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

No. 2715. 1 3 September 1979

Australia/New Zealand Economic Relations and the South Pacific

There has been some questioning of the implications for South Pacific Island countries of the current discussions between Australia and New Zealand regarding a possible closer economic relationship. You might wish to make use of the following extract from a speech delivered by the Deputy Prime Minister2 at Otaki on 2 September. Full text follows by bag.

'Nor will a closer economic relationship with Australia involve our turning our backs on our economic (or political) obligations to the developing countries which are our neighbours in the South Pacific. I want to be quite explicit about this. Australia and New Zealand have both agreed to enter into negotiations on a comprehensive non-reciprocal Trade Agreement in favour of the South Pacific Forum Island countries. As recently agreed by regional heads of government at the last Forum meeting, the aim of these negotiations is to achieve progressively duty free and unrestricted access to the markets of Australia and New Zealand over as wide a range of Pacific Island products as possible. This effort will proceed at the same time as our consideration with Australia of new options for our bilateral relationship. And, most important, the opportunities for improved access from the South Pacific to New Zealand will not overall be diminished by whatever arrangements are eventually agreed with Australia.3 As I have said, we must become more outward looking rather than less pursuing our interests and in meeting our responsibilities.

In the final analysis we are a Pacific nation, not just an Australasian nation, and no new economic relationship with Australia will change that. Such a relationship would only be of value to us, I believe, if it made us better able to exploit the economic opportunities available to us in Asia and the Pacific. And better able to play a distinctive and constructive New Zealand role in the region in which we live.'

[ABHS 950/Boxes1221-1226, 40/4/1 Part 21A Archives New Zealand/Te Whare Tohu Tuhituhinga 0 Aotearoa, Head Office, Wellington]