Co-operation In Pacific Basin Important

Press, Volume CIX, Issue 32062, 9 August 1969, Page 2

Co-operation In Pacific Basin Important

[ New Zealand and Aus- : tralia should'yalae the I natural understanding they had with each ‘other, and they should develop as many political, cultural, economic and personal ties as possible with other countries in the Pacific Basin, the i Australian Trade Com- : missioner for the South . Island (Mr R. C. Sutton) ' said recently. Until Australia and New L Zealand could come to some sort of arrangement that would help the less developed countries in this area of the ’ world, there would continue 1 to be political instability, Mr ; Sutton said, in an address to ■ the Christchurch area group ' of the Pan Pacific and South- ‘ East Asia Women’s Associa- ' tion. Proposals for a Pacific free ' trade area had not proved acceptable, he said. They would mean Australia would have to revert to agricultural produc. tion, after endeavouring for some years to industrialise its economy so as not to be dependent on only two or three products. Talk of a Pacific free trade area was raised as a defensive measure when Britain began ‘ talking of entering the Com- ’ mon Market.

More recently a Japanese professor had put forward a specific proposal for the establishment of a Pacific common market, where tariff barriers would be removed. The plan evisaged the five

developed countries in the area, Canada, the United States, Japan, Australia, and New Zealand, helping the less developed countries.

But the existing Australia and New Zealand Free Trade Agreement offered more scope for both countries to broaden their economies than a Pacific common market would, said Mr Sutton. For New Zealand, the agreement opened up a market of some 12 million people.

Because the demand /or agricultural products could only develop slowly, it was ncessary for New Zealand, as Australia had done, to diversify and industrialise its economy, he said. Since the agreement came into force in 1966, New Zealand exports to Australia had doubled in many commodities, whereas Australian exports to New Zealand had remained static. Seventy-four per cent of New Zealand and 44 per cent of Australian exports had been affected by the Free Trade Agreement. Potential There “I think, though, that the agreement has all sorts of potential for both countries,” said Mr Sutton. “There are difficulties, of course, mainly related to the fact that we have parallel economies and, in many cases, we produce the same sort of products. But I think, with co-operation, these can be overcome. We must get our businessmen together and work out suitable arrangements."

An example of how cooperation could interest trade was the sharp rise in recent years in the amount of trade between Australia and Japan, he said.

In the last 15 years, Japan

had moved to overtake Britain and become Australia’s most important trading partner. In this time, the percentage to Japan of Australia’s total exports had increased from 7 per cent to 21 per cent. By comparison, 36 per cent of Australia’s exports had gone to the United Kingdom 15 years ago: last year, it had dropped to 14 per cent. This was because the United Kingdom market had not expanded as Australia would have liked it to. Japan had expanded dramatically, Mr Sutton said.

New Zealand was going through the same sort of period now as Australia had a few years ago. Luckily, when Australia was trying to diversify its trade, the Chinese market opened up for its wheat, the Japanese market for raw materials, and Australia discovered minerals. He said Australia bad made "quite a courageous political decision” when it negotiated a trade plan with Japan in 1956. It gave preference to Japan, but reserved the right to impose import restrictions should ti>e need arise.

From 1957 to 1960, however, such a great deal of understanding had developed that there was no opposition to renegotiating the plan. Because oi the trade understanding which had developed after the trade agreement, Japan had become Australia’s best market and its third most Important for exports. Aust* ralia was Japan's second best market for selling goods, and its third for export, Sir Sutton said.