For High Commissioner
Thanks your interesting 2679 and 2692. It is disappointing that Australian Cabinet consideration of CER will not now take place this week but in the circumstances, we have little choice but to swallow any frustration we feel about timetable problems. We are at this stage very much in Australian hands on the timing of further round of discussions. But whatever practical difficulties may loom ahead with the 1 January 1983 start-up date if the Prime Ministers are not able to initial an agreement fairly soon, we must try to avoid a situation where inadequate time is available for officials to prepare for meetings of ministers. There would be little point in rushing into a further round of officials meetings before we have a reasonably full reading of Australian Cabinet reaction to Mr Anthony's report on the consultation exercise. Comments of Hayes reported in your 2679 are interesting as far as they go but we will not be able to assess their significance until we know where Australian ministers stand. (Did Mr Anthony in particular raise other issues than forestry?) We have an open mind on the need for full-fledged JWP or Permanent Head meetings. The format of such meetings will very much depend on the degree of substance in issues the Australians want to raise. What is of concern is that the timing should allow us to consult Ministers as soon as possible after a Cabinet decision.
- It is of concern that the forest products issue is threatening to become a stumbling block. We agree with Mr Anthony that the problem stems from the differences that persist in the attitudes of the two industries. For the Australian industry, the current economic downturn appears to be the critical factor. The New Zealand industry, on the other hand, is approaching CER on the basis that it is unreasonable for their Australian counterparts to use their current economic difficulties to open up within the framework of CER questions that were not at issue under NAFTA. We agree in principle that resolution of Australian industries current1 could lie in inter-industry understandings. We are less than certain that a further meeting of the kind now being proposed would in practice reach the kind of understandings that would be required to meet Australia's apparent concerns. We would be happy to ask the New Zealand industry to have another go with its Australian counterpart if Mr Anthony insists that this is essential, and the Australian industry formally extends an invitation. We could not, however, give any advance undertaking as to the likely outcome of the meeting if the Australian industry maintains a non-accommodating approach. In this regard, Mr Anthony's talk about countervailing duties does not auger well.
- Following cable contains comments of Prime Minister in a speech that he gave yesterday to the Wellington Manufacturers Association. This was after Cabinet had on Monday reviewed CER timetable question.
[ABHS 950/Box 1228, 40/4/2 Part 5 Archives New Zealand/Te Whare Tohu Tuhituhinga 0 Aotearoa, Head Office, Wellington]