Canadian trade link ‘worth pursuing’

Press, 23 February 1989, Page 4

Canadian trade link ‘worth pursuing’

By

BRENDON BURNS

in Wellington

Canada continues to be viewed as a potential free trade partner by New Zealand, although enthusiasm for the proposal is distinctly muted. Last December, the Trade Development Board released a report examining the prospects of expanding the Closer Economic Relationship withAustralia to include Canada. A seminar of business leaders was held this week in Wellington to assess responses to the report.

Its co-author, Sir Frank Holmes, said a decision had to be made as to whether a Canada, Australia and New Zealand (C.A.N.Z.) free trade relationship was worth pursuing.

Sir Frank said a C.A.N.Z. trade pact was not an end in itself.

.It could also .give New Zealand and Australia a stronger position in negotiating other bilateral trade links, such as with the United States. Multilateral trade bargaining, such as the current G.A.T.T. round, could also be enhanced.

At this point it would be premature to enter into official negotiations with Canada, he said. New Zealand and Australia were preoccupied with their own economic relationship, as was Canada and the United States.

“But both sides recognise there is a dangerous trading world out there,” said Sir Frank. In such a climate, further exploration .of ‘ the C.A.N.Z. proposal was worth considering. Sir Frank, an influential advocate of the C.E.R. relationship with Australia, recalled he had first proposed expanding trans-Tasman trade in 1961.

A Dairy Board representative, Mr Nigel Mitchell, expressed doubts about pursuing a trade relationship with Canada. He said Canada’s protected dairy industry created problems for New Zealand dairy farmers inexport markets such as Japan and Latin America. Any diversion of effort from reducing trade barriers and protectionism through multilateral negotiations was a matter of concern, he said.

Mr Ken Futter, chief executive of the AustraliaNew Zealand Business Council, said it was important not to put improving trade with Canada ahead of gaining a better foothold in important Pacific Rim markets.

A C.A.N.Z. trade agreement would not be another C.E.R., he said, f But a Canadian Airline representative, Mr Warwick Beadle, said the opportunities for CanadaNew Zealand trade were extensive. He said seafood was being loaded in New Zealand each week-end and being sold on Monday mornings in Toronto.

Sir Frank Holmes said 1 per cent of Canada’s dairy consumption would be worth $43 million annually to New Zealand.

Fears that Canada’s dairy industry could be wiped cut by cheap New Zealand products were unfounded, said Federated Farmers president, Mr Brian Chamberlin.

Under a free trade agreement Canadian farmers would still have no competition in fresh milk or products such as yoghurt, he said.