Optimism for next round of C.E.R.

Press, 17 April 1982, Page 6

Optimism for next round of C.E.R.

NZPA staff correspondent Sydney Real progress on the closer economic relations trade negotiations is expected to be made in minis-, terial talks in Wellington next week.

Officials closely involved with C.E.R. said that although two days of talks in Canberra still left major issues to be resolved they expected progress in Wellington when the Australian Deputy Prime Minister (Mr Anthony) met the Prime Minister (Mr Muldoon) and other senior Ministers. “There will be a lot of progress. Whether it is total and acceptable to the two Cabinets is., conjecture for now,” said one. ■ The official two-day talks in Canberra "by departmental heads made little real progress in the main areas of import licensing and export incentives as those need political solution. The Australian Cabinet had issued specific guidelines that it wanted . a . terminal date for the removal of New Zealand’s; import licensing Both New - - Zealand and Australian negotiators accept that under C.E.R. import licensing' will in effect have been removed,, or be negligible, within 10. years. ■ Australian ■industrialists and exporters have been very firm that they want the restrictive import licensing system ended but; the Australian Government beljevesjit cannot have an open-ended commitment from the New Zealanders. . • On the other side of the Tasman it is seen that if New Zealand set a date it could alarm manufacturers, especially those unsure \of the effects of C.E.R. on their business viability. .. : ; New Zealand has refused to concede a cut-off date, even though the Australians have indicated, they would accept some time beyond the 10-year period. New Zealand has been offering a review after five years of C.E.R. but this is unacceptable to Australia. *

The talks in Wellington are expected to seek a political solution to this impasse, one acceptable to the Australian Cabinet.

Mr Anthony, the Minister for Trade and Resources, is responsible for C.E.R. in the Australian Cabinet whereas in New Zealand more Ministers. including the whole Cabinet economic committee, have been closely involved so that any negotiations with New Zealand usually means total Cabinet approval. On export incentives there is pressure to have these removed because of codes under the General Agreement on Tariffs and Trade. In the last Budget, Australia cut its incentives by half and the Industries Assistance. Commission has now recommended they be cut completely. ; •

Businessmen- here therefore are not keen to be left exposed with New Zealand manufacturers having- the advantage of incentives they cannot have.

The solving of this could also mean a resolution of Tasmanian and other vegetable growers 1 fears of being swamped by New Zealand horticultural" products sold here at uncompetitive prices. ,-Tn talks late into Thursday might in Canberra the senior officials tnade a' ..lot of- progress on removing products from the C.E.R. deferred ' category.!, • . ■/ Officials: said that those products for; which a. plan had been devised to bring them under the C.E.R. provisions had now been removed from the deferred category.

Items still in the “too har'd” .basket were industries for which; basic information was still required or which were under long-term Government study — for example, New Zealand’s mbtorvehicle industry and the Australian tobacco industry. • Mr Anthony will fly to Wellington on Monday for talks on Tuesday and Wednesday. Negotiators from both sides are then expected to report to; their respective Cabinets to await further

instructions or, all going well, endorsement of the agreement so it can be made public. A big team of Australian officials will go with Mr Anthony, including the heads of the departments of Trade and Resources, Primary Industry, and Industry and Commerce. “Grave reservation” about the prospect of closer economic relations with Australia were expressed yesterday by the Social Credit leader (Mr Beetham), reports the Parliamentary reporter of “The Press.” Mr Beetham said that he was becoming increasingly suspicious that C.E.R. was being hastened along to replace the collapsing “think big” strategy in order that it could be placed before the people of New Zealand, as another possible means of economic salvation, a “new hallucinatory red herring.”

“Until now I have been prepared to believe that a sound decision on C.E.R. could be made on the basic of information made freely available by the Government, but it appears more and more that we will simply be presented with a fait accompli,” he said. “The simple fact of the matter is that New Zealand does not have any real.overall advantage -pver Australia. One has only to look at the nature of the' two economies to realise that. They are essentially similar.

“It would make far more sense- for New Zealand to be developing a much closer economic relationship with a country such as Indonesia or Malaysia, which , has a complementary economy, not one that is comparatively the same.

“there are;very considerable dangers'’in .the C.E.R. proposals, the greatest of which is that New Zealand’s economy will be swamped by that of Australia.,

“There, is also the very real risk that an. already serious unemployment problem in New Zealand will be greatly worsened through heavy Australian competition,” Mr Beetham said.