‘C.E.R. opens a new era for N.Z. industry’

Press, 5 June 1982, Page 1

‘C.E.R. opens a new era for N.Z. industry’

PA Wellington The long-awaited final draft of the new trade agreement with Australia was released yesterday and heralded by the Prime Minister (Mr Muldoon) as the opening of a new era for New Zealand industry.

The Labour Party gave the C.E.R. draft a cautious welcome. but Social Credit harshly criticised the scheme. The new scheme will come into effect on January 1 next year and will be completely phased in by 1995. Il will, replace the ' outdated New Zealand-Australia Free Trade Agreement (N.A.F.T.A.) with a common market of 18 million people. The draft agreement, which has taken two years to negotiate, said all import restrictions on Tasman trade would end by 1995. It will be open-ended but will be reviewed after five years by a council of ministers in 1988. who will consider whether it was "providing a satisfactory balance of advantage to both countries" and whether its "full potential" was being realised. Export subsidies and incentives will, finish by the end of the 1987 tax year, but special conditions-will applyto certain agricultural products including 'dairy J products. wheat, sugar,' citrus, and some tropical products. The old N.A.F.T.A. arrangement for Cheddar , exports will be absorbed into . the agreement to ensure New Zealand benefits from growth of the Australian market. C.E.R. will extend preferential Government purchasing arrrarigements across the Tasman' and New Zealand will “pursue discussions with the individual state Governments” on equal treatment under interstate preferences. The document said the slow phase-in was to stop any "substantial disruption” to industry. Restrictive trade practices such as standards, labelling, and technical specifications, which could, frustrate the

aims of C.E.R., would be prevented, the draft said. Many products will be phased in at varying times up to 1987. The late start is designed to protect certain 1 industries in each country. All goods that now carry a 5 per cent tariff will become duty-free from January 1 next year, and annual tariff cuts on other goods will result in duty free treatment for them within one to five years. The draft contains safeguards for those industries forced .out of business by C.E.R. Companies who believe they may be adversely affected may apply in advance for remedial steps to be taken or for compensation? Mr Muldoon said the agreement was "the' most significant external opportunity for New Zealand in recent years." “I believe we are opening a new era for New Zealand ■ industry" - The trade package should be seen as an integral part of the Government's growthstrategy he said. “Trade-led growth means a buoyant economy and- • therefore more jobs and increased prosperity.” . Seminars would be held in main centres to explain the trade package and the draft would also be . tabled and debated in Parliament “shortly,” Mr Muldoon said. He gave no hint of whether the agreement would be finally signed with Australian Prime Minister (Mr Fraser) in, August. Mr Fraser will probably be in New Zealand then for the South Pacific Forum. The leader of the Opposition (Mr Rowling) said C.E.R. contained “considerable potential for jobs arid business opportunities . . . if the

situation is properly managed." But there had to be big changes in the Government's economic thinking if C.E.R. was to benefit New Zealand. Unless there was a commitment by the Government to positive industrial development and an appropriate investment strategy “the agreement could be a disaster for the New Zealand economy." Mr Rowling said. The leader of the Social ■Credit League (Mr Beetham) said the draft did nothing "to allay (the league's) worst fears about the impact C.E.R. could have on our economy and our future development." There was no assurance that "significant sections of the agreement" could be renegotiated. The eight weeks allowed for consultation was too short and talk of a review after five years was ’’little more, than a platitude," '. Mr Beetham.said. ’ The Manufacturers' Federation said C.E.R. would have an enormous impact on the New Zealand economy, some of it negative. The federation’s president. Mr Bill Christie, said manufacturers would have to be able to compete with Australians to make C.E.R. a success. and before this could happen other areas of the economy must become more efficient. . ' The president of the Canterbury Trades Council, Mr Leon Morrell, said' Mr Muldoon's promise of a “new .era': through C.E.R. was a distorted fabrication that would never eventuate. “C.E.R. is a complete sellout of New Zealand's industrial progress and will result in massive unemployment,” Mr Morrell said. Report, page 7