With further reference to the forthcoming talks between Australia
and New Zealand [1], the following points which emerged during a
conversation with Mr. A. D. McIntosh, the Secretary for External
Affairs, may be of interest.

While the officially announced members of the New Zealand
Delegation would be the Prime Minister, Mr. Fraser, the Minister
for Mines, Mr. Webb, and the Minister for Defence, Mr. Jones, it
was possible that another Minister might also attend. The Prime
Minister would be accompanied most likely by his wife on account
of his health and each of the Ministers would bring a private
secretary. As officials, McIntosh would attend together with
Patrick, who is the official concerned in External Affairs with
Pacific Islands. Possible additions to the official party would be
Shanahan of External Affairs, and the Secretary of the Treasury,
Ashwin, but these have not been selected yet. It appears likely
that the New Zealand party will fly from Auckland arriving in
Sydney on the afternoon of 14th January.

McIntosh referred to our draft agenda paper [2] which he repeated
had not yet been considered by Mr. Fraser. The main comment which
he, McIntosh, made was on the absence of questions relating to
trade and commerce. He remarked that such topics as the
application of Article 7 of the Mutual Aid Agreement were of vital
importance to New Zealand. If there were a reduction in Imperial
preference as a result of Article 7, New Zealand's trade in
primary produce, which is so important to this country, might be
greatly affected. Australia, he remarked, was not so dependent on
her exports of primary produce now that her secondary industries
had developed. McIntosh also pointed out that Pacific Island trade
is a small item to Australia and a very small item to New Zealand,
whereas the British market for primary products is a most
important factor in New Zealand's economic life. He therefore felt
that discussions on Pacific Islands supply were of relatively
minor importance compared with those larger issues.

Another possible topic of discussion which he raised was the
working of our reciprocal Lend Lease Agreements with the United
States and the wish of the Americans to extend to a wider range of
primary products the goods which Australia and New Zealand are
supplying. He mentioned, for example, that the inclusion of tallow
as reciprocal aid was a considerable burden and I remarked that
Australia had recently declined to agree to further additions to
the list of raw materials supplied as reciprocal aid to the United
States.

These suggestions concerning commercial policy were raised quite
informally by McIntosh and he emphasised that the Prime Minister
had not had the opportunity of making any suggestions. They are
interesting, however, taken in conjunction with Mr. Nash's
expressed wish to discuss with Mr. Chifley questions affecting our
two countries' balances of payments in London after the war.

McIntosh enquired also about the meaning of Item 1 of the draft
agenda and the term 'In relation to discussions in London and
Washington'. He seemed to think that this limited the whole scope
of the proposed talks to questions which were likely to be raised
at London or Washington, but I said that there was no wish on our
part to limit the topics for discussion. McIntosh expressed the
view that Mr. Fraser would wish the subjects of discussion to be
left in as wide terms as possible.

McIntosh remarked that the Conference would be of value even if it
merely clarified the views of our two Governments. I said,
however, that on our part we expected some definite conclusions
and agreements on policy to be reached as a result of the talks.

PATRICK SHAW