The Press MONDAY, JANUARY 23, 1967. Australia-New Zealand Trade

Press, Volume CVI, Issue 31275, 23 January 1967, Page 12

The Press MONDAY, JANUARY 23, 1967. Australia-New Zealand Trade

The dispute arising from the Tasman Pulp and Paper Company’s decision to produce liner board for export to Australia provides the first real test of the New Zealand-Australia Free Trade Agreement. The decision was announced by the Tasman chairman (Mr J. C. Fletcher) in August last year. An initial production of 100,000 tons a year, starting in the early 19705, is planned by Tasman, which at present manufactures only newsprint (apart from timber and pulp). By that time there will have been a substantial reduction, under the agreement, of Australian duties on New Zealand packaging board. Tasman’s decision has aroused protests from paper producers in both countries. N.Z. Forest Products, New Zealand’s only producer of kraft paper, has protested that Tasman’s scheme will not help the “ orderly development ” of the industry. Australian Paper Manufacturers, Ltd., the major producer of kraft papers in Australia, has said the Australian industry could meet the country’s requirements. A.P.M. claims that Tasman would “have to dump” to compete on the Australian market. The short answer to this claim is that Tasman is unlikely to embark on an export-based development involving a £l5 million investment if it expected to be dumping its output. It is conceivable, though, that Tasman might, from time to time, have difficulty in disposing of all its liner board on the Australian market. On such occasions it might seek to dispose of some of its surplus, at “marginally-costed” prices, on the New Zealand market. This possibility may have prompted Forest Products’ fears that this venture will not help the “ orderly development ” of the industry.

It is regrettable that a major dispute should have arisen so early in the history of the agreement. It is ironical, too, that Tasman should be the company to provoke the dispute, for both the New Zealand Government and A.P.M. have a shareholding in the company. By insisting on its right, under the agreement, to proceed with its scheme, Tasman could provoke Australian paper producers into retaliatory action, such as the export to New Zealand of increased quantities of tissues or other papers. The enlargement of the market available to paper producers on both sides of the Tasman which the agreement has brought about need not be the occasion for commercial throat-cutting—though it may, and should, lead to keener price competition. There is, surely, scope for expanding production and trade in both countries in the paper industry which will prove both profitable to producers and advantageous to consumers. The forthcoming visit of the Australian Minister of Trade (Mr McEwen) will provide a favourable opportunity for discussions; it would be good tactics by New Zealand to see that he returned with more than a crumb of comfort for Australian interests.