69 Minute from Doran to Ashwin
Canberra, 4 March 1980
Closer Economic Association with NZ: Prime Ministerial Meeting
The following are the main points arising from an interdepartmental meeting held at STR 3-6 p.m. on 3 March to discuss preparations for the proposed Prime Ministerial Meeting scheduled for (20) 21 March.
Prime Ministerial Meeting
- PM&C (Fitzgerald) advised that Departments should act on the strong assumption that the Prime Ministerial Meeting would take place as scheduled. The Prime Minister was waiting for an assurance from Mr Muldoon (expected 4 or 5 [March]) that he was happy to proceed before finally committing himself to the meeting.
- A list of topics for inclusion in the Officials and the Prime Minister's briefs for the visit was circulated (see attachment) and format guidelines issued. Departments responsible for drafting are required to lodge fully cleared items with PM&C no later than lunch-time Monday 10 March. DFA has responsibility for initiating 8 items. Departments with an interest in clearing items are to contact initiating Departments direct to register their interest. An [intemal]1 note on briefing has been prepared for your signature.
Draft Cabinet Submission
- The Trade and Resources/STR draft Cabinet submission came in for considerable adverse comment at the meeting. BACA (Maddem), Treasury (Waterman) and DIC (Purcell) felt that it was too neutral in tone and that the major impediments on the NZ side to a full measure of closer economic association needed to be given greater emphasis. There was insufficient emphasis given to the fact that NZ had moved very little and Australia had to take all the running. Discussion proceeded on the basis that comments were welcome and would be taken into account but the final wording of the body of the submission must remain the prerogative of the initiating Departments/Ministers (i.e. T&R and STR). This produced some mild protest but it was eventually accepted. After some modification agreement was reached by all Departments on the recommendations, which would be [so] recorded in the co-ordination section of the submission. (A copy of the agreed recommendations is attached.) DIC said that they may wish to have a short note included in the co-ordination section to the effect that although they agreed with the recommendations they are not necessarily in full agreement with comments in the main body.
- DIC's main grievance was that the submission did not stress sufficiently the amount of further study required before Australian Departments would be in a position to make responsible recommendations to Cabinet on whether to proceed with the proposed package. DIC further argued that the proposals in the Permanent Heads report2 required much more refining whereas STR was assuming that we are already well down the track on the general package envisaged to the extent that the language of the submission was running ahead of the Permanent Heads report.
- DIC challenged the use of the word 'arrangement' throughout the draft arguing that it had certain implications in trade law and suggested that 'approach' was the preferable term. DIC counselled caution lest the New Zealanders only take a first step towards closer association based on Australian concessions and without reciprocal benefit for Australia.
- Treasury had particular difficulty with the 'understanding' on import licensing. It was their view that although New Zealand officials had refused to give any specific undertaking (on the grounds that it [would] be unacceptable to NZ Ministers) they had acknowledged in an indirect way that [the] import licensing package would be a first step towards [its] eventual abolition. DIC supported Treasury arguing that the import licensing proposal could not be sold to the Australian public unless something in writing could be obtained from the New Zealanders.
- Although not spelt out in the draft submission PM&C and STR made it clear
- that the leader of the Opposition and appropriate shadow Ministers would be informed of developments some time after the Prime Ministerial Meeting and
- Ministers had indicated that no important decisions would be taken before this year's election.
- It was agreed to set up a small working group chaired by David Hawes (STR) to examine the draft Tasman declaration.3 The aim would be to obtain NZ comments on any proposed changes and to present a final draft to the Prime Minister for his approval by the end of next week. Mr Flood said that comments had been received from Mr Parsons about references to transport and tourism. I&EA (Smith) expressed dissatisfaction with the references to the free movement of people between the two countries.
- In examining the draft Mr Flood suggested that we should treat it as if it were a legally binding document so that the Government would not be embarrassed by the wording at some later stage.
- It was agreed that although principle (ii) on page 3 ('to the greatest extent possible both countries will treat the citizens of the other no less favourably than if they were their own citizens') is still square bracketted in the text, Permanent Heads on both sides would require a lot of convincing before it would be dropped. However it should be vigorously examined from the taxation, social security and immigration angles in particular.
- It was agreed that the Legal and Treaties Division of Foreign Affairs should be consulted on whether anything in the draft declaration or the Permanent Heads report would cut across special treatment given to other countries under treaties such as the Basic Treaty of Friendship and Co-operation with Japan. Treasury are particularly worried about principle (ii) and the implication of para 24 of the Permanent Heads report that Australia might be prepared to give New Zealand special treatment under the Australian foreign investment policy. (However the protocol to the Japanese Treaty may cancel out the effect of the undertaking given to Japan in the body of the treaty.) A draft note to Mr Bray is being prepared for your consideration.
- DIC felt that some consideration should be given to broadening the declaration to bring in political aspects of the relationship. However it was generally felt that to do so would loosen up the economic [focus]. However Mr Flood suggested that individual Ministers might wish to raise the question in Cabinet and that perhaps some contingency work could be done in case some broadening of focus is necessary.
- The NZ draft communique would also be examined by the Hawes group [which would aim] to get an Australian redraft back to the New Zealanders as soon as possible.
- I will draft a Ministerial submission commenting on the final Cabinet submission (when received) over the next couple of days.
[NAA: A1838, 370/1119/18, xvi]