‘Tasman Sea costs may inhibit C.E.R.’

Press, 18 May 1982, Page 12

‘Tasman Sea costs may inhibit C.E.R.’

PA Dunedin The high cost of Tasman shipping will inhibit full achievement of Closer economic relations between New Zealand, and Australia, according to the Secretary of Foreign Affairs, Mr M. Noirish. ..“The way in which goods and services flow across the Tasman will condition the successful development of a single Tasman market on which domestic producers can foot it with international competition,” Mr Norrish said. . .- . “When the C.ER ; , machinery begins to roll, continuing work will be required on the complex and, at .times, frustrating issue of sea freight,” he told the Foreign Policy School. “The business community has described the Tasman as the costliest stretch of water in the world.” The problem of Tasman transport may be more serious for New Zealand than Australia, Mr Norrish said. Most of our exports to Australia are primary products such as pulp and paper, which have low value for volume. Australia exports highervalue manufactured goods to

us,.and these are better able to bear a high freight rate, he said. While a continuation of high shipping costs might not drastically frustrate the trade creation and expansion objectives of the agreement, it would certainly inhibit them and militate against their full achievement, Mr Norrish said. Ways of reducing the high shipping cost, included improving the fuel efficiency of the ships of the Tasman run. As shipping terminals were subject to economies of scale, an increase in trade would bring about a decrease in these costs. He suggested that Tasman air services should be rationalised. Both New Zealand tourist firms and exporters of services or small scale high technology items would be best served by airline schedules and frequencies that set out to minimise Tasman shipments and irritating delays, he said. “We each operate domestic airline systems with little thought for the other and international systems that often seem geared to longhaul routes at the expense of the maximum efficiency and convenience across the Tasman,” Mr Norrish said.