harmony with the objectives and principles of the closer economic relationship. Agreement was not reached on a date by which performance-based incentives would no longer be applied to trans-Tasman trade. In respect of nonĀ­ performance-based incentives, however, Permanent Heads agreed that there should be prior consultations when changes were contemplated by either country. This would imply that Australia would consult with New Zealand on any changes proposed as a result of a review currently in progress.

Permanent Heads noted that in New Zealand export incentives are operated on the basis of a 1 April - 31 March fiscal year as compared with a 1 July - 30 June fiscal year in Australia. It could be expected that any changes to export incentive schemes would coincide with those dates in the respective countries.

Forest Products

The future of the NAFTA Arrangements covering forest products should be considered by Governments in the light of industry to industry discussions before the entry into force of CER. These arrangements deal with newsprint, packaging materials, pulp, tissues, certain other papers and the JCCFI2 Both Governments would be willing to maintain those arrangements which were considered still to be of value.

The two Governments would encourage the industries to pursue discussions aimed at co-operation and rationalisation in respect of the Australian and New Zealand markets and the development of trade across the Tasman and with third countries.

Intermediate Goods

Permanent Heads have reached agreement on the text of an explanatory note which identifies considerations relevant to the assessment of intermediate goods problems arising from differences in tariffs against third countries. In this context they discussed the possibility of establishing a benchmark figure for determining the existence of a 'substantial intermediate goods problem', as reflected in differences in the total cost for manufacture and sale of the relevant final goods.

Permanent Heads decided that a benchmark figure would not be included in the explanatory note. They agreed, however, that, where either side was approached by industry on this aspect, it could be explained that a possible benchmark figure of 10 per cent had been discussed, but it was recognised that a higher or lower figure may be appropriate in individual circumstances.

Quality of Access

There are three factors which determine the quality of access of Australia to the New Zealand market:

  • quantitative access
  • New Zeland tariff level
  • duty advantage accorded to Australia over Third countries.

New Zealand undertakes that for tyres, electronics and writing instruments which have been subject to industry studies but on which Government decisions are still pending, Australian access will be such that when the three factors above are weighed it will be at least equivalent to the quality of access that New Zealand would be required to provide should the normal CER provisions apply. Specifically on these three items:

  1. Access: as a minimum, access phasing on the basis of the CER formula may begin on day one. Should subsequent decisions result in a more rapid creation of global access opportunity it will be at least equal to the quality of access which would otherwise have been achieved by Australia.
  2. Tariffs: should the decisions taken by the New Zealand Government result in a different tariff, the new tariff will be the base for an agreed tariff phasing formula.

It is expected that the decisions on all three industries will be announced before 1 January 1983.

carpet

To enable trans-Tasman trade in synthetic carpet to be conducted, the normal area content rules of origin would oblige synthetic carpet manufacturers in both countries sourcing their synthetic yam from the single yam manufacturer in the area. This manufacturer is located in Australia.

The bounty paid by the Australian Government on synthetic yam manufacture gives rise to a prospective intermediate goods problem. It is agreed that New Zealand is required to demonstrate that an intermediate goods problem exists of sufficient dimension to warrant remedial action. In terms of the agreed formula covering intermediate goods problems it is also agreed that if a significant problem exists, action will be taken to overcome New Zealand's disability. Such action could include the deletion of pile content from area content calculations or a reduced area content requirement.

[NAA: A1313/113, 82/2989, ix]