31 Ministerial Submission to Peacock by Ashwin

Canberra, 22 October 1979

CONFIDENTIAL

Cabinet Submission: Subject-Future Trade and Economic Relations between Australia and New Zealand

PURPOSE: To provide you with Departmental comment on the above submission for possible use during Cabinet discussion.

ISSUES: Ministers are asked to note the progress so far and, in particular, that no decision on options for closer association is required at this stage.

As explained to Departments by the Department of the Special Trade Representative on 25 September, this was to have been a report on the reaction to the concept of closer economic co-operation as perceived by Mr Garland during his recent familiarisation visit to New Zealand. However the submission goes beyond this, and, rather, constitutes a progress report on planning for the Permanent Heads Talks and beyond. It may also be taken to imply that Mr Garland has been given the carriage of this matter. In a letter to you in June,1 the Prime Minister said that he did not want to set up any interdepartmental machinery at that stage, but would review later what machinery would be most appropriate.

RECOMMENDATIONS: We are not aware of any specific review, but we understand from the Department of the Prime Minister and Cabinet that at this stage it still wishes the Department of the Special Trade Representative to have carriage of the exercise. As you know, this is not the arrangement we proposed some months ago (when you suggested to the Prime Minister that this Department should chair any IDC dealing with the matter), but we do not see any point at this stage in pressing for any change in the de facto situation.

We are broadly in agreement with the terms of the Submission, but have the following comments:

  1. discussion may eventually centre not only on any one of the five formal economic co-operation options mentioned in para 2, but also on possibilities for co-operation in such fields as joint marketing in third countries and industrial policy;
  2. the submission does not refer to Mr Garland's discussions with senior members of the New Zealand Labour Party. (Some members, whom Mr Garland saw, were fairly positive, but he did not see Mr Rowling);
  3. with reference to the last sentence of para 12, it is of course not only our relations with ASEAN and the South Pacific which may be affected. Account will have to be taken of any implications closer association with New Zealand may have for our relations with other important States and groups of States, e.g. the United States, Japan and the European Community;
  4. para 11 fails to mention that an exchange of papers is to take place later this month in preparation for the Senior Officials Talks. These papers, still under preparation on both sides of the Tasman, will be in three parts-broad trade and economic restructuring strategies and objectives; consideration of how the trans– Tasman initiative relates to them; and a catalogue of issues, questions and conclusions arising from preliminary studies.

Should the question arise of whether the meeting between the two Prime Ministers no later than February 1980 should take place in Canberra or Wellington, you may care to say that we see political and psychological advantages in the Prime Minister visiting Wellington.

You may wish to inform Cabinet that you see advantage in wide public debate about the issues involved and that you would be willing to ask the Australia New Zealand Foundation to undertake some work in this regard. The possibility of Parliamentary Committees also debating the matter could be explored.

This might be a useful occasion on which to raise for consideration whether to inform the Opposition leadership on developments so far. We do not know if the New Zealand Government has yet briefed the New Zealand Opposition.

You may also wish to raise the question of the desirability of briefing State Governments on developments to allay any apprehension and to enlist co– operation in view of recent mischievous publicity in New Zealand that the Australian States would 'make or break' the current trans-Tasman exercise.

Recommendation: It is recommended that you refer to the abovementioned matters in Cabinet.2

[NAA: A1838, 370/1119118, ix]