92 Memorandum from Ministry of Foreign Affairs to Chairman, Officials' Economic Committee

Wellington, 17 March 1980

Aus/NZ Economic Relations Draft Declaration And Communique

In the brief for the Prime Minister the declaration and communique, and the public version of the Joint Permanent Heads Report, are seen as the main instruments, following the Muldoon/Fraser meeting, for establishing a clear direction to the A/NZ economic relationship. It is important that at this stage, while public opinion appears favourably disposed to a positive step forward, that we get the public signals right. The Australian draft communique does not seem to go far enough either in content, tone or language to meet this prescription. Significantly, it appears to have been written from a position several steps behind the point reached between Permanent Heads in Canberra.(1) Although the reports we have received suggest that the Australian Cabinet had no difficulty with the spirit underlining the draft declaration(2) prepared in Canberra, the Australian redraft of the communique, incorporating a much watered down version of the declaration, does not capture much of the spirit or, indeed, all of the substance. For example:

  1. the joint Canberra draft recognised the existence of a special economic relationship. In the latest Australian draft, all references to a special economic relationship are edited out (the closest the Australians get to this thought is the acknowledgement of the 'special nature of the Tasman relationship');
  2. in the Canberra draft, the Prime Ministers declare that a closer economic relationship will lead to stronger economic growth prospects for both countries. The latest draft is more conditional. '... Prime Ministers were of the opinion that .. . a closer trading relationship could offer the prospect of economic benefits for both countries'. This is a much weaker formulation;
  3. the Canberra draft states, without qualification, that 'the freest possible movement of people, goods and capital between Australia and New Zealand will contribute to these broad goals' (i.e. of stronger economic growth, the most efficient use of their natural resources and productive capacities, and a fuller contribution to world trade and development). The latest draft refers only to the freest possible movement of their peoples (subject to their respective laws) but not to goods or capital. This is an important omission;
  4. there is no reference in the Australian draft to the agreed goal of progressive liberalisation of trade, or even freer trade. There is no reference to the inclusion of both manufactured and agricultural products;
  5. the reference to the agreement by Prime Ministers to 'keep under review all aspects of the relationship' has been dropped.
  1. It is suggested that you may wish to circulate to the Australian side as a basis for further discussion the latest version of the New Zealand draft communique which incorporates Mr Templeton's redraft of the Tasman declaration. Copies of the New Zealand version will be available for this purpose. Once there has been sufficient discussion on the two drafts it should be possible for a small joint drafting group to be set up to work out a composite draft that could reflect more closely the positions of the two sides. An opportunity for discussion would be helpful for us in determining whether the latest Australian draft reflects fairly the position of Australian officials or just the views of one department.

[ABHS 950/Boxes1221-1226, 40/411 Part 26 Archives New Zealand/Te Whare Tohu Tuhituhinga 0 Aotearoa, Head Office, Wellington]