23 Minute from Doran to Ashwin

Canberra, 10 August 1979

CONFIDENTIAL

Subject-Australia- New Zealand Closer Association Exercise

As the STR task force report1 will be available this week, it may be opportune to give further consideration to the role we think our Minister and this Department should have in the closer association exercise.

[matter omitted]2

  1. . . ..The Prime Minister also proposed that once the New Zealand study was received 'we review how our overall examination can be best progressed and what machinery would be most appropriate for that purpose'. Unless this last point has been superseded by discussions between Messrs Fraser, Peacock and Garland at Lusaka, it probably still stands and would seem to override the Prime Minister's earlier apparent view that PM&C should chair an IDC.
  2. [If]3 we are back to a tabula rasa situation on interdepartmental machinery do we wish to reassert our earlier bid for an IDC chaired by DFA? I personally think we should if the Minister agrees. However, if we do so, we must be prepared to provide the resources to service the IDC.
  3. This brings me to the related question of how we approach consideration of the issue internally. You will be aware of my views conveyed in another note that a special unit (of two officers) should be set up within the Department immediately to co-ordinate our input into the closer association exercise. I believe this is warranted because of the importance attached to the issue by the Government and its manifold foreign policy implications. I also fear that not much 'imaginative thinking' about a range of options (which appears to have been requested by the Prime Minister) is going to be done unless we do it and this will require resources to be set aside. The STR study will, I understand, concentrate almost exclusively on a customs union which is but one of the options.
  4. If we renew our bid for IDC chairmanship any internal unit set [up] could be given the added task of servicing the IDC in much the same way as the successful ASEAN exercise has proceeded. The unit could be located either in EP4 or Western Division although the latter probably would make more sense in the light of the fuss we have made of the need for wider questions to be addressed and not just the trade relationship in isolation; [and] because of our relationship with the ANZ Foundation and the Businessmen's Council. It would also parallel the ASEAN arrangements.
  5. Another consideration is that as the closer association exercise is a 'new function' the Department's hand would be strengthened in negotiating [with the PSB] for more staff to perform that function if we could point to our role in serving an IDC on the question.
  6. We should also give some consideration to how the exercise should be conducted at the Ministerial level. Should it be through the normal Cabinet system [or] by a special task force or subcommittee of ministers? Do we want a joint Australia- New Zealand Ministerial task force? Which Minister(s) should conduct negotiations with the New Zealand Government? According to the Financial Review of 9 August Mr Fraser and Mr Anthony agreed earlier this year that Mr Garland should handle the discussions and negotiations. I have seen no official confirmation of such a decision and if there is none I think that we should work against any suggestion that Mr Garland should have exclusive carriage of negotiations for the following reasons:
    1. There would probably be a repetition of the difficulties which occurred during the STR European exercise. (See the attached note [(D)] from Sir James Plimsoll.) There have already been hints of this with Mr Flood dealing with the Senior Trade Commissioner in Wellington rather than through DFA channels.
    2. Mr Border feels strongly that the exercise must continue to be handled at the highest political level if it is to get anywhere. Mr Garland is No. 24 out of 27 in the Ministry and is not in Cabinet.
    3. If Mr Garland and his [Department] are running the exercise drawing on the old NAFTA hands, it will probably degenerate into another item by item trade negotiation without wider considerations in mind, which is doomed to failure.
    4. Mr Talboys seems to have reacted fairly coolly to the suggestion that Mr Garland visit New Zealand in mid September (see attachment E). Note also NZMFA Dep Secretary Stewart's comment to Mr Henderson when discussing on 3 August the possibility of a visit by Mr Garland. 'Mr Stewart emphasised that discussion should proceed on the broad principles involved rather than on a case by case basis. The latter approach he said had been tried with NAFTA and had produced only limited progress.' Note also Mr Henderson's subsequent comment 'The Minister for Foreign Affairs was determined that the exercise be conducted on a broad basis and not just as another trade negotiation'.
    5. As far as we know, the time-table agreed upon at Lusaka makes no provision for any Ministerial negotiations or discussions before the Prime Ministerial meeting to be held not later than February 1980.
  7. Finally, I would just like to flag the question of the need for a bipartisan political approach to the question of a closer association with New Zealand. I think we should advise the Minister that there is a need to consult and involve the Oppositions in both countries at any early stage, so that if a decision is made to proceed we can all be assured that it will not be frustrated at a later stage.

[NAA: A1838, 370/1119118, ii]