THE PRESS WEDNESDAY, FEBRUARY 10, 1982. Getting closer to C.E.R.

Press, 10 February 1982, Page 20

THE PRESS WEDNESDAY, FEBRUARY 10, 1982. Getting closer to C.E.R.

The fears being expressed about the trade negotiations between New Zealand and Australia are not new. Alarm has been expressed in both’ countries. Last-ditch attempts are being made by certain parties in. New Zealand and in Australia to try to wring, concessions from the other side. For some; there is a sudden realisation that the moves towards Closer Economic Relations are drawing to a conciusipn; the implications can no longer be ignored. The attitudes being adopted are attempts to alter the course of the final negotiations.

On neither side of the Tasman is there unanimity in the opposition to C.E.R. The New Zealand Manufacturers’ Federation is split on the issue, as it has been from the beginning. In Australia the Deputy Prime Minister, Mr Anthony, who is the senior National Country Party politician, has been arguing strongly for C.E.R. As the Minister of Trade and Resources, and as the most experienced Australian politician in dealing with trade negotiations with New Zealand, Mr Anthony’s views are important. On the other hand, the Minister for Primary Industry, Mr Nixon, who is number two in the National Country Party, has begun to express doubts about the timing of the introduction of the new agreement,, which is expected to apply from January next year. Within New Zealand, some manufacturers are trying to make sure that their products are exempt from the C.E.R. agreements. Products may be exempt from the agreement if they are included in the socalled deferred list. The intention of the new agreement is to lower trade barriers, including quantitative restrictions and tariffs, gradually and automatically. As much trade as possible will be included in this automatic process; the only way to avoid the agreement is to have a product placed on the deferred list. This is what a number of manufacturers are trying to do. Because one manufactured item may depend on the supply and price of another, the inclusion or exclusion of items is interlocked. ' Should New Zealand engineering firms, for instance, count on access to Australian steel? Eventually, New Zealand steel is to be included in the C.E.R. but the position, until New Zealand steel is included, is less clear. Groups such

as engineering firms have to know what is likely to happen so that they can plan their businesses. The Government is in a difficult position because some of the negotiations — including those about steel — are not complete. Dairy products present special

difficulties. New Zealand has insisted that „t it has access to Australia for dairy products. The problem has been handed to . the dairy industries in the two countries to solve. The dairy trade is conducted now under an industry-to-industry agreement. Will much be different with C.E.R.? Another problem has been New Zealand’s export incentive scheme and its import licensing schemes. Both of these affect Australian access to the New Zealand

market, which is the key problem for Australia. Export incentives are seen by some Australians as removing any prospect of equal trading opportunities. Australians want to know how long the incentives will continue. Items in New Zealand-Australian trade affected by import licensing will have restrictions removed gradually, and Australia wants a definite date for the dismantling of the import licensing scheme. New Zealand has not agreed to the proposed date, 1995. This is still under discussion.

Horticulture and wine also present difficulties. Australian growers are worried by. New Zealand’s ability to produce peas and beans more cheaply than Australians can produce them. New Zealand winemakers are worried by Australia’s more mature industry. The two Governments are working to resolve the horticultural products issue. The wine issue is being examined by representatives from the two countries.

The detailed negotiations will continue and. as with all trade negotiations, some of the wrangling will be bitter. Yet it will be important for those engaged in the negotiations, whether industry representatives or government officials, and for all those affected by the moves, to see the merit of the’ main object. The idea of closer economic links is a good one. If it were overthrown, the consequences would be unfortunate for New Zealand and Australia.