CER Agreement with New Zealand
PURPOSE: To provide you with up-dated background information and brief talking points on the Cabinet Submission by Mr Anthony for consideration on 1 June. (Attached is Copy No.9 of the Submission-Submission No. 5487.
- Mr Anthony's discussions with Mr Muldoon in Wellington on [20/21] April and subsequent negotiations by officials have now led to a package which meets major outstanding Australian objectives, notably termination dates for New Zealand export incentives (30 June 1987) and import licensing (1995). New Zealand has obtained arrangements satisfactory to its interests on safeguards and government-to-government purchasing. On 18 and 19 May state officials and industry organisations were briefed on the stage negotiations had reached. New Zealand's final agreement on export incentives was obtained only on 25 May, following direct industry-to-industry talks (which had made clear the firmness of the Australian position) and an urgent message on 24 May from Mr Anthony to Mr Muldoon.
- You may wish to draw on the following points in Cabinet's discussion of the submission:
- the agreed package at this stage represents very satisfactory progress towards a CER agreement after prolonged and in many issues closely argued negotiations with New Zealand. The eventual agreement will be a significant milestone in relations with New Zealand, which while close have seen recent strains such as the passport issue2 last year and possible damage to this year's Commonwealth Games resulting from New Zealand sporting links with South Africa.
- the arrangements now proposed meet Australia's objectives in the negotiations and could be expected to give Australia some economic benefits, notably in offering new opportunities for Australian exports. New Zealand has set much store by the achievement of a new trade agreement; and, despite continuing concern among New Zealand manufacturers at the prospect of competition from Australian imports, general public reaction to the CER proposals has been favourable. The export incentive and import licensing termination dates are not yet known publicly and may provoke some negative reaction in New Zealand, but he overall attachment to finalising and agreement is likely to prevail.
- the broad thrust of the proposed agreement is a practical and early illustration of aspects of the proposals which the Prime Minister has advocated to participants in the forthcoming Versailles Summit.3 (PM&C will be making a similar point in the Prime Minister's Cabinet briefing.)
- joint briefings with New Zealand officials of senior officials in Pacific developing countries have been set in train; these are intended to allay any concern that the CER agreement may have adverse consequences for their trade, particularly exports to New Zealand.
- it will be important to ensure that Governments of important trading partners in Europe, the Pacific and South East Asia are informed of the contents and implications of CER to minimise any possibility of misunderstanding or misrepresentation.4
[NAA: A1838, 370/1/19/18, xxvii]