Aust. C.E.R. fears smouldering

Press, 13 December 1982, Page 1

Aust. C.E.R. fears smouldering

By

ALAN THORNHILL,

of Australian Associated Press

Canberra Bert Kelly, in an impish mood, once asked the Australian Government to slap a tariff oh New Zealand's racehorses. Mr Kelly, a former member, of Parliament who led the free trade movement in the Australian Parliament, said New Zealand’s lush pastures gave that country’s racehorses an unfair advantage on Australia’s racetracks. However, the fears Mr Kelly mocked then still smoulder in Australia, even though the Acting Prime Minister, Mr Anthony, and New Zealand’s Prime Minister, Mr Muldoon, will sign an

agreement tomorrow bringing the long-awaited closer economic relations into effect. The new agreement will replace the late but unlamented New Zealand Australia Free Trade Agreement, which bogged down and finally collapsed under the weight of its own detailed regulations. Even by current world standards, Australia and New’ Zealand are both highly protectionist countries, a fact which deeply affects the daily lives of ordinary people on both sides of the. Tasman. Australia’s Leader of the Opposition. Mr Hayden, said recently that Australia’s cars were the second most expen-

sive in the world, as a result of protection. A check with his office revealed that Mr Hayden had New Zealand's prime position in mind when he made that statement. However, C.E.R. will not mean cheap Holdens for New Zealanders, although many types of cars are being sold cheaply in Australia at present in a price-cutting war that was brought about by depressed demand and oversupply. New Zealanders will not be able to take advantage of the "suicide deals" that Australia's car makers are now offering, because motor vehicles have been left out of the C.E.R. arrangements “for

the time being.’’ Australian officials say "no specific time” has been set for their inclusion. The world recession has struck Australia hard. On the latest figures, Australia’s unemployment is already about 8 per cent (New* Zealand’s is 5 per cent) and the Government expects it to reach 10 per cent early in 1983 when this year’s schoolleavers will be seeking jobs: There will then be about 700.000 Australians out of work. Australia’s manufacturing industry generally has been in decline for a decade and the recession has suddenly made things much worse. Australian farmers have also struck very bad times. Just as the world recession

knocked the bottom out of their commodity markets they were hit by a drought .that the Australian Government calls the worst in memory. In such adverse circumstances it is hardly surprising that the voice of protectionism has been rising in Australia, as it has elsewhere. It is understandable, too. that some people in Australia are getting cold feet on their way to the C.E.R. marriage ceremony. This has been particularly noticeable in the Australian Parliament in the last fewweeks where there has been a string of small complaints about New Zealanders. . Those Australians who will suffer, if all these fears are realised, include leather

workers, dairy farmers, margarine makers, and Tasmanian berry growers. The list is by no means exhaustive.

However, experienced observers such as New Zealand’s High Commissioner in Australia, Sir Laurie Francis, take a sceptical view of these fears.

Sir Laurie said recently. "I believe that in the current economic climate there could be temptations for some companies to try to blame the free trade area, and the process of liberalisation it sets in train, for their troubles.

"There will inevitably be a heightened sensitivity to the prospect of greater Tasman competition." Greater Tasman competition is what the C.E.R. agreement will be all about. There has been tough talking on both sides to get the agreement.

One Australian industry group which had very serious reservations about C.E.R. at first has become more amenable recently.

The Confederation of Australian Industry last month described the prospective C.E.R. agreement as desirable and welcome, in spite of what it called “some significant shortcomings.”

The C.A.l.'s new, more relaxed attitude became evident after the most recent round of haggling between Mr Anthony and Mr Muldoon in Wellington in October. At its simplest, C.E.R. will offer Australian manufacturers better access to a

market ol three million people in New Zealand. In return. New Zealand exporters will get better access to Australia’s market of 15 million people.

The agreement, which generates far more interest among ordinary New Zealanders than it does among the general public of Australia. will nevertheless be a historic achievement.

The most remarkable thing about it. though, may well be the fact that a free trade agreement is being signed at all in times like the present, when the courage of bigger and more powerful countries has fallen away in protection talks, as failure of the recent General Agreement on Tariffs and Trade Ministerial meeting showed.