70 Ministerial Submission to Peacock by Ashwin

Canberra, 6 March 1980

CONFIDENTIAL

Subject-Cabinet Submission 3866: Closer Economic Co-operation with New Zealand Prime Minister's Proposed Visit to New Zealand

PURPOSE: To brief you for Cabinet consideration of a submission by Mr Anthony/Senator Scott on closer economic co-operation with New Zealand.

ISSUES: Cabinet is to take the attached submission at short notice today (6 March)

instead of next week.

[matter omitted]1

We and all other Departments support the recommendations although we would not necessarily agree with all the value judgments in the body of the submission.

Although much work still has to be done we believe that the outline of the possible package which emerged from the Permanent Heads talks does provide an acceptable basis for continuing with the exercise and eventually achieving a result acceptable to both countries.

Some economic Departments, particularly Industry and Commerce, remain sceptical about the seriousness of New Zealand's commitment to a closer mutually beneficial economic relationship. It is felt that New Zealand really wants non-reciprocal trade concessions from Australia. However we believe that New Zealand should be given the benefit of the doubt and that we should continue to approach the exercise in a positive and constructive spirit.

The earlier idea of trying to revise or replace the 1944 Agreement between Australia and New Zealand as a gesture of commitment to the relationship has been dropped. It has been superseded by the proposal for a Tasman Declaration2 although by comparison the focus of the latter is almost solely economic.2

Departmentally we have no difficulty with a largely economic umbrella declaration as it is that area of the relationship which requires particular attention at present. However we would not object to the inclusion of additional non-economic content if it did not take the spotlight off the economic relationship.

Legal advice is being sought on possible domestic and international legal implications of certain passages in the declaration as currently drafted. Departments have asked for particular attention to be paid to principle (ii) 'to the greatest extent possible both countries will treat citizens of the other no less favourably than if they were their own citizens'. Any necessary changes to the wording will be made before a final draft is presented to the Prime Minister for approval.

We feel that the submission and the draft declaration as it stands adequately meet our concern about the implications for our relations with third countries although we will need to pay careful attention to the final wording of the declaration and any associated communique.

[matter omitted]

You will recall your own and the Department's initial reservations about STR chairmanship of this exercise. However in the event our earlier fears have not been realised. Foreign Affairs has been fully involved throughout and the broader implications of the exercise have been taken into account at all stages.We therefore are agreeable to STR continuing to co-ordinate.

We do not know whether the Prime Minister intends to take other Ministers with him. We understand that Mr Muldoon is not planning to be accompanied unless Mr Fraser wishes to bring other Ministers. The main item for discussion will be the economic relationship. However, if the Prime Minister wishes to discuss international issues such as Afghanistan, there may be some merit in your accompanying him if convenient.

[matter omitted]

RECOMMENDATIONS: It is recommended that:

  1. you agree to the recommendations in the submission
  2. you raise for discussion the question of other Ministers accompanying the Prime Minister and register the views of New Zealand Ministers on civil aviation.3

[NAA: A1838, 370/1119118, xvi]