65 Minute from Willis to Parsons

Canberra, 22 February 1980

CONFIDENTIAL

Briefing for Meeting of Australian and New Zealand Senior Officials to Discuss Closer Economic Association, Canberra 25/26 February

The venue for the Permanent Head level meeting which you are attending next Monday and Tuesday is the fourth floor conference room at Trade and Resources. Sessions are expected to be 9.30-12.30 and 2.30-4.30 each day. Mr Scully is hosting a reception at the Press Club 6--8 p.m. on Monday evening and the New Zealand High Commissioner may reciprocate hospitality (probably a lunch) on Tuesday.

2. It is expected that Mr Scully will chair all sessions. The Australian Delegation will be:

The Australian Delegation People
Mr Scully T&R
Mr Lind T&R
Mr Flood STR
Mr Anderson STR
Mr Hawes STR
Mr Codd (Act. Sec.) PM&C
Mr Fitzgerald PM&C
Mr Stone Treasury
Mr Waterman Treasury
Mr Currie I&C
Mr Neilson I&C
Mr Besley BACA
Mr Maddem BACA
Mr Smith (Act. Sec.) PI
Mr Parsons (Act. Sec.) FA
Mr Doran Head, NZ Section
Mr Santer (Act. Head) Commercial Policy Section

3. The New Zealand Delegation is expected to comprise:

The New Zealand Delegation People
Mr N. V. Lough Secretary, Treasury (Leader)
Dr G. Scott Director, Treasury
Mr B. Galvin Secretary, PM's
Mr J. KeanComptroller, Customs
Mr G. Bathgate Director, Customs
Mr H. ClarkSecretary, Trade and Industry
Mr A. Cranston Director, Trade and Industry
Mr A. Edwards Secretary, Transport
Mr M. L. Cameron Director-General, Agricultural Fisheries
Mr I. L. G. StewartDeputy Secretary, MFA
Dr L. A. Beath Assistant Head (Aust., & Am. Div.) MFA H. E.
Mr L. Francis High Commissioner
Mr Plimmer Dep. High Commissioner
Mr Tumbull Minister Commercial
Mr Price Second Secretary (Economic)

The following briefing/working documents for the meeting are attached.

  1. Draft Agenda (based on the terms of reference for Working Groups agreed on by Australian and New Zealand Permanent Heads at their meeting last year in Wellington and incorporated into their Statement of Understanding 1).
  2. Joint report by Australian and New Zealand Working Parties2 agreed at a meeting in Wellington, 29 Jan- 1 Feb. (It sets out the principal issues and conclusions arising from studies undertaken in accordance with the terms of reference.)
  3. Issues for Consideration3 (Confidential briefing document for the Australian side which reports on the background to the work which resulted in the Joint Report and highlights areas of difficulty).
  4. A confidential Australian Objectives paper4 for next week's meeting which amongst other things will seek to obtain New Zealand agreement to the draft Statement referred to in (e) below.
  5. A draft outline confidential Statement of Understanding5 to be agreed between the Prime Ministers when they meet on 20/21 March. (The draft represents the Australian perception of the optimal agreement possible between Prime Ministers and presupposes that the whole exercise will continue to move forward. It is hoped that the Permanent Heads can go a long way towards reaching agreement on the draft at this meeting.)

New Zealand Approach

According to [cablegram] O.WL4825 (attached) the objective of the New Zealand side will be to adopt a pragmatic and flexible approach with a view to achieving a good negotiating framework for the Prime Ministers' talks. More specifically the New Zealanders are expected to use their best efforts to achieve:

  1. Agreement that a meeting between the two Prime Ministers will be worthwhile;
  2. Recognition that while there are difficulties in some form of closer economic association, these difficulties are negotiable;
  3. Agreement that following the Prime Ministers' Meeting it will be worthwhile pursuing the objective of negotiating a new trade agreement.

An important New Zealand aim will be to obtain agreement on a draft communique for the March meeting of Prime Ministers. Such a draft would not duplicate the Australian work on a Confidential Statement of Understanding as the New Zealand draft would be for public use.

We understand that consistent with the views expressed from time to time by the New Zealand Prime Minister, most of the New Zealand Permanent Heads (certainly Galvin), will not want discussion to be confined to trade, but to canvas wider areas of co-operation (energy, transport, including civil aviation, joint marketing, the financial sector and tourism have been specifically mentioned). We also understand that the aim is not to obscure the trade relationship, which is fundamental, but to recognise that the ANZ relationship is not exclusively trade.

It is unlikely that substantial progress could be made on these points at this meeting. Some of them have been considered before and the view reached (by Australian Departments mainly) that there is little scope for meaningful co-operation in these areas. Civil aviation is a new addition to the list and one which the Australian side would prefer to see excluded from the current exercise. (We will be providing you with separate briefing on civil aviation relations with New Zealand.)

Foreign Affairs Role

Departmentally we support the objectives of the Australian side for next week's meeting. The prospects for a positive result seem somewhat brighter than they were a few weeks back. Both sides are now approaching the talks in a positive spirit and seem anxious to ensure that we maintain the momentum of the exercise if at all possible.

It is difficult to foresee in advance what sort of a role Foreign Affairs should play at the meeting. Much will depend on how the discussions progress. It is important for the overall relationship that there not be a complete breakdown in negotiations but this does not seem likely now.

The economic Departments will take most of the running as much hard-headed talking will have to be done on technical matters. We should be generally supportive of the need to maintain momentum and to proceed with the Prime Ministers' Meeting in March if it is not to be a non-event. We should also continue to support the continued involvement of Ministers and Permanent Heads in the exercise.

ANZAC Pact

An Australian working group was set up (chaired by Mr Gate of Foreign Affairs) to advise Permanent Heads on the scope for a new treaty with New Zealand to replace the ANZAC Pact of 1944. The Working Group's report6 is attached. It does not make a recommendation but leaves it up to Australian Permanent Heads to decide on whether or not to proceed with the exercise. An indicative draft of what such a treaty might contain is attached to the report.

The New Zealand side appears to be most unenthusiastic about this idea and although it is on the agenda (Item 3(c)), it may be unwise to push it too hard. You may wish to discuss with Ian Stewart (Deputy Secretary NZMFA) how this agenda item should be handled.

[NAA: A1838, 370/1/19/18, xv]