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

Wellington, 14 December 1981

No 4874. CONFIDENTIAL IMMEDIATE

ANZCER: SPARTECA and Pacific Island Arrangements

  1. The following is a background brief for a discussion of ANZCER and our commitments to the Pacific Island countries for your talks with Australian officials this week.1
  2. Both Australia and New Zealand acknowledge the need to assist economic development of the South Pacific region. (Bilaterally through the Prime Ministers' communique, March 1980,2 the draft Heads of Agreement3 and the Nareen statement4 and multilaterally under SPARTECA itself.) More specifically, in their communique, the Prime Ministers agreed: 'that an appropriately structured closer economic relationship would bring benefits to both countries and improve the living standards of their peoples. They believed that this could be achieved in a manner consistent with their obligations to the developing countries of the region, enhancing their prosperity as well as that of Australia and New Zealand.'
  3. That opening the New Zealand market for certain tropical products to competition from Australia could affect the Pacific Islands' export prospects has been recognised by both sides in the negotiations, most recently, during the discussions with Mr Anthony in May this year (see unofficial record of discussion page 25 agenda item 3(c).5 In that case discussion focused on New Zealand's monopoly import arrangements for citrus fruit. The question obviously goes wider than that, however, and we have not so far looked at it in detail. It now seems desirable that we should both do so, in order that we may establish the terms on which the question would be dealt with in the CER Heads of Agreement.
  4. Our starting point is that both Australia and New Zealand accept that CER must take account of existing commitments to the Pacific Island countries. There are the SPARTECA commitments that both countries have entered into. The issue does not stop there however. New Zealand in particular has other commitments to the Cook Islands, Niue and Western Samoa that pre-date and are protected under SPARTECA. This is the reason for the inclusion of a number of products on our Appendix 3 negative list under SPARTECA.
  5. New Zealand will need to discuss with the Australians, how our special arrangements with the Cooks, Niue and Western Samoa are to be accommodated in CER. The problem is not easily settled administratively.
  6. Once Australia and New Zealand have considered how CER and SPARTECA inter-relate, there will be a need for early consultations with the other SPARTECA members about the implications for them of expanding access to the New Zealand market for Australian goods. SPARTECA has been in force for less than a year and we would not want to weaken the undertakings given to the FICs under that agreement.
  7. It is important to bear in mind that this is not just a New Zealand problem. The Australians have their own commitments under SPARTECA and PATCRA that they will no doubt want to talk to us about. In particular, we should be interested to know what the prospects are for changes in their current SPARTECA positive list once the lAC hearings on orange and tangerine juice are complete. We might also explore a little in discussion what added benefits the FICs may expect to enjoy under CER.
  8. We would be grateful for any preliminary reaction you may be able to glean from the Australians before our talks with them start on Wednesday.

[ABHS 950/Box 1228, 40/4/2 Part 1 Archives New Zea1andffe Whare Tohu Tuhituhinga 0 Aotearoa, Head Office, Wellington]