Tasman trade favours N.Z.—Australian official

Press, 8 November 1978, Page 13

Tasman trade favours N.Z.—Australian official

NZPA Canberra. New Zealand producers do not % pose a threat to Australian manufactures on their domestic market, says the president of the New Zealand Manufacturers’ Association (Mr J. Gemmel). New Zealand only sought a share of the existing imports to Australia, Mr Gemmel said in a speech to manufacturers at the fifteenth annual New Zealand-Australia Free Trade Agreement meeting in Canberra. “We have never sought a share of your domestic sales and production,” he said. “The fact that we have only 3 per cent of your total imports, and of manufactured goods even a lesser percentage than that, indicates that our exports to your country can have had little if any adverse effect on your local domestic production,” said Mr Gemmel. In his opening address to the conference, Mr Gemmel made a plea for constructive rather than destructive talks over the two days of the meeting.

Tasman trade was vital now to both countries and would continue to be vital “for many years to come,” he said. For the third year running the manufacturers were meeting when both countries faced troubled circumstances, said Mr Gemmel.

“Indeed, over the years, many circumstances have occurred to influence our relationship — some for the better, others for the worse.

“The most profound of these have reflected fundamental shifts in global trading patterns and have therefore been beyond the capacity of either of our two countries to influence in any but a very marginal way,” he said. Mr Gemmel said the manufacturing sectors had been the most affected and this had led some to question as to the continu i n g strength of N.A.F.T.A. “It is to those critics that we New Zealanders reiterate our unchanged understanding of N.A.F.T.A. “It must be beneficial to both parties, not one or the other. With our exports to Australia, we have never intended any harm to Australian manufacturers,” he said.

The president of the Confederation of Australian Industry, Mr Max Dillon, said the Australian view was that Australia’s trading relationship with New Zealand had reached a “threshold.” Both sides had to reassess the conditions under which New Zealand-Aus-tralia trade was developing, he said. Little further progress would be made with trade expansion under NAFTA if ho reappraisal took place, said Mr Dillon. “Indeed, if there is no basic change, we must face up to the prospect of considering whether some of the present detailed NAFTA arrangements should continue,” he said. Total Tasman trade had increased by only around 5 per cent in the last year and most of this consisted

of increased New Zealand exports to Australia.

Exports from Australia to New Zealand increased by less than I per cent, a decline in value in real terms, while Australian imports from New Zealand increased by 12.5 per cent, he said. This reflected the continuing trend in the trading pattern evident throughout the 19705, which had had the effect of reducing the balance of trade in Australia’s favour from almost 3:1 to 5:1 over the last four years, “If present trends continue, New Zealand will soon be in the position of having a favourable balance of trade and a more than favourable balance in per capita terms,” said Mr Dillon.

The trend, and the fact, was that on a population basis New Zealand exported $ll6 worth of produce per head to Australia last year, while Australian exports per capita in return amounted to only $4l. Together with the problem that Australian exports to New Zealand were being held static, this meant many Australian manufacturers had begun to question whether the basic objectives of NAFTA were being met.

These were the “mutually beneficial expansion of trade” and the development of trade “under conditions of fair competition,” said Mr Dillon. The Questioning had been reinforced by the difficulties” in the Australian economy and the fact that many Australian companies were now looking to South-East Asia as the

main growth area for their products. The trading situation between the two countries had reached the point where a decision had to be made on whether it should move forwards or backwards, said Mr Dillon. “To move forwards will require a broad consensus between us as to whether our trading relationship can be developed in a mutually beneficial manner — and if this is the consensus, then bold new initiatives will need to come forward in order to achieve that,” he told the manufacturers.