195 Extract from Record of Discussion Between Fraser and Muldoon

Canberra, 10 June 1982

CONFIDENTIAL

Record(1) of discussion between the Prime Minister of Australia, the Rt Hon. Malcolm Fraser, CH, MP, and the Prime Minister of New Zealand, the Rt Hon. R. D. Muldoon, CH, MP, on Thursday 10 June 1982 at Kirribilli House, Sydney

Also present:

Australia

Sir Geoffrey Yeend - Secretary, Department of the Prime Minister and Cabinet
HE Mr J. J. Webster - Australian High Commissioner to New Zealand
Mr Cliff Walsh - Senior Economic Adviser, Prime Minister's Office
Mr F. E. Anderson - First Assistant Secretary, Department of Trade and Resources
Mr J. D. Anderson - Assistant Secretary, Department of the Prime Minister and Cabinet

New Zealand

Mr Gerald Hensley - Secretary, Prime Minister's Department
HE Mr L. J. Francis - New Zealand High Commissioner to Australia

The discussion began at 3.15 p.m.

[matter omitted]

Closer Economic Relationship

Mr Muldoon said that he had no difficulty with the timing envisaged by Australia for securing approval forCER. Mr Fraser said he expected to go to Cabinet early in August.

Mr Fraser suggested that the conclusion ofthe CER agreement should be marked as a particularly Australia- New Zealand occasion and not tacked on to the South Pacific Forum meeting in Rotorua. Mr Muldoon said he thought Mr Fraser was right and this presented no problems for him.

Mr Muldoon said that some industry groups had raised problems. He had stated publicly that if there were genuine practical problems that could not be resolved, New Zealand would have to seek amendments to the draft agreement. He did not however anticipate that there would be much change from the New Zealand side. Mr Fraser said that anything New Zealand industry groups could do with their Australian counterparts to avoid undermining the agreement would be appreciated.

Mr Fraser said that the Confederation of Australian Industry had criticised some aspects but it was early days yet and Ministers would be monitoring reactions during the consultations period.

Mr Muldoon said that he had received representations in respect of some processed foods but he thought the problem was manageable. Mr Fraser said Australian producers also had some concerns on processed foods but it had to be accepted that in a comprehensive arrangement like CER there had to be gainers and losers on both sides.

Mr Fraser said the consultation process in Australia was more complex than in New Zealand because of the need to consult the States. Initial reactions of the States were to raise the question of structural adjustment assistance, which he rejected. He said in particular New South Wales and Victoria could be difficult. Mr Muldoon said that New South Wales had most to gain as 50% of New Zealand imports from Australia were sourced from there. Victoria accounted for about 30% of New Zealand's imports from Australia and also stood to gain considerably.

Mr Fraser said it could be helpful if Mr Muldoon were to take any opportunity that arose to make that point to the New South Wales and Victorian State Governments.

[NAA: A1838, 370/1/19/18, XXX]