THE PRESS TUESDAY, AUGUST 16, 1988. The Australian link

Press, 16 August 1988, Page 20

THE PRESS TUESDAY, AUGUST 16, 1988. The Australian link

While Mr Lange is in Australia this week, closer economic relations will be much talked about. More is at stake than an ordinary — or even an extraordinary — trade agreement. C.E.R. is the formal expression of close trans-Tasman cooperation, and the pact has the potential to allow even closer co-operation. C.E.R. is also forcing New Zealand and Australia jointly to reassess the international trading system and how they should position themselves in the world.

Some speculation has occurred about where C.E.R. is headed. Mr Lange has recently denied that there will be any political union between the countries. When he and Mr Hawke met in New Zealand, neither Prime Minister gave any encouragement to the idea of political union. What seems reasonable to observe, however, is that there is every indication that this New Zealand Government, like the National Government before it, wants to move as close to Australia as it can without political union. It wants, in fact, New Zealand to be treated as if it were part of the Australian federation without any loss of sovereignty on the. part of the New Zealand Government.

The observation once frequently made about New Zealand and Australia was that they took one another for granted. That was only half true. New Zealanders generally took Australia for granted and Australia rarely thought about New Zealand at all. There is a certain amount more awareness than there used to be, but the danger still exists that New Zealand will continue to take Australia for granted.

One of the most remarkable aspects of the relationship is the number of New Zealanders who are settling in Australia. Australia is generally a richer country than New Zealand and offers more opportunities for the ambitious. Although there is occasionally some criticism of certain New Zealanders who take the Australian dole and of some who find themselves before Australian courts, many New Zealanders flourish in Australia, add to its prosperity, and fit comfortably into the society, which they find does not conform to some of the cliches about Australian society to be heard

in New Zealand. There is probably less of a problem for Australia about New Zealanders living there than there is for New Zealand, which loses some of its ablest people to Australia.

Mr Lange is not going to sort out such aspects of the relationship, but some of the immediate problems involved in C.E.R. are complex enough to occupy those at this week’s Canberra talks.

Australian dairy interests are suspicious of the New Zealand dairy industry. Their fears must be accentuated because of the threat to New Zealand’s dairy exports to the European Community. Where will all the dairy produce go if the E.C. cuts down New Zealand’s access for dairy products substantially? Australian dairyfarmers hope that it will not go to Australia and want a written assurance on the subject. Even bringing about free trade in goods and services by the early 1990 s will not be totally straightforward. After all, C.E.R. will be a pioneering trade agreement covering such services and may be expected to come up against problems for which there will be no agreed international method of solution. The harmonisation of certain marketing codes and the harmonising of some commercial law will take time and forbearance on both sides of the Tasman. Both New Zealand and Australia are placing great faith in the new multilateral trade negotiations under the General Agreement on Tariffs and Trade. Both countries would be very badly hit if the major trading countries, such as the United States, Japan, and the countries in the European Community, decided that they would make separate deals and ignore the international trading rules set up under G.A.T.T. Already the United States is using its subsidy system as a means of fighting the E.C. If that practice continued for long, or became widespread, the agricultural economies of New Zealand and Australia would stand a good chance of being crushed. However, New Zealand and Australia have to have a reserve plan if the G.A.T.T. negotiations fail. There will be a very great need indeed for them to work together in such circumstances.