232 Telegram from New Zealand High Commission in Canberra to Ministry of Foreign Affairs

Canberra, 12 October 1981

No. 3031. CONFIDENTIAL PRIORITY

ANZCER: Discussion with Anderson

Thanks your 3541, 3548,1 3549 and 3550 which formed a useful basis for our discussion with Anderson.

  1. IMPORT LICENSING: Commenting on the record of the Muldoon/Anthony discussion2 (CHOGM Melbourne's 15) Anders[on] said that he thought the Prime Minister3 had gone a little further than the record seems to acknowledge. As the cable records, he explained the political difficulty in advancing the issue much further in the next couple of months. But he had gone on to say that he felt there would be scope for movement early next year. This was, Anderson noted, an important acknowledgement in Mr Anthony's view. Lind added that the issue had to be seen against the background of the CAI's firm position that a terminal date for import licensing must be set now so that Australian businessmen know at the outset when full free trade will come into effect. In communications with officials they had not shifted from this position, and had even gone as far as to say that unless a date was fixed at the outset they would find it difficult to support the concept of a CER. Australian officials had therefore gone well beyond their brief in canvassing with us the formula they had floated at the last joint working party meeting. Since the Muldoon/Anthony discussion, however, the question that was likely to occur to Australian ministers was whether New Zealand would not be prepared to accept a terminal date for import licensing at the outset.
  2. We explained that New Zealand ministers had been briefed on the discussion on import licensing at the last JWP, and that officials had obtained authority to continue discussions, both with MANFED and Australian officials. We then read to them the first formulation in your 3548, stressing that the specific wording had not been cleared with Ministers and that it should not be regarded as a firm New Zealand response to the Australian formulation. Anderson said he thought that it would be impossible for them to sell such a formulation to the CAI, given the strength of their position on the issue. Furthermore he wondered whether it adequately reflects the tone of what the Prime Minister seemed prepared to accept during his discussion with Mr Anthony. In the light of this response we floated the second formulation, pointing out that it went a considerable way towards meeting the Australian requirement for a terminal date. Anderson and Lind agreed. They thought the second formulation was indeed a 'useful step' which officials could probably agree to-but that is not the point. It had the inconsiderable disadvantage of being less saleable to the CAI than their own formulation and probably unacceptable to Ministers. They undertook nevertheless to look at it closely.
  3. At this point in the discussion Lind suggested that there was yet another way of satisfying the Australian requirement for a terminal date: it was to declare that all obstacles to trade (ie, including import licensing) would be removed by Year X, but that a review would be held which would examine whether extensions beyond that date are justifiable for some industries/products. Lind was careful to stress that as with other formulations, this 'idea' had no official status, and he did not want to divert our attention from the other formulae being discussed. But it has the merit-which the others do not--of having a date set, and it may be necessary to pick up this suggestion later depending on reaction to those being discussed.
  4. WINE: Lind said that officials are planning a session with the Wine and Brandy Corporation shortly, preliminary to a meeting between the industries. It is fundamental to the Australian approach on wine that some form of Government-to-Government commitment is necessary underscoring whatever agreement the industries may reach. At the moment Australian officials felt they were in the rather unsatisfactory position of an agreement having been reached between two chairmen (that is, not necessarily between the two industries) one of whom has departed from the scene.
  5. There are, in Lind's view, some significant differences between the two industries' approach to the problem which need to be resolved. As far as the CER issue is concerned, the New Zealand industry has tended to take the line that the New Zealand Government's decision, implying as it does indefinite deferral, effectively disposes of the issue. Considerable work will be required if the issue is to be wrapped up by the end of March with a firm commitment on when CER phasing will begin. Lind is, nevertheless, reasonably confident that an understanding between the industries on the short term issue (that is the action that would be taken in the event of Australia's marketing opportunities in New Zealand being prejudiced) should go a considerable way towards resolving the longer term CER issue.
  6. TIMING: Anderson said that Australian officials will be working towards a meeting with Permanent Heads at the end of January in the expectation that Prime Ministers will be meeting March/April. The Prime Ministers' undertaking to meet will make it necessary for the bulk of substantive consultations at the Australian end to be completed by then-hence the gap between Permanent Heads meeting and Prime Ministers.
  7. This scenario would result in the Heads of Agreement being published in April with an announcement to the effect that, eg it 'will be signed in four weeks'. This would enable the Australians to observe their constitutional formalities in respects of consultations with the states. Any issues thrown up in the course of these consultations were unlikely to be major ones, provided officials had done their homework in the period leading up to the Prime Ministers' meeting.
  8. We drew Anderson's attention to the slight difference in timing recorded in the meeting with Mr Anthony (Prime Ministers meeting 'April/May') from that suggested by the Prime Ministers themselves ('March/April'). Mr Anthony had subsequently suggested 'March/April' as a more flexible guide. In the later meeting with the Prime Minister, Mr Anthony had referred to 'April/May'. This difference probably reflected to Mr Anthony's sharper-and therefore slightly more cautious-view of the political difficulties that could be involved in obtaining full Cabinet endorsement of the final agreement. As far as officials are concerned, however, work is proceeding on the assumption that Prime Ministers will meet in March.

[ABHS 950/Boxes1221-1226, 40/4/1 Part 39 Archives New Zealand/Te Whare Tohu Tuhituhinga 0 Aotearoa, Head Office, Wellington]