Government move on newsprint sale

Press, Volume CXI, Issue 32612, 21 May 1971, Page 3

Government move on newsprint sale

(Ftom MAX LAMBERT, N.Z.P.A. staff correspondent)

CANBERRA, May 20. An exchange of letters at Government level on New Zealand sales of newsprint in Australia is imminent, it was reliably learned today. >

It is believed that the two Governments have agreed on terms which will place New Zealand newsprint sales here on a much firmer foundation. They will also ensure a market for New Zealand exports as production expands.

The agreement in the exchange of letters will leave no-one in doubt about New Zealand’s preferred position in the Australian newsprint field. New, long-term contracts between New Zealand suppliers and Australian newspaper publishers are expected to flow from the agreement. A third newsprint machine at the Tasman Pulp and Paper Company’s Kawerau plant, the installation of which is dependent to a large extent on secure market prospects in Australia, is also considered almost certain to be bought. The matter might be discussed at Tasman’s board meeting—the first for several weeks —in New Zealand next week. It is believed that Australia’s Deputy Prime Minister and Minister for Trade and Industry (Mr Anthony) will sign the letter setting out the agreed position before he leaves Australia this week. This will be sent to Wel-

lington to await a formal reply from New Zealand’s Deputy Prime Minister (Mr Marshall). Once the formal exchange of letters has been made details will be disclosed.

Earlier letters of understanding on New ■ Zealand newsprint sales here have been exchanged in the past between Mr Marshall and Mr Anthony’s predecessor, Sir John McEwen.

These gave New Zealand a preferred position, but in recent months contract negotiations between suppliers and some Australian publishers ran into difficulties, and Tasman referred the matter to the New Zealand Government.

The question was raised at the recent New ZealandAustralia Free Trade Agreement talks in Wellington, where Mr Anthony said Australia would honour its undertaking to provide a market for New Zealand newsprint, and forecast the exchange of letters.

Mr Anthony has had talks with Australian publishers since his return. However, there has been no contact between the newsprint suppliers’ representatives and the publishers. The commercial contract and resumption of contract negotiations will have to await the exchange of letters. Price and quantity will still be open to negotiation, but the exchange of letters will make Australia’ obligations to buy from New Zealand very clear and binding. Canadian newsprint, claimed in some quarters to be "dumped,” is the cause of the difficulties in negotiating the contracts. Newsprint is New Zealand’s most valuable single export to Australia, and earned $15.4m in the year ended June, 1970. Australia now uses about 120,000 tons of New Zealand newsprint a year, 175,000 tons from its own plants, and

150,000 tons from other sources. Extra New Zealand sales in Australia in future—when a third machine at Kawerau begins working—will be at the expense of “other” sources. However, Australia has always reserved the right to, import some of its requirements from other sources. This right will be continued.