Comment on steel surprise to N.Z.

Press, 7 February 1985, Page 9

Comment on steel surprise to N.Z.

PA Auckland The new Australian Minister of Trade, Mr John Dawkins, has identified steel imports as the last remaining stumbling block in the Australia-New Zealand investment row. Mr Dawkins arrived in New Zealand yesterday on his first visit since taking over the trade portfolio in December. He said in Auckland that the New Zealand Minister of Finance, Mr Douglas, would meet the Australian Treasurer, Mr Paul Keating, to discuss the investment issue later this month. But, in a comment which astonished New Zealand Steel, he said Mr Keating had linked the investment issue to greater trade access for motor-vehicles and steel.

On motor-vehicles, Australia was satisfied with New Zealand’s decision in December to allow greater access to Australian cars in

return for access for New Zealand components in Australia. “The motor-vehicle area has been fixed up,” Mr Dawkins said. “The steel area has not yet. “With that caveat, I think it (investment) is an area we would both like to clear up as soon as possible.” The marketing manager of New Zealand Steel, Mr' Alex Green, said yesterday that any linking of the investment and steel issues was completely new to him and to New Zealand officials.

“It is a totally new angle. I cannot see any, rationale for linking the two,” he said.

Steel is virtually the only product yet to be brought under the Closer Economic Relations agreement. This is because of a National Government commitment to introduce import licensing for flat rolled steel from the time New Zealand Steel’s

new rolling mill at Glenbrook is commissioned late next year. Under an “understanding” reached when New Zealand Steel decided to go ahead with the Glenbrook expansion, this protection will be phased out between 1989 and January 1, 1991. At that point, it will be replaced by a tariff of about 50 per cent against all countries except Australia, which will be given dutyfree entry four years ahead of most other products under C.E.R.

Australia, which exports about $3O million worth of flat roiled steel a year to New Zealand, has objected to being shut out of its existing market for the transitional years after 1986.

Mr Green said the company needed protection in its first few years of flat rolled steel production because of "start-up difficulties” which usually occurred with a new mill.