87 File Note by Beath

Wellington, 6 March 1980

AUS/NZ Economic Relations Consultations with Industry

At the CEC meeting on Tuesday the Prime Minister agreed with a suggestion from DTI that there should be some limited consultation with industry leaders before his meeting with Mr Fraser on 20-21 March. The purpose would be to brief them on the outcome of the Canberra Permanent Heads meeting and indicate the probable lines along which the two Prime Ministers would be concentrating their discussions and further studies on the new trading relationship.

  1. The first of these briefing sessions was held yesterday evening in Mr Clark's office. The briefing was for Mr Scollay and Mr Putter of the ANZ Businessman's Council. Other officials present were Woodfield and Dolan (DTI) and Scott (Treasury, Chairman of the NZ Working Party).
  2. Clark began by explaining that this was the first in a limited series of confidential briefings for industry leaders. The two other groups who were to be briefed were the Manufacturers Federation (to be confined to Turnovsky, Stevens and Douglas) and the Federated Farmers (Wright, McLaggan, Storey).
  3. After traversing the background leading up to the Canberra meeting Clark went through the Joint Report of Permanent Heads(1) on a paragraph by paragraph basis, reading each section carefully before outlining in some detail the tactical background and approach taken by both sides which had resulted in the various nuances of language in the report.
  4. Scollay and Putter showed most interest in the draft provisions for the phasing out of tariffs on trans Tasman trade and the removal of quantitative restrictions. They also questioned Clark closely on the future of export incentives and the proposed Tasman declaration.
  5. The outcome of the briefing appeared to be very positive. Scollay noted that the approach devised by Permanent Heads appeared to be 'very close' to the working philosophy of the New Zealand arm of the Australian New Zealand Businessmen's Council. After some discussion on how detailed an account of the briefing could be passed on to the New Zealand and Australian membership of the Council, it was agreed by Scollay and Putter that they would do no more than tell their membership that on the basis of the confidential briefing they had received it appeared that the approach being taken by Government was consistent with the philosophy and work going on in the Council.
  6. Scollay was particularly interested in the concept of the two Prime Ministers issuing a declaration to mark the start of a new relationship. He had been toying with this idea himself and intended reviewing past treaties and agreements between Australia and New Zealand to see what language and ideas might appropriately be carried forward (we are supplying Scollay today with a complete list taken from the treaty register of all agreements, treaties and exchanges of letters between the two governments, together with copies of the more relevant papers, including the Gorton/Holyoake declaration(2) -if we can drag it back from the oblivion in which it seems to have come to rest-and the Nareen declaration(3)).
  7. I thought it significant that in his presentation Mr Clark stressed that the joint report represented the unanimous views of Australian and New Zealand Permanent Heads who had been engaged in the exercise and that the broad thrust of it had now been endorsed by the Cabinet Economic Committee. He hoped that Scollay and Putter would take this into account in framing any proposals or public statements they might have in mind and try to avoid doing or saying anything that would 'box the Prime Minister in'. Clark passed on to them a comment made to him earlier in the day by Alan Wright. Wright had spoken to the Prime Minister and was surprised by the level of his enthusiasm. According to Wright, the Prime Minister, despite his public stance of coolness, was 'gung ho on getting progress on the AUS/NZ exercise'. Clark asked Scollay and Putter to be particularly careful not to 'steal the Prime Minister's thunder' on the declaration. He told them that a draft had been prepared by the New Zealand side and that he (Clark) had been surprised and pleased that it had been possible to get the Australians to accept the draft which had some 'very positive and useful language' that would act as a framework for all aspects of the economic relationship.
  8. Two or three other remarks were of interest as a guide to the overall approach DTI are now taking to the exercise. Clark indicated that he was concerned to keep the list of sensitive industries nominated by the New Zealand side (for deferred treatment so far as tariffs are concerned) as small as possible-he said that he believes the final NZ list will in fact be less extensive than the Australian list, and in any event he sees the sensitive category as not being permanently excluded from the programme of tariff reduction but simply treated on a deferred basis or handled over a longer phase in period. On safeguards, Clark expressed the view that these should be kept to an absolute minimum-his personal belief is that these should be confined to anti-dumping measures using actual harm (rather than anticipated harm) as the trigger mechanism. I understand that Clark has indicated separately to officers in his department that because of its importance in influencing the outcome he plans to take 'personal control' of the list drawing up exercise.
  9. The next briefing is for the Manufacturers' Federation and will be held on Wednesday, 12 March.

[ABHS 950/Boxesl221-1226, 40/4/1 Part 26 Archives New Zealandffe Whare Tohu Tuhituhinga 0 Aotearoa, Head Office, Wellington]