THE PRESS THURSDAY, MAY 14, 1981. Good will and C.E.R.

Press, 14 May 1981, Page 16

THE PRESS THURSDAY, MAY 14, 1981. Good will and C.E.R.

Ever since the Prime Minister (Mr Muldoon) suddenly announced that he would take part in the talks on closer economic relations between New Zealand and Australia, when the Australian Deputy Prime Minister (Mr Anthony) came, it seemed likely that something decisive would come from the meeting. What was less clear was which way the talks would move. As it turned out Mr Muldoon and Mr Anthony both showed themselves well disposed towards the idea of reaching a new agreement to replace the New Zealand-Australia Free Trade Agreement. The progress made at the talks will have to be submitted to the Cabinets of the two countries before, the details are announced. There seems to be little doubt that there was progress, which is significant in itself. For a long time there was a chance that the exercise would collapse because of an uncertainty about the political will to go ahead. That point has now been passed. In concrete terms possibly only a limited amount was achieved in Wellington on the first two days of this week. Some points were settled: Mr Muldoon referred to opportunities for New Zealand finance houses. Some remain to be settled: these have not been announced, but it requires little deduction to conclude that the unsettled issues entail dairy products, wine, import licensing, and possibly export incentives. New Zealand has sought access to Australia for dairy products and the probable outcome has been that Australia has played for time. After all, in many areas of Australia dairying has been run down and will continue to be phased out. To some extent the phasing out of dairying in parts of Australia requires a decision on a matter of principle by the Australian Government. The same applies to import licensing in New Zealand. The present scheme has been in existence for more than 40 years and to abolish it completely requires a decision on a matter of principle by the New Zealand Government. In both Australia and New Zealand the two Governments will have to be able to persuade the affected industries of the wisdom of the moves. Wine is another matter. Just before the talks, the Government introduced a new system under which wine can be imported. Import licensing was abolished and new lariffs imposed, the effects of which will be lo increase the price of much imported

wine; almost certainly this will mean an increase in the price of New Zealand wine and little or no Australian cask, wine may be available in New Zealand soon. Mr Anthony’s responses when questioned publicly about the new system might lead an observer to believe that the last word has not yet been said about wine. The under-arm bowling incident earlier this year, the unilateral decision by the Australian Government to introduce passports, the cancellation of the visit by the Australian Minister of Foreign Affairs, Mr Street, because of suggestions that he would attempt to put pressure on New Zealand to call off the Springbok tour appear not to have diverted Mr Muldoon and Mr Anthony from the task of looking at the economic problems of closer economic relations. In a television interview Mr Anthony appeared generally well disposed towards New Zealand and cast himself in the role of telling the Australian Government that New Zealand considered a new agreement important. He refused to be drawn on the question of how a Springbok tour would affect relations between New Zealand and Australia but was quite open about how serious an effect he thought it would have on New Zealand throughout the world. Although there was no threat in anything Mr Anthony said about the Springbok tour, there was a lesson to be read. It is difficult to avoid the conclusion that, if the Springbok tour disrupts the Commonwealth Heads of Government meeting in Melbourne, moves towards a closer economic relationship will be affected adversely.

The circumstances of the next political moves on a new economic agreement are particularly vulnerable. Mr Muldoon expects to arrange a meeting With the Australian Prime Minister, Mr Fraser, during the Commonwealth Heads of Government meeting. Mr Fraser considers that he has a considerable stake in the success of that meeting. He clearly does not want to see it upset by the Springbok tour. One part of that can be put down to Mr Fraser’s vanity, but another part lies in the role that Australia wants to play in the world for its own interests. Australia considers the Springbok tour a threat to its own interests. The good will evident in the two days of talks this week remains in danger of disappearing overnight.